EMPLOYMENT AGREEMENT
This Agreement has been made and entered into this 16th day of October,
1998, between APPOINTNET, INC., a Pennsylvania corporation having its principal
place of business at 000 X. Xxxxxxxx Xxxxxx, Xxxxxxxxxxxx, XX 00000 (the
"Company"), and Xxxxxxx Xxxxxxx, an individual having an address of 000 Xxxxxxxx
Xxxx, Xxxxxxxxx, XX 00000 (the "Executive").
W I T N E S S E T H:
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WHEREAS, the Company desires to employ the Executive as Chief Financial
Officer ("CFO"), and the Executive desires to accept that position subject to
the provisions of this Agreement.
NOW THEREFORE, in consideration of the mutual covenants contained
herein, and intending to be legally bound hereby, the parties hereto agree as
follows:
1. Employment. The Company hereby offers, and the Executive hereby
accepts, employment as CFO of the Company upon the terms and conditions set
forth herein.
2. Length of Employment.
(a) Term. The Executive's employment as CFO of the Company shall
commence as of the date hereof (the "Commencement Date"), and shall expire at
the close of business on the second anniversary of the Commencement Date, unless
earlier terminated pursuant to the provisions hereof (the "Term").
(b) Extended Term.
(i) The Term shall automatically be extended for successive one
year periods commencing on the second anniversary of the Commencement Date and
each anniversary thereafter, unless either party elects not to so extend by
giving the other written notice, at least one-hundred-twenty (120) days prior
to any such anniversary of the Commencement Date, of its or his intention to
terminate the employment provided hereby at the next anniversary of the
Commencement Date.
(ii) In the event the Executive elects not to extend his
employment pursuant to subsection (i) of this Section 2(b):
(A) the Executive shall continue to perform his duties
hereunder until the end of such term; and
(B) the Company shall continue to pay the Executive on the
normal payment dates, all salary, compensation and benefits provided for under
this Agreement through the end of such term.
(iii) In the event the Company elects not to extend the
Executive's employment pursuant to subsection (i) of this Section 2(b):
(A) the Executive shall be entitled to cease working as of
the date of his receipt of written notice of the Company's election not to
extend the Executive's employment; and
(B) the Company shall continue to pay the Executive, in
accordance with normal payroll practices, all salary compensation and benefits
provided for under this Agreement through the end of such term.
3. Compensation and Allowances.
(a) Base Salary.
(i) The Company shall pay the Executive an initial annual base
salary of $120,000.00 (the "Initial Base Salary").
(ii) Fees and the base salary shall be payable in convenient
installments, as determined by the Company, but not less frequently than
monthly.
(iii) The Executive's base salary shall be reviewed each year
of the Term and may be increased, but not decreased, by the Board of Directors
of the Company (the "Board") in its sole discretion.
(b) Necessary Items. The Company shall furnish office space,
equipment, secretarial and other support, supplies and items necessary or proper
in order that the Executive may perform his duties hereunder.
(c) Reimbursement of Expenses. The Company shall reimburse the
Executive within 15 days of the presentation to the Company of receipts for the
reasonable expenses and disbursements he incurs in the course of the performance
of his duties hereunder; provided, however, that all expenses in excess of $250
must be preapproved by the Company in order for Executive to be entitled to
reimbursement.
(d) Perquisites. The Executive shall be entitled to those
perquisites commensurate with his position as are approved by the Board and made
available to similarly situated employees of the Company.
(e) Fringe Benefits. On the Commencement Date, the Executive shall
be entitled to participate in the Company's welfare and fringe benefit plans and
programs made available to senior executives of the Company at no additional
cost to Executive. No plan or program made available to senior executives of the
Company shall specifically exclude the Executive. As of the date hereof, such
plans and programs only include family health insurance coverage. While nothing
contained herein shall be construed as an obligation of the Company to offer any
additional plans or programs beyond family health insurance coverage, in the
future the Company may offer, among other items, an employee stock option plan.
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(f) Bonus. During each year of the Executive's employment, the
Board will conduct a review of the performance of the Executive's duties
hereunder in order to determine whether the Executive shall be entitled to
receive any bonus. Any such bonus will be based upon the overall profits of the
Company, the Executive's effectiveness in performing his duties hereunder and
any other considerations deemed relevant to the Board. Nothing contained in this
Agreement (nor the payment of any previous bonus) shall be construed as an
obligation on the part of the Company to pay any bonus.
(g) Vacations. The Executive may take a maximum of 15 business days
vacation each calendar year, all at times to be determined in the manner most
convenient to the Executive and the business of the Company.
(h) Additional Compensation. The Executive shall be granted stock
options to purchase 240,000 shares of common stock of the Company at $1.25 per
share vesting ratably over 36 months from the Commencement Date of this
Agreement. In addition, the Executive shall be issued a warrant to purchase
60,000 shares of common stock of the Company at an exercise price of $.01 per
share, fully exercisable six months flowing the Commencement Date of this
Agreement.
4. Duties. The Executive shall perform all duties consistent with the
position of CFO of the Company, as well as any other duties which are reasonably
assigned to him by the Board and the President of the Company. The Executive
shall report to such single officer of the Company as is designated by the
Board.
5. Extent of Services. During the term hereof, the Executive shall
devote his full time, efforts and attention during business hours to the benefit
and business of the Company.
6. Termination of Employment.
(a) Death. All rights and benefits of the Executive under this
Agreement shall terminate automatically upon his death (other than rights
accrued prior to that date). The Company shall pay to the estate of the
Executive such salary as would have been payable to the Executive up to the date
of his death and will pay any bonus compensation which would otherwise have been
payable to the Executive with respect to the year of his death.
(b) Permanent Disability. This Agreement shall terminate upon the
Executive's permanent disability by the Company's giving the Executive at least
thirty days written notice of such termination.
(i) The term "permanent disability" as used in this Agreement
shall mean the inability of the Executive, as determined by the Company's
physician (who shall be reasonably approved by the Executive), by reason of
physical or mental disability, to substantially perform the duties required of
him under this Agreement for a period of ninety days in any one-year period.
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(ii) Successive periods of disability, illness or incapacity
will be considered separate periods unless the later period of disability,
illness or incapacity is due to the same or related cause and commences less
than nine months from the ending of the previous period of disability.
(c) Termination by the Company without Good Cause.
(i) Notwithstanding any other provision hereof to the contrary,
the Company may terminate this Agreement and the employment of the Executive
hereunder upon written notice to the Executive.
(ii) If the Executive is terminated pursuant to this Section
6(c), the Company shall
(A) pay the Executive (1) any salary earned but not paid
to the date of such termination, (2) any benefits earned or accrued as of the
date of such termination and (3) a sum equal to 180 days base salary, which
shall be payable to the Executive in accordance with the Company's normal
payroll practices; and
(B) continue to provide to the Executive the family health
insurance coverage which was being provided to the Executive as of the date of
such termination for a period of ninety (90) days commencing on the date of such
termination.
(d) Termination by the Company with Good Cause.
(i) The Company may terminate this Agreement and the employment
of the Executive hereunder upon written notice for good cause as defined below.
(ii) The term "good cause" as used herein shall include, but
not be limited to any of the following as applied to the Executive: (A)
conviction of any felony; (B) physical dependence on alcohol or illegal drugs;
(C) continued or habitual failure to perform the material duties required by
this Agreement; (D) an act of dishonesty, moral turpitude, breach of trust or
other improper conduct resulting or intended to result principally, directly or
indirectly, in significant personal gain or enrichment at the expense of the
Company or which is otherwise materially harmful to the Company; or (E) a
material breach of this Agreement. The right of the Company to terminate this
Agreement pursuant to clause (E) of the preceding sentence shall not become
effective if the breach by the Executive, other than a breach of the provisions
of Section 7, is cured within thirty days of written notification of such breach
from the Company.
(iii) If the Executive is terminated pursuant to this Section
6(d), the Company shall pay the Executive any salary earned but not paid to the
date of such termination.
(e) Termination by the Executive. The Executive may terminate this
Agreement and his employment hereunder upon thirty days prior written notice to
the Company (i) if the Executive's duties or authority are materially changed
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without the prior consent of the Executive, (ii) if the Company, its officers,
directors, employees or agents materially interfere with the Executive's ability
to perform his duties hereunder or (iii) upon the material breach of this
Agreement by the Company. The right of the Executive to terminate this Agreement
pursuant to clause (ii) or (iii) of the preceding sentence shall not become
effective if the interference or breach, as the case may be, by the Company is
cured within 30 days of written notification of such interference or breach, as
the case may be, from the Executive.
(f) No Duty to Mitigate. Any compensation provided to the Executive
pursuant to this Agreement shall be payable regardless of whether the Executive
obtains employment after the termination of this Agreement; provided, however,
that in the event the Executive obtains employment after the termination of this
Agreement and receives family health insurance coverage in connection with such
employment which is substantially similar to that being provided to the
Executive hereunder, the Company shall no longer be obligated to provide family
health insurance coverage to the Executive hereunder.
7. Noncompetition, Trade Secrets, Etc.
(a) During the term of the Executive's employment and for twenty
four (24) months after the termination or expiration thereof, (i) the Executive
shall not directly or indirectly induce or attempt to influence any employee or
independent contractor of the Company to terminate his employment with the
Company and (ii) the Executive shall not (A) solicit or (B) provide (as a
principal, partner, director, officer, agent, employee, consultant or otherwise)
any services which are competitive with those services which the Company has
previously provided, is currently providing, or plans (within the Executive's
knowledge) to provide or has begun the development to provide within the
following 12 months, at the time of the termination of the Executive's
employment to, any existing or former client or customer of the Company (or any
affiliate of such existing or former client or customer).
As used herein, the phrase "within the Executive's knowledge" or the
like shall mean the actual knowledge of the Executive together with any and all
information which should reasonably be known by the Executive given his position
with the Company.
(b) During the term of the Executive's employment and for six (6)
months after the expiration of the Executive's employment or the termination of
the Executive's employment in the event such termination is either by the
Executive with or without good cause or by the Company for good cause, the
Executive shall not engage in (as a principal, partner, director, officer,
agent, employee, consultant or otherwise) or be financially interested in any
business operating within any state, territory or foreign jurisdiction in which
the Company is then conducting (or in which the Company has definite plans to
conduct) any business which is in competition with business activities carried
on by the Company, or being definitely planned by the Company, at the time of
the termination of the Executive's employment. However, nothing contained in
this Section 7(b) shall prevent the Executive from holding for investment not
more than two percent (2%) of any class of equity securities of a company whose
securities are traded on a national securities exchange or national interdealer
quotation system.
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(c) All books, cards, records, accounts, files, notes, memoranda,
computer files, disks and records, patents, trademarks, tradenames, copyrights,
advertising, sales, manufacturers' and other materials or articles or
information, including without limitation data processing reports, customer
sales analyses, invoices, price lists or information, samples, or any other
materials or data of the Company are and shall remain the sole and confidential
property of the Company and shall be kept on the premises of the Company
whenever reasonably possible; if the Company requests the return of such
materials at any time during or at or after the termination of the Executive's
employment, the Executive shall immediately deliver the same to the Company,
together with any notes, memoranda, copies, reproductions, extracts and
summations of or regarding the aforesaid materials. As used in this Section 7(c)
and Section 7(d) below, the term "Company" shall include the Company's
subsidiaries and affiliates.
(d) During the term of the Executive's employment and at all times
thereafter, the Executive shall not use for the Executive's personal benefit, or
disclose, communicate or divulge to, or use for the direct or indirect benefit
of any person, firm, association or entity other than the Company any records,
programs, methods, policies, techniques, trade secrets, patterns, devices,
procedures, processes, compilations of information, employee information
(including wages, benefits and duty descriptions) research or development
projects or results, names and addresses of customers or clients, data on or
relating to past, present or prospective (within the Executive's knowledge)
customers or clients or any other confidential information relating to or
dealing with the business operations or activities of the Company, made known to
the Executive or learned or acquired by the Executive while in the employ of the
Company.
(e) Any and all writings, inventions, improvements, processes,
procedures and/or techniques which the Executive may make, conceive, discover or
develop, either solely or jointly with any other person or persons, at any time
while the Executive is in the employ of the Company, whether during working
hours or at any other time and whether at the request or upon the suggestion of
the Company or otherwise, which relate to or are useful in connection with any
business now or hereafter carried on or known by the Executive to be
contemplated by the Company, including developments or expansions of its present
fields of operations, shall be the sole and exclusive property of the Company.
The Executive shall make full disclosure to the Company of all such writings,
inventions, improvements, processes, procedures and techniques, and shall do
everything reasonably necessary or desirable to vest the absolute title thereto
in the Company, at the Company's expense. The Executive shall write and prepare
all specifications and procedures regarding such inventions, improvements,
processes, procedures and techniques and otherwise aid and assist the Company so
that the Company can prepare and present applications for copyright or Letters
Patent therefor and can secure such copyright or Letters Patent wherever
possible, as well as reissues, renewals, and extensions thereof, and can obtain
the record title to such copyright or patents so that the Company shall be the
sole and absolute owner thereof in all countries in which it may desire to have
copyright or patent protection. The Executive shall not be entitled to any
additional or special compensation or reimbursement regarding any and all such
writings, inventions, improvements, processes, procedures and techniques.
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(f) The Executive acknowledges that the restrictions contained in
subsections (a) through (e) of this Section 7 do not impose an undue hardship on
the Executive and will not act as a bar to the Executive's sole means of support
and, in view of the nature of the business in which the Company is engaged, are
reasonable and necessary in order to protect the legitimate interests of the
Company, and that any violation thereof would result in irreparable injuries to
the Company, and the Executive therefore acknowledges that, in the event of the
Executive's violation of any of these restrictions, the Company shall be
entitled to obtain from any court of competent jurisdiction preliminary and
permanent injunctive relief as well as damages and an equitable accounting of
all earnings, profits and other benefits arising from such violation, which
rights shall be cumulative and in addition to any other rights or remedies to
which the Company may be entitled.
8. Compliance with other Agreements. The Executive represents to the
Company that the execution of this Agreement by him and the performance of his
obligations hereunder will not conflict with or result in the breach of any
provision of, or constitute a default under, any other agreement or undertaking
to which the Executive is a party or by which the Executive is or may be bound.
9. Binding Effect; Assignment. The rights and obligations of the
Company under this Agreement shall inure to the benefit of and be binding upon
its successors and assigns. Accordingly, this Agreement shall not terminate by
the voluntary or involuntary dissolution of the Company or by any merger,
including one where the Company is not the surviving or resulting corporation,
or upon any transfer of all or substantially all of the business or assets of
the Company. In the event of such merger or transfer, the provisions of this
Agreement shall be binding on and shall insure to the benefit of the surviving
entity or the entity to which such business or assets shall be transferred. This
Agreement is a personal employment contract and the rights, obligations and
interests of the Executive hereunder may not be sold, assigned, pledged,
hypothecated or otherwise transferred to any other person.
10. Notice. Any notice herein required or permitted to be given shall
be in writing and may be delivered by facsimile, nationally recognized courier
or sent by United States mail and shall be deemed to have been given (i) upon
receipt, if delivered by facsimile transmission on or prior to 5:00 p.m. local
time (or on the next business day, if delivered by facsimile after 5:00 p.m.
local time) or sent by courier or (ii) three (3) business days after being
deposited and properly addressed in the United States mail, certified, with
postage pre-paid.
11. Whole Agreement; Amendments. This Agreement sets forth all of the
agreements, representations, warranties and conditions of the parties hereto
with respect to the subject matter hereof, and supersedes all prior or
contemporaneous agreements, representations, warranties and conditions. No
alteration, amendment, modification or waiver of any of the terms or provisions
hereof, and no future representation or warranty by either party with respect to
this transaction, shall be valid or enforceable unless the same be in writing
and signed by the party against whom enforcement of same is sought.
12. Authority. The Company represents and warrants that it (and the
undersigned officers of the Company) has full power, authority and legal right
to execute and deliver this Agreement pursuant to the terms hereof, and to keep
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and observe all of the terms and provisions of this Agreement on the Company's
part to be observed and performed. The Company warrants that this Agreement is a
valid and enforceable obligation of the Company according to the terms hereof.
13. Headings. The headings of the sections of this Agreement are for
convenience only and have no meaning with respect to this Agreement or the
rights or obligations of the parties hereto.
14. Governing Law. This Agreement shall be governed by and determined
in accordance with the laws of the Commonwealth of Pennsylvania.
15. Survival. The agreements and covenants of the Company and the
Executive contained in Sections 6 and 7 hereof shall survive the termination of
this Agreement.
16. Severability. If any provision of this Agreement is held illegal,
invalid or unenforceable, such illegality, invalidity, or unenforceability shall
not affect any other provision hereof. Such provision and the remainder of this
Agreement shall, in such circumstances, be modified to the extent necessary to
render enforceable the remaining provisions hereof.
17. Counterparts. This Agreement may be executed in counterparts, all
of which taken together shall constitute one and the same instrument.
18. Joint Participation in Drafting. Each party to this Agreement
participated in its drafting. As such, the language used herein shall be deemed
to be the language chosen by the parties hereto to express their mutual intent.
19. Acknowledgment. Each party acknowledges that it has read this
Agreement, that such party understands the implications of the restrictions
contained herein and that such party has been afforded the opportunity to
discuss this Agreement with counsel of its choice.
APPOINTNET, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx, President
/s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx
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