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EXHIBIT 10.35
THE TESSERACT GROUP, INC.
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EMPLOYMENT AGREEMENT
with
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THIS AGREEMENT is made as of April 22, 1999, between THE TESSERACT GROUP,
INC., a Minnesota corporation (the "Company"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
("Employee").
RECITALS
The Company's current business activities include, among other things,
designing, developing, marketing and providing educational services.
Employee desires to be employed, and the Company desires to employ
Employee, in connection with its business in the position of Chief Financial
Officer and Vice President.
Accordingly, in consideration of the mutual promises and agreements
contained herein, the parties hereto agree as follows:
1. Nature of Employment. The Company shall employ Employee and Employee
shall serve the Company as Chief Financial Officer and Vice President
of the Company upon the terms and conditions contained herein.
Employee agrees to devote his full time and best efforts to the
business of the Company and the performance of his duties hereunder.
Such duties shall be consistent with the position of a senior officer
of the Company as may be determined by the Chief Executive Officer or
the Board of Directors from time to time. Employee shall be subject to
the supervision and direction of the Chief Executive Officer of the
Company, as to assignment and performance of his duties.
2. Term of Employment. The term of Employee's employment under this
Agreement shall commence on April 23, 1999, and shall continue upon
the terms and conditions contained herein, until terminated in
accordance with paragraph 3 thereof.
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3. Termination. This Agreement and Employee's employment hereunder may be
terminated in accordance with the following provisions:
(a) Disability. If Employee at any time is prevented from performing his
duties under this Agreement by reason of illness, injury or mental
incapacity for an aggregate of one hundred twenty (120) days in any
twelve consecutive months during the term of this Agreement, the
Company shall have the right to terminate this Agreement and
Employee's employment hereunder by giving Employee fourteen (14) days'
prior written notice of termination.
(b) Cause. The Company shall have the right to terminate this Agreement
and Employee's employment hereunder for cause by giving Employee
thirty (30) days' prior written notice of termination. "Cause" shall
include gross negligence, gross neglect of duties, gross
insubordination, Employee's unauthorized appropriation of the
Company's property, willful violation of any law applicable to the
conduct of the Company's business and affairs, the violation of which
could have a material adverse effect upon the business or financial
condition of the Company, and conviction of or plea of no contest to
any crime involving moral turpitude.
(c) Without Cause. The Company shall have the right to terminate this
Agreement and Employee's employment hereunder without cause at any
time by giving Employee thirty (30) days' prior written notice of
termination, provided, that the Company shall be obligated to make
severance payments to Employee (provided that Employee has not
violated the terms of his non-competition agreement set forth in
paragraph 9 hereof) in an amount equal to his then current monthly
compensation (exclusive of any benefits) for (6) six months. Extended
severance at the same rate will be provided on a month to month basis
until employee is re-employed or up to a maximum of an additional six
months, whichever comes first.
(d) By Employee. This Agreement may be terminated at any time by Employee
upon thirty (30) days' prior written notice to the Company.
(e) Return of Property. No later than the date of cessation of his
employment by the Company, Employee shall deliver to an executive
officer of the Company (or another Company employee designated by an
executive officer) all keys, credit cards, travel advances, business
plans and records (including all copies and extracts thereof) and
other property of the Company in Employee's possession, custody or
control.
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(f) Right to Receive Compensation and Benefits. Employee's right to
receive compensation and benefits pursuant to paragraphs 4 and 5 of
this Agreement (except for disability or other benefits that, by
their terms , arise or are operative after termination) shall cease
upon the effective date of termination under this paragraph 3.
4. Compensation.
(a) Base Salary. Employee shall receive a base salary of $14,583.33 per
month ($175,000.00 annualized), payable semi-monthly, on the 15th and
last day of each calendar month commencing with the first day of
employment, or such higher compensation as the Company in its
discretion may from time to time determine to be appropriate.
(b) Performance Bonus. Employee shall be eligible to receive annual
performance bonuses, to be determined by the Board of Directors, at a
target of 50% of base pay; up to 100% of base pay for "outstanding"
achievement. Employee's bonus for fiscal year 2000 (July 1, 1999
through June 30, 2000) is guaranteed and will be paid at the target of
50% base pay or higher if company results are above target.
(c) Signing Bonus. Employee will be paid a one-time signing bonus of
$25,000.00 payable in the first month of employment.
5. Employee Benefits.
(a) Benefit Plans and Programs. During the term of employment Employee
shall be entitled to participate in such benefit plans and programs as
the Company may make available from time to time. The details of the
availability and operation of benefit plans and programs are governed
by the plan or program documents. The Company reserves the right to
change or discontinue any benefit plan or program at any time upon
reasonable notice to employees.
(b) Options. In addition to any benefits received under subparagraph 5(a)
above and subject to the terms and conditions of a definitive stock
option agreement between Employee and the Company, Employee shall
receive options to purchase 100,000 shares of the Company's common
stock, par value $.01 per share, at the closing sale price of a common
share on the date immediately preceding the date of grant. The
Company's Board of Directors has approved the granting of these
options on April 16, 1999. The pricing of these options will be equal
to the closing price of TesseracT stock on April 22, 1999. Fifty
thousand (50,000) shares will be granted from the Company's 1988 Stock
Option Plan, as Amended and Restated, and will vest 1/3, 1/3, 1/3
respectively,
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after years one, two, and three of employment. The remaining fifty
thousand (50,000) shares will be granted from the Company's 1992
Long-Term Executive Stock Option Plan and will vest based upon
performance as agreed upon from year to year. Vesting of the 50,000
shares from the 1992 Plan may be accelerated by the Company's Board of
Directors based upon the achievement of individual and Company goals.
In addition, proposed with this agreement, you may be granted certain
stock awards based upon performance and achieving company targets.
6. Reimbursement of Expenses. The Company shall reimburse the Employee for all
reasonable and necessary business expenses incurred in the performance of
his duties hereunder.
7. Trade Secrets. Employee shall not, during the term of this Agreement or at
any time thereafter, divulge, furnish or make accessible to anyone other
than the directors, officers, employees and agents of the Company any
knowledge or information with respect to (a) processes, plans, software,
formulae, machinery, devices or material relating to the business,
products, or activities of the Company, its affiliates or subsidiaries
which is maintained by the Company as secret or confidential, or (b) any
development or research work of the Company, its affiliates or subsidiaries
which is maintained by the Company as secret or confidential, or (c) any
other aspect of the business, products, or activities of the Company, its
affiliates or subsidiaries which is maintained by the Company as secret or
confidential, or (d) any customer or student lists of the Company, its
affiliates or subsidiaries which are maintained by the Company as secret or
confidential. This restriction shall not apply to any information (a) that
becomes generally available to the public other than as a result of
unauthorized disclosure by Employee, (b) that was available to Employee on
a nonconfidential basis prior to the date hereof or is received hereafter
from a third party without restriction, or (c) that is disclosed pursuant
to a requirement of a government agency.
8. Intellectual Property. As one of the conditions to Employee's employment
hereunder, Employee shall do all in his power to promote the interests of
the Company and shall exercise his inventive faculties for the benefit of
the Company. If Employee shall discover or invent anything related to the
business of the Company, or its affiliates or subsidiaries, at the specific
request or instruction of the Company, the same shall be the exclusive
property of the Company. Employee shall forthwith disclose in writing such
discoveries or inventions to the Company but to no other person and shall
forthwith assign to the Company full and exclusive rights to any such
discovery or invention and to any trademark, copyright or patent to the
full end of the term of such trademark, copyright or patent. Employee, upon
request of the Company, shall
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forthwith execute all documents necessary or advisable in the opinion of
the Company to direct the issuance of trademarks, copyrights or patents to
the Company or to vest title in the Company to such inventions or
discoveries. The expense of securing any trademark, copyright or patent
shall be borne by the Company. The continuance of Employee in the Company's
employ for a definite period is not made obligatory upon either party
hereto as a condition hereof. Employee shall hold any secret process,
software, plans, formula, methods or applications developed for the Company
or its affiliates or subsidiaries but for which no trademark, copyright or
patent is issued, as trustee for the benefit of the Company. This paragraph
does not apply to an invention which was developed entirely on Employee's
own time and (a) which does not relate (i) directly to the business of the
Company or (ii) to the Company's actual or demonstrably anticipated
research or development, or (b) which does not result from any work
performed by the Employee for the Company.
9. Non-Competition. Employee covenants and agrees that, commencing on April
23, 1999, and thereafter during the term of this Agreement and without the
express consent of the Board of Directors of the Company, Employee will not
give advice or render services as an employee or consultant to, nor invest
or acquire any interest in, any corporation or any other business
organization, a substantial portion of the business of which is the same
as, related to, or complementary to the business of the Company or its
affiliates or subsidiaries, provided, however, that Employee may invest in
securities of any company which is listed on a national securities
exchange. Employee also covenants and agrees that for one (1) year
following termination of this Agreement or last severance payment whichever
comes later, Employee will not in any manner personally solicit or cause to
be solicited in competition with the Company or its affiliates or
subsidiaries any persons or companies who were or are employees, customers
or reasonably firm prospective customers of the Company or such affiliates
or subsidiaries during the term of this Agreement. Employee hereby agrees
to these restrictions in recognition that the imposition of such
restrictions may be essential to the success of the Company and the
livelihood of the Employee's associates.
10. Specific Enforcement. Employee acknowledges and agrees that a breach by him
of the provisions of this Agreement, including without limitation the
provisions of paragraphs 7, 8, and 9 hereof, may cause the Company
irreparable injury and damage which cannot be reasonably or adequately
compensated by damages at law. Employee, therefore, expressly agrees that
the Company shall be entitled to injunctive relief or other equitable
relief to prevent a breach of this Agreement or any part thereof, in
addition to any other remedies legally available to it.
11. Invalidity. In case any one or more of the provisions of this Agreement
should be invalid, illegal or unenforceable in any respect, the validity,
legality, and
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enforceability of the remaining provisions contained herein shall not
in any way be affected or impaired thereby.
12. Notices. Any notices required to be given to the Company hereunder
shall be deemed properly given if addressed to its registered office.
Any notices required to be given to Employee hereunder shall be deemed
properly given if addressed to:
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13. Governing Law. This Agreement shall be construed under and governed by
the laws of the State of Arizona.
14. Assignments. This Agreement shall not be assignable, in whole or in
part, by either party.
15. Amendments. This Agreement may be amended, terminated or superseded
only by an agreement in writing between the Company and the Employee.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date and year first above written.
THE TESSERACT GROUP, INC. EMPLOYEE
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Its Chief Executive Officer ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 22 APR 99