EMPLOYMENT AGREEMENT
This Employment Agreement dated as of the 16th day of June 1997, between
AVIC Group International, Inc., a Delaware Corporation ("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 and 8 hereof, the term of this Agreement shall commence
on the date hereof and shall terminate on June15, 1999.
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 substantially all of his time and
attention to, but no less than four days per week, 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 matters now existing or hereafter arising
in which the interests of Employer and 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, 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 copies
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 date hereof or hereafter
conducted, directly or indirectly, by Employer during the term of this
Agreement, in any county were 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 the term of this Agreement, Employer shall pay Executive an annual
salary of One Hundred Thousand Dollars ($100,000), payable semi-monthly and
subject to income tax withholdings and other payroll deductions as customary in
respect of Employer's salaried employees in general. The base salary of
Executive for the second year of this Agreement will be determined by the
Compensation Committee of the Board of Directors, but will be no less than One
Hundred Twenty Thousand Dollars ($120,000).
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, it is the intention of the Employer to pay Executive a bonus greater
than One Hundred Thousand Dollars ($100,000) for each complete, but not partial,
year of the term of this Agreement, within thirty days of the end of each year
of employment hereunder. Criteria for the determination of the amount of said
bonus will be as agreed upon by the Executive and the Chairman of the Board
within forty-five days of the date of this Agreement.
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 STOCK OPTIONS. Upon the execution of this agreement, Employer
shall grant stock options to Executive covering 400,000 shares of Common Stock
of Employer. Such options shall be exercisable at a price of $3.00 per share,
and shall have a 10 year term. 250,000 options shall vest 25% on each of the
following dates: June 16, 1997, September 16, 1997, December 16, 1997 and March
16, 1998, provided that the Executive is still employed by Employer at each date
of vesting. The remaining 150,000 options shall vest 25% on each of the
following dates: June 16, 1998, September 16, 1998, December 16, 1998 and March
16, 1999, provided that the Executive is still employed by Employer at each date
of vesting. In the event Executive is terminated by the Company pursuant to
Paragraph 8, or the Executive is terminated without good cause pursuant to
Paragraph 7, all of such stock options shall immediately vest.
5. EXPENSES. Employer will pay or reimburse Executive for such
reasonable travel, entertainment, or other expenses as 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) consecutive weeks), during
the term of this Agreement, Executive's employment under this Agreement shall
automatically terminate and all of Executive's benefits and all payments to
Executive under this Agreement shall immediately terminate.
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 contained in Section 3
of this Agreement;
(b) Executive's conviction by, or entry of a plea of guilty or nolo
contendere 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. EARLY TERMINATION. Subject to Section 7, above, either of Employer or
Executive may terminate Executive's employment hereunder upon thirty days prior
written notice.
9. MISCELLANEOUS.
9.1 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.
9.2 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.
9.3 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 attorneys' fees and other
costs it incurred in that action or proceeding, in addition to any other relief
to which it may be entitled.
9.4 ASSIGNMENT. This Agreement may not be assigned in any manner
whatsoever.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on the day
and year first above written.
EXECUTIVE: EMPLOYER:
AVIC GROUP
INTERNATIONAL, INC.
/s/ Xxxxx X. X'Xxxxx
-----------------------------
Xxxxx X. X'Xxxxx
Address of Executive:
00 Xxxxx Xxxx By: /s/ Xxxxxx X. Xxxxxx, Xx.
Xxxxxx, XX 00000 ------------------------------
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
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.)
