EMPLOYMENT AND NON-COMPETITION AGREEMENT
THIS AGREEMENT is made and entered into as of the 14th day of June, 2000,
by and between InteliData Technologies Corporation, a Delaware corporation (the
"Company"), and Michael E. Jennings (the "Executive").
RECITALS
WHEREAS, the Board of Directors of the Company expects that the Executive
will make substantial
contributions to the growth and prospects of the Company; and
WHEREAS, the Board of Directors desires to obtain for the Company the
services of the Executive, and the Executive desires to become employed by the
Company, all on the terms and subject to the conditions set forth herein.
AGREEMENTS
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties agree as follows:
1. EMPLOYMENT OF EXECUTIVE.
1.1. Duties and Status. The Company hereby engages and employs the
Executive for the Employment Period, as defined in Section 3.1 herein, and the
Executive accepts such employment, on the terms and subject to the conditions
set forth in this Agreement. During the Employment Period, the Executive shall
faithfully exercise such authority and perform such duties on behalf of the
Company as are normally associated with his title and position as the Vice
President, Product Management, or such other duties or position as the Chief
Executive Officer of the Company shall determine.
1.2. Time and Effort. During the Employment Period, the Executive shall
devote his full business time and attention to his duties on behalf of the
Company. Notwithstanding the foregoing, the Executive may participate fully in
social, charitable, civic activities and such other personal affairs of the
Executive as do not interfere with performance of his duties hereunder. The
Executive may serve on the boards of directors of other companies, provided that
such activities do not unreasonably interfere with the performance of and do not
involve a conflict of interest with his duties or responsibilities hereunder.
Each board of directors upon which the Executive serves as of the date hereof is
deemed to have been approved by the Company;
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provided that each such directorship shall be subject to further review by the
Company upon a material change in the business of the subject company.
2. COMPENSATION AND BENEFITS.
2.1. Annual Base Salary. The Company shall pay the Executive an annual
base salary as determined from time to time by the Chief Executive Officer of
the Company or the Board of Directors of the Company or designated committee
thereof ("Annual Base Salary"), which shall not be less than $200,000 per year.
The Executive's Annual Base Salary shall be payable in equal installments in
accordance with the practice of the Company in effect from time to time for the
payment of salaries to officers of the Company but in no event less frequently
than semi-monthly. The Executive's performance shall be reviewed at least
annually and he shall be entitled, but not guaranteed, to receive such raises as
may from time to time be approved by the Chief Executive Officer or the Board of
Directors or designated committee thereof.
2.2. Expenses. The Company shall pay or reimburse the Executive for all
reasonable expenses actually paid or incurred by the Executive during the
Employment Period in the performance of the Executive's duties under this
Agreement in accordance with the Company's employee business expense
reimbursement policies in effect from time to time, but in no event less
frequently then monthly.
2.3. Bonuses, Etc. The Executive shall be entitled to receive such annual
bonus compensation in respect of each fiscal year of the Company (the "Bonus"),
and to participate in such bonus, profit-sharing, stock option, incentive, and
performance award plans and programs, if any, as may from time to time be
determined by the Board of Directors or designated committee thereof.
2.4. Benefits. The Executive shall be entitled to receive such employee
benefits including, without limitation, any and all pension, disability, group
life, sickness, accident and health insurance programs, as the Company may
provide from time to time to its salaried employees generally, and such other
benefits as the Compensation Committee of the Board of Directors may from time
to time establish for the Company's executives.
2.5. Vacation. The Executive shall be entitled to paid vacation of not
less than four weeks per calendar year.
2.6. Transportation and Housing. The Executive shall spend the majority of
his time working out of the Company's headquarters office in Virginia. In lieu
of any relocation expenses for a move to Virginia, the Company shall reimburse
Executive for weekly travel to and from his residence in Missouri and for his
reasonable temporary lodging expenses in Virginia, with such reimbursements
"grossed-up" for tax purposes.
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3. TERM AND TERMINATION.
3.1. Employment Period. Subject to Section 3.2 hereof, the Executive's
"Employment Period" shall commence on the date of this Agreement and shall
terminate on the earlier of: (i)the close of business on June 30, 2002,
provided however, such period shall automatically renew for subsequent 12-month
periods unless either party provides written notice of termination to the other
party at least 90 days prior to the date of such termination then in effect; or
(ii)the death of the Executive.
3.2. Termination of Employment. Each party shall have the right to
terminate the Executive's employment hereunder before the Employment Period
expires to the extent, and only to the extent, permitted by this Section.
(a) By the Company for Cause. The Company shall have the right to
terminate the Executive's employment at any time upon delivery of written notice
of termination for Cause(as defined below) to the Executive (which notice shall
specify in reasonable detail the basis upon which such termination is made) if
the Chief Executive Officer or the Board of Directors determines that the
Executive: (i)has stolen or embezzled Company funds or property, (ii)has been
convicted of a felony or entered a plea of "nolo contendre" which in the
reasonable opinion of the Chief Executive Officer or the Board brings the
Executive into disrepute or is likely to cause material harm to the Company's
business, customer or supplier relations, financial condition or prospects,
(iii) has, after not less than ten (10) days prior written notice from the Chief
Executive Officer of the Company or the Board of Directors, willfully failed to
perform or persistently neglected (other than by reason of illness or temporary
disability, regardless of whether such temporary disability is or becomes Total
Disability, or by reason of approved vacation or leave of absence) any duties or
responsibilities assigned to the Executive or normally associated with the
Executive's position to the detriment of the Company, its reputation or its
prospects, (iv) has demonstrated insubordination or the refusal to carry out
directives, or (v) has willfully violated or breached any provision of this
Agreement or any law or regulation to the material detriment of the Company, its
reputation or its business (collectively, "Cause"). In the event that the
Executive's employment is terminated for Cause, the Executive shall be entitled
to receive only the payments referred to in Section 3.3(d) hereof.
(b) By the Company Upon Total Disability. The Company shall have the
right to terminate the Executive's employment on fourteen (14) days' prior
written notice to the Executive if the Board of Directors or Chief Executive
Officer of the Company determines that the Executive is unable to perform his
duties by reason of Total Disability, but any termination of employment pursuant
to this subsection (b) shall obligate the Company to make the payments referred
to in Section 3.3(b) hereof. As used herein, "Total Disability" shall mean the
inability of the Executive due to physical or mental illness or injury to
perform his duties hereunder for any period of 180 consecutive days or 180 days
in the aggregate in any 365-day period.
(c) By the Company Other Than for Cause or Upon Death or Total
Disability. The Company shall have the right to terminate the Executive's
employment, other than for Cause or upon the Executive's death or Total
Disability in the Company's sole discretion,
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but any termination of employment pursuant to this subsection (c) shall obligate
the Company to make the payments referred to in Section 3.3(c) hereof.
(d) By the Executive. The Executive shall have the right to terminate
his employment hereunder (i)upon the failure of the Company to make any required
payment to the Executive hereunder, which failure continues unremedied for ten
(10) days after the Executive has given the Chief Executive Officer or the Board
of Directors written notice of such failure, or any material failure by the
Company to comply with any of the provisions of this Agreement (other than a
failure to make a required payment), which failure continues unremedied for
fourteen (14) days after the Executive has given the Board of Directors written
notice of such failure, (ii) upon a Change of Control and (a) a substantial
diminution of the Executive's duties or responsibilities compared to the
Executive's duties or responsibilities immediately prior to the change of
control, or (b) a relocation of more than 50 miles from the Company's primary
place of business at 11600 Sunrise Valley Drive, Suite 100, Reston, VA 20191 or
(iii) otherwise after sixty (60) days' prior written notice to the Company. In
the event that the Executive elects to terminate his employment pursuant to
subsection (d)(iii), the Executive shall be entitled to receive only the
payments referred to in Sectionn 3.3(d) hereof.In the event the Executive elects
to terminate his employment pursuant to subsection (d)(i) or (d)(ii), the
Executive shall be entitled to receive the benefits referred to in
Section 3.3(c) hereof.
A "Change in Control" shall be deemed to have occurred if the conditions
set forth in any one of the following paragraphs shall have been satisfied:
(i) Any person, or any persons acting together which would constitute a
"group" for purposes of section 13(d) of the Securities Exchange Act of 1934,
together with any affiliate thereof shall beneficially own (as defined in Rule
13d-3 under the Securities Exchange Act of 1934, as amended) at least 50% of the
total voting power of all classes of capital stock of the Company entitled to
vote generally in the election of directors of the Company; or
(ii) Any event or series of events that results in the Directors on the
Board of Directors, who were Directors prior to the event or series of events,
to cease to constitute a majority of the Board of Directors of any parent of or
successor to the Company; or
(iii) The merger, consolidation or reorganization (a) in which the Company
is the continuing or surviving corporation, (b) in which the Company is not the
continuing or surviving corporation, or (c) pursuant to which the Company's
common stock would be converted into cash, securities or other property, except
in the case of either (a), (b), or (c), a consolidation or merger of the company
in which the holders of the Common Stock immediately prior to the consolidation
or merger have, directly or indirectly, at least a majority of the total voting
power of all classes of capital stock entitled to vote generally in the election
of directors of the continuing or surviving corporation immediately after such
consolidation or merger in substantially the same proportion as their ownership
of Common Stock immediately before such transaction ; or
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(iv) The consummation of a tender or exchange offer for shares of the
Company's Common Stock (other than tender or exchange offers made by the Company
or Company-sponsored employee benefit plans); or
(v) The sale or transfer of all or substantially all of the assets of the
Company to an unaffiliated corporation, person or entity; or
(vi) The Board of Directors of InteliData approves a plan of complete or
partial liquidation of InteliData or an agreement for the sale or disposition by
InteliData of all or substantially all of its assets.
For purposes of this Section, "Person" shall have the meaning given in
Section (3)(a)(9) of the Exchange Act, as modified and used in Sections 13(d)
and 14(d) thereof; however, a Person shall not include (i) the Company or any of
its subsidiaries or affiliates, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any of its
subsidiaries, (iii)an underwriter temporarily holding securities pursuant to an
offering of such securities, or (iv) a corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company.
3.3. Compensation and Benefits Following Termination. Except as
specifically provided in this Section, any and all obligations of the Company to
make payments to the Executive under this Agreement shall cease as of the date
the Employment Period expires under Section 3.1 or as of the date the
Executive's employment is terminated under Section 3.2, as the case may be. The
Executive shall be entitled to receive only the following compensation and
benefits following the termination of his employment hereunder:
(a) Upon Death. In the event that the Employment Period terminates
pursuant to Section 3.1(ii) on account of the death of the Executive (i) the
Company shall pay to the Executive's surviving spouse or, if none, his estate, a
lump-sum amount equal to the sum of the Executive's earned and unpaid salary
through the date of his death, any Bonus agreed to by the Company but not yet
paid to the Executive, additional salary in lieu of Executive's accrued and
unused vacation, any unreimbursed business and entertainment expenses in
accordance with the Company's policies, and any unreimbursed employee benefit
expenses that are reimbursable in accordance with the Company's employee benefit
plans (collectively, the "Standard Termination Payments"), and (ii) death
benefits, if any, under the Company's employee benefit plans shall be paid to
the Executive's beneficiaries as properly designated in writing by the
Executive.
(b) Upon Termination for Total Disability. In the event that the
Company elects to terminate the employment of the Executive pursuant to Section
3.2(b) because of his Total Disability, (i) the Company shall pay to the
Executive a lump-sum amount equal to the Standard Termination Payment, and (ii)
the Executive shall be entitled to such disability and other employee benefits
as may be provided under the terms of the Company's employee benefit plans.
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(c) Upon Termination Other Than for Cause or Upon Death or Total
Disability. In the event that the Company elects to terminate the employment of
the Executive pursuant to Section 3.2(c) or the Executive terminates under
Section 3.2(d)(i) or 3.2(d)(ii), the Company shall pay to the Executive within
30 (thirty) days of such termination a lump-sum amount equal to (i) the Standard
Termination Payment; (ii) any bonus earned but not yet paid under any bonus plan
then in effect at the time of termination; (iii) 100% of the Annual Base Salary;
and (iv) any and all options granted to the Executive (the "Options") shall be
amended to provide for continued vesting for twelve (12) months and to be
exercisable for the longer of (a) twelve (12) months after the Termination Date,
or (b) the period for exercise upon Termination as provided in the Option
Agreement. Provided, however, no Option shall be extended beyond any Option
expiration date or period established by the Option Plan authorizing such Option
grant. The Company shall also be obligated to provide continued coverage at no
cost to Executive under the Company's medical, dental, life insurance and total
disability benefit plans or arrangements with respect to the Executive for a
period of six (6) months following the date of any termination of employment
pursuant to Section 3.2(c). From the date of such notice of Termination other
than for cause or upon death or Total Disability through the Termination Date,
the Executive shall continue to perform the normal duties of his employment
hereunder, and shall be entitled to receive when due all compensation and
benefits applicable to the Executive hereunder. The Executive shall have no
obligation whatsoever to mitigate any damages, costs or expenses suffered or
incurred by the Company with respect to severance obligations set forth in this
Section 3.3(c), and no such severance payments received or receivable by the
Executive shall be subject to any reduction, offset, rebate or repayment as a
result of any subsequent employment or other business activity by the Executive.
In addition, for termination pursuant to Section 3.2(c) subsequent to a Change
of Control or 3.2(d)(ii), any and all Options granted but not vested to the
Executive shall become immediately vested and nonforfeitable and the Executive
shall have the life of the Option to exercise such Options.
(d) For Cause or By the Executive. In the event that the Company
terminates the employment of the Executive pursuant to Section 3.2(a) for Cause
or the Executive terminate his employment pursuant to Section 3.2(d)(iii), the
Executive shall be entitled to receive an amount equal to previously earned but
unpaid salary or bonuses through the effective date of such termination, as well
as salary in lieu of accrued and unused vacation, entertainment expenses in
accordance with Company policies, and reimbursable employee plan benefits.
3.4. Survival of Non-Competition and Confidentiality Agreements. Any
provision of this Agreement to the contrary notwithstanding, if the employment
of the Executive hereunder is terminated for any reason, the provisions and
covenants of Sections 4 and 5 hereof shall nevertheless remain in full force and
effect in accordance with their respective terms.
4. NON-COMPETITION, NON-HIRE, AND NON-DISPARAGEMENT.
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4.1. Scope.
(a) The Executive covenants and agrees that during the term of
this Agreement and for so long as he remains an employee of the Company and
thereafter for a period of 12 months following termination of this Agreement
(the "Non-Competition Period"), he will not, nor will he permit any person,
firm, corporation, partnership or other entity that directly or indirectly
controls, is controlled by or is under common control with the Executive
(collectively, "Affiliate") to, directly or indirectly:
(i) solicit for employment any employee of the Company (and it shall be
presumed to be a violation of this covenant if a subsequent employer of
Executive hires an employee of the Company unless Executive can demonstrate to
Company's reasonable satisfaction that the Executive had no knowledge of or
participation in the solicitation and hiring of the employee);
(ii) solicit the business of any customer of the Company with respect to
businesses of the type referred to in subsection 4.1(a)(iii) hereof;
(iii) engage in any business of the type conducted as of the date hereof by
the Company, which shall be limited to home banking software and consumer
telecommunications equipment;
(iv) engage in any business substantially similar to that of the Company
in a geographic area within fifty (50) miles of the Company headquarters at
which the Executive was previously located;
(v) make any direct or indirect investment in any person, firm,
corporation, partnership or other entity that engages or proposes to engage in
the business of the Company; or
(vi) make any comments, whether written or unwritten, which disparage the
services and products provided by the Company or which are critical of the
performance or professionalism of the officers, employees, and Boards of
Directors of the Company and any affiliated companies.
provided however, that this Section shall not be construed to prohibit the
Executive from owning less than an aggregate of 5% of any class of capital stock
of any corporation that is traded on a national securities exchange or
inter-dealer quotation system.
(b) A breach of this provision will irreparably and continually
damage the Company in an amount which may be difficult to quantify. Executive
therefore agrees that in the event he breaches any of the provisions of Section
4.1(a), he will pay the Company the sum of $50,000 in liquidated damages for
each occasion of breach. Executive acknowledges that this
<PAGE>
amount is a reasonable approximation of the damages the Company is likely to
incur due to his breach.
4.2. Enforcement and Construction. If in any judicial proceeding a court
shall refuse to enforce as written the covenant set forth in Section 4.1, then
such covenant shall be limited and restricted in scope and duration to the
extent necessary to make such covenant, as so limited and restricted,
enforceable. Notwithstanding the foregoing, it is the intent and agreement of
the parties that Section 4.1 be given the maximum force, effect, and application
permissible under applicable law.
4.3. Limitations. The restrictions set forth above shall immediately
terminate and shall be of no further force or effect in the event of a default
by the Company in the payment of compensation or benefits to which the Executive
is entitled hereunder, which default is not cured within ten (10) days after
written notice thereof to the Company.
5. CONFIDENTIALITY.
(a) Except as specifically authorized by the Company in writing, from
the date hereof and continuing forever, the Executive agrees that he will not,
directly or indirectly, (i) disclose any Confidential Information (as defined
below) to any person or entity, or otherwise permit any person or entity to
obtain or disclose any Confidential Information, or (ii) use any Confidential
Information for the Executive's benefit, whether directly or on behalf of any
person or entity. In the event that the Executive is requested or required (by
oral question or request for information or documents in any legal proceeding,
interrogatory, subpoena, civil investigation demand or similar process) to
disclose any Confidential Information, he will notify the Company within a
reasonable period of time of the request or requirement so that the Company may
seek an appropriate protective order or waive compliance with the provisions of
this Section 5. If, in the absence of a protective order or the receipt of a
waiver hereunder, the Executive, on the advice of counsel, is compelled to
disclose any Confidential Information to any tribunal or else stand liable for
contempt, the Executive shall use his reasonable efforts to obtain, at the
request of the Company, an order or other assurance that confidential treatment
will be accorded to such portion of the Confidential Information required to be
disclosed as the Company shall designate.
(b) For purposes hereof, the term "Confidential Information" means
(i)information concerning trade secrets of the Company; (ii) information
concerning existing or contemplated products, services, technology, designs,
processes and research or product developments of the Company; (iii) information
concerning business plans, sales or marketing methods, methods of doing
business, customer lists, customer usages and/or requirements, or supplier
information of the Company; and (iv) any other confidential information which
the Company may reasonably have the right to protect by patent, copyright or by
keeping it secret or confidential. The term "Confidential Information" will not,
however, include information which (a) at the time of disclosure or thereafter
is generally available to and known by the public (other than as a result of a
disclosure directly or indirectly by the Executive in violation of this
Agreement), (b) at the time of disclosure was available on a nonconfidential
basis from a source other than the Company, or (c)was known by the Executive
prior to receiving the Confidential Information from the
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Company or has been independently acquired or developed by the Executive without
violating any of the Executive's respective obligations under this Agreement.
6. MISCELLANEOUS.
6.1. Applicable Law and Venue. This Agreement shall be construed under and
in accordance with the laws of the Commonwealth of Virginia (exclusive of any
provision that would result in the application of the laws of any other state or
jurisdiction). Any dispute arising out of this Agreement, if litigated, shall be
resolved by the courts of the Commonwealth of Virginia located in Fairfax County
or in the Federal Court for the Eastern District of Virginia, and the parties
consent to the jurisdiction of such courts.
6.2. Headings. The headings and captions set forth herein are for
convenience of reference only and shall not affect the construction or
interpretation hereof.
6.3. Notices. Any notice or other communication required, permitted, or
desirable hereunder shall be hand delivered (including delivery by a commercial
courier service) or sent by United States registered or certified mail, postage
prepaid, addressed as follows:
To the Executive: Michael E. Jennings
1346 Rusticview Drive
St. Louis, MO 63011
To the Company InteliData Technologies Corporation
or the Board of 11600 Sunrise Valley Drive, Suite 100
Directors: Reston, VA 20191
Attention: Chief Executive Officer
or such other addresses as shall be furnished in writing by the parties. Any
such notice or communication shall be deemed to have been given as of the date
so delivered in person or three business days after so mailed.
6.4. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of successors and permitted assigns of the parties. This
Agreement may not be assigned, nor may performance of any duty hereunder be
delegated, by either party without the prior written consent of the other.
Provided, however, the Company may assign this Agreement to an Affiliate.
6.5. Entire Agreement; Amendments. This Agreement sets forth the entire
agreement and understanding of the parties with respect to the subject matter
hereof, and there are no other contemporaneous written or oral agreements,
undertakings, promises, warranties, or covenants not specifically referred to or
contained herein. This Agreement specifically supersedes any and all prior
agreements and understandings of the parties with respect to the subject matter
hereof, all of which prior agreements and understands (if any) are hereby
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terminated and of no further force and effect. This Agreement may be amended,
modified, or terminated only by a written instrument signed by the parties
hereto.
6.6. Execution of Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same Agreement. This Agreement may be
delivered by facsimile transmission of an originally executed copy to be
followed by immediate delivery of the original of such executed copy.
6.7. Severability. If any provision, clause or part of this Agreement, or
the applications thereof under certain circumstances, is held invalid or
unenforceable for any reason, the remainder of this Agreement, or the
application of such provision, clause or part under other circumstances, shall
not be affected thereby.
6.8. Incorporation of Recitals. The Recitals to this Agreement are an
integral part of, and by this reference are hereby incorporated into, this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
INTELIDATA TECHNOLOGIES CORPORATION:
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Alfred S. Dominick, Jr.
President and Chief Executive Officer
EXECUTIVE:
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Michael E. Jennings
