Exhibit 10.17
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of this 16th day of
September, 1996, by and between Allin Communications Corporation, a Delaware
corporation ("Employer"), and Xxx Xxxx XxxXxxxxxx ("Employee"), a resident of
Pennsylvania.
W I T N E S S E T H:
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WHEREAS, Employer desires to employ Employee on a full-time and exclusive
basis and Employee is willing to serve on a full-time and exclusive basis, all
upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein contained and intending to be legally bound hereby, the parties agree as
follows:
Section 1. Employment. Subject to the terms and conditions of this
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Agreement, Employer agrees to employ Employee as Chief Financial Officer of
Employer, and Employee accepts such employment. Employee will diligently and
faithfully and in conformity with the directions of the Board of Directors of
Employer perform the duties of his employment hereunder, and he will devote his
best efforts and attention on a full-time basis to the performance of said
duties.
Section 2. Employment Period. (a) Term. The term of Employee's
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employment hereunder shall begin on September 16, 1996 and shall continue
through December 31, 1998 unless sooner terminated in accordance with the
terms of this Section 2, or extended as provided in the next paragraph
("Employment Period").
(b) Automatic Renewal. If Employee is still employed by Employer on
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December 31, 1998, this Agreement shall be automatically renewed, on the same
terms and conditions set forth in the Agreement, for another two (2) year period
until December 31, 2000, unless either party gives written notice to the other
of its intent not to renew this Agreement at least 60 days prior to December 31,
1998. Thereafter, if on any subsequent two (2) year anniversary, Employee is
still employed by Employer, this Agreement shall be automatically renewed, on
the same terms and conditions set forth in this Agreement, for another two (2)
year period, unless either party gives written notice to the other of its intent
not to renew this Agreement at least 60 days prior to the end of the then
current two (2) year period.
(c) Termination. The Employment Period shall terminate upon (i) Employee's
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death or, unless waived by Employer, his disability, either physical or mental
(as determined by Employer's physician) which may reasonably be anticipated to
render him unable, for a period of at least three (3) months, effectively to
perform the obligations, duties and responsibilities of Employee's employment
with Employer; or (ii) the termination of Employee's employment by the Board of
Directors with cause (as hereinafter defined); or (iii) the passage of ninety
(90) days from the date of delivery by either party to the other of his or its
election to terminate this Agreement. As used herein, "cause" shall mean (i)
dishonest, fraudulent or illegal conduct; (ii) misappropriation of Employer
funds; (iii) conviction of a felony; (iv) excessive use of alcohol, (v) use of
controlled substances or other addictive behavior; (vi) unethical business
conduct; (vii) breach of any statutory or common law duty of loyalty to
Employer; and (viii) action by Employee which is prejudicial or injurious to the
business or goodwill of Employer or a material breach of this Agreement.
Section 3. Employment Compensation and Other Benefits.
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(a) Salary. For services performed by Employee during the Employment
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Period, Employer will pay to Employee a salary of not less than One Hundred
Forty Thousand Dollars ($140,000) per annum, payable in equal semi-monthly
installments of $5,833.33, prorated for any partial period of employment.
(b) Benefits. During the term of his employment hereunder, Employee will
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be entitled to the following:
(i) payment by Employer of the premiums for medical insurance coverage
for himself and his family consistent with programs from time to time in
effect for the employees of Employer;
(ii) not less than four weeks of paid vacation each year of employment;
(iii) such other benefits as are available to other employees of
Employer generally.
(c) Business Expenses. Employer will reimburse Employee for
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reasonable out-of-pocket expenses incurred by him, in accordance with Employer's
policies as in effect from time to time, for entertainment, travel, lodging and
similar items in connection with the business of Employer, provided that
Employee properly accounts for and promptly submits appropriate supporting
documentation with respect to all such expenses.
(d) Discretionary Bonus. The Board of Directors of Employer may, on
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an annual basis, in its sole and absolute discretion, award a bonus to Employee.
(e) Stock Option Plan. Effective upon the commencement of an initial
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public offering of common stock by Employer, Employee will receive, pursuant to
Employer's 1996 Stock Option Plan (the "Stock Option Plan") options to purchase
14,000 shares of the common stock of Employer at an exercise price equal to the
initial public offering price for such common stock. Such options shall vest in
accordance with the terms of the Stock Option Plan. Provided, however, that if
(i) the Company sells all or substantially all of its assets, (ii) merges with
another entity in a transaction in which the Company is not the surviving
corporation, or (iii) any person or group of persons other than the shareholders
of Employer (as existing on the date hereof) holds 50% or more of the common
stock of Employer (collectively, a "Change in Control"), all of the foregoing
options shall vest on the date of the Change in Control. Further provided that
Employer may, in the sole discretion of the Board of Directors, award additional
options to Employee during the term of this Agreement.
(f) Annual Merit Review. Annually, on or before September 15 of each
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year, Employer will conduct an annual review of Employee's performance under
this Agreement and, if deemed appropriate, implement adjustments to this Section
3 for such year.
(g) Severance Pay.
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(i) Termination by Employer. If Employee's employment is terminated
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by Employer during the Employment Period without cause, Employee shall
receive semi-monthly severance payments equal to the semi-monthly base salary
payment which Employee was receiving immediately prior to the termination, until
the one-year anniversary of the date of termination; provided, however, that if
Employee is terminated without cause, after December 31, 1997, Employee shall
receive such severance payments for a period of only six (6) months following
the date of termination. If Employee's employment is terminated by Employer
during the Employment Period, contemporaneously with a Change in Control,
Employee shall receive semi-monthly severance payments equal to the semi-monthly
base salary payment which Employee was receiving immediately prior to the
termination, until the one-year anniversary of the date of termination.
(ii) Voluntary Quit by Employee. If Employee's employment is
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terminated by Employee during the period from September 16, 1996 through
December 31, 1997, due to Employee's voluntary quit, Employee shall receive
semi-monthly severance payments equal to $5,833.33 until the earlier of (a) the
six (6) month anniversary of the termination date or (b) the date on which
Employee begins other full-time employment.
Section 4. Conditions of Employment. As conditions of his employment
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and in consideration of his employment, Employee covenants and agrees as
follows:
(a) that, during the Employment Period, he will devote his full time,
services and attention and best efforts to the performance of his duties and to
the promotion of the business and interests of Employer;
(b) that, during the Employment Period, and for a period of two (2)
years thereafter, he will not, without the prior written consent of the Board of
Directors of Employer, directly or indirectly, as a stockholder (except as a
stockholder owning beneficially or of record less than five percent (5%) of the
outstanding shares of any class of stock of any issuer listed on a national
securities exchange), or as an officer, director, manager, member, employee,
partner, joint venturer, proprietor or otherwise, engage in, become interested
in, consult with, lend to or borrow from, advise or negotiate for or on behalf
of, any business which is of the type in which Employer or any affiliate or
subsidiary of Employer engages during the Employment Period; provided that the
prohibition contained in this subsection 4(b) shall not apply to any business in
which Employer was engaged during the Employment Period if, during the two year
period thereafter, Employer permanently ceases to be engaged in such business;
(c) that, during the Employment Period, and for a period of two (2)
years thereafter, he will not solicit any customer of Employer or any customer
of any affiliate or subsidiary of Employer, directly or indirectly, for the
purpose of enticing such customers to do business with anyone other than
Employer;
(d) that, during the Employment Period, and for a period of two (2)
years thereafter, he will not solicit (or employ or cause to be employed other
than by Employer) other employees of Employer or any affiliate or subsidiary of
Employer, directly or indirectly, for the purpose of enticing them to leave
their employment with Employer or
any affiliate or subsidiary of Employer;
(e) that, during the Employment Period and for a period of two (2)
years thereafter, he will make full and complete disclosure of the existence of
this Agreement and the content of this Section 4 to all prospective employers
with whom he may discuss possible employment;
(f) that, he will refrain from directly or indirectly disclosing,
making available or using or causing to be used in any manner whatsoever, any
information of Employer of a proprietary or confidential nature (including,
without limitation, information regarding inventions, processes, formulas,
systems, plans, programs, studies, techniques, "know-how," trade secrets, income
or earnings, tax data, customer lists and contracts to which Employer is a
party, but excluding any such information which may be in the public domain
through proper means) and, upon termination of his employment, such information,
to the extent that it has been reduced to writing (including any and all copies
thereof), together with all copies of all forms, documents and materials of
every kind, whether confidential or otherwise, shall forthwith be returned to
the Employer and shall not be retained by Employee or furnished to any third
party, either by sample, facsimile or by verbal communication;
(g) that, he will refrain from any disparagement, direct or indirect,
through innuendo or otherwise, of Employer or any of its employees, agents,
officers, directors, shareholders or affiliates;
(h) that, during the Employment Period, he will not, without the prior
written consent in each case of the Board of Directors of Employer: (i)
participate actively in any other business interests or investments which would
conflict with his responsibilities under this Agreement, or (ii) borrow money
from, or lend to, customers (except those commercial institutions whose business
it is to lend money) or individuals or firms from which Employer or any
affiliate or subsidiary of Employer buys services, materials, equipment or
supplies, or with whom Employer or any affiliate or subsidiary of Employer does
business;
(i) that, during the Employment Period, he will not, without the prior
written consent in each case of the Board of Directors of Employer: (i)
exchange goods, products or services of Employer in return for goods, products
or services of any individual or firm or (ii) accept gifts or favors from any
outside organization or agency which, individually or collectively, may cause
undue influence in his selection of goods, products or services for Employer;
(j) that, after the termination of his employment, he will not secure,
or attempt to secure, from any employee or former employee of Employer or any
affiliate or subsidiary of Employer, any information relating to Employer or any
affiliate or subsidiary of Employer or their business operations; and
(k) that he will promptly and voluntarily advise the Board of
Directors of Employer of any activities which might result in a conflict of
interest with his duties to
Employer hereunder, and, further, will make such other and further disclosures
as Employer may reasonably request from time to time.
Employee represents and warrants to Employer that, notwithstanding the
operation of the covenants contained in this Section 4, upon the termination of
his employment hereunder, Employee will be able to obtain employment for the
purpose of earning a livelihood.
Section 5. Injunctive Relief. Because the services to be performed
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by Employee hereunder are of a special, unique, unusual, confidential,
extraordinary and intellectual character which character renders such services
unique and because Employee will acquire by reason of his employment and
association with Employer an extensive knowledge of Employer's trade secrets,
customers, procedures, and other confidential information, the parties hereto
recognize and acknowledge that, in the event of a breach or threat of breach by
Employee of any of the terms and provisions contained in Section 4 or Section 7
of this Agreement, monetary damages alone to Employer would not be an adequate
remedy for a breach of any of such terms and provisions. Therefore, it is
agreed that in the event of a breach or threat of a breach of any of the
provisions of Section 4 or Section 7 of this Agreement by Employee, Employer
shall be entitled to an immediate injunction from any court of competent
jurisdiction restraining Employee, as well as any third parties including
successor employers of Employee whose joinder may be necessary to effect full
and complete relief, from committing or continuing to commit a breach of such
provisions without the showing or proving of actual damages. Any preliminary
injunction or restraining order shall continue in full force and effect until
any and all disputes between the parties to such injunction or order regarding
this Agreement have been finally resolved. Employee hereby agrees to pay all
costs of suit incurred by Employer, including but not limited to reasonable
attorneys' fees, in obtaining any such injunction or order. Employee hereby
waives any right he may have to require Employer to post a bond or other
security with respect to obtaining or continuing any such injunction or
temporary restraining order and, further, hereby releases Employer, its
officers, directors, employees and agents from and waives any claim for damages
against them which he might have with respect to Employer obtaining in good
faith any injunction or restraining order pursuant to this Agreement.
Section 6. Absence of Restrictions. Employee hereby represents and
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warrants that he has full power, authority and legal right to enter into this
Agreement and to carry out his obligations and duties hereunder and that the
execution, delivery and performance by Employee of this Agreement will not
violate or conflict with, or constitute a default under, any agreements or other
understandings to which Employee is a party or by which he may be bound or
affected, including, but not limited to, any order, judgment or decree of any
court or governmental agency.
Section 7. Patents and Inventions. Employee will promptly submit to
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Employer written disclosures of all inventions, improvements, discoveries,
technological innovations and new ideas, relating to Employer's business,
whether or not patentable (hereinafter called "Inventions"), which are directly
or indirectly made, conceived, created or prepared by Employee, alone or jointly
with others, during the Employment Period. Worldwide right, title and interest
in and to the intellectual property rights (including but not limited to
copyrights created in, patents to, or any other form of legal protection as may
be obtained or obtainable in the United
States of America or any foreign country), relating to all such Inventions that
shall be within the existing or contemplated scope of Employer's business at the
time such inventions are made or conceived or which result from or are suggested
by any work Employee or others may do for or on behalf of Employer, shall belong
to Employer. Employee will assign all right, title and interest in and to such
intellectual property rights to Employer, and upon the request of Employer, will
at any time during the Employment Period and after termination of Employee's
employment for any reason, execute all proper papers for use in applying for,
obtaining, maintaining and enforcing such copyrights, patents or other legal
protection as Employer may desire and will execute and deliver all proper
assignments thereof, when so requested, without remuneration but at the expense
of Employer.
Section 8. General.
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(a) Interpretation. If the provisions of subsections 4(b), 4(c) or
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4(d) of this Agreement should be held to be invalid, illegal or unenforceable by
a court of competent jurisdiction because of the time limitation or geographical
area therein provided, such provisions shall nevertheless be effective and
enforceable for such period of time and/or such geographical area as may be held
to be reasonable by such court. Any provision of this Agreement that is
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without invalidating or rendering unenforceable the remaining
provisions of this Agreement, and any such invalidity, illegality or
unenforceability shall not, of itself, affect the validity, legality or
enforceability of such provision in any other jurisdiction.
(b) Notices. In any case where any notice or other communication is
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to be given or made pursuant to any provision of this Agreement, such notice or
communication shall be deemed to be delivered when actually received on the date
specified in the return receipt for a notice or communication mailed by
registered or certified mail, postage prepaid, addressed as follows:
If to Employer:
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Allin Communications Corporation
c/o SeaVision, Inc.
000 Xxxxxxxxx Xxxxxxx
000 Xxxxxxxxx Xxx.
Xxxxxxxxxx, XX 00000
Attention: R. Xxxxxx Xxxxxxx
with copies to:
Xxxxx X. Xxxxxxxxxxx, Esq.
Xxxxxx Xxxxxxx Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, XX 00000
If to Employee:
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Xxx Xxxx XxxXxxxxxx
000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
or such other address or addresses as any party may specify by notice to the
other party given as herein provided.
(c) Headings. The headings in this Agreement are inserted for
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convenience and identification and in no way describe, interpret, define or
limit the scope, extent or intent of this Agreement or any provision hereof.
(d) No Presumption on Interpretation. Nothing herein shall be
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construed more strongly against or more favorably toward either party by reason
of either party having drafted this Agreement or any portion hereof.
(e) Binding Effect. This Agreement shall be binding upon, and inure
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to the benefit of, the parties hereto and their respective heirs, beneficiaries,
executors, administrators, personal representatives, successors and permissible
assigns.
(f) Integration. This Agreement constitutes and contains the entire
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Agreement and understanding between the parties with respect to the subject
matter hereof and supersedes any and all prior agreements, if any,
understandings and negotiations relating thereto. No promise, understanding,
representation, inducement, condition or warranty not set forth herein has been
made or relied upon by any party hereto.
(g) Waivers; Modification. This Agreement, or any provision hereof,
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may be amended, supplemented or modified only by a writing signed by both
parties and may be waived only by a writing signed by the party to be bound
thereby. A written waiver of any provision shall be valid only in the instance
for which given and shall not be deemed to be a continuing waiver or construed
as a waiver of any other provisions.
(h) Governing Law. This Agreement shall be construed in accordance
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with and governed in all respects by the laws of the Commonwealth of
Pennsylvania (without giving effect to the conflicts of laws provisions
thereof).
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
ALLIN COMMUNICATIONS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name Printed: Xxxxxxx X. Xxxxxxxx
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Title: Chief Executive Officer
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WITNESS:
/s/ R. Xxxxxx Xxxxxxx /s/ Xxx Xxxx XxxXxxxxxx
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Xxx Xxxx XxxXxxxxxx
