Exhibit 10.17
EMPLOYMENT AGREEMENT
--------------------
This Agreement is entered into as of August 30, 1999 by and between VIALOG
Corporation, a Massachusetts corporation (the "Company") and MICHAEL SAVAGE
("Mr. Savage").
FACTS
The Company desires to employ Mr. Savage as CHIEF FINANCIAL OFFICER with
the duties, responsibilities, rights and obligations set forth below, and Mr.
Savage desires to be so employed.
In Mr. Savage's capacity as Chief Financial Officer of the Company, Mr.
Savage will obtain access to, and be in a position to adversely affect, the
confidential information and good will of VIALOG and its subsidiaries (VIALOG
and the subsidiaries collectively and each individually referred to as the
"VIALOG Group").
AGREEMENT
In consideration of the foregoing and of the covenants and agreements set
forth in this Agreement, the Company and Mr. Savage agree as follows:
1. Term. The term of this Agreement commenced on August 30, 1999 (the
"Effective Date"), and will continue until terminated in accordance with the
provisions of Section 6 of this Agreement (the "Term").
2. Duties and Responsibilities. The Company agrees to employ Mr. Savage,
and Mr. Savage agrees to be employed, as Senior Vice President and Chief
Financial Officer, and Mr. Savage will perform all of the duties and
responsibilities of said office, subject to direction by the Chief Executive
Officer and the Board of Directors of the Company. In addition, Mr. Savage will
perform such other specific tasks and responsibilities, consistent with Mr.
Savage's position as Senior Vice President and Chief Financial Officer, as may
be assigned
to Mr. Savage from time to time by the Chief Executive Officer and the Board of
Directors of the Company. However, Mr. Savage will not be required to locate
outside the Greater Boston metropolitan area without Mr. Savage's consent. Mr.
Savage will carry out his duties in a professional and competent manner and will
devote his full business time, labor, skill and best efforts to carrying out his
duties and responsibilities under this Agreement. Mr. Savage shall not engage in
any other business activity during the term of this Agreement, except as may be
approved by the Board of Directors. Mr. Savage will travel to whatever extent
may be reasonably necessary in the conduct of the VIALOG Group's business and
his duties and responsibilities under this Agreement.
3. Compensation. Subject to Mr. Savage's adherence to the
responsibilities and obligations under this Agreement, the Company agrees to pay
Mr. Savage a base compensation at the bi-weekly rate of seven thousand five
hundred dollars ($7,500.00), less all lawful holdings and deductions, which if
annualized would equal one hundred ninety-five thousand dollars ($195,000.00).
Mr. Savage will be eligible for such increases in base compensation, and to
participate in the Company's annual bonus compensation program up to fifty
percent (50%) of his annual base salary (approximately $97,500.00). Mr. Savage
will also receive a signing bonus in the amount of thirty-five thousand
($35,000.00) payable within thirty (30) days of the effective date of this
Agreement.
4. Benefits, Vacation and Stock Options. Mr. Savage will be eligible to
participate in and/or receive such group retirement plans (qualified and non-
qualified), health, dental and executive disability insurance plans, other
benefit plans and vacation the Company generally makes available to other
executive employees on similar terms. Subject to the approval of the Board of
Directors, Mr. Savage will be granted a stock option to purchase 100,000 shares
of the Company's Common Stock, pursuant to the provisions of a Stock Option
Agreement to be entered into between the Company and Mr. Savage on the form
attached hereto as Exhibit A.
2
5. Expense Reimbursement.
-- ---------------------
(a) Business Expenses. Mr. Savage will be entitled to reimbursement
for all reasonable and necessary business expenses properly incurred by
Mr. Savage in connection with the performance of his duties and
responsibilities under this Agreement upon submission of documentation in
accordance with such procedures as the Company may establish from time to
time.
(b) Relocation Expenses. The Company will reimburse Mr. Savage for
all reasonable and customary expenses incurred in connection with his
relocation. Such reimbursement shall include the cost of airline
transportation between Leesburg, VA and Boston, MA and a rental car and
interim housing for a period of six (6) months from the Effective Date of
this Agreement. Mr. Savage acknowledges that he must submit all receipts or
appropriate documentation within six (6) months from the date of his
employment in order to receive reimbursement from the Company. Mr. Savage
further acknowledges that should he voluntarily leave his employment with
the Company other than for good reason less than one (1) year from the date
of his employment with the Company, he will reimburse the Company the full
amount he has received under this Agreement; and, he hereby authorizes the
Company to deduct any monies owing to the Company for expenses reimbursed
to him under this Agreement, from his final paycheck and severance payments
if applicable. Mr. Savage acknowledges that any amount remaining due to the
Company shall be a debt owed by him to the Company. Mr. Savage further
agrees that if any taxing authority determines taxes, penalties or interest
to be due or owing with respect to any monies paid to him under this
Section, he will be solely responsible for the payment of such taxes, and
agrees further to indemnify and hold harmless the Company in the event any
such taxing authority alleges that the Company should pay such taxes,
penalties or interest.
6. Termination. The Company may terminate Mr. Savage's employment at any
time during the Term for any reason as follows:
3
(a) By the Company for Cause. The Company has the right to terminate
Mr. Savage's employment immediately for "Cause." For purposes of this
Agreement only, the term "Cause" means material breach of any provision of
this Agreement; material misconduct; substantial nonperformance of Mr.
Savage's duties or responsibilities; incompetence; inability to perform the
essential functions of the office of Chief Financial Officer with or
without reasonable accommodation as defined by the Americans With
Disabilities Act ("ADA"), other than on account of short term illness;
conviction of, or admission to, a felony or other crime involving moral
turpitude; any act involving theft, embezzlement or fraud; or a material
violation of any written policy of the Company. If Mr. Savage's employment
is terminated for Cause, the Company will only be obligated to pay his base
compensation through the date of such termination, together with such other
benefits or payments to which Mr. Savage may be entitled (in the event of a
Cause termination) by law or pursuant to benefit plans of the Company then
in effect. Mr. Savage will remain bound by his obligations under Sections
7, 8 and 9 of this Agreement.
(b) Death. In the event of Mr. Savage's death, the Company will pay
to Mr. Savage's estate, designated beneficiary, or legal representative his
base compensation and other benefits through the date of termination and
also will pay them such base compensation and provide such comparable group
health insurance benefits as Mr. Savage would have received had he remained
alive and employed by the Company (at such times as Mr. Savage would have
received them) for a period equal to six (6) months after the end of the
Term, together with such other benefits or payments to which Mr. Savage may
be entitled by law or pursuant to benefit plans of the Company then in
effect. For purposes of this Agreement, Mr. Savage's death shall terminate
the Agreement.
(c) Resignation and Termination by the Company Other than for Cause
or Death. The Company has the right to terminate Mr. Savage's employment
other than for cause or death without prior notice. Mr. Savage may
terminate his employment upon thirty (30) days' prior written notice to the
Company. Mr. Savage will in any event remain bound by his obligations under
Sections 7, 8 and 9 of this Agreement. If Mr. Savage's employment is
terminated by Mr. Savage other than for good reason, then he will be
entitled to his base
4
compensation and other benefits through the date of termination, however,
he will not be entitled to any severance payments. If Mr. Savage's
employment is terminated by the Company pursuant to this Section 6 (c) or
if Mr. Savage terminates his employment for good reason, he will be
entitled to the following: (i) a severance payment equal to six (6) months
pay at his then current base rate of compensation, less all lawful
withholdings and deductions, such severance payment to be paid in
accordance with the regular pay periods of the Company; and (ii)
continuation, at the Company's sole expense, of health insurance benefits
comparable to those he was receiving at the time of termination, provided
such health insurance is still being offered to Company employees, for a
period of six (6) months after the end of the Term. For purposes of this
Agreement only, the term "good reason" means a material breach of this
Agreement by the Company, including, without limitation, the Company's
failure to pay any compensation owed to Mr. Savage after written notice
that the amount was due or the assignment to him of duties which are
significantly inconsistent with the second and third sentences of Section 2
hereof.
7. Confidentiality. Mr. Savage will not at any time, without the
Company's prior written consent, reveal or disclose to any person outside of the
VIALOG Group, except in pursuit of the VIALOG Group's business, or use for his
own benefit or the benefit of any other person or entity, any confidential
information concerning the business or affairs of the VIALOG Group, or
concerning the customers, clients or employees of the VIALOG Group
("Confidential Information"). For purposes of this Agreement, Confidential
Information includes, but is not limited to, financial information or plans;
sales and marketing information or plans; business or strategic plans; salary,
bonus or other personnel information of any type; information concerning methods
of operation; proprietary systems or software; legal or regulatory information;
cost and pricing information or policies; information concerning new or
potential products or markets; models, practices, procedures, strategies or
related information; research and/or analysis; and information concerning new or
potential investors, customers, or clients. Confidential Information does not
include information already available to the public or to the trade through no
act of Mr. Savage, nor does it include salary, bonus or other personnel
information specific to Mr. Savage.
5
Mr. Savage further understands and agrees that all Confidential
Information, however or whenever produced, will be the VIALOG Group's sole
property. Upon the termination of Mr. Savage's employment, Mr. Savage will
promptly deliver to the Company all copies of all documents, equipment, property
or materials of any type in Mr. Savage's possession, custody or control, that
belong to the VIALOG Group, and/or that contain, in whole or in part, any
Confidential Information.
8. Inventions. During the Term of this Agreement, Mr. Savage will
promptly disclose to the Company or any successor or assign, and grant to the
Company and its successors and assigns (without any separate remuneration or
compensation other than that received by Mr. Savage in the course of
employment), Mr. Savage's entire right, title and interest in and to any and all
inventions, developments, discoveries, models, or any other intellectual
property of any type or nature whatsoever ("Intellectual Property") developed
during the Term of this Agreement, whether developed by Mr. Savage during or
after business hours, or alone or in connection with others, reasonably related
to the business of the Company, the Subsidiaries and their respective successors
or assigns, determined as such business is constituted at the time of the
invention. Mr. Savage agrees, at the Company's expense, to take all steps
necessary or proper to vest title to all such Intellectual Property in the
Company, its affiliates, successors, assigns, nominees or designees, and to
cooperate fully and assist the VIALOG Group in any litigation or other
proceedings involving any such Intellectual Property.
9. Restrictive Covenants. During the Restricted Period (defined below),
Mr. Savage will not, directly or indirectly, for Mr. Savage's own account or for
or on behalf of any other person or entity, whether as an officer, director,
employee, partner, principal, joint venturer, consultant, investor, shareholder,
independent contractor or otherwise:
(a) engage in any business in competition with the then business of
the VIALOG Group, or in competition with any business that the VIALOG
Group, to Mr. Savage's knowledge, actively was planning to enter at the
time of the termination of Mr. Savage's employment;
6
(b) solicit or accept business in competition with the VIALOG Group
from any (i) clients of the VIALOG Group who were clients of the VIALOG
Group at the time of the termination of Mr. Savage's employment, or who
were clients during the two (2) year period preceding such termination, or
(ii) any prospective clients of the VIALOG Group who, within two (2) years
prior to such termination, had been solicited directly by Mr. Savage or
where Mr. Savage supervised or participated in such solicitation
activities;
(c) hire or employ, or attempt to hire or employ, in any fashion
(whether as an employee, independent contractor or otherwise), any employee
of the VIALOG Group or independent contractor who renders or rendered
services solely to the VIALOG Group, or solicit or induce, or attempt to
solicit or induce, any of the VIALOG Group's employees, consultants,
clients, customers, vendors, suppliers, or independent contractors to
terminate their relationship with the VIALOG Group; or
(d) make any disparaging remarks about the VIALOG Group, its present
or former officers, directors, employees, affiliates, or agents, in either
their personal or official capacities, or about VIALOG Group's business or
reputation.
For purposes of this Agreement, the Restricted Period will be a period
beginning on the Effective Date and ending on the later of (i) two (2) years
after this Agreement terminates or (ii) the last day of the Severance Period.
Mr. Savage may own not more than 5 percent of any class of securities
registered pursuant to the Securities Exchange Act of 1934, as amended, of any
corporation engaged in competition with the VIALOG Group so long as Mr. Savage
does not otherwise (i) participate in the management or operation of any such
business, or (ii) violate any other provision of this Agreement.
Mr. Savage understands and agrees that, by virtue of his position with the
Company, he will have substantial access to and impact on the good will,
confidential information and other legitimate business interests of the VIALOG
Group, and therefore will be in a position to have a substantial adverse impact
on the VIALOG Group's business interests should Mr. Savage engage
7
in business in competition with the VIALOG Group. Mr. Savage acknowledges that
his adherence to the restrictive covenants set forth in this Section is an
important and substantial part of the consideration that the Company is
receiving under this Agreement, and agrees that the restrictive covenants in
this Section are enforceable in all respects. Mr. Savage consents to the entry
of injunctive relief to enforce such covenants, in addition to such other relief
to which the Company may be entitled by law, and he shall pay reasonable
attorney's fees incurred by the Company to enforce this Section of the
Agreement.
10. Specific Performance. Mr. Savage acknowledges that the VIALOG Group's
remedy at law for breach of Sections 7, 8 and 9 of this Agreement would be
inadequate, and agrees that, for breach of such provisions, the VIALOG Group is
entitled to injunctive relief and to enforce its rights by an action for
specific performance.
11. Enforcement of Agreement. If either party brings suit to enforce any
provision of this Agreement, the prevailing party shall be entitled to
reasonable attorney's fees.
12. Choice of Law. This Agreement, and all disputes arising under or
related to it, will be governed by the law of the Commonwealth of Massachusetts.
13. Choice of Forum. All disputes arising under or out of this Agreement
will be brought in courts of competent jurisdiction located within the
Commonwealth of Massachusetts.
14. Assignment. This Agreement, and the rights and obligations of Mr.
Savage and the Company, inures to the benefit of and is binding upon, Mr.
Savage, his heirs and representatives, and upon the Company, the Subsidiaries
and their respective successors and assigns. This Agreement may not be assigned
by Mr. Savage. This Agreement may be assigned to any member of the VIALOG Group.
15. Notices. All notices required by this Agreement will be in writing and
will be deemed to have been duly delivered when delivered in person or when
mailed by certified mail, return receipt requested, or nationally recognized
next day delivery service, as follows:
8
(a) If to Mr. Savage, to the address which appears below Mr. Savage's
signature to this Agreement, and
(b) If to the Company, at:
Vice President, Human Resources
35 New England Business Center, Suite 160
Andover, MA 01810
or to such other address as a party specifies in writing given in accordance
with this Section.
16. Severability. If any one or more of the provisions of this Agreement
is held to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions will not in any way be affected or
impaired. Moreover, if any one or more of the provisions contained in this
Agreement is held to be excessively broad as to duration, activity or subject,
such provision will be construed by limiting or reducing it so as to be
enforceable to the maximum extent compatible with applicable law.
17. Consultation with Counsel; No Representations. Mr. Savage acknowledges
that he has had a full and complete opportunity to consult with counsel of his
own choosing concerning the terms, enforceability and implications of this
Agreement, and that the Company has made no representations or warranties to Mr.
Savage concerning the terms, enforceability or implications of this Agreement
other than are as reflected in this Agreement.
18. Completeness of Agreement. This Agreement contains all the terms and
conditions agreed upon by the parties with reference to the subject matters
contained in this Agreement. No other agreement, oral or otherwise, will be
deemed to exist or to bind either of the parties to this Agreement. No
representative of any party to this Agreement had, or has, any authority to make
any representation or promise not contained in this Agreement, and each of the
parties to this Agreement acknowledges that such party has not executed this
Agreement in reliance upon any such representation or promise. This Agreement
cannot be modified, except by a written instrument signed by both parties.
9
EMPLOYEE VIALOG CORPORATION
/s/ Michael Savage By: /s/ Kim Mayasi
- ------------------------- -------------------------------------
Michael Savage Kim Mayasi
President and Chief Executive Officer
Address:
- -------------------------
- -------------------------
Date: Date:
------------------------- ------------------------------
10