EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT made effective as of the 1st day of August, 1998 (the
"Effective Date") by and between Analytical Graphics, Inc., a Pennsylvania
corporation with its principal place of business at 000 Xxxxxxxxxx Xxxxx,
Xxxxxxx, Xxxxxxxxxxxx 00000 (the "Company"), and Xxxx X. Xxxxxxxx (the
"Employee").
WITNESSETH:
WHEREAS, the Company desires to secure the continued employment of the
Employee in accordance with the provisions of this Agreement; and
WHEREAS, the Employee desires and is willing to continue his employment
with the Company in accordance herewith.
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. Term. The Company hereby agrees to employ the Employee and the
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Employee hereby agrees to serve the Company pursuant to the terms and conditions
of this Agreement as Chairman of the Board, President and Chief Executive
Officer of the Company, or in a position at least commensurate therewith in all
material respects, for a term commencing on the Effective Date hereof and
expiring on the third anniversary thereof, provided that the Employee is elected
to such office, or a comparable or higher office, at each annual meeting of the
Board of Directors of the Company (the "Board of Directors") during the term of
this Agreement. If the Employee shall not be so elected at any such annual
meeting of the Board of Directors, the Employee's
employment hereunder shall forthwith terminate and the Company shall be
obligated to compensate the Employee in accordance with Section 6(a) of this
Agreement.
2. Positions and Duties.
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(a) Duties. The Employee's duties hereunder shall be those
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which shall be prescribed from time to time by the Board of Directors in
accordance with the By-Laws of the Company and shall include such executive
duties, powers and responsibilities as customarily attend the office of Chairman
of the Board, President and Chief Executive Officer at companies comparable to
the Company. The Employee will hold, in addition to the office of Chairman of
the Board, President and Chief Executive Officer of the Company, such other
executive offices in the Company and its subsidiaries to which he may be
elected, appointed or assigned by the Board of Directors from time to time and
will discharge such executive duties in connection therewith. During the
employment period, the Employee's position (including status, offices and
reporting requirements), authority, duties and responsibilities shall be at
least commensurate in all material respects with the most significant of those
held, exercised and assigned immediately preceding the Effective Date. The
Employee shall devote his full working time, energy and skill (reasonable
absences for vacations and illness excepted), to the business of the Company as
is necessary in order to perform such duties faithfully, competently and
diligently; provided, however, that notwithstanding any provision in this
Agreement to the contrary, the Employee shall not be precluded from devoting
reasonable periods of time required for serving as a member of boards of
companies or organizations which have been approved by the Board of Directors so
long as such memberships or activities do not interfere with the performance of
the Employee's duties hereunder.
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(b) Board Nomination. So long as the Employee is the Chairman
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of the Board, President and Chief Executive Officer of the Company, the Company
will use diligent efforts to obtain the nomination and election of the Employee
as a director of the Company. In the event that the Employee is elected as a
director of the Company, the Employee shall perform all duties incident to such
directorship faithfully, diligently and competently and in the best interests of
the Company.
3. Compensation. During the term of this Agreement, the Employee
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shall receive, for all services rendered to the Company hereunder, the following
(hereinafter referred to as "Compensation"):
(a) Base Salary. For the term hereof, the Employee shall be
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paid an annual base salary equal to one hundred seventy six thousand dollars
($176,000). The Employee's annual base salary shall be payable in equal
installments in accordance with the Company's general salary payment policies
but no less frequently than monthly. Such base salary shall be reviewed, and any
increases in the amount thereof shall be determined, by the Board of Directors
or a compensation committee formed by the Board of Directors (the "Compensation
Committee") at the end of each 12-month period of employment during the term
hereof.
(b) Bonuses. The Employee shall be eligible for and may
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receive bonuses. The amount of such bonuses, if any, shall be solely within the
discretion of the Board of Directors or, if formed, the Compensation Committee
thereof.
(c) Incentive Compensation. The Employee shall be eligible for
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awards from the Company's incentive compensation plans, including without
limitation any stock option plans, applicable to high level executive officers
of the Company or to key employees of the
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Company or its subsidiaries, in accordance with the terms thereof and on a basis
commensurate with his position and responsibilities.
(d) Benefits. The Employee and his "dependents," as that term
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may be defined under the applicable benefit plan(s) of the Company, shall be
included, to the extent eligible thereunder, in any and all plans, programs and
policies which provide benefits for employees and their dependents. Such plans,
programs and policies may include health care insurance, long-term disability
plans, life insurance, supplemental disability insurance, supplemental life
insurance, holidays and other similar or comparable benefits made available to
the Company's employees.
(e) Expenses. Subject to and in accordance with the Company's
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policies and procedures, the Employee hereby is authorized to incur, and, upon
presentation of itemized accounts, shall be reimbursed by the Company for, any
and all reasonable and necessary business-related expenses, which expenses are
incurred by the Employee on behalf of the Company or any of its subsidiaries.
4. Absences. The Employee shall be entitled to vacations,
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absences because of illness or other incapacity, and such other absences,
whether for holiday, personal time, or for any other purpose, as set forth in
the Company's employment manual or current procedures and policies, as the case
may be, as same may be amended from time-to-time.
5. Termination. In addition to the events of termination and
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expiration of this Agreement provided for in Section 1 hereof, the Employee's
employment hereunder may be terminated only as follows:
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(a) Without Cause. The Company may terminate the Employee's
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employment hereunder without cause only upon action by the Board of Directors,
and upon no less than sixty (60) days prior written notice to the Employee. The
Employee may terminate employment hereunder without cause upon no less than
sixty (60) days prior written notice to the Company.
(b) For Cause, by the Company. The Company may terminate the
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Employee's employment hereunder for cause immediately and with prompt notice to
the Employee, which cause shall be determined in good faith solely by the Board
of Directors. "Cause" for termination shall include, but is not limited to, the
following conduct of the Employee:
(1) Material breach of any provision of this
Agreement by the Employee, which breach shall not have been cured by the
Employee within ten (10) days of receipt of written notice of said breach;
(2) Misconduct as an employee of the Company,
including but not limited to: misappropriating any funds or property of the
Company; attempting to willfully obtain any personal profit from any transaction
in which the Employee has an interest which is adverse to the interests of the
Company; or any other act or omission which substantially impairs the Company's
ability to conduct its ordinary business in its usual manner;
(3) Unreasonable neglect or refusal to perform
the duties assigned to the Employee under or pursuant to this Agreement;
(4) Conviction of a felony; or
(5) Any other act or omission which subjects the
Company or any of its subsidiaries to substantial public disrespect, scandal or
ridicule.
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(c) For Good Reason by Employee. The Employee may
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terminate employment hereunder for good reason immediately and with prompt
notice to the Company. "Good reason" for termination by the Employee shall
include, but is not limited to, the following conduct of the Company:
(1) Material breach of any provision of this
Agreement by the Company, which breach shall not have been cured by the Company
within ten (10) days of receipt of written notice of said breach;
(2) Failure to maintain the Employee in a
position commensurate with that referred to in Section 2 of this Agreement; or
(3) The assignment to the Employee of any duties
inconsistent with the Employee's position, authority, duties or responsibilities
as contemplated by Section 2 of this Agreement, or any other action by the
Company which results in a diminution of such position, authority, duties or
responsibilities, excluding for this purpose any isolated action not taken in
bad faith and which is promptly remedied by the Company after receipt of notice
thereof given by the Employee.
(d) Death. The period of active employment of the
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Employee hereunder shall terminate automatically in the event of his death.
(e) Disability. In the event that the Employee shall be
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unable to perform duties hereunder for a period of ninety (90) consecutive
calendar days by reason of disability as a result of illness, accident or other
physical or mental incapacity or disability, the Company may, in its discretion,
by giving written notice to the Employee, terminate the Employee's employment
hereunder as long as the Employee is still disabled on the effective date of
such termination.
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(f) Mutual Agreement. This Agreement may be terminated at
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any time by mutual agreement of the Employee and the Company.
6. Compensation in the Event of Termination. In the event that
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the Employee's employment pursuant to this Agreement terminates prior to the end
of the term of this Agreement because he is not reelected pursuant to Section 1
or for a reason provided in Section 5 hereof, the Company shall pay the Employee
compensation as set forth below:
(a) Employee Not Elected by Board of Directors; By
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Employee for Good Reason; By Company Without Cause In the event that the
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Employee's employment hereunder is terminated: (i) because the Employee is not
elected to the office of Chairman of the Board, President and Chief Executive
Officer of the Company, or in a position at least commensurate therewith in all
material respects, at any annual meeting of the Company's Board of Directors
during the term of this Agreement, as contemplated by Section 1 hereof; (ii) by
the Employee for good reason pursuant to Section 5(c) hereof; or (iii) by the
Company without cause, then the Company shall continue to pay or provide, as
applicable, the following compensation to the Employee:
(1) Annual base salary as set forth in Section
3(a) hereof; and
(2) Continuing coverage, but only to the extent
required by law, for the Employee and his eligible dependents under all of the
Company's benefit plans, programs and policies in effect as of the date of
termination.
Such compensation shall continue to be paid or
provided, as applicable, in the same manner as before termination, and for a
period of time ending on the date when the term of this Agreement would
otherwise have expired in accordance with Section 1 of this Agreement.
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The Employee shall not be required to mitigate the amount of any payment
provided for in this Section 6(a) by seeking employment or otherwise, nor shall
any amounts received from employment or otherwise by the Employee offset in any
manner the obligations of the Company hereunder.
(b) By Company Upon Termination of Agreement Due to Employee's
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Death or Disability. In the event of the Employee's death or if the Company
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shall terminate the Employee's employment hereunder for disability pursuant to
Section 5(e) hereof, the base salary payable hereunder shall continue to be paid
at the then current rate for three (3) months after the termination of
employment to the Employee or his personal representative, as applicable.
(c) By Company For Cause or By Employee Without Good Reason.
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In the event that (i) the Company shall terminate the Employee's employment
hereunder for cause pursuant to Section 5(b) hereof or (ii) the Employee shall
terminate employment hereunder without "good reason" as provided in Section 5(c)
hereof, the Company shall not be obligated to pay the Employee any compensation
except for salary and other compensation which may have been earned and are due
and payable but which have not been paid as of the date of termination.
7. Effect of Termination. In the event of expiration or early
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termination of this Agreement as provided herein, neither the Company nor the
Employee shall have any remaining duties or obligations hereunder except that:
(a) The Company shall:
(1) Pay the Employee's accrued salary and any
other accrued benefits under Section 3 hereof;
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(2) Reimburse the Employee for expenses already incurred in
accordance with Section 3(e) hereof;
(3) To the extent required by law, pay or otherwise provide for
any benefits, payments or continuation or conversion rights in accordance with
the provisions of any benefit plan of which the Employee or any of his
dependents is or was a participant; and
(4) Pay the Employee or his beneficiaries any compensation due
pursuant to Section 6 hereof; and
(b) The Employee shall remain bound by the terms of Section 8 hereof
and EXHIBIT A attached hereto.
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8. Restrictive Covenant. (a) The Employee acknowledges and agrees that
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he has access to secret and confidential information of the Company and its
subsidiaries and that the following restrictive covenant is necessary to protect
the interests and continued success of the Company. Except as otherwise
expressly consented to in writing by the Company, until the termination of the
Employee's employment (for any reason and whether such employment was under this
Agreement or otherwise) and thereafter for the period of time, not to exceed
twenty four (24) months, for which the Employee is being compensated at an
annual rate of at least 50% of the last annual base salary received by the
Employee under Section 3(a) hereof (the "Restricted Period"), the Employee shall
not, directly or indirectly, acting as an employee, owner, shareholder, partner,
joint venturer, officer, director, agent, salesperson, consultant, advisor,
investor or principal of any corporation or other business entity:
(i) engage, in any state or territory of the United States
of America or other country where the Company is doing business (determined as
of the date the Employee's
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employment with the Company terminates), in direct or indirect competition with
the business conducted by the Company or activities which the Company plans to
conduct within one year of termination (determined as of the date the Employee's
employment with the Company terminates);
(ii) request or otherwise attempt to induce or influence,
directly or indirectly, any present customer or supplier, or prospective
customer or supplier, of the Company, or other persons sharing a business
relationship with the Company, to cancel, limit or postpone their business with
the Company, or otherwise take action which might be to the material
disadvantage of the Company; or
(iii) hire or solicit for employment, directly or indirectly,
or induce or actively attempt to influence, any Employee of the Company or any
Affiliate, as such term is defined in the Securities Act of 1933, as amended, to
terminate his or her employment or discontinue such person's consultant,
contractor or other business association with the Company.
(b) If the Employee violates any of the restrictions
contained in Section 8(a) above, the Restrictive Period shall be increased by
the period of time from the commencement of any such violation until the time
such violation shall be cured by the Employee to the satisfaction of the
Company, and the Company may withhold any and all payments, except salary,
otherwise due and owing to the Employee under this Agreement.
(c) In the event that either the geographical area or the
Restrictive Period set forth in Section 8(a) of this Agreement is deemed to be
unreasonably restrictive in any court proceeding, the court may reduce such
geographical area and Restrictive Period to the extent which it deems reasonable
under the circumstances.
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(d) Nothing in this Section 8, whether express or implied,
shall prevent the Employee from being a holder of securities of a company whose
securities are registered under Section 12 of the Securities Exchange Act of
1934, as amended; provided, however, that the Employee holds of record and
beneficially less than two percent (2%) of the votes eligible to be cast
generally by holders of securities of such company for the election of
directors.
(e) The Employee, as a condition of his continued
employment, acknowledges and agrees that he has reviewed and will continue to be
bound by all of the provisions set forth in Exhibit A attached hereto, which is
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incorporated herein by reference and made a part hereof as though fully set
forth herein, during the term of this Agreement, and any time hereafter.
(f) Employee acknowledges and agrees that in the event of a
breach or threatened breach of the provisions of this Section 8 by Employee the
Company may suffer irreparable harm and therefore, the Company shall be
entitled, to the extent permissible by law, immediately to cease to pay or
provide the Employee any compensation being, or to be, paid or provided to him
pursuant to Sections 3 or 6 of this Agreement, and also to obtain immediate
injunctive relief restraining the Employee from conduct in breach or threatened
breach of the covenants contained in this Section 8. Nothing herein shall be
construed as prohibiting the Company from pursuing any other remedies available
to it for such breach or threatened breach, including the recovery of damages
from the Employee.
9. Resolution of Differences Over Breaches of Agreement. Except
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as otherwise provided herein, any controversy or claim arising out of, or
relating to, this Agreement, or the breach hereof, shall be reviewed in the
first instance in accordance with the Company's internal review procedures, if
any, with recourse thereafter--for temporary or preliminary injunctive relief
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only--to the courts having jurisdiction thereof, and if any relief other than
injunctive relief is sought, then to arbitration in Xxxxxxx County, Pennsylvania
in accordance with the rules of the American Arbitration Association, and
judgment upon the award rendered by the Arbitrator(s) may be entered in any
court having jurisdiction thereof.
10. Waiver. The waiver by a party hereto of any breach by the other
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party hereto of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach by a party hereto.
11. Assignment. This Agreement shall be binding upon and inure to the
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benefit of the successors and assigns of the Company, and the Company shall be
obligated to require any successor to expressly assume its obligations
hereunder. This Agreement shall inure to the benefit of and be enforceable by
the Employee or his legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. The Employee may not
assign any of his duties, responsibilities, obligations or positions hereunder
to any person and any such purported assignment by him shall be void and of no
force and effect.
12. Notices. Any notices required or permitted to be given under this
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Agreement shall be sufficient if in writing, and if personally delivered or when
sent by first class certified or registered mail, postage prepaid, return
receipt requested--in the case of the Employee, to his residence address as set
forth below, and in the case of the Company, to the address of its principal
place of business as set forth below, in care of the Board of Directors--or to
such other person or at such other address with respect to each party as such
party shall notify the other in writing.
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13. Construction of Agreement.
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(a) Governing Law. This Agreement shall be governed by and its
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provisions construed and enforced in accordance with the internal laws of the
Commonwealth of Pennsylvania without reference to its principles regarding
conflicts of law.
(b) Severability. In the event that any one or more of the
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provisions of this Agreement shall be held to be invalid, illegal or
unenforceable, the validity, legality or enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
(c) Headings. The descriptive headings of the several
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paragraphs of this Agreement are inserted for convenience of reference only and
shall not constitute a part of this Agreement.
14. Entire Agreement. This Agreement contains the entire agreement of
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the parties concerning the Employee's employment and all promises,
representations, understandings, arrangements and prior agreements on such
subject are merged herein and superseded hereby. The provisions of this
Agreement may not be amended, modified, repealed, waived, extended or discharged
except by an agreement in writing signed by the party against whom enforcement
of any amendment, modification, repeal, waiver, extension or discharge is
sought. No person acting other than pursuant to a resolution of the Board of
Directors shall have authority on behalf of the Company to agree to amend,
modify, repeal, waive, extend or discharge any provision of this Agreement or
anything in reference thereto or to exercise any of the Company's rights to
terminate or to fail to extend this Agreement.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed and attested by its duly authorized officers, and the Employee has set
his hand, all as of the day and year first above written.
ATTEST: Analytical Graphics, Inc.
__________________________ By:_____________________________
WITNESS: EMPLOYEE
__________________________ ________________________________
Xxxx X. Xxxxxxxx
Address:______________________________
_______________________________
_______________________________
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EXHIBIT A
ANALYTICAL GRAPHICS, INC.
EMPLOYEE'S
INVENTION ASSIGNMENT AND CONFIDENTIALITY
AGREEMENT
In consideration of my employment or continued employment by Analytical
Graphics, Inc., a Pennsylvania corporation or any subsidiary or parent
corporation thereof (the "Company"), I hereby represent and agree as follows:
1. I understand that the Company is engaged in the business of
providing software solutions for the space industry and that I may have access
to or acquire information with respect to Confidential Information (as defined
below), including software, processes and methods, development tools,
scientific, technical and/or business innovations.
2. Disclosure of Innovations. I agree to disclose in writing to the
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Company all inventions, improvements and other innovations of any kind that I
may make, conceive, develop or reduce to practice, alone or jointly with others,
during the term of my employment with the Company, whether or not they are
related to my work for the Company and whether or not they are eligible for
patent, copyright, trademark, trade secret or other legal protection
("Innovations"). Examples of Innovations shall include, but are not limited to,
discoveries, research, inventions, formulas, techniques, processes, know-how,
marketing plans, new product plans, production processes, advertising, packaging
and marketing techniques and improvements to computer hardware or software.
3. Assignment of Ownership of Innovations. I agree that all Innovations
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will be the sole and exclusive property of the Company and I hereby assign all
of my rights, title or interest in the Innovations and in all related patents,
copyrights, trademarks, trade secrets, rights of priority and other proprietary
rights to the Company. At the Company's request and expense, during and after
the period of my employment with the Company, I will assist and cooperate with
the Company in all respects and will execute documents, and, subject to my
reasonable availability, give testimony and take further acts requested by the
Company to obtain, maintain, perfect and enforce for the Company patent,
copyright, trademark, trade secret and other legal protection for the
Innovations. I hereby appoint the Secretary of the Company as my
attorney-in-fact to execute documents on my behalf for this purpose.
4. Protection of Confidential Information of the Company. I understand
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that my work as an employee of the Company creates a relationship of trust and
confidence between myself and the Company. During and after the period of my
employment with the Company, I will not use or disclose or allow anyone else to
use or disclose any "Confidential Information" (as defined below) relating to
the Company, its products, suppliers or customers except as may be necessary in
the performance of my work for the Company or as may be authorized in
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advance by appropriate officers of the Company. "Confidential Information" shall
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include methodologies, processes, tools, innovations, business strategies,
financial information, forecasts, personnel information, customer lists, trade
secrets and any other non-public technical or business information, whether in
writing or given to me orally, which I know or have reason to know the Company
would like to treat as confidential for any purpose, such as maintaining a
competitive advantage or avoiding undesirable publicity. I will keep
Confidential Information secret and will not allow any unauthorized use of the
same, whether or not any document containing it is marked as confidential. These
restrictions, however, will not apply to Confidential Information that has
become known to the public generally through no fault or breach of mine or that
the Company regularly gives to third parties without restriction on use or
disclosure. Upon termination of my work with the Company, I will promptly
deliver to the Company all documents and materials of any nature pertaining to
my work with the Company and I will not take with me any documents or materials
or copies thereof containing any Confidential Information.
5. Non-Solicitation. I understand that my work as an employee of the
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Company creates a relationship of trust and confidence between myself and the
Company. During and after the period of my employment with the Company, I will
not request or otherwise attempt to induce or influence, directly or indirectly,
any present customer or supplier, or prospective customer or supplier, of the
Company, or other persons sharing a business relationship with the Company to
cancel, to limit or postpone their business with the Company, or otherwise take
action which might be to the material disadvantage of the Company. During and
after the period of my employment with the Company, I will not hire or solicit
for employment, directly or indirectly, or induce or actively attempt to
influence, any Employee of the Company or any Affiliate of the Company, as such
term is defined in the Securities Act of 1933, as amended, to terminate his or
her employment or discontinue such person's consultant, contractor or other
business association with the Company.
6. Other Agreements. I represent that my performance of all the terms
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of this Agreement and my duties as an employee of the Company will not breach
any invention assignment agreement, confidential information agreement,
non-competition agreement or other agreement with any former employer or other
party. I represent that I have not and will not bring with me to the Company or
use in the performance of my duties for the Company any documents or materials
of a former employer that are not generally available to the public.
7. Disclosure of this Agreement. I hereby authorize the Company to
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notify others, including but not limited to customers of the Company and any of
my future employers, of the terms of this Agreement and my responsibilities
hereunder.
8. Injunctive Relief. I understand that in the event of a breach or
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threatened breach of this Agreement by me the Company may suffer irreparable
harm and monetary damages alone would not adequately compensate the Company. The
Company will therefore be entitled to injunctive relief to enforce this
Agreement.
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9. Enforcement and Severability. I acknowledge that each of the
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provisions in this Agreement are separate and independent covenants. I agree
that if any court shall determine that any provision of this Agreement is
unenforceable with respect to its term or scope such provision shall nonetheless
be enforceable by any such court upon such modified term or scope as may be
determined by such court to be reasonable and enforceable. The remainder of this
Agreement shall not be affected by the unenforceability or court ordered
modification of a specific provision.
10. Governing Law. I agree that this Agreement shall be governed by and
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construed in accordance with the laws of the Commonwealth of Pennsylvania.
11. Superseding Agreement. I understand and agree that this Agreement
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contains the entire agreement of the parties with respect to subject matter
hereof and supersedes all previous agreements and understandings between the
parties with respect to its subject matter.
12. Acknowledgments. I acknowledge that I have read this agreement, was
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given the opportunity to ask questions and sufficient time to consult an
attorney and I have either consulted an attorney or affirmatively decided not to
consult an attorney. I understand that this agreement does not alter the terms
of an executed Employment Agreement with the Company, or in the absence of an
Employment Agreement, this Agreement does not alter my status as an employee at
will and that my employment may be terminated at any time, with or without
cause. I also understand that my obligations under this Agreement survive the
termination of my employment with the Company.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written below.
Date: _________________ ______________________________
Name of Employee:
Address: ______________________
______________________
______________________
______________________
Analytical Graphics, Inc.
Date:__________________ By:______________________________
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