EMPLOYMENT AGREEMENT
Exhibit
10.1
This
EMPLOYMENT AGREEMENT (this “Agreement”) is
entered into as of the 30 day of April, 2009 (the “Effective Date”), by
and between Emtec, Inc., a Delaware corporation (the “Company”) and Xxxxxxx
X. Xxxxxxxx (the “Executive”).
WITNESSETH
THAT:
WHEREAS,
the parties desire to enter into this Agreement pertaining to the employment of
the Executive by the Company.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth
below and intending to be legally bound, it is hereby covenanted and agreed by
the Executive and the Company as follows:
1. Employment; Position and
Responsibilities; Term.
(a)
During
the Agreement Term (as defined below), and subject to the terms of this
Agreement, the Executive shall be employed by the Company and shall occupy the
positions of Chief Financial Officer of the Company and President of Emtec
Global Services LLC. The Executive agrees to serve in such positions
or in such other executive offices or positions with the Company or a Subsidiary
(as defined below), as shall from time to time be determined by the Board of
Directors (the “Board”). The
Executive represents that his employment with the Company does not violate any
other agreement to which he is a party.
(b)
During
the Agreement Term, the Executive shall report solely and directly to the Chief
Executive Officer of the Company or his designee.
(c)
During
the Agreement Term, while employed by the Company, the Executive shall devote
his full time and best efforts to the business of the Company and shall perform
all duties and services for and on behalf of the Company as shall be reasonably
requested by the Chief Executive Officer of the Company, the Board or the
Chairman of the Audit Committee, in their absolute discretion. The
Executive’s duties may include providing executive services for both the Company
and the Subsidiaries, as determined by the Chief Executive Officer of the
Company, the Board or the Chairman of the Audit Committee.
(d)
The term
of employment under this Agreement shall commence on the Effective Date and,
unless earlier terminated under Section 3 below, shall terminate as of the close
of business on the day before the second anniversary of the Effective Date (the
“Agreement
Term”). Thereafter, the Agreement Term may be extended
annually for additional one-year periods with the mutual consent of the Company
and the Executive.
(e)
For
purposes of this Agreement, the following terms shall have the meanings set
forth in this Section 1(e):
(i)
“Change
in Control” shall mean:
(1) the
acquisition after the Effective Date by an individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934 (the “Exchange
Act”)) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of more than 50% of the total voting power
of the voting securities of the Company entitled to vote generally in the
election of directors (the “Voting Securities”);
provided, however, that the following acquisitions shall not constitute a Change
in Control: (A) any acquisition, directly or indirectly by or from the Company
or any Subsidiary, by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any Subsidiary or by the Executive (whether
directly or indirectly), (B) any acquisition by any underwriter in connection
with any firm commitment underwriting of securities to be issued by the Company,
(C) any acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act) who, as of the Effective Date,
beneficially owns 20% or more of the Voting Securities or (D) any acquisition by
any corporation if, immediately following such acquisition, 50% or more of the
then outstanding shares of common stock of such corporation and the combined
voting power of the then outstanding voting securities of such corporation
(entitled to vote generally in the election of directors), are beneficially
owned, directly or indirectly, by all or substantially all of the individuals
and entities who, immediately prior to such acquisition, were the beneficial
owners of the Voting Securities in substantially the same proportions,
respectively, as their ownership, immediately prior to such acquisition of the
Voting Securities;
(2) the
consummation after the Effective Date of (A) a complete liquidation or
substantial dissolution of the Company or (B) the sale or other disposition,
during any 12-month period ending on the date of the most recent sale or
disposition, of assets of the Company that have a total gross fair market value
equal to or more than 75% of the total gross fair market value of all of the
assets of the Company immediately before such sale or disposition, in each case
other than to a subsidiary, wholly-owned, directly or indirectly, by the Company
or to a holding company of which the Company is a direct or indirect wholly
owned subsidiary prior to such transaction; or
(3) the
occurrence of a merger, reorganization or consolidation, other than a merger,
reorganization or consolidation with respect to which all or substantially all
of the individuals and entities who were the beneficial owners, immediately
prior to such merger, reorganization or consolidation, of the common stock of
the Company (“Common
Stock”) and the Voting Securities beneficially own, directly or
indirectly, immediately after such reorganization, merger or consolidation 50%
or more of the then outstanding common stock and voting securities (entitled to
vote generally in the election of directors) of the corporation resulting from
such reorganization, merger or consolidation in substantially the same
proportions as their respective ownership, immediately prior to such
reorganization, merger or consolidation, of the Common Stock and the Voting
Securities.
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Notwithstanding
the foregoing, a “Change in Control” shall not include any event, circumstance
or transaction which results from the action of any entity or group which
includes, is affiliated with, or is wholly or partially controlled by, one or
more executive officers of the Company and in which the Executive participates
(whether directly or indirectly).
(ii) “Good Reason” shall
mean, following the occurrence of a Change in Control, a material reduction by
the Company in the Executive’s Base Salary from the rate in effect immediately
prior to such Change in Control.
(iii) Subsidiary” shall
mean any corporation, partnership, joint venture or other entity during any
period in which at least a 50% interest in such entity is owned, directly or
indirectly, by the Company (or a successor to the Company).
2. Compensation and Other
Benefits.
(a) Base
Salary. During the Agreement Term, the Executive shall receive
an annual base salary (“Base Salary”),
payable in accordance with the Company’s normal payroll practices, of
$275,000. The Base Salary may be increased by the Company’s Chief
Executive Officer or the Company’s Compensation Committee, in his or its
discretion.
(b) Bonus. In
respect of each fiscal year ending during the Agreement Term, the Executive
shall participate in the Company’s Annual Incentive Plan (the “AIP”) as maintained
by the Company for the benefit of senior executives, and shall be eligible to
receive an annual bonus (the “Bonus”) if the
Executive and/or the Company achieve performance goals established by the Board
in good faith and consistent with the AIP. Such Bonus shall be
payable in accordance with the terms of the AIP, but in no event may be paid
later than March 15th next
following the close of the fiscal year to which the Bonus relates.
(c) Equity. Within
a reasonable period of time following the Effective Date, the Company shall
grant to the Executive under the Company’s 2006 Stock-Based Incentive
Compensation Plan (the “Plan”) (i) in
consideration of the Executive’s service on the Board during the 2009 fiscal
year through the Effective Date, a fully vested non-qualified stock option to
purchase 5,000 shares of Common Stock and (ii) 137,500 shares of restricted
stock, which restricted stock shall vest in equal annual installments on each of
the first four anniversaries of the Effective Date, provided that the Executive
remains employed by the Company on such vesting date (the “Restricted
Stock”). Notwithstanding the foregoing, the Restricted Stock
shall, to the extent then outstanding and unvested, become 100% vested in the
event of the Executive’s termination of employment during the Agreement Term due
to his death or Disability (as defined below). Each of the equity
grants described in this Section 2(c) shall be subject to the terms and
conditions of the Plan and such other terms and conditions as determined by the
Company and set forth in the award agreements evidencing such
grants.
(d) Employee
Benefits. During the Agreement Term, the Executive shall be
entitled to participate on the same basis as the other executive employees of
the Company, in any pension, retirement, savings, medical, disability or other
welfare benefit plans maintained by the Company from time to time and in
accordance with the terms thereof.
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(e) Expense
Reimbursement. During the Agreement Term, the Company shall
reimburse the Executive for all out-of-pocket travel, lodging, meal and other
reasonable expenses incurred by him in connection with his performance of
services hereunder, upon submission of appropriate evidence, in accordance with
the Company’s policy, of the incurrence and purpose of each such expense and
otherwise in accordance with the Company’s business travel and expense
reimbursement policy as in effect from time to time.
(f) Vacation. During
the Agreement Term, Executive shall be entitled to four weeks of paid vacation
on an annualized basis. Vacation shall be prorated for part of a year
worked. Such vacation shall be taken at such times as shall be
approved by the Company, in the reasonable exercise of its
discretion.
3.
Termination of
Employment. The Executive’s employment with the Company during
the Agreement Term may be terminated by the Company or the Executive without
breach of this Agreement only as provided in this Section 3.
(a) Termination Due to
Disability. The Executive’s employment hereunder may be
terminated by the Company in the event of the Executive’s
Disability. For purposes of this Agreement, “Disability” shall
mean that the Executive is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment that can
be expected to result in death or can be expected to last for a continuous
period of not less than 12 months, or the Executive is, by reason of any
medically determinable physical or mental impairment that can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months, receiving income replacement benefits for a period of not less
than three months under an accident and health plan covering employees of the
Company. The determination of the Executive’s Disability shall (i) be made by an
independent physician selected by the Company and the Executive (provided that
if the Executive and the Company cannot agree as to such an independent
physician, each shall appoint one physician and those two physicians shall
appoint a third physician who shall make such determination), (ii) be final and
binding on the parties hereto and (iii) be made taking
into account such competent medical evidence as shall be presented to such
independent physician by the Executive and/or the Company or by any physician or
group of physicians or other competent medical experts employed by the Executive
and/or the Company to advise such independent physician.
(b) Termination Due to
Death. The Executive’s employment hereunder shall terminate
upon the Executive’s death.
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(c) Termination by the Company
for Cause. The Company may immediately terminate the
Executive’s employment hereunder at any time for Cause (as defined
below). “Cause” shall mean
(i) the
continued failure of the Executive substantially to perform his duties hereunder
or his negligent performance of such duties (other than any such failure due to
the Executive’s physical or mental illness), (ii) the Executive
having engaged in misconduct that has caused or is reasonably expected to result
in material injury to the Company or any of its Subsidiaries, (iii) a material
violation by the Executive of a Company policy, (iv) the breach by the
Executive of any of his material obligations hereunder or under any other
written agreement or covenant with the Company or any of its Subsidiaries,
(v) a material
failure by the Executive to timely comply with a lawful direction or instruction
given to him by the Board, the Chairman of the Audit Committee or the Company’s
Chief Executive Officer, (vi) the Executive
having been convicted of, or entering a plea of guilty or nolo contendere to, a
crime that constitutes a felony or a misdemeanor involving moral turpitude (or
comparable crime in any jurisdiction that uses a different nomenclature),
including any offense involving dishonesty as such dishonesty relates to the
Company’s assets or business or the theft of Company property and (vii) the Executive’s
insobriety or use of illegal drugs, chemicals or controlled substances either
(A) in the
course of performing the Executive’s duties and responsibilities under this
Agreement, or (B) otherwise
affecting the ability of the Executive to perform the same. In the
event of litigation concerning the Company’s termination of Executive for Cause,
the Company shall prove that it terminated the Executive for Cause by a standard
of clear and convincing evidence. In the case of a termination for
Cause as described in clauses (i), (ii), (iii), (iv) and (v) of this Section,
the Board or the Chief Executive Officer, as applicable, shall give the
Executive written notice of its or his intention to terminate him for Cause,
such notice to state in detail the particular circumstances that constitute the
grounds on which the proposed termination for Cause is based. The
Executive shall have ten (10) days, after receiving such special notice, to cure
such grounds, to the extent such cure is possible (as reasonably determined by
the Board in its sole discretion). If he fails to cure such grounds
to the Board’s reasonable satisfaction, the Executive shall thereupon be
terminated for Cause.
(d) Termination by Company
Without Cause. The Company may terminate the Executive’s
employment hereunder at any time Without Cause (as defined below) by giving the
Executive prior written Notice of Termination (as defined below), which notice
shall be effective immediately, or at such later time as specified in such
notice. A termination “Without Cause” shall
mean a termination of the Executive’s employment by the Company other than as a
result of his Disability or for Cause. Notwithstanding the foregoing
provisions of this Section 3(d), if the Executive’s employment is terminated by
the Company in accordance with this Section 3(d) and, within a reasonable time
period thereafter, it is determined by the Board that circumstances existed
which would have constituted a basis for termination of the Executive’s
employment for Cause in accordance with Section 3(c), the Executive’s employment
will be deemed to have been terminated for Cause in accordance with Paragraph
3(c).
(e) Termination by the Executive
for Good Reason. The Executive may terminate his employment
under this Agreement for Good Reason by providing the Company with a Notice of
Termination specifying the actions giving rise to Good Reason within 30 days
after the occurrence of such actions; provided, however, that the Company shall
have a period of 30 days following receipt of such Notice of Termination to cure
such actions.
(f) Voluntary Termination by the
Executive Without Good Reason. The Executive may voluntarily
terminate his employment hereunder without Good Reason at any time by giving the
Company prior written Notice of Termination at least 90 days prior to such
termination; provided that the Board may, in its sole discretion, terminate the
Executive’s employment hereunder prior to the expiration of the 90-day notice
period; further provided, that, for all purposes of this Agreement, such
termination shall be deemed a voluntary termination of employment by the
Executive without Good Reason. In such event and upon the expiration
of such 90-day period (or such shorter time as the Board in its sole discretion
may determine), the Executive’s employment hereunder shall immediately and
automatically terminate.
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(g) Notice of
Termination. Any termination of the Executive’s employment by
Company or the Executive, other than a termination due to the Executive’s death,
shall be communicated by a written Notice of Termination addressed to the
appropriate party. A “Notice of
Termination” shall mean a notice that indicates the Date of Termination
(as defined below), which shall not be earlier than the date on which the notice
is provided, which indicates the specific termination provision in this
Agreement relied on and which sets forth in reasonable detail the facts and
circumstances, if any, claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated.
(h) For
purposes of this Agreement, the “Date of Termination”
is the last day that the Executive is employed by the Company, provided the
Executive’s employment is terminated in accordance with the foregoing provisions
of this Section 3.
(i)
Resignation upon
Termination. As of the Date of Termination, the Executive
shall resign, in writing, from all positions then held by him with the Company
and its Subsidiaries.
(j)
Cessation of Professional
Activity. Upon delivery of a Notice of Termination by any
party, the Company may relieve the Executive of his responsibilities and require
the Executive to immediately cease all professional activity on behalf of the
Company. In addition, in the event that the Board determines that
there is a reasonable basis for it to investigate whether circumstances exist
that would, if true, permit the Company to terminate the Executive’s employment
for Cause, the Board may relieve the Executive of his responsibilities during
the pendency of such investigation.
4.
Payments Upon Certain
Terminations.
(a)
General. If,
during the Agreement Term, the Executive’s employment terminates for any reason,
the Executive (or his estate, beneficiary or legal representative) shall be
entitled to receive the following:
(i) any
earned or accrued but unpaid Base Salary through the Date of Termination
(including, except in the case of a termination for Cause, with respect to
unused vacation time); and
(ii) all
amounts payable and benefits accrued under any otherwise applicable plan,
policy, program or practice of the Company (other than relating to severance) in
which the Executive was a participant during his employment with Company in
accordance with the terms thereof; provided that the foregoing shall not be
construed as requiring the Executive to be treated as employed by the Company
for purposes of any employee benefit plan or arrangement following the date of
the Executive’s Date of Termination except as otherwise expressly provided in
this Agreement or required by law.
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(b) Termination Without Cause;
Termination for Good Reason. If, during the Agreement
Term, the Company terminates the Executive’s employment Without Cause or the
Executive terminates his employment for Good Reason, the Executive shall be
entitled to receive, in addition to the payments and benefits described in
Section 4(a)(i) and Section 4(a)(ii) above, (A) any earned but unpaid
Bonus with respect to any fiscal year of the Company ending prior to the Date of
Termination and (B) provided Executive executes and delivers a general release
of all claims in form and substance satisfactory to the Company, (1) his Base
Salary, at the rate in effect hereunder immediately prior to the Date of
Termination, which shall be payable in installments on the Company’s regular
payroll dates, until the later of (i) the day before the second anniversary of
the Effective Date or (ii) one year following the Date of Termination and (2) a
pro-rata Bonus payment for the fiscal year of the Executive’s Date of
Termination, equal to the Bonus that the Executive would have been entitled to
if he had remained employed by the Company at the end of such fiscal year
multiplied by a fraction, the numerator of which is the number of days
transpired in the fiscal year up to and including the Date of Termination, and
the denominator of which is 365, which pro-rata Bonus shall be payable at the
time provided in Section 2(b).
(c) Termination
Due to Death or Disability. If,
during the Agreement Term, the Executive dies or the Company terminates the
Executive’s employment hereunder due to his Disability, the Executive (or his
estate, beneficiary or legal representative) shall be entitled to receive, in
addition to the payments and benefits described in Section 4(a)(i) and Section
4(a)(ii) above, (A) any earned but unpaid Bonus with respect to any fiscal year
of the Company ending prior to the Date of Termination and (B) a pro-rata Bonus
payment for the fiscal year of the Executive’s death or Disability, equal to the
Bonus that the Executive would have been entitled to if he had remained employed
by the Company at the end of such fiscal year multiplied by a fraction, the
numerator of which is the number of days transpired in the fiscal year up to and
including the Date of Termination, and the denominator of which is 365, which pro-rata Bonus shall
be payable at the time provided in Section 2(b). In addition,
if, during the Agreement Term, the Executive dies or the Company terminates the
Executive’s employment hereunder due to his Disability, the Restricted Stock
shall, to the extent then outstanding and unvested, become 100% vested on the
Date of Termination.
(d) No Other
Obligations. If the Executive’s Date of Termination occurs
during the Agreement Term under any circumstances described in Section 3, the
Company shall have no obligation to make payments under the Agreement for
periods after the Executive’s Date of Termination other than those payments in
accordance with Sections 4(a), 4(b) and 4(c) above.
(e) Payment. Except
as otherwise provided in this Agreement, any payments to which the Executive is
entitled under Sections 4(a), 4(b) and 4(c) shall be made as soon as
administratively feasible following the Date of Termination and in no event
later than 90 days following the Date of Termination.
(f) Certain Terminations in
Connection with a Change in Control. Notwithstanding anything
contained in this Agreement to the contrary if, in connection with a Change in
Control described in Section 1(e)(i)(2)(B) (an “Asset Sale”), the
Executive is offered employment with the acquirer of the Company’s assets (or
any of its affiliates) on terms and conditions (including the location of the
Executive’s principal place of employment) no less favorable (in the aggregate)
than those in effect immediately prior to such Asset Sale (as determined in the
sole discretion of the Board), then the Executive shall not be entitled to any
of the payments or benefits described in Section 4(b) upon his termination of
employment with the Company in connection with such Asset Sale.
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5.
Duties on
Termination. Subject to the terms and conditions of this
Agreement, to the extent that there is a period of time elapsing between the
date of delivery of a Notice of Termination, and the Date of Termination, the
Executive shall continue to perform his duties as set forth in this Agreement
during such period, and shall also perform such services for the Company as are
necessary and appropriate for a smooth transition to the Executive’s successor,
if any. Notwithstanding the foregoing provisions of this Section 5,
the Company may suspend the Executive from performing his duties under this
Agreement following the delivery of a Notice of Termination providing for the
Executive’s resignation, or delivery by the Company of a Notice of Termination
providing for the Executive’s termination of employment for any reason;
provided, however, that during the period of suspension (which shall end on the
Date of Termination), the Executive shall continue to be treated as employed by
the Company for other purposes, and his rights to compensation or benefits shall
not be reduced by reason of the suspension.
6.
Restrictive
Covenants.
(a) Noncompetition.
(i)
During
the Agreement Term, and for the twenty-four (24) month period immediately
following the Executive’s termination of employment with the Company (the “Restrictive
Period”):
(1) The
Executive shall not, without the express written consent of the Board, be
employed by, serve as a consultant to, or otherwise assist or directly or
indirectly provide services to a Competitor (as defined below) if: (A) such
services are to be provided with respect to any location in which the Company or
a Subsidiary does business, or with respect to any location in which the Company
or a Subsidiary has devoted material resources to doing business; or (B) the
trade secrets, confidential information, or proprietary information (including,
without limitation, confidential or proprietary methods) of the Company and the
Subsidiaries to which the Executive had access could reasonably be expected to
benefit the Competitor if the Competitor were to obtain access to such secrets
or information.
(2) The
Executive shall not, without the express written consent of the Board, directly
or indirectly own an equity interest in any Competitor (other than ownership of
1% or less of the outstanding stock of any corporation listed on a national
stock exchange or included in the NASDAQ System).
(3) The
Executive shall not, without the express written consent of the Board, solicit
or attempt to solicit any person or entity who is then or, during the
twelve-month period prior to such solicitation or attempt by the Executive, was
(or was solicited to become) a customer or supplier of the Company or a
Subsidiary, or a user of the services provided by the Company or a
Subsidiary.
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(4) The
Executive shall not without the express written consent of the Board, solicit,
entice, persuade, induce or hire any individual who is employed by the Company
or any Subsidiary (or was so employed within 90 days prior to the Executive’s
action) to terminate or refrain from renewing or extending such employment or to
become employed by or enter into contractual relations with any other individual
or entity other than the Company or any Subsidiary, and the Executive shall not
approach any such employee for any such purpose or authorize or knowingly
cooperate with the taking of any such actions by any other individual or
entity.
(ii)
The term
“Competitor” means any enterprise (including a person, entity, firm or business,
whether or not incorporated) during any period in which it is engaged in or
aiding others to conduct business that engages in, or plans to engage in, any
line of business that the Company or its Subsidiaries engages in or has made
plans to engage in during the Agreement Term, or within the prior 12 months was
engaged in, or otherwise competes, directly or indirectly, with the Company or
any of its Subsidiaries.
(b) Non-Disparagement. The
Executive and the Company agree that each will not make any false, defamatory or
disparaging statements about the other, the Subsidiaries, or the officers or
directors of the Company or the Subsidiaries that are reasonably likely to cause
material damage to the Executive, the Company, the Subsidiaries, or the officers
or directors of the Company or the Subsidiaries.
(c) Confidential
Information.
(i)
The
Executive agrees that, during the Agreement Term and at all times thereafter, he
will (1) keep secret all Confidential Information (as defined below) and
Intellectual Property (as defined below) which may be obtained during his
employment by the Company and (2) not reveal or disclose any Confidential
Information or Intellectual Property, directly or indirectly, except with the
Company’s prior written consent. The Executive shall not make use of
the Confidential Information or the Intellectual Property for the Executive’s
own purposes or for the benefit of anyone other than the Company and shall
protect the Confidential Information and the Intellectual Property against
disclosure, misuse, espionage, loss and theft.
(ii) The
Executive acknowledges and agrees that all Intellectual Property is and shall be
owned by the Company. The Executive hereby assigns and shall assign
to the Company all ownership rights possessed in any Intellectual Property
contributed, conceived or made by the Executive (whether alone or jointly with
others) while employed by the Company, whether or not during work
hours. The Executive shall promptly and fully disclose to the Company
in writing all such Intellectual Property after such contribution, conception or
other development. The Executive agrees to fully cooperate with the
Company, at the Company’s expense, in securing, enforcing and otherwise
protecting throughout the world the Company’s interests in such Intellectual
Property, including, without limitation, by signing all documents reasonably
requested by the Company.
(iii) Immediately
following the Date of Termination, the Executive agrees to promptly deliver to
the Company all memoranda, notes, manuals, lab notebooks, computer diskettes,
passwords, encryption keys, electronic mail and other written or electronic
records (and all copies thereof) constituting or relating to Confidential
Information or Intellectual Property that the Executive may then possess or have
control over. The Executive shall provide written certification that
all such materials have been returned.
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(iv) For
purposes of this Agreement, the following terms shall be defined as set forth
below:
(1) “Confidential
Information” shall mean all information, in any form or medium, that
relates to the business, suppliers and prospective suppliers, existing and
potential creditors and financial backers, marketing, costs, prices, products,
processes, services, methods, computer programs and systems, personnel,
customers, potential customers, research or development of the Company and the
Subsidiaries and all other information related to the Company and the
Subsidiaries which is not readily available to the public. Confidential
Information shall include any of the foregoing information that is created or
developed by the Executive during his employment by the Company.
(2) “Intellectual
Property” shall mean, with respect to the following which are created or
existing during the period of the Executive’s employment by the Company, any:
(A) idea, know-how, invention, discovery, design, development, software, device,
technique, method or process (whether or not patentable or reduced to practice
or including Confidential Information) and related patents and patent
applications and reissues, re-examinations, renewals, continuations-in-part,
continuations, and divisions thereof; (B) copyrightable and mask work (whether
or not including Confidential Information) and related registrations and
applications for registration; (C) trademarks, trade secrets and other
proprietary rights; and (D) improvements, updates and modifications of the
foregoing made from time to time. Intellectual Property shall include
any of the foregoing that is created or developed by the Executive during his
employment by the Company.
(d) Duty of Loyalty to the
Company. Nothing in this Section 6 shall be construed as
limiting the Executive’s duty of loyalty to the Company, or any other duty
otherwise owed to the Company, while the Executive is employed by the
Company.
7.
Assistance with
Claims. The Executive agrees that, during the Agreement Term,
and continuing for a reasonable period after the Executive’s Date of
Termination, the Executive will assist the Company and the Subsidiaries in
defense of any claims that may be made against the Company and the Subsidiaries,
and will assist the Company and the Subsidiaries in the prosecution of any
claims that may be made by the Company or the Subsidiaries, to the extent that
such claims may relate to services performed by the Executive for the Company
and the Subsidiaries. The Executive agrees to promptly inform the
Company upon becoming aware of any lawsuits involving such claims that may be
filed against the Company or any Subsidiary. The Company agrees to
provide legal counsel to the Executive in connection with such assistance (to
the extent legally permitted), and to reimburse the Executive for all of the
Executive’s reasonable out-of-pocket expenses associated with such assistance,
including travel expenses. For periods after the Executive’s
employment with the Company terminates, the Company agrees to provide reasonable
compensation to the Executive for such assistance. To the extent
permitted by law, the Executive also agrees to promptly inform the Company upon
being asked to assist in any investigation of the Company or the Subsidiaries
(or their actions) that may relate to services performed by the Executive for
the Company or the Subsidiaries, regardless of whether a lawsuit has then been
filed against the Company or the Subsidiaries with respect to such
investigation.
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8.
Disclosure of
Agreement. The Executive shall provide each of his subsequent
employers during the two-year period following his termination of employment
with the Company with a copy of the restrictive covenants set forth in Section 6
of this Agreement in order to allow such subsequent employers to avoid
inadvertently causing the violation of such covenants. The Executive
shall advise the Company of the identity of each of his subsequent employers
during the two-year period following his termination of employment with the
Company.
9. Injunctive Relief with
Respect to Covenants; Certain Acknowledgments; Etc.
(a) Injunctive
Relief. The Executive acknowledges and agrees that the
covenants, obligations and agreements of Executive contained in Section 6 relate
to special, unique and extraordinary matters and that a violation of any of the
terms of such covenants, obligations or agreements will cause the Company
irreparable injury for which adequate remedies are not available at
law. Therefore, the Executive agrees that the Company shall be
entitled to an injunction, restraining order or such other equitable relief
(without the requirement to post bond unless required by applicable law) as a
court of competent jurisdiction may deem necessary or appropriate to restrain
the Executive from committing any violation of such covenants, obligations or
agreements. These injunctive remedies are cumulative and in addition
to any other rights and remedies the Company may have. The Company
shall be entitled to collect from the Executive any costs of obtaining
injunctive relief, including, without limitation, attorneys’ fees.
(b) Blue
Pencil. In the event any term of Section 6 hereof shall be
determined by any court of competent jurisdiction to be unenforceable by reason
of its duration or geographic scope, or by reason of it being too extensive in
any other respect, it will be interpreted to extend only over the maximum period
of time for which it may be enforceable, over the maximum geographical area as
to which it may be enforceable, or to the maximum extent in all other respects
as to which it may be enforceable, all as determined by such court in such
action.
(c) Certain
Acknowledgements. The Executive acknowledges and agrees that
the Executive will have a prominent role in the management of the business, and
the development of the goodwill, of the Company and its Subsidiaries and will
establish and develop relations and contacts with the principal customers and
suppliers of the Company and its Subsidiaries in the United States of America
and the rest of the world, all of which constitute valuable goodwill of, and
could be used by the Executive to compete unfairly with, the Company and its
Subsidiaries and that (i) in the course of
his employment with the Company, the Executive will obtain confidential and
proprietary information and trade secrets concerning the business and operations
of the Company and its Subsidiaries in the United States of America and the rest
of the world that could be used to compete unfairly with the Company and its
Subsidiaries; (ii) the covenants and
restrictions contained in Section 6 are intended to protect the legitimate
interests of the Company and its Subsidiaries in their respective goodwill,
trade secrets and other confidential and proprietary information; (iii) the Executive
desires and agrees to be bound by such covenants and restrictions; and (iv) the compensation
to be provided to the Executive are adequate consideration for the restrictive
covenants provided in Section 6.
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10.
Miscellaneous.
(a) Binding Effect;
Assignment. This Agreement shall be binding on and inure to
the benefit of the Company, and its respective successors and
assigns. This Agreement shall also be binding on and inure to the
benefit of the Executive and his heirs, executors, administrators and legal
representatives. This Agreement shall not be assignable by the
Executive without the prior written consent of the Company. This Agreement shall
be assignable by the Company without the consent of the Executive.
(b) Entire
Agreement. This Agreement constitutes the entire agreement
among the parties hereto concerning the subject matter hereof and supercedes all
prior and contemporaneous correspondence and proposals (including but not
limited to summaries of proposed terms and term sheets) and all prior and
contemporaneous promises, representations, understandings, arrangements and
agreements, if any, concerning such subject matter (including but not limited to
those made to or with the Executive by any other person); provided, however,
that nothing in this Agreement shall be construed to limit any policy or
agreement that is otherwise applicable relating to confidentiality, rights to
inventions, copyrightable material, business and/or technical information, trade
secrets, solicitation of employees, interference with relationships with other
businesses, competition, and other similar policies or agreement for the
protection of the business and operations of the Company and the
Subsidiaries.
(c) Applicable
Law. This Agreement shall be governed in all respects,
including as to validity, interpretation and effect, by the laws of the State of
Delaware without giving effect to the conflict of laws rules of any
state.
(d) Consent to Jurisdiction;
Waiver of Jury Trial; Attorneys Fees.
(i) Consent to
Jurisdiction. Each party hereby irrevocably submits to the
jurisdiction of the courts of the State of Delaware and the federal courts of
the United States of America located in the State of Delaware solely in respect
of the interpretation and enforcement of the provisions of this Agreement and of
the documents referred to in this Agreement, and in respect of the transactions
contemplated hereby and thereby. Each party hereby waives and agrees
not to assert, as a defense in any action, suit or proceeding for the
interpretation and enforcement hereof, or any such document or in respect of any
such transaction, that such action, suit or proceeding may not be brought or is
not maintainable in such courts or that the venue thereof may not be appropriate
or that this Agreement or any such document may not be enforced in or by such
courts. Each party hereby consents to and grants any such court
jurisdiction over the person of such parties and over the subject matter of any
such dispute and agree that the mailing of process or other papers in connection
with any such action or proceeding in the manner provided in Section 10(k) or in
such other manner as may be permitted by law, shall be valid and sufficient
service thereof.
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(ii) Waiver of Jury
Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE EACH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS AGREEMENT, OR THE BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT, OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. Each party certifies and
acknowledges that (i) no representative,
agent or attorney of any other party has represented, expressly or otherwise,
that such other party would not, in the event of litigation, seek to enforce the
foregoing waiver, (ii) each such party
understands and has considered the implications of this waiver, (iii) each such party
makes this waiver voluntarily, and (iv) each such party
has been induced to enter into this agreement by, among other things, the mutual
waivers and certifications in this Section 10(d)(ii).
(e) Taxes. The
Company may withhold from any payments made under this Agreement all applicable
taxes, including but not limited to income, employment and social insurance
taxes, as shall be required by law.
(f)
Key Man
Insurance. The Executive acknowledges that the Company may
purchase “key man” insurance on his life and hereby agrees to cooperate with the
Company in obtaining such insurance, including without limitation, submitting to
such medical examinations as may be required promptly upon request by the
Company.
(g) Amendments. This
Agreement may be amended or cancelled only by mutual agreement of the parties in
writing. So long as the Executive lives, no person, other than the
parties hereto (and the Company’s successors and assigns), shall have any rights
under or interest in this Agreement or the subject matter hereof.
(h) Severability. The
invalidity or unenforceability of any provision of this Agreement will not
affect the validity or enforceability of any other provision of this Agreement,
and this Agreement will be construed as if such invalid or unenforceable
provision were omitted (but only to the extent that such provision cannot be
appropriately reformed or modified).
(i)
Waiver of
Breach. No waiver by any party hereto of a breach of any
provision of this Agreement by any other party, or of compliance with any
condition or provision of this Agreement to be performed by such other party,
will operate or be construed as a waiver of any subsequent breach by such other
party of any similar or dissimilar provisions and conditions at the same or any
prior or subsequent time. The failure of any party hereto to take any
action by reason of such breach will not deprive such party of the right to take
action at any time while such breach continues.
(j)
Survival of
Agreement. Except as otherwise expressly provided in this
Agreement, the rights and obligations of the parties to this Agreement shall not
survive the termination of the Executive’s employment with the
Company.
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(k) Notices. Notices
and all other communications provided for in this Agreement shall be in writing
and shall be delivered personally or sent by registered or certified mail,
return receipt requested, postage prepaid, or sent by facsimile or prepaid
overnight courier to the parties at the addresses set forth below (or such other
addresses as shall be specified by the parties by like notice). Such
notices, demands, claims and other communications shall be deemed
given:
(i) in the
case of delivery by overnight service with guaranteed next day delivery, the
next day or the day designated for delivery;
(ii) in the
case of certified or registered U.S. mail, five days after deposit in the U.S.
mail; or
(iii) in the
case of facsimile, the date upon which the transmitting party received
confirmation of receipt by facsimile, telephone or otherwise;
provided,
however, that in no event shall any such communications be deemed to be given
later than the date they are actually received. Communications that
are to be delivered by the U.S. mail or by overnight service or two-day delivery
service are to be delivered to the addresses set forth below:
to the
Company:
Emtec,
Inc.
00
Xxxxxxx Xxxx
Xxxxxxxxxxx,
XX 00000
Facsimile
number: 973-376-8846
or to the
Executive:
at the
address in the Company’s records.
All
notices to the Company shall be directed to the attention of Secretary of the
Company, with a copy to the Board. Each party, by written notice
furnished to the other party, may modify the applicable delivery address, except
that notice of change of address shall be effective only upon
receipt.
(l)
Code Section 409A
Compliance. Notwithstanding any other provision of this
Agreement to the contrary, if the Executive is a "specified employee" within the
meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”) and the
regulations issued thereunder, and a payment or benefit provided for in this
Agreement would be subject to additional tax under Code Section 409A if such
payment or benefit is paid within six months after the Executive’s "separation
from service" (within the meaning of Code Section 409A), then such payment or
benefit required under this Agreement shall not be paid (or commence) during the
six-month period immediately following the Executive’s separation from service
except as provided in the immediately following sentence. In such an event, any
payments or benefits that would otherwise have been made or provided during such
six-month period and which would have incurred such additional tax under Code
Section 409A shall instead be paid to the Executive in a lump-sum cash payment,
without interest, on the earlier of (i) the first business day of the seventh
month following the Executive’s separation from service or (ii) the 10th
business day following the Executive’s death. If the Executive’s termination of
employment hereunder does not constitute a "separation from service" within the
meaning of Code Section 409A, then any amounts payable hereunder on account of a
termination of the Executive’s employment and which are subject to Code Section
409A shall not be paid until the Executive has experienced a "separation from
service" within the meaning of Code Section 409A. In addition, the
Executive’s right to reimbursement under this Agreement may not be liquidated or
exchanged for any other benefit and no reimbursement under this Agreement may
occur later than the last day of the calendar year immediately following the
calendar year in which such expenses were incurred.
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(m) Headings. The
section and other headings contained in this Agreement are for the convenience
of the parties only and are not intended to be a part hereof or to affect the
meaning or interpretation hereof.
(n) Execution of the
Agreement. The Executive shall have until the close of
business on May 1, 2009 to deliver a copy of this Agreement executed by him to
the Company in accordance with Section 10(k) hereof. If the Executive
fails to deliver such an executed copy of this Agreement to the Company by the
close of business on such date, the Company’s offer of employment contained in
this Agreement (as well as all of the terms, conditions and other provisions
contained herein) shall automatically lapse, expire and be revoked without any
further action by the Company and the Executive’s execution and/or delivery of
this Agreement any time thereafter shall be null and void and not bind or
obligate the Company in any manner. This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
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IN
WITNESS WHEREOF, the Company has duly executed this Agreement by its authorized
representative, and the Executive has hereunto set his hand, in each case
effective as of the date first above written.
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EMTEC,
INC.
|
|
|
By:
|
s/s Xxxxxx Xxxxx
|
|
Name:
XXXXXX XXXXX
|
|
|
Title:
CHAIRMEN
|
|
|
Date:
April 30, 2009
|
|
|
EXECUTIVE
|
|
|
s/s Xxxxxxx X. Xxxxxxx
|
|
|
XXXXXXX
X. XXXXXXXX
|
|
|
Date:
April 30, 2009
|
|
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