EXHIBIT 10.17
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is dated as of the 11th day of
December, 1997, and is by and between Quadrant International, Inc., a
Pennsylvania corporation with an office for purposes of this Agreement at 000
Xxxxx Xxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxxxxxx 00000 (hereinafter "QI") and Xxxxxxx
Xxxxx with an address at 000 Xxxxxxx Xxx. Xxxxxx Xxxx, Xxxxxxxxxx hereinafter
"Sharp".
W I T N E S S E T H
WHEREAS:
(a) QI wishes to retain the services of Sharp to render services for
and on its behalf in accordance with the following terms, conditions and
provisions; and
(b) Sharp wishes to perform such services for and on behalf of QI, in
accordance with the following terms, conditions and provisions.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
herein contained the parties hereto intending to be legally bound hereby agree
as follows:
1. EMPLOYMENT. QI hereby employs Sharp and Sharp accepts such employment
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and shall perform his duties and the responsibilities provided for herein in
accordance with the terms and conditions of this Agreement.
2. EMPLOYMENT STATUS. Sharp shall at all times be QI's employee subject
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to the terms and conditions of this Agreement.
3. TITLE AND DUTIES. QI agrees to employ Sharp and Sharp accepts such
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employment as a full time employee and agrees as per the terms and conditions of
this agreement to serve as and have the title of Vice President of Sales and
Marketing of QI with the authority and responsibilities normally associated with
that position, it being agreed Sharp will report directly to QI's President and
will be subject to the President's direction and will perform diligently,
faithfully, and to the best of his ability all duties assigned and instructions
given.
4. TERM OF SERVICES. The initial term of this agreement is for a two year
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period commencing January 1, 1998, subject to the termination section of this
agreement, with the parties agreeing to confirm any subsequent extension of this
initial term in a signed written agreement setting forth any amended or
supplemental conditions.
5. BASE COMPENSATION. Sharp's base salary for rendered services for
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the initial term of this agreement shall be $125,000 an annual amount payable in
accordance with QI's payroll procedures and policies as implemented during the
term of this Agreement.
6. ADDITIONAL COMPENSATION. The additional package compensation proposed
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by this section is subject to QI's receipt of further capital funds required to
finance the management compensation program. QI's Board of Directors will also
have to vote approval of these or any other specific additional compensation
packages proposed for payment or for vesting to Sharp during the term of this
agreement. The proposed post funding
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compensation program allocated for Sharp will be comprised of the following
elements:
a) An annual Cash Bonus of $35,000
b) Commission: For 1998, an amount equal to 3% of the gross contribution
margin in excess of $9,236,000 the "plan"). The plan numbers will be
broken into quarterly amounts with the commission paid quarterly based
on those objectives. For 1999, a commensurate commission plan will be
developed based on 1999 objectives.
c) Stock Options:
i) Initial option: QI shall xxxxx Xxxxx an option (the "Initial
Option") to purchase common stock of QI, which is intended to be
an incentive stock option within the meaning of Section 422 of
the Internal Revenue Code of 1986 as amended. The Initial Option
shall entitle Sharp to purchase 500,000 shares of QI's Common
Stock which equals approximately 1.61 percent (1.61%) of QI's
outstanding capitalization on an as converted and fully diluted
basis as of the date of this agreement. Of this 500,000 shares,
350,000 shares will be granted effective the date of hire,
150,000 shares will be granted effective 180 days after date of
hire. The per share exercise price for the Initial Option shall
be equal to $1.00, the fair market value of QI's common stock per
share at the time of grant, provided however, that in the event
the Board subsequently determines the fair market value of QI's
Common Stock to be less than $1.00 and offers to each person who
holds an option to purchase Common Stock of QI the ability to
elect to amend their respective stock option agreements to reduce
the exercise price set forth therein accordingly, Sharp shall be
eligible to make such an election with respect to the Initial
Option. The initial option shall vest and become exercisable
according to QI' s current incentive stock option program. Vested
options must be exercised within 5 years of date of grant.
(ii) Change of Control provision: Where Change of Control is defined
as (a) the direct or indirect sale or exchange by the
shareholders of QI of all or substantially all of the capital
stock of QI,(b) a merger or consolidation of QI with any other
corporation which results in the voting securities
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of QI outstanding immediately prior thereto representing less
than 50% of the total voting power represented by the voting
securities of QI or such surviving entity outstanding immediately
after such merger or consolidation, or (c) the approval by the
shareholders of QI of a plan of compete liquidation. (d) the
resignation, termination, or demotion in position, title,
organizational level, or responsibilities, whether voluntary or
involuntary, of Xxxxx Xxxxx as President of QI. Upon a change of
Control, the entire unvested portion of all stock options
(together "Unvested Options") held by Sharp under QI's stock
option plans shall automatically vest and Sharp shall have the
right to exercise all or any portion of such stock options so
vested in addition to any portion of the option vested prior to
such vesting. If the change of control occurs before the balance
of 150,000 shares of the Initial Option are granted, then those
shares shall be immediately granted and shall automatically vest,
along with the other 350,000 shares.
d) After the first year of Sharp's employment, further incentive stock
options will be granted as specified and approved by the Board of
Directors by means of stock options at the rate of 25,000 shares per
year for significant performance with an additional stock option at
the rate of 12,500 shares per year for exceptional performance as
defined and determined by the Board of Directors.
e) Car Allowance: $500 per month
f) Business Expenses: In addition to funding the business expenses
associated with the remote office in San Xxxx, and normal
reimbursement of business expenses per QI's stated policy, QI will
reimburse Sharp for personal office expenses in Xxxxxx Xxxx through
the termination of Sharp's $650 lease in October of 1998. In order to
qualify for this reimbursement, the Xxxxxx Xxxx office space will be
utilized for QI's business purposes.
g) Signing Bonus: $10,000 plus vesting of the options for 35,000 shares
granted as part the existing consulting contract between QI and Sharp
7. EXTENT OF SERVICES. Sharp shall devote his entire business time,
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attention, and energies to the business of QI, but this shall not be construed
as preventing Sharp from investing his
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assets as a passive investor in such form or manner as he sees fit as long as
the investments will not require any personal service from Sharp. However, Sharp
agrees not to invest in any entities that compete directly with QI or affiliated
or related companies.
8. TERMINATION.
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a) In the event QI terminates Sharp's employment for any reason
other than Sharp's gross malfeasance or gross nonfeasance, Sharp
will continue to be paid his salary by QI for a period of six
months after such notice of termination is given or until Sharp
shall commence employment of a comparable nature and salary with
another entity, whichever shall first occur. In this regard, it
is understood and agreed that Sharp shall use his best efforts in
attempting to locate such other employment and QI agrees to
cooperate in helping Sharp in the pursuit of any such position
and QI agrees to provide the requisite references and if such
employment is of a lesser salary than his then current salary at
QI, QI agrees to reimburse Sharp for the difference between such
salaries for the six month period specified above. It is agreed
that any stock options awarded Sharp will continue to vest during
this six month period.
b) QI shall have the absolute right to terminate this agreement
immediately in the event of gross
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malfeasance or gross nonfeasance on the part of Sharp.
c) It is understood and agreed that this is a personal services
contract, and that QI shall have the right to terminate this
agreement on 10 days notice to Sharp, if appropriate, in the
event of the disability or death of Sharp which would otherwise
prevent him from performing his duties. For purposes of this
provision, "disability" shall be defined in accordance with the
definition of "disability" as contained in QI's disability
insurance policy. In the event of Sharp's death, any guaranteed
monies due under this agreement would be paid directly to Sharp's
estate as probated.
d) If QI requires Sharp to relocate more than 50 miles from the
initial business location for his position in San Jose,
California, Sharp has the option to exercise the provisions under
Paragraph 8, Section a).
9. NONDISCLOSURE. During the course of his employment with QI, Sharp may
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have occasion to conceive, create, develop, review, or receive information that
is considered by QI to be confidential or proprietary, including information
relating to inventions, patent, trademark and copyright applications,
improvements, know-how, specifications, drawings, cost and pricing date, process
flow
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diagrams, customer and supplier lists, bills, ideas, and/or any other written
material referring to said Confidential or Proprietary information, both during
the term of employment and thereafter.
(a) Sharp, as an employee, agrees to maintain in strict confidence such
Confidential Information.
(b) Sharp further agrees to use his best efforts to ensure that all such
Confidential Information is properly protected and kept from unauthorized
persons or disclosure.
(c) If requested by QI, Sharp agrees to promptly return to QI all
materials, writings, equipment, models, mechanisms, and the like obtained from
or through QI, including but not limited to, all Confidential Information, all
of which Sharp recognizes is the sole and exclusive property of QI.
(d) Sharp agrees that he will not, without first obtaining the prior
written permission of QI: (a) directly or indirectly utilize such Confidential
Information in his or her own business; (b) manufacture and/or sell any product
that is based in whole or in part on such Confidential Information; or (c)
disclose such Confidential Information to any third party.
10. EMPLOYER PERQUISITES. Sharp shall be entitled to and shall receive all
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employer perquisites as would normally be granted to employees of QI. Such
perquisites to include the following:
a. Health insurance under terms and conditions as provided to other
employees of QI.
b. Vacation of 10 business days per annum.
c. Paid holidays pursuant to QI's stated policy.
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d. 401(K) retirement plan pursuant to QI's stated policy.
x. Xxxxx will be reimbursed for his current health insurance plan at
the rate of $300/month for the duration of this contract.
11. REPRESENTATIONS AND WARRANTIES. X. Xxxxx represents and warrants to
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Company that he is not a party to or otherwise bound by any other employment or
services that may, in any way, restrict his right or ability to enter into this
agreement or otherwise be employed by QI.
X. Xxxxx agrees that he will not reveal to QI, or otherwise utilize in
his employment with QI, any proprietary trade secrets or confidential
information of any previous employer.
12. NOTICES. Any written notice required to be given pursuant to this
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agreement shall be hand delivered or sent via fax or E-mail, or delivered by a
national overnight express service such as Federal Express.
13. JURISDICTION AND DISPUTES. A. This agreement shall be governed by the
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State of Pennsylvania.
B. All disputes hereunder shall be resolved in the applicable state or
federal courts of Pennsylvania. The parties consent to the jurisdiction of such
courts, agree to accept service of process by mail, and waive any jurisdictional
or venue defenses otherwise available. The parties reserve the right to mutually
agree to binding arbitration in accordance with the policies of the American
Arbitration Association.
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14. AGREEMENT BINDING ON SUCCESSORS. This agreement shall be binding on
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and shall inure to the benefit of the parties hereto, and their heirs,
administrators, successors, and assigns.
15. WAIVER. No waiver by either party of any default shall be deemed as a
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waiver of any prior or subsequent default of the same or other provisions of
this agreement.
16. SEVERABILITY. If any provision hereof is held invalid or unenforceable
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by a court of competent jurisdiction, such invalidity shall not affect the
validity or operation of any other provision, and such invalid provision shall
be deemed to be severed from the agreement.
17. ASSIGNABILITY. This agreement and the rights and obligations
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thereunder are personal with respect to Sharp and may not be assigned by any
action of Sharp or by operation of law. QI shall, however, have the right to
assign this agreement to a successor in interest to QI or to the purchaser of
any of the assets of QI but not to any other third party.
18. INTEGRATION. This agreement constitutes the entire understanding of
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the parties, and revokes and supersedes all prior agreements between the parties
and is intended as a final expression of their agreement. It shall not be
modified or amended except in writing signed by the parties hereto and
specifically referring to this agreement. This agreement shall take precedence
over any other documents that may be in conflict therewith.
IN WITNESS WHEREOF, QI and Sharp confirm the foregoing accurately sets
forth the parties respective rights and obligations
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and agrees to be bound by having the evidenced signature affixed thereto.
Quadrant International, Inc. Xxxxxxx Xxxxx
By: /s/ Xxxxxxx Xxxxx /s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx, President Signature
Date: 12-15-97 Date: 12-15-97
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