EXHIBIT 10.19
EMPLOYMENT AGREEMENT
THIS AGREEMENT, by and between Xxxxx Xxxxxxx (the "Employee") and Apropos
Technology, Inc., an Illinois corporation (the "Company"), is made as of the
27th day of November, 2002.
In consideration of the mutual covenants herein contained, and in
consideration of the employment of Employee by the Company, the parties agree as
follows:
1. DUTIES AND SCOPE OF EMPLOYMENT.
(a) POSITION. The Company agrees to employ the Employee under the terms of
this Agreement in the position of Chief Financial Officer. As Chief Financial
Officer, Employee shall report to the President of the Company. The primary
duties and responsibilities of the Chief Financial Officer are defined on
Exhibit A. Exhibit A is intended to demonstrate Employee's primary duties and
responsibilities as envisioned by the President as of the date hereof. The
Employee's duties shall not be limited by this Exhibit. Accordingly, Employee's
responsibilities may be modified, reduced or expanded at any time to accommodate
the Company's needs, consistent with Employee's position as Chief Financial
Officer of the Company. Employee shall use his best efforts to fulfill his
duties and responsibilities. The Employee commenced employment with the Company
on July 12th, 2000 (the "Commencement Date").
(b) OTHER ACTIVITIES. During the term of this Agreement, the Employee shall
devote his full business efforts and time to the Company during normal working
hours. Employee shall not be involved in any other activities with an
expectation of profit, other than passive investments, during these hours.
2. COMPENSATION.
(a) BASE SALARY AND BONUS. Beginning on the effective date of this
Agreement, the Employee shall be paid a base salary (the "Base Compensation") of
$190,000, per year, payable in accordance with the Company's standard payroll
policies. The President shall review Employee's performance and the Company's
financial and operating results on at least an annual
basis and shall report his findings to the Compensation Committee. The
Compensation Committee, in its sole discretion, may increase Employee's base
salary as it deems appropriate based on such review.
(b) BONUS. Employee shall also be eligible for a bonus of up to 35% of the
Base Compensation for each full fiscal year. The objectives shall be determined
by the President on an annual basis. The bonus shall be due and payable on the
15th day of February of each year, commencing with February 15th, 2003, if the
Compensation Committee, in the exercise of its reasonable judgment, believes
that the objectives have been obtained. In the event Employee's employment with
the Company terminates for any reason other than pursuant to Section 6(c) hereof
(voluntary termination by the Employee) or 6(b)(ii) hereof (Termination for
Cause), Employee shall be entitled to receive a pro rated bonus for such year,
determined by multiplying the aggregate bonus that he would have earned for the
entire year by a fraction representing the portion of the year during which he
was employed. Such bonus shall be paid on February 15th of the following year.
If Employee's employment with the Company terminates pursuant to Section 6(c)
hereof or Section 6(b)(ii) hereof, Employee shall be deemed to have forfeited
his entire bonus for such year and no such bonus shall be due or payable by the
Company.
(c) STOCK OPTIONS. On the Commencement Date, the Employee received stock
options to purchase an aggregate of 120,000 Common Shares of the Company (the
"Common Shares").
(d) STOCK AWARD. On the Commencement Date, the Employee received a
restricted stock award (the "Restricted Stock Award") for 10,000 Common Shares.
(e) VACATION. Employee shall be entitled to three (3) weeks paid vacation
during each year of employment. Such vacation shall be taken at a time mutually
convenient for both the Company and the Employee. Unused vacation time may not
be accrued from year to year during the term of this Agreement without the
Company's prior written approval. In the event this Agreement is terminated by
either the Company or the Employee, the Employee shall be paid for any unused,
accrued vacation time. Vacation time is accrued up front effective the first day
of the calendar year.
3. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "Termination for Cause" shall mean the termination of employment of
Employee as a result of (i) act or acts of dishonesty or illegal conduct
undertaken by Employee and intended to result in gain or personal enrichment of
Employee, (ii) failure by Employee to perform, or gross negligence in
performing, the duties and obligations of Employee's employment which failure is
not remedied within ten days following written notice from the Company; (iii)
the conviction of Employee of a felony; (iv) Employee's continued breach of any
term of this Agreement after notice and ten days opportunity to cure, or (v) a
breach of the Noncompetition, Nondisclosure and Developments Agreement of even
date herewith between the Company and Employee.
-2-
(b) "Constructive Termination" shall mean (i) a material reduction in
Employee's salary or benefits not agreed to by Employee (except in connection
with a decrease to be applied because the Company's performance has decreased
and which is also applied to other officers, and excluding the substitution of
substantially equivalent compensation and benefits), or (ii) a material
reduction in Employee's responsibilities (other than as contemplated by, and
consistent with the spirit of, Section 1(a)) not agreed to by Employee.
(c) "Disability" shall mean that the Employee, at the time notice is given,
has been unable to perform his duties under this Agreement for a period of not
less than six (6) consecutive months or for a period of two hundred seventy
(270) days in any three hundred sixty-five (365) day period as the result of his
incapacity due to physical or mental illness. In the event that the Employee
resumes the performance of substantially all of his duties hereunder before the
termination of his employment under Section 6(b)(iii) becomes effective, the
notice of termination shall automatically be deemed to have been revoked.
(d) "Voluntary Termination of Employment" shall mean Employee voluntarily
terminates his employment with the Company, unless such termination occurs
within three (3) months following a Constructive Termination.
4. EMPLOYEE BENEFITS.
(a) GENERAL. During the term of his employment under this Agreement, the
Employee shall be entitled to the benefits for which Employee is eligible under
those employee benefit plans (including (without limitation) any pension plans,
savings or profit-sharing plans, stock purchase plans, deferred compensation
plans, supplemental retirement plans, life, disability, health, accident and
other insurance programs) made available to employees generally, and subject in
each case to the generally applicable terms and conditions of the plan or
program in question and to the determination of any committee or the Board of
Directors administering such plan or program.
5. BUSINESS EXPENSE AND TRAVEL. During the term of his employment under
this Agreement, the Employee shall be authorized to incur necessary and
reasonable travel, entertainment and other business expenses in connection with
his duties hereunder. The Company shall reimburse the Employee for such expenses
upon presentation of an itemized accounting and appropriate supporting
documentation, all in accordance with the Company's generally applicable
policies.
6. TERM OF EMPLOYMENT.
(a) BASIC RULE. The Company agrees to continue the Employee's employment,
and the Employee agrees to remain in the employ of the Company, from the
effective date of this Agreement until the date when the Employee's employment
terminates pursuant to the provisions of this Agreement.
(b) TERMINATION BY THE COMPANY. The Company may terminate Employee's
employment at any time under the following guidelines:
-3-
(i) TERMINATION WITHOUT CAUSE. If the Company terminates Employee's
employment during the term of this Agreement for any reason whatsoever,
other than Voluntary Termination of Employment, Termination for Cause, or
termination as a result of Employee's Death or Disability, the provisions
of Section 7(a) shall apply.
(ii) TERMINATION FOR CAUSE. If the Company terminates Employee's
employment for Cause during the term of this Agreement, the provisions of
Section 7(b) shall apply.
(iii) TERMINATION ON DEATH OR DISABILITY. If the Company terminates
Employee's employment as a result of Employee's Death or Disability, the
provisions of Section 7(c) shall apply.
(c) VOLUNTARY TERMINATION BY THE EMPLOYEE. The Employee may terminate his
employment voluntarily by giving the Company thirty (30) days' advance notice in
writing, at which time the provisions of Section 7(b) shall apply. The Company
may elect to have such termination effective at a date following such notice but
prior to the expiration of the thirty (30) day period. However, if the Employee
terminates his employment within three (3) months following a Constructive
Termination, the provisions of Section 7(a) shall apply.
(d) WAIVER OF NOTICE. Any waiver of notice shall be valid only if it is
made in writing and expressly refers to the applicable notice requirement in
this Section 6.
7. PAYMENTS UPON TERMINATION OF EMPLOYMENT.
(a) PAYMENTS UPON TERMINATION PURSUANT TO SECTION 7(b)(i) AND CONSTRUCTIVE
TERMINATION. If, during the term of this Agreement, the Employee's employment is
terminated by the Company pursuant to Section 6(b)(i) or voluntarily by Employee
within three (3) months following a Constructive Termination, the Employee shall
be entitled to receive the following:
(i) SEVERANCE PAYMENT. The Company shall continue to pay to the
Employee his Base Compensation for twelve (12) months following the date of
Employee's actual termination of employment (the "Severance Payment"). Such
Base Compensation amount shall be the Base Compensation determined as of
the commencement date of this Agreement, and as adjusted in future years by
the Board of Directors.
(ii) METHOD OF PAYMENT. The Severance Payment shall be made in
semi-monthly installments, according to normal payroll schedules.
-4-
(iii) COBRA. The Company will agree to pay Employee's COBRA costs
during the twelve (12) months following the date of Employee's actual
termination of employment.
(iv) OUTPLACEMENT. The Company shall re-imburse employee for up to
$20,000 for the use of outplacement services. All services require
appropriate receipts and should be submitted for payment through the normal
expense report process.
(v) PAYMENT IN LIEU OF CONTRACT DAMAGES. The Severance Payment shall
be in lieu of any further payments to the Employee and any further accrual
of benefits with respect to periods subsequent to the date of the
employment termination. Notwithstanding, the preceding sentence neither the
Severance Payment nor any other payments under this Section 7(a) shall
reduce or offset any benefits the Employee may be entitled to under the
specific terms of the benefit plans of the Company.
(b) TERMINATION BY COMPANY FOR CAUSE OR VOLUNTARY TERMINATION. If the
Employee's employment is terminated pursuant to Section 6(b)(ii) or voluntarily
(other than within three (3) months following a Constructive Termination)
pursuant to Section 6(c), no compensation or payments will be paid or provided
to the Employee for the periods following the date when such a termination of
employment is effective. Notwithstanding the preceding sentence, the Employee's
rights under the benefit plans, the Restricted Stock Award and the Option
Agreements shall be determined under the provisions of those plans and
agreements.
(c) TERMINATION ON DEATH OR DISABILITY. If the Employee's employment is
terminated because of Employee's Death or Disability (as defined in Section 3(c)
herein), then the Company shall continue to pay to the Employee or his estate,
as the case may be, his Base Compensation for six (6) months following the date
of Employee's actual termination of employment. Employee shall also receive any
severance and disability payments that are provided in the Company's standard
benefit plans, which amounts shall offset and reduce the Base Compensation
otherwise payable under the preceding sentence.
Any payments pursuant to Sections 7(b) or (c) are conditioned on prior execution
by the Employee of a waiver and general release of any known or unknown claims,
in a form requested by the Company.
8. NONCOMPETITION, NONDISCLOSURE AND DEVELOPMENTS. As a condition of
employment, concurrently with the execution hereof, Employee agrees to execute
the Noncompetition, Nondisclosure and Developments Agreement set forth in
EXHIBIT C.
-5-
9. SUCCESSORS.
(a) COMPANY'S SUCCESSORS. Any successor to substantially all of the
Company's assets shall assume this Agreement and agree expressly to perform this
Agreement in the same manner and to the same extent as the Company would be
required to perform it in the absence of a succession.
(b) EMPLOYEE'S SUCCESSORS. This Agreement and all rights of the Employee
hereunder shall be binding upon, inure to the benefit of, and be enforceable by,
the Employee's personal or legal representatives, devises and legatees in the
event of Employee's death. Any purported or attempted assignment or transfer by
the Employee of any of the Employee's duties, responsibilities or obligations
hereunder shall be void.
10. NOTICE. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or three (3) days after being mailed by U.S. registered or
certified mail, return receipt requested and postage prepaid. In the case of the
Employee, mailed notices shall be addressed to him at the home address which he
most recently communicated to the Company in writing in accordance herewith
(provided that no such change shall be effective until actually received by the
Company). In the case of the Company, mailed notices shall be addressed to its
corporate headquarters, and all notices shall be directed to the attention of
its President.
11. TERMINATION OF THIS AGREEMENT. This Agreement shall terminate upon the
earlier of (i) the date that all obligations of the parties hereunder have been
satisfied, or (ii) [four (4)] years from the date of this Agreement. A
termination of this Agreement pursuant to the preceding sentence shall be
effective for all purposes, except that such termination shall not affect (A)
the payment or provision of compensation or benefits on account of a termination
of employment occurring prior to the termination of this Agreement as
contemplated herein, or (B) the rights and obligations of the parties contained
in ancillary agreements hereto or set forth in the Exhibits. No payments under
this Agreement shall be required for any termination of employment occurring
after [four (4)] years from the date of this Agreement.
12. MISCELLANEOUS PROVISIONS.
(a) WAIVER. No provision of this Agreement shall be modified, waived or
discharged unless the modification, waiver or discharge is agreed to in writing
and signed by the Employee and by the President. No waiver by either party of
any breach of, or of compliance with any condition or provision of this
Agreement by the other party shall be considered a waiver of any other condition
or provision or of the same condition or provision at another time.
(b) WHOLE AGREEMENT. No agreements, representations or understandings
(whether oral or written and whether expressed or implied) that are not
expressly set forth in this Agreement or the Exhibits hereto have been made or
entered into by either party with respect to the subject
-6-
matter hereof. This Agreement shall not supercede any vesting provisions
contained in the Option Agreements. This Agreement shall supersede and control
in the event of any conflict between this Agreement and any other correspondence
with the Company.
(c) CHOICE OF LAW. This Agreement shall be governed by and construed in
accordance with the internal substantive laws of the State of Illinois.
(d) SEVERABILITY. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision hereof, which shall remain in full force and effect.
(e) NO ASSIGNMENT OF BENEFITS. To the extent permitted by law, the rights
of any person to payments or benefits under this Agreement shall not be made
subject to option or assignment, either by voluntary or involuntary assignment
or by operation of law, including (without limitation) bankruptcy, garnishment,
attachment or other creditor's process, and any action in violation of this
subsection (e) shall be void.
(f) EMPLOYMENT AT WILL; LIMITATION OF REMEDIES. The Company and the
Employee acknowledge that the Employee's employment is at will, as defined under
applicable law.
(g) EMPLOYMENT TAXES. All payments made pursuant to this Agreement will be
subject to withholding of applicable taxes.
(h) COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together will constitute one
and the same instrument.
IN WITNESS THEREOF, each of the parties has executed this Agreement, in the
case of the Company, by its President and Chief Executive Officer, as of the day
and year first above written.
APROPOS TECHNOLOGY, INC.
/s/ Xxxxx X. Xxxxx
------------------------------------
Xxxxx X. Xxxxx
President and Chief Executive Officer
EMPLOYEE
/s/ Xxxxx Xxxxxxx
------------------------------------
Xxxxx Xxxxxxx
Chief Financial Officer
-7-
EXHIBIT A
DUTIES & RESPONSIBILITIES OF
CHIEF FINANCIAL OFFICER
Responsible for (i) the definition, selection and implementation of
effective financial systems, financial reporting, internal controls and
processes, (ii) developing the Company's overall financial plans, monthly
reporting systems, capital planning systems and all accounting functions and
practices (including general accounting, management reporting,
policy/procedures/controls, FASB/SEC reporting, development of long term and
short term operating plans, budgets, forecasting and cash management) required
for the financial control and effective growth of the Company, (iii) investor
relations, (iv) maintaining relationships with public research analysts and (v)
providing financial analysis on potential merger and acquisition activity.
