Employment Agreement Twincraft, Inc., with Richard Asch
Twincraft,
Inc., with Xxxxxxx Xxxx
Employment
Agreement
(the
"Agreement"), dated as of January 23, 2007 (the “Commencement Date”), between
Twincraft, Inc., a Vermont corporation (the “Company," which term includes all
subsidiaries of the Company, whether now in existence or hereafter created,
established or acquired), and Xxxxxxx Xxxx (the "Employee").
W
I T N E S S E T H :
Whereas,
the
parties are entering into this Agreement pursuant to the terms of that certain
stock purchase agreement (the "Purchase Agreement") dated as of November 14,
2006, among Xxxxxx, Inc., a Delaware corporation (the "Purchaser" or the
"Parent"), and the persons, including the Employee, who, immediately prior
to
the closing of the Purchase Agreement, are or were the stockholders of the
Company (such persons, including the Employee, the "Sellers"), pursuant to
which
Purchase Agreement the Purchaser will acquire from the Sellers (including the
Employee) all the outstanding capital stock of the Company;
Whereas,
the
Company desires to employ the Employee and to be assured of the Employee's
services on the terms and conditions hereinafter set forth; and
Whereas,
the
Employee is willing to accept such employment on such terms and
conditions.
Now,
Therefore,
in
consideration of the mutual covenants and agreements set forth in this
Agreement, the Company and the Employee hereby agree as follows:
1. Term.
The term
of this Agreement shall commence on the Commencement Date and shall expire
on
the second anniversary of the Commencement Date (the “Term”), subject to earlier
termination as provided herein.
2. Duties.
(a)
During the Term of this Agreement, the Employee shall serve in such managerial
capacity as may be assigned to the Employee, and shall perform all duties as
may
be assigned to the Employee by the Chief Executive Officer of the Company or
the
Chairman of the Board of Directors or such other person(s) as may be designated
by the Board of Directors of the Company (the “Company Board”) or the Board of
Directors of the Parent (the "Parent Board"). From the Commencement Date until
July 1, 2007 (the “Initial Period”) the Employee will be a full-time employee of
the Company and shall devote the Employee's full business time and energies
to
the business and affairs of the Company and the Parent. From July 1, 2007 until
the second anniversary of the Commencement Date (the “Remaining Period”), the
Employee will be a part-time employee of the Company and shall use the
Employee's best efforts, skills and abilities to promote the interests of the
Company and the Parent, and to diligently and competently perform the duties
of
the Employee's position.
1
(b) The
Employee shall report to the Chief Executive Officer of the Company or the
Parent, or such other person(s) as may be designated by the Company Board or
Parent Board and shall at all times keep the Company's Chief Executive Officer
(or such other officer as the Company Chief Executive Officer or the Company
Board or Parent Board may designate from time to time) promptly and fully
informed (in writing if so requested) of the Employee's conduct and of the
business or affairs of the Company and the Parent for which the Employee is
responsible, and provide such explanations of the Employee's conduct as may
be
required.
3. Compensation,
Bonus, Stock Options, Benefits, etc.
(a) Salary.
For the
period from the date hereof through December 31, 2007, the Company shall pay
to
the Employee, and the Employee shall accept from the Company, as compensation
for the performance of services under this Agreement and the Employee's
observance and performance of all of the provisions hereof, an annual salary
at
the rate of $149,000 (the "First Year Compensation"). Thereafter and to the
end
of the Term, the Company shall pay to the Employee, and the Employee shall
accept from the Company, as compensation for the performance of services under
this Agreement and the Employee's observance and performance of all of the
provisions hereof, an annual salary at the rate of $30,000 (the "Second Year
Compensation" and, collectively with the First Year Compensation, the "Base
Compensation"). The “Base Compensation shall be payable in accordance with the
normal payroll practices of the Company and shall be subject to withholding
for
applicable taxes and other amounts. The Employee’s performance and the Base
Compensation shall be subject to annual review by the Company.
(b) Benefits.
During
the Term, the Employee shall be entitled to participate in or benefit from,
in
accordance with the eligibility and other provisions thereof, the Company's
medical insurance and other fringe benefit plans or policies as the Company
may
make available to, or have in effect for, its senior executive officers from
time to time. The Company and its affiliates retain the right to terminate
or
alter any such plans or policies from time to time. The Employee shall also
be
entitled to three weeks' paid vacation in each calendar year, sick leave and
other similar benefits in accordance with policies of the Company from time
to
time in effect for its senior executive officers. Unused vacation time and
sick
leave shall not be carried forward or carried back into any subsequent or prior
calendar year.
(c) Reimbursement
of Auto Expense.
During
the Term of this Agreement, the Company shall make payments for the Employee’s
car lease (but not in excess of $800 per month) which will continue until the
earlier of (i) April 2008 or (ii) the termination of the Employee under any
of
the provisions as stated in Section 7 of this Agreement.
4. Representations
of Employee.
(a) The
Employee represents and warrants that the Employee is not party to, or bound
by,
any agreement or commitment, or subject to any restriction, including but not
limited to agreements related to previous employment containing confidentiality
or noncompetition covenants, which presently has or may in the future have
a
possibility of adversely affecting the business of the Company or the
performance by the Employee of the Employee's duties under this Agreement.
2
(b) During
the Term, the Employee agrees that the Employee will not offer for sale, sell,
pledge, assign, hypothecate or otherwise create any interest in or dispose
of
(or enter into any transaction or device that is designed to, or could
reasonably be expected to, result in any of the foregoing) any shares of Common
Stock owned by the Employee on the Commencement Date or any shares of Common
Stock owned or acquired by him after the Commencement Date upon the conversion
or exercise of options or any securities convertible into or exercisable or
exchangeable for Common Stock, without first notifying the Chief Executive
Officer of the Parent in writing to inquire as to whether there exist any facts
or circumstances that would make it inadvisable for the Company or the Parent
if
the Employee engaged in such transaction.
(c) The
representations, warranties and covenants of this Section 4 shall survive
termination of the Employee’s employment hereunder and the expiration of the
Term hereof.
5. Confidentiality,
Noncompetition, Nonsolicitation and Non-Disparagement.
For
purposes of this Section 5, all references to the Company shall be deemed to
include the Parent and all its subsidiaries, including the Company all its
subsidiaries, whether now existing or hereafter established or acquired. In
consideration for the compensation and benefits provided to the Employee
pursuant to this Agreement, the Employee agrees with the provisions of this
Section 5.
(a) Confidential
Information.
(i) The
Employee acknowledges that as a result of the Employee's employment, the
Employee has and will continue to have knowledge of, and access to, proprietary
and confidential information of the Company, including, without limitation,
research and development plans and results, software, databases, technology,
inventions, trade secrets, technical information, know-how, plans,
specifications, methods of operations, product and service information, product
and service availability, pricing information (including pricing strategies),
financial, business and marketing information and plans, and the identity of
customers, clients and suppliers (collectively, the “Confidential Information”),
and that the Confidential Information, even though it may be contributed,
developed or acquired by the Employee, constitutes valuable, special and unique
assets of the Company developed at great expense which is the exclusive property
of the Company. Accordingly, the Employee shall not, at any time, either during
or subsequent to the Term of this Agreement, use, reveal, report, publish,
transfer or otherwise disclose to any person, corporation or other entity,
any
of the Confidential Information without the prior written consent of the
Company, except to responsible officers and employees of the Company and other
responsible persons who are in a contractual or fiduciary relationship with
the
Company and who have a need for such Confidential Information for purposes
in
the best interests of the Company, and except for such Confidential Information
which is or becomes of general public knowledge from authorized sources other
than the Employee.
3
(ii) The
Employee acknowledges that the Company would not enter into this Agreement
without the assurance that all the Confidential Information will be used for
the
exclusive benefit of the Company.
(b) Return
of Confidential Information.
Upon
the termination of this Agreement or upon the request of the Company, the
Employee shall promptly return to the Company all Confidential Information
in
the Employee's possession or control, including but not limited to all drawings,
manuals, computer printouts, computer databases, disks, data, files, lists,
memoranda, letters, notes, notebooks, reports and other writings and copies
thereof and all other materials relating to the Company’s business, including
without limitation any materials incorporating Confidential
Information.
(c) Inventions,
etc.
During
the Term and for a period of one year thereafter, the Employee will promptly
disclose to the Company all designs, processes, inventions, improvements,
developments, discoveries, processes, techniques, and other information related
to the business of the Company conceived, developed, acquired, or reduced to
practice by the Employee alone or with others during the Term of this Agreement,
whether or not conceived during regular working hours, through the use of
Company time, material or facilities or otherwise (“Inventions”).
The
Employee agrees that all copyrights created in conjunction with the Employee's
service to the Company and other Inventions, are “works made for hire” (as that
term is defined under the Copyright Act of 1976, as amended). All such
copyrights, trademarks, and other Inventions shall be the sole and exclusive
property of the Company, and the Company shall be the sole owner of all patents,
copyrights, trademarks, trade secrets, and other rights and protection in
connection therewith. To the extent any such copyright and other Inventions
may
not be works for hire, the Employee hereby assigns to the Corporation any and
all rights the Employee now has or may hereafter acquire in such copyrights
and
any other Inventions. Upon request the Employee shall deliver to the Company
all
drawings, models and other data and records relating to such copyrights,
trademarks and Inventions. The Employee further agrees, as to all such
Inventions, to assist the Company in every proper way (but at the Company’s
expense) to obtain, register, and from time to time enforce patents, copyrights,
trademarks, trade secrets, and other rights and protection relating to said
Inventions in and all countries, and to that end the Employee shall execute
all
documents for use in applying for and obtaining such patents, copyrights,
trademarks, trade secrets and other rights and protection on and enforcing
such
Inventions, as the Company may desire, together with any assignments thereof
to
the Company or persons designated by it. Such obligation to assist the Company
shall continue beyond the termination of the Employee’s service to the Company,
but the Company shall compensate the Employee at a reasonable rate after
termination of service for time actually spent by the Employee at the Company’s
request for such assistance. In the event the Company is unable, after
reasonable effort, to secure the Employee’s signature on any document or
documents needed to apply for or prosecute any patent, copyright, trademark,
trade secret, or other right or protection relating to an Invention, whether
because of the Employee’s physical or mental incapacity or for any other reason
whatsoever, the Employee hereby irrevocably designates and appoints the Company
and the its duly authorized officers and agents as the Employee's agent coupled
with an interest and attorney-in-fact, to act for and in the Employee's behalf
and stead to execute and file any such application or applications and to do
all
other lawfully permitted acts to further the prosecution and issuance of
patents, copyrights, trademarks, trade secrets, or similar rights or protection
thereon with the same legal force and effect as if executed by the Employee.
4
(d) Non-competition.
The
Employee will not utilize the Employee's special knowledge of the business
operations of the Company or its customers, suppliers and others to compete
with
the Company. During the Term of this Agreement and for a period of one year
after the termination of this Agreement, the Employee shall not engage, directly
or indirectly, or have an interest, directly or indirectly, anywhere in the
United States of America or any other geographic area where the Company does
business or in which its products or services are marketed, alone or in
association with others, as principal, officer, agent, Employee, director,
partner or stockholder (except with respect to the Employee's employment by
the
Company), or through the investment of capital, lending of money or property,
rendering of services or otherwise, in any business competitive with or
substantially similar to that engaged in by the Company during the Term of
this
Agreement (it being understood hereby, that the ownership by the Employee of
five percent (5%) or less of the stock of any company listed on a national
securities exchange shall not be deemed a violation of this Section 5).
(e) Non-solicitation.
During
the Term of this Agreement and for a period of one year after the termination
of
this Agreement, the Employee shall not, and shall not permit any of the
Employee's employees, agents or others under the Employee's control to, directly
or indirectly, on behalf of the Employee or any other person, (i) call
upon, accept competitive business from, or solicit the competitive business
of
any individual or entity who is, or who had been at any time during the
preceding two years, a customer of the Company or any successor to the business
of the Company, or otherwise divert or attempt to divert any business from
the
Company or any such successor, or (ii) directly or indirectly recruit or
otherwise solicit or induce any person who is an Employee of, or otherwise
engaged by, the Company or any successor to the business of the Company to
terminate such person's employment or other relationship with the Company or
such successor, or hire or enter into any business with any person who is
employed by, or who has left the employ of, the Company or any such successor
during the preceding two years. The Employee shall not at any time, directly
or
indirectly, use or purport to authorize any person to use any name, xxxx, logo,
trade dress or other identifying words or images which are the same as or
similar to those used at any time by the Company in connection with any product
or service, whether or not such use would be in a business competitive with
that
of the Company. Any breach or violation by the Employee of the provisions of
this Section 5 shall toll the running of any time periods set forth in this
Section 5 for the duration of any such breach or violation.
(f) Non-Disparagement. The
Employee shall not at any time, directly or indirectly, take any action (whether
orally or in writing or otherwise) which has or may be expected to have the
effect of disparaging the Company or any of its subsidiaries or affiliates
or
their directors, officers or executives or their respective reputations,
including, but not limited to, their business models, practices, relationships,
internal workings, financial condition or operations, in any manner whatsoever
at any time.
5
6. Remedies.
The
restrictions set forth in Section 5 are considered by the parties to be fair
and
reasonable. The Employee acknowledges that the restrictions contained in Section
5 will not prevent him from earning a livelihood. The Employee further
acknowledges that the Company would be irreparably harmed and that monetary
damages would not provide an adequate remedy in the event of a breach of the
provisions of Section 5. Accordingly, the Employee agrees that, in addition
to
any other remedies available to the Company, the Company shall be entitled
to
injunctive and other equitable relief to secure the enforcement of these
provisions, and shall be entitled to receive reimbursement from the Employee
for
all reasonable attorneys' fees and expenses incurred by the Company in enforcing
these provisions. In connection with seeking any such equitable remedy,
including, but not limited to, an injunction or specific performance, the
Company shall not be required to post a bond as a condition to obtaining such
remedy. If any provisions of Sections 5 or 6 relating to the time period, scope
of activities or geographic area of restrictions is declared by a court of
competent jurisdiction to exceed the maximum permissible time period, scope
of
activities or geographic area, the maximum time period, scope of activities
or
geographic area, as the case may be, shall be reduced to the maximum which
such
court deems enforceable. If any provisions of Sections 5 or 6 other than those
described in the preceding sentence are adjudicated to be invalid or
unenforceable, the invalid or unenforceable provisions shall be deemed amended
(with respect only to the jurisdiction in which such adjudication is made)
in
such manner as to render them enforceable and to effectuate as nearly as
possible the original intentions and agreement of the parties. For purposes
of
this Section 6, all references to the Company shall be deemed to include the
Company's affiliates and subsidiaries, whether now existing or hereafter
established or acquired.
7. Termination;
Non-renewal.
This
Agreement may be terminated prior to the expiration of the Term set forth in
Section 1 upon the occurrence of any of the events set forth in, and subject
to
the terms of, this Section 7.
(a) Death
or Permanent Disability.
If
the
Employee dies or becomes permanently disabled, this Agreement shall terminate
effective at the end of the calendar month during which the Employee's death
occurs or when the Employee's disability is deemed to have become permanent.
If
the Employee is unable to perform the Employee's normal duties for the Company
because of illness or incapacity (whether physical or mental) for 45 consecutive
days during the Term of this Agreement, or for 60 days (whether or not
consecutive) out of any calendar year during the Term of this Agreement, the
Employee's disability shall be deemed to have become permanent. If this
Agreement is terminated on account of the death or permanent disability of
the
Employee, then the Employee or the Employee's estate shall be entitled to
receive accrued Base Compensation through the date of such termination and
the
Employee and the Employee’s estate shall have no further entitlement to Base
Compensation, bonus, or benefits from the Company following the effective date
of such termination.
6
(b) Cause.
This
Agreement may be terminated at the Company’s option, immediately upon written
notice to the Employee, upon: (i) the Employee’s commission of a
misdemeanor or felony that, in the Company Board or Parent Board’s reasonable
judgment, adversely affects the Company’s or any of the Company’s affiliates’
reputation, business or interests, or the ability of the Employee to perform
the
Employee's duties as an employee of the Company; (ii) the Employee’s act of
fraud or dishonest act upon, or misappropriation of funds of, the Company or
any
of the Company’s affiliates; (c) the Employee’s gross negligence, willful
or intentional act or omission in the performance of the Employee's duties
under
this Agreement as determined by the Company Board or Parent Board; (d) the
Employee’s disregard of a lawful direction of the Company Board or Parent Board
or the executive officer to whom the Employee reports; (e) the Employee’s
appropriation for himself of a Company corporate opportunity without the express
prior written consent of the Company Board or Parent Board; (f) the
Employee’s material breach of any of the Employee's obligations under this
Agreement (other than Section 5 of this Agreement) that continues unremedied
for
14 days following the Employee’s receipt of written notice from the Company
Board or Parent Board thereof; (g) the Employee’s breach of any of the
Employee's obligations of any of the provisions of Section 5 of this Agreement;
or (h) the Employee is convicted of a felony. If this Agreement is
terminated by the Company for cause, then the Employee shall be entitled to
receive accrued Base Compensation through the date of such
termination.
(c) By
Employee.
The
Employee may terminate the Agreement upon providing the Company with ninety
(90)
days' prior written notice. If this Agreement is terminated by the Employee
pursuant to this Section 7(c), then the Employee shall be entitled to receive
the Employee's accrued Base Compensation and benefits through the effective
date
of such termination, and the Employee shall have no further entitlement to
Base
Compensation, bonus, or benefits from the Company following the effective date
of such termination.
8. Miscellaneous.
(a) Survival.
The
provisions of Sections 5, 6, 7, and 8 shall survive the termination of this
Agreement.
(b) Entire
Agreement.
This
Agreement sets forth the entire understanding of the parties and, except as
specifically set forth herein, merges and supersedes any prior or
contemporaneous agreements between the parties pertaining to the subject matter
hereof.
(c) Modification.
This
Agreement may not be modified or terminated orally, and no modification,
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.
(d) Waiver.
Failure
of a party to enforce one or more of the provisions of this Agreement or to
require at any time performance of any of the obligations hereof shall not
be
construed to be a waiver of such provisions by such party nor to in any way
affect the validity of this Agreement or such party’s right thereafter to
enforce any provision of this Agreement, nor to preclude such party from taking
any other action at any time which it would legally be entitled to
take.
(e) Successors
and Assigns.
Neither
party shall have the right to assign this Agreement, or any rights or
obligations hereunder, without the consent of the other party; provided,
however,
that
upon the sale of all or substantially all of the assets, business and good-will
of the Company to another company, or upon the merger or consolidation of the
Company with another company, this Agreement shall inure to the benefit of,
and
be binding upon, both Employee and the company purchasing such assets, business
and goodwill, or surviving such merger or consolidation, as the case may be,
in
the same manner and to the same extent as though such other company were the
Company; and provided,
further,
that the
Company shall have the right to assign this Agreement to any affiliate or
subsidiary of the Company. Subject to the foregoing, this Agreement shall inure
to the benefit of, and be binding upon, the parties hereto and their legal
representatives, heirs, successors and assigns.
7
(f) Communications.
All
notices, requests, demands and other communications under this Agreement shall
be in writing and shall be deemed to have been given at the time personally
delivered or when mailed in any United States post office enclosed in a
registered or certified postage prepaid envelope and addressed to the addresses
set forth below, or to such other address as any party may specify by notice
to
the other party; provided,
however,
that any
notice of change of address shall be effective only upon receipt.
|
If
to the Company:
Xxxxxx,
Inc.
000
Xxxxxxx Xxxx
Xxxx
Xxxx, Xxx Xxxx 00000
Facsimile:
(000) 000-0000
Attention:
Chief Executive Officer
|
With
a copy to:
Xxxx
Xxxxxxx, P.C.
0000
Xxxxxx xx xxx Xxxxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Facsimile:
(000) 000-0000
Attention:
Xxxxxx X. Xxxxxxxx, Esq.
|
|
If
to the Employee, to:
Xx.
Xxxxxxx Xxxx
____________________________________
____________________________________
Facsimile:
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With
a copy to:
Xxxxxx
Xxxxxxx & Leckerling P.C.
00
Xxxx Xxxxxx
Xxxxxxxxxx,
Xxxxxxx 00000
Facsimile:
802-864-3629
Attention:
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(g) Severability.
If any
provision of this Agreement is held to be invalid or unenforceable by a court
of
competent jurisdiction, such invalidity or unenforceability shall not affect
the
validity and enforceability of the other provisions of this Agreement and the
provisions held to be invalid or unenforceable shall be enforced as nearly
as
possible according to its original terms and intent to eliminate such invalidity
or unenforceability.
(h) Jurisdiction;
Venue.
This
Agreement shall be subject to the jurisdiction of the courts of New York County,
New York, and the courts of Xxxxxxxxxx County, State of Vermont, and the parties
irrevocably and expressly agree to submit to the jurisdiction of such courts
for
actions or proceedings involving any breach of this Agreement other than claims
or causes of action that relate to or arise under the Purchase Agreement. Claims
hereunder involving any causes of action that relate to or arise under the
Purchase Agreement shall be brought exclusively in the courts of New York
County, New York, and the parties irrevocably and expressly agree to submit
to
the exclusive jurisdiction of the courts of New York County, New York for the
purpose of resolving disputes among them relating to this Agreement or the
transactions contemplated by this Agreement, and waive any objections on the
grounds of forum non
conveniens
or
otherwise. The parties hereto agree to service of process by certified or
registered United States mail, postage prepaid, addressed to the party in
question.
8
(i) Governing
Law; Indemnification.
This
Agreement is made and executed and shall be governed by the laws of the State
of
New York, without regard to the conflicts of law principles thereof.
Notwithstanding the foregoing, the Employee shall have the right to any
indemnification to the extent provided for such Employee in the Company's
certificate of incorporation, bylaws, and the provisions of Delaware
law.
(j) Counterparts.
This
Agreement may be executed in any number of counterparts, but all counterparts
will together constitute but one agreement.
(k) Code
Section 409A.
The
parties to this Agreement intend that the Agreement be exempt from (or, if
not
so exempt, comply with) Section 409A of the U.S. Internal Revenue Code (the
"Code"), where applicable, and this Agreement shall be interpreted in a manner
consistent with that intention. To the extent required by Section 409A of
the Code, no payment or other distribution required to be made to the Employee
hereunder (including any payment of cash, any transfer of property and any
provision of taxable benefits) as a result of the Employee's termination of
employment with the Company shall be made earlier than the date that is six
(6)
months and one day following the date on which the Employee separates from
service with the Company and its affiliates (within the meaning of Section
409A
of the Code).
This
Agreement is for the sole and exclusive benefit of the parties hereto and shall
not be deemed for the benefit of any other person or entity.
[Signature
Page Follows:]
9
In
Witness Whereof,
each of
the parties hereto has duly executed this Employment Agreement as of the date
set forth above.
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Twincraft,
Inc.,
a
Vermont corporation
By: /s/
W. Xxxx Xxxxxxx
Name:
W. Xxxx Xxxxxxx
Title:
Executive Chairman
|
Employee:
/s/
Xxxxxxx Xxxx
Xxxxxxx Xxxx |
