Exhibit 10.25
EMPLOYMENT AGREEMENT
("the Agreement")
between
IAT Multimedia, Inc., c/o IAT AG, Geschaftshaus Wasserschloss, Xxxxxxxxxxx 00,
XX-0000 Xxxxxxxxx-Xxxxx
(the "Company")
and
Xx. Xxxxxx Xxxx, Xxxxxxxxxxxx 00, XX-0000 Xxxxxx bei Nussbaumen
(the "Executive")
1. Employment Duties.
1.1 Title/Responsibilities. Executive shall hold the title of President,
Chief Executive Officer and Co-Chairman of the Company, and shall
have the powers and duties consistent with such position. Executive
shall also perform all duties which are assigned to him by the Board
of Directors (the "Board"). In particular, Executive shall, without
any additional compensation by either the Company or its
subsidiaries, provide such services to the subsidiaries of the
Company as are required by the Board.
1.2 Full Time Attention. Executive shall devote substantially all of his
business time and attention, energy and skills to the Company and its
subsidiaries during the Employment Term. Executive agrees to notify
and obtain approval from the Board prior to accepting any board of
director or other positions with any other company.
1.3 Services to IAT AG. Services of Executive performed in Switzerland
shall be rendered to IAT AG which entity shall make all payments
pursuant to this Agreement on behalf of the Company and for which IAT
AG shall be reimbursed by the Company to the extent that Executive's
compensation is allocable to the Company.
1.4 Policy Compliance. Executive is required to comply with the Company
policy, practice and procedure in effect during his employment.
2. Compensation
2.1 Base Salary. The Company shall pay to Executive an initial annual
Base Salary (the "Base Salary") of $140,000. The Base Salary shall be
payable to Executive in Swiss Francs at a fixed Swiss Franc to U.S.
Dollar exchange rate of SF1.35 to $1.00. Any increase to the annual
Base Salary is within the sole discretion of the Company.
2.2 Non-Accountable Expense Allowance. The Company shall pay to Executive
a yearly non-accountable expense allowance of SF12,000.
2.3 Bonus Compensation. In addition to the compensation provided above,
the Company will pay Executive a cash incentive bonus for each full
year starting with 1997 during the employment relationship in the
amount of one half of one percent of the Company's net sales in
excess of $5.0 million, provided that such cash bonus will not be
less than $10,000. Such bonuses are payable on March 30 of each year
or such earlier date which is ten business days after receipt and
acknowledgment of the Company's audited financial statements by the
Board of Directors of the Company; provided that Executive remains in
his position with the Company on that date.
2.4 Stock Options. Executive will be granted options to purchase shares
of the Company's common stock under the Company's 1996 Stock Option
Plan, at a price which is the fair market value of the stock at close
of business on the date of the grant. The timing and amounts of such
grants as well as the terms of the options shall be determined by the
Stock Option Committee in accordance with the provisions of the
Company's 1996 Stock Option Plan.
2.5 Benefits. Executive is entitled to the following benefits:
a) Vacation. During the Employment Term, until he reaches the age
of 50, Executive shall be entitled to four weeks (20 working
days) annual paid vacation in addition to customary paid
holidays. Thereafter, in addition to customary paid holidays,
Executive shall be entitled to five weeks (25 working days)
annual paid vacation. Executive may carry over up to 10 unused
vacation days from the prior year, but will cease to accrue
vacation once he has accrued a maximum of 30 days. Executive
will not accrue any more vacation until he has taken enough
vacation to bring his accrued vacation below the maximum.
b) Accident and Sickness Insurance. During the time Executive is
employed under this Agreement, (the "Employment Term"), the
Company agrees to insure Executive for accident and sickness
in accordance with the insurance plan which applied to date to
Executive as Chief Executive Officer of IAT AG.
c) Pension Fund Contributions. The Company shall ensure that
Executive will be able to join a pension fund substantially
under the same terms and conditions as the pension fund
Executive is presently enrolled in as the Chief Executive
Officer of IAT AG. In accordance with the former arrangements
of Executive with IAT AG, the Company will pay 2/3 of the
total pension fund contribution payments which are to be made
(both by the employer and employee) under the pertinent
statutory provisions and Executive shall pay 1/3 of such total
pension fund contributions.
d) Life Insurance. The Company shall maintain a term life
insurance policy such that the sum of the proceeds from the
Swiss pension system and the term life insurance will result
in payment of an aggregate of two times the annual base salary
to Executive's designated beneficiaries should Executive die
during the Employment Term.
e) Director and Officer Insurance. During his term as Director
and/or and Officer of the Company, Executive will be covered
according to the terms of the Company's director and officer
insurance.
f) Automobile. During the Employment Term, the Company agrees to
provide Executive with an automobile substantially equivalent
to the type of automobile customarily provided to executives
occupying similar positions to Executive at other companies
within the industry.
3. Confidentiality.
3.1 Proprietary Information. Executive agrees that he will not disclose
any Proprietary Information (as hereinafter defined) to any
individual or entity at any time while he is employed by the Company
or at any time thereafter, except as is necessary and appropriate in
the ordinary course of performing Executive's duties to the Company
during his employment under this Agreement, or unless such disclosure
has been authorized in writing by the Board, or unless such
disclosure is required by law. For purposes of this Agreement, the
term "Proprietary Information" shall mean any information that was
developed by, became known by, or was assigned or otherwise conveyed,
to the Company, and which has commercial value in the Company's
business. Proprietary Information includes, but is not limited to,
trade secrets, financial information, customer lists and information,
marketing plans, strategies, business forecasts, computer programs,
product plans, research and development information, testing methods
and results, inventions, improvements, formulas, processes,
techniques, designs, know-how and data. Proprietary Information also
includes, without limitation, any information which is generally
regarded as confidential in the Company's industry or which is
generally treated as confidential by the Company.
3.2 Return Of Property. Executive agrees that all documents, records,
apparatus, equipment and other physical property which is furnished
or obtained by Executive in the course of his employment with the
Company shall be and remain the sole property of the Company.
Executive agrees that, upon the termination of his employment, he
shall return all such property and any other property of the Company
or of any of the Company's subsidiaries that may have come into his
possession in the course of the employment relationship or previous
employment relationships with any other company of the IAT group
(whether or not it pertains to Proprietary Information), and agrees
not to make or retain copies, reproductions or summaries of any such
property.
4. Non-Competition
4.1 Covenant not to Compete. For a period of two years after termination
of the Agreement, Executive shall not, to the extent that the Company
does not expressly waive such obligation of the Executive, within
Switzerland, Germany and within any other country where the Company
or any of its subsidiaries are active, directly or indirectly engage
in any business activity, competing with the product lines of the
Company and of its subsidiaries or participate in any such
competitive business.
4.2 Liquidated Damages. Upon breach of his covenant not to compete,
Executive shall pay to the Company liquidated damages in the amount
of $50,000. In addition, Executive shall be liable for any further
damages caused by the breach of his covenant not to compete.
4.3 Specific Performance. In addition to the liquidated damages pursuant
to section 4.2, the Company may request Executive to refrain from or
cease any activities violating his covenant not to compete. In
particular, the Company is entitled to seek interim relief in order
to enforce such specific performance.
4.4 Severance. During the non-competition period, as set out in section
4.1, the Company shall compensate Xx. Xxxx for not competing by
paying him the difference between his average salary (excluding
bonus) he earned in the last twelve months before termination of the
employment relationship and any compensation he receives from a third
party during the non-competition period.
5. Effectiveness, Duration and Termination
5.1 Effectiveness. This Agreement shall be effective as of March 1, 1997.
5.2 Duration. This Agreement has a fixed duration of three years and
will, therefore, expire on March 1, 2000.
5.3 Termination. During the fixed term set out in section 5.2 each party
may only terminate this Agreement for gross misconduct of the other
party. In such a case, the contract may, however, be terminated
immediately without giving advance notice.
5.4 Relief of Duties. Notwithstanding anything to the contrary in this
Agreement, the Company is at any time entitled to relieve Executive
of his functions and duties as set out in section 1. In such a case,
the Company will, however, pay such compensation to Executive as set
out in section 2, until the term of this Agreement expires.
5.5 Extension of Agreement. On December 15, 1999 at the latest the
parties shall enter into negotiations as to an extension of the
employment relationship between Executive and the Company.
6. General Provisions
6.1 Assignment. Executive may not assign, pledge or encumber his interest
in this Agreement or any part thereof.
6.2 No Waiver Of Breach. The failure to enforce any provision of this
Agreement will not be construed as a waiver of any such provision,
nor prevent a party thereafter from enforcing the provision or any
other provision of this Agreement. The rights granted the parties are
cumulative, and the election of one will not constitute a waiver of
such party's right to assert all other legal and equitable remedies
available under the circumstances.
6.3 Severability. The provisions of this Agreement are severable, and if
any provision will be held to be invalid or otherwise unenforceable,
in whole or in part, the remainder of the provisions, or enforceable
parts of this Agreement, will not be affected.
6.4 Entire Agreement. This Agreement constitutes the entire Agreement of
the parties with respect to the subject matter of this Agreement, and
supersedes all prior and contemporaneous negotiations, Agreements and
understandings between the parties, oral or written.
6.5 Amendment, Modification and Waivers. No amendment, modification,
termination or attempted waiver of this Agreement will be valid
unless in writing and signed by the parties.
6.6 Fees and Expenses. If any proceeding is brought for the enforcement
or interpretation of this Agreement, or because of any alleged
dispute, breach, default or misrepresentation in connection with any
provisions of this Agreement, Executive, if Executive is the
successful or prevailing party, will be entitled to recover from the
Company reasonable attorneys' fees and other costs incurred in the
proceedings, in addition to any other relief to which Executive may
be entitled.
6.7 Interpretation. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning
or interpretation of this Agreement.
6.8 English Language. All reports, data, information, notices, schedules,
plans, records and other information required to be provided
hereunder by either party shall be in the English language. If a
translation is made of this Agreement, it shall be made for the
convenience of the parties and the English language of this Agreement
shall be controlling.
6.9 Notices. Unless otherwise provided, any notice required or permitted
under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery or delivery by facsimile to
the party to be notified or four days after deposit with an air
courier or by registered or certified mail, postage prepaid and
addressed to the party to be notified at the address indicated for
such party below, or at such other address as such party may
designate by ten days' advance written notice to the other parties.
If to the Company:
IAT Multimedia, Inc.
Geschaftshaus Wasserschloss
Xxxxxxxxxxx 00
XX-0000 Xxxxxxxxx-Xxxxx, Xxxxxxxxxxx
011-41-56-223-5023 (facsimile number)
If to the Executive:
Xx. Xxxxxx Xxxx
Xxxxxxxxxxxx 00
0000 Xxxxxx b. Nussbaumen, Switzerland
7. Applicable Law and Jurisdiction
7.1 Applicable Law. This Agreement shall be governed by Swiss law, in
particular by Art. 319 et seq. of the Swiss Code of Obligations.
7.2 Jurisdiction. The ordinary Civil Courts of Baden in the Canton of
Aargau shall have exclusive jurisdiction for any disputes arising out
of or in connection with this Agreement.
Place and date: Place and date:
As of March 1, 1997. Turgi As of March 1, 1997. Turgi
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/s/ Xxxxx Xxxx /s/ Xxxxxx Xxxx
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IAT Multimedia, Inc. Xx. Xxxxxx Xxxx
