EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement"), dated as of October 15,
1998, is entered into between NET/TECH INTERNATIONAL, INC., a Delaware
Corporation (the "Company"), and XXXXX X. XXXXX ("Executive").
RECITALS
A. The Company wishes to employ Executive as Chairman of the Board,
President and Chief Executive Officer in accordance with the terms and
conditions set forth below.
B. The Executive wishes to be employed by the Company as Chairman of
the Board, President and Chief Executive Officer in accordance with the terms
and conditions set forth below.
THEREFORE, in consideration of the foregoing recitals and the
respective covenants and agreements of the parties contained in this document,
the Company and Executive agree as follows:
1. EMPLOYMENT DUTIES. During the term of the Agreement (as defined in
paragraph 8 below), the Company will employ Executive as its Chairman of the
Board, President and Chief Executive Officer. In such capacities, Executive will
be responsible for managing the day to day operations of the Company and will
report directly to the Board of Directors (the "Board") and perform all such
duties on a full-time basis as may be designated by the Board. The Executive's
election as a member of the Company's Board shall be determined by the
shareholders of the Company and the Company shall have no obligation to effect
such election.
It is understood and agreed that Executive shall devote such time as is
deemed necessary for the performance of his duties as Chairman of the Board,
President and Chief
Executive Officer. It is further understood that Executive is involved in other
business activities that would not interfere with his ability to perform his
duties as Chairman of the Board, President and Chief Executive Officer.
2. START DATE. October 15, 1998.
3. BASE SALARY. Base salary shall be at the rate of $125,000.00 per
calendar year payable in periodic installments in accordance with the Company's
regular payroll practices. The base salary shall be increased at the rate of
$25,000.00 per year. Such increase shall be effective each calendar year.
4. BONUS. Executive shall be eligible to receive a bonus as determined
by the Board.
5. EXPENSES. Executive shall be entitled to prompt reimbursement
(within 30 days of submission of request for reimbursement) for all reasonable,
ordinary and necessary travel, entertainment, and other expenses incurred by the
Executive during the employment period (in accordance with the policies and
procedures established for senior executive officers of the Company) in the
performance of his duties and responsibilities for the Company under this
Agreement; provided, that the Executive shall properly account for such expenses
in accordance with the policies and procedures of the Company.
6. EMPLOYEE BENEFITS. The Company shall provide Executive the following
fringe benefits:
a) fully paid basic health insurance and major medical insurance;
b) a dental plan;
c) vacation of four (4) weeks per calendar year;
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d) an Income Continuation and Disability Plan in an amount equal to at
least 70% but not greater than 80% of Executive's annual base salary
as shall be standard with the insurance company which provides such
coverage;
e) term life insurance equal to one and one-half (1 1/2) times
Executive's current annual base salary provided, however, if
Executive is rated by the life insurance company any increase in
premiums resultING from such rating shall be paid by Executive; and
f) officers' and directors' liability insurance.
7. STOCK OPTIONS. The Company, subject to shareholder approval, hereby
grants to Executive options to acquire 250,000 shares of the Company's Common
Stock at an exercise price of $.15 per share. The Company, subject to
shareholder approval, hereby grants Executive options to acquire 750,000 shares
of the Company's Common Stock at an exercise price of .15(cent) per share first
exercisable and conditioned upon the Company achieving revenue of 1 million
dollars or more from and after the date of grant (October 15, 1998) of the
option. The term of said options shall be five (5) years.
Upon any Change of Control of the Company as that term is defined
herein or, in the event Executive is terminated for any reason other than for
cause, voluntary termination, death or disability, any and all options held by
Executive to the extent they are not vested will become vested and any
conditions to the exercise of those options shall be deemed satisfied.
8. TERM OF EMPLOYMENT. The term of Executive's employment under this
Agreement (the "Term") will begin on October 15, 1998 and will continue, subject
to the termination provisions set forth in paragraph 9 below AND THE EXTENSION
PROVISIONS OF THIS PARAGRAPH 8, UNTIL OCTOBER 15, 2003. On April 15, 1999 and on
April 15 every year thereafter,
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the Term of Executive's employment shall be automatically extended BY ONE (1)
additional year, unless, on or before such date, the Company shall have
delivered to Executive or Executive shall have delivered to the Company written
notice that the Term of Executive's employment hereunder will not be extended.
The word "Term" as defined and used herein shall include any additional one (1)
year extension period unless otherwise indicated.
9. RESIGNATION - TERMINATION.
a) In order to assist Executive during any transition
period that may occur, if Executive is terminated for
any reason other than for cause, voluntary termination,
death or disability, Executive shall be entitled to a
severance payment ("the Severance") equal to the amount
of compensation which would otherwise be payable during
the remainder of the original term of this Agreement (as
such term may have been extended). The Severance shall
be payable on all regularly scheduled pay days following
Executive's employment termination.
b) Executive may resign upon ninety (90) days prior written
notice to the Company, in which event Executive shall be
paid Executive's full compensation until the effective
date of termination. Provided, however, if Executive
resigns after an Adverse Change, such resignation shall
constitute a termination of this Agreement without
cause.
c) As used herein, the following terms are defined;
(i) "Adverse Change" shall mean any of the following:
(A) Any material diminution of Executive's
positions, duties or responsibilities with the
Company.
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(B) A relocation of the Company's principal
executive office to a location outside of the
State of New Jersey without Executive's consent.
(C) The failure of the Company to comply in good
faith with the terms of this Agreement.
(D) A Change in Control OCCURS AND THE EXECUTIVE
REMAINS IN THE EMPLOY OF THE COMPANY FOR A
PERIOD OF ONE (1) YEAR FOLLOWING SUCH CHANGE IN
CONTROL. DURING SUCH ONE (1) YEAR PERIOD, THE
EXECUTIVE SHALL BE PAID HIS ENTIRE THEN CURRENT
COMPENSATION UNDER THIS AGREEMENT AND SUCH
COMPENSATION SHALL NOT BE CONSIDERED AS PART OF
EXECUTIVE'S SEVERANCE.
AN ADVERSE CHANGE SHALL NOT BE DEEMED TO HAVE
OCCURRED PURSUANT TO SUBSECTIONS (A), (B), (C) OR
(D) ABOVE UNLESS A DETERMINATION WITH RESPECT TO AN
ADVERSE CHANGE HAS BEEN MADE BY EXECUTIVE WITHIN ONE
(1) YEAR OF THE OCCURRENCE OF THE EVENTS SPECIFIED
IN THE FOREGOING SUBSECTIONS.
(ii)"CHANGE OF CONTROL" means the occurrence of any
one of the following events:
(A) (I) Any consolidation or merger of the Company
in which the Company respectively is not the
continuing or surviving corporation or which
contemplates that all or substantially all of
the business and/or assets of the Company shall
be controlled by another corporation; or (II) a
recapitalization including an exchange of the
Company's equity securities by the holders
thereof in which any "Person" (as such term is
used in Section 13(d) and 14(d)(2) of the
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Exchange Act), becomes the beneficial owner
(within the meaning of Rule 13d3 promulgated
under the Exchange Act) of securities of the
Company representing more than 30% of the
combined power of the then outstanding
securities ordinarily having the right to vote
in the election of directors;
(B) any sale, lease, exchange or transfer (in one
transaction or series of related transactions)
of all or substantially all of the assets of the
Company;
(C) approval by the shareholders of the Company of
any plan or proposal for the liquidation or
dissolution of the Company unless such plan or
proposal is abandoned within sixty (60) days
following such approval;
(D) any "Person" (as such term is used in Sections
13(d) and 14(d)(2) of the Exchange Act), becomes
the beneficial owner of securities of the
Company representing more than 30% of the
combined voting power of outstanding securities
ordinarily having the right to vote in the
election of directors; or
(E) more than 50% of the then existing directors of
the Company are changed at any election of the
Board.
d) DISABILITY.
(i) In the event that at any time during the
Employment Term, Executive, due to physical or
mental injury, illness, disability or
incapacity, including "disability" within the
meaning of the disability plan which the Company
then has in effect entitling Executive to
benefits
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thereunder, shall fail to perform satisfactorily
and continuously the duties assigned to him and
the services to be performed by him hereunder
for a period of three (3) consecutive months or
for a non-consecutive period of five (5) months
within any twelve (12) month period, the Company
may terminate Executive's Employment for
"Disability" upon not less than thirty (30) days
prior written notice (such notice referred to
herein as a "Termination Notice") to Executive.
(ii) During any period (the "Disability Period") that
Executive, due to physical or mental injury,
illness, disability or incapacity, including
"disability" within the meaning of the
disability plan which the Company then has in
effect entitling Executive to benefits
thereunder, fails to perform satisfactorily and
continuously the duties assigned to him and the
services to be performed by him thereunder, the
Company shall continue to pay to Executive the
Annual Salary (as in effect at such time), less
any compensation payable to Executive under the
applicable disability insurance plan of the
Company during such Disability Period.
Thereafter, if Executive's employment hereunder
is terminated pursuant to Section 9(d)(i), the
Company shall have no further obligations under
this Agreement after the effective date of
Executive's termination of employment other than
the compensation payable to Executive under the
applicable disability insurance plan of the
Company.
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e) DEATH. Executive's employment shall terminate
immediately upon the death of Executive. Upon
termination of Executive's employment pursuant to this
Section 9(e) as a result of his death, the Company shall
have no further obligations under this Agreement after
the date of Executive's death, other than the payment of
(i) the Annual Salary accrued and unpaid through the
date of Executive's death, and (ii) the bonus payment,
if any, payable pursuant to Section 4 for the final year
of the Company during which Executive's death shall have
occurred, it being understood that payments under this
Section 9(e) shall be made to Executive's heirs and
assigns.
f) FOR CAUSE TERMINATION. The Company may at any time
terminate Executive's employment hereunder and Executive
shall have no right to receive any further compensation
or severance upon the occurrence of any of the following
events:
(i) a conviction or a plea of NOLO CONTENDERE, a
guilty plea or confession by Executive to an act
of fraud, misappropriation or embezzlement with
respect to the Company, or to a felony; or
(ii) the commission of a fraudulent act or practice
by Executive affecting the Company.
10. CONFIDENTIALITY AND PROPRIETARY INFORMATION. Executive agrees to
disclose promptly and fully to the Company all inventions, improvements,
discoveries, or new ideas (collectively "Inventions") made or conceived by
Executive, either alone or with others which are along the existing or
contemplated lines of the Company's business and Executive will execute any
necessary papers or perform such other acts which may be necessary to evidence
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title to such inventions in the Company. Executive also acknowledges that any
such inventions are the property of the Company. Executive will not disclose,
publish, use or permit anyone else to disclose, publish or use any proprietary
or confidential information or trade secrets of the Company at any time during
or after Executive's employment with the Company unless required to do so by
law. Such information shall include, but not be limited to, product information,
information concerning the past, present or future business interests or plans
of the Company, customer/client lists, financial information and information
imparted to the Company by third parties which the Company protects from
disclosure to other parties. At the end of Executive's employment, Executive
will return to the Company any proprietary or confidential information in
Executive's possession.
11. NON-SOLICITATION OF COMPANY CUSTOMERS. For a period of one year
following the end of Executive's employment with the Company, Executive agrees
to not solicit or do business with directly or indirectly, any present or past
customer of the Company, or any prospective customer of the Company with whom
Executive had contact, in connection with the hand wash monitoring business
and/or any other business which resulted therefrom while Executive was employed
by the Company.
12. NON-SOLICITATION OF COMPANY EMPLOYEES. For a period of one year
following the end of Executive's employment with the Company, Executive agrees
to not participate directly or indirectly in the hiring or soliciting for
employment of any person employed by the Company or in any manner seek to induce
any such person to leave his or her employment with the Company with the
exception of Executive's personal secretary.
13. NON-COMPETE AGREEMENT. For a period of one year following the end
of Executive's employment with the Company, Executive will not, directly or
indirectly, create,
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sell, market, or otherwise provide any product related to the hand wash
monitoring business. The Executive will also not engage in any business activity
which is directly or indirectly in competition with the hand wash monitoring
business being developed, marketed, distributed, planned, sold or otherwise
provided by the Company.
14. REPRESENTATIONS. The Executive represents that he has read and
fully understands the terms of this Agreement and has signed it voluntarily.
Executive acknowledges that the Company may suffer irreparable harm if Executive
breaches this Agreement and may, in addition to other remedies, obtain an
injunction to prevent a breach or further breach of this Agreement. Executive
has been given an adequate opportunity to review this Agreement with the
attorney or other personal counsel of his choosing. Executive acknowledges that
this Agreement is the entire agreement between Executive and the Company and
that it supersedes any and all prior written or oral agreements,
representations, or any other documents or understandings.
15. GOVERNING LAW AND AMENDMENTS. This Agreement shall be interpreted
pursuant to the laws of the State of New Jersey. This Agreement may only be
changed by written agreement signed by the parties hereto and approved by the
Board. The invalidity or unenforceability of any provision of this Agreement
shall in no way affect the validity or enforceability of any other provision of
this Agreement.
16. BINDING NATURE OF AGREEMENT. This Agreement shall be binding upon
and shall inure to the benefit of each party's heirs, executors, personal
representatives and assigns.
17. NOTICES. For purposes of this Agreement, notices and other
communications provided for in this Agreement shall be in writing and shall be
delivered personally, sent via
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overnight mail or United States certified mail, return receipt requested,
postage prepaid, addressed as follows:
If to the Executive: Xxxxx X. Xxxxx
000 Xxxxx Xxxxxx Xxxxx #0
Xxxx Xxxxxx, Xxx Xxxxxx 00000
Tel: (000) 000-0000
If to the Company: Net/Tech International, Inc.
0 Xxxx Xxxxx Xxxxxx, Xxxxx 00
Xxx Xxxx, Xxx Xxxxxx 00000
or to such other address or the attention of such other person as the recipient
party has previously furnished to the other parties in writing in accordance
with this paragraph. Such notices or other communications shall be effective
upon delivery or, if earlier, three days after they have been mailed as provided
above.
18. WAIVER. Failure or delay on the part of either party hereto to
enforce any right, power, or privilege hereunder shall not be deemed to
constitute a waiver thereof. Additionally, a waiver by either party or a breach
of any promise hereof by the other party shall not operate as or be construed to
constitute a waiver of any subsequent breach or promise by such other party.
19. HEADINGS. The headings of the paragraphs contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of any provision of this Agreement.
20. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, none of which need contain the signature of more than one party
hereto, each of which shall be deemed to be an original, and all of which
together shall constitute a single agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first set forth above.
NET/TECH INTERNATIONAL, INC.
By:________________________
/s/ XXXXX X. XXXXX
---------------------------
Xxxxx X. Xxxxx
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