Exhibit 10.13
EMPLOYMENT AND NON-COMPETE AGREEMENT
This Employment and Non-Compete Agreement ("Employment Agreement") is made this
24th day of October, 1997 by and between Alacrity Systems Incorporated, a New
Jersey corporation, with its principal office located at 00 Xxxxxxx Xxxx,
Xxxxxxxxxxxx, Xxx Xxxxxx 00000 (the "Employer") and Xxxx X. Reap (the
"Employee").
WHEREAS, Employer is in the business of software design and development for
office devices that have telephony, faxing, copying, printing and scanning
capabilities combined in one multifunction product; and
WHEREAS, Employer desires to retain the services of the Employee; and
WHEREAS, Employee is willing to be employed by the Employer.
NOW, THEREFORE, in consideration of the mutual covenants contained herein, the
parties agree as follows:
1. Capacity. Employee shall serve the Employer as its President.
2. Best Efforts of Employee. During his employment hereunder, the Employee
shall, subject to the direction and supervision of the Chairman of the Board and
Board of Directors, devote his full business time, best efforts, business
judgment, skill and knowledge to the advancement of the Employer's interests and
to the discharge of his duties and responsibilities hereunder. Such duties shall
be provided at Hackettstown, New Jersey and other such places as the needs,
business or opportunities of the Employer may require from time to time.
However, Employee shall not be required to relocate. He shall not engage in any
other business activity, except as may be approved by the Board of Directors;
provided, however, that nothing herein shall be construed as preventing the
Employee from:
a. investing his assets in a manner which shall not require any
material services on his part in the operations or affairs of the companies
or other entities in which such investments are made;
b. serving on the Board of Directors of any company, provided he
receives the approval in writing from the Chief Executive Officer and Board
of Directors, and further provided that he shall not be required to render
any material services with respect to the operations or affairs of any such
company; or
c. engaging in religious, charitable or other community or non-profit
activities which does not impair his ability to fulfill his duties and
responsibilities under this Employment Agreement.
3. Compensation of Employee. As compensation for the services provided by
Employee under this Paragraph, Employer will pay Employee an annual salary of
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one hundred twenty thousand dollars ($120,000.00) in accordance with the
Employer's usual payroll procedures. Separate incentive and stock option plans
will be developed by the Employer, together with key management, and that these
plans will reflect company goals and performance objectives.
The Employee shall also be entitled to participate in any and all employee
benefit plans, medical insurance plans, life insurance plans, disability income
plans and other benefit plans, from time to time, in effect for executives of
the Employer. Such participation shall be subject to the terms of the applicable
plan documents, generally applicable Company policies and the discretion of the
Board of Directors or any administrative or other committee provided for in, or
contemplated by, such plan. In addition, the Employee shall be entitled to
receive benefits which are the same or substantially similar to those which are
currently being provided to the other Executives by the Employer.
In addition to the above compensation, Employee shall be eligible to
receive a broker's fee ("Fee") in the event that Employee introduces to ACT a
company which either ACT or Employer later acquires at least an eighty percent
(80%) interest. The amount of said Fee shall be determined by a percentage of
the gross purchase price of that interest as follows:
Five percent (5%) of the first one million dollars ($1,000,000.00) Four
percent (4%) of the next one million dollars ($1,000,000.00) Three percent
(3%) of the next one million dollars ($1,000,000.00) Two percent (2%) of
the next one million dollars ($1,000,000.00) One percent (1%) of the
remaining purchase price
Employee shall receive no greater than one-half (1/2) of the amount of the Fee
distributed in accordance with the above formula. The remaining amount after
Employee receives his share shall be allocated among and between other employees
of the Employer.
4. Termination of Employment. Upon termination of this Employment
Agreement, any and all payments and/or obligations under Section 3, and as
accrued under Section 7, of this Employment Agreement shall cease; provided,
however, that the Employee shall be entitled to payments for periods or partial
periods that occurred prior to the date of termination and for which the
Employee has not yet been paid.
5. Reimbursement for Expenses. In accordance with the Employer's policy,
the Employee will be reimbursed for all "out-of-pocket" and other direct
business expenses (exclusive of daily commuting costs to principal place of
business), upon presentation of appropriate receipts and documentation.
6. Confidentiality. Employee recognizes that the Employer has and will have
inventions, business affairs, products, future plans, trade secrets, customer
lists and other vital information (collectively "Confidential Information")
which are valuable, special and unique assets of the Employer. The Employee
agrees that he will not at any time or in any manner, either directly or
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indirectly, divulge, disclose or communicate in any manner any Confidential
Information to any third party without the prior written consent of the
Employer. The Employee will protect the Confidential Information and treat it as
strictly confidential.
In the event of a breach, or threatened breach, by Employee of his
obligations under this Paragraph, the Employee hereby acknowledges and
stipulates that the Employer shall not have an adequate remedy at law, shall
suffer irreparable harm and, therefore, it is mutually agreed and stipulated by
the parties hereto that, in addition to any other remedies at law or in equity
which Employer may have, the Employer shall be entitled to obtain in a court of
law and/or equity (i) a temporary and/or permanent injunction from disclosing in
whole or in part such Confidential Information or (ii) from providing any
services to any party to whom such Confidential Information has been disclosed,
or may be disclosed. Employer shall not be prohibited by this Paragraph from
pursuing other remedies, including a claim for losses and damages.
In addition to the above, Employee shall continue to be subject to the
Employment Secrecy Agreement ("Secrecy Agreement") previously executed by
Employee and, unless otherwise modified, such Secrecy Agreement shall remain in
full force and effect.
7. Vacation. The Employee shall continue to be entitled to three (3) weeks
of paid vacation. Such vacation shall be taken at a time mutually convenient to
Employer and Employee. Unused vacation may be carried over into the next
calendar year only.
8. Sick Days/Personal Business. The Employee shall be entitled to ten (10)
paid sick or personal days off due to illness or personal business each year of
employment beginning on the first day of the Employee's employment.
9. Holidays. The Employee shall be entitled to the standard company
holidays.
10. Term. This Employment Agreement shall have an initial term of three (3)
years, beginning at the commencement date ---- so indicated at the end of this
Employment Agreement.
11. Termination. Notwithstanding the provisions of Paragraph 10, the
Employee's employment hereunder shall terminate under the following
circumstances:
a. Death or Permanent Disability. In the event of the Employee's death
during the Employee's employment hereunder, the Employee's employment shall
terminate on the date of his death or Permanent Disability (as defined
below).
Permanent Disability. For the purposes of this Employment Agreement,
the term "permanent disability" shall mean the Employee's inability to
perform the essential functions of his duties as prescribed in this
Employment Agreement, which, following a written request by either the
Employer or the Employee, shall be determined by agreement between the
parties and, if they cannot agree, by a panel of three (3) physicians, one
of whom will be selected by the Employer, one
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by the Employee and the third by the first two so selected. Said panel
shall also fix the date of the occurrence of the permanent disability. Said
panel's determination shall be conclusive. Notwithstanding anything to the
contrary set forth herein, the Employee shall be presumed to be permanently
disabled as of the date he is receiving payments for permanent disability
under any disability insurance policies or under the Social Security Act.
b. Temporary Disability. If, due to physical or mental illness,
disability or injury, the Employee shall be disabled so as to be unable to
perform substantially all of his essential duties and responsibilities
hereunder, the Board of Directors may designate another person to act in
his place during the period of such disability. Notwithstanding any such
designation, the Employee shall continue to receive his full salary and
benefits under Paragraph 3 of this Agreement until he becomes eligible for
disability income under the Employer disability income plan. In the absence
of a disability income plan at the time of such disability, the Employer
shall pay the Employee benefits equal to those the Employee would have
received if the Employer's current disability income plan were in effect at
such time; provided however, that the Employer's obligations hereunder
shall cease twelve (12) months from the onset of such disability.
c. Termination by the Employer for Cause. The Employee's employment
hereunder may be terminated for cause, without further liability on the
part of the Employer, by a majority vote of all of the members of the Board
of Directors. Termination for cause shall be defined as:
(i) Deliberate dishonesty of the Employee with respect to the
Employer.
(ii) Conviction of the Employee of a crime involving moral
turpitude.
(iii)Gross and willful failure to perform a substantial portion
of his duties and responsibilities hereunder.
(iv) Employee's abandonment of his duties hereunder for a period
of more than thirty (30) days. Abandonment by the Employee
of duties hereunder shall be deemed to have occurred if: the
Employee ceases to function and perform duties hereunder,
leaves the geographic area in which the Employer engages in
its business, or conducts himself with intentional disregard
of the Employer's interests and its business.
(v) Any other willful act that has or will have a similar
negative impact on the financial success of the Employer.
d. After the first anniversary date, Employee may, upon thirty (30)
days written notice, terminate this Employment Agreement. Notwithstanding
such termination, the provisions of paragraph 13 shall remain in effect for
an additional one (1) year beyond the date of resignation.
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e. Termination Without Good Cause. In the event that Employee
terminates this Employment Agreement with good cause or Employer terminates
the Employment Agreement without good cause; Employee shall continue to
receive payments and benefits, including vesting of options issued by ACT,
for the remaining Term of the Employment Agreement.
12. Resignation as Officer and Director. In the event that the Employee's
employment with the Employer is terminated for any reason whatsoever, the
Employee agrees to immediately resign as an Officer and Director of the
Employer.
13. Non-Competition. The Employee acknowledges that he has gained, and will
gain, extensive and valuable experience and knowledge in the business conducted
by Employer and has had, and will have, extensive contacts with customers of
Employer. Accordingly, the Employee covenants and agrees with Employer that he
shall not compete directly or indirectly with Employer, either during the term
of his employment or during the one (1) year period immediately thereafter and
shall not, during such period, make public statements in derogation of Employer.
For the purposes of this Section 13, the term "Employer" shall be deemed to
include subsidiaries, parents and affiliates of Employer. Competing directly or
indirectly with Employer shall mean engaging or having a material interest,
directly or indirectly, as owner, employee, officer, director, partner,
venturer, stockholder, capital investor, consultant, agent, principal, advisor
or otherwise, either alone or in association with others, in the operation of
any entity engaged in the business of software design and development for office
devices that have telephony, faxing, copying, printing and scanning capabilities
combined in one multifunction product. Competing directly or indirectly with
Employer, as used in this Employment Agreement, shall be deemed not to include
an ownership interest as an inactive investor, which, for purposes of this
Employment Agreement, shall mean the beneficial ownership of less than one
percent (1%) of the outstanding shares of any series or class of securities of
any competitor of Employer, which shares are publicly traded in the securities
markets.
In the event that one or more of the provisions contained herein shall, for
any reason, be held too excessively broad as to duration, geographical scope
activity or such provision shall be construed as limiting and reducing its as
determined by a court of competent jurisdiction and shall be enforceable to the
extent compatible with applicable law.
14. Restriction on Authority of Employee. Notwithstanding anything set
forth in this Employment Agreement to the contrary, the Employee, in the
performance of his duties hereunder, shall not take any of the following actions
without the written consent of the Board of Directors:
a. Enter into negotiations or execute documents which would effect the
existing debt and/or structure or alter, modify or change any banking
relations after such Closing Date.
15. Representations and Warranties. The Employee hereby represents and
warrants that he is free to enter this Employment Agreement and to render his
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services pursuant hereto and that neither the execution and delivery of this
Employment Agreement, nor the performance of his duties hereunder, violates the
provisions of any other agreement to which he is a party or by which he is
bound.
16. Date of Commencement. This Employment Agreement is effective as of the
date the Agreement of Sale is executed and delivered.
17. Notices. All notices required or permitted under this Employment
Agreement shall be in writing and shall be deemed delivered when delivered in
person or deposited in the United States mail, postage paid, addressed as
follows:
Employer: Alacrity Systems Incorporated
00 Xxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Employee: Xxxx X. Reap
00 Xxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Such addresses may be changed from time to time by either party by
providing written notice in the manner set forth above.
18. Entire Agreement. This Employment Agreement contains the entire
agreement of the parties and there are no other promises or conditions in any
other agreement, whether oral or written. This Employment Agreement supersedes
any prior written or oral agreements between the parties.
19. Amendment. This Employment Agreement may be modified or amended, if the
amendment is made in writing and is signed by both parties.
20. Assignment. This Employment Agreement may not be assigned by Employee.
21. Section Headings. The headings contained in this Employment Agreement
are for reference only and shall not in any way affect the meaning or
interpretation of this Employment Agreement.
22. Severability. If any provision of this Employment Agreement shall be
held to be invalid or unenforceable for any reason, the remaining provisions
shall continue to be valid and enforceable. If a court finds that any provision
of this Employment Agreement is invalid or unenforceable, but that by limiting
such provision it would become valid and enforceable, then such provision shall
be deemed to be written, construed and enforced as so limited.
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23. Waiver of Contractual Right. The failure of either party to enforce any
provision of this Employment Agreement shall not be construed as a waiver or
limitation of that party's right to subsequently enforce and compel strict
compliance with every provision of this Employment Agreement.
24. Applicable Law. This Employment Agreement shall be governed by the laws
(other than the law governing conflict of law questions) of the State of New
Jersey.
25. Counterparts. This Employment Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument and, in pleading or
proving any provision of this Employment Agreement, it shall not be necessary to
produce more than one of such counterparts.
26. The parties have executed this Employment Agreement the day and year
first above written.
EMPLOYER
Alacrity Systems Incorporated
By: Xxxxxxx X. Xxxxxxxx
Chairman of the Board
EMPLOYEE
Xxxx X. Reap
