Exhibit 10.5
EMPLOYMENT, SEVERANCE AND NON-SOLICITATION AGREEMENT
This Employment, Severance and
Non-Solicitation Agreement (this “ Agreement ”)
is entered into between Private Business, Inc., a Tennessee
corporation (“ Company ”), and David Peterson,
an individual resident of Georgia (“ Employee
”), effective as of January
, 2006 (the “
Effective Date ”).
Company has purchased a business for
which Employee served as an executive and has offered employment to
Employee in connection with such acquisition. As part of such
acquisition, Company has agreed to provide employee with a
severance agreement, and employee has agreed to enter into a
non-solicitation agreement. Now, therefore, for and in
consideration of the foregoing and other consideration exchanged as
part of the acquisition, the mutual covenants contained herein, and
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
ARTICLE I. TERMS OF EMPLOYMENT
Section 1.01 Employment.
Company shall employ Employee, and Employee shall serve Company, in
the capacity of Senior Vice President of the Goldleaf division of
Company upon the terms and conditions set forth herein. Employee
shall have such authority, responsibilities and duties as are
consistent with his title, subject to the oversight by
Company’s CEO (the “ CEO ”) and
Company’s Board of Directors (the “ Board
”). Employee shall devote his full business time, attention,
skill and efforts to the performance of his duties hereunder,
except during periods of illness or periods of vacation and leaves
of absence consistent with Company’s company policies.
Notwithstanding the foregoing, Employee may devote reasonable
periods of time to serve as a director or advisor to other
organizations, to perform charitable and other community
activities, and to manage his personal investments; provided
, however , that such activities do not materially interfere
with the performance of his duties hereunder and are not in
conflict or competitive with, or adverse to, the interests of
Company, as determined by the CEO or the Board.
Section 1.02 Term. This
Agreement shall be for a term of six months (the “
Term ”), and shall be extended one day for each day it
is in effect, such that the Term shall always remain six
months.
Section 1.03 Compensation and
Benefits.
(a) Company shall pay employee a
signing bonus of $171,500 upon the execution of this
Agreement.
(b) Company shall pay Employee a
base salary at a rate of $200,000 per annum in accordance with the
normal salary payment practices of Company. The CEO (or the Board
or the compensation committee thereof if the Board or such
committee so chooses) shall review and may increase, but shall not
decrease, Employee’s base salary at least annually.
(c) Employee shall participate
in Company’s executive bonus plan, which shall provide
Employee with an opportunity to earn a bonus dependent on Employee
and Company meeting individual, division and corporate performance
goals as determined by the CEO (or the Board or the compensation
committee thereof if the Board or such committee so chooses).
(d) Employee shall be entitled
to participate in all retirement, life and health insurance,
disability and other similar benefit plans or programs of Company
now or hereafter applicable to Employee or applicable generally to
employees’ of Company, provided that Employee shall not be
required to pay the premiums for such benefits that Company
requires other emplpyees to pay (although Employee acknowledges
that the amount of such premiums paid by Purchaser on
Employee’s behalf shall be considered compensation to
Employee for tax purposes); provided, however, that
during any period during the Term that Employee is disabled, and
during the 180-day period of physical or mental infirmity leading
up to Employee’s disability, the amount of Employee’s
compensation provided under this Section 1.03 shall be reduced
by the sum of the amounts, if any, paid to Employee for the same
period under any disability benefit or pension plan of Company or
any of its subsidiaries, For purposes of this Section 1.03(d),
Employee shall be deemed “ disabled ” upon the
earlier of: (i) a written determination by a duly licensed
physician or psychologist following a personal examination of
Employee that Employee is not capable of performing the normal
duties attendant to his position with or without reasonable
accommodation and that such condition appears to be permanent or of
indefinite duration; (ii) a determination by a court of
competent jurisdiction that Employee is not capable of managing his
or her own person or property and that such condition appears to be
permanent or of indefinite duration; (iii) a determination by
any duly licensed insurance company maintaining a policy of
disability insurance covering Employee that Employee is disabled to
the point that benefits are payable pursuant to the terms of such
policy; or (iv) Employee has been unable to perform the normal
duties attendant to bis position with or without reasonable
accommodation for a continuous period of 180 days.
(e) Employee shall be eligible
for the grant of stock options, restricted stock and other awards
under Company’s equity incentive plan. On January 23,
2005, as an inducement to Employee to enter into this Agreement,
Company granted Employee options to purchase 250,000 shares of
Company’s common stock at an exercise price of $1.33 per
share, the closing price of Company’s common stock on the
Nasdaq Small Cap Market on the previous trading day.
ARTICLE II. COVENANTS OF EMPLOYEE
Section 2.01 Covenant Not to
Solicit Employees or Customers . Employee covenants and agrees
that, for and during the period of his employment with Company and
for a period of two years thereafter:
(a) Employee shall not
individually or through or with any other person or affiliate of
Employee, solicit for employment or hire any individual who was
employed by Company on the Effective Date or the date of
termination of employment of Employee, without the prior written
consent of Company; or
(b) solicit any Person that was an
active customer of Company on the Effective Date or the date of
termination of employment of Employee, for the purpose of
contracting with such Person for the goods and services which
comprise the Subject Business.
Section 2.02 Covenant To
Maintain Confidentiality .
(a) Employee shall not divulge
or appropriate for his own use any Trade Secrets (as defined below)
of Company, from and after the Effective Date of this Agreement,
for as long as the information remains a Trade Secret, and shall
not make any unauthorized disclosure of Confidential Information
(as defined below) about Company for and during the period of his
employment with Company and for a period of two years thereafter.
“ Trade Secrets ” shall mean any information of
Company (including but not limited to technical or non-technical
data, a formula, a pattern, a compilation, a program, a device, a
method, a technique, a drawing, a process, financial data,
financial plans, product plans, or a list of actual or potential
customers or suppliers provided that such list is not available to
the general public) which derives economic value, actual or
potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain
economic value from its disclosure or use, and is the subject of
efforts that are reasonable under the circumstances to maintain its
secrecy, or such other definition as may be provided under
applicable law. “ Confidential Information ”
means any valuable, nonpublic, competitively sensitive information
(other than Trade Secrets) concerning Company, its business, or its
financial position, results of operations, annual and long range
business plans, product or service plans, marketing plans and
methods, training, educational and administrative manuals, client
lists or employee lists obtained by Employee from Company during
the period of his employment; provided , however ,
that Confidential Information shall not include information to the
extent that it is or becomes publicly known or generally utilized
(other than because of the unauthorized disclosure of such
information by Employee) by others engaged in the same business or
activities in which Company utilized, developed or otherwise
acquired such information.
(b) Disclosure of Trade Secrets
or Confidential Information shall not be precluded, if such
disclosure is:
(i) in response to a valid order of a
court or other governmental body or otherwise required by law;
provided , however , that Employee shall first have
given notice to Company and made a reasonable effort to obtain a
protective order requiring that the information and/or documents so
disclosed be used only for the purposes for which the order was
issued; or
(ii) necessary to establish rights
under this Agreement (but only to the extent necessary to do
so).
(c) Promptly following the
termination of Employee’s employment with Company, Employee
shall promptly transfer to Company or destroy (as directed by
Company) all tangible information containing Trade Secrets or
Confidential Information in his possession or within his control
which is not already in the possession or control of Company, and
shall promptly certify in writing to Company such transfer or
destruction.
(d) The obligations set forth in
this Section 2.03 are in addition to and not in lieu of any
confidentiality obligations in the Stock Purchase Agreement dated
the date of this Agreement by and among Company and the
stockholders of Goldleaf Technologies, Inc., including Employee
(the “ Stock Purchase Agreement ”).
3
Section 2.03 Survival .
The covenants of Employee contained in this Article II shall
survive the termination of this Agreement and the termination of
Employee’s employment with Company, and shall remain
enforceable in accordance with their terms as set forth
herein.
ARTICLE III. TERMINATION
Section 3.01 Termination by
Company . This Agreement, and Employee’s employment with
Company, shall automatically terminate upon his death, and may
otherwise be terminated by Company by giving notice during the Term
upon the occurrence of one or more of the following events:
(a) Employee’s disability
(as defined in Section 1.03(d) hereof), provided that such
disability arises from a condition which appears to be permanent or
of indefinite duration;
(b) without Cause (as defined in
the following paragraph), effectively immediately upon delivery of
written notice to Employee following a determination by the Board
to terminate Employee’s employment, provided that
(i) the Board may elect to specify in such written notice that
the effective date of termination shall be a date up to and
including the 90 th day following
the delivery of such written notice to Employee; and
(ii) Employee shall be entitled to payment as provided in
Section 3.03 below as severance pay following any such
termination without Cause, unless and until Employee breaches any
of the covenants set forth in Article II hereof; or
(c) for “ Cause
” which for purposes of this Agreement shall mean that
Employee shall have:
(i) committed an act of fraud,
embezzlement or theft in connection with bis duties or in the
course of Ms employment with Company;
(ii) inflicted intentional damage to
any material asset of Company;
(iii) intentionally committed any act
resulting in liability in tort, under employment laws, or for
breach of contract by Company pursuant to which Company has
actually paid damages to any Person in an amount in excess of
$20,000;
(iv) materially failed o
| 
