Exhibit 10.23
EMPLOYMENT AGREEMENT
with
Xxx Xxxxx
AGREEMENT entered into as of the 5th day of November 2001 (the "Effective
Date") between Xxx Xxxxx (the "Employee") and TTR Technologies, Inc., a Delaware
corporation (the "Company").
W I T N E S S E T H
WHEREAS, the Company desires to engage the Employee for the Company in the
position of Vice President of Corporate Strategy, all upon the terms and
conditions contained herein; and
NOW THEREFORE, in consideration of the promises and mutual agreements
hereinafter contained, the parties hereto agree as follows:
1. Engagement & Duties
1.1 With effect from the effective date (as defined in Section 2), the
Company employs Employee and Employee accepts employment with the Company as its
Vice President of Corporate Strategy, upon the terms and conditions set forth
herein. The Employee shall perform faithfully and diligently the duties
customarily performed by persons in the position for which Employee is engaged.
Employee shall devote Employee's full business time and efforts to rendition of
such services and to the performance of such duties as are set forth herein.
The Employee shall further have such duties and responsibilities
commensurate with his position as may be assigned to him from time to time by
the Chief Executive Officer.
1.2 The Employee's authority shall be subject to the authority of the
Chief Executive Officer, to whom the Employee shall report.
1.3 The Parties acknowledge and agree that the nature of the Employee's
duties hereunder will also require substantial domestic and possible
international travel.
2. Term; Termination
2.1 Employee's employment under this Agreement shall commence on the
Effective Date and shall end on the earlier of: (i) the death or disability (as
defined herein) of the Employee, (ii) termination of Employee's employment with
cause (as defined herein); (iii) termination of Employee's employment without
cause by the Company or the Employee upon one (1) month prior written notice;
and (iv) May 5, 2002 (the "Initial Term"); provided, however that at the end of
the Initial Term the
Company may, in its sole discretion upon the decision of its board of directors,
extend or renew this Agreement for an additional twelve months (the "Additional
Term") on the terms and conditions set forth herein, including without
limitation, the Gross Salary payable hereunder, on at least two (2) weeks
written notice to the Employee, prior to the scheduled expiration of the Initial
Term. Within five (5) business days' of Employee's receipt of the notice to
extend or renew for the Additional Term, Employee shall notify the Company in
writing of acceptance or rejection of the renewal or extension; Employee's
failure to so respond within the designated period shall be deemed to be a
rejection.
Notwithstanding the foregoing, in the event that Company or Employee shall
have terminated this Agreement without cause, upon the request of the Company
the Employee shall vacate his position and the Company's premises (if
applicable) on a date specified by the Company which is earlier than the end of
the notice period specified in (iii) above upon payment to Employee, in one lump
sum on the effective date of termination, the amount of Gross Salary payable
under Section 3 from the effective date of termination until the end of such
notice period, less required deductions for state and federal withholding tax,
social security and other employee taxes.
2.2 For the purpose of this Section 2, "disability" shall mean any
physical or mental illness or injury as a result of which Employee remains
absent from work for a period of two (2) successive months, or an aggregate of
two (2) months in any twelve (12) month period. Disability shall occur at the
end of any such period.
2.3 The Company shall have the right to terminate for "Cause" upon notice
to the Employee in the event of (a) a failure by the Employee to perform his
duties hereunder, or (b) a failure by the Employee to comply with the lawful and
proper instructions of the Chief Executive Officer or the Company's Board of
Directors (hereinafter, the "Board"), or (c) Employee's illegal or unethical
acts or conduct which causes material harm or loss to the Company or otherwise
brings notoriety to the Company or has a material adverse effect on the name or
public image of the Company.
2.4 Commencing on (and subject to) the Additional Term, in the event of
termination of Employee by the Company for any reason whatsoever other than as
set out in Section 2.1(ii) or Section 2.3 above, the Employee shall be paid a
one-time payment in an amount equal to three (3) months' Gross Salary then
payable under Section 3.1, less required deductions for state and federal
withholding tax, social security and other employee taxes, which payment shall
be made, at the sole discretion of the Company, in one-lump sum payment within
five (5) business days following the date on which the termination shall become
effective or in periodic installments over a period of time not exceeding 3
months following the effective date of termination (but not less than once a
month) until such amount is paid in full, provided, that, notwithstanding
anything to the contrary contained herein, upon termination of Employee by the
Company as herein provided under this Section 2.4, the Employee shall not be
entitled to the amount payable under Section 2.1(iii).
2.5 During the period following notice of termination until the effective
date of termination by either party for whatever reason, the Employee shall
cooperate
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with the Company and use his good-faith efforts to assist the integration into
the Company the person or persons who will assume the Employee's
responsibilities.
3. Remuneration
Salary. During the Initial Term and the Additional Term (if any), and
subject to the satisfactory performance of the services required to be performed
hereunder by Employee, the Company shall pay to the Employee for all services
rendered hereunder as salary, payable in accordance with the Company's normal
payroll practices but in no event less than once every calendar month, the
amount of $125,000 per annum (the "Gross Salary"), less required deductions for
state and federal withholding tax, social security and other employee taxes.
Commencing on the first anniversary of the Effective Date, Employee shall be
entitled to a review of his Gross Salary.
4. Stock Options
As additional consideration, upon the ratification by the Compensation
Committee of the Company's Board of Directors (the "Compensation Committee"),
the Company shall cause to be issued to the Employee options (hereinafter, the
"Option") to purchase up to 250,000 shares of the Company's Common Stock, par
value $0.001 per share (the "Common Stock"), at a per share purchase price equal
to the Market Price (as defined below) on the date of the grant of the Option.
Options shall vest in equal installments over five (5) years, with the first
installment for 50,000 shares of Common Stock vesting on the first anniversary
of the Effective Date; thereafter, the Option with respect to the remaining
shares shall vest in equal annual installments of 50,000 shares on each
subsequent annual anniversary of the Effective Date. The terms of such options
shall be reflected in a separate written option agreement to be entered into by
the parties within thirty (30) days of the Effective Date, which agreement shall
govern with respect to the Option, the exercise thereof and other terms relating
to the Option. As used herein, the term "Market Price" shall mean the average
sale price of the Company's Common Stock on the business day preceding the date
of grant by the Compensation Committee, as quoted on the Nasdaq National Market.
Notwithstanding anything to the contrary contained herein, in the event
that Employee's employment hereunder (i) expires at the end of the Initial Term
by reason of the election by the Company to not extend or renew the Agreement or
(ii) is terminated by the Company at any time on or after the Additional Term
but before the first anniversary of the Effective Date for any reason other than
for that stated in Section 2.1(ii), then the Option with respect to 50,000
shares of Common Stock shall vest and first become exercisable on the first
anniversary of the Effective Date, provided that if the Employee's employment
hereunder (i) expires at the end of the Initial Term by reason of Employee's
election to not accept the Company's offer to extend or renew such Agreement or
(ii) is terminated by employee at any time on or after the Additional Term but
before the first anniversary of the Effective Date under Section 2.1(iii), then
the Option with respect to 25,000 shares of Common Stock shall vest and first
become exercisable first anniversary of the Effective Date.
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5. Fringe Benefits.
5.1 Vacation. Employee shall be entitled to an aggregate of 15 business
days of paid vacation per year, during the term hereof, prorated for any portion
of a year to date of termination. The timing and duration of any vacation shall
be as agreed upon by the parties. In addition to the foregoing, the Employee
shall be entitled to paid vacation for the following legal holidays in the
United: New Year's, President's Day, Memorial Day, July 4, Labor Day,
Thanksgiving Day (Thursday and Friday), and Christmas; and during the holidays
of Rosh Hashana, Yom Kippur, first two days and last two days of Succot,
Passover and Shavuot.
5.2 No Accumulation. The Employee shall not be entitled to accumulate
unused vacation or sick leave or other fringe benefits from year to year without
the written consent of the Company, unless the accumulation of any such unused
leave and/or fringe benefit is necessitated by the Company's actions or
otherwise caused by Employee's performance of Employee's job-related duties at
the Company. Further, Employee shall not be entitled to receive payments in lieu
of any compensation or payment for or in lieu of said fringe benefits prorated
to the date of termination of this Agreement.
5.3 Health Insurance. The Company intends to establish a Company-wide
health insurance plan under which its employees and their spouses and minor
children may participate. Pending the establishment of a plan that affords
coverage to the Employee in New York, the Employee shall be entitled to be
reimbursed monthly, for medical insurance payments made by the Employee to a
bona fide health and dental insurance provider, in accordance with the Company's
policy as it might change from time to time, up to a maximum monthly amount of
$1,000 payable by the Company. The Company may in its sole discretion and at any
time during the course of this agreement and in compliance with applicable law,
substitute a Company sponsored health and dental insurance program including
without limitation, medical insurance plan for the medical reimbursement
payments specified herein. Subject to the provisions contained in this Section
5.3, the employee's participation in such plans shall be on the same terms and
conditions as other United States-based employees' of the Company.
6. Development Rights
The Employee agrees and declares that all proprietary information
including but not limited to trade secrets, know-how, patents and other rights
in connection therewith developed by or with the contribution of Employee's
efforts during his employment with the Company shall be the sole property of the
Company. Upon the Company's request (whenever made), Employee shall execute and
assign to the Company all the rights of Employee in the proprietary information.
7. Employee Representations
The Employee represents and warrants to the Company that the execution and
delivery of this Agreement and the fulfillment of the terms hereof (i) will not
constitute a breach of any agreement or other instrument to which Employee is
party, (ii) does not require the consent of any person, and (iii) shall be
deemed Employee's
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consent not to utilize during the term of his employment any proprietary
information of any third party, including prior employers of the Employee.
8. Confidentiality
8.1 The term "Information" as used in this section means any and all
confidential and proprietary information including but not limited to any and
all specifications, formulae, prototypes, software design plans, computer
programs, and any and all records, data, methods, techniques, processes and
projections, plans, marketing information, materials, financial statements,
memoranda, analyses, notes, and other data and information (in whatever form),
as well as improvements and know-how related thereto, relating to the Company or
its products. Information shall not include information that (a) was already
known to or independently developed by the Employee prior to its disclosure as
demonstrated by reasonable and tangible evidence satisfactory to the Company;
(b) shall have appeared in any printed publication or patent or shall have
become part of the public knowledge except as a result of breach of this
Agreement by the Employee or similar agreements by other Company employees (c)
shall have been received by the Employee from another person or entity having no
obligation of confidentiality to the Company or (d) is approved in writing by
the Company for release by the Employee.
8.2 Subject to the provisions of Section 8.3 below, the Employee agrees to
hold in trust and confidence all Information disclosed to Employee and further
agrees not to exploit or disclose the Information to any other person or entity
or use the Information directly or indirectly for any purpose other than for
Employee's work with the Company, unless otherwise consented to in writing by
the Company.
8.3 The Employee agrees to disclose the Information only to persons
necessary in connection with Employee's work with the Company or who have
undertaken the same confidentiality obligations set forth herein in favor of the
Company. The Employee agrees to assume full responsibility for the
confidentiality of the Information disclosed to Employee and to prevent its
unauthorized disclosure, and shall take appropriate measures to ensure that such
persons acting on his behalf are bound by a like covenant of secrecy.
8.4 The Employee acknowledges and agrees that the Information furnished
hereunder is and shall remain proprietary to the Company. Unless otherwise
required by statute or government rule or regulation, all copies of the
Information, shall be returned to the Company immediately upon request without
retaining copies thereof.
9. Non-Compete.
9.1 Unless otherwise expressly consented to in writing by the Company,
Employee will not, directly or indirectly, for his own account or as an
employee, officer, director, consultant, joint venturer, shareholder, investor,
or otherwise (except as an investor in a corporation whose stock is publicly
traded and in which the Employee holds less than 5% of the outstanding shares)
interest him/herself or engage, directly or indirectly, in the design,
development, production, sale or distribution of any product or component that
directly or indirectly competes with a product or component (i) being designed,
produced, sold or distributed by the
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Company or any of its affiliates (ii) or to which the Company or any of its
affiliates shall then have proprietary rights; provided such affiliates operate
in a field directly related to the business of the Company or involve
distribution or promoting of the Company's products or technology.
9.2 Unless otherwise expressly consented to in writing by the Company,
Employee will not hire or otherwise contract the services of, whether directly
or indirectly (i) an employee of the Company (ii) a former employee of the
Company whose employment with the Company ended less than twelve months prior to
the date of such hiring, or (iii) any corporation or entity in which such
employee or former employee is an officer, director or shareholder holding 25%
of the equity or is employed providing service to that corporation or entity.
9.3 Employee's undertakings herein under section 9 shall be binding upon
Employee's successors, heirs or assigns, and shall continue until the later of
(i) the expiration of one year from the date of execution of this Agreement or
(ii) the expiration of one year from the date the Employee last represented
him/herself as an employee, agent or representative of the Company or any of its
affiliates, subsidiaries or successors.
9.4 Employee acknowledges that the restricted period of time specified
under this section 9 are reasonable, in view of the nature of the business in
which the Company is engaged and Employee's knowledge of the Company's business
and products. If such a period of time or geographical location should be
determined to be unreasonable in any judicial proceeding, then the period of
time and area of restriction shall be reduced so that this Agreement may be
enforced in such an area and during such a period of time as shall be determined
to be reasonable by such judicial proceeding.
10. Miscellaneous
10.1 Benefit & Assignment This Agreement shall inure to the benefit of and
be binding upon the Company, its successors and assigns. The rights and
obligations of the Employee under this Agreement may not be assigned by the
Employee.
10.2 Entire Agreement This Agreement constitutes the entire understanding
and agreement between the parties, and supersedes any and all prior discussions
and agreements and correspondence, and may not be amended or modified in any
respect except by a subsequent writing executed by both parties.
10.3 Notices All notices or other communications hereunder shall be in
writing and shall be sent to either party by hand or by Registered or Certified
mail, postage prepaid, return receipt requested, or sent by telegram or
facsimile to the address set forth in the Preamble to this Agreement or to such
other address as the recipient may designate by notice in accordance with the
provisions of this section.
10.4 Applicable Law. This Agreement shall be interpreted, governed,
construed and enforced according to the internal laws of the State of New York,
without giving effect to its conflict of laws provisions. Each of the parties
consents to the jurisdiction of the United States District Court for the
Southern District of New
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York or the state courts of the State New York, sitting in Manhattan County, in
connection with any dispute arising under this Agreement and hereby waives, to
the maximum extent permitted by law, any objection, including any objection
based on forum non conveniens, to the bringing of any such proceeding in such
jurisdictions.
10.5 Directors and Officers Insurance. The Company currently has in effect
a standard insurance policy for directors and officers under which Employee, to
the extent that he is deemed to be "key" employee or exercises any or all of the
duties that are exercised by officers or directors of the Company, including
without limitation executive decision making duties, will be covered in
accordance with the terms of such policy.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
signed as of the date stated above.
TTR Technologies, Inc.
By: /s/ Xxxx X. Xxxxxxx /s/ Xxx Xxxxx
---------------------------- --------------------------------
Title: Chief Executive Officer Xxx Xxxxx
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