Exhibit 10.15
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of this 10th day of
January 2002, and effective as of January 1, 2001, by and between Allin
Corporation, a Delaware corporation ("Employer"), and Xxxxxxx X. Xxxxxxxx
("Employee"), a resident of Pennsylvania.
WITNESSETH:
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WHEREAS, Employer and Employee entered into that certain Employment
Agreement as of June 15, 1998 (the "Prior Employment Agreement") pursuant to
which Employee was employed as Chief Executive Officer of the Employer on the
terms and conditions contained in the Prior Employment Agreement; and
WHEREAS, Employer desires to continue to employ Employee as its Chief
Executive Officer on a full-time basis and Employee is willing to continue to
serve on a full-time basis but Employer and Employee desire to replace the Prior
Employment Agreement with this Employment Agreement.
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained and intending to be legally bound hereby, the parties agree as
follows:
Section 1. Employment. Subject to the terms and conditions of this
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Agreement, Employer agrees to continue to employ Employee as Chief Executive
Officer of Employer, and Employee accepts such employment. Employee will
diligently and faithfully and in conformity with the directions of the Board of
Directors of Employer perform the duties of his employment hereunder, and he
will devote his best efforts and attention on a full-time basis to the
performance of said duties.
Notwithstanding the foregoing, Employee may devote his time to various personal
endeavors provided such activities and services do not materially interfere or
conflict with the performance of his duties hereunder and provided further that
such activities as are consistent with the Employee's past practices will not be
deemed to materially interfere or conflict with the performance of his duties
hereunder.
Section 2. Employment Period. The term of Employee's employment hereunder
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shall begin on January 1, 2001 and shall continue through December 31, 2003
unless sooner terminated in accordance with the terms of this Section 2
("Employment Period"). The Employment Period shall terminate upon (i) Employee's
death or, unless waived by Employer, his disability, either physical or mental
(as determined by Employer's physician) which may reasonably be anticipated to
render him unable, for a period of at least three (3) months, effectively to
perform the obligations, duties and responsibilities of Employee's employment
with Employer; or (ii) the termination of Employee's employment by the Board of
Directors with cause (as hereinafter defined); or (iii) the passage of one
hundred and eighty (180) days from the date of delivery by either party to the
other of his or its election to terminate this Agreement. As used herein,
"cause" shall mean (i) dishonest, fraudulent or illegal conduct; (ii)
misappropriation of Employer funds; (iii) conviction of a felony; (iv) excessive
use of alcohol; (v) use of controlled substances or other addictive behavior;
(vi) unethical business conduct; (vii) breach of any statutory or common law
duty of loyalty to Employer; and (viii) action by Employee which is prejudicial
or injurious to the business or goodwill of Employer or a material breach of
this Agreement.
Section 3. Employment Compensation and Other Benefits.
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(a) Salary. For services performed by Employee during the Employment
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Period, Employer will pay to Employee a salary of One Hundred Seventy Five
Thousand Dollars ($l75,000) per annum, payable in equal semi-monthly
installments of $7,291.76, prorated for any partial period of employment. Future
increases or decreases in salary during the term of this Agreement will be
subject to Section 3(f).
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(b) Benefits. During the term of his employment hereunder, Employee will be
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entitled to the following:
(i) payment by Employer of the premiums for medical insurance
coverage for himself and his family consistent with programs from
time to time in effect for the employees of Employer;
(ii) four weeks of paid vacation each year of employment; and
(iii) such other benefits as are available to other employees of
Employer generally.
(c) Business Expenses. Employer will reimburse Employee for reasonable
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out-of-pocket expenses incurred by him, in accordance with Employer's policies
as in effect from time to time, for entertainment, travel, lodging and similar
items in connection with the business of Employer, provided that Employee
properly accounts for and promptly submits appropriate supporting documentation
with respect to all such expenses.
(d) Discretionary Bonus. During the Employment Period, the Employee shall
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have the opportunity to earn an annual bonus in accordance with a Company annual
bonus program to be established by the Compensation Committee and approved by
the Board of Directors of the Company. The payment of any annual bonus under any
such program shall be contingent upon the achievement of certain corporate
and/or individual performance goals established by the Board in its sole
discretion. In general, annual bonuses shall be based on goals which enhance
shareholder value. One or more of the following may be established as acceptable
performance goals: Company revenues, pre-tax income, earnings before income
taxes, interest, depreciation and amortization, return on equity, total
shareholder return, or other measures of corporate performance which would be in
the best interests of the shareholders.
A discretionary bonus for a particular calendar year will be payable to the
Employee only if the Employee is employed on the last day of the calendar year
for which the bonus is earned unless (i) cessation of employment prior to year
end is due to his death or disability or follows (for any reason) a Change in
Control (as defined in subsection 3(e)) during that calendar year or (ii) agreed
upon goals were already attained for that calendar year prior to cessation of
his employment unless the Employee is terminated for "cause" (as defined in
Section 2).
In the event of a Change in Control the Board will determine the bonus to be
awarded for the year in which the Change in Control occurs and such payment will
be made within sixty days after the Change in Control.
In the event that cessation of employment is due to Employee's death or
disability the Board will award the pro-rata portion of bonus that would have
been due as if the Employee had completed the year. For purposes of this
paragraph the performance of the company as of the date of cessation will be
annualized through the end of the year.
(e) Stock Option Plan. Employee will be entitled to participate in
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Employer's stock option plans. All options to purchase stock of Employer granted
to Employee prior to February 13, 2001 shall vest upon the earlier to occur of
(a) May 15, 2001, and (b) the date on which (i) the termination of this
Agreement without cause occurs, (ii) Employer sells all or substantially all of
its assets, (iii) Employer merges with another entity in a transaction in which
Employer is not the surviving corporation, or (iv) any person (as that term is
used in Section 13 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) other than the shareholders of Employer (as existing on January
1, 2001) becomes the Beneficial Owner (as that term is used in Section 13(d) of
the Exchange Act) directly or indirectly of 40% or more of the common stock of
Employer (collectively, an event described in (ii), (iii) or (iv) is referred to
as a "Change in Control"). Notwithstanding the foregoing, vested options granted
to Employee prior to February 13, 2001 will be immediately forfeited, and will
no longer be exercisable, upon the termination of the Employee for "cause," as
defined in Section 2.
(f) Annual Merit Review. Annually, on or before November 1 of each year
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Employer will conduct an annual review of Employee's performance under this
Agreement and, if deemed appropriate, implement adjustments to this Section 3
for the following year.
(g) Severance Pay. If Employee's employment is terminated, during the
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Employment Period, (a) by Employer without cause, or (b) by Employer or Employee
in conjunction with, or within one year after, the occurrence of a Change in
Control, Employee shall receive:
(i) semi-monthly severance payments equal to the semi-monthly base
salary payment which Employee was receiving immediately prior to
the termination, until the one-year anniversary of
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the date of termination. For so long as Employee is entitled to
receive severance payments, the Employer will continue, at its
expense, coverage for the Employee (and his eligible dependents)
under the Employer's group health plan. The period of time
Employer continues Employee's coverage will not reduce the period
of time Employee may continue coverage at his expense under
COBRA;
(iii) the right to convert each of his vested options to purchase
stock of Employer granted prior to February 13, 2001 into the
right to receive cash in an amount equal to the difference
between the fair market value of the stock on the date the right
is exercised and the exercise price of the option from which the
right was converted. These rights may be exercised at any time
prior to the "Expiration Date", as defined in Employee's stock
option agreement from which the right was converted,
notwithstanding the expiration of the options based on Employee's
termination prior to the "Expiration Date". Employee's options
granted prior to February 13, 2001 will automatically convert
into such rights immediately prior to the day such options
otherwise terminate based on the termination of Employee's
employment with Employer.
(h) Change in Control Bonus. Employee shall receive a single sum payment of
Two Hundred and Twenty Five Thousand Dollars ($225,000) upon a Change in
Control. In the event that Employer sells a significant portion (instead of all)
of its assets, Employee shall receive a portion of such sum as determined by the
Board.
Section 4. Conditions of Continued Employment. As conditions of his
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continued employment, Employee covenants and agrees as follows:
(a) that, during the Employment Period, he will devote his full time,
services and attention and best efforts to the performance of his duties and to
the promotion of the business and interests of Employer except as permitted in
Section 1;
(b) that, during the Employment Period, and for a period of two (2) years
thereafter, he will not, without the prior written consent of the Board of
Directors of Employer, directly or indirectly, as a stockholder (except as a
stockholder owning beneficially or of record less than five percent (5%) of the
outstanding shares of any class of stock of any issuer listed on a national
securities exchange), or as an officer, director, manager, member, employee,
partner, joint venturer, proprietor or otherwise, engage in, become interested
in, consult with, lend to or borrow from, advise or negotiate for or on behalf
of, any business which is of the type in which Employer or any affiliate or
subsidiary of Employer engages during the Employment Period;
(c) that, during the Employment Period, and for a period two (2) years
thereafter, he will not solicit any customer of Employer or any customer of any
affiliate of subsidiary of Employer, directly or indirectly, for the purpose of
enticing such customers to do business with anyone other than Employer;
(d) that, during the Employment Period, and for a period of two (2) years
thereafter, he will not solicit (or employ or cause to be employed other than by
Employer) other employees of Employer or any affiliate or subsidiary of
Employer, directly or indirectly, for the purpose of enticing them to leave
their employment with Employer or any affiliate or subsidiary of Employer;
(e) that, during the Employment Period and for a period of two (2) years
thereafter, he will make full and complete disclosure of the existence of this
Agreement and the content of this Section 4 to all prospective employers with
whom he may discuss possible employment;
(f) that, he will refrain from directly or indirectly disclosing, making
available or using or causing to be used in any manner whatsoever, any
information of Employer of a proprietary or confidential nature (including
without limitation, information regarding inventions, processes, formulas,
systems, plans, programs, studies, techniques, "know-how," trade secrets, income
or earnings, tax data, customer lists and contracts to which Employer is a
party, but excluding any such information which may be in the public domain
through proper means) and, upon termination of his employment, such information,
to the extent that it has been reduced to writing (including any and all copies
thereof), together with all copies of all forms, documents and materials of
every kind, whether confidential or otherwise, shall forthwith be returned to
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the Employer and shall not be retained by Employee or furnished to any third
party, either by sample, facsimile or by verbal communication;
(g) that, he will refrain from any disparagement, direct or indirect,
through innuendo or otherwise, of Employer or any of its employees, agents,
officers, directors, shareholders or affiliates;
(h) that, during the Employment Period, he will not, without the prior
written consent in each case of the Board of Directors of Employer: (i)
participate actively in any other business interests or investments which would
conflict with his responsibilities under this Agreement except as permitted in
Section 1, or (ii) borrow money from, or lend to, customers (except those
commercial institutions whose business it is to lend money) or individuals or
firms from which Employer or any affiliate or subsidiary of Employer buys
services, materials, equipment or supplies, or with whom Employer or any
affiliate or subsidiary does business;
(i) that, during the Employment Period, he will not, without the prior
written consent in each case of the Board of Directors of Employer (i) exchange
goods, products or services of Employer in return for goods, products or
services of any individual or firm or (ii) accept gifts or favors from any
outside organization or agency which, individually or collectively, may cause
undue influence in his selection of goods, products or services for Employer;
(j) that, after the termination of his employment, he will not secure, or
attempt to secure, from any employee or former employee of Employer or any
affiliate or subsidiary of Employer, any information relating to Employer or any
affiliate or subsidiary of Employer or their business operations; and
(k) that he will promptly and voluntarily advise the Board of Directors of
Employer of any activities which might result in a conflict of interest with his
duties to Employer hereunder, and, further, will make such other and further
disclosures as Employer may reasonably request from time to time.
Employee represents and warrants to Employer that, notwithstanding the
operation of the covenants contained in this Section 4, upon the termination of
his employment hereunder, Employee will be able to obtain employment for the
purpose of earning a livelihood.
Section 5. Injunctive Relief. Because the services to be performed by
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Employee hereunder are of a special, unique, unusual, confidential extraordinary
and intellectual character which character renders such services unique and
because Employee will acquire by reason of his employment and association with
Employer an extensive knowledge of Employer's trade secrets, customers,
procedures, and other confidential information, the parties hereto recognize and
acknowledge that, in the event of a breach or threat of breach by Employee of
any of the terms and provisions contained in Section 4 or Section 6 of this
Agreement, monetary damages alone to Employer would not be an adequate remedy
for a breach of any of such terms and provisions. Therefore, it is agreed that
in the event of a beach or threat of a breach of any of the provisions of
Section 4 or Section 6 of this Agreement by Employee, Employer shall be entitled
to an immediate injunction from any court of competent jurisdiction restraining
Employee, as well as any third parties including successor employers of Employee
whose joinder may be necessary to effect full and complete relief, from
committing or continuing to commit a breach of such provisions without the
showing or proving of actual damages. Any preliminary injunction or restraining
order shall continue in full force and effect until any and all disputes between
the parties to such injunction or order regarding this Agreement have been
finally resolved. Employee hereby agrees to pay all costs of suit incurred by
Employer, including but not limited to reasonable attorneys' fees, in obtaining
any such injunction or order. Employee hereby waives any right he may have to
require Employer to post a bond or other security with respect to obtaining or
continuing any such injunction or temporary restraining order and, further,
hereby releases Employer, its officers, directors, employees and agents from and
waives any claim for damages against them which he might have with respect to
Employer obtaining in good faith any injunctions or restraining order pursuant
to this Agreement.
Section 6. Absence of Restrictions. Employee will promptly submit to
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Employer written disclosures of all inventions, improvements, discoveries,
technological innovations and new ideas, relating to Employer's business,
whether or not patentable (hereinafter called "Inventions"), which are directly
or indirectly made, conceived, created or prepared by Employee, alone or jointly
with others, during the Employment Period. Worldwide right, title and interest
in and to the intellectual property rights (including but not limited to
copyrights created in, patents to, or any other form of legal protection as may
be obtained or obtainable in the United States of America or any foreign
country), relating to all such Inventions that shall be within the existing or
contemplated scope of Employer's business at the time such inventions are made
or conceived or which result from or are suggested by any work Employee or
others may do for or on behalf of Employer, shall belong to Employer. Employee
will assign all right, title and interest in and to such intellectual property
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rights to Employer, and upon request of Employer, will at any time during the
Employment Period and after termination of Employee's employment for any reason,
execute all proper papers for use in applying for, obtaining, maintaining and
enforcing such copyrights, patents or other legal protection as Employer may
desire and will execute and deliver all proper assignments thereof, when so
requested, without remuneration but at the expense of Employer.
Section 7. General.
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(a) Interpretation. If the provisions of subsections 4(b), 4(c) or 4(d) of
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this Agreement should be held to be invalid, illegal or unenforceable by a court
of competent jurisdiction because of time limitation or geographical area
therein provided, such provisions shall nevertheless be effective and
enforceable for such period of time and/or such geographical area as may be held
to be reasonable by such court. Any provision of this Agreement that is invalid,
illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity, illegality or unenforceability
without invalidating or rendering unenforceable the remaining provisions of this
Agreement, any such invalidity, illegality or unenforceability shall not, of
itself, affect the validity, legality or enforceability of such provision in any
other jurisdiction.
(b) Notices. In any case where any notice or other communications is to be
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given or made pursuant to any provision of this Agreement, such notice or
communication shall be deemed to be delivered when actually received on the date
specified in the return receipt for a notice or communication mail by registered
or certified mail, postage prepaid, addressed as follows:
If to Employer:
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Allin Corporation
000 Xxxxxxxxx Xxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
with copies to:
Xxxxx X. Xxxxxxxxxxx, Esq.
Xxxxxx Xxxxxxx Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, XX 00000
If to Employee:
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Xxxxxxx X. Xxxxxxxx
0000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxxx Xxxx, XX 00000
or such other address or addresses as any party may specify by notice to the
other party given as herein provided.
(c) Headings. The headings in this Agreement are inserted for convenience
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and identification and in no way describe, interpret, define or limit the scope,
extent or intent of this Agreement or any provision hereof.
(d) No Presumption on Interpretation. Nothing herein shall be construed
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more strongly against or more favorably toward either party by reason of either
party having drafted this Agreement or any portion hereof.
(e) Binding Effect. This Agreement shall be binding upon, and inure to the
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benefit of, the parties hereto and their respective heirs, beneficiaries,
executors, administrators, personal representatives, successors and permissible
assigns.
(f) Integration. This Agreement constitutes and contains the entire
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Agreement and understanding between the parties with respect to the subject
matter hereof and supersedes any all prior agreements (including the Prior
Employment Agreement), understandings and negotiations relating thereto. No
promise, understanding, representation, inducement, condition or warranty not
set forth herein has been made or relied upon by any party hereto.
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(g) Waivers: Modification. This Agreement, or any provision hereof, may be
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amended, supplemented or modified only by a writing signed by both parties and
may be waived only by a writing signed by the party to be bound thereby. A
written waiver of any provision shall be valid only in the instance for which
given and shall not be deemed to be a continuing waiver or construed as a waiver
of any other provisions.
(h) Governing Law. This Agreement shall be construed in accordance with and
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governed in all respects by the laws of the Commonwealth of Pennsylvania
(without giving effect to the conflicts of laws provisions thereof).
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
WITNESS: ALLIN CORPORATION
/s/ Xxxxxx Xxxxx /s/ Xxxx X. Xxxxxxxx
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By: Xxxx X. Xxxxxxxx
Name Printed: Xxxx X. Xxxxxxxx
Title: Vice President and Chief Financial
Officer
WITNESS:
/s/ Xxxxxx Xxxxx /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
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