Exhibit 10.6
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made on and as of May 30, 2000 (the "Agreement Date")
by and between XXXXXXX XXXXXXXXX ("Employee") and CTI GROUP (HOLDINGS) INC., a
Delaware corporation ("Company").
BACKGROUND
A. Company desires to employ Employee, and Employee desires to be
employed by Company, upon the conditions and terms set forth in this Agreement.
NOW, THEREFORE, intending to be legally bound hereby, and in
consideration of the mutual covenants set forth this Agreement, Employee and
Company agree as follows:
l. Employment and Duties. Company shall employ Employee as Company's
Chief Financial Officer during the term of employment set forth in Section 2
hereof. Employee shall have such responsibilities and duties, consistent with
his position and expertise, as may from time to time be prescribed by Company's
President. Employee shall devote his full time, energy, skill and best efforts
to the business and affairs of Company, and shall not, during the term of this
Agreement, be engaged in any other business activity whether or not such
business activity is pursued for gain, profit or other pecuniary advantage;
provided, however, that nothing in this Agreement shall prevent Employee from
(i) engaging in charitable activities, or (ii) investing his assets in such form
or manner as (A) will not require any services on Employee's part in the
operations or the affairs of the company in which such investments are made
(other than services to Company and its affiliates) and (B) will not be an
investment in any company which competes, directly or indirectly, with Company
in any manner; provided, further, that the activities permitted in the foregoing
subsections (i) and (ii) shall not, either alone or together with other
activities permitted under those subsections, interfere in any material way with
Employee's responsibilities under this Agreement. Employee shall be employed by
Company, and shall spend his business time, initially at Company's current
offices at Valley Forge, Pennsylvania. The parties agree that if at any time
after the consummation of the proposed merger between Company and Centillion
Data Systems, Inc., Company relocates its headquarters, Company shall be
entitled to require Employee to relocate to the new headquarters location.
Company shall reimburse Employee for all reasonable moving and relocation
expenses incurred in connection with such relocation.
2. Term.
2.1 Term. The initial term of Employee's employment under this
Agreement shall be a period of three (3) years (the "Initial Term") commencing
on June 12, 2000, unless sooner terminated in accordance with the other
provisions of this Agreement. At the end of the Initial Term, this Agreement
shall automatically renew for successive periods of one year (each a "Renewal
Term" and together with the Initial Term, the "Term") unless either party
provides written notice of termination to the other party at least 90 days prior
to the end of the then current Initial or Renewal Term. In such event, this
Agreement shall terminate at the end of the then current Initial or Renewal
Term. In the event that Company provides such termination notice during the
Initial Term, and if Employee relocated during the Initial Term pursuant to
Section 1, then Employee shall be reimbursed for reasonable relocation and
moving expenses to return to the Philadelphia, Pennsylvania metropolitan area if
such return is within 180 days after the end of the Initial Term.
2.2 Early Termination and Severance. In the event of a Change of
Control (as defined below) or Xxxx Xxxxx ceases to be President and Chief
Executive Officer of Company (a "Change of Management") at any time during the
Term, Employee shall be entitled to terminate this Agreement by providing 60
days written notice of termination to Company. Such notice shall be provided no
more than 60 days after the date of the Change of Control or Change of
Management. In the event of a termination pursuant to this Section 2.2, Employee
shall be entitled to a severance payment equal to his then current annual Salary
(as defined in Section 3.1), payable over a 12 month period after the
termination date, in the same periodic installments that payments of Salary are
being made at the time. For purposes of this Section 2.2, the term "Change in
Control" shall mean a change in control of a nature that would be required to be
reported in response to Item 5(f) of Schedule 14A of Regulation 14A promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
whether or not Company is then subject to such reporting requirement; provided
that, without limitation, such a Change in Control shall be deemed to have
occurred if (1) any "person" (as such term is used in Sections 13 (d) and 14(d)
of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rule,
13d-3 under the Exchange Act), directly or indirectly, of securities of Company
representing 50% for more of the combined voting power of Company's then
outstanding securities; (2) during any period of two consecutive years during
the term of this Agreement, individuals who at the beginning of such period
constitute the Board of Directors and any new director, whose election by the
Board of Directors or nomination for election by Company's stockholders was
approved by a vote of at least a majority of the directors then still in office
who either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof, or (3) the business of Company for which
Employee's services are principally performed is disposed of by the Company
pursuant to a partial or complete liquidation of Company, a sale of assets
(including stock of a subsidiary) of Company, or otherwise. Upon termination
under this Section 2.2, Employee shall continue to be bound by the restrictions
set forth in Section 5.
3. Compensation.
3.1 Salary. Company shall pay to Employee as compensation for all
services rendered hereunder a base salary of $175,000 per year ("Salary"),
payable in accordance with Company's normal payroll practices for employees.
Company shall deduct or cause to be deducted from the Salary all taxes and
amounts required by law to be withheld. The Salary shall be reviewed by Company
on an annual basis.
3.2 Benefits. During the Term, subject to the other provisions of
this Agreement, Employee shall be entitled to participate and shall be included
in any savings, 401(K), pension, profit-sharing, group medical, group disability
or similar plan adopted by Company, now existing or established hereafter, to
the extent he is eligible under the general provisions thereof.
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3.3 Cash Bonus. In addition to his Salary, Employee may also receive
cash bonuses on such terms, at such times and in such amounts as Company's
President or Board of Directors may determine in his or its sole discretion
("Cash Bonus").
3.4 Fringe Benefits.
3:4.1 Vacation. Employee shall be entitled to twenty (20) days of
paid vacation during each year, with up to five days of unused vacation time
each year to accrue and be carried over to the next year.
3.4.2 Reimbursement of Expenses. Employee is authorized to incur
ordinary, necessary and reasonable expenses in the course of Company's business,
in accordance with Company's standard expense and expense reimbursement
procedures applicable to executive employees of Company ("Business Expenses").
Company shall reimburse Employee for Business Expenses upon presentation by the
Employee of an itemized account of such Business Expenses in a manner reasonably
prescribed by Company, unless Business Expenses have been paid directly by
Company.
3.4.3 Options. Employee shall be entitled to participate in any
employee stock option plan adopted by Company for the benefit of employees of
Company and its subsidiaries.
3.4.4 Automobile. Company shall provide Employee with an automobile
allowance of $500.00 per month. Employee shall maintain liability, collision and
comprehensive insurance covering any such automobile, in such amounts and on
such terms as are required by applicable law and shall provide Company with
proof of such coverage as and when requested.
3.5 Entire Compensation. The compensation provided for in this
Section shall be the full consideration for the services to be rendered by
Employee to Company hereunder.
4. Termination.
4.1 Notice of Termination. Except as otherwise provided in this
Agreement, any termination of Employee's employment under this Agreement shall
be communicated by written Notice of Termination to Employee. As used in this
Agreement, "Notice of Termination" means a notice specifying the termination
provision in this Agreement relied upon and setting forth the circumstances
providing the basis for termination of Employee's employment under the provision
specified. As used in this Agreement, "Date of Termination" shall mean the date
specified in the Notice of Termination or, where notice is not required, the
date employment actually terminates.
4.2 Grounds for Termination.
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4.2.1 Termination upon Death. Employee's employment with Company and
all of Employee's rights to compensation and benefits hereunder shall
automatically terminate upon his death, except that Employee's heirs, personal
representatives or estate shall be entitled to any unpaid portion of his Salary,
his earned but unpaid bonus, if any, and accrued benefits up to the Date of
Termination and shall also be entitled to reimbursement for any Business
Expenses properly incurred by Employee.
4.2.2 Termination upon Disability. If Employee becomes disabled,
Employee shall continue to receive all of his compensation and benefits in
accordance with Section 3 for a period of six months following the Onset of
Disability (as defined in this Section 4.2.2). Any amounts due to Employee under
this Section 4.2.2 shall be reduced, dollar-for-dollar, by any amounts received
by Employee under any Company disability insurance policy or plan ("Disability
Payments") provided to Employee by Company. "Onset of Disability" means the
first day on which Employee shall be unable to attend to his duties on a full
time basis by reason of physical or mental incapacity, sickness or infirmity.
Company will notify Employee promptly upon having made a determination of the
Onset of Disability. If Employee's disability continues for more than six months
after the Onset of Disability or for periods aggregating more than six months
during any twelve (12) month period, then, Company shall have the right to
terminate Employee's employment immediately upon notice, and all of his rights
to compensation and benefits hereunder shall simultaneously terminate, except
that Employee shall be entitled to any unpaid portion of his Salary and accrued
benefits up to the Date of Termination and to any benefits which are to be
continued or paid after the Date of Termination in accordance with the terms of
the corresponding benefit plans, if any. A determination of Employee's
disability shall be subject to the certification of a qualified physician agreed
to by Company and Employee or, in the event of Employee's incapacity to
designate a physician, Employee's legal representative. In the absence of
agreement between Company and Employee, each party shall nominate a qualified
physician and the two physicians shall select a third physician, who shall make
the determination as to disability.
4.2.3 Termination for Cause. At any time during the Term, Company
may terminate Employee's employment hereunder for Cause (as defined below),
effective immediately upon notice to Employee.
For purposes of this Agreement, Cause shall mean: (1) Employee
breaches, neglects or fails to diligently perform any or all of his duties under
this Agreement (other than such failure resulting from Employee's incapacity due
to physical or mental illness within the meaning of Section 4.2.2), (2) Employee
commits an act of dishonesty or breach of trust, or acts in a manner which is
inimical or injurious to the business or interests of Company, either during the
Term or in connection with the Transaction, (3) Employee violates or breaches
any of the provisions of this Agreement, and, shall have either failed to remedy
such breach within 30 days after his receipt of written notice from Company
identifying the breach in reasonable detail and demanding that he remedy such
breach, or, if incapable of full cure within such 30 day period, shall have
failed to take all reasonable steps to that end during such 30-day period and
thereafter fails to fully cure within an additional period of 15 days, (4)
Employee's intentional act or omission to act results in or is intended to
result directly in gain to or personal enrichment of Employee and injury to
Company or, (5) Employee is indicted for or convicted of a felony or any crime
involving larceny, embezzlement or moral turpitude (which, in the case of moral
turpitude, materially adversely affects Company in any financial manner).
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On termination of this Agreement pursuant to this Section 4.2.3, all
rights to compensation and benefits of Employee shall cease as of the Date of
Termination, except Employee shall be entitled to any unpaid portion of his
Salary and benefits earned to the Date of Termination.
4.3 Procedure Upon Termination. On termination of employment regardless
of the reason, Employee shall promptly return to Company all information
regarding Company in whatever manner or media such information is stored or
maintained, and all documents (including copies) and other property of Company,
including without limitation, customer lists, manuals, letters, materials,
reports, and records in his possession or control no matter from whom or in what
manner acquired.
5. Employee's Covenants.
5.1 Discoveries. Employee shall communicate to Company and preserve as
confidential information of Company each discovery, idea, design, invention and
improvement relating in any manner to Company's business, whether or not
patentable and whether or not reduced to practice, which is conceived, developed
or made by Employee, whether alone, or jointly with others, at any time during
the Term hereof (such discoveries, ideas, designs, inventions and improvements
are referred to as "Employee's Discoveries"). All of Employee's Discoveries
shall be Company's exclusive property, and all of Employee's right, title and
interest therein are hereby irrevocably assigned to Company. Employee shall not,
except with Company's express prior written consent, or except in the proper
course of his employment with Company, use any of Employee's Discoveries for his
own benefit or the benefit of any Person (as defined herein), or disclose any of
Employee's Discoveries to any outside Person through publication or in any other
manner.
For purposes of this Agreement, the term "Person" means a natural
person, corporation, partnership, trust, estate, joint venture, sole
proprietorship, government (and any branch or subdivision thereof), governmental
agency, association, cooperative or other entity.
5.2 Nondisclosure. At all times during and after the Term, Employee
shall keep confidential and shall not, except with Company's express prior
written consent, or except in the proper course of his employment with Company,
directly or indirectly, communicate, disclose, divulge, publish, or otherwise
express, to any Person, or use for his own benefit or the benefit of any Person,
any trade secrets, confidential or proprietary knowledge or information, no
matter when or how acquired, concerning the conduct and details of Company's
business, including without limitation names of customers and suppliers,
marketing methods, trade secrets, policies, prospects and financial condition.
For purposes of this Section 5.2, confidential information shall not include any
information which is now known by or readily available to the general public or
which becomes known by or readily available to the general public other than as
a result of any improper act or omission of Employee.
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5.3 Noncompetition. During the Term hereof and for a period of one
(1) year thereafter, Employee shall not, except with Company's express prior
written consent, directly or indirectly, in any capacity, for the benefit of any
Person:
(1) Communicate with or solicit or employ any Person who is or
during such period becomes a customer, supplier, employee, salesman, agent or
representative of Company, in any manner which interferes or might interfere
with such Person's relationship with Company, or in an effort to obtain such
Person as a customer, supplier, employee, salesman, agent, or representative of
any business in competition with Company.
(2) Establish, engage, own, manage, operate, join or control, or
participate in the establishment, ownership, management, operation or control
of, or be a director, officer, employee, salesman, agent or representative of,
or be a consultant to, any Person in any business in competition with Company,
at any location in North America or the United Kingdom or any other location
where Company now conducts or during the Term begins conducting any business, or
act or conduct himself in any manner which he would have reason to believe
harmful or contrary to the best interests of Company.
5.4 Enforcement. Employee acknowledges that any breach by him of any of
the covenants and agreements of this Section 5 ("Covenants") will result in
irreparable injury to Company for which money damages could not adequately
compensate Company, and therefore, in the event of any such breach, Company
shall be entitled, in addition to all other rights and remedies which Company
may have at law or in equity, to have an injunction issued by any competent
court enjoining and restraining Employee and/or all other Persons involved
therein from continuing such breach. The existence of any claim or cause of
action which Employee or any such other Person may have against Company shall
not constitute a bar to the enforcement of any of the Covenants. If Company is
obliged to resort to litigation to enforce any of the Covenants which has a
fixed term, then such term shall be extended for a period of time equal to the
period during which a material breach of such Covenant was occurring, beginning
on the date of a final court order (without further right of appeal) holding
that such a material breach occurred or, if later, the last day of the original
fixed term of such Covenant.
5.5 Consideration. Employee expressly acknowledges that the Covenants
are a material part of the consideration bargained for by Company and, without
the agreement of Employee to be bound by the Covenants, Company would not have
agreed to enter into this Agreement.
5.6 Scope. If any portion of any Covenant or its application is
construed to be invalid, illegal or unenforceable, then the other portions and
their application shall not be affected thereby and shall be enforceable without
regard thereto. If any of the Covenants is determined to be unenforceable
because of its scope, duration, (geographical area or similar factor, then the
court making such determination shall have the power to reduce or limit such
scope, duration, area or other factor, and such Covenant shall then be
enforceable in its reduced or limited form.
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6. Additional Terms and Provisions.
6.1 Notices. All notices, requests, demands, consents, waivers, and
other communications required or permitted under this Agreement must be in
writing and shall be deemed to have been given (i) upon delivery to the
appropriate addresses stated below, if delivered personally, or (ii) three (3)
days after the date mailed to the appropriate addresses stated, below, if mailed
by first class certified mail, registered mail, or express mail, in each case
with postage prepaid and return receipt requested, or (iii) one (1) day after
the date sent to the appropriate addresses stated below, if sent by a nationally
recognized overnight delivery or courier service, with delivery charges prepaid
and proof of delivery or receipt requested, or (iv) on the date sent to the
appropriate addresses or fax numbers stated below, if sent by prepaid telegram,
e-mail, or fax, provided that a copy is sent within twenty-four (24) hours
thereafter by one of the other methods of giving notices permitted under this
Section. The addresses, e-mail addresses, and fax numbers of the parties for
purposes of this Section are set forth below. Any party may change its
addresses, e-mail addresses, or fax numbers for purposes of this Section by
giving notice of such change to all other parties in the manner permitted under
this Section.
If to Company:
CTI Group (Holdings) Inc.
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: President
with a copy to:
Klehr, Harrison, Xxxxxx, Xxxxxxxxx & Xxxxxx LLP
000 X. Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxxxx, Esq.
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6.2 Entire Understanding. This Agreement sets forth the entire
understanding between the parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous, written, oral, expressed or implied,
communications, agreements and understandings with respect to the subject matter
hereof.
6.3 Modification. This Agreement shall not be amended, modified,
supplemented or terminated except in writing signed by both parties.
6.4 Prior Agreements. Employee represents to Company (1) that there are
no restrictions, agreements or understandings whatsoever to which Employee is a
party which would prevent or make unlawful his execution of this Agreement or
his employment hereunder, (2) that his execution of this Agreement and his
employment hereunder shall not constitute a breach of any contract, agreement or
understanding, oral or written to which he is a party or by which he is bound
and (3) that he is free and able to execute this Agreement and to enter into
employment by Company.
6.5 Termination of Prior Employment Agreements. All prior employment
agreements between Employee and Company (and/or any of its predecessors or
affiliates) are hereby terminated as of the date hereof as fully performed on
both sides.
6.6 Parties in Interest. This Agreement and all rights of Employee
hereunder shall inure to the benefit of, bind and be enforceable by Employee and
his heirs, personal representatives, estate and beneficiaries, and Company and
its successors and assigns.
6.7 Assignment. This Agreement is a personal employment contract of
Company, being for the personal services of Employee, and shall not be
assignable by Employee. This Agreement shall inure to the benefit of and be
binding upon any corporate or other successor of the Company which may acquire,
directly or indirectly, by merger, consolidation, purchase, or otherwise, all or
substantially all of the assets of Company, and shall otherwise inure to the
benefit of and be binding upon the parties hereto and their respective heirs,
executors, administrators, successors and assigns. Company shall be entitled to
assign this Agreement to any subsidiary of Company. Nothing in the Agreement
shall preclude Company from consolidating or merging into or with or
transferring all or substantially all of its assets to another person. In that
event, such other Person shall assume this Agreement and all obligations of
Company hereunder. Upon such a consolidation, merger, or transfer of assets and
assumption, the term "Company" as used herein, shall mean such other person and
this Agreement shall continue in full force and effect.
6.8 Severabilitv. If any provision of this Agreement is construed to be
invalid, illegal or unenforceable, then the remaining provisions hereof shall
not be affected thereby and shall be enforceable without regard thereto.
6.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be an original
hereof, and it shall
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not be necessary in making proof of this Agreement to produce or account for
more than one counterpart hereof.
6.10 Section Headings. Section and subsection headings in this
Agreement are inserted for convenience of reference only, and shall neither
constitute a part of this Agreement nor affect its construction, interpretation,
meaning or effect.
6.11 References. All words used in this Agreement shall be construed to
be of such number and gender as the context requires or permits.
6.12 Controlling Law. This Agreement is made under, and shall be
governed by, construed and enforced in accordance with, the substantive laws of
the Commonwealth of Pennsylvania applicable to agreements made and to be
performed entirely therein, notwithstanding any conflict-of-laws doctrines of
such state or other jurisdiction to the contrary, and without the aid of any
canon, custom or rule of law requiring construction against the draftsman.
6.13 Settlement of Disputes. Any claims, controversies, demands,
disputes or differences between or among the parties hereto or any persons bound
hereby arising out of, or by virtue of, or in connection with, or relating to
this Agreement shall be submitted to and settled by arbitration in Philadelphia,
PA before a single arbitrator who shall be knowledgeable in the field of
business law and employment relations and such arbitration shall be in
accordance with the rules then obtaining of the American Arbitration
Association. The parties agree to bear joint and equal responsibility for all
fees of the arbitrator, abide by any decision rendered as final and binding, and
waive the right to submit the dispute to a public tribunal for a jury or non-
jury trial.
6.14 Exclusive Jurisdiction. The parties hereto irrevocably consent to
the exclusive jurisdiction of the state and federal courts located in
Philadelphia or Xxxxxxxxxx County, PA in any action or proceeding between the
parties hereto and both of the parties agree to service of process by hand
delivery or by certified mail, to the addresses set forth herein for each party.
6.15 Indulgences, Etc. Neither the failure nor delay on the part of
either party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall the single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or any other right, remedy, power or privilege, nor shall
any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence. No waiver shall be effective unless it is
in writing and is signed by the party asserted to have granted such waiver.
6.16 Indemnification. Company hereby indemnifies and holds harmless
Employee from any and all claims, suits, causes of action, liability and
judgments, and all reasonable legal costs and expenses (including reasonable
attorneys' fees) associated therewith, incurred by
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Employee as a result of his termination of his employment with IGI, Inc. in
connection with his execution of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Agreement Date.
CTI GROUP (HOLDINGS) INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------
Xxxxxxx X. Xxxxx
President
Witness:
/s/ Xxxx Xxx Xxxxx /s/ Xxxxxxx Xxxxxxxxx (SEAL)
-------------------------------- --------------------------
Xxxxxxx Xxxxxxxxx
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