EMPLOYMENT AGREEMENT
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AGREEMENT made as of the 1st day of March, 1999, by and
between COVER-ALL TECHNOLOGIES INC., a Delaware corporation (the
"Company"), having its principal office at 00-00 Xxxxxxx Xxxxx,
Xxxx Xxxx, Xxx Xxxxxx 00000 and XXXXX X. XXXXX, currently
residing at 00 Xxxxxxxxxx Xxxxx, Xxxxxxx, Xxx Xxxxxx 00000 (the
"Employee").
W I T N E S S E T H:
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WHEREAS, the Employee has been serving as President of
the Company pursuant to that certain Employment Agreement by and
among the Company and the Employee, dated the 1st day of March,
1998, which expires on February 28, 1999, and the Company and the
Employee wish to continue the Employee's employment pursuant to
the terms hereof.
NOW, THEREFORE, in consideration of the
representations, warranties and mutual covenants set forth
herein, the parties agree as follows:
1. Employment. The Company, effective March 1, 1999,
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hereby agrees to continue to retain the Employee as President of
the Company and the Employee hereby accepts such employment, all
upon and subject to the terms and conditions hereinafter set
forth.
2. Term. The term of employment under this Agreement
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shall commence as of March 1, 1999 and shall continue month to
month (the "Employment Term"), subject to earlier termination for
disability or for Cause as provided in Section 5 hereof. This
Agreement shall terminate upon the Employee providing written
notice of termination to the Company, provided such written
notice is given prior to the first day of the month which the
Employee elects to be the final month of his Employment Term.
3. Duties.
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(a) The Employee will render his services to the
Company as President and shall perform such duties and services
of those offices or positions or of such other office or position
as may be assigned to him from time to time by the Board of
Directors or the Chief Executive Officer of the Company. In
addition, the Employee will hold, without additional compensation
therefor, such other offices and directorships in the Company or
any parent or subsidiary of the Company to which, from time to
time, he may be appointed or elected.
(b) Except as otherwise provided herein and except for
illness, permitted vacation periods and permitted leaves of
absence consistent with the past practice of the Company or as
otherwise approved by the Board of Directors of the Company, the
Employee agrees that during the term of his employment hereunder,
he shall devote all of his full working time and attention, and
give his best effort, skill and abilities, exclusively to the
business and interests of the Company.
4. Compensation; Benefits.
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(a) (i) Salary. In consideration of the services to
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be rendered by the Employee hereunder, including, without
limitation, any services rendered by him as an officer or
director of the Company or any parent, subsidiary or affiliate of
the Company, the Company agrees to pay to the Employee, and the
Employee agrees to accept as compensation, an annual salary of
$210,000.00 (the "Base Salary"), payable in accordance with the
Company's normal payroll policies, retroactive to January 1,
1999. The Company, by action of the Board of Directors or the
Compensation Committee of the Board of Directors of the Company,
may, in its sole discretion, increase the Base Salary at any
time. The Employee's Base Salary shall be subject to all
applicable withholding and other taxes.
(ii) Bonus. In addition to the payment of the
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Base Salary, as provided for hereunder, the Company shall pay the
Employee a bonus in the amount of $40,000 (the "Retention Bonus")
which shall be immediately payable to the Employee upon the
execution of this Agreement.
(b) Benefits. During the term of his employment
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hereunder, the Employee shall be entitled to the following
employment benefits:
(i) vacations and sick leaves in accordance with
the Company's policies from time to time in effect for
officers and executive employees of the Company; and
(ii) participation, subject to qualification and
participation requirements, in medical, life or other
insurance or hospitalization plans and any pension, profit
sharing or other employee benefit plans, presently in effect
or hereafter instituted by the Company and applicable to its
officers and executive employees.
(c) Reimbursement of Expenses. The Employee shall be
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reimbursed for reasonable and necessary expenses incurred by the
Employee in performing his employment hereunder, provided such
expenses are adequately documented in accordance with the
Company's policies.
(d) Indemnification. To the extent and under the
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conditions provided in the Company's bylaws, the Employee shall
be indemnified by the Company for judgments, costs, and expenses
for acts performed as an officer and employee of the Company
(subject to Delaware law). As of the date of this Agreement, the
Company has insurance coverage for directors and officers
liability, and if such coverage should expire during the term of
the Employee's employment, the Company shall, to the extent it is
reasonably economically feasible, use its best efforts to renew
such coverage.
5. Termination in Case of Disability, Death or for
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Cause.
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(a) If the Employee, due to physical or mental injury,
illness, disability or incapacity, shall fail to render the
services provided for in this Agreement for a consecutive period
of three (3) months, or an aggregate of three (3) months in any
six (6) month period, the Company may, at its option, terminate
the Employee's employment hereunder upon fourteen (14) days'
written notice to the Employee.
(b) If the Employee shall die during the term of this
Agreement, this Agreement and the Employee's employment hereunder
shall terminate immediately upon the Employee's death, except
that the Company shall be required to continue paying to the
Employee's spouse (or estate, if there shall be no surviving
spouse) the severance compensation payable pursuant to Section 6
hereof consisting of an amount equal to $95,000 in cash, payable
in accordance with the Company's payroll policies for a period of
six (6) months following such death.
(c) Notwithstanding anything to the contrary in this
Agreement, the Company, upon notice to the Employee, may
terminate this Agreement and the employment of the Employee
hereunder for Cause, which, for purposes of this Agreement, shall
be defined to mean (i) the continued and repeated failure or
refusal by the Employee to perform specific directives of the
Board of Directors or the Chief Executive Officer of the Company,
(ii) embezzlement or any offense involving misuse or
misappropriation of money or other property of the Company, (iii)
conviction for a felony, (iv) any act of dishonesty, disloyalty
or other conduct that is materially injurious to the Company, or
(v) material breach by the Employee of any of the terms of this
Agreement other than those contained in this Section 5.
6. Severance Compensation.
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(a) In the event the Employee's employment hereunder
is terminated during the Employment Term either by the Employee
for any reason or no reason at all or by the Company for any
reason other than for Cause, the Company shall pay to the
Employee as severance compensation an amount equal to $95,000 in
cash.
(b) Severance compensation shall be paid biweekly in
accordance with the Company's usual practices. Employee shall
also be paid biweekly for unused vacation time.
(c) In the event the Employee receives severance
compensation under this Section 6, the Employee shall not be
entitled to receive any other compensation or benefits under this
Agreement after the termination of the Employee's employment
hereunder and, as a condition to receiving such severance
compensation, the Employee hereby agrees that he shall have no
other claim against the Company by reason of this Agreement.
7. Disclosure and Assignment of Discoveries.
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(a) The Employee shall (without any additional
compensation) promptly disclose in writing to the Board of
Directors of the Company all ideas, processes, devices and
business concepts (hereinafter referred to collectively as
"Discoveries"), whether or not patentable or copyrightable, which
he, while employed by the Company, conceives, develops, acquires
or reduces to practice, whether alone or with others and whether
during or after usual working hours, and which are related to the
Company's business or interests, or arise out of or in connection
with the duties performed by him hereunder; and the Employee
hereby transfers and assigns to the Company all right, title and
interest in and to such Discoveries. Upon the request of the
Company, the Employee shall (without any additional
compensation), from time to time during or after the expiration
or termination of his employment, execute such further
instruments and do all such other acts and things as may be
deemed necessary or desirable by the Company to protect and/or
enforce its rights in respect of such discoveries.
(b) For purposes of this Section 7 and the following
Section 8, the term "Company" shall mean and include any and all
subsidiaries, parents and affiliated corporations of the Company
in existence from time to time.
8. Non-Disclosure of Confidential Information and
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Non-Competition.
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(a) The Employee represents that he has been informed
that it is the policy of the Company to maintain as secret and
confidential all information relating to (i) the products,
processes and/or business concepts used by the Company and (ii)
the customers and employees of the Company ("Confidential
Information"), and the Employee further acknowledges that such
Confidential Information is of great value to the Company and is
the property of the Company. The parties recognize that the
services to be performed by the Employee are special and unique,
and that by reason of his employment by the Company, he will
acquire Confidential Information as aforesaid. The parties
confirm that to protect the Company's goodwill, it is reasonably
necessary that the Employee agree, and accordingly the Employee
does hereby agree, that he will not directly or indirectly
(except where authorized by the Board of Directors of the Company
for the benefit of the Company):
A. at any time during his employment hereunder or
after he ceases to be employed by the Company, divulge to
any persons, firms or corporations other than the Company
(hereinafter referred to collectively as "Third Parties"),
or use, or cause to authorize any Third Parties to use, any
such Confidential Information, or any other information
regarded as confidential and valuable by the Company which
he knows or should know is regarded as confidential and
valuable by the Company (whether or not any of the foregoing
information is actually novel or unique or is actually known
to others); or
B. at any time during his employment hereunder and
for a period of one (1) year after he ceases to be employed
by the Company (the "Restricted Period"), solicit or cause
or authorize, directly or indirectly, to be solicited for
employment, for or on behalf of himself or Third Parties,
any persons who were at any time within one year prior to
the cessation of his employment hereunder, employees of the
Company; or
C. at any time during his employment hereunder and
during the Restricted Period, employ or cause or authorize,
directly or indirectly, to be employed, for or on behalf of
himself or Third Parties, any such employees of the Company;
or
D. at any time during his employment hereunder, the
Employee will not accept employment with or participate,
directly or indirectly, as owner, stockholder, director,
officer, manager, consultant or agent or otherwise use his
special, unique or extraordinary skills or knowledge with
respect to the business of the Company or of any affiliate
of the Company in or with any business, firm, corporation,
partnership, association, venture or other entity or person
which is engaged in the business of designing, developing or
providing software services to the property and casualty
insurance industry, except that this paragraph D shall not
be construed to prohibit the Employee from owning up to 5%
of the securities of a corporation which are publicly traded
on a national securities exchange or in the over-the-counter
market or from being employed by an insurance or other
company which may design and market software provided the
designing and marketing of software is not a principal part
of the business of such other company or concern; or
E. at any time during his employment hereunder,
solicit or cause or authorize, directly or indirectly, to be
solicited, for or on behalf of himself or Third Parties, any
business with respect to designing, developing or providing
software services to the property and casualty insurance
industry from Third Parties who were, at any time within one
(1) year prior to the cessation of his employment hereunder,
customers of the Company for such business; or
F. at any time during his employment hereunder,
accept or cause or authorize, directly or indirectly, to be
accepted, for or on behalf of himself or Third Parties, any
such business from any customers of the Company.
(b) The Employee agrees that he will not, at any time,
remove from the Company's premises any drawings, notebooks, data
and other documents and materials relating to the business and
procedures heretofore or hereafter acquired, developed and/or
used by the Company without prior written consent of the Board of
Directors of the Company, except as reasonably necessary to the
discharge of his duties hereunder.
(c) The Employee agrees that, upon the expiration of
his employment by the Company for any reason, he shall forthwith
deliver up to the Company any and all order-books, customer
lists, logs, drawings, notebooks and other documents and
materials, and all copies thereof, in his possession or under his
control relating to any Confidential Information or any
discoveries or which is otherwise the property of the Company.
(d) The Employee agrees that any breach or threatened
breach or alleged breach or alleged threatened breach by him of
any provision of this Section 8 shall entitle the Company, in
addition to any other legal remedies available to it, to apply to
any court of competent jurisdiction to enjoin such breach or
threatened breach or alleged breach or alleged threatened breach.
The parties understand and intend that each restriction agreed to
by the Employee hereinabove shall be construed as separable and
divisible from every other restriction, and that the
unenforceability, in whole or in part, of any other restriction,
will not effect the enforceability of the remaining restrictions
and that one or more or all of such restrictions may be enforced
in whole or in part as the circumstances warrant. No waiver of
any one breach of the restrictions contained in this Section 8
shall be deemed a waiver of any future breach.
(e) The Employee hereby acknowledges that he is fully
cognizant of the restrictions put upon him by this Section 8, and
that the provisions of this Section 8 shall survive the
termination of this Agreement and his employment with the
Company.
9. Life Insurance. The Employee agrees that the
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Company may apply for and purchase one or more life insurance
policies on the life of the Employee in such amount or amounts as
the Company deems appropriate. The Company shall be the sole
beneficiary of such insurance policy or policies and the Employee
hereby acknowledges that the Company has an insurable interest in
his life. The Employee agrees to cooperate with the Company in
obtaining any insurance on the life or on the disability of the
Employee which the Company may desire to obtain for its own
benefit and shall undergo such physical and other examinations,
and shall execute any consents or applications, which the Company
may request in connection with the issuance of one or more of
such insurance policies. The Company hereby agrees to cancel
such life insurance policy with respect to the Employee
immediately upon the termination of his employment hereunder.
10. Notices.
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(a) All notices, requests, demands or other
communications hereunder shall be deemed to have been given if
delivered in writing personally or by certified mail to each
party at the address set forth below, or at such other address as
each party may designate in writing to the other:
If to the Company:
Cover-All Technologies Inc.
00-00 Xxxxxxx Xxxxx
Xxxx Xxxx, Xxx Xxxxxx 00000
Attention: Chief Executive Officer
with a copy to:
Xxxxxx Xxxx & Priest LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxx, Esq.
If to the Employee:
Xxxxx X. Xxxxx
00 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxx Xxxxxx 00000
11. Entire Agreement. This Agreement contains the
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entire understanding of the parties with respect to the subject
matter hereof, supersedes any prior agreement between the
parties, and may not be changed or terminated orally. No change,
termination or attempted waiver of any of the provisions hereof
shall be binding unless in writing and signed by the party
against whom the same is sought to be enforced. No provision
hereof shall be construed against a party because that provision
or any other provision was drafted by or at the direction of such
party.
12. Successors and Assigns. This Agreement shall be
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binding upon and shall inure to the benefit of the respective
heirs, legal representatives, successors and assigns of the
parties hereto.
13. Severability. In the event that any one or more
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of the provisions of this Agreement shall be declared to be
illegal or unenforceable under any law, rule or regulation of any
government having jurisdiction over the parties hereto, such
illegality or unenforceability shall not affect the validity and
enforceability of the other provisions of this Agreement.
14. Counterparts. This Agreement may be executed in
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one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
same instrument.
15. Governing Law. All matters concerning the
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validity and interpretation of and performance under this
Agreement shall be governed by the laws of the state of New York,
whose courts or the federal courts located in the Southern
District of New York shall have exclusive jurisdiction over the
parties to which they consent.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above written.
COVER-ALL TECHNOLOGIES INC.
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: Chief Executive Officer
/s/ Xxxxx X. Xxxxx
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XXXXX X. XXXXX
