EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is dated as of this 25th day of March,
1998, by and between Unidigital Inc., a Delaware corporation, with an office for
purposes of this Agreement at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000
(hereinafter the "Company" or "Employer"), and Xxxxxxx Xxxxxx with an address at
0 Xxxxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx 00000 (hereinafter the "Employee").
WITNESSETH:
WHEREAS:
(a) Company wishes to engage the services of Employee to render
services for and on its behalf in accordance with the following terms,
conditions and provisions; and
(b) Employee wishes to perform such services for and on behalf of
the Company, in accordance with the following terms, conditions and provisions.
NOW, THEREFORE, in consideration of the mutual covenants and
conditions herein contained the parties hereto intending to be legally bound
hereby agree as follows:
1. EMPLOYMENT. Company hereby employs Employee and Employee accepts
such employment and shall perform his duties and the responsibilities provided
for herein in accordance with the terms and conditions of this Agreement
principally in New York City, New York.
2. EMPLOYMENT STATUS. Employee shall at all times be Company's
employee subject to the terms and conditions of this Agreement.
3. TERM. The term of this Agreement (the "Term") shall commence on
March 25, 1998, and shall terminate on March 25, 2001 (the "Termination Date"),
for a total term of three (3) years, unless earlier terminated pursuant to the
terms and provisions of this Agreement.
4. During Employee's employment hereunder, Employee shall serve as
Senior Vice President and Chief Operating Officer of the Company. In such
positions, Employee shall have the customary powers, responsibilities and
authorities of officers in such position of corporations of the size, type and
nature of the Company. Employee shall perform such duties and exercise such
powers commensurate with his positions and responsibilities as shall be
determined from time to time by the Company's Board of Directors (the "Board"),
Xxxxxxx X. Xxx or such other executive officer designated by the Board or Xx.
Xxx and shall report directly to Xxxxxxx X. Xxx and to no other person, entity
or committee other than the Board or a duly appointed designee of the Board or
Xx. Xxx. Employee shall be provided with an office, staff and other working
facilities consistent with his positions and as required for the performance of
his duties. In addition, Company agrees to cause Employee to be nominated to
serve as a director of the Company and to use its best efforts to cause Employee
to be elected to the Board and be retained as a director of the Company during
Employee's employment during the Term, as it may be extended.
- 2 -
5. COMPENSATION.
(a) For the performance of all Employee's services to be rendered
pursuant to the terms of this Agreement, Company will pay and Employee will
accept the following compensation:
Base Salary. During the Term, Company shall pay the Employee
an initial base annual salary of $250,000 (the "Base Salary") payable in regular
installments in accordance with the Company's usual payment practices (which
currently is in equal bi-monthly installments). Employee shall be entitled to
such further increases, if any, in his Base Salary as may be determined from
time to time in the sole discretion of the Board; but, in any event, Employee
shall be entitled to receive an annual increase equal to the increase in the CPI
for the New York Metropolitan Area on annual basis. Employee's Base Salary, as
in effect from time to time, is hereinafter referred to as the "Employee's Base
Salary".
Bonus. During the Term, Employee shall be eligible for and
may receive bonuses. The amount of such bonuses, if any, shall be solely within
the discretion of the Board or the Compensation Committee thereof.
(b) Company shall deduct and withhold from Employee's
compensation all necessary or required taxes, including but not limited to
Social Security, withholding and otherwise, and any other applicable amounts
required by law or any taxing authority.
- 3 -
6. EMPLOYEE BENEFITS.
(a) During the Term hereof and so long as Employee is not
terminated, Employee shall receive and be provided health and insurance
benefits, and during Employee's employment hereunder, Employee shall receive and
be provided employee benefits (including without limitation, fringe benefits,
vacation, automobile, retirement plan participation and life, health, accident
and disability insurance etc., (collectively, "Employee Benefits") on the same
basis as those benefits are generally made available to the most senior
executives of the Company. Employee shall be entitled to receive not less than
four weeks vacation per year and if such vacation time is not taken by Employee,
in the then current year, Employee at his option may accrue vacation or receive
compensation at the then current level.
(b) At his discretion and at the Company's sole expense, Employee
may travel business class, portal to portal, when traveling on business for the
Company.
7. BUSINESS EXPENSES AND PERQUISITES.
(a) Reasonable travel, entertainment and other business expenses
incurred by Employee in the performance of his duties hereunder shall be
reimbursed by the Company in accordance with Company policies then in effect.
(b) Company shall provide Employee a new automobile, every three
years, including all related maintenance, repairs, insurance parking and other
costs. The base annual automobile rental expense shall not exceed $18,000 per
annum.
- 4 -
8. TERMINATION.
(a) For Cause by the Company. (i) Employee's employment hereunder
may be terminated by the Company for cause. For purposes of this Agreement,
"cause" shall mean (A) Employee's unjustified failure to perform his duties
hereunder or to follow reasonable directions of the Board, Xxxxxxx X. Xxx or a
duly appointed designee of the Board or Xx. Xxx, (B) willful misconduct by
Employee in connection with his employment, (C) Employee's conviction of, or
plea of nolo contendere to, any crime constituting a felony under the laws of
the United States or any State thereof, or any crime constituting a misdemeanor
under any such law involving moral turpitude, or (D) Employee's material breach
of any of the provisions of this Agreement.
(ii) If Employee is terminated for cause, he shall entitled
to receive
Employee's Base Salary from Company through the date of termination and
Employee shall be entitled to no other payments of Employee's Base Salary under
this Agreement. All other benefits, if any, due Employee following Employee's
termination of employment pursuant to this Section 8(a) shall be determined in
accordance with the plans, policies and practices of the Company for most senior
executives.
(b) Disability or Death. (i) Employee's employment hereunder
shall terminate upon his death or if Employee becomes physically or mentally
incapacitated and is therefore unable (or will as a result thereof, be unable)
for a period of six (6) consecutive months or for an aggregate of twelve (12)
months in any twenty-four (24) consecutive month
- 5 -
period to perform his duties (such incapacity is hereinafter referred to as
"Disability"). Any question as to the existence of the Disability of Employee as
to which Employee and the Company cannot agree shall be determined in writing by
a qualified independent physician mutually acceptable to Employee and the
Company. If Employee and the Company cannot agree as to a qualified independent
physician, each shall appoint such a physician and those two physicians shall
select a third who shall make such determination in writing. The determination
of Disability made in writing to the Company and Employee shall be final and
conclusive for all purposes of the Agreement.
(ii) Upon termination of Employee's employment hereunder
during the Term for Disability, Employee shall receive from the Company 50% of
Employee's Base Salary through the end of the Term and the amount equivalent to
50% of the last bonus, if any, received by the Employee under the terms of this
Agreement times the number of years remaining in the Term. Employee shall be
entitled to no further payments of Employee's Base Salary under this Agreement,
provided that any payment under this Section 8(b)(ii) shall be reduced by the
amount of any disability benefits paid to Employee under any other disability
plan, program or arrangement maintained and paid for by the Company or its
affiliates.
(iii)Upon termination of Employee's employment hereunder
during the Term as a result of death, the Employee's estate or named
beneficiary(ies) shall receive from the Company (A) Employee's Base Salary at
the rate in effect at the time of Employee's death through the end of the month
in which his death occurs and pro rata bonus paid to Employee during then
immediately preceding year of the Term, and (B) the proceeds of any
- 6 -
life insurance policy maintained for his benefit by the Company pursuant to
Section 6(a) under this Agreement.
(iv) All other benefits, if any, due Employee following
Employee's termination of employment pursuant to this Section 8(b) shall be
determined in accordance with the plans, policies and practices of the Company
and shall be at least equal to those received by most senior executives of the
Company.
(c) Without Cause by the Company. If Employee's employment is
terminated by the Company without cause (other than by reason of Disability or
death), then Employee shall be entitled to receive the Employee's Base Salary
from the Company for the balance of the Term, to be paid to Employee during
immediately succeeding next bi-weekly intervals. All other benefits, if any, due
Employee following Employee's termination of employment pursuant to this Section
8(c) shall be determined in accordance with the plans, policies and practices of
the Company then in effect.
(d) Termination by Employee. If Employee wishes to terminate his
employment with the Company for any reason, Employee must afford the Company
with at least six full month's written notice of termination. Such termination
shall not be deemed a breach of this Agreement.
(e) Change of Control. For purposes of this Agreement, "Change of
Control" shall mean (i) any transaction or series of transactions (including,
without limitation, a tender offer, merger or consolidation) the result of which
is that any "person" or "group"
- 7 -
(within the meaning of Sections 13(d) and 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), becomes the "beneficial" owner (as
defined in Rule 13(d)(3) under the Exchange Act) of more than 50 percent (50%)
of the total aggregate voting power of all classes of the voting stock of the
Company and/or warrants or options to acquire such voting stock, calculated on a
fully diluted basis, or (ii) a sale of assets constituting all or substantially
all of the assets of the Company (determined on a consolidated basis). In the
event of such a Change of Control, the new entity shall be obligated to perform
the Company's obligations under the terms of this Agreement. Notwithstanding the
foregoing, such Change in Control shall not release the Company from its
liability for the full and faithful performance of all the terms and conditions
of this Agreement.
9. NON-DISCLOSURE OF INFORMATION. Employee acknowledges that by virtue
of his position he will be privy to the Company's trade secrets including, but
not limited to, Company's customers list and private processes, as they may
exist or as Company may determine from time to time, and that such secrets are
valuable, special, and unique assets of Company's business and constitute
confidential information and trade secrets of Company (hereafter collectively
"Confidential Information"). Employee shall not, during the Term and for a
period of two (2) years thereafter, intentionally disclose all or any part of
the Confidential Information to any person, firm, corporation, association or
any other entity for any reason or purpose whatsoever, nor shall Employee and
any other person by, through or with Employee, during the Term and for a period
of two (2) years thereafter, intentionally make use of any of the Confidential
Information for any purpose or for the benefit of any
- 8 -
other person or entity, other than Company, under any circumstances. Company and
Employee agree that a violation of the foregoing covenants will cause
irreparable injury to the Company, and that in the event of a breach or
threatened breach by the Employee of the provisions of this Section 9, Company
shall be entitled to an injunction.
The foregoing to the contrary notwithstanding, no information, written
or oral, shall be construed or considered "Confidential Information" and thereby
subject to the restrictions of this Section 9 if such information was (i)
generally available to the public other than as a result of a disclosure by the
Employee or anyone to whom the Employee transmits the information in violation
hereof, (ii) in the possession of the Employee or known to him on a
non-confidential basis prior to its disclosure to him, (iii) available to the
Employee on a non-confidential basis from a source other than Unidigital who is
not bound by a confidentiality agreement with Unidigital, or (iv) available in
trade publications, reference books or other resources and which may be compiled
by any person desirous of preparing a report or memorandum containing such
information.
10. RESTRICTIVE COVENANT.
Without the prior written approval of the Board first obtained:
(a) For a period of two (2) years after the termination of this
Agreement, Employee covenants and agrees that, within a radius of twenty-five
(25) miles from each of the then present place(s) of Company's business or any
other area in which Company is engaged in business, he shall not own, manage,
operate, control, be employed by, participate
- 9 -
in, or be connected in any manner with the ownership, management, operation, or
control, whether directly or indirectly, as an individual on his own account, or
as a partner, member, joint venture, officer, director or shareholder of a
corporation or other entity (this excludes ownership of less than five (5%)
percent of any public company), of any business similar to or competitive with
the type of business conducted by Company at the time of the termination or
expiration of this Agreement. Employee further covenants and agrees he shall
not, directly or indirectly, in any manner whatsoever interfere with, solicit or
disrupt or attempt to interfere with, solicit or disrupt the relationship,
contractual or otherwise, between Company and any customer, supplier, lessee or
employee of Company, its parent or subsidiaries during such period.
(b) For the period set forth in the immediately preceding
subsection (a) Employee covenants and agrees that within a radius of twenty-five
(25) miles from each of the then present place(s) of Company's business or any
other area in which Company is engaged in business, he shall not render any
services to any person, firm, corporation, association or other entity to whom
any Confidential Information in whole or in part, has been disclosed or is
threatened to be disclosed in violation of this Agreement.
(c) Company and Employee agree that a violation of either of the
foregoing covenants will cause irreparable injury to the Company, and that in
the event of a breach or threatened breach by Employee of the provisions of this
Section 10, Company shall be entitled to an injunction.
- 10 -
(d) Employee acknowledges that the restrictions contained in this
Section 10 are reasonable. In that regard, it is the intention of the parties to
this Agreement that the provisions of this Section 10 shall be enforced to the
fullest extent permissible under the law and public policy applied in each
jurisdiction in which enforcement is sought. Accordingly, if any portion of this
Section 10 shall be adjudicated or deemed to be invalid or unenforceable, the
remaining portions shall remain in full force and effect, and such invalid or
unenforceable portion shall be limited to the particular jurisdiction in which
such adjudication is made.
11. BREACH OR THREATENED BREACH OF COVENANTS. In the event of
Employee's actual or threatened breach of his obligations under either Section 9
or 10, or both, of this Agreement, in addition to any other remedies Company may
have, Company shall be entitled to obtain a temporary restraining order and a
preliminary and/or permanent injunction restraining the other from violating
these provisions. Nothing in this Agreement shall be construed to prohibit
Company from pursuing and obtaining any other available remedies which Company
may have for such breach or threatened breach, whether at law or in equity,
including the recovery of damages from the other.
12. REPRESENTATIONS AND WARRANTIES BY EMPLOYEE. Employee hereby
warrants and represents that he is not subject to or a party to any restrictive
covenants or other agreements that in any way preclude, restrict, restrain or
limit him (a) from being an Employee of Company, (b) from engaging in the
business of Company in any capacity, directly or indirectly, and (c) from
competing with any other persons, companies, businesses or entities engaged in
the business of Company.
- 11 -
13. ARBITRATION. Any controversy or claim arising out of or relating
to this Agreement, the performance thereof of its breach or threatened breach
shall be settled by arbitration in the State of New York, County of New York in
accordance with the then governing rules of the American Arbitration
Association. The findings of the arbitration panel or arbitrator shall be final
and binding upon the parties. Judgment upon any arbitration award rendered may
be entered and enforced in any court of competent jurisdiction. In no event may
the arbitration determination change Employee's compensation, title, duties or
responsibilities, the entity to whom Employee reports or the principal place
where Employee is to render his services.
14. NOTICES. Any notice required, permitted or desired to be given
under this Agreement shall be sufficient if it is in writing and (a) personally
delivered to Employee or an authorized member of Company, (b) sent by overnight
delivery, or (c) sent by registered or certified mail, return receipt requested,
to Employer's or Employee's address as provided in this Agreement or to a
different address designated in writing by either party. In all instances of
notices to be given to Company, a copy by like means shall be delivered to
Company's counsel care of Xxxxxxxx Xxxxxxxxx, 000 Xxxxxxx Xxxx Xxxx, Xxxxxxxxx,
XX 00000, Attn: Xxxxx Xxxxx, Esq. In all instances of notices to be given to
Employee, a copy by like means shall be delivered to Employee's counsel care of
Xxxxxx Davidoff Xxxxx Xxxxxxxxxx & Kass, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX
00000, Attn: Xxxxxxx X. Xxxxxx, Esq. Notice is deemed given on the day it is
delivered personally or by overnight delivery, or five (5) business days after
it is mailed, if transmitted by the United States Post Office.
- 12 -
15. ASSIGNMENT. Employee acknowledges that his services are unique and
personal. Accordingly, Employee may not assign his rights or delegate his duties
or obligations under this Agreement. Company's rights and obligations under this
Agreement shall inure to the benefit of and shall be binding upon the Company's
successors and assigns. Company has the absolute right to assign its rights and
benefits under the terms of this Agreement.
16. WAIVER OF BREACH. Any waiver of a breach of provision of this
Agreement, or any delay of failure to exercise a right under a provision of this
Agreement, by either party, shall not operate or be construed as a waiver of
that or any other subsequent breach or right.
17. ENTIRE AGREEMENT. This Agreement contains the entire agreement of
the parties. It may not be changed orally but only by an agreement in writing
which is signed by the parties. The parties hereto agree that any existing
employment agreement between them shall be terminated as of the date of this
Agreement.
18. GOVERNING LAW. This Agreement shall be construed in accordance
with and governed by the internal laws of the State of New York.
19. SEVERABILITY. The invalidity or non-enforceability of any
provision of this Agreement or application thereof shall not affect the
remaining valid and enforceable provisions of this Agreement or application
thereof.
- 13 -
20. CAPTIONS. Captions in this Agreement are inserted only as a matter
of convenience and reference and shall not be used to interpret or construe any
provisions of this Agreement.
21. GRAMMATICAL USAGE. In construing or interpreting this Agreement,
masculine usage shall be substituted for those feminine in form and vice versa,
and plural usage shall be substituted or singular and vice versa, in any place
in which the context so requires.
22. CAPACITY. Employee has read and is familiar with all the terms and
conditions of this Agreement and has the capacity to understand such terms and
conditions hereof. By executing this Agreement, Employee agrees to be bound by
this Agreement and the terms and conditions hereof.
23. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same Agreement.
- 14 -
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the date first hereinabove written.
UNIDIGITAL INC.
/s/ Xxxxxxx X. Xxx
--------------------------
Xxxxxxx X. Xxx
Chief Executive Officer
/s/ Xxxxxxx X. Xxxxxx
--------------------------
Xxxxxxx X. Xxxxxx
