EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is signed as of the 22nd day of
December, 1995, by and between ANALYTICAL SURVEYS, INC., a
Colorado corporation (hereinafter referred to as the "Employer"
or "ASI"), and XXXXXXX XXXXXXX (hereinafter referred to as the
"Employee").
WITNESSETH THAT:
WHEREAS, Employee has been employed by Intelligraphics, Inc.
("Intelligraphics"); and that employment has now been terminated
by reason of ASI's acquisition of substantially all of the assets
of Intelligraphics; and
WHEREAS, ASI wants to hire the employee, and ASI and
Employee desire to state in writing the terms and conditions of
their agreements and understandings, and to continue the term of
Employee's employment hereunder;
NOW, THEREFORE, in consideration of the foregoing, of the
mutual promises herein contained, and of other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending legally to be bound, agree
as follows:
1. Term of Employment.
The term shall commence on December 22, 1995, and shall
continue through December 31, 1996, unless sooner terminated in
accordance with the provisions of Paragraph 6 or unless extended
by Employer under Paragraph 6.4.
2. Duties of Employee.
2.1 It is understood and agreed that Employee's principal
duties on behalf of Employer are and shall be as President of the
Intelligraphics Division of ASI, or such additional
responsibilities as assigned by the President of ASI. In
accepting employment by Employer, Employee shall undertake and
assume the responsibility of performing for and on behalf of
Employer whatever duties are reasonably necessary and required in
his position as President of the Intelligraphics Division of ASI.
Employer agrees that it will not relocate Employee from his place
of current employment in Waukesha, Wisconsin to any other place
of employment, without Employee's prior consent which Employee
agrees to consider in good faith. Employer agrees that it will
not change Employee's title as President of the Intelligraphics
Division of ASI.
2.2 Employee covenants and agrees that at all times during
the term of this Agreement, Employee shall devote his full-time
efforts to his duties as an employee of the Employer.
3. Compensation.
3.1 Salary. As compensation for the services to be
rendered by Employee for Employer under this Agreement, Employee
shall be paid not less than the following base annual salary, on
the same basis (biweekly) as ASI's payroll, during the term
hereof: $130,000.00, plus annual increases and bonuses, if any,
as directed by the President of ASI.
3.2 Bonus. Employee shall be a participant in the
Intelligraphics Division of ASI Incentive Bonus Plan effective
through September 30, 1996 (and, if the option is exercised under
Paragraph 6.4, through September 30, 1997) ("Bonus Plan"). The
Bonus Plan is attached hereto as Exhibit A.
3.3 Salary Review. Employee's salary will be reviewed
annually for appropriate increases, if any, in January,
commencing January, 1997.
4. Additional Benefits.
In addition to, and not in limitation of, the compensation
referred to in Paragraph 3, Employee shall be paid the following
additional benefits during the term hereof:
4.1 Reimbursement. Reimbursement of all reasonable
expenses incurred by him in connection with performance of his
duties upon submission of vouchers. Reasonable expenses shall
include, but not be limited to all reasonable out-of-pocket
expenses for entertainment, automobile expenses, travel, meals,
lodging, professional fees, professional dues and the like
incurred by him in the interest of the Employer, subject to such
guidelines and policies as may be promulgated by Employer for
senior executives.
4.2 Vacations. Employee shall be entitled to vacations of
not less than four (4) weeks per year, in accordance with the
Employer's regular vacation policies established for senior
executives; provided, that Employee may accrue any unused
vacation time from year to year, and upon termination of
employment will be compensated for any unused vacation time.
4.3 Death or Disability Payments. In the event of the
Employee's disability or death prior to December 31, 1996 (or
prior to December 31, 1997, if the option is exercised under
Paragraph 6.4), Employee's salary in effect at the time of his
death or disability shall continue to be paid to the Employee, or
to his designee, for a period of six (6) calendar months from the
date of death or from the date of Employee's termination by
reason of disability. For the purposes of this Employment
Agreement, the obligations of the Employer to make the payments
upon the disability of Employee shall not become effective unless
and until all of the following conditions are met, as determined
by an independent physician selected by the President of ASI and
agreed to by Employee: (1) Employee shall become physically or
mentally incapable (excluding infrequent and temporary absences
due to ordinary illnesses) of properly performing the services
required of him in accordance with his obligations under
paragraph 2 hereof or similar provisions of any renewal
Agreement; (2) such incapacities shall exist or be reasonably
expected to exist for more than ninety (90) days in the aggregate
during the period of twelve (12) consecutive months; and (3)
either Employee or Employer shall have given the other party
thirty (30) days' written notice of his or its intention to
terminate the active employment of Employee because of such
disability.
4.4 Life Insurance. Employee shall be provided with a term
life insurance policy in the amount of $150,000 (provided he can
meet the medical conditions for such coverage without being
"rated"), payable to such beneficiaries as he shall designate,
with an additional $150,000 of accidental death coverage.
4.5 Comparable Benefits. Employee shall also be provided
with additional comparable benefits, if any, to those Employee
was receiving from Intelligraphics at the time of his termination
of employment with Intelligraphics.
5. Disclosure of Information.
Employee acknowledges that in and as a result of his employ-
ment hereunder, he will be making use of, acquiring, and/or
adding to confidential information of a special and unique nature
and value relating to such matters as Employer's trade secrets,
systems, procedures, manuals, confidential reports, and lists of
clients. As a material inducement to Employer to enter into this
Agreement and to pay to Employee the compensation stated in
Paragraph 3, as well as any additional benefits stated in
Paragraph 4, Employee covenants and agrees that he shall not,
other than in the ordinary course of business conducted for ASI,
at any time during or following the term of his employment,
directly or indirectly divulge or disclose for any purpose
whatsoever or appropriate to his own use or to the use of others
any confidential information that has been obtained by, or
disclosed to him, as a result of his employment by Employer.
6. Termination.
6.1 Termination By Employer.
(A) If Employer terminates Employee's employment
without cause prior to December 31, 1996, Employer will continue
to pay compensation and benefits to Employee (as if Employee
still were employed), and Employee shall be subject to the non-
compete provisions (the "Non-Compete") described in paragraph 7,
for the period beginning on the date of termination and ending
seven months thereafter.
(B) If Employer exercises the option described in paragraph
6.4 and then terminates Employee's employment without cause prior
to December 31, 1997, Employer will continue to pay compensation
and benefits to Employee (as if Employee still were employed),
and the Non-Compete shall apply, each for a period beginning on
the date of termination and ending seven months thereafter.
(C) If Employer terminates Employee's employment with
cause, at any time, the Non-Compete will apply for a period
beginning on the date of termination and ending 12 months
thereafter.
6.2 Termination by Employee.
(A) If Employee terminates his employment without cause
prior to December 31, 1996 or, if Employer exercises the option
in paragraph 6.4 and Employee terminates his employment without
cause prior to December 31, 1997, then the Non-Compete will apply
for a period beginning on the date of termination and ending 12
months thereafter.
(B) If Employee terminates his employment with cause prior
to December 31, 1996, or, if Employer exercises its option in
paragraph 6.4 and Employee terminates employment with cause prior
to December 31, 1997, Employer will pay compensation and benefits
to Employee (as if Employee still were employed), and the Non-
Compete will apply, each for a period beginning on the date of
termination and ending seven months thereafter.
6.3 Non-Renewal and Termination by Employee Without Cause.
If Employer does not exercise its option in paragraph 6.4 or if
Employer exercises its option in paragraph 6.4 but Employer and
Employee do not enter a new agreement prior to January 1, 1998,
and in either event Employee thereafter terminates employment
without cause, then Employer, at its option (to be exercised
within ten business days after such termination specifying the
period during which the payments and Non-Compete shall apply),
may pay Employee 75% of the compensation and 75% of the cost of
benefits that Employee would have received under the terms of
this Agreement in effect as of December 31, 1996 or December 31,
1997, as the case may be if Employee had remained employed, and
the Non-Compete will apply to Employee for any period in which
such payments are made, but such period may not extend beyond
twelve months from the date of termination without the mutual
written agreement of the parties.
6.4 Option to Extend. At Employer's option, and upon
payment to Employee of an additional $10,000, on or before
January 1, 1997, Employee agrees that the term of this Agreement
will be extended through December 31, 1997 and that he will not
voluntarily terminate his employment at any time prior to
December 31, 1997. If the option is exercised, and if Employee
has not terminated employment without cause and has not been
terminated by Employer with cause prior January 1, 1998, Employer
will pay to Employee an additional $10,000.
6.5 Except as provided in paragraphs 6.1(c) and 6.2(a), the
provisions set forth above regarding compensation and
applicability of the Non-Compete are the exclusive remedy for
damages for a termination of employment (but not for any other
breach), except that Employer shall be entitled to equitable
relief for any breach of the Non-Compete.
6.6 "For Cause" Definition. For purposes hereof, the term
"for cause," in the case of a breach by Employee, shall mean the
failure of Employee for any reason, within thirty (30) days after
receipt by Employee of written notice thereof from Employer, to
correct, cease, or otherwise alter any action or omission to act
that constitutes a material and willful breach of this Agreement
likely to result in material damage to ASI, or willful gross
misconduct likely to result in material damage to ASI (including
but not limited to any such willful activities or participation
in such willful activities, directly or indirectly, which are
materially adverse to the Employer or violate Employee's duty of
loyalty to the Employer); and, in the case of a breach by
Employer, shall mean a material default by Employer which remains
uncured 30 days after Employee gives Employer notice of such
breach or any reduction of duties of Employee such that Employee
ceases to have executive supervisory responsibilities.
6.7 Effective Date of Termination.
(A) The effective date of termination with respect to
termination "without cause," shall be the date on which Employee
actually ceases to perform his duties hereunder.
(B) The effective date of termination with respect to
termination "for cause," shall be thirty (30) calendar days after
the date on which Employee receives written notice of
termination.
6.8 Limitation on Severance Compensation. Notwithstanding
any other provision of this Agreement, the aggregate of the
amount of severance compensation paid to the Employee under this
Agreement or otherwise, shall not include any amount that the
Employer is prohibited from deducting for federal income tax
purposes by virtue of Section 280G of the Internal Revenue Code
or any successor provision.
7. Covenant Not To Compete.
During any applicable period specified in paragraph 6, the
Employee shall not directly or indirectly own, control, operate,
manage, consult, own shares in, be employed by, or otherwise
participate in any sole proprietorship, corporation, partnership
or other entity whose primary business is the same or similar to
the business of ASI within the territory in which ASI does
business.
This covenant of non-competition has been negotiated and
agreed to by and between the Employer and Employee with full
knowledge of, and pursuant to the requirements of Section 8-2-113
(2) of Colorado Revised Statutes, as amended from time to time,
and is deemed by both parties to be fair and reasonable under the
terms of that statute.
8. Other Business Activities.
During the period of his employment under this Agreement,
the Employee shall not be employed by or otherwise engage or be
interested in any business whether or not in competition with
ASI, with the following exceptions:
(A) Employee's investment in any business shall not be
considered a violation of this paragraph, provided that such
business is not in competition with ASI and so long as any
services rendered to such business by Employee do not in any way
interfere with Employee's duties under this Agreement.
(B) Employee may consult with other businesses not in
competition with ASI, if expressly considered and approved in
advance by the President of ASI (in his or her sole discretion).
9. Indemnification.
So long as Employee is not found by a court of law to be
guilty of a willful and material breach of this Agreement, or to
be guilty of willful gross misconduct, he shall be indemnified
from and against any and all losses, liability, claims and
expenses, damages, or causes of action, proceedings or
investigations, or threats thereof (including reasonable attorney
fees and expenses of counsel satisfactory to and approved by
Employee) incurred by Employee, arising out of, in connection
with, or based upon Employee's services and the performance of
his duties pursuant to this Employment Agreement, or any other
matter contemplated by this Employment Agreement, whether or not
resulting in any such liability subject to such limitations as
are provided by the Colorado Business Corporations Act; and
Employee shall be reimbursed by Employer as and when incurred for
any reasonable legal or other expenses incurred by Employee in
connection with investigating or defending against any such loss,
claim, damage, liability, action, proceeding, investigation or
threat thereof, or producing evidence, producing documents or
taking any other action in respect thereto (whether or not
Employee is a defendant in or target of such action, proceeding
or investigation), subject to such limitations as are provided by
the Colorado Business Corporations Act.
10. [Intentionally Omitted.]
11. Burden and Benefit.
This Agreement shall be binding upon, and shall inure to the
benefit of, Employer and Employee, and their respective heirs,
personal and legal representatives, successors, and assigns and
shall be expressly binding upon and inure to the benefit of any
person or entity acquiring ASI by merger, consolidation, purchase
of all or substantially of its assets or 80% or more of its
outstanding common stock; provided, however, that the interests
of the Employee hereunder are not subject to the claims of his
creditors, and may not be voluntarily or involuntarily assigned,
alienated or encumbered.
12. Release.
Employee, by signing this Agreement, hereby forever releases
ASI against any claims or liabilities whatsoever arising out of
his employment by Intelligraphics.
13. Governing Law.
It is understood and agreed that the construction and inter-
pretation of this Agreement shall at all times and in all
respects be governed by the laws of the State of Colorado.
14. Severability.
The provisions of this Agreement, including particularly but
not solely, the provisions of Paragraphs 5 and 7, shall be deemed
severable, and the invalidity or unenforceability of any one or
more of the provisions of this Agreement shall not affect the
validity and enforceability of the other provisions.
15. Notice.
Any notice required to be given shall be sufficient if it is
in writing and sent by certified or registered mail, return
receipt requested, first-class postage prepaid, to his residence
in the case of Employee, and to its principal office in the case
of Employer.
16. Entire Agreement.
This Agreement contains the entire Agreement and under-
standing by and between Employer and Employee with respect to the
employment of Employee, and no representations, promises, agree-
ments, or understandings, written or oral, not contained herein
shall be of any force or effect. No change or modification of
this Agreement shall be valid or binding unless it is in writing
and signed by the party intended to be bound. No waiver of any
provision of this Agreement shall be valid unless it is in
writing and signed by the party against whom the waiver is sought
to be enforced. No valid waiver of any provision of this
Agreement at any time shall be deemed a waiver of any other
provision of this Agreement at such time or at any other time.
17. Counterparts.
The Agreement may be executed in two or more counterparts,
any one of which shall be deemed the original without reference
to the others.
18. Dispute Resolution.
All disputes arising out of or related to this Agreement,
including any claims that all or any part of this Agreement is
invalid, illegal, voidable, or void, will be settled by
arbitration, pursuant to an Arbitration Agreement between ASI,
Intelligraphics, Inc., certain former employees of
Intelligraphics, Inc., Xxxxxx Xxxxxxxx, Xxxxx Xxxxxxxxx, the
members of the board of directors of the Company who are voting
trustees under the Voting Trust Agreement and Bank One, Colorado,
NA dated December 22, 1995.
IN WITNESS WHEREOF, Employer and Employee have duly executed
this Agreement as of the day and year first above written.
EMPLOYEE: EMPLOYER:
ANALYTICAL SURVEYS, INC.,
a Colorado corporation
/s/ Xxxxxxx Xxxxxxx By: /s/ Xxxxxx X. Xxxxxx
XXXXXXX XXXXXXX XXXXXX X. XXXXXX, President
