Exhibit 10.19
AXEDA SYSTEMS INC.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is dated as of the 7th day of
December 2003, and is by and between Axeda Systems Inc., a Delaware corporation
with an office for purposes of this Agreement at 00 Xxxxxx Xxxx, Xxxxxxxxx XX
00000 (hereinafter "Company") and Xxxxxx X. Xxxxxxx (hereinafter "Employee").
W I T N E S S E T H
WHEREAS:
A. The Company and the Employee entered into an Employment Agreement dated
as of the 13th day of July, 2001 (the "Previous Employment Agreement"); and
B. The term of Employee's employment pursuant to the Previous Employment
Agreement expires on December 7, 2003; and
C. Company wishes to continue to retain the services of Employee on
expiration of the term of the Previous Employment Agreement, to render services
for and on behalf of Company, in accordance with the following terms, conditions
and provisions; and
D. Employee wishes to perform such services for and on behalf of Company,
in accordance with the following terms, conditions and provisions.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
herein contained the parties hereto intending to be legally bound hereby agree
as follows:
I. EMPLOYMENT. Company hereby employs Employee and Employee accepts such
employment and shall perform his duties and the responsibilities provided for
herein accordance with the terms and conditions of this Agreement.
II. EMPLOYMENT STATUS. Employee shall at all times be Company's employee
subject to the terms and conditions of this Agreement.
III. TITLE AND DUTIES. Company agrees to employ Employee and Employee
accepts such employment as a full time employee and agrees as per the terms and
conditions of this agreement to serve as and have the title of Executive Vice
President, Chief Financial Officer and Treasurer and perform diligently,
faithfully, and to the best of his ability, duties as reasonably assigned and
instructions given by the Chairman and CEO of Company or other Company officer
as authorized by Company's Board of Directors.
IV. TERM OF SERVICES. The initial term of this Agreement is for a period
commencing on the date first written above and ending on the first anniversary
thereof, subject to the termination section of this agreement. Unless either
party notifies the other at least 60 days prior to its expiration, the Agreement
shall extend automatically for additional one-year periods.
V. BASE COMPENSATION. Employee's base salary for rendered services for the
initial term of this agreement shall be two hundred twenty thousand dollars
($220,000), an annual amount payable in accordance with Company's payroll
procedures and policies as implemented during the term of this agreement. All
references to payments in this Agreement are in U.S. dollars.
VI. ADDITIONAL COMPENSATION. The Company and its Board of Directors shall
have complete discretion to grant Employee any other specific additional
compensation packages proposed for payment or for vesting to Employee, during
the term of this Agreement.
VII. EMPLOYER PERQUISITES. Employee shall be entitled to and shall receive
all employer perquisites as would normally be granted to employees of Company.
Such perquisites to include the following:
1. Health insurance under terms and conditions as provided to other
employees of Company;
2. Four weeks vacation pursuant to Company's stated policy;
3. Paid holidays pursuant to Company's stated policy;
4. $600 monthly car allowance;
5. Quarterly bonus target of $25,000 ($100,000 annually) based on
mutually agreed to quarterly goals and objectives ("Base Bonus"); and
6. Such benefits, as the Company generally makes available to its
employees at the same level.
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The existence, amount and extent of any benefits listed in Paragraphs
VII(1), (2), (3), and (6) above shall be in the sole discretion of the Employer
and any of such plans or benefits may be modified from time to time by the
Employer in such manner as the Employer may determine in its sole discretion. In
the absence of a written mutual agreement on goals and objectives as specified
in Paragraph VII(5), above, the amount of bonus, if any, shall be determined by
the Employer in its discretion.
VIII. EXTENT OF SERVICES. Employee shall devote his entire business time,
attention, and energies to the business of Company, but this shall not be
construed as preventing Employee from investing his assets in the future as a
passive investor in accordance with the provisions of Paragraph XI(2), below
IX. TERMINATION.
1. A termination for "Cause" shall mean a termination for any of the
following reasons: (i) Employee's gross malfeasance or gross nonfeasance; (ii)
Employee is convicted of a felony; (iii) Employee commits an act of fraud
against, or misappropriates property belonging to, Company; or (iv) Employee
commits a material breach of this Agreement or any confidentiality or
proprietary information agreement between Employee and Company, not cured within
thirty (30) days after written notice specifying breach is given to Employee.
Company will provide written notice of the reason for termination in the case of
any termination for Cause. A termination of Employee's employment for any reason
other than the foregoing shall be a termination "without Cause".
2. "Involuntary Termination" shall mean Employee's termination which occurs
by reason of: (i) Employee's involuntary dismissal or discharge by the Company
other than for Cause; or (ii) such individual's voluntary resignation following
(A) a change in his or her position with the Company or Parent or Subsidiary
employing the individual which materially reduces his or her duties and
responsibilities or the level of management to which he or she reports, (B) a
reduction in his or her level of compensation (including base salary, fringe
benefits and target bonus under any performance based bonus or incentive
programs) by more than fifteen percent (15%), (C) a relocation of such
individual's place of employment by more than thirty (30) miles from Malvern PA,
provided and only if such change, reduction or relocation is effected by the
Company without the individual's consent or (D) job abolishment, mutually agreed
upon separation, position elimination due to merger, acquisition, or sale of
assets.
3. It is understood and agreed that this is a personal services contract,
and that Company shall have the right to terminate this agreement on 10 days
notice to Employee, if appropriate, in the event of the disability or death of
Employee which would otherwise prevent him from performing his or her duties.
For purpose of this provision, "disability" shall be defined in accordance with
the definition of "disability" as contained in Company's disability insurance
policy. In the event of Employee's death, any guaranteed monies due under this
agreement would be paid directly to Employee's spouse, or such other person or
persons designated by Employee from time to time in writing, to the extent
permitted by law.
4. In the event: (a) of Employee's Involuntary Termination, or (b) Company
terminates Employee's employment hereunder without Cause, or (c) Employee's
employment is terminated as a result of his death or disability (as provided in
paragraph 3 above), or (d) this Agreement expires or (e) employee resigns upon
sixty days prior written notice after completing six months of services under
this agreement, then, in addition to the payment of all amounts earned by
Employee as of the date of termination or expiration, Company will pay Employee
a lump sum payment equal to Employee's full one year salary, health benefits,
car allowance and Base Bonus as specified in Paragraphs V, VII(1), VII(4), and
VII(5) after expiration or such notice of termination is given. Company shall
make such payment promptly after such expiration or notice of termination is
given, but in no event later than the next regular Company pay period. Upon such
expiration of this Agreement or upon such termination of Employee's employment,
all of Employee's stock options will immediately vest and become exercisable.
X. CONFIDENTIAL INFORMATION.
1. The nature of the work performed and any information belonging to
Company with which Employee may or have become familiar will be treated as
confidential and may not be disclosed to third parties without the written
consent of Company, whether or not this Agreement is in effect. If any portion
of the work performed under this Agreement is of a classified or confidential
nature, or develops into such, Employee agrees to preserve the security of such
work in compliance with all applicable laws and regulations of the United
States.
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2. Employee agrees that Employee shall keep in strictest confidence all
information relating to the products, methods of manufacture, marketing and
sales plans, financial information, customer and supplier information, pricing
information, software, trade secrets or secret processes (except information in
the public domain) or the business or affairs of Company which may be acquired
in connection with or as a result of his employment or otherwise. During the
term of this Agreement and at any time thereafter, without the prior written
consent of Company, Employee will not publish, communicate, divulge, disclose or
use any of such information which has been designated as secret, confidential,
proprietary and/or trade secret, or which from the surrounding circumstances in
good conscience ought to be treated as secret or confidential. Upon termination
of this Agreement Employee will return to Company all documents, graphic
materials, or other materials containing or comprising such confidential
information.
3. Employee agrees and understands that Company does not desire to receive
the proprietary rights or trade secrets of third parties if not so authorized,
and Employee agrees not to disclose any such proprietary rights or trade secrets
to Company.
XI. NON-COMPETITION.
1. Employee acknowledges and agrees that by entering into this Agreement
with Company and engaging in the employment relationship contemplated hereby,
Employee will be performing significant duties on behalf of Company, and
Employee will be exposed to certain valuable know-how and information relating
to a highly competitive industry. Employee also acknowledges and agrees that the
covenants set forth in this section are a material part of the consideration
bargained for by Company, and without Employee's agreement to be bound by such
covenants, Company would not have agreed to enter into this Agreement or to
engage Employee's services.
2. Non-competition. The Employee agrees that during the period that
Employee is employed by the Company and for a period of one (1) year thereafter
(the "Noncompete Period") Employee will not either alone or in concert with
others, directly or indirectly, own, be a partner in, operate, be employed by,
act as an advisor, consultant, agent, officer, director, or independent
contractor for, or otherwise have an interest in or provide services to, any
business competing with the Company ("Competing Business") without the written
consent of the Company. A Competing Business shall include a business that is
competitive with any business in which the Company is currently engaged,
demonstrably anticipates to be engaged or has been engaged during the Noncompete
Period; provided, however, that nothing contained in this Agreement shall
prevent Employee from holding for investment up to 5% of any class of equity
securities of a company whose securities are publicly traded (other than Company
as to which there shall be no such limitation).
3. Non-solicitation. Employee agrees that during the period Employee is
employed by the Company and for a period of one (1) year thereafter, Employee
will not, either alone or in concert with others, directly or indirectly,
solicit, entice, induce or encourage: (a) any employee(s) to leave the
employment of the Company; (b) any customers or prospective customers to
discontinue using the Company's services; (c) any customers to refer prospective
customers to any other Competing Business or to discontinue referring
prospective customers to the Company or to switch customers from the Company or
any of its Affiliated Companies to any other Competing Business; or (d) any
existing or proposed arrangement or other community or institutional affiliation
to discontinue the affiliation or relationship with Company.
XII. REMEDIES. Employee acknowledges and agrees that: (a) the covenants set
forth in sections X and XI of this Agreement are reasonable and are essential to
the business interests and operations of Company; (b) Company will not have any
adequate remedy at law if Employee violates the terms hereof or fails to perform
any of Employee's obligations hereunder; and (c) Company shall have the right,
in addition to any other rights it may have under applicable law, to obtain from
any court of competent jurisdiction preliminary and permanent injunctive relief
to restrain any breach or threatened breach of or otherwise to specifically
enforce any such covenant or any other of Employee's obligations under this
Agreement, as well as to obtain damages and an equitable accounting of all
earnings, profits and other benefits arising from such violation, which rights
shall be cumulative and in addition to any other rights or remedies to which
Company may be entitled.
XIII. NO CONFLICT. Employee represents and warrants to Company that he is
not a party to or otherwise bound by any other employment or services that may,
in any way, restrict his right or ability to enter into this agreement or
otherwise be employed by Company.
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XIV. NOTICES. Any written notice required to be given pursuant to this
agreement shall be hand delivered or sent via fax or E-mail, or delivered by a
national overnight express service such as Federal Express.
XV. JURISDICTION AND DISPUTES. This agreement shall be governed by the laws
of the Commonwealth of Pennsylvania. All disputes hereunder shall be resolved in
the applicable state or federal courts of Pennsylvania. The parties consent to
the exclusive jurisdiction of such courts, agree to accept service or process by
mail, and waive any jurisdictional or venue defenses otherwise available. The
parties reserve the right to mutually agree to binding arbitration in accordance
with the policies of the American Arbitration Association.
XVI. AGREEMENT BINDING ON SUCCESSORS. This agreement shall be binding on
and shall inure to the benefit of the parties hereto, and their heirs,
administrators, and permitted successors and assigns.
XVII. WAIVER. No waiver by either party of any default shall be deemed as a
waiver of any prior or subsequent default of the same or other provisions of
this agreement.
XVIII. SEVERABILITY. If any provision hereof is held invalid or
unenforceable by court of competent jurisdiction, such invalidity shall not
affect the validity or operation of any other provision, and such invalid
provision shall be deemed to be severed from the agreement.
XIX. ASSIGNABILITY. This agreement and the rights and obligations
thereunder are personal with respect to Employee and may not be assigned by any
action of Employee or by operation of law. Company shall, however, have the
right to assign this agreement to a successor in interest to the business or
assets of Company or to any affiliate of Company.
XX. INTEGRATION. This agreement constitutes the entire understanding of the
parties and is intended as a final expression of their agreement. It shall not
be modified or amended except in writing signed by the parties thereto and
specifically referring to this agreement. This agreement shall take precedence
over any other documents that may be in conflict therewith.
IN WITNESS WHEREOF, Company and Employee confirm the foregoing accurately
sets forth the parties respective rights and obligations and agrees to be bound
by having the evidenced signature affixed thereto.
AXEDA SYSTEMS INC.
By: /s/ Xxxx XxXxxx /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxx XxXxxx Xxxxxx X. Xxxxxxx
Title: VP-Human Resources
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