EXHIBIT 10.36
EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT dated January 9, 2001 between Constellation 3D, Inc.
(NASDAQ Symbol: CDDD) ("C3D") and XXXXX XXXXXX, residing at 000 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx ("EMPLOYEE").
Accordingly, the parties hereto, intending to be legally bound, hereby
agree that C3D shall engage Employee as an employee of C3D, and Employee shall
accept such engagement, on the following terms and conditions:
1. TERM
The term of Employee's employment by C3D under this Employment Agreement
shall commence on and as of January 15, 2001 and shall expire one year and six
months (1.5 years) thereafter (the "Term"), unless earlier terminated as
hereinafter provided.
2. TITLE AND DUTIES
During the Term, Employee shall be a full-time employee of C3D employed as
its Chief Legal Officer ("General Counsel"). Employee shall devote such of his
time as C3D determines is reasonably necessary to fulfill his obligations
hereunder; provided, however, that the foregoing shall not preclude Employee
from engaging in charitable and community affairs, managing his personal passive
investments and continuing his board memberships. Employee shall perform such
duties, which shall not be inconsistent with his position as General Counsel of
C3D, as are assigned to him from time to time by the Chairman and Chief
Executive Officer of C3D, and/or the President and/or the Director of Legal
Affairs and any other duties undertaken or accepted by Employee.
3. SALARY
Employee shall receive a base salary of $150,000 per annum during the Term
hereof (the "Base Salary"), increased each year after the first year by an
amount equal to the increase in the CPI for such year but in no event less than
5% per year. Salary payments shall be made in equal installments in accordance
with C3D's then prevailing payroll policy.
4. BONUS
For each of C3D's fiscal year of the Term, Employee shall receive a bonus
which shall be subject to the discretion of the Board of Directors of C3D.
5. STOCK OPTIONS
a. Employee is granted a stock option pursuant to C3D's Incentive Stock
Option Plan under section 422 of the Internal Revenue Code (individually, the
"Option" and collectively, the "Options") to purchase an aggregate of 175,000
shares of common stock of C3D at $6 and 31/32 per share (the "Exercise Price")
subject to anti-dilution and registration rights as provided herein. Any Option
must be exercised not later than 48 months following its vesting. The Options
shall vest as follows:
i. 30,000 shares shall vest on January 16, 2001;
ii. 25,000 shares shall vest on June 30, 2001;
iii. 25,000 shares shall vest on December 31, 2001;
iv. 25,000 shares shall vest on June 30, 2002;
v. 25,000 shares shall vest on December 31, 2002;
vi. 25,000 shares shall vest on June 30, 2003;
vii. 20,000 shares shall vest on December 31, 2003.
b. Registration. The Company shall immediately provide any and all
assistance necessary for the listing of the Option shares upon each stock
exchange on which C3D's stock is registered at such time as each Option vests
and is exercised.
c. Method of Exercise. The Option shall be exercisable only by delivery of
an Exercise Notice which shall state the election to exercise the Option, the
whole number of Shares in respect of which the Option is being exercised, and
such other provisions as may be necessary. Such Exercise Notice shall be signed
by the Optionee and shall be delivered in person or by certified mail to C3D
accompanied by payment of the Exercise Price. The Option shall be deemed to be
exercised upon receipt by C3D of such written notice accompanied by the Exercise
Price.
d. Method of Payment. Payment of the Exercise Price shall be by any of the
following, or a combination thereof, at the election of the Optionee; provided,
however, that such exercise method does not then violate an Applicable Law:
i. cash;
ii. check;
iii. surrender of C3D Shares or delivery of a properly executed form
of attestation of ownership of C3D Shares as may be required (including
withholding of C3D Shares otherwise deliverable upon exercise of the Option)
which have a Fair Market Value on the date of surrender or attestation equal to
the aggregate Exercise Price of the Shares as to which the Option is being
exercised (but only to the extent that such exercise of the Option would not
result in an accounting compensation charge with respect to the C3D Shares used
to pay the exercise price);
iv. delivery of a properly executed Exercise Notice together with
such other documentation as may be required to effect an exercise of the Option
and delivery to the Company of the sale or loan proceeds required to pay the
Exercise Price.
e. Loan of Exercise Price. If so requested by Employee upon an exercise of
any Options contemplated hereby, C3D shall make a loan to Employee in an amount
equal to the
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Exercise Price of such Options. The terms and conditions of the loan shall be
evidenced by a promissory note ("Note") to be executed by Employee. A form of
the Note including a related Security Agreement is attached hereto as Exhibit A.
f. Adjustments Upon Changes in Capitalization, Dissolution or Liquidation:
i. Adjustments upon Changes in Capitalization. Subject to any required
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action by the stockholders of the Company, the number of Shares covered by the
options as well as the price per share of Common Stock covered by the options
shall be proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock split, reverse stock split,
and/or stock dividend.
ii. Dissolution or Liquidation. In the event of the proposed dissolution
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or liquidation of the Company, the Company shall notify Employee as soon as
practicable prior to the effective date of such proposed transaction. The
Company in its discretion may provide for Employee to have the right to exercise
his Option until ten (10) days prior to such transaction as to all of the Shares
covered thereby, including Shares as to which the Option would not otherwise be
exercisable. In addition, the Company may provide that any Company repurchase
right applicable to any Shares purchased upon exercise of an Option shall lapse
as to all such Shares, provided the proposed dissolution or liquidation takes
place at the time and in the manner contemplated. To the extent it has not been
previously exercised, an Option will terminate immediately prior to the
consummation of such proposed action.
g. CHANGE IN CONTROL. In the event of a "change in control" of C3D, the
vesting and exercisability of all outstanding options shall accelerate. The
Options shall be deemed to vest immediately prior to the occurrence of a "change
of control." For purposes hereof, a "change in control" shall be deemed to occur
if:
i. any "person" (as such term is defined in (S) 3(a)(9) of the
Securities Exchange Act of 1934 (the "Exchange Act") and as used in (S)(S)
13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of C3D representing 50 percent or more of the combined voting power
of C3D's then outstanding securities eligible to vote for the election of the
Board (the "Corporation Voting Securities"); PROVIDED, HOWEVER, that the event
described in this paragraph (i) shall not be deemed to be a Change in Control by
virtue of any of the following acquisitions"
(a) by C3D of any subsidiary;
(b) by any employee benefit plan sponsored or maintained by C3D of
any subsidiary;
(c) by any underwriter temporarily holding securities pursuant to an
offering of such securities;
(d) pursuant to a Noncontrol Transaction (as defined in paragraph
(ii)(d);
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ii. the consummation of a merger, consolidation, share exchange or similar
form or corporate reorganization of the C3D or any such type of transaction
involving C3D or any of its Subsidiaries that requires the approval of C3D's
stockholders (whether for such transaction or the issuance of securities
(whether for such transaction or the issuance of securities in the transaction
or otherwise) (a "Business Combination"), unless immediately following such
Business Combination:
(a) 50 percent or more of the total voting power of the corporation
resulting from such Business Combination (including, without limitation, any
corporation which directly or indirectly has beneficial ownership of 100 percent
of the Corporation Voting Securities) eligible to elect directors of such
corporation is represented by shares that were C3D Voting Securities immediately
prior to such Business Combination (either by remaining outstanding or being
converted), and such voting power is in substantially the same proportion as the
voting power of such C3D Voting Securities immediately prior to the Business
Combination; and
(b) no person (other than any publicly traded holding Corporation
resulting from such Business Combination, any employee benefit plan sponsored or
maintained by the Corporation (or the corporation resulting from such Business
Combination)) becomes the beneficial owner, directly or indirectly, of 50
percent or more of the total voting power of the outstanding voting securities
eligible to elect directors of the corporation resulting from such Business
Combination; or
(c) the stockholders of C3D approve a plan of complete liquidation or
dissolution of C3D or the direct or indirect sale or other disposition of all or
substantially all of the assets of C3D and its subsidiaries. This provision (c)
shall not apply to technology licensing joint ventures in which C3D is a
material participant.
(d) Any Business Combination which satisfies the conditions specified
in (a) and (b) shall be deemed to be a "Noncontrol Transaction");
6. BENEFITS AND PERQUISITES
Employee shall be entitled to receive the healthcare and insurance benefits
and perquisites.
7. REIMBURSEMENT FOR EXPENSES
a. Employee shall be expected to incur various business expenses
customarily incurred by persons holding like position, including but not limited
to traveling, entertainment and similar expenses, all of which are to be
incurred by Employee for the benefit of C3D. Subject to C3D's reasonable policy
regarding the reimbursement and non-reimbursement of such expenses, C3D shall
reimburse Employee for such expenses from time to time, at Employee's request,
and Employee shall account to C3D for such expenses.
b. In addition, C3D shall furnish or reimburse the following:
i. Bar Admission and Continuing Legal Education expenses.
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8. PROTECTION OF C3D'S INTERESTS
During the term of Employee's employment by C3D and for a period of one
year subsequent to the term of Employee's employment with C3D, Employee will not
compete in any manner with C3D, except that the foregoing will not prevent
Employee from holding at any time less than 5% of the outstanding capital stock
of any company whose stock is publicly traded. In addition, during the term of
Employee's employment by C3D and for a period of one year subsequent to the term
of Employee's employment by C3D, Employee shall not solicit for employment
and/or employ any of C3D's employees in Employee's individual capacity and/or in
Employee's capacity as an officer, director and/or employee of another business
entity. The bonus indicated in section 4 herein shall serve as separate
consideration for the non-compete and non-solicitation provisions of this
section.
9. CONTRACT RENEWAL
This Agreement shall automatically renew on the same terms and conditions
as set forth herein, unless not later than one month prior to the end of the
Term, either C3D or Employee give written notice that such party does not intend
to renew the Agreement at the end of the Term. In the event this Employment
Agreement is not renewed, fifty percent (50%) of all remaining Options shall
accelerate and vest on the last day of the Term.
10. TERMINATION
a. C3D shall have the right to terminate Employee's employment with
C3D under the following circumstances:
i. Upon death of Employee.
ii. Upon notice from C3D to Employee in the event of an illness
or other disability which has totally and permanently incapacitated him from
performing his duties for three consecutive months or four months in a twelve
month period as determined in good faith by the Board of Directors.
iii. For good cause unless Employee has, within ten days after
the date such notice has been given by C3D, commenced in good faith to cure the
conduct or cause specified in such notice and has completed such cure within 30
days following the date of such notice. Termination by C3D of Employee's
employment for "good cause" as used in this Employment Agreement shall be
limited to gross negligence or willful malfeasance by Employee in the
performance of his duties under this Employment Agreement or the voluntary
resignation by Employee prior to expiration of the Term (other than pursuant to
a valid termination of employment by Employee in accordance with Section 11
hereof) as an employee of C3D without the prior written consent of C3D or
Employee being convicted of a felony.
b. If Employee's employment is terminated pursuant to Section 10(a)(i) or
10(a)(ii) above, Employee's rights and C3D's obligations hereunder shall
forthwith terminate in their entirety, except that, notwithstanding the
foregoing the Options shall continue as provided in this Employment Agreement.
In the event Employee is terminated pursuant to section 10(a)(iii) (for good
cause), C3D's obligations hereunder shall forthwith terminate in their
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entirety, except that notwithstanding the foregoing, all Options which would
vest within six months of the date of Employee's termination shall accelerate
and vest on the date of Employee's termination. To the extent that any other
term or provision of this Employment Agreement shall expressly state that any
such right or obligation shall survive termination of the Agreement pursuant to
Section 10(a) hereof, it shall so survive.
c. Whenever compensation is payable to Employee hereunder during a time
when he is partially or totally disabled and such disability would entitle him
to disability income or to salary continuation payments from C3D according to
the terms of any plan now or hereafter provided by C3D or according to any C3D
policy in effect at the time of such disability, the compensation payable to him
hereunder shall be inclusive of any such disability income or salary
continuation and shall not be in addition thereto. If disability income is
payable directly to Employee by any insurance company under an insurance policy
paid for by C3D, the amounts paid to him by said insurance company shall be
considered to be part of the payments to be made by C3D to him pursuant to this
Section 10(c) and shall not be in addition thereto.
11. TERMINATION BY EMPLOYEE
Prior to the expiration of the Term, Employee shall have the right to
terminate his employment under this Employment Agreement upon 30 days' notice to
C3D given within 60 days following the occurrence of any of the following events
provided that C3D shall have 10 days after the date such notice has been given
to C3D in which to cure the conduct or cause specified in such notice:
a. C3D shall assign duties to Employee hereunder which are
materially inconsistent with his position as General Counsel.
b. C3D shall fail to grant Employee's Options provided for herein or
shall fail to pay any bonus provided for herein, or C3D shall fail to make any
compensation payment required hereunder.
In the event this Employment Agreement shall terminate pursuant to
this Section 11, the Options shall continue as provided in this Employment
Agreement.
12. ASSIGNMENT
C3D shall assign this Employment Agreement to any entity that succeeds to
all or substantially all of C3D's assets or that holds all or substantially all
of the capital stock of C3D or that is otherwise a successor in interest to C3D
generally, and this Employment Agreement shall inure to the benefit of, and be
binding upon, such assignee or successor in interest. This Employment Agreement
is personal to Employee and Employee may not, without the express written
permission of C3D, assign or pledge any rights or obligations hereunder to any
person, firm, corporation or other entity.
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13. NO CONFLICT WITH PRIOR AGREEMENTS
Employee represents and warrants to C3D that neither his commencement of
employment hereunder nor the performance of his duties hereunder conflicts with
any contractual commitment on his part to any third party or violates or
interferes with any rights of any third party.
14. CONFIDENTIALITY
The parties consent and agree that this Agreement and the terms thereof
shall remain confidential and shall not be disclosed to third parties (other
than professional advisors) except as may be required by applicable law.
Employee agrees to execute C3D's standard confidentiality and non-disclosure
agreement currently in effect.
15. ENTIRE AGREEMENT; AMENDMENTS; WAIVER, ETC.
a. This Employment Agreement supersedes all prior and/or
contemporaneous agreements and/or statements, whether written or oral,
concerning the terms of Employee's employment, and no amendment or modification
of this Employment Agreement shall be binding unless set forth in a writing
signed by C3D and Employee. No waiver by either party of any breach by the other
party of any provision or condition of this Employment Agreement shall be
effective unless in writing and signed by the party effecting the waiver, and no
such waiver shall be deemed a waiver of any similar or dissimilar provision or
condition at the same or any prior or subsequent time.
b. Nothing herein contained shall be construed so as to require the
commission of any act contrary to law, and wherever there is any conflict
between any provision of this Employment Agreement and any present or future
statute, law, ordinance or regulation, the latter shall prevail, but in such
event the provision of this Employment Agreement affected shall be curtailed and
limited only to the extent necessary to bring it within legal requirements.
c. All payments required to be made to Employee hereunder, whether
during the term of his employment hereunder or otherwise, shall be subject to
all applicable federal, state and local tax withholding laws.
d. This Employment Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to its
conflicts of law principles. Both parties consent to the exclusive jurisdiction
of New York State.
e. Legal Fees and Expenses. In the event that a claim for payment or
benefits under this Agreement is disputed, upon resolution of such dispute, C3D
shall pay all reasonable attorneys' fees and expenses incurred by the Employee
in pursuing such claim, provided that the Employee is substantially
successfully. In the event a court of competent jurisdiction deems Employee's
claims frivolous, Employee shall be required to reimburse C3D for legal fees
incurred in defending an action commenced by Employee against C3D. Employee
shall not be required to mitigate damages by seeking employment elsewhere.
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f. Indemnification: Employee shall be entitled to indemnification by
C3D consistent with indemnification provided to C3D's officers and directors. In
the event Employee is named as a party in a suit arising from his capacity as an
officer, director and/or employee of C3D, Employee shall be provided a defense
at the Company's expense and indemnify Employee from any judgment that may be
rendered therein.
16. NOTICES
All notices that either party is required or may desire to give the other
shall be in writing shall be effective (i) upon personal delivery or (ii) three
business days after deposit of same with the United States Postal Service for
delivery by certified mail, return receipt requested, addressed to the party to
be given notice as follows:
To C3D:
Constellation 3D, Inc.
000 Xxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx, Esq. and Xx. Xxxxxxxx Xxxxxxxxxx
To Employee:
Xxxxx Xxxxxx 000 Xxxx 00xx Xxxxxx - 00X, Xxx Xxxx, XX 00000-0000
With copies to:
Xxxx Slawotski, Esq.
RubinBaum LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Either party may by written notice designate a different address for giving
of notices. The date of mailing of any such notices shall be deemed to be the
date on which such notice is given.
17. HEADINGS
The headings set forth herein are included solely for the purpose of
identification and shall not be used for the purpose of construing the meaning
of the provisions of this Employment Agreement.
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IN WITNESS WHEREOF, the parties have executed this Employment Agreement as
of the date first above written.
CONSTELLATION 3D, INC.
/s/ Xxxxxxx Xxxxxxxx
By:______________________________
Name:Xxxxxxx Xxxxxxxx
Title:Director of Legal Affairs
/s/ Xxxxx Xxxxxx
______________________________
XXXXX XXXXXX
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