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EXHIBIT 10.4
AGREEMENT
Employment Agreement, between Applied Systems, Inc. (the "Company") and Xxxxxxx
XxXxxxxx (the "Employee").
1. For good and sufficient consideration, the Company employs the
Employee on the following terms and conditions.
2. Term of Employment. Subject to the provisions for the termination set
forth below, the initial term of this agreement will begin on May 4, 1998.
The initial term of this agreement shall terminate on May 4, 2000,
unless sooner terminated.
The term of employment shall be renewed automatically for successive
periods of one (1) year each (a "Renewal Term") at an Annual Salary at least
equal to the Annual Salary in the preceding year, after the expiration of the
initial term and any subsequent Renewal Term, unless the Board of Directors
provides the Employee, or Employee provides the Board of Directors with written
notice to the contrary at least sixty (60) days prior to the end of the initial
term or of any Renewal Term.
3. Salary. The Company shall pay Employee a salary of $11,250.00 per
month, for the services of the Employee, payable at regular payroll periods.
In addition, Employee shall be eligible for an annual discretionary bonus and
participation in any other compensation plans as the Company may create from
time to time.
4. Duties and Position. The Company hires the Employee in the capacity
of Chief Financial Officer. The Employee's duties may be reasonably modified
at the Company's discretion from time to time.
5. Employee to Devote Full Time to Company. The Employee will devote
full time, attention, and energies to the business of the Company, and, during
this employment, will not engage in any other business activity, regardless of
whether such activity is pursued for profit, gain, or other pecuniary advantage.
Employee is not prohibited from making personal investments in any other
businesses provided those investments do not require active involvement in the
day to day operation of said companies.
6. Confidentiality or Proprietary Information. Employee agrees, during
and for two (2) years after the term of his employment, not to reveal
confidential information, or trade secrets as defined in the Illinois Trade
Secrets Act, 765 ILCS section 1065, et seq., to any person, firm, corporation,
or entity. Should Employee reveal or threaten to reveal this information, the
Company shall be entitled to an injunction restraining the Employee from
disclosing same, or from rendering any services to any entity to whom said
information has been or is threatened to be disclosed by employee. The right to
secure an injunction is not exclusive, and the Company may pursue any other
remedies it has against the Employee for a breach or threatened breach of this
condition, including the recovery of damages from the Employee.
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7. Reimbursement of Expenses. The Employee may incur reasonable
expenses for furthering the Company's business, including expenses for
entertainment, travel, and similar items. The Company shall reimburse Employee
for all business expenses after the Employee presents an itemized account of
expenditures, pursuant to Company policy.
8. Vacation. The Employee shall be entitled to a yearly vacation. For
1998, Employee shall be entitled to two weeks paid vacation. For 1999 and
future years, vacation shall accrue monthly at a rate of 3 weeks per year.
9. Termination of Agreement. With cause, the Company may, without
notice, terminate this agreement at any time. The Company shall be liable to
the Employee only to the date of such termination.
For purposes of this Agreement "cause" shall exclusively consist of the
following:
(i) Employee shall have breached any of his material obligations or
duties under this Agreement or the fiduciary duty of loyalty
owed to Company and which breach in not cured within thirty
(30) days after written notice from Company;
(ii) Employee shall have refused to, or willfully failed to, perform
his material duties hereunder;
(iii) Employee shall have committed intentional acts that materially
impair the goodwill or business of the Company or cause
material damage to its property, goodwill or business; or
(iv) Employee shall have been convicted of any felony or act of
fraud, theft, misappropriation or embezzlement.
Without cause, the Company may terminate this agreement at any time upon
one day written notice to the Employee. If the Company requests, the Employee
will continue to perform his duties and may be paid his regular salary up to the
date of termination. In addition, the Company will pay the Employee on the date
of the termination a severance allowance in the amount of 6 months of salary
less taxes and social security required to be withheld and employee shall
receive 6 months of health insurance coverage at the Company's expense. Without
cause, the Employee may terminate employment upon 30 days' written notice to the
Company. Employee may be required to perform his or her duties and will be paid
the regular salary to date of termination but shall not receive severance
allowance if termination is by Employee.
Notwithstanding anything to the contrary contained in this agreement,
Employee may terminate the Employee's employment, upon 30 days' notice to the
Company, should any of the following events occur.
a) The sale of substantially all of the Company's assets to a
single purchaser or group of associated purchasers;
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b) The sale, exchange, or other disposition, in one transaction
of the majority of the Company's outstanding corporate
shares;
c) The Company's decision to terminate its business and
liquidate its assets;
d) The merger or consolidation of the Company with another
company.
e) Bankruptcy or chapter 11 reorganization.
f) A material diminution in Employee's duties and
responsibilities.
Under the above circumstances, the Company will pay the Employee
on the date of the termination a severance allowance in the
amount of 6 months of salary less taxes and social security
required to be withheld and employee shall receive 6 months of
health insurance coverage at the Company's expense.
The compensation under this Agreement shall be the Employee's
exclusive remedy.
10. Death Benefit. Should Employee die during the term of
employment, the Company shall pay to Employee's estate any compensation
due through the end of the month in which death occurred.
11. Restriction on Post Employment Competition. For a period of two
(2) years after the end of employment, the Employee shall not control,
consult to or be employed in any capacity by any direct competitor
(insurance automation and specific automation produced by the Company) of
the Company, either by soliciting any of its accounts or by operating
within Employer's general trading area.
12. Assistance in Litigation. Employee shall, upon reasonable
notice, furnish such information and proper assistance to the Company as
it may reasonably require in connection with any litigation in which it
is, or may become, a party either during or after employment.
13. Limited Effect of Waiver by Company. Should either party waive
breach of any provision of this agreement, that waiver will not operate or
be construed as a waiver of further breach.
14. Severability. If, for any reason, any provision of this
agreement is held invalid, all other provisions of this agreement shall
remain in effect. If this agreement is held invalid or cannot be
enforced, then to the fullest extent permitted by law, any prior agreement
between the Company (or any predecessor thereof) and the Employee shall be
deemed reinstated as if this agreement had not been executed.
15. Assumption of Agreement by Company's Successors and Assignees.
The Company's rights and obligations under this agreement will inure to the
benefit and be binding upon the Company's successors and assignees.
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16. Oral Modifications not Binding. This instrument is the entire
agreement of the Company and the Employee. Oral changes have no effect.
It may be altered only by a written agreement signed by the party against
whom enforcement of any waiver, change, modification, extension, or
discharge is sought. This Agreement adopts and incorporates by reference,
Applied Systems Employee Handbook, to the extent the Employee Handbook
does not specify conflict with the terms contains herein.
17. Applicable Law. This Agreement shall be governed by the laws of
the State of Illinois.
18. Arbitration. Except for the Company's right to seek an
injunction pursuant to paragraph 6 above, all other matters relating to
interpretation, performance or breach of the Agreement shall be the
subject of single arbitration binding arbitrators in Will County,
Illinois, under the auspices and pursuant to the Rules of the American
Arbitration Association. The prevailing party in such arbitration shall
be entitled to recover reasonable costs and reasonable attorneys fees.
Signed this 17th day of April 1998
APPLIED SYSTEMS, INC.
/s/ XXXXX X. XXXXXXX /s/ XXXXXXX X. XXXXXXXX
President/CEO Xxxxxxx XxXxxxxx
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