EMPLOYMENT AGREEMENT
This Employment Agreement dated as of October 15, 1997, is between AmTec,
Inc. ("Employer") and Xxxxx X. X'Xxxxx ("Executive").
W I T N E S S E T H
1. Term. Employer hereby employs Executive and Executive hereby
accepts employment on the terms and conditions hereinafter set forth. Subject
to the provisions of Section 7 hereof, the term of this Agreement shall commence
on the date hereof and shall terminate on October 14, 2002.
2. Duties. Executive agrees to serve Employer as Senior Vice
President and General Counsel and in such capacity Executive agrees to render
his services to the best of his ability. Executive will report to the Chairman
of the Board of the Company and the Chief Executive Officer of the Company.
During the term of this Agreement, Executive will devote no less than two thirds
(2/3) of his time and attention to, and use his best efforts to advance the
business and welfare of Employer, subject to the direction and control of the
Board of Directors.
3. Confidential Information and Covenant Not to Compete.
(a) Employer acknowledges that Executive has certain professional
obligations to third parties described in Exhibit "A" hereto and that Executive
will continue to perform those obligations. With respect to such of those
professional obligations as may or may appear to constitute a conflict between
the interests of Employer and the interests of such third parties, Employer and
Executive agree that Executive shall not provide services to Employer or such
third parties in connection with any maters now existing or hereafter arising in
which the interests of Employer or such third parties are adverse or have the
potential to be adverse.
(b) Executive hereby agrees that, during the term of this Agreement
and thereafter, he will not disclose to any person, or otherwise use or exploit
any of the proprietary or confidential information or knowledge, including
without limitation to, trade secrets, processes, records of research, proposals,
reports, methods, processes, techniques, computer software or programming, or
budgets or other financial information, regarding Employer, its business,
properties or affairs obtained by him at any time prior to or subsequent to the
execution of this Agreement, except in the furtherance of the interests of
Employer in the execution of Executive's duties hereunder or as may be required
pursuant to a lawful order of a judicial tribunal or legislative body of
competent jurisdiction.
(c) Upon termination of employment, Executive will deliver to
Employer all processes, records of research, proposals, reports, memoranda,
computer software and programming, budgets and other financial information, and
other materials
or records or writings of any other type (including any copy thereof made), used
or obtained by Executive in connection with his employment by Employer.
(d) During the term of this Agreement, Executive agrees that he will:
(i) neither authorize his name to be used by, (ii) nor engage in or carry on,
directly or indirectly, for himself as a member of a partnership or as a
stockholder (other than as a stockholder of less than five percent (5%) of the
issued and outstanding stock of a publicly held corporation having assets in
excess of $10,000,000), investor, officer, or director of a corporation (other
than Employer, or any parent, subsidiary, affiliate or successor of Employer),
or as an employee, agent, associate, or consultant of any person, partnership,
corporation or other business entity, in competition with any business carried
on, directly or indirectly, by Employer prior to the de hereof or hereafter
conducted, directly or indirectly, by Employer during the term of this
Agreement, in any country where business is then carried on or conducted by
Employer.
(e) Executive agrees that the remedy at law for any breach by him of
any of the covenants and agreements set forth in this Section 3 will be
inadequate and that in the event of any such breach, Employer may, in addition
to the other remedies which may be available to it at law, obtain injunctive
relief prohibiting him (together with all those persons associated with him)
from the breach of such covenants and agreements.
(f) The parties hereto intent that the covenants and agreements
contained in this Section 3 shall be deemed to include a series of separate
covenants and agreements. If, in any judicial proceeding, a court shall refuse
to enforce all of the separate covenants deemed included in such action, then
such unenforceable covenants shall be deemed eliminated from the provisions
hereof for the purposes of such proceeding to the extent necessary to permit the
remaining separate covenants to be enforced in such proceeding.
4. Compensation.
4.1 Salary. For the services to be rendered by Executive during the
first year of this Agreement, Employer shall pay Executive an annual base salary
of Two Hundred Thousand Dollars ($200,000), payable in cash semi-monthly and
subject to income tax withholdings and other payroll deductions as customary in
respect of Employer's salaried employees in general. In addition, Executive
shall receive ten year options to purchase 67,500 shares of Common Stock of the
Employer at a price of $2.125 per share, said options to vest 25% at the end of
each 90 day period during the first year of the term of this Agreement. The
annual base salary of Executive for the second year of this Agreement will be
determined by the Compensation Committee of the
Board of Directors, but shall be no less than Two Hundred Fifty Thousand Dollars
($250,000) plus 67,500 options to purchase common stock of the Employer at
$2.125 per share, said options to vest at the end of each 90 day period during
the second year of the term of this Agreement. The annual base salary of
Executive for the third, fourth and fifth years of the term of this Agreement
will be determined by the Compensation Committee of the Board of Directors, but
shall be no less in each year than 110% of the annual base salary (including
cash and options) of Executive for the immediately preceding year.
4.2 Bonus. Executive shall be entitled to participate in such
bonus plans of Employer applicable to senior executives of Employer as
determined by the Board of Directors of Employer in its sole discretion.
Notwithstanding the foregoing, for the first year of employment hereunder,
Employer shall pay Executive a bonus of at least $50,000 (and if during the
first year of the term of this Agreement, Employer obtains additional financing,
said bonus shall be no less than $100,000), payable in cash within thirty days
of the end of the first year of employment hereunder. For the second year and
each succeeding year of employment hereunder, Employer shall pay Executive a
bonus at least equal to 50% of Executive's annual base salary for the then
current year of employment hereunder. Criteria for the determination of the
discretionary amount of bonus will be as agreed upon by Executive and the
Chairman of the Board within forty-five days of the date of this Agreement and
within forty-five days of the commencement of each succeeding year of employment
hereunder.
4.2(a) Long Term Compensation Plan. Executive shall be entitled to
participate in a long-term compensation plan which will be multi-year
performance based over three years starting with the first contract year. It is
the intention of the Employer to pay the Executive on an incentive basis to be
determined by the Board of Directors the equivalent of at least 50% of annual
base pay per year under this plan after three years.
4.3 Vacation. Executive shall be entitled to four weeks' paid
vacation for each year during the term of this Agreement.
4.4 Medical Insurance. During the term of this Agreement, Employer
shall furnish Executive with the same medical and hospital insurance furnished
to other employees of Employer.
4.5 Disability Insurance. During the term of this Agreement, Employer
shall furnish Executive with Long Term Disability insurance on the same terms
available to all senior executives of Employer.
4.6 Pension and Profit Sharing. Executive shall participate in such
pension and profit sharing plans as are established for senior executives of
Employer.
4.7 Stock Options. Effective the date of this Agreement, Employer
grants stock options to Executive covering 400,000 shares of Common Stock of
Employer. Such options shall be exercisable at a price of $2.125 per share, and
shall have a ten year term. Provided that the Executive is employed by the
Company on each of the vesting dates set forth below, the options shall vest as
follows:
October 15, 1997 - 125,000
January 15, 1998 - 62,500
April 15, 1998 - 62,500
July 15, 1998 - 37,500
October 15, 1998 - 37,500
January 15, 1999 - 37,500
April 15, 1999 - 37,500
In the event Executive is terminated by the Company without good cause pursuant
to Paragraph 7, all of such stock options shall immediately vest.
4.8 Other Rights and Options. In addition to the foregoing, Executive
shall be entitled to such additional rights and options as may be granted or
established for the benefit of senior executive officers of the Company,
including, without limitation, in connection with, any recapitalization,
reorganization, consolidation or merger of the Company.
5. Expenses. Employer will pay or reimburse Executive for such reasonable
travel, entertainment, or other expenses he may incur at the request of Employer
during the term of this agreement in connection with the performance of his
duties hereunder. Executive shall furnish Employer with such evidence that such
expenses were incurred as Employer may from time to time require or request.
6. Death or Total Disability of Executive. If Executive dies, or becomes
totally disabled (for a period of more than six (6) weeks), during the term of
this Agreement, Executive's employment under this Agreement shall automatically
terminate; provided that, in such event of death or total disability,
Executive's stock options under paragraph 4.7 hereof, to the extent not already
vested, shall vest immediately.
7. Termination for Cause. Executive's Employment under this Agreement
may be terminated by Employer for "good cause." The term "good cause" is
defined as any one or more of the following occurrences:
(a) Executive's breach of any of the covenants in Section 3 of this
Agreement;
(b) Executive's conviction by, or entry of a plea of guilty or nolo
contendre to a felony;
(c) Executive's commission of an act of fraud, whether prior to or
subsequent to the date hereof, upon Employer;
(d) Executive's continuing failure or refusal to perform his duties
as required by this Agreement;
(e) Executive's gross negligence, insubordination, material violation
of any duty or loyalty to Employer or any other material misconduct relating to
the business or good will of Employer.
8. Miscellaneous.
8.1 Modification and Waiver of Breach. No waiver or modification of this
Agreement shall be binding unless it is in writing signed by the parties hereto.
No waiver of a breach hereof shall be deemed to constitute a waiver of a future
breach, whether of a similar or dissimilar nature.
8.2 Complete Agreement. The Agreement contains the entire agreement
between the parties hereto with respect to the transactions contemplated by this
Agreement and supersedes all previous oral and written and all contemporaneous
negotiations, commitments, writings, and understandings and is and shall be
binding upon and inure to the benefit of Employer, its successors and permitted
assigns and Executive, his heirs, executors and administrators.
8.3 Legal Fees. If any legal action, arbitration or other proceeding is
brought for the enforcement of this Agreement, or because of any alleged
dispute, breach, default or misrepresentation in connection with this Agreement,
the successful or prevailing party shall be entitled to recover reasonable
attorney's fees and other costs incurred in that action or proceeding, in
addition to any other relief to which it may be entitled.
8.4 Assignment. This Agreement may not be assigned in any manner
whatsoever.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first above written.
EXECUTIVE: EMPLOYER:
AMTEC, INC.
/s/ Xxxxx X. X'Xxxxx /s/Xxxxxx X. Xxxxxx, Xx.
XXXXX X. X'XXXXX CHAIRMAN
EXHIBIT "A"
PROFESSIONAL OBLIGATIONS OF XXXXX X. X'XXXXX
Promethean Investment Group, L.L.C. Counsel
Promethean Investment Group, Inc. Counsel
Themis Partners, L. P. Counsel
Heracles Fund Counsel and Member of the Board of
Directors
(The above entities are subject to Paragraph 3(a) of the Employment Agreement.)
The Jetty Fund Counsel
The Xxxxxxxxx Fund Counsel
Compo Asset Management Counsel
Goulston & Storrs, P.C. Co-Counsel
(Involves representations of two clients of Goulston & Storrs in litigation
matters pending in the Superior Court and the Land Court of the Commonwealth of
Massachusetts.)
