CONFIDENTIAL
January 21, 1998
Xx. Xxxxxxx X. Xxxxx
0000 XXX
Xxxx Xxxxx, XX 00000
Dear Xxxxxxx:
I am pleased to confirm our agreement with you concerning your
employment by Xxx-Xxxxxxx Technologies, Inc. (the "Company"), which is subject
to review, approval, and ratification by the Company's Board of Directors.
I. EMPLOYMENT. Subject to the terms and conditions described in this
Employment Agreement (the "Agreement"), the Company agrees to employ
you as the President, Chief Operating Officer, and Executive Vice
Chairman of the Company, and you accept this employment on the
following terms and conditions.
II. DUTIES.
1. You agree to spend substantially all of your business hours
on the Company's business. You will diligently perform the
duties of your position, within guidelines to be determined by
Xxx Xxx-Xxxxxxx, who is the Company's Chief Executive Officer
and the Chairman of the Board of Directors. In particular, you
will actively manage the day-to-day business of the Company
and shall set corporate policies, under the direction of the
Board of Directors. More particularly, your duties shall
include the day-to-day responsibility for running and
administering the Company. Said responsibilities shall
include, but not be limited to, the following specific areas:
shareholder relations, fundraising, Nasdaq listing, direction
of R&D, licensing and other business development activities,
budgeting and fiscal controls, and all personnel matters. You
will report to Xx. Xxx-Xxxxxxx, who will be responsible for
evaluating your job performance in accordance with the
Company's annual performance review process. The Company
agrees that during the term of this Agreement, as it may be
extended, no one other than Xx. Xxx-Xxxxxxx shall serve as
CEO, except you.
2. During the term of this Agreement, you will also serve as a
Director of the Company and will perform all such duties
incident to such service. Towards this end, the Company shall
nominate you as a nominee for director and solicit proxies for
your election for so long as this Agreement is in effect.
3. While you are employed by the Company, except as otherwise
permitted by the Company's Conflict of Interest policy or this
Agreement, you will not engage in any business activity or
outside employment that conflicts with the Company's interests
or adversely affect the performance of your duties for the
Company.
Xx. Xxxxxxx X. Xxxxx
January 21, 1998
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CONFIDENTIAL
4. You shall be based at, and shall perform your duties at an
office located in, Chicago, Illinois, or the surrounding
suburban area, where the corporate headquarters of the Company
shall also be located. The Company agrees that the other
officers and executives of the Company (except for those who
are directly involved in the research and development
activities of the Company that are currently conducted in
Atlanta, Georgia) shall also be located in the same corporate
headquarters. However, you shall also travel to other
locations at such times as may be appropriate for the
performance of your duties under this Agreement.
III. TERM. This Agreement is effective January 20, 1998 (the "Effective
Date"), and will terminate on December 31, 2000, unless earlier
terminated pursuant to Section V of this Agreement (the "Base Term").
Commencing January 1, 2001, and on each January 1st thereafter, the
term of your employment will be automatically extended for three (3)
additional years unless on or before October 1st immediately preceding
any such extension, either party gives written notice to the other of
the cessation of further extensions, in which case no further automatic
extensions will occur. In the event that the Company elects not to
renew this Agreement other than for "cause" as defined herein, you will
be paid the amount described in Section V.C.2 below.
IV. COMPENSATION.
A. BASE SALARY. The Company agrees to pay you an annual base
salary of Two Hundred Thirty Thousand Dollars ($230,000) in
accordance with the Company's standard payroll practices
("Base Salary"). Beginning January 20, 1999 or sooner if you
raise Two Million Dollars ($2,000,000), your Base Salary shall
be increased to Two Hundred and Fifty Thousand Dollars
($250,000). In subsequent years, the Board of Directors shall
have the sole discretion to establish your Base Salary, except
that, at a minimum, it shall be adjusted upward consistent
with changes to the Consumer Price Index.
B. ANNUAL BONUS. You will be eligible to receive an annual
performance bonus not to exceed 50% of your Base Salary in
effect during the year under review. The amount of said bonus
shall be determined in the sole discretion of the Compensation
Committee and approved by the Board of Directors.
C. OPTIONS.
1. Upon execution of this Agreement, the Company will
grant you six hundred thousand (600,000) stock
options at the lowest permissible price when this
agreement is executed, one hundred thousand of which
shall vest at the time of the grant. The remainder
shall vest in twelve equal quarterly installments
over the Initial Term of this Agreement. The
remaining unvested options shall vest immediately
upon a termination without cause by the Company.
Xx. Xxxxxxx X. Xxxxx
January 21, 1998
Page 3
CONFIDENTIAL
2. You shall also be eligible to receive a combination
of an additional four hundred thousand (400,000)
shares and/or stock options during the Initial Term
of this Agreement at the lowest permissible price
when this agreement is executed. Receipt of these
options shall be subject to the stock price being
equal to or greater than One Dollar ($1.00) per share
at the time the options and/or shares vest. If this
condition precedent is satisfied, then these options
shall vest in twelve equal quarterly installments
over the Initial Term of this Agreement.
3. In the event of any reorganization, merger,
consolidation, recapitalization, liquidation,
reclassification, stock dividend, reverse stock
split, combination of shares, rights offering,
extraordinary dividend or divestiture (including a
spin-off) or any other change in the corporate
structure or shares of the Company, (or, if the
Company is not the surviving corporation in any such
transaction, the board of directors of the surviving
corporation), in order to prevent dilution or
enlargement of your rights, the Company (or the board
of the surviving corporation) shall make appropriate
adjustment (which determination shall be conclusive)
as to the number, kind and exercise price of
securities subject to this Option.
In the event that your employment is terminated by the Company
other than for justifiable cause (as hereinafter defined), or
if the Company elects not to renew this Agreement, or if you
are not nominated by the Company for reelection to the Board
of Directors other than for justifiable cause (as hereinafter
defined), all outstanding stock options and shares that are
held by you or your estate will immediately become exercisable
and all restrictions against disposition, if any, which have
not otherwise lapsed shall immediately lapse, and the period
within which they may be exercised will be one year following
such termination of employment.
D. BENEFITS. In addition to the other compensation to be paid
under this Section IV, you will be entitled to participate in
all benefit plans available to all full-time, eligible
employees hereafter established by the Company, in accordance
with the terms and conditions of such plans, which the Company
shall adopt promptly following the date hereof. These plans
shall include, but not be limited to, the following: a 401(k)
plan; group hospitalization, health, dental, disability (for
which the Company agrees to obtain the maximum long-term
disability insurance benefit allowed by applicable law), and
term life insurance (in the amount of $1.1 million); and
supplementary long-term disability insurance.
E. REIMBURSEMENT OF BUSINESS EXPENSES. In addition to payment of
compensation under this Section IV, the Company agrees to
reimburse you for all reasonable out-of-pocket business
expenses incurred by you on behalf of the Company, provided
that you properly account to the Company for all such expenses
in accordance with the rules and regulations of the Internal
Revenue Service promulgated under the Internal Revenue Code of
1986, as amended, and in
Xx. Xxxxxxx X. Xxxxx
January 21, 1998
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CONFIDENTIAL
accordance with the standard policies of the Company relating
to reimbursement of business expenses.
F. AUTOMOBILE ALLOWANCE. The Company shall provide you with a
monthly stipend of One Thousand Dollars ($1,000.00) for your
automobile use.
G. VACATION. You are entitled to four (4) weeks of paid vacation
per calendar year.
V. TERMINATION.
A. EARLY TERMINATION. Subject to the respective continuing
obligations of the parties pursuant to Sections VI, VII and
VIII, this Section sets forth the terms for early termination
of this Agreement.
B. TERMINATION FOR CAUSE. The Company may terminate this
Agreement and your employment immediately for cause. For this
purpose, "cause" means any of the following: (1) fraud, (2)
theft or embezzlement of the Company's assets, (3) a violation
of law involving moral turpitude, (4) your repeated and
willful failure to follow instructions of the Board provided
that the conduct has not ceased or the offense cured within
thirty (30) days following written warning from the Company
that sets forth in reasonable detail the facts claimed to
provide the basis for such termination. In the event of
termination for cause pursuant to this Section V.B, you will
be paid at the usual rate your annual Base Salary, car
allowance, and any out-of-pocket expenses, through the date of
termination specified in any notice of termination and any
amounts to which you are entitled under any Company benefit
plan in accordance with the terms of such plan.
C. TERMINATION WITHOUT CAUSE. Either you or the Company may
terminate this Agreement and your employment without cause on
thirty (30) days written notice. In the event of termination
of this Agreement and of employment pursuant to this Section
V.C, compensation will be paid as follows:
1. if the termination is by you without cause, you will
be paid at the usual rate of your annual Base Salary,
car allowance, and any out-of-pocket expenses
incurred on behalf of the Company and accounted for
pursuant to Section IV.E through the date of
termination specified in such notice (but not to
exceed thirty (30) days from the date of such
notice); or
2. Notwithstanding any provision to the contrary
contained herein, in the event your employment is
terminated by the Company at any time for any reason
other than justifiable cause, disability or death,
the Company shall:
(i) pay you a severance benefit, in a lump
sum payable no later than the fifth business day
following the date of termination, an amount equal to
your total compensation over the preceding twelve
months, including the car allowance;
Xx. Xxxxxxx X. Xxxxx
January 21, 1998
Page 5
CONFIDENTIAL
(ii) continue to provide you, at the
Company's expense, with term life insurance, as
provided herein until the earlier of (A) the
expiration of the "Severance Period" (which shall
mean the longer of these two periods: one year from
the date of termination or the remaining term of this
Agreement), or (B) your obtaining full-time
employment;
(iii) continue to allow you to participate,
at the Company's expense, in the Company's group
hospitalization, health, dental and disability
insurance programs until the earlier of (A) the
expiration of the Severance Period, or (B) your
becoming eligible to participate in another
employer's corresponding group insurance and
disability plans;
(iv) provide you with outplacement services
at a qualified agency selected by you and the use of
an office and reasonable secretarial support for one
year (unless you become otherwise employed within
such period);
(v) reimburse out-of-pocket expenses
incurred by you on behalf of the Company and
accounted pursuant to Section IV.E; and
(vi) reimburse you for any and all unused
vacation days accrued to the date of such
termination.
D. TERMINATION FOR GOOD REASON. You may terminate this Agreement
upon thirty (30) days written notice to the Company for good
reason. For this purpose, "good reason" means: (i) the
assignment to you of any duties inconsistent with your
positions, duties, responsibilities and status with the
Company as of the date hereof, or a change in your reporting
responsibilities, titles or offices, or any removal of you
from or any failure to re-elect you to any of such positions;
(ii) the failure of the Company to continue in effect any
fringe benefit or compensation plan, retirement plan, life
insurance plan, health or disability plan in which you were
participating (except as such change is prompted in good faith
by a change in the law), or the taking of any action by the
Company, which could reasonably be expected to adversely
affect your participation in or materially reduce your
benefits under any such plans or deprive you of any material
fringe benefit enjoyed by you, (iii) the reduction of your
salary or car allowance or failure to increase such salary as
is provided in Section IV.A above, or any other breach of this
Agreement by the Company; or (iv) the occurrence of a Change
in Control as defined in Section IX. In any such case the
Company will pay you the amounts, and provide you the
benefits, all as set forth in Section V.C.2 above.
E. TERMINATION IN THE EVENT OF DEATH OR PERMANENT DISABILITY.
This agreement and your employment will terminate in the event
of your death or permanent disability.
1. In the event of your death, Base Salary and car
allowance will be terminated as of the end of the
month in which death occurs.
Xx. Xxxxxxx X. Xxxxx
January 21, 1998
Page 6
CONFIDENTIAL
2. For the purposes of this Agreement, the term
"disability" shall mean your inability, due to
illness, accident or any other physical or mental
incapacity, to substantially perform your duties for
a period of four (4) consecutive months or for a
total of six (6) months (whether or not consecutive)
in any twelve (12) month period during the term of
this Agreement.
3. Upon your "disability", the Company shall have the
right to terminate your employment. Notwithstanding
any inability to perform your duties, you shall be
entitled to receive your compensation (including
bonuses, if any) as provided herein until the later
of (i) the date of your termination of employment for
disability in accordance with this Agreement, or (ii)
the date upon which you begin to receive long-term
disability insurance benefits under the policy
provided by the Company pursuant to this Agreement.
Any termination pursuant to Section V.E.2 shall be
effective on the date thirty (30) days after which
you shall have received written notice of the
Company's election to terminate.
F. ENTIRE TERMINATION PAYMENT.
1. The compensation provided for in Sections V.B, V.C,
V.D and V.E for early termination of this Agreement
will constitute your sole remedy for such
termination. You will not be entitled to any other
termination or severance payment which might
otherwise be payable to you under any other agreement
between you and the Company or under any policy of
the Company. This Section will not have any effect on
distributions to which you may be entitled at
termination from any qualified tax plan or any other
plan (other than a severance payment or similar
plan).
2. Notwithstanding any other provisions of this
Agreement or any other agreement, contract or
understanding heretofore or hereafter entered into
between you and the Company, if any "payments"
(including, without limitation, any benefits or
transfers of property or the acceleration of the
vesting of any benefits) in the nature of
compensation under any arrangement that is considered
contingent on a Change in Control for purposes of
Section 280G of the Internal Revenue Code of 1986, as
amended (the "Code"), together with any other
payments that you have the right to receive from the
Company or any corporation that is a member of an
"affiliated group" (as defined in Section 1504(a) of
the Code without regard to Section 1504(b) of the
Code) of which the Company is a member, would
constitute a "parachute payment" (as defined in
Section 280G of the Code), such payments will be
reduced to the largest amount as will result in no
portion of such payments being subject to the excise
tax imposed by Section 4999 of the Code; provided,
however, that you will be entitled to designate those
payments that will be reduced or eliminated in order
to comply with the foregoing provision.
Xx. Xxxxxxx X. Xxxxx
January 21, 1998
Page 7
CONFIDENTIAL
X. REQUIRED RESIGNATIONS UPON EARLY TERMINATION OR EXPIRATION.
You agree that upon any termination of your employment with
the Company or expiration of this Employment Agreement, such
termination or expiration under this Agreement will
automatically and without further action be deemed to
constitute your simultaneous resignation from all director,
officer, trustee, agent and any other positions within the
Company, all of its affiliates (including but not limited to
any entity that is a shareholder of the Company and any
subsidiaries and any parent of the Company), the Company's
employee benefit plans, trusts and foundations (charitable or
otherwise) or any other similar position associated with the
Company. Simultaneously upon such termination of employment or
expiration of this employment agreement, you agree to execute
and deliver to the Company any and all documents, agreements,
certificates, letters or other written instruments confirming
all such resignations.
VI. INVENTIONS.
A. You agree that all Inventions (as defined below) you make,
conceive, reduce to practice or author (either alone or with
others) during or within one year after the term of this
Agreement will be the Company's sole and exclusive property.
You will, with respect to any such Invention: (i) keep
current, accurate, and complete records, which will belong to
the Company and be kept and stored on the Company's premises
while you are employed by the Company; (ii) promptly and fully
disclose the existence and describe the nature of the
Invention to the Company in writing (and without request);
(iii) assign (and you do hereby assign) to the Company all of
your rights to the Invention, any applications you make for
patents or copyrights in any country, and any patents or
copyrights granted to you in any country; and (iv) acknowledge
and deliver promptly to the Company any written instruments,
and perform any other acts necessary in the Company's opinion
to preserve property rights in the Invention against
forfeiture, abandonment, or loss and to obtain and maintain
patents and/or copyrights on the Invention and to vest the
entire right and title to the Invention in the Company.
B. "Inventions," as used in this Section, means any discoveries,
improvements, creations, ideas and inventions, including
without limitation software and artistic and literary works
(whether or not they are described in writing or reduced to
practice) or other works of authorship (whether or not they
can be patented or copyrighted) that: (i) relate directly to
the Company's business or the Company's research or
development during the term of this Agreement; (ii) result
from any work you perform for the Company; (iii) use the
Company's equipment, supplies, facilities or trade secret
information; or (iv) you develop during any time that Section
II above obligates you to perform your employment duties.
The requirements of this Section do not apply to an Invention
for which no equipment, supplies, facility or trade secret
information of the Company was used and which was developed
entirely on your own time, and which neither (1) relates
directly to the Company's business or to the Company's actual
or demonstrably
Xx. Xxxxxxx X. Xxxxx
January 21, 1998
Page 8
CONFIDENTIAL
anticipated research or development, nor (2) results from
any work you performed for the Company. Except as
previously disclosed to the Company in writing, you do not
have, and will not assert, any claims to or rights under
any Inventions as having been made, conceived, authored or
acquired by you prior to your employment by the Company.
VII. PROPRIETARY INFORMATION.
A. Except as required in your duties to the Company, you will
never, either during or after your employment by the Company,
use or disclose Proprietary Information to any person not
authorized by the Company to receive it. When your employment
with the Company ends, you will promptly turn over to the
Company all records and any compositions, articles, devices,
apparatus and other items that disclose, describe or embody
Proprietary Information, including all copies, reproductions
and specimens of the Proprietary Information in your
possession, regardless of who prepared them.
B. "Proprietary Information," as used in this Section VII, means
any nonpublic information concerning the Company, including
information relating to the Company's research, product
development, engineering, purchasing, product costs,
accounting, leasing, servicing, manufacturing, sales,
marketing, administration and finances. This information
includes, without limitation: (i) trade secret information
about the Company and its products; (ii) "Inventions," as
defined in Section VI.B; (iii) information concerning any of
the Company's past, current or possible future products.
Proprietary Information or confidential information also
includes any information which is not generally disclosed and
which is useful or helpful to the Company and/or which would
be useful or helpful to competitors. More specific examples
include financial data, sales figures for individual projects
or groups of projects, planned new projects or planned
advertising programs, areas where the Company intends to
expand, lists of suppliers, lists of customers, wage and
salary data, capital investment plans, projected earnings,
changes in management or policies of the Company, testing
data, manufacturing methods, suppliers' prices to us, or any
plans we may have for improving any of our products. This
information is confidential or Proprietary Information
regardless of its form, e.g. oral, written, electronic or
other, and whether or not it is labeled as "proprietary" or
"confidential." The Company's Proprietary Information or
confidential information includes our information and that of
our affiliates and third parties concerning or relating to us.
VIII. COMPETITIVE ACTIVITIES.
A. You agree that during your employment with the Company, you
will not alone, or in any capacity with another person or
entity, (i) directly or indirectly engage in any employment or
activity that competes with the Company's business at the time
your employment with the Company ends, within any state in the
United
Xx. Xxxxxxx X. Xxxxx
January 21, 1998
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CONFIDENTIAL
States or within Canada, (ii) interfere with the Company's
relationships with any of its current or potential
customers.
B. You also agree that for a period of one year after the
termination of this Agreement for any one of the following
reasons: (i) for "cause" as defined above, (ii) voluntarily by
you without "good reason" as defined above; or (iii) in the
event of a non-renewal of the Agreement by you other than for
"good reason", you will abide by clauses (ii) and (iii) of
Section VIII.A above.
IX. CHANGE IN CONTROL.
A. For purposes of this Agreement, a "Change in Control" of the
Company will mean the following:
(i) the sale, lease, exchange or other transfer,
directly or indirectly, of substantially all of the
assets of the Company (in one transaction or in a
series of related transactions) to a person or entity
that is not controlled by the Company;
(ii) the approval by the shareholders of the Company
of any plan or proposal for the liquidation or
dissolution of the Company;
(iii) a change in control of the Company of a nature
that would be required to be reported in response to
Item 5(f) of Schedule 14A of Regulation 14A or to
Item 1 of Form 8-K promulgated under the Securities
Exchange Act of 1934, as amended (the "Act"),
provided that, without limitation, a Change in
Control shall be deemed to have occurred if (i) any
"person" (as such term is used in Sections 13(d) and
14(d)(2) of the Act) is or shall become the
beneficial owner, directly or indirectly, of
securities of the Company representing 30% or more of
the Company's then outstanding securities; or (ii)
during any period of twenty-four (24) consecutive
months, individuals who at the beginning of such
period constitute the entire Board of Directors shall
cease for any reason to constitute a majority thereof
unless the election, or the nomination for election
by the Company's stockholders, of each new director
was approved by a vote of at least two-thirds of the
directors then still in office who were directors at
the beginning of the period.
B. If a Change in Control occurs, the Option will become
immediately exercisable in full and will remain exercisable
for the remainder of its term, regardless of whether you
remain in the employ or service of the Company.
C. For purposes of this Section IX, you shall be entitled to the
severance benefits provided in Section V.D if the date of
termination occurs either (i) while there is to the Company's
knowledge actively pending a proposed transaction, which, if
consummated, could reasonably be expected to result within one
(1) year in a Change in Control, or (ii) within two (2) years
following a Change in Control;
Xx. Xxxxxxx X. Xxxxx
January 21, 1998
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CONFIDENTIAL
unless, in the case of either (i) or (ii), your employment
is terminated or this Agreement is not renewed because of
death or disability or by the Company for "cause" or
voluntarily by you other than for "good reason".
X. MISCELLANEOUS.
A. NO ADEQUATE REMEDY. You understand that if you fail to fulfill
your obligations under this Agreement, the damages to the
Company would be very difficult to determine. Therefore, in
addition to any other rights or remedies available to the
Company at law, in equity, or by statute, you hereby consent
to the specific enforcement of this Agreement by the Company
through an injunction or restraining order issued by an
appropriate court.
B. GOVERNING LAW. The laws of Illinois will govern the validity,
construction, and performance of this Agreement.
C. ARBITRATION. Any and all disputes which arise concerning the
rights, duties or obligations of either party under any
provision of this Agreement shall be resolved exclusively by
binding arbitration in accordance with the following terms and
conditions. The party seeking arbitration shall commence a
proceeding in arbitration in Chicago, Illinois under the Rules
of the American Arbitration Association. Within one month from
one of the party's request for arbitration, the party
requesting arbitration shall appoint one arbitrator and within
one month of the date of such appointment, the other party
shall appoint an arbitrator. Within three weeks of the date
that the second arbitrator is appointed, and prior to any
examination of the merits of the case, the two arbitrators
shall mutually select a third arbitrator. If either of the
parties fails to appoint an arbitrator or if the two
arbitrators fail to appoint the third arbitrator within the
periods referred to above, one shall be appointed in
accordance with the Rules within fifteen (15) days of the
expiry date of the respective period referred to above. The
three arbitrators so selected shall constitute the arbitral
panel. The arbitral panel shall make its decisions by the
majority of its members. The arbitral panel shall render its
decision and award in writing within ninety (90) days from its
final constitution. There shall be no appeal from the decision
and award of the arbitral panel, which shall be final and
binding on the parties and may be entered in any court having
jurisdiction thereof.
D. RIGHTS IN THE EVENT OF DISPUTE. If, with respect to any
alleged failure by the Company to comply with any of the terms
of this Agreement, you hire legal counsel with respect to this
Agreement or institute any negotiations or institute or
respond to legal action to assert or defend the validity of,
enforce your rights under, or recover damages for breach of
this Agreement, the Company shall pay, as they are incurred,
your actual expenses for attorneys' fees and disbursements,
together with such additional payments, if any, as may be
necessary so that the net-after-tax payments to you equal such
fees and disbursements, provided that such payments shall be
reimbursed by you to the Company if the Arbitration
Xx. Xxxxxxx X. Xxxxx
January 21, 1998
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CONFIDENTIAL
panel rules in favor of the Company and further decides
that such reimbursement is appropriate. Further, pending
the resolution of any such claim or dispute, you shall not
be deemed terminated for purposes of this Agreement.
E. MITIGATION. You are not required to mitigate the amount of any
payments to be made pursuant to this Agreement by seeking
other employment or otherwise, nor shall the amount of any
payments provided for in this Agreement be reduced by any
compensation earned by you as the result of your
self-employment or your employment by another employer after
the date of termination of your employment with the Company.
F. CONSTRUCTION. Wherever possible, each provision of this
agreement will be interpreted so that it is valid under the
applicable law. If any provision of this agreement is to any
extent invalid under the applicable law, that provision will
still be effective to the extent it remains valid under the
applicable law. The remainder of this agreement also will
continue to be valid, and the entire agreement will continue
to be valid in other jurisdictions.
X. XXXXXXX. No failure or delay by either the Company or you in
exercising any right or remedy under this agreement will waive
any provision of the agreement. Nor will any single or partial
exercise by either the Company or you of any right or remedy
under this agreement preclude either the Company or you from
otherwise or further exercising these rights or remedies, or
any other rights or remedies granted by any law or any related
document.
H. ENTIRE AGREEMENT. This Agreement is the entire agreement
between the parties and replaces all other oral negotiations,
commitments, writings and understandings between the parties
concerning the matters in this agreement. This Agreement can
only be modified by mutual written consent of the parties. You
acknowledge that you have been advised to seek legal counsel
to review this Agreement with you before you sign it.
I. SUCCESSORS AND ASSIGNS. Except as otherwise provided in
Section IX, this Agreement will be binding upon and inure to
the benefit of the successors and assigns of the Company
whether by way of merger, consolidation, operation of law,
purchase or other acquisition of substantially all of the
assets or business of the Company, and any such successor or
assign will absolutely and unconditionally assume all of the
Company's obligations under this Agreement.
J. NOTICES. All notices, requests and demands given to or made
pursuant hereto will, except as otherwise specified herein, be
in writing and be delivered or mailed to any such party at its
address which:
Xx. Xxxxxxx X. Xxxxx
January 21, 1998
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CONFIDENTIAL
1. In the case of the Company will be:
Xxx-Xxxxxxx Technologies
000 Xxxxxxxxx Xxxxxx, XX
Xxxxx 0000, Xxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxx Xxx-Xxxxxxx, CEO
2. In the case of employee will be:
Xxxxxxx X. Xxxxx
0000 XXX
Xxxx Xxxxx, XX 00000
Any party may, by notice to the other party, designate a changed
address. Any notice, if mailed properly addressed, postage prepaid,
registered or certified mail, will be deemed dispatched on the
registered date or that date stamped on the certified mail receipt, and
will be deemed received within the second business day thereafter or
when it is actually received, whichever is sooner.
K. CAPTIONS. The various headings or captions in this agreement
are for convenience only and will not affect the meaning or
interpretation of this agreement.
Would you please confirm that this agreement is in accordance with your
understanding and that you have received a copy of this letter by signing an
dating it where indicated below, and returning an executed copy for our records.
Very truly yours,
XXX-XXXXXXX TECHNOLOGIES, INC.
/s/ Xxx Xxx-Xxxxxxx
---------------------------
*By: Xxx Xxx-Xxxxxxx, M.D.
Its: Chief Executive Officer
Xxxxxx to and confirmed as of January 21, 1998:
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
*Subject to approval by the Company's Board of Directors.
/s/ ABA
CONFIDENTIAL
April 15, 1999
Xx. Xxxxxxx X. Xxxxx
0000 XXX
Xxxx Xxxxx, XX 00000
Dear Xxxxxxx:
As you are aware, Xxx-Xxxxxxx Technologies, Inc. (the "Company") has
agreed to sell securities (the "Transaction") to certain investors on the
date hereof pursuant to a Private Placement Memorandum dated March 19, 1999
and certain Securities Purchase Agreements (the "Securities Purchase
Agreements") with such purchasers (the "Purchasers"). The Securities Purchase
Agreements specify, as a condition to closing, that (i) the certain letter
agreement dated as of January 21, 1998 between you and the Company regarding
your employment (the "Employment Agreement") be amended; and (ii) you waive
certain rights you may have under such Employment Agreement. Terms not
defined herein shall have the meanings ascribed to such terms in the
Employment Agreement.
1. The first two sentences of SECTION 11.1 of the Employment
Agreement are hereby amended in their entirety to read as follows:
"You agree to devote, on a full-time basis, all of your
business house to the Company's business. You will diligently
perform the duties of your position within guidelines to be
determined by the Board of Directors."
2. SECTION IV.C.3 of the Employment Agreement is hereby amended
in its entirety to read as follows:
"In the event the Company issues a stock dividend, or
effectuates a stock split or exchange of any shares of the
Company, whether by way of reorganization, reclassification,
conversion or other means, the Company shall make appropriate
adjustments to the terms of the Option in order to prevent
dilution or enlargement of your rights."
Notwithstanding the foregoing, the Company has agreed to issue to you
concurrently with the closing of the Transaction additional options to
purchase that number of subordinate voting shares of the Company equal to the
product of (i) five percent (5%) multiplied by (ii) the number of subordinate
voting shares sold in the Transaction (excluding any shares issuable pursuant
to warrants). You acknowledge that any future sales of securities by the
Company will not entitle you to additional options.
3. In the event the Transaction would be deemed a "Change of
Control", or cause a "Change of Control" to have occurred, as such term is
defined in SECTION IX.A of the Employment Agreement, you hereby agree to
waive, only with respect to any deemed "Change of Control" arising out of or
related to the Transaction (which, for greater certainty, includes the change
in constitution of the Board of Directors), any rights you have under SECTION
IX.B, including without limitation the right for the Option to become
immediately exercisable.
4. Except as otherwise specifically set forth herein, the
Employment Agreement shall remain in full force and effect.
You hereby acknowledge that the Company and the Purchasers are entering into the
Securities Purchase Agreements in reliance upon on this letter. Please indicate
your agreement to the foregoing by signing the enclosed copy of this letter
where indicated and returning such executed copy to the Company.
Very truly yours,
Xxx-Xxxxxxx Technologies, Inc.
By: /s/ Xxxxx X. Xxxxxxxx
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Its: Chairman, Board of Directors and
Chairman, Compensation Committee
ACCEPTED AND AGREED:
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
Dated: 4/15/99
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