EXHIBIT 17
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made this first day of May, 1997,
by and between XXXXXXX X. XXXX, an individual ("Employee"), and SYBEX, LTD.,
an Ontario corporation ("Company"), with reference to the following facts:
RECITALS:
A. Employee has been employed as an officer of Sybex Ltd. and BBicon Inc.
both Ontario corporations ("BBI").
B. Pursuant to those certain Share Purchase Agreements, dated May 15, 1997,
between State of the Art, Inc., a California corporation ("SOTA"), and the
respective shareholders of BBI (as defined therein) (the "Purchase
Agreements"), the parties to the Purchase Agreements intend that all of BBI's
capital stock be purchased by SOTA.
C. The Purchase Agreements contemplate, among other things, that, as a
condition precedent to the closing thereunder, the Company and Employee will
enter into this Agreement in connection with such purchases.
D. The Company desires to employ Employee on the terms and subject to the
conditions set forth herein, and Employee desires to accept such employment.
AGREEMENT
In consideration of the foregoing recitals and the covenants and agreements
of the parties contained herein, the parties do hereby agree as follows:
A. Employment
1. Effective upon the Closing as defined in the Purchase Agreements,
Company shall hire Employee, and Employee shall accept employment as the
Company's Vice President and General Manager of the ProvideX Division. In
such capacity, Employee shall report to the President of SOTA and shall
perform such duties and render such services as are reasonably requested by
that President.
2. Employment Term. The period of Employee's employment hereunder shall
commence on the date hereof and shall continue until and terminate on the
third anniversary hereof unless earlier terminated pursuant to this
Agreement (the "Employment Period").
3. Place of Employment. During the Employment Period, Employee shall
render his services principally at the offices of the Company or an
affiliate of the Company not more than 50 miles from Markham, Ontario,
although such duties will also require Employee to render such services
from time to time at the Company's or its affiliates other offices.
4. Employee shall devote all his working time, attention, and energies to
the performance of this duties hereunder and he shall discharge his duties
in a proper and diligent manner.
B. Compensation.
As compensation for his services to be performed hereunder, Company shall
provide Employee with the following compensation and benefits:
1. Base Salary. Employee's initial base salary shall be $159,850 Canadian
dollars per year. Employee's base salary shall continue at such amount,
subject to adjustment by the mutual agreement of the parties. Employee's
base salary shall be payable in accordance with Company's payroll practices
in effect from time to time, and subject to such withholding as is required
by law.
2. Bonus Plan. In addition to the base salary, Employee shall be eligible
to participate in bonus plans as the Company shall determine from time to
time. Employee's bonus under such plans shall be based on criteria set
forth or established pursuant to any such plan. The Company shall set
Employee's total bonus at $34,750.00 Canadian Dollars for the Employee's
first calendar year.
3. Options. Subject to approval by the Compensation Committee of the
Board of Directors of SOTA, upon the commencement of Employee's employment,
Employee shall be granted an option to purchase an aggregate of 25,000
shares of SOTA's common stock, at an exercise price equal to the last
reported sale price of SOTA's common stock on the date of grant as reported
on The Nasdaq National Market. Such shares subject to such option shall
vest in equal amounts each year over a three year period. The foregoing
shall not constitute any commitment or agreement by SOTA to continue to
employ Employee for any specified term. Such option shall be granted under
one of SOTA's existing stock option plans. Upon such grant, Employee agrees
to execute SOTA's standard form of stock option agreement, which contains
additional terms and conditions relating to such options. Company shall
have no obligation under this Section if the Compensation Committee of the
Board of Directors does not approve such options or if Employee fails to
execute such form of stock option agreement.
C. Benefits.
1. Vacation. Employee shall be entitled to three (3) weeks paid vacation
during each year of his employment by the Company, which shall be
administered according to the Company's standard employment policies as in
effect from time to time.
2. Business Expenses. The Company shall reimburse Employee for all
reasonable business expenses incurred by Employee in the course of
performing services for the Company, in accordance with the company's
expense reimbursement policy as in effect from time to time.
3. Other Benefits. The Company shall provide Employee with such other
employment benefits, including, without limitation, medical insurance, as
is provided by Company to its other employees.
4. At-Will Employment. The parties expressly agree that employee shall be
an "at will" employee, and Employee's continued employment by the Company
shall be by the mutual consent of Employee and Company, subject to
termination at the will of either party, with or without cause, at any
time.
D. Termination and Severance.
1. Termination of Employment With Cause. Employee's employment by Company
may be terminated for "cause," at any time and in the event of termination
for cause, or in the event Employee voluntarily terminates his employment,
the Company shall have no obligation to pay any severance or termination
pay to Employee. For purposes of this Section, the term "cause," shall
mean:
(a) Conviction of a crime involving moral turpitude;
(b) The death or permanent disability of Employee, with the term
"permanent disability" defined as meaning a total or partial physical
or mental disability continuing for a period of not less than three (3)
consecutive months, which prevents Employee from substantially
discharging his duties and responsibilities as set forth herein;
(c) Employee's neglect of his duties hereunder after written
notification thereof by the Company, which notice shall specify the
alleged instances of neglect of his duty, and shall provide Employee
with 15 days in which to remedy such neglect, if it is subject to being
remedied;
(d) Employee's breach of this Agreement, Employee's breach of the
Company's Employee Nondisclosure and Invention Assignment Agreement or
malfeasance in connection with his employment;
(e) Employee personally engaging in knowing and intentional illegal
conduct which is seriously injurious to the Company or its affiliates;
or
2
(f) Employee breaches any of his obligations, representations or
warranties under the Purchase Agreements.
2. Termination Without Cause. In the event Employee's employment is
terminated by the Company without cause during the Employment Period,
Employee shall receive immediately upon termination, as severance pay, a
cash payment equal to twelve month's base salary then being paid to
Employee. Employee agrees to accept the Company's payment under this
Section in full and complete settlement for all of Employee's claims and
damages, if any, resulting from such termination without cause.
3. Withholding, Etc. The Company may make such deductions, withholdings
and other payments from all sums payable to Employee pursuant to this
Agreement which are required by law or as Employee requests for taxes and
other charges.
4. Deliverables. Upon any termination or expiration of this Agreement,
Employee shall promptly deliver to Company (without retaining any copies)
all the forms, brochures, project materials, sales materials, letterhead,
business cards, and all other written, printed, and computer stored
materials relating to the business of the Company and its affiliates in
Employee's possession.
E. Confidentiality and Nondisclosure.
1. Confidentiality, Nondisclosure and Intellectual Property
Agreements. Employee agrees to execute, deliver and perform, during the
term of his employment with the Company and thereafter, all
confidentiality, nondisclosure and intellectual property agreements
(including the Company's Employee Nondisclosure and Invention Assignment
Agreement and any similar invention and copyright assignment agreements),
concerning the Company, its affiliates and their products, which have been
executed by other key employees and executives of the Company and its
affiliates, and any such reasonable modifications thereof which are deemed
necessary by the Company to protect its intellectual property rights.
2. Exclusive Service. Employee agrees that so long as he remains employed
by the Company, and for a period of two years thereafter the termination of
his employment by the Company, he will not, except with the written
approval of the Company, engage in or be employed in any business
competitive with that of the Company, within Canada or the United States,
either actively or as a passive investor, and will otherwise do nothing
inconsistent with his duties hereunder including, but not limited to, using
any of the Company's, or the Company's affiliates', trade secrets, patents,
trademarks, trade names, copyrights, secret processes, plans of business
operation, customer lists or other intangible assets of the Company or its
affiliates, whether presently owned or hereafter acquired, other than in
connection with his employment by the Company. The holding and trading of
publicly traded stocks of competitive companies, as long as the total
amount of stock in any one company does exceed 5% of that company's
outstanding shares is excepted.
3. Confidentiality Policies. Employee acknowledges that the Company is a
publicly held corporation and that as such, it is legally obligated to
maintain certain policies concerning the disclosure of nonpublic material
information concerning the Company, the Company's affiliates, their
products, operations and business. Employee agrees to comply with all of
such policies as may be adopted by the Company from time to time hereafter,
or as may be presently existing. Employee further agrees to fully comply
with all laws, rules and regulations of the United States Securities and
Exchange Commission, its Canadian counterpart, any state or provincial
securities authority, any court or other regulatory authority or agency
relating to or affecting transactions in the Company's or the Company's
affiliates' securities and specifically agrees not to purchase or sell
securities of the Company while in possession of material nonpublic
information concerning the Company or its affiliates.
4. Trade Secrets and Confidential Information of Prior
Employers. Employee agrees to abide by all confidentiality, trade secret,
proprietary information, invention, copyright and other intellectual
property agreements or policies relating to his prior employment. He agrees
NOT to: (a) disclose to the Company or any of its agents or employees; (b)
use in the course of his employment by the Company; (c) use as a basis
3
for or component of any Company products; or (d) incorporate in any
products he designs on behalf of the Company, any trade secret information,
ideas, designs, programs, algorithms or other intellectual property
information which are proprietary to any other person or entity. Employee
further represents and warrants that he does not have possession or control
of any manuals, documents, written plans, computer disks or other memory
devices, or any other physical materials which contain proprietary,
nonpublic information of any other person or entity.
5. Survival. Employee's agreements under this Section shall survive the
termination of his employment.
F. Miscellaneous.
1. Arbitration. If any dispute between the parties arises out of this
agreement, such dispute shall be finally resolved by binding arbitration
conducted in Orange County, California by Judicial Arbitration and
Mediation Services, Inc., or if such entity no longer exists, by an
arbitrator reasonably acceptable to both of the parties. Any such
arbitration shall be conducted before a single arbitrator. Judgment upon
the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof.
2. Assignment. This Agreement shall inure to the benefit of and shall be
binding upon the successors and the assigns of the Company. This Agreement
is personal to Employee and may not be assigned by him.
3. Severability. If any provision of the Agreement shall be found invalid
by any court of competent jurisdiction, such findings shall not affect the
validity of the other provisions hereof and the invalid provisions shall be
deemed to have been severed herefrom.
4. Waiver of Breach. The waiver by any party of the breach, of any
provision of this Agreement by the other party or the failure of any party
to exercise any right granted to it hereunder shall not operate or be
construed as the waiver of any subsequent breach by such other party nor
the waiver of the right to exercise any such right.
5. Entire Agreement. This Agreement, the Purchase Agreements, the
Company's Employee Nondisclosure and Invention Assignment Agreement
referred to above, the Company's employee manual(s) and all agreements
entered into in connection with the grant of stock options above contain
the entire agreement of the parties concerning the subject matter hereof,
and supersede all prior agreements or understandings, whether written or
oral. This Agreement may not be changed orally, but only by an agreement in
writing signed by the parties. Employee acknowledges that no
representation, inducement, promise or agreement, oral or otherwise, has
been made by the Company or its officers or agents to induce Employee to
enter into this Agreement.
6. Notices. Any notice required or permitted to be given hereunder shall
be in writing and may be personally served or sent by United States mail,
and shall be deemed to have given when personally served or five days after
having been deposited in the United States mail, if mailed first-class
mail, postage prepaid and properly addressed as follows. For the purposes
hereof, the addresses of the parties hereto (until notice of a change
thereof is given as provided in this Section shall be as follows:
If to Employee: Xxxxxxx Xxxx
0000 Xxxxxx Xx.
Xxxxxxxxxxx, Xxxxxxx X0X 0X0
If to the Company: State of the Art, Inc.
00 Xxxxxxxxxx Xxxxx.
Xxxxxxx, XX 00000
Attention: President
cc: Xxxx Xxxxxxxxx
7. Applicable Law. This Agreement is entered into and executed in the
State of California and shall be governed by the laws of such State.
4
8. Counterparts. This Agreement may be executed simultaneously in any
number of counterparts, each of which shall be deemed an original but all
of which together shall constitute one and the same instrument.
9. Headings. The paragraph and subparagraph headings herein are for
convenience only and shall not affect the construction hereof.
10. Further Assurances. Each of the parties hereto shall, from time to
time, and without charge to the other parties, take such additional actions
and execute, deliver and file such additional instruments as may be
reasonably required to give effect to the transactions contemplated hereby.
11. Attorney's Fees. In the event any party hereto commences arbitration
or legal action to enforce this Agreement, the prevailing party shall be
entitled to its reasonable attorney's fees, costs and expenses incurred in
such action.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands as of
the day and year first above written.
SYBEX LTD.
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------
Xxxxx X. Xxxxxxxxx
Chief Financial Officer
EMPLOYEE
By: /s/ Xxxxxxx X. Xxxx
--------------------------------
Xxxxxxx X. Xxxx
5
