EMPLOYMENT AGREEMENT
This Agreement is entered into by and between Cover-All
Technologies Inc. ("CAT") having a place of business at 00-00
Xxxxxxx Xxxxx, Xxxx Xxxx, Xxx Xxxxxx 00000 and Xxxx X. Xxxxx
("Nobel") of 000 Xxxxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxxxx 00000.
CAT develops and markets applications software solutions and
services to the insurance and related industries. CAT wishes to
continue to employ Nobel as its Chief Financial Officer and Nobel
is willing to accept such continued appointment. The parties
wish to provide in this Agreement for the terms and conditions
applicable to the employment of Nobel as Chief Financial Officer
of CAT.
ACCORDINGLY THE PARTIES HEREBY AGREE AS FOLLOWS:
1. DUTIES OF NOBEL: CAT employs Nobel as Chief Financial
Officer to perform (1) the customary duties of the Chief
Financial Officer of a public corporation, including but not
limited to ensuring compliance with all SEC and statutory
requirements governing the keeping of CAT's accounting and
related records, 10K and 10Q reports, and (2) such other
duties as are stipulated, from time to time, by CAT's
Chairman and Chief Executive Officer. During the term of
this Agreement, Nobel shall devote his full time, ability
and attention to his position of Chief Financial Officer and
the business of CAT on a "best efforts" and professional
basis and at all times such efforts shall be under the
direction of CAT's Chairman and Chief Executive Officer.
During the term of this Agreement, Nobel agrees not,
directly or indirectly, to engage in any business,
commercial or professional activity that will compete or
interfere with the business of CAT, or with the performance
of duties by Nobel hereunder. Nobel further agrees not to
have or enter into any other written or oral agreement for
full time or part time employment with any other entity or
person during the term of this Agreement.
2. NONDISCLOSURE OF CONFIDENTIAL INFORMATION: Nobel agrees
that he will not, at any time during or within a period of
five (5) years after the termination of his employment under
this Agreement, use for his own benefits, either directly or
indirectly, or disclose or communicate in any manner to any
individual, corporation, or other entity, other than CAT,
any trade secrets or confidential information or proprietary
information (collectively "Information") acquired by him
during his employment. As used in this Agreement,
"Information" shall mean any and all information of
whatsoever kind (whether in machine readable or visually
readable form) which is confidential and/or proprietary to
CAT, including, without limitation, all trade secrets,
technical specifications, drawings, schematics, models,
computer programs, system design specifications, systems
architecture specifications and/or all information disclosed
to or known by Nobel as a consequence of his employment by
CAT, including all knowledge, information and materials
regarding CAT's customers and suppliers, as well as
confidential information about financial, marketing,
pricing, costs, employee compensation and any and all copies
of Information. Any breach of this paragraph 3 shall
constitute a ground for termination for cause and such other
relief as may be afforded by applicable law.
3. PERIOD OF EMPLOYMENT: CAT employs Nobel and Nobel accepts
employment for the Year 1999 ("Year 1999" is to be construed
as an employment year commencing from January 1, 1999 and
expiring on December 31, 1999). At its sole option and
election (but without any obligation in respect thereof) CAT
may, upon the expiration of this Agreement, offer to extend
Nobel's employment by CAT upon such terms and conditions as
are offered by CAT to Nobel, provided that such terms and
conditions are no less favorable to Nobel than those set
forth in this Agreement. No later than ninety (90) days
prior to the expiration of the term of this Agreement CAT
shall deliver to Nobel (1) a written offer of continued
employment (pursuant to this paragraph 3) which offer shall
be open for acceptance by Nobel for a period of ten (10)
business days from the date upon which it is delivered to
Nobel, or (2) written notice that Nobel's employment will
terminate with effect from the expiration of the term of
this Agreement. In the event that the notice referred to in
(2) above is not delivered to Nobel ninety (90) days prior
to the expiration of the term of this Agreement, Nobel shall
be entitled to receive a payment upon the termination of his
employment hereunder which is commensurate to the number of
days by which such notice is delayed beyond the provided for
notice period of ninety (90) days (e.g. if such notice is
given sixty (60) days prior to the expiration of this
Agreement, Nobel shall be entitled to a payment in amount
equal to thirty (30) days salary), plus any accrued PTO Days
(as defined below).
4. COMPENSATION:
a. Salary. As compensation for the services rendered by
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Nobel under this Agreement during Year 1999, CAT shall
pay Nobel a salary (the "Salary") of One Hundred Thirty
Thousand ($130,000) Dollars, in twenty-six equal
installments.
b. Bonus. In addition to the payment of the Salary, CAT
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shall pay Nobel a bonus for Year 1999, such bonus to be
paid on the conditions hereinafter set forth:
(1) $25,000 upon CAT achieving for the fiscal
year ending December 31, 1999, earnings per
share on a fully diluted basis ("EPS")
greater than or equal to $.15 per share (but
less than $.20 per share);
(2) $35,000 upon CAT achieving for the fiscal
year ending December 31, 1999, EPS greater
than or equal to $.20 per share (but less
than $.25 per share); and
(3) $50,000 upon CAT achieving for the fiscal
year ending December 31, 1999, EPS of at
least $.25 per share.
The determination as to CAT's EPS for the fiscal year
ending December 31, 1999, shall be made in accordance
with generally accepted accounting principles
consistently applied, shall be based upon the audited
financial statements to be filed by CAT in its
Form 10-K Annual Report with the Securities and
Exchange Commission, and such bonus, if any, shall be
paid no later than 10 days from the date of such
filing.
c. Compensation During Illness. CAT will pay Nobel from
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the date of the commencement of any illness which
renders Nobel unable to fulfill the duties specified in
this Agreement in accordance, as applicable, with the
provisions of CAT's short term disability policy or (in
the case of illness exceeding 179 days in duration) in
accordance with the provisions of CAT's long term
disability insurance plan. In no event shall
compensation paid to Nobel under any disability policy
be less than sixty (60%) percent of the compensation
set forth in clause (a) of this paragraph 4.
Compensation during illness may be reduced by any
amount paid by state or Federal disability insurance or
other program or by other income insurance plans.
5. BENEFITS:
a. INSURANCE: During the term of his employment, CAT
shall provide Nobel with the opportunity to enroll
himself, his wife and dependent children in a
contributory indemnity type medical, prescription and
dental insurance plan administered by the Guardian POS.
Such medical, prescription and dental insurance
coverage shall be provided to Nobel in accordance with
plans in place from time to time by CAT and shall be on
a basis no less favorable than that provided to CAT's
other executive level employees. In addition Nobel
will be entitled to participate in a non-contributory
life insurance plan which will provide for fifty
thousand ($50,000) dollars of life insurance coverage.
b. RETIREMENT PLAN: CAT offers a 401K retirement plan and
Nobel shall be entitled to participate in such plan.
c. PAID TIME OFF: Nobel shall receive eighteen (18) days
paid time off ("PTO Days") in Year 1999, plus CAT-
observed public holidays. All vacation requests shall
be submitted to and shall be subject to the approval of
CAT's Chairman and Chief Executive Officer.
d. CONTINUATION OF BENEFITS DURING ILLNESS: CAT will
continue to provide Nobel with the benefits specified
in this paragraph during the period of any illness
which renders Nobel unable to fulfill the duties
specified in this Agreement.
6. STOCK OPTIONS:
a. Nobel holds options to purchase 15,000 shares of CAT
common stock (the "Old Options") granted in accordance
with the terms and conditions of his employment
agreement with CAT dated January 22, 1998 (the "Old
Employment Agreement"), which Old Options vest over a
three year period.
b. CAT shall xxxxx Xxxxx additional options to purchase
its stock in accordance with the following terms and
conditions:
(i) CAT grants Nobel twenty-five thousand (25,000)
options (the "New Options"), subject to vesting as set
forth below, to purchase one share of CAT ordinary
common stock at the price of $1.75 per share.
(ii) subject always to Nobel being employed by CAT, the
aforesaid options will vest as follows:
8,333 options to vest on December 28, 1999;
8,333 options to vest on December 28, 2000; and
8,334 options to vest on December 28, 2001.
(iii) when vested, the aforesaid options may only be
exercised during Nobel's employment by CAT. Any and
all option rights will expire upon the termination of
Nobel's employment with CAT.
c. In the event that at any time during Year 1999 there is
a "Change of Control" (as defined in paragraph 8
hereof), all of the then unvested Old Options and all
of the then unvested New Options shall automatically
vest and become immediately exercisable,
notwithstanding any provision to the contrary in this
Agreement, the Old Employment Agreement or the stock
option agreements between Nobel and CAT pursuant to
which the Old Options and the New Options were granted.
7. TERMINATION OF EMPLOYMENT: If Nobel wilfully breaches or
habitually neglects the duties which he is required to
perform under the terms of this Agreement, CAT may at its
option terminate Nobel's employment hereunder forthwith by
written notice to Nobel. Upon any such termination CAT
shall pay Nobel an amount equal to three months salary plus
accrued PTO Days.
If Nobel terminates his employment under this Agreement
without cause, Nobel shall be entitled to be compensated up
to the date upon which Nobel ceases employment with CAT plus
accrued PTO Days.
8. CHANGE OF CONTROL. In the event that at any time during
Year 1999 there is a "Change of Control" (as hereinafter
defined), Nobel shall, in the exercise of his sole
discretion and upon the provision of written notice to CAT
within three (3) months after the date of a Change of
Control, be entitled to terminate his employment hereunder
as of the date of provision of such written notice, and CAT
shall in such event pay Nobel immediately a lump sum payment
(the "Change of Control Payment") equal to $75,000.00. The
Change of Control Payment shall be made within ten (10) days
of such written notice. If Nobel's employment hereunder is
terminated pursuant to this paragraph 8, CAT shall have no
further obligations hereunder except as expressly provided
in paragraph 6(c) hereof and under this paragraph 8.
As used herein, a "Change of Control" shall be deemed to
have occurred if (i) any person (including any individual,
firm, partnership or other entity) together with all
Affiliates and Associates (as defined under Rule 12b-2 of
the General Rules and Regulations promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange
Act")) of such person, but excluding (A) a trustee or other
fiduciary holding securities under an employee benefit plan
of CAT or any subsidiary of CAT, (B) a corporation owned,
directly or indirectly, by the stockholders of CAT in
substantially the same proportions as their ownership of
CAT, or (C) CAT or any subsidiary of CAT, is or becomes the
Beneficial Owner (as defined in Rule 13d-3 promulgated under
the Exchange Act), directly or indirectly, of securities of
CAT representing 50% of more of the combined voting power of
CAT's then outstanding securities, such person being
hereinafter referred to as an Acquiring Person; (ii)
individuals who, on the date hereof, are Continuing
Directors (as defined below) shall cease for any reason to
constitute a majority of the Board of Directors of CAT (the
"Board"); (iii) the stockholders of CAT approve a merger or
consolidation of CAT with any other corporation, other than
a merger or consolidation that would result in the voting
securities of CAT outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving
entity) at least 80% of the combined voting power of the
voting securities of CAT or such surviving entity
outstanding immediately after such merger or consolidation,
or (iv) the stockholders of CAT approve a plan of complete
liquidation of CAT or an agreement for the sale or
disposition by CAT of all or substantially all of CAT's
assets. For purposes of this paragraph, the term
"Continuing Director" shall mean (1) any member of the
Board, while such person is a member of the Board, who is a
member of the Board on the date of this Agreement, or
(2) any person who subsequently becomes a member of the
Board, while such person is a member of the Board (excluding
an Acquiring Person or a representative of any Acquiring
Person), if such person's nomination for election or
election to the Board is recommended or approved by a
majority of the Continuing Directors.
9. OFFICER'S INDEMNITY: To the extent permitted by law, CAT
shall indemnify Nobel against any claim or liability and
shall hold Nobel harmless from and pay any expenses
(including, without limitation, legal fees and court costs)
judgments, fines, penalties, settlements and other amounts
arising out of or in connection with any act or omission of
Nobel (other than criminal or fraudulent acts or omissions
or any willful violation of any statute or regulation)
performed or made in good faith for or on behalf of CAT
pursuant to this Agreement, regardless of negligence. CAT
shall not be obligated to pay Nobel's legal fees and related
charges of counsel (with respect to any such claim or
liability) during any period that CAT or its insurer
furnishes at its expense, counsel to defend Nobel. In
addition CAT shall maintain a policy of director's and
officer's liability insurance covering acts or omissions
(other than criminal or fraudulent acts or omissions or any
willful violation of any statute or regulation) by Nobel
made in the performance of his duties for and on behalf of
CAT under this Agreement. If such insurance is not
occurrence-based, CAT shall continue the coverage for a
period of two (2) years after the date of termination of
Nobel's employment with CAT.
10. EXPENSES: Subject to the compliance by Nobel with such
policies regarding expenses and expense reimbursement, as
may be adopted by CAT from time to time, Nobel is authorized
to incur reasonable expenses in the performance of his
duties hereunder in furtherance of the business and affairs
of CAT, and CAT shall reimburse Nobel for all such
reasonable expenses, in all cases upon the presentation by
him of an itemized account in substantiation of such
expenses when claiming reimbursement.
11. PLACE OF EMPLOYMENT: 00-00 Xxxxxxx Xxxxx, Xxxx Xxxx, Xxx
Xxxxxx.
12. ENTIRE AGREEMENT: This Agreement supersedes any and all
other correspondence or agreements, whether oral or written,
between the parties with respect to the subject matter
hereof.
13. GOVERNING LAW: This Agreement shall be governed by the laws
of the State of New Jersey.
IN WITNESS WHEREOF, this Agreement has been signed by a duly
authorized representative of CAT and by Xxxx X. Xxxxx, the day,
month and year indicated below.
SIGNED FOR AND ON BEHALF OF SIGNED BY XXXX X. XXXXX
COVER-ALL TECHNOLOGIES INC.: /s/ Xxxx X. Xxxxx
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By /s/ Xxxxx Xxxxxxx Date: February 19, 1999
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Name: Xxxxx Xxxxxxx
Title: Chairman and Chief Executive Officer
Date: February 19, 1999
