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EXHIBIT 10.16
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated this 24th day of July, 1998, between ICARUS
International, Inc., a Maryland corporation and ICARUS Corporation, a Maryland
Corporation (both companies referred to herein collectively as the
"Corporation") and Xxxxx X. Xxxxx (the "Executive").
WITNESSETH
WHEREAS, the Corporation desires to hire the Executive to act as the
Corporation's Chief Financial Officer; and
WHEREAS, the Corporation (the "Employer") desires to ensure the
Executive's active participation in the business of the Employer; and
WHEREAS, the Executive desires to be employed by the corporation in
such capacity;
WHEREAS, in order to induce the Executive to remain in the employ of the
Employer and in consideration of the Executive's agreement to remain in the
employ of the Employer, the parties desire to specify the terms and conditions
of Executive's employment with the Corporation;
NOW THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. DEFINITIONS. The following words and terms shall have the meanings
set forth below for the purposes of this Agreement:
(a) AFFILIATES. "Affiliates" of the Corporation, or a person "affiliated"
with the Corporation, are any persons or entities which, directly or indirectly,
through one or more intermediaries, controls or are controlled by or are under
common control with, the persons or entities specified.
(b) AVERAGE ANNUAL COMPENSATION. The Executive's "Average Annual
Compensation" for purposes of this Agreement shall be deemed to mean the average
level of compensation paid to the Executive by the Employer or any subsidiary
thereof during the most recent three taxable years preceding the Date of
Termination (or such shorter period as the Executive was employed), including
Base Salary and bonuses or other compensation under any employee benefit plans
of the Employer.
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(c) BASE SALARY. "Base Salary" shall have the meaning set forth in Section
3(a) hereof.
(d) CAUSE. Termination of the Executive's employment for "Cause" shall
mean termination because of incompetence, willful misconduct, breach of
fiduciary duty involving personal profit, conduct which causes or could
reasonably be expected to cause competitive harm to the Corporation, intentional
failure to perform stated duties, willful violation of any law, rule or
regulation (other than traffic violations or similar offenses) or final
cease-and- desist order or material breach of any provision of this Agreement.
For purposes of this paragraph, no act or failure to act on the Executive's part
shall be considered "willful" unless done, or omitted to be done, by the
Executive not in good faith and without reasonable belief that the Executive's
action or omission was in the best interest of the Employer. Cause shall be
determined in good faith by the affirmative vote of a majority of the whole
Board of Directors after the Executive has been provided the opportunity to make
a presentation to the Board which presentation to the Board may be with counsel.
(e) CODE. "Code" shall mean the Internal Revenue Code of 1986, as amended.
(f) DATE OF TERMINATION. "Date of Termination" shall mean (i) if the
Executive's employment is terminated for Cause, Disability or for Retirement,
the date specified in the Notice of Termination, and (ii) if the Executive's
employment is terminated for any other reason, the date on which a Notice of
Termination is given or as specified in such Notice.
(g) DISABILITY. Termination by the Employer of the Executive's employment
based on "Disability" shall mean termination because of any physical or mental
impairment which qualifies the Executive for disability benefits under the
applicable long-term disability plan maintained by the Employer or any
subsidiary or, if no such plan applies, which would qualify the Executive for
disability benefits under the Federal Social Security System.
(h) IRS. "IRS" shall mean the Internal Revenue Service.
(i) NOTICE OF TERMINATION. Any purported termination of the Executive's
employment by the Employer for any reason, including without limitation for
Cause, Disability or Retirement, or by the Executive for any reason, shall be
communicated by a written "Notice of Termination" to the other party hereto. For
purposes of this Agreement, a "Notice of Termination" shall mean a dated notice
which (i) indicates the specific termination provision in this Agreement relied
upon, (ii) sets forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of Executive's employment under the provision
so indicated, (iii) specifies a Date of Termination, which shall be not less
than thirty (30) nor more than ninety (90) days after such Notice of Termination
is given, except in the case of the Employer's termination of Executive's
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employment for Cause for which the Date of Termination may be the date of the
notice; and (iv) is given in the manner specified in Section 13 hereof.
(j) RETIREMENT. "Retirement" shall mean voluntary termination by the
Executive in accordance with the Employer's retirement policies, including early
retirement, generally applicable to the Employer's salaried employees.
(k) SUBSIDIARY. "Subsidiary" shall mean any subsidiary of the Corporation.
2. TERM OF EMPLOYMENT.
(a) The Employer hereby employs the Executive as Chief Financial Officer,
and Executive hereby accepts said employment and agrees to render such services
to the Employer, on the terms and conditions set forth in this Agreement. Unless
extended as provided in this Section 2, this Agreement shall terminate three (3)
years after the date first above written. Reference herein to the term of this
Agreement shall refer both to the initial term and any successive term as the
context requires.
(b) During the term of this Agreement, the Executive shall perform such
executive services for the Employer as is consistent with his title of Chief
Financial Officer and as directed, from time to time, by the Board of Directors
and/or the President and Chief Executive Officer, including but not limited to,
the supervision of the Corporation's financial records, financial reporting,
taxes, audit, planning and forecasting and other duties typically performed by a
chief financial officer for a Company in like circumstances. The Executive shall
devote his full time, attention and energies to the business of the Corporation
and shall not, during the term hereof (as defined in Section 2(a)), be employed
or involved in any other business activity, whether or not such activity is
pursued for gain, profit or other pecuniary advantage, except for such other
activities as may be specifically approved by the Board of Directors. This
restriction shall not, however, preclude the Executive from employment in any
capacity with affiliates of the Corporation, nor shall any remuneration from
such affiliates be considered in calculating the Base Salary (as defined in
Section 3(a)) due to Executive hereunder.
3. COMPENSATION AND BENEFITS.
(a) For services rendered hereunder by the Executive, the Employer shall
compensate and pay Executive for his services during the term of this Agreement
a base salary of one hundred thirty-eight thousand dollars ($138,000.00) per
year ("Base Salary"), which may be increased from time to time in such amounts
as may be determined by the Board of Directors of the Employer.
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(b) During the term of the Agreement, and subject to this subparagraph
3(b), the Executive shall be entitled to participate in and receive the benefits
of any pension or other retirement benefit plan, the 401(k) plan, profit
sharing, stock option, employee stock ownership, or other plans, benefits and
privileges given to employees and executives of the Employer, to the extent
commensurate with his then duties and responsibilities, as fixed by the Board of
Directors of the Employer. In addition to his Base Salary, the Executive shall
receive an option to purchase 50,000 shares of the Employer's Common Stock which
shall be granted on the first date on which stock options are granted to other
employees of the Corporation by the Board of Directors, all pursuant to the
terms and conditions of the Corporation's 1998 Stock Option Plan, at an exercise
price equal to the price per share of the Common Stock sold in the Corporation's
initial public offering, or if there is no public offering, at fair market
value, which options shall vest at the rate of 20% per year for five years, the
last to vest on the fifth anniversary of the date of grant. Nothing paid to
Executive under any plan or arrangement presently in effect or made available in
the future shall be deemed to be in lieu of the Base Salary payable to Executive
pursuant to Section 3(a) hereof.
(c) During the term of this Agreement, Executive shall be entitled to two
(2) weeks (10 working days) during the first five years of employment and,
thereafter, to four (4) weeks (20 working days), paid vacation in each calendar
year to be taken and determined in accordance with the vacation policies and
procedures as established from time to time by the Board of Directors of the
Employer. Executive shall also be entitled to all paid holidays to which
similarly situated executives and key management employees of the Corporation
are entitled. The Executive shall be entitled to paid leave due to physical
illness in each calendar year to be taken and determined in accordance with the
policies and procedures as established from time to time by the Board of
Directors. Executive shall not be entitled to receive any additional
compensation from the Employer for failure to take a vacation, or failure to use
"sick days," nor shall Executive be able to accumulate unused vacation or "sick"
time from one year to the next, except to the extent authorized by the Board of
Directors of the Employer.
4. EXPENSES. The Employer shall reimburse Executive or otherwise provide
for or pay for all reasonable expenses incurred by Executive in furtherance of,
or in connection with the business of the Employer, including, but not by way of
limitation, parking at the main office, traveling expenses, and all reasonable
entertainment expenses (whether incurred while traveling or otherwise), subject
to such reasonable documentation and other limitations as may be established by
the Board of Directors of the Employer. If such expenses are paid in the first
instance by Executive, the Employer shall promptly reimburse the Executive
therefor.
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5. TERMINATION.
(a) The Employer shall have the right, at any time upon prior Notice of
Termination, to terminate the Executive's employment hereunder for any reason,
including without limitation termination for Cause, Disability or Retirement,
and Executive shall have the right, upon prior Notice of Termination, to
terminate his employment hereunder for any reason.
(b) In the event that Executive's employment is terminated by the Employer
for Cause, Executive shall have no right pursuant to this Agreement to
compensation or other benefits for any period after the applicable Date of
Termination.
(c) In the event that (i) Executive's employment is terminated by the
Employer for other than Cause, including termination due to Disability,
Retirement or the Executive's death, or (ii) such employment is terminated by
the Executive due to a material breach of this Agreement by the Employer, which
breach has not been cured within fifteen (15) days after a written notice of
non-compliance has been given by the Executive to the Employer, then the
Employer shall pay to the Executive (or to his estate, as the case may be), in a
lump sum or over time, at the option of the Executive (or of his estate, as
applicable), the unpaid Base Salary to be paid hereunder through the end of the
term of employment and the Employer shall maintain and provide for a period
ending at the earlier of (i) the expiration of the remaining term of employment
pursuant hereto prior to the Notice of Termination or (ii) the date of the
Executive's full-time employment by another employer (provided that the
Executive is entitled under the terms of such employment to benefits
substantially similar to those described in this subparagraph), at no cost to
the Executive, the Executive's continued participation in all group insurance,
life insurance, health and accident, disability and other employee benefit
plans, programs and arrangements in which the Executive was entitled to
participate immediately prior to the Date of Termination (other than stock
option and restricted stock plans of the Employer), provided that in the event
that the Executive's participation in any plan, program or arrangement as
provided in this subparagraph is barred or during such period any such plan,
program or arrangement is discontinued or the benefits thereunder are materially
reduced, the Employer shall arrange to provide the Executive with benefits
substantially similar to those which the Executive was entitled to receive under
such plans, programs and arrangements immediately prior to the Date of
Termination.
6. MITIGATION; EXCLUSIVITY OF BENEFITS.
(a) The Executive shall not be required to mitigate the amount of any
benefits hereunder by seeking other employment or otherwise, nor shall the
amount of any such benefits be reduced by any compensation earned by the
Executive as a result of employment by another employer after the Date of
Termination or otherwise.
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(b) The specific arrangements referred to herein are not intended to
exclude any other benefits which may be available to the Executive upon a
termination of employment with the Employer pursuant to employee benefit plans
of the Employer or otherwise.
7. WITHHOLDING. All payments required to be made by the Employer
hereunder to the Executive shall be subject to the withholding of such amounts,
if any, relating to tax and other payroll deductions as the Employer may
reasonably determine should be withheld pursuant to any applicable law or
regulation.
8. NON-SOLICITATION OF CUSTOMERS AND EMPLOYEES.
(a) The Executive hereby acknowledges and recognizes the highly
competitive nature of the business of the Corporation and accordingly agrees
that, during the term of this Agreement and, in consideration of the receipt of
any payment pursuant to this Agreement, for a period of two years following the
date of termination of the Executive's employment under this Agreement, unless
otherwise agreed to in writing by the Corporation, the Executive shall not,
either directly or indirectly, in any manner or capacity, whether as principal,
agent, partner, officer, director, employee, joint venturer, salesman, or
corporate shareholder or otherwise for the benefit of any Person (as defined
below), (i) render services to, or solicit the rendering of services to, any
Person in competition with the business of the Corporation, which then is, or at
any time during a period of one year prior to the termination of the Executive's
employment under this Agreement (the "Termination Date"), was a Customer (as
defined below) of the Corporation, or (ii) solicit the rendering of services to
any Person of any kind whatsoever which is then or has been at any time during a
period of one year prior to the Termination Date a Customer, employee,
salesperson, agent or representative of the Corporation in any manner which
interferes or might interfere with the relationship of the Corporation with such
Person, or in an effort to obtain such Person as a customer, supplier, employee,
salesperson, agent or representative of any business in competition with the
Corporation, or (iii) for a period of two years following the Termination Date,
hire or participate in the hiring by any Person of an employee of the
Corporation. In order to assure strict compliance with the foregoing, and in
recognition of the compensation to be paid by Employer to Executive on the
termination of this Agreement, Executive grants to Employer the sole and
absolute right to determine whether any employment or services anticipated to be
undertaken by Executive during said period of time as outlined above, is or may
be in violation of the foregoing provisions and Executive agrees to notify
Employer, in writing, fourteen (14) days prior to undertaking any employment or
services within the said time period, regardless of the nature thereof, of the
name and address of any such intended employer, proposed job title, proposed job
description and salary, and the business of the prospective employer. If, within
such fourteen (14) day period, Employer shall object on reasonable grounds to
such anticipated
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employment in writing to Executive, Executive agrees not to accept the same or
in any manner directly or indirectly render services to any such prospective
employer.
"Person" means any individual, trust, partnership, corporation, limited
liability company, association, or other legal entity.
"Customer" means any Person with which the Corporation or any subsidiary
is currently engaged to provide goods or services, has been engaged to provide
goods or services within twelve (12) months prior to the Termination Date, or
actively marketed, discussed a project with, negotiated with, provided a bid to
or otherwise communicated with in an effort to obtain an engagement to provide
goods or services sold by the Corporation or any subsidiary within twelve (12)
months prior to the Termination Date.
(b) It is expressly understood and agreed that although the Executive and
the Corporation consider the restrictions contained in Section 8(a) of this
Agreement reasonable for the purpose of preserving for the Corporation its good
will and other proprietary rights, if a final judicial determination is made by
a court having jurisdiction that the time or territory or any other restriction
contained in Section 8(a) of this Agreement is an unreasonable or otherwise
unenforceable restriction against the Executive, the provisions of Section 8(a)
of this Agreement shall not be rendered void but shall be deemed amended to
apply as to such maximum time and territory and to such other extent as such
court may judicially determine or indicate to be reasonable.
9. DISCLOSURE OF CONFIDENTIAL INFORMATION. The Executive acknowledges that
the Corporation's trade secrets, as they may exist from time to time, and
confidential information concerning its products, programs, technical
information, procurement and sales activities and procedures, identity of
customers and potential customers, business plans, promotion and pricing
techniques, and credit and financial data concerning customers are valuable,
special and unique assets of the Corporation. In light of the highly competitive
nature of the industry in which the Corporation's business is conducted, the
Executive agrees that all knowledge and information described in the preceding
sentence not in the public domain and heretofore or in the future obtained by
the Executive shall be considered confidential information. Executive agrees
that he will not disclose any or such secrets, processes or information to any
Person or other entity for any reason or purpose whatsoever, except as necessary
in the performance of his duties as an employee of or consultant to the
Corporation and then only upon a written confidentiality agreement in such form
and content as requested by the Corporation from time to time, nor shall the
Executive make use of any such secrets, processes or information (other than
information in the public domain) for his own purposes or for the benefit of
himself, any Person or other entity (except the Company and its subsidiaries)
under any circumstances. The provisions
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contained in this Section 9 shall also apply to information obtained by the
Executive with respect to any future subsidiary of the Corporation.
10. BUSINESS INFORMATION. Upon the termination of his employment with the
Corporation, Executive (or, as appropriate, his personal representatives) shall
deliver to the Corporation (without retaining copies of the same), all plans,
source codes, designs, customer lists, correspondence, records, documents,
accounts and papers of any description and any other property of the Corporation
within the possession or under the control of Executive (or, as appropriate, his
personal representatives) and relating to the affairs and business of the
Corporation, whether drafted, created or compiled by Executive or received by
Executive from other individuals or entities (whether employees of or affiliated
with the Corporation).
11. REMEDIES. The Executive acknowledges and agrees that the Company's
remedy at law for a breach or threatened breach of any of the provisions of
Section 8, Section 9 or Section 10 of this Agreement would be inadequate and, in
recognition of this fact, in the event of a breach or threatened breach by the
Executive of any of the provisions of Section 8, Section 9 or Section 10 of this
Agreement, it is agreed that, in addition to any remedy at law, the Corporation
shall be entitled to without posting any bond, and the Executive agrees not to
oppose the Corporation's request in the nature of specific performance,
temporary restraining order, temporary or permanent injunction, or any other
equitable relief or remedy which may then be available, provided, however,
nothing herein shall be deemed to relieve the Corporation of its burden to prove
grounds warranting such relief nor preclude the Executive from contesting such
grounds or facts in support thereof. Nothing herein contained shall be construed
as prohibiting the Corporation form pursuing any other remedies available to it
for such breach or threatened breach.
12. ASSIGNABILITY. The Employer may assign this Agreement and its rights
and obligations hereunder in whole, but not in part, to any corporation or other
entity with or into which the Employer may hereafter merge or consolidate or to
which the Employer may transfer all or substantially all of its assets, if in
any such case said corporation or other entity shall by operation of law or
expressly in writing assume all obligations of the Employer hereunder as fully
as if it had been originally made a party hereto, but may not otherwise assign
this Agreement or its rights and obligations hereunder. The Executive may not
assign or transfer this Agreement or any rights or obligations hereunder.
13. NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by certified or
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below:
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To the Employer: Board of Directors
ICARUS International, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Chairman
With copies to: Xxxxxxx X. Xxxxxxx, Esq.
Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P.
000 00xx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
To the Executive: Xxxxx X. Xxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
14. AMENDMENT; WAIVER. This Agreement represents the entire
agreement of the parties relating to subject matter hereof. No provisions of
this Agreement may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing signed by the Executive and
such officer or officers as may be specifically designated by the Board of
Directors of the Employer to sign on its behalf. No waiver by any party hereto
at any time of any breach by any other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time.
15. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Maryland.
16. NATURE OF OBLIGATIONS. The obligations of the Employer hereunder
are unsecured and the Executive represents a general creditor of the Corporation
for compensation which may be due and owing. Nothing contained herein shall
create or require the Employer to create a trust of any kind to fund any
benefits which may be payable hereunder, and to the extent that the Executive
acquires a right to receive benefits from the Employer hereunder, such right
shall be no greater than the right of any unsecured general creditor of the
Employer.
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17. INTERPRETATION AND HEADINGS. This Agreement shall be interpreted
in order to achieve the purposes for which it was entered into. The section
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
18. SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which shall remain in full force and
effect. With respect to Section 8 of this Agreement, in the event any court of
competent jurisdiction determines that such provisions are unreasonable or
contrary to law with respect to their time or geographic restriction, or both,
the parties hereto authorize such court to substitute restrictions as it deems
appropriate without invalidating such paragraph or this Agreement.
19. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, this Agreement has been executed as of the date
first above written.
Attest: ICARUS INTERNATIONAL, INC.
By:
-------------------------- ----------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
ICARUS CORPORATION
By:
----------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: President and Chief Executive Officer
EXECUTIVE
By:/s/ XXXXX X. XXXXX
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Xxxxx X. Xxxxx
