EXECUTION COPY
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into as of the 17th day of January,
1996, by and among INTERNATIONAL DISPENSING CORPORATION, a Delaware corporation
with offices at 000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000 (the
"Company"), and XXX XXXXXXXXX, who resides at 00 Xxxxxxxxx Xxxxx, Xxx Xxxxx, Xxx
Xxxx 00000 (the "the Executive").
W I T N E S S E T H :
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WHEREAS, the Company desires to retain the services of the Executive as
an employee of the Company; and
WHEREAS, the Executive is desirous of becoming an employee of the
Company on the conditions hereinafter provided;
NOW THEREFORE, in consideration of the premises, and of the mutual
covenants herein contained, the parties hereto agree as follows:
1. Employment
The Company hereby agrees to employ the Executive during the Employment
Period, as that term is defined in Section 2, and the Executive agrees to accept
such employment on the terms and conditions hereinafter set forth. During the
Employment Period, the Executive also shall be elected, effective immediately
upon the commencement of the Employment Period, to and shall serve on the Board
of Directors.
2. Employment Period
The term of the Executive's employment hereunder (the "Employment
Period") shall commence on the date the Company's Registration Statement on Form
SB-2 (No. 333-7915) is declared effective by the Securities and Exchange
Commission ("Effective Date") and shall continue until the earlier to occur of
December 31, 1999 or the Termination Date (as defined).
3. Duties and Responsibilities
During the Employment Period
During the Employment Period the Executive shall serve as the Chairman
of the Board of Directors, President and Chief Executive Officer ("CEO") of the
Company. The Executive shall not be required to perform his duties during the
Employment Period in
any location other than New York, New York, other than incidental travel.
As President and CEO, the Executive shall have general management
authority over the day-to-day operations of the Company and in connection
therewith perform such executive duties and responsibilities as may be assigned
to him from time to time by or under the authority of the Board of Directors of
the Company, consistent with his positions as designated in this Section 3, and
in the absence of such assignment, such duties customary to such offices as are
necessary to the successful operations of the Company. During the Employment
Period, the Executive agrees that he will devote a majority of his business time
to the business of the Company, to work with other employees of the Company in a
competent and professional manner and generally to promote the interests of the
Company and its business. The Executive may serve on the boards of directors of
other corporations and engage in other business and charitable activities.
4. Basic Salary
As compensation for services to be rendered by the Executive hereunder
during the Employment Period, the Company hereby agrees to pay or cause to be
paid to the Executive, and the Executive agrees to accept as compensation
hereunder, a base fixed salary ("Basic Salary") at the rate of $180,000 per
annum payable in substantially equal monthly installments in arrears on the date
regular payroll is paid to the employees of the Company. The Basic Salary may be
increased at the discretion of the Board of Directors.
5. Benefits
Executive shall be entitled to any benefits which become available to
the Executive along with other employees of the Company according to his and
their respective positions under any stock option plan or arrangement, bonus,
deferred compensation, incentive compensation or profit-sharing plan or
arrangement, group life insurance plan, hospitalization plan, dental insurance
plan, disability insurance plan, medical services plan, and any other employee
benefit plan or arrangement now or hereafter provided by the Company to any of
its employees during the Employment Period (the "Benefits"). The Executive shall
be entitled to four (4) weeks paid vacation per year. During the Employment
Period, the Executive may participate in all Benefits in effect from time to
time as may be made available to the officers of the Company, whether currently
in effect or adopted hereafter during the Employment Period, to the extent the
Executive meets the eligibility requirements specified in any plan of or
relating to a Benefit.
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6. Life Insurance
If the Executive is insurable, the Company shall purchase a term life
insurance policy on the life of the Executive in the face amount of $1,000,000
for a term commencing as of the date of the purchase of the policy and ending,
subject to paragraph 9 hereof, on the last day of the Employment Period. The
beneficiary of such policy shall be designated by the Executive. The Company
shall maintain such insurance in full force and effect and shall not cancel such
policy or take or omit to take any action which might result in the termination
or cancellation thereof. The Company shall pay all premiums on such policy as
they become due and shall give due proof of said payments to the Executive
within five (5) days after its due date on each premium. If any premium is not
paid within five (5) days after its due date, the Executive may pay or cause the
premiums to be paid, and he shall be entitled to reimbursement from the Company.
The Executive agrees to submit to such medical examinations as may be reasonably
required by any insurance company with respect to such policy.
7. Expenses and Accommodations
During the Employment Period the Company shall pay the Executive for
any reasonable documented travel, hotel, meals, entertainment, telephone, and
other expenses incurred by him in connection with his rendering of services
hereunder.
8. Definitions Relating to Termination
8.1 Disability
The term "Disability" shall mean any physical or mental condition of
the Executive which, in the reasonable discretion of the Board of Directors,
after consultation with the Executive's physician, materially impairs the
Executive's ability to render the services to be performed by him hereunder if
during the Employment Period, for a period of 90 consecutive days or for at
least 120 days in any consecutive 180 day period. The Company shall give the
Executive at least 30 days advanced written notice of the termination of his
employment hereunder for Disability.
8.2 Cause
(a) The term "Cause" shall mean the good faith finding by the Board of
Directors of the Company upon resolution adopted by it of the existence of any
one of the following:
(i) The Executive's failure or refusal to perform specific written
directives consistent with his duties and responsibilities as set
forth in Section 3 hereof, which lack of performance is not cured
within 30 days after written notice thereof or 60 days if at the 15th
day after such written notice and thereafter the Executive is
diligently attempting to cure.
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(ii) Excessive use of alcohol or illegal drugs, interfering with
performance of the Executive's obligations under this Agreement,
which interference is not cured within 30 days after written
notice thereof or 60 days if at the 30th day after such written
notice and thereafter the Executive's diligently attempting to
cure;
(iii) Conviction of a felony or of any crime involving moral
turpitude or fraud;
(iv) Any material breach (not covered by any of the clauses (i)
through (iii) hereof) of any of the provisions of this Agreement,
if such breach is not cured within 30 days after written notice
thereof to the Executive by the Board of Directors.
The Board of Directors shall notify the Executive in writing of its
decision to terminate his employment for Cause which notice shall set forth the
Termination Date (which date shall be no sooner than the date of such notice and
shall be after the lapse of all applicable cure periods) and be accompanied by a
copy of the Board of Director's resolution as provided by this Section 8.2.
(b) If the Executive leaves the employ of the Company other than for
Good Reason (as defined), the cessation of employment will be treated as a
termination for Cause. The Executive shall give the Company at least 30 days
advanced written notice of his decision to leave the employ with the Company
other than for Good Reason.
8.3 Without Cause
The term "Without Cause" shall mean a determination of the Board of
Directors to terminate the Executive for any reason other than Disability or
Cause. The Company shall give the Executive at least six (6) months advanced
written notice of the termination of his employment hereunder Without Cause
which notice shall set forth the Termination Date.
8.4 Good Reason
The term "Good Reason" shall mean (i) the sale by the Company of all or
substantially all of its assets, (ii) a "Change in Control" as hereafter
defined, (iii) any removal of the Executive during the Employment Period from
his positions as the Chairman of the Board of Directors, President and CEO,
except in connection with termination or suspension of the Executive's
employment for death, Disability or Cause, or (iv) a material
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reduction or change in the Executive's duties and responsibilities as Chairman
of the Board of Directors, President and CEO. The Executive shall give the
Company at least 30 days advanced written notice of his decision to terminate
his employment hereunder for "Good Reasons" which notice shall specify the
reasons for his decision and the Termination Date relating thereto.
8.5 Change in Control
A "Change of Control" shall be deemed to have occurred if:
(a) any "person" (as defined in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1994, as amended (the "Exchange Act") is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing fifty percent
(50%) or more of the combined voting power of the Company's then outstanding
securities;
(b) there shall cease to be a majority of the Board comprised as
follows: individuals who on the Effective Date constitute the Board and any new
director(s) whose election by the Board or nomination for election by the
Company's shareholders was approved by a vote of a majority of the directors
then still in office who either were directors or whose election or nomination
for election was previously so approved; or
(c) the shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent at least
sixty-five percent (65%) of the combined voting power of the voting securities
of the Company or such surviving entity outstanding immediately after such
merger or consolidation, or the shareholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all the Company's assets.
8.6 Termination Date. The term "Termination Date" shall mean:
(a) in the case of the termination of the Executive's employment
by the Company for Disability, the date specified in the notice delivered by the
Company pursuant to Section 8.1 hereof which date shall be at thirty 30 days
after the date of such notice;
(b) in the case of the termination of the Executive's employment
by the Company for Cause, the later of (i) the date the Board of Directors
provides the Executive with a written copy of the resolution adopted by the
Board of Directors as
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required in Section 8.2(a) or (ii) the date specified by the Board of Directors
in a written notice required by Section 8.2(a);
(c) in the case of the Executive's terminating his employment for
any reason other than Good Reason, the date specified in the notice delivered by
the Executive pursuant to paragraph 8.2(b) hereof which date shall be at least
30 days after the date of such notice.
(d) in the case of the termination of the Executive's employment
by the Company Without Cause, the date specified in the notice delivered by the
Company pursuant to Section 8.3 hereof which date shall be at least six (6)
months after the date of such notice;
(e) in the case of the termination by Executive of his employment
with the Company for Good Reason, the date specified in the notice delivered by
the Executive pursuant to Section 8.4 hereof which date shall be at least 30
days after the date of such notice; or
(f) in the case of the Executive's death, the last day of the
month after the month in which the Executive dies.
9. Effect of Termination on
Compensation and Incentive Bonus
(a) If the Executive's employment with the Company is terminated
for any reason, the Executive shall be paid his Basic Salary through the
Termination Date.
In addition, if Executive's employment is terminated
by the Company for Disability or Without Cause or if Executive leaves the employ
of the Company for Good Reason he shall be entitled to an amount equal to the
greater of (i) one year's Basic Salary at the highest rate paid to the Executive
during the Employment Period or (ii) the Basic Salary that would have been paid
to the Executive had the Employment Period ended on December 31, 1999 calculated
at the highest rate paid to the Executive during the Employment Period. The
amount due under this Section 9(a) shall be paid within ten (10) days of the
Termination Date.
(b) If the Executive is insurable and if his employment is
terminated by the Company for Disability or Without Cause or if the Executive
leaves the employ of the Company for Good Reason, the Company shall continue to
provide the Executive with the life insurance described in Section 6 hereof
until the later of December 31, 1999 or the first anniversary of the applicable
Termination Date.
(c) Upon the termination of his employment with the Company for
any reason, the Executive shall be entitled to such Benefits under any plans or
arrangements maintained by the Company for any of its employees on the
Termination Date in which Executive
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was participating on the Termination Date in accordance with the terms and
conditions of such plans or arrangements.
10. Indemnification
The Company shall indemnify and hold harmless the Executive to the
fullest extent permitted by the General Corporation Law of Delaware as the same
currently exists or may hereafter be amended. Expenses incurred by the Executive
in defending a civil or criminal action, suit or proceeding brought by any party
other than the Company against the Executive at any time when he has ceased to
serve as such, in respect to the Executive's acts or actions in his official
capacity with the Company, shall be advanced by the Company promptly after the
Executive has delivered to the Company a written request therefor and prior to
final disposition of the action. The indemnification and advancements of
expenses provided by this Section shall not be deemed exclusive of any other
rights to which the Executive may be entitled under any other by-law, agreement,
vote of stockholders or disinterested directors, or otherwise, and shall inure
to the benefit of the heirs, executors and administrators of the Executive to
the fullest extent permitted by General Corporation Law of Delaware as the same
currently exists or may hereinafter be amended.
11. Entire Agreement
This Agreement constitutes the entire agreement of the parties hereto
with respect to the Executive's consultancy to and employment by the Company,
and all prior agreements and arrangements are hereby superseded and terminated
with effect from and after the date hereof. The clause headings used herein are
for convenience of reference only, and shall not define or limit the provisions
of this Agreement.
12. Exercise of Rights
No failure by either party hereto to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right hereunder by either party preclude any
other or future exercise of that right or any other right hereunder by that
party.
13. Validity of Provisions
In case any one or more of the provisions of this Agreement should be
invalid, illegal or unenforceable in any respect, the validity, legality or
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
14. No Assignment
This Agreement shall not be assignable, in whole or in part, by either
party, except that the Company may assign this
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Agreement to and it shall be binding upon any person, firm or company with which
the Company may be merged or consolidated, or which may acquire all or
substantially all of the assets of the Company. In the event of the merger or
liquidation of the Company into another corporate entity, whether foreign or
domestic, the obligations of the Company hereunder to the Executive shall remain
in full force as to such successor entity and no waiver on the Executive's part
shall be deemed made in any respect.
15. Amendment
This Agreement may not be amended, terminated or superseded except by
an agreement in writing between the Company and the Executive.
16. Execution of Agreement
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original hereof, and all of which together shall
constitute one and the same document. This document may be executed and
thereafter transmitted by facsimile and the return facsimile shall constitute an
original.
17. Notices
All notices hereunder shall be given in writing by registered or
certified mail, postage prepaid, return receipt requested, addressed to the
parties at the following respective addresses, or at such other address as may
from time to time be designated by either party to the other hereunder:
To the Executive: Xxx Xxxxxxxxx
00 Xxxxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Telecopier: (000) 000-0000
With a copy to: Lowenthal, Landau, Xxxxxxx & Bring, P.C.
000 Xxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Bring, Esq.
Telecopier: (000) 000-0000
To the Company: International Dispensing Corporation
000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxx
Executive Vice President
Telecopier: (000) 000-0000
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With a copy to: Kramer, Levin, Naftalis
& Xxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Telecopier: (000) 000-0000
18. Governing Law
This Agreement shall be governed by, and construed in accordance with
the substantive laws of the State of New York and the precedents applicable
thereto, exclusive,however, of any provision thereof as to choice of law.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed on authority of the Board of Directors and Xxx Xxxxxxxxx has hereunto
set his hand the day and year first above written.
/s/ Xxx Xxxxxxxxx
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XXX XXXXXXXXX
INTERNATIONAL DISPENSING CORPORATION
By: /s/ Xxxxxx Xxxxxx
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Name: Xxxxxx Xxxxxx
Title: Executive Vice President
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