EXHIBIT 10.28
EMPLOYMENT AGREEMENT
AGREEMENT (this "Agreement") entered into as of the 1st day of
May, 2000, by and between Micros-to-Mainframes, Inc., a New York
corporation with its principal place of business at 000 Xxxxxxxxx Xxx,
Xxxxxx Xxxxxxx, Xxx Xxxx 00000 (the "Company"), and Xxxxx Xxxxxxxx,
residing at 0 Xxxxxxxx Xxxxx, Xxx Xxxxxxxx, Xxx Xxxx 00000 (the
"Employee").
WITNESSETH:
WHEREAS, Company desires to employ the Employee, and the Employee
is willing to be employed by the Company, as the Chief Financial
Officer of the Company, on the terms and subject to the conditions set
forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the adequacy and receipt of' which is
hereby acknowledged, the Company and the Employee do hereby agree as
follows:
1. Employment
The Company hereby employs the Employee, and the Employee hereby
accepts employment, as Chief Financial Officer for the Company, upon
the terms and subject to the conditions set forth in this Agreement.
2. Term
The term of this Agreement shall begin on the date hereof (the
"Commencement Date") and continue for an initial term of twelve months
from the Commencement Date, unless earlier terminated as provided
herein; provided, however, that the term of this Agreement shall be
automatically continued and extended for successive twelve month
periods at the end of the initial term (each twelve month extension
being hereinafter referred to as a "renewal term"), unless, at least
ninety (90) days before the end of the initial term or any renewal
term, the Company shall give the Employee, or the Employee shall give
the Company, a notice in writing electing to terminate this Agreement
as of the end of the initial term or any renewal term, as the case may
be. If no such notice is given at least 90 days prior to the end
of the initial term or any renewal term, as the case may be, then on
the last day upon which such notice could have been given, the term
shall be deemed to have been extended for an additional twelve month
period.
3. Duties
During the term of this Agreement, the Employee shall serve as
Chief Financial Officer of the Company and shall perform services
commensurate with that position, subject to the supervision of the
Chief Executive Officer and President of the Company. The Employee
shall devote his full business time exclusively to the business and
affairs of the Company and its subsidiaries, except during a
transition period of not more than 30 days from the date hereof during
which the Employee fulfills his obligations to his prior employer (the
"Transition Period"). During the term of this Agreement, the Employee
shall use his best efforts, skill and abilities to promote the
interests of the Company and its subsidiaries. The Employee shall
perform his duties out of the Valley Cottage, New York office for as
long as the Company has an office at such location and thereafter in
such reasonable location as the Company shall determine, provided such
office is in the New York City Metropolitan Area.
4. Compensation
For the services rendered hereunder, the Company shall pay and
the Employee shall accept the following compensation:
(a) An annual base salary of $185,000, subject to annual review
by the Company's Board of Directors; except that the Employee's base
salary shall be prorated during the Transition Period based upon the
actual time devoted to the business and affairs of the Company and its
subsidiaries. The Employee's salary shall be payable subject to such
deductions as are then required by law and such further deductions as
may be agreed to by the Employee, in accordance with the Company's
prevailing salary payroll practices.
(b) The Company will pay the Employee a bonus in the amount of
$20,000 upon the consummation of a public offering or private
financing, of which at least $ 10,000,000 of the gross proceeds are to
be used for the benefit of its Pivot Technologies, Inc. ("Pivot")
subsidiary (a "Qualified Pivot Financing"). The Company also shall pay
the Employee a bonus of $15,000 at the end of the initial term for
successfully implementing financial systems for Pivot and effecting
the separation of Pivot from the Company. The Employee shall be
entitled to such additional noncumulative bonus as determined by the
Company's Board of Directors from time to time in its sole and
absolute discretion.
(c) On the Commencement Date, the Company shall grant to the
Employee stock options (the "Options") to purchase 25,000 shares of
its common stock pursuant to the Company's 1998 Stock Option Plan (the
"Plan"). The exercise price of the Options shall be equal to the mean
of the closing bid and asked prices of one share of common stock on
the Commencement Date. The Employee may exercise Options to purchase
10,000 shares at any time after the Commencement Date, Options to
purchase a cumulative total of 15,000 shares after the first
anniversary of the Commencement Date, Options to purchase a cumulative
total of 20,000 shares after the second anniversary of the
Commencement Date, and Options to purchase a cumulative total of
25,000 shares of common stock after the third anniversary of the
Commencement Date. In no event may the Options be exercised after the
tenth anniversary of the Commencement Date, subject to the early
termination provisions of the Plan. The Options shall be subject to
the Plan, and in the event of any inconsistency between the terms
hereof and the terms of the Plan, the terms of the Plan shall govern.
(d) The Company shall pay the Employee $650 per month as a non-
accountable automobile allowance, and provide him with an E-Z Pass
account for highway and bridge tolls.. The Company shall not be
responsible for insurance for said automobile nor any other expenses
associated with such automobile. Any income taxes resulting from the
payment of such allowance or E-Z Pass tolls shall be the
responsibility of the Employee.
(e) If the Employee is appointed Chief Financial Officer of
Pivot, then upon consummation of an initial public offering of the
common stock of Pivot ("Pivot Common Stock") resulting in gross
proceeds of at least $10,000,000 (the "Pivot IPO"), the Company shall
cause Pivot to grant the Employee options to purchase 100,000 shares
of Pivot Common Stock (the "Pivot Options") pursuant to the Pivot 2000
Long Term Performance Plan (the "Pivot Plan"). The number of shares of
Pivot Common Stock subject to the Pivot Options has been determined on
the assumption that the number of shares of Pivot Common Stock
outstanding immediately after the closing of the Pivot IPO will not
exceed 20,000,000 shares. If the number of shares of Pivot Common
Stock outstanding immediately after the IPO exceeds 20,000,000 shares,
the number of shares of Pivot Common Stock subject to the Pivot
Options granted to the Employee shall be proportionately adjusted. The
exercise price of the Pivot Options shall be equal to the initial
public offering price of the Pivot Common Stock in the Pivot IPO. The
Employee may exercise the Pivot Options at any time during the period
commencing upon the first anniversary of the closing of the Pivot IPO
(or such earlier date, if any, as the Company distributes all shares
of Pivot Common Stock which it owns to its shareholders without
federal income tax consequences to the Company and its shareholders)
and ending on the tenth anniversary of the closing of the Pivot IPO.
The Pivot Options shall be subject to the Pivot Plan, and in the event
of any inconsistency between the terms hereof and the terms of the
Pivot Plan, the terms of the Pivot Plan shall govern.
5. Benefits and Expenses
(a) The Employee shall be entitled to participate, subject to
customary eligibility requirements, in all fringe benefits customarily
granted or made available to an executive officer of the Company,
other than to the extent made available to Xxxxxxx Xxxxxxxxxx, Xxxxxx
Xxxxxx and/or Xxxxxx Xxxxxxx and not to other executives of the
Company, such as medical, disability, hospital and health insurance
plans, and profit sharing and pension plans, life insurance and other
plans, if any.
(b) During the term of this Agreement, the Company shall, upon
presentation of proper vouchers, also reimburse the Employee for all
reasonable expenses incurred by him directly in connection with his
performance of services as an officer and employee of the Company,
other than automobile related expenses.
(c) The Employee shall be entitled to three (3) weeks of paid
vacation for the initial term, and four (4) weeks of paid vacation for
any renewal term, provided that the Employee shall not take more than
two consecutive weeks of vacation during any calendar year.
(d) The Employee shall receive as paid days off all holidays
that the Company, pursuant to established policy, recognizes and
observes.
6. Disability, Death: Termination for Cause
(a) If, during the term of this Agreement, the Employee becomes
so disabled or incapacitated by reason of any physical or mental
illness so as to be unable to perform the services required of him
pursuant to this Agreement for a continuous period of (i) three (3)
months during the initial term, or (ii) four (4) months during any
renewal term, then this Agreement shall terminate at the end of such
three month or four month period, as the case may be; provided that
during such period, the Employee shall be paid the full salary,
benefits, and expenses otherwise payable to him as set forth above,
less the amount paid to the Employee from mandatory disability
insurance for the period of such illness or incapacity. A termination
by reason of the Employee's disability shall not relieve the Employee
of his covenants to the Company set forth herein, which shall survive
such termination, except that the covenant set forth in Section 8(a)
hereof shall be of no force and effect upon Employee giving the
Company four (4) week written notice that he is no longer disabled and
the Company (or a successor or assign) not offering to rehire Employee
upon substantially the same terms and conditions set forth herein.
This Agreement shall also terminate upon and as of the date of death
of the Employee at any time during the term of this Agreement.
(b) The employment of Employee may be terminated by the Company
for "Cause" (as hereinafter defined). Such termination for Cause shall
be effective immediately upon delivery of written notice to the
Employee setting forth the reason or reasons for such termination. If
the Employee's employment is terminated for Cause, the Company shall
not be obligated to make any further payments of compensation
hereunder to the Employee, except amounts accrued through the date of
termination. Termination for Cause shall not relieve Employee of his
covenants to the Company set forth herein, which covenants shall
survive such termination. For purposes hereof, "Cause" shall mean (i)
acts and/or omissions, or a course of conduct, of Employee, that
constitute gross negligence or willful neglect, (ii) drug or alcohol
abuse, (iii) conviction of a felony, other than traffic offenses which
do not bring the Employee or the Company into disgrace or disrepute,
or (iv) any act of embezzlement, conversion of goods or services, or
fraud with respect to the Company.
7. Severance Benefits
If the Company terminates the Employee's employment under
this Agreement:
(a) Other than for Cause or disability, prior to the
renewal of the initial term:
(1) the Company shall pay the Employee as a severance
benefit, within 30 days after the date of termination,
an amount equal to
(i) his base compensation on the date of
termination for the remainder of the
initial term, plus
(ii) 50% of his annual base salary on the date
of termination, or if such termination is
within six months after a Change In Control
(as hereinafter defined), 100% of his
annual base salary on the date of
termination; and
(2) the Company shall provide the Employee with
health insurance coverage, or reimburse the Employee
for the cost of such coverage, under the Company's
health insurance plan, on the same basis as
immediately prior to the date of termination during
the period commencing with the date of termination and
ending six months after the end of the initial term.
(b) By not extending the term of this Agreement at the end
of the initial term:
(1) the Company shall pay the Employee as a severance
benefit, within 30 days after the end of the initial
term, an amount equal to 50% of his annual base salary
on the date of termination; and
(2) the Company shall provide the Employee with
health insurance coverage, or reimburse the Employee
for the cost of such coverage, under the Company's
health insurance plan, on the same basis as
immediately prior to the date of termination during
the period commencing with the date of termination and
ending six months after the end of the initial term.
(c) Other than for Cause or disability, after extending
the initial term:
(1) the Company shall pay the Employee as a severance
benefit, within 30 days after the date of termination,
an amount equal to
(i) his base compensation on the date of
termination for the remainder of the
applicable renewal term, plus
(ii) 100% of his annual base salary on the date
of termination, or if such termination is
within six months after a Change In
Control, 200% of his annual base salary on
the date of termination; and
(2) the Company shall provide the Employee with
health insurance coverage, or reimburse the
Employee for the cost of such coverage, under the
Company's health insurance plan, on the same basis
as immediately prior to the date of termination
during the period commencing with the date of
termination and ending twelve months after the
end of the renewal term.
(d) By not extending the term of this Agreement at the
end of any renewal term:
(1) the Company shall pay the Employee as a severance
benefit, within 30 days after the end of the renewal
term, an amount equal to his annual base salary on
the date of termination; and
(2) the Company shall provide the Employee with
health insurance coverage, or reimburse the Employee
for the cost of such coverage, under the Company's
health insurance plan, on the same basis as
immediately prior to the date of termination during
the period commencing with the date of termination
and ending twelve months after the end of the renewal
term.
As used herein, a "Change In Control" shall be deemed to occur when
any person, corporation, partnership, association or entity, directly
or indirectly (through a subsidiary or otherwise), (i) acquires or is
granted the right to acquire, directly or through a merger or similar
transaction, a majority of Company's outstanding voting securities, or
(ii) acquires all or substantially all of the Company's assets.
8. Covenants and Restrictions
The Employee covenants that, except in carrying out his duties
hereunder, during the term of his employment and for a period of
twelve (12) months following the date of termination of employment
hereunder:
(a) Employee will not, directly or indirectly, own any interest
in, participate or engage in, assist, render any services (including
advisory services) to, become associated with, work for, serve (in any
capacity whatsoever, including, without limitation, as an employee,
consultant, advisor, agent, independent contractor, officer or
director) or otherwise become in any way or manner connected with the
ownership, management, operation, or control of, any business, firm,
corporation, partnership or other entity (collectively referred to
herein as a "Person") that engages in, or assists others in engaging
in or conducting any business, which deals, directly or indirectly, in
products or services competitive with the Company's product line or
services, within a 250 mile radius of any office of the Company or its
subsidiaries; provided, however, that the above shall not be deemed to
prohibit Employee from owning or acquiring securities issued by any
corporation whose securities are listed with a national securities
exchange or are traded in the over-the-counter market, provided that
Employee at no time owns, directly or indirectly, beneficially or
otherwise, one (I %) percent or more of any class of any such
corporation's outstanding capital stock.
(b) Except as specifically provided in this subsection (b),
notwithstanding anything contained in subsection (a) above, Employee
will not knowingly provide or solicit to provide to any Person or
individual, services or products competitive with those provided by
the Company, or that the Company has planned to provide.
Notwithstanding anything herein to the contrary, no limitation shall
be imposed on Employee hereunder with respect to services that the
Company has planned to provide and which are not actually being
provided at the time of the termination of Employee's employment
hereunder and which are not actually provided within twelve (12)
months following the termination of Employee's employment hereunder.
(c) Employee agrees that he shall not divulge to others, nor
shall he use to the detriment of the Company or in any business
competitive with or similar to any technology or business engaged in
by the Company or any of its subsidiary or affiliated companies, at
any time during his employment with the Company or thereafter, any
confidential or trade secret information obtained by him during the
course of his employment with the Company relating to technology,
sales, salesmen, sales volume or strategy, customers, formulas,
processes, methods, ideas, improvements or inventions belonging to or
relating to the business of the Company, or its subsidiary or
affiliated companies.
(d) Employee will neither solicit, hire or seek to solicit or
hire any of the Company's personnel in any capacity whatsoever nor
shall Employee induce or attempt to induce any of the Company's
personnel to leave the employ of the Company to work for Employee or
otherwise.
(e) Employee acknowledges that his breach of any of the
restrictive covenants contained in this Section 8 may cause
irreparable damage to the Company for which remedies at law would be
inadequate. Accordingly, if Employee breaches or threatens to breach
any of the provisions of this Section 8, the Company shall be entitled
to appropriate injunctive relief, including, without limitation,
preliminary and permanent injunctions, in any court of competent
jurisdiction, restraining Employee from taking any action prohibited
hereby. This remedy shall be in addition to all other remedies
available to the Company at law or equity. If any portion of this
Section 8 is adjudicated to be invalid or unenforceable, this Section
8 shall be deemed amended to delete therefrom the portion so
adjudicated, such deletion to apply only with respect to the operation
of this Section 8 in the jurisdiction in which such adjudication is
made.
9. Proprietary Property
(a) The Employee agrees that any and all inventions or
improvements as well as any and all ideas, creations, know-how and
methods of applying and putting into practice any inventions or
improvements (all of the foregoing being hereinafter called
"Proprietary Property" and being more fully defined in subparagraph
(b) below) that are created, developed, conceived of or discovered
either (i) by the Employee (solely or jointly with others) either in
the course of his employment, on the Company's time, with the
Company's materials or facilities, relating to any subject matter with
which his work for the Company is or may be concerned, or relating to
any business in which the Company or any of its subsidiaries or
affiliated companies is involved, or (ii) by or for the Company, or
(iii) by any independent individual or Person and thereafter acquired
by the Company, and which are within the Employee's knowledge or
possession in the case of (i) above or that come into the Employee's
knowledge or possession during and in the course of the Employee's
employment hereunder in the case of (ii) or (iii) above, shall be, if
created, developed, conceived of or discovered by the Employee,
promptly disclosed to the Company, or shall be, if otherwise developed
or acquired by the Company, received by the Employee as an employee of
the Company and not in any way for his own benefit. Employee shall
neither have nor obtain any right, title or interest in or to such
Proprietary Property unless and until the Company shall expressly and
in writing waive the rights that it has therein and thereto under the
provisions of this sentence. With respect to any and all Proprietary
Property that is invented, created, written, developed, furnished or
produced by the Employee, or suggested by the Employee to the Company,
during the term of the Employee's employment under this Agreement,
Employee does hereby agree that all such Proprietary Property shall be
the exclusive property of the Company, and that the Employee shall
neither have nor retain any right, title or interest, of any kind
therein and thereto or in and to any results or proceeds therefrom. At
any time, whether during or after the term of this Agreement, the
Employee will, upon the request and at the expense of the Company, (A)
obtain patents or copyrights on, or (B) permit the Company to patent
or copyright, any such Proprietary Property, whichever (A) or (B) is
appropriate, and/or (C) execute, acknowledge and deliver any and all
assignments, instruments of transfer, or other documents, that the
Company deems necessary or appropriate to transfer to and vest in the
Company all right, title and interest in and to such Proprietary
Property and to evidence the Company's ownership of such Proprietary
Property, including, without limitation, taking all steps necessary to
enable the Company to publish or protect said Proprietary Property by
patents or otherwise in any and all countries and to render all such
assistance as the Company may require in any patent office proceeding
or litigation involving said Proprietary Property. The Employee shall
not, without limitation as to time or place, use any Proprietary
Property except on Company business, during or after his period of
employment, nor disclose the same to any other Person or individual
except for disclosure on Company business or as may be required by
law.
(b) As used in this Agreement, "Proprietary Property" means
proprietarytechnical information not generally known in the Company's
industry and which is disclosed to Employee or known or developed by
Employee as a consequence of or through his employment with the
Company.
(c) During or subsequent to the Employee's employment by
Company, Employee will never, directly or indirectly, lecture upon,
publish articles concerning, use, disseminate, disclose, sell or offer
for sale any Proprietary Property without the Company's prior written
permission.
10. Prior Agreements
Employee represents that he is not now under any written
agreement, nor has he previously, at any time, entered into any
written agreement with any person, firm or corporation, which would or
could in any manner preclude or prevent him from giving freely and the
Company receiving the exclusive benefit of his services.
11. Miscellaneous
(a) This Agreement shall inure to the benefit of and be binding
upon the Company, its successors and assigns, and upon the Employee,
his heirs, executors, administrators, legatees and legal
representatives. Employee acknowledges that upon the consummation of
the Pivot IPO, the Company will assign this Agreement to Pivot, and
the Company will cause Pivot to assume the obligations of the Company
hereunder, whereupon this Agreement shall become the sole obligation
of Pivot, without any further liability on the part of the Company,
and Employee shall continue to be bound by the terms hereof. The
Company shall give the Employee prompt written notice of such
assignment and assumption of this Agreement. Following the assignment
of this Agreement to Pivot, all references to the Company in Section 8
shall include Pivot.
(b) Should any part of this Agreement, for any reason
whatsoever, be declared invalid, illegal, or incapable of being
enforced in whole or in part, such decision shall not affect the
validity of any remaining portion, which remaining portion shall
remain in full force and effect as if this Agreement had been executed
with the invalid portion thereof eliminated, and it is hereby declared
the intention of the parties hereto that they would have executed the
remaining portion of this Agreement without including therein any
portion which may for any reason be declared invalid.
(c) This Agreement shall be construed and enforced in accordance
with the laws of the State of New York applicable to agreements made
and performed in such State without application to the principles of
conflicts of laws.
(d) This Agreement and all rights hereunder are personal to the
Employee and except as provided in Section I I (a) above, shall not be
assignable, and any purported assignment in violation thereof shall be
null and void.
(e) This Agreement constitutes the entire agreement between the
parties hereto with respect to the terms and conditions of the
Employee's employment by the Company, and this Agreement supersedes
and renders null and void any and all other prior oral or written
agreements, understandings, or commitments pertaining to the
Employee's employment by the Company. No variation hereof shall be
deemed valid unless in writing and signed by the parties hereto, and
no discharge of the terms hereof shall be deemed valid unless by full
performance by the parties hereto or by a writing signed by the
parties hereto. No waiver by either party of any provision or
condition of this Agreement by him or it to be perfon-xxx shall be
deemed a waiver of similar or dissimilar provisions and conditions at
the same time or any prior or subsequent time.
(f) Any notice, statement, report, request or demand required or
permitted to be given by this Agreement shall be in writing, and shall
be sufficient if delivered in person or if addressed and sent by
certified mail, return receipt requested, to the parties at the
addresses set forth above, or at such other place that either party
may designate by notice in the foregoing manner to the other.
(g) The failure of either party to insist upon the strict
performance of any of the terms, conditions and provisions of this
Agreement shall not be construed as a waiver or relinquishment of
future compliance therewith, and said terms, conditions and provisions
shall remain in full force and effect. No waiver of any term or any
condition of this Agreement on the part of either party shall be
effective for any purpose whatsoever unless such waiver is in writing
and signed by such party.
(h) The heading of the paragraphs herein are inserted for
convenience and shall not affect any interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first written above.
MICROS-TO-MAINFRAMES, INC.
By:/s/ Xxxxxx X Xxxxxxx
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Xxxxxx X. Xxxxxxx
Chief Executive Officer and
President
/s/ Xxxxx Xxxxxxxx
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Xxxxx Xxxxxxxx
