EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("AGREEMENT") IS MADE APRIL 1, 2004, BY AND
BETWEEN COLOR IMAGING, INC. ("EMPLOYER"), WHOSE ADDRESS IS 0000 XXXXXXXXX
XXXXXXXXX, XXXXX 000, XXXXXXXX, XXXXXXX 00000, AND XXXXXXX X. XXXXXX
("EMPLOYEE"), WHOSE ADDRESS IS 0000 XXXX XXXXXX XXX, XXXXXXX, XXXXXXX 00000.
WHEREAS, EMPLOYER is in the business of developing, manufacturing and
marketing worldwide products used in electronic printing and photocopying,
formulating and manufacturing black text and specialty toners, including color
and magnetic character recognition toners for numerous laser printers, facsimile
machines and analog and digital photocopiers and suppling other consumable
products used in electronic printing and photocopying, including toner
cartridges, cartridge components, photoreceptors and imaging drums, all in one
cartridges, and parts worldwide ("Employer Business"), and
WHEREAS, EMPLOYER's business objectives are to further develop, manufacture
and market digital, color and other specialty products and source
state-of-the-art products from key suppliers, and
WHEREAS, EMPLOYER is a corporation duly organized under the laws of the
State of Delaware with its headquarters in the State of Georgia, and
WHEREAS, EMPLOYER desires to hire Employee as Senior Vice President,
Marketing and Sales, under the terms herein to promote Employer's business
goals,
NOW, THEREFORE, in consideration of the promises and covenants hereinafter
set forth, the parties agree as follows:
ARTICLE I
TERM OF EMPLOYMENT
SECTION1.01. The term of this Agreement is for a two (2) year period,
unless sooner terminated as provided herein below. Employer's employment shall
automatically terminate upon the death of Employee. Employer may terminate
Employee's employment in the event of Employee's Disability (as defined below).
"Disability" means the inability of Employee to perform those duties and
responsibilities which are essential functions of Employee's position due to
illness, accident or other physical or mental incapacity for a period of more
than 60 consecutive days or more than 90 days in any 180-day period.
SECTION 1.02. Employee, at his election, may terminate this Agreement on
three months' written notice to Employer. Employer may terminate this Agreement
at any time, with or without Cause (as defined below), by providing Employee
notice, either verbally or in writing. If Employee's employment is terminated by
Employer for any reason other than death, Disability, or For Cause, Employee
shall be entitled to severance equal to the lesser of (a) the product of (i)
three, multiplied by (ii) Employee's monthly base salary, or (b) the product of
(i) the number of months remaining in the then current term of the Agreement,
multiplied by (ii) Employee's monthly base salary. Severance amounts due under
this Section 1.02 shall be paid on Employer's normal payroll schedule over the
three month period (or such lesser period as may be applicable pursuant to the
foregoing sentence) with respect to which severance is due. "For Cause" shall
mean termination resulting from (a) Employee's act or acts amounting to
negligence or moral turpitude which are materially detrimental to Employer or
its reputation; (b) Employee's fraud or embezzlement of funds or property; (c)
Employee's conviction of, pleading guilty to, or confessing to any felony; or
(d) Employee's failure to observe or perform any material covenant, condition,
or provision of this Agreement or of Employer's written policies, which failure
is not remedied within 30 days after notice of such failure is given to Employee
by Employer. Notwithstanding any termination, Employee will be due any salary
earned or expenses incurred prior to the effective date of the termination.
ARTICLE II
DUTIES OF EMPLOYEE
SECTION 2.01. Employee will devote Employee's entire productive time, ability
and attention to the business of the Employer during the term of this Agreement.
The Employee will not directly or indirectly render any services of a business,
commercial, or professional nature, to any other person or organization, whether
for compensation or otherwise, without the prior written consent of the
Employer. Said consent will not be unreasonably withheld by Employer.
SECTION 2.02. Employee will perform his duties from Employer's headquarters
located at 0000 Xxxxxxxxx Xxxxxxxxxx Xxxx, Xxxxxxxx, XX 00000 ("Headquarters").
However, at any time deemed necessary or advisable by the Employer, for business
purposes, the Employee will work at such other place or places as may be
determined by the Employer.
SECTION 2.03. In the event that Employee is assigned a temporary work location
during the term of this Agreement at a place other than the Employee's then
assigned location, the Employer will provide reasonable advances, prepay
expense(s) and reimburse all temporary housing, transportation and incidental
expenses related to the Employee's temporary relocation.
SECTION 2.04. As Senior Vice President, Sales and Marketing, Employee shall be
responsible for promoting sales of Employer's products and services throughout
the world, supervising all sales and marketing employees and representatives,
excepting those exclusively or primarily engaged in marketing and selling
all-in-one cartridges, coordinating, when directed, with Employer's key
suppliers and vendors, recommending prices for products and commissions or
commission programs for sales personnel and independent manufacturer's
representatives, recommending and assisting with the development, sourcing and
introduction of new products, coordinating resolution of any problems with
products or services provided to customers of Employer, keeping the Chief
Executive Officer, President and Executive Vice President and any others as
directed informed of all sales and marketing activities and results, include
whenever requested and otherwise when possible other executives in meetings with
key customers, suppliers or others instrumental in the furthering of Employer's
business, developing and implementing promotional and marketing initiatives, and
such other duties as are normally performed by an executive with this title or
as may be reasonably assigned to Employee by Employer.
ARTICLE III
COMPENSATION OF EMPLOYEE
SECTION 3.01. Employer will compensate Employee with an annual salary of
$150,000, paid ratably every two weeks, or in such frequency as is then in
effect. Base salary may be increased by the Employer at will and any such change
will not require the modification of this Agreement.
SECTION 3.02. Employee has indicated to Employer that Employee does not intend
to participate in Employer's group health or life plan (the "Health Plan") and
Employee's annual salary has been adjusted to reflect such non-participation. If
Employee elects to participate in the Health Plan, Employee's annual base salary
shall be reduced by $5,000 per year (subject to pro ration for any partial year
of participation). Employee may participate in any other benefit plan of
Employer for which he is eligible under the terms of such plan.
SECTION 3.03. Employer agrees that within 30 days following the date of this
Agreement, it will submit to the Board of Directors of Employee ("Board") a
resolution granting to Employee an option ("Option") to acquire an aggregate of
100,000 shares ("Option Shares") of Employer's Common Stock pursuant to
Employer's currently outstanding 2003 Stock Incentive Plan ("Plan"), at a price
per share equal to the Fair Market Value of Common Stock of Employer on the date
of grant (with Fair Market Value being determined in accordance with the Plan),
and vesting as follows: (a) 20,000 Option Shares shall vest immediately, and (b)
20,000 Option Shares shall vest on each of the first, second, third, and fourth
anniversary of the grant of the Option. Employee acknowledges that (i) the
Option may or may not be approved by the Board, (ii) granting of the Option, if
approved by the Board, shall be subject to the execution of a written option
agreement of Employer, and (iii) any failure of the Board to approve the Option,
any approval by the Board of an option on terms other than those described
above, or any failure of the parties to reach mutual agreement on the form of
option agreement shall not void, amend, or terminate this Agreement. Employer
shall have fulfilled its obligation under this Section 3.03 solely by submitting
the Option to the Board for approval.
ARTICLE IV
BUSINESS EXPENSES
SECTION 4.01. Employee is authorized to incur reasonable business expenses for
promoting the business of the Employer, including expenditures for entertainment
and travel. The Employer will promptly reimburse the Employee for all such
business expenses provided that: (1) each such expenditure is of a nature
qualifying it as a proper deduction on the federal and state income tax return
of the Employer; and (2) the Employee furnishes Employer adequate and timely
records and other documentary evidence required by the Employer's policy and by
federal and state statutes and regulations issued by the appropriate taxing
authorities for the substantiation of each such expenditure as an income tax
deduction.
ARTICLE V
PROPERTY RIGHTS OF THE PARTIES
SECTION 5.01. Employee agrees to the terms of Exhibit I attached hereto. Exhibit
I is by this reference made a part hereof and included herein.
ARTICLE VI
RESTRICTIVE COVENANTS
SECTION 6.01. During Employee's employment by Employer and for a period of two
years thereafter, Employee will not, without the prior written consent of
Employer, directly or indirectly, on Employee's own behalf or in the service or
on behalf of others, solicit or attempt to divert or appropriate to a Competing
Business (as defined below), any customer of Employer with whom Employee dealt
on behalf of Employer at any time during the 18 months immediately preceding the
termination of employment or any potential customer whom Employee contacted on
behalf of Employer during such 18-month period. "Competing Business" means any
person or entity which engages in a business substantially the same as the
Employer Business.
SECTION 6.02. During Employee's employment by Employer and for a period of one
year thereafter, Employee will not, without the prior consent of Employer,
directly or indirectly, on Employee's own behalf or in the service or on behalf
of others solicit, divert or recruit any Employee of Employer to leave such
employment, whether or not such employment is pursuant to a written contract by
Employer or at will.
SECTION 6.03. The restrictions contained in Exhibit I and Sections 6.01 and 6.02
of this Agreement are considered by the parties hereto to be fair and reasonable
and necessary for the protection of the legitimate business interests of
Employer. It is recognized that damages in the event of breach of the provisions
of Exhibit I and Sections 6.01 and 6.02 of this Agreement by Employee would be
difficult, if not impossible, to ascertain, and it is therefore agreed that
Employer, in addition to and without limiting any other remedy or right it may
have, shall have the right to an injunction or other equitable relief in any
court of competent jurisdiction, enjoining any such breach. The existence of
this right shall not preclude any other rights and remedies at law or in equity
which Employer may have. The intent of this Agreement is to provide Employer
with all remedies afforded to it under applicable law, including but not limited
to those remedies under any applicable trade secrets statute.
ARTICLE VII
GENERAL PROVISIONS
SECTION 7.01. If any provision in this Agreement is held by a court of competent
jurisdiction to be invalid, void, or unenforceable, the remaining provisions
will nevertheless continue in full force without being impaired or invalidated
in any way.
SECTION 7.02. This Agreement, and Exhibit to this Agreement, constitute the only
agreement in effect with respect to the subject matter hereof, and supercedes
and terminates all previous agreements, either oral or in writing, with respect
to the subject matter hereof, while Employee is employed by Employer, provided
the foregoing shall not be deemed to supercede or terminate (1) the
Indemnification Agreement of even date herewith between Employee and Employer,
(2) the Code of Ethics for Executives of Employer of even date herewith, (3) the
terms of a written option agreement between Employee and Employer, if any,
executed contemporaneously with or following the execution of this Agreement,
(4) the certification of the Employer's policy on trading in the securities of
Employer by Employee, or (5) the terms of any benefit plan of Employer in which
Employee participates. Each party to this Agreement acknowledges that no
representations, inducements, promises, or agreements, orally or otherwise, with
respect to the subject matter of this Agreement, have been made by any party, or
anyone acting on behalf of any party, which are not embodied herein. The parties
acknowledge and agree that the engagement of Employee by Employer as a
consultant pursuant to that certain Consulting Agreement between Employee and
Employer dated April 1, 2001 shall terminate as of March 31, 2004. Any
modification of this Agreement will be effective only if in writing, signed by
the parties hereto.
SECTION 7.03. Except as expressly provided herein to the contrary, the
provisions of this Agreement are for the benefit of the parties solely and not
for the benefit of any other person, persons, or legal entities. This Agreement
is a personal service agreement and may not be assigned in whole or in part by
Employee. The covenants of Employee contained in Exhibit I shall be binding upon
the heirs, beneficiaries, administrators, and executors of Employee.
SECTION 7.04. This Agreement will be governed by and construed in accordance
with the laws of the State of Georgia, and BOTH PARTIES EXPRESSLY WAIVE TRIAL BY
JURY.
SECTION 7.05. Except as expressly set forth to the contrary in this Agreement,
all notices, requests, consents, and other communications hereunder to any party
shall be deemed to be sufficient if contained in a written instrument delivered
in person (including delivery by overnight or express courier) or duly sent by
certified mail, return receipt requested, proper postage prepaid, addressed to
such party at the address set forth in the first paragraph of this Agreement or
such other addresses as may hereafter be designated in writing by the addressee
to the addressor. All such notices, advices, and communications shall be deemed
to have been received (a) in the case of personal delivery, on the date of
actual personal receipt, and (b) in the case of mailing, on the third day after
the posting by certified mail, return receipt request thereof.
SECTION 7.06. This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original, but all which together shall constitute one
and the same instrument.
SECTION 7.07. Employee agrees and understands that nothing in this Agreement
shall confer any rights with respect to continuation of Employee's employment by
the Employer. Employee agrees and acknowledges that Employee's employment is
based on the mutual consent of the Employer and Employee as otherwise provided
in this Agreement.
SECTION 7.08. The provisions of Articles III and IV (with respect to amounts
owed prior to or as severance in accordance with the terms of this Agreement),
Article V (and Exhibit I), Article VI (for the period designated therein), and
Article VII shall survive termination or expiration of this Agreement.
Executed as of the day and year first above written.
UNDERSTOOD AND ACCEPTED:
EMPLOYER: COLOR IMAGING, INC. EMPLOYEE: XXXXXXX X. XXXXXX
For: /S/ XXXXXX X. XXX XXXXXXX
Executive Vice President /S/ XXXXXXX X. XXXXXX
By:
--------------------------------- -------------------------------
Xx. Xxxxxxx Xxxx, President Xxxxxxx X. Xxxxxx
EXHIBIT I
PROPRIETARY INFORMATION & INVENTIONS
In consideration of Employee's employment or continued employment by Employer,
and the compensation now and hereafter paid to Employee, Employee hereby agree
as follows:
1. RECOGNITION OF EMPLOYER'S RIGHTS; NONDISCLOSURE. Employee will hold in
strictest confidence and will not disclose, use, lecture upon or publish any
Proprietary Information (defined below), except as such disclosure, use or
publication may be required in connection with his work for the Employer, or
unless an officer of the Employer expressly authorizes such in writing.
The term "Proprietary Information" shall mean Trade Secrets (as defined below)
and any other confidential knowledge, data or any other proprietary information
of the Employer. "Trade Secrets" shall mean any information of Employer, without
regard to form, including, but not limited to, technical or nontechnical data, a
formula, a pattern, a compilation, a program, a device, a method, a technique, a
drawing, a process, financial data, financial plans, product plans, or a list of
actual or potential customers or suppliers, which is not commonly known by or
available to the public and which information (a) derives economic value, actual
or potential, from not being generally known to and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use; and (b) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy. Employee
acknowledges that (i) Employer's information regarding its customers, suppliers,
and manufacturing representatives is the Proprietary Information of Employer,
including, without limitation, lists of names, contacts, addresses, email
addresses, and telephone numbers; information regarding products represented,
supplied, or purchased; and related pricing information, and (ii) Employer
considers such Proprietary Information to constitute a Trade Secret of Employer.
Employee understands, in addition, that the terms Proprietary Information and
Trade Secrets includes information the Employer has received and in the future
may receive from third parties ("Third Party Information") subject to a duty on
the Employer's part to maintain the confidentiality of such information and to
use it only for certain limited purposes.
Employee's obligations under this Section 1 shall begin as of that date upon
which he is first employed, shall continue throughout his employment by
Employer, and shall terminate three years following termination of his
employment by Employer, provided with respect to Proprietary Information that
also qualifies as a Trade Secret, Employer's obligations under this Section 1
shall continue for so long as such information continues to qualify as Trade
Secret (excluding failure to so qualify as a result of breach by Employee of
this Agreement).
Employee recognizes and acknowledges that Employer is engaged, has engaged or
may engage in activities which involve, and continue to involve, the use of
skilled experts and the expenditure of substantial amounts of time and money. As
a result of such investments of skill, time, and money, Employer has developed
or may develop certain Trade Secrets or Proprietary Information that give
Employer significant advantages over its competitors. Due to the nature of
Employee's employment by Employer, Employee may be presented with, have access
to, or participate in the development of proprietary Trade Secrets or
Proprietary Information. These constitute valuable, special and unique assets of
Employer, and any use or disclosure thereof contrary to the terms of this
Agreement may cause substantial loss of competitive advantage and other serious
injury to Employer.
2. ASSIGNMENTS OF RIGHTS.
2.1. ASSIGNMENT. Employee hereby assigns to the Employer all Employee's right,
title and interest in and to any and all Inventions (as defined below),
including all worldwide copyrights, patent rights, trade secret rights, and
other proprietary rights embodied therein or associated therewith (collectively,
"Proprietary Rights"),which Inventions are made or conceived by Employee or
reduced to practice or learned by Employee, either alone or jointly with others,
during the period of Employee's employment with the Employer. "Inventions" means
works of authorship, inventions, discoveries, improvements, developments, ideas,
processes, formulae, source or object code, data, programs, designs, techniques,
or other work products. Inventions assigned to the Employer by this paragraph 2
are hereafter referred to as "Employer Inventions." Employee recognizes that
this Agreement does not require assignment of any invention that Employee can
demonstrate that Employee developed entirely on Employee's own time without
using the Employer's equipment, supplies, facilities, or information except for
those inventions that either: (1) Relate, at the time of conception or reduction
to practice of such invention, to the Employer's business, or actual or
demonstrably anticipated research or development of the Employer, (2) Result
from any work performed by the Employee for the Employer.
2.2. WORKS FOR HIRE. Employee acknowledges that all original works of authorship
which are made by Employee (solely or jointly with others) within the scope of
Employee's employment and which are protectable by copyright are "works made for
hire," as that term is defined in the United States Copyright Act (17 U.S.C.
Section 101.).
3. ENFORCEMENT OF PROPRIETARY RIGHTS. Employee will assist Employer in every
proper way to obtain and from time to time enforce United States and foreign
Proprietary Rights relating to Employer Inventions in any and all countries. To
that end Employee will execute, verify and deliver such documents and perform
such other acts (including appearances as a witness) as the Employer reasonably
requests for use in applying for, obtaining, perfecting, evidencing, sustaining
and enforcing such Proprietary Rights and the assignment thereof. In addition,
Employee will execute, verify and deliver assignments of such Proprietary Rights
to the Employer or its designee. Employee's obligation to assist the Employer
with respect to Proprietary Rights relating to such Employer Inventions in any
and all countries shall continue beyond the termination of Employee's
employment, but the Employer shall compensate Employee at a reasonable rate
after Employee's termination for the time actually spent by Employee at the
Employer's request of such assistance.
In the event the Employer is unable for any reason, after reasonable effort, to
secure Employee's signature on any document needed in connection with the
actions specified in the preceding paragraph, Employee hereby irrevocably
designates and appoints the Employer and its duly authorized officers and agents
as Employee's agent and attorney in fact, to act for and in Employee's behalf to
execute, verify and file any such documents and to do all other lawfully
permitted acts to further the purposes of the preceding paragraph thereon with
the same legal force and effect as if executed by Employee. Employee hereby
waives and quitclaims to the Employer any and all claims, of any nature
whatsoever, which Employee now or may hereafter have for infringement of any
Proprietary Rights assigned hereunder to the Employer.
4. OBLIGATION TO KEEP EMPLOYER INFORMED. During the period of Employee's
employment, Employee will promptly disclose to the Employer fully and in writing
and will hold in trust for the sole right and benefit of the Employer any and
all Inventions. In addition, after termination of Employee's employment,
Employee will disclose all patent applications filed by Employee within a year
after termination of employment. At the time of each such disclosure, Employee
will advise the Employer in writing of any Inventions that Employee believes
fully qualifies for protection; and Employee will at that time provide to the
Employer in writing all evidence necessary to substantiate that belief. Employee
understands that the Employer will keep in confidence and will not disclose to
third parties without Employee's consent any proprietary information disclosed
in writing to the Employer pursuant to this Agreement relating to Inventions
that qualify fully for protection. Employee will preserve the confidentiality of
any Invention that does not fully qualify for protection.
5. NO IMPROPER USE OF MATERIAL. During Employee's employment by the Employer,
Employee will not improperly use or disclose any confidential information or
trade secrets, if any, of any former employer or any other person to whom
Employee has an obligation of confidentiality, and Employee will not bring onto
the premises of the Employer any unpublished documents or any property belonging
to any former employer or any other person to whom Employee has an obligation of
confidentiality unless consented to in writing by that former employer or
person.
6. NO CONFLICTING OBLIGATION. Employee represents that Employee's performance of
all the terms of this Agreement and as an Employee of the Employer does not and
will not breach any agreement to keep in confidence information acquired by
Employee in confidence or in trust prior to Employee's employment by the
Employer. Employee has not entered into, and Employee agrees Employee will not
enter into, any agreement either written or oral in conflict herewith.
7. RETURN OF EMPLOYER DOCUMENTS. When Employee leaves the employ of the
Employer, Employee will deliver to the Employer any and all notes, reports,
records, drawings, memoranda, devices, formulas, and other documents, together
with all copies thereof, and any other material, containing or disclosing any
Employer Inventions, Third Party Information or Proprietary Information of the
Employer, whether made or compiled by Employee, furnished to Employee, or
otherwise obtained by Employee. Employee further agrees that any property
situated on the Employer's premises and owned by the Employer, including disks
and other storage media, filing cabinets or other work areas, is subject to
inspection at any time with or without notice.
8. LEGAL AND EQUITABLE REMEDIES. Because Employee's services are personal and
unique and because Employee may have access to and become acquainted with the
Proprietary Information of the Employer or of Third Party Information, the
Employer shall have the right to enforce this Agreement and any of its
provisions by injunction, specific performance or other equitable relief,
without bond, without prejudice to any other rights and remedies that the
Employer may have for a breach of this Agreement.
EMPLOYEE UNDERSTANDS THAT THIS EXHIBIT I AFFECTS EMPLOYEE'S RIGHTS TO INVENTIONS
EMPLOYEE MAKES DURING EMPLOYEE'S EMPLOYMENT AND RESTRICTS EMPLOYEE'S RIGHT TO
DISCLOSE OR USE THE EMPLOYER'S CONFIDENTIAL INFORMATION DURING OR SUBSEQUENT TO
EMPLOYEE'S EMPLOYMENT.
EMPLOYEE HAS READ THIS EXHIBIT I CAREFULLY AND UNDERSTAND ITS TERMS.
