EMPLOYMENT AGREEMENT
Exhibit
10(k)
[EXECUTION
COPY]
____________________
AGREEMENT,
dated as of March 31, 2009, between Dataram Corporation (the "Company"), a New
Jersey corporation having a mailing address at X.X. Xxx 0000, Xxxxxxxxx, Xxx
Xxxxxx 00000-0000, and Xxxxx Xxxxxx (the "Executive"), an individual having a
mailing address at c/o Micro Memory Bank, Inc., Xxxxxxxxx Xxxxx,
Xxxxxxxxxxxxxxx, XX 00000.
WHEREAS,
the Company desires to employ the Executive, and the Executive desires to be
employed by the Company, on the terms and conditions set forth in this
Agreement; and
NOW,
THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the parties hereto hereby agree as follows:
1. Term
Of Employment. The Company will employ the Executive, and the
Executive hereby accepts employment by the Company, on the terms and conditions
contained in this Agreement for the period commencing upon the date of this
Agreement and ending on the fourth anniversary of the date set forth above (the
"Expiration Date"); provided, however, that such employment is conditioned on
the Company's continued operation of the Unit defined in Section 2.1 of this
Agreement.
2. Duties.
2.1 Position. During
the term of Executive's employment under this Agreement (the "Term"), the
Executive shall serve as the Company's general manager of the micro memory
business unit (the "Unit") of the Company and report directly to the President
and CEO of the Company, with such additions to the scope of the duties of his
employment within the Company's field of operations or those of the Company's
subsidiaries or affiliated corporations as the Company may direct.
2.2 Time. The
Executive shall devote all of his business time, energy and skill to the affairs
of the Company and its subsidiaries and affiliated corporations and to the
promotion of their interests, provided that the Executive may serve as a
director of such business and not-for-profit corporations, and as a principal of
businesses and other ventures, as the Company shall permit in its
discretion. The Company hereby permits Executive to devote reasonable
time, energy and skill to the disposition of the inventory of Micro Memory Bank,
Inc. existing on the date of this Agreement, so long as such disposition does
not interfere with Executive's duties to the Company as determined in the
reasonable judgment of the Company's President.
3. Compensation.
3.1 Base
Compensation. During the Term, the Company shall pay the Executive a
salary at the rate of $200,000 per annum, payable in equal installments in
accordance with the Company's normal practices for payment of
executives. Executive shall receive such annual increases in Base
Compensation as the Board of Directors of Company deems
appropriate.
3.2 Bonus
Compensation. The Executive shall receive an annual incentive bonus
payment, based on the Company's fiscal year to be paid 30 days after the end of
the Company's fiscal year, and based on a designated percentage of EBITDA of the
Unit, provided the Unit's EBITDA for such year is $500,000 or
higher. The designated percentage of EDITDA shall be calculated by
multiplying the percentage obtained by $100,000. The bonus for any year shall be
no more than $100,000. EBITDA will be calculated in accordance with
GAAP. EBITDA expenses will be calculated based on the
following: (i) all direct expenses of the business unit to be
operated following consummation of this transaction (the "Unit"), including
personnel, personnel benefits, facilities, equipment, etc. will be included;
(ii) synergistic savings will be credited to the Unit based on agreement between
the Executive and the President of the Company; and (iii) proportional corporate
expenses, including accounting, audits, SOX Compliance and corporate support and
not to exceed $100,000 per year, will be included. The Company shall permit
Executive and Executive's legal and accounting advisors full, complete and
prompt access, upon reasonable prior notice and at such times as are reasonably
acceptable to the Company and Executive, to all books, records, and other
documents as may from time to time be reasonably requested by Executive to
verify the calculation of the EBITDA as contemplated by this Section
3.2.
3.3 Reimbursement
for Expenses. During the Term, the Company will reimburse the
Executive for all documented expenses properly incurred by the Executive in the
performance of the Executive's duties under this Agreement.
3.4 Stock
Options. Subject to the approval of Dataram's Board of Directors and
its standard stock option procedures, non-statutory five-year Dataram stock
options in the total amount of 100,000 shares per year will be made available
annually for four years to the Unit, to be allocated among Xx. Xxxxxx and
certain employees of such unit as are recommended by Xx. Xxxxxx in his capacity
as general manager, subject to standard Dataram stock option
guidelines. All such options shall have an exercise price equal to
fair market value on date of grant and shall vest on or after the first
anniversary of the date of grant. The first year's stock option for
an aggregate of 100,000 shares will be granted within 90 days from the date of
this Agreement.
3.5 Other
Benefits. In addition to the benefits specified in Sections 3.1
through 3.4, during the Term the Executive will be entitled to participate in
any present and future life insurance, travel insurance, disability insurance,
health insurance, pension, retirement and similar plans adopted by the Company
for the general and overall benefit of its employees and its principal
executives. The Executive shall be entitled to twenty (20) days paid
vacation per year.
3.6 Withholding. The
Company shall have the right to withhold from any amounts payable hereunder any
amounts required to be withheld by the appropriate taxing
authorities.
4. Nonassignability
Of Benefits. No benefit under this Agreement shall be subject in any
manner to anticipation, alienation, sale, transfer or assignment by the
Executive, his beneficiaries or his estate, nor shall any benefit in any manner
be liable for or subject to attachments or legal process for or against the
Executive, his beneficiaries or his estate.
5. Termination
Of Agreement.
5.1 Termination
Generally. Except as otherwise expressly stated herein, this
Agreement, and all liabilities and obligations of the Company to the Executive
under this Agreement, shall cease and terminate upon the earliest of the events
specified below, provided that such termination shall not effect the right of
the Executive or his estate or beneficiaries to receive any salary or bonus
accrued but unpaid, and shall not affect any vested rights which the Executive
may have pursuant to any insurance or other benefit plans or any other plans,
policies or arrangements of the Company or any of its subsidiaries or affiliated
corporations:
(a) the
occurrence of the Expiration Date;
(b) the
date of a determination by the Company that this Agreement should be terminated
by reason of the Executive's suffering from a disability to such an extent that
he will be unable to perform the functions of his office for a continuous period
of not less than 6 months from the date of such determination;
(c) in
the event the Company is consolidated with or merged into any other corporation
or entity or sells or conveys to any other corporation or entity all or
substantially all of its assets, or there is a change in control of the Company
(defined as a change in ownership resulting in an individual, entity or group
owning 51% or more of the outstanding shares of the Company's Common Stock), the
Company or any such successor entity may terminate this Agreement upon thirty
(30) days notice to the Employee;
(d) the
death of the Executive, subject to Section 5.3;
(e) the
date of termination for cause as discussed in Section 5.2; and
(f) voluntary
termination of the Executive pursuant to Section 5.4 hereof.
5.2 Termination
for Cause. Anything herein to the contrary notwithstanding, the
Company may terminate the Term and all of the Company's then remaining
obligations hereunder for cause. For purposes of this Agreement,
"cause" shall mean the Executive's material breach of this Agreement as defined
by any of the following actions of the Executive: (a) the Executive's gross
negligence in performing his duties or willful or knowing failure or refusal to
perform his duties as directed by the Company; (b) the appropriation (or
attempted appropriation) of a material business opportunity of the Company,
including attempting to secure or securing any personal profit in connection
with any transaction entered into on behalf of the Company; (c) the
misappropriation (or attempted misappropriation) of any funds or property of the
Company; (d) any breach of any duty of loyalty (imposed by this Agreement, at
law, in equity or otherwise) owed to the Company; (e) the conviction of any
crime involving an act of dishonesty or moral turpitude; or (f) the conviction
of, or the entering of a guilty plea or plea of no contest with respect to, a
felony, the equivalent thereof, or any other crime with respect to which
imprisonment is a possible punishment.
5.3 Death. If
the Executive dies during the Term, the Executive's estate shall be entitled to
receive the base compensation provided in Section 3.1 at the then current rate
to the last day of the 6th month after his death occurs together with the bonus
for any fiscal year which concludes during that 6 month period. If a
fiscal year does not conclude during such 6 months, the Executive's estate shall
be entitled to a bonus for the year of his death prorated according to the
number of months in such year through the 6th month of the Executive's
death
5.4 Termination
by Executive. The Executive may terminate his employment under this
Agreement upon 120 days written notice.
5.5 Post-Termination
Compensation. In the event the Executive is terminated by the Company
other than for cause, or a notice of termination is given by the Executive
pursuant to 5.4 by reason of a material (a) decrease in base salary or (b)
change in job description, status or position, (c) diminution of duties or (d)
change in location of employment to a location more than fifty miles from the
headquarters of the Unit at the date of this Agreement, then the Company will
pay the Executive six months base salary at the rate existing 60 days prior to
the date of the notice of termination. Such payment shall be
considered to be a severance payment and shall relieve the Executive and the
Company of all obligations hereunder except that the Executive's covenants in
Xxxxxxx 0, 0 xxx 0 xxxxx xx continuing obligations.
6. Confidentiality. During
the Term and for three years thereafter Executive will not disclose information
concerning the Company's affairs, including undisclosed financial information,
products, the identity of suppliers and the identity of customers, as to which
the Executive has obtained specific knowledge during the Term and which is
otherwise unknown to the public. The Executive's obligations under
this Section 6 shall survive the termination or expiration of this
Agreement.
7. Assignment
And Disclosure Of Inventions. As used herein, "Restricted Inventions"
shall mean all inventions, discoveries, improvements or modifications to
inventions or discoveries, whether or not patentable, which are conceived of
and/or reduced to practice, by the Executive, alone or with others, at any time
during the Term and which are used or useful by the Company in any of its lines
of business. The Executive shall disclose any Restricted Invention
promptly to the Company and the Executive hereby assigns the Company all rights
to any Restricted Invention. The Executive will execute and deliver
all documents and instruments necessary or desirable for the Company to apply
for and obtain domestic and foreign patents for Restricted
Inventions. The Executive's obligations under this Section 7 shall
survive the termination or expiration of this Agreement.
8. Competition
And Post Employment Restriction.
8.1 Restrictions. During
the term of this Agreement and (i) for one year thereafter, if Executive's
employment with the Company is three years or longer or (ii) for two years
thereafter, if Executive's employment with the Company is less than three years,
the Executive covenants and agrees that the Executive shall not directly or
indirectly, without the Company's prior written consent: (a) make any
public statement or disclosures inconsistent with his duties to advance the
business and interests of the Company or make any statement disparaging the
Company; (b) engage in selling, purchasing inventory or product, research,
scientific investigation, employment or consulting as an officer, director,
employee, consultant or individual in any capacity whatsoever in any enterprise
(whether or not for profit) which competes substantially with the business of
the Company or the Company's interests, successors or affiliates; or (c) solicit
employees of the Company in connection with any business, whether or not such
business competes with the business of the Company, its successors or
affiliates. If the Company is making payments to the Executive
pursuant to the terms of this Agreement after the fourth anniversary of this
Agreement, the additional one year period set forth in the first sentence of
this Section 8.1 shall be extended to one year after the date the last such
payment is made by the Company to the Executive. The Company
expressly excepts from the restrictions set forth in subsection (b) above the
sale of the inventory of Micro Memory Bank, Inc. as contemplated in Section 2.2
hereof.
The
Executive represents and warrants that his employment by the Company, as set
forth herein, does not and will not cause him to be in breach of any other
employment agreement or arrangement with any other party. The
Executive's obligations under this Section 8 shall survive the termination or
expiration of this Agreement.
8.2 Covenants
Extendable and Divisible. In the event of a breach by the Executive
of any covenant set forth in Section 8.1 of this Agreement, the term of such
covenant will be extended by the period of the duration of such
breach. If any covenant in Section 8.1 is held to be unreasonable,
arbitrary, or against public policy, such covenant will be considered to be
divisible with respect to scope, time, and geographic area, and such lesser
scope, time, or geographic area, or all of them, as a court of competent
jurisdiction may determine to be reasonable, not arbitrary, and not against
public policy, will be effective, binding, and enforceable against
the
Executive.
9. Injunctive
Relief. The Executive acknowledges that disclosure of any Restrictive
Inventions or any breach of any restrictive agreements contained herein shall
give rise to irreparable injury to the Company. The damage done to
the Company will be difficult to ascertain and the Company will be inadequately
compensated in damages. Accordingly, the Company may seek and obtain
injunctive relief against the breach of the foregoing undertakings, in addition
to any other legal remedies, which may be available. The Executive
further acknowledges and agrees that in the event of the termination of
employment with the Company, the Executive's experience and capabilities are
such that the Executive can obtain employment in business activities which are
of a different or noncompeting nature with his activities as an Executive of the
Company; and the enforcement of a remedy hereunder by way of injunction shall
not prevent the Executive from earning a reasonable livelihood. The
Executive further acknowledges and agrees the covenants contained herein are
necessary for the protection of the Company's legitimate business interests and
are reasonable in scope and content.
10. Severability. Any
provision of this Agreement which is determined by a court of competent
jurisdiction to be invalid or unenforceable, due to being overbroad, shall be
deemed to be amended to be only as broad as may be fully
enforceable. Any provision of this Agreement which, notwithstanding
the foregoing sentence, is determined by a court of competent jurisdiction to be
invalid or unenforceable for any reason, shall not affect, impair or invalidate
the remainder of this Agreement.
11. Successors
And Assigns. This Agreement shall be binding upon and inure to the
benefit of the Company, its successors and assigns and shall be binding upon and
inure to the benefit of the Executive and his heirs, executors, administrators,
legal representatives and assigns.
12. Notices. All
notices, requests, demands and other communications hereunder must be in writing
and shall be deemed to have been duly given if mailed by first class certified
mail, return receipt requested, postage prepaid, to the parties at their address
as first set forth above. A copy of any notice to the Company also
shall be sent to:
Xxxxxx
X. Xxxxx, Esq.
Xxxxxx,
Xxxxx & Xxxxxx
00
Xxxxx Xxxxxx
Xxxxxxxxxx,
Xxx Xxxxxx 00000
A
copy of any notice to the Executive shall be sent to:
L.
Xxxxxx Xxxxx, Esquire
Xxxxxx
& Xxxxxxx
One
Xxxxxxx Xxxxx, 00xx Xxxxx
0000
Xxxxxx Xxxxxx
Xxxxxxxxxxxx,
XX 00000
Either
party, by notice in writing mailed to the other as provided herein, may change
the address to which future notices to such party shall be mailed.
13. Miscellaneous. This
Agreement shall be construed and enforced in accordance with, and governed by,
the laws of the State of New Jersey. This Agreement embodies the
entire agreement and understanding between the Company and the Executive and
supersedes all prior agreements and understandings relating to the subject
matter hereof except for written obligations relating to the stock option and
benefit plan. This Agreement may not be modified or amended or any
term or provision thereof waived or discharged except in writing signed by the
party against whom such amendment, modification, waiver or discharge is sought
to be enforced. All prior Agreements between the parties concerning
the subject matters of this Agreement are hereby terminated. The
headings of this Agreement are for the purpose of reference only and shall not
limit or otherwise affect the meaning thereof.
[signature
page follows]
IN
WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement
as of the date first set forth above.
DATARAM
CORPORATION
By:
/s/ Xxxx X. Xxxxxxx
Xxxx
X. Xxxxxxx, President
and
Chief Executive Officer
THE
EXECUTIVE
/s/ Xxxxx Xxxxxx
Xxxxx
Xxxxxx
