[LOGO]
XXXXXX TECHNOLOGIES, INC.
EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into this 25th day of
February, 1999, by and between Xxxxxx Technologies, Inc. (hereinafter referred
to as "Xxxxxx Technologies," "Xxxxxx" or "Company"), a Delaware Corporation with
a business address of 00-00 00xx Xxxxxx, Xxxx Xxxxxx Xxxx, XX 00000, and Xxxxxx
X. Rough, Jr. (hereinafter referred to as "Employee"), residing at 000 XxxXxxxxx
Xxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000.
WITNESSETH:
WHEREAS, Xxxxxx Technologies wishes to employ Employee as Chief Financial
Officer and Vice President of the Company; and
WHEREAS, Employee wishes to be so employed.
NOW THEREFORE, in consideration of the premises, of the mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
I Employment
Xxxxxx Technologies hereby employs Employee and Employee hereby agrees to
be employed, commencing March 1, 1999, as Chief Financial Officer and
Vice-President of the Company upon the terms and conditions herein set forth.
Employee shall report to the Company's Chief Executive Officer and shall be
responsible for oversight and administration of the Company's finances and
financial affairs, and any other responsibilities and duties that may be
assigned to him customarily appertaining to the role of Chief Financial Officer
and Vice President, from time to time by the Company's Chief Executive Officer
or Board of Directors of the Company. Employee agrees to devote his reasonable
best diligence and his full time to the performance of his duties hereunder.
Employee's principal place of
Page 1 of 5
February 18, 1999
employment shall be at the Company's headquarters in Long Island City, New York;
Employee shall travel as reasonably required in the performance of his duties
hereunder.
II Term
Employee's term of employment shall be for an initial term of three (3)
years commencing on March 1, 1999 (the "Initial Term"). This Agreement and
Employee's employment thereunder shall be renewable thereafter on a year-to-year
basis (each a "Renewal Term"), unless either party gives 60 days written notice
of termination before the end of the then-current term.
III Compensation & Benefits
Xxxxxx Technologies shall pay Employee, as full consideration for the
services to be rendered hereunder, compensation consisting of the following:
(1) Annual Base Salary of $240,000, payable bi-monthly or in accordance
with any other payment schedule as may be adopted generally for the
payment of the Company's payroll. Employee shall be eligible for
annual merit, or cost-of-living increases as may be determined by the
Company's Chief Executive Officer, subject to approval by the
Executive Compensation Committee of the Board of Directors;
(2) "Sign-On" Bonus of $150,000, payable with Employee's initial Company
paycheck;
(3) Guaranteed Annual Bonus of $40,000, payable at or about the end of
each fiscal year of employment hereunder, commencing April 1, 1999;
Employee shall also be eligible for annual merit bonuses in amounts
greater than $40,000, as may be determined by the Company's Chief
Executive Officer, subject to approval by the Executive Compensation
Committee of the Board of Directors;
(4) 100,000 Incentive Stock Options to be granted upon commencement of
employment under the Xxxxxx Technologies 1996 Employee Stock Option
Plan, as amended ("ESOP"). The exercise price of said options shall be
the fair market value of the Company's stock, as determined by the
Company's Board of Directors, on the date Employee commences
employment hereunder. Said options shall become exercisable in 25%
increments on, respectively, March 1, 2000, March 1, 2001, March 1,
2002, and March 1, 2003;
(5) Immediate vesting of said Stock Options in the event that, and at such
time as, Xxxxxx Technologies has a change in control or is acquired by
another entity or company. (For purposes of this Agreement, "control"
is defined as any event or circumstance that would require disclosure
pursuant to Item 1 of Form 8-K, or any comparable requirement of the
Securities and Exchange Commission.);
(6) Employment benefits generally provided to Xxxxxx employees, including
medical and dental insurance, on terms and in amounts no less
favorable than provided for other Xxxxxx employees similarly employed;
and
Page 2 of 5
February 18, 1999
(7) Fifteen (15) business days per year for vacation time, and five
business days per year for sick or personal leave, during which times
Employee will be compensated the normal pro-rated portion of his base
salary.
IV Termination For Cause
This Agreement may be terminated immediately by the Company in the event
that a majority of the Company's Board of Directors (i) determines that any one
of the following events has occurred, and (ii) votes in favor of said
termination:
(1) that Employee is guilty of fraud, dishonesty, or other acts of
misconduct in his rendering of services for or on behalf of the
Company;
(2) that Employee materially fails or refuses to faithfully or diligently
perform his duties or responsibilities hereunder.
V Severance
(1) In the event that Employee is terminated from employment hereunder
without cause within twelve (12) months of any change in control of
the Company, Employee shall receive, in a lump-sum payment upon
termination, all amounts (including base salary and bonus) to be paid
to him hereunder during the remainder of the Initial Term or any
Renewal Term, but in no event shall he receive less than the amounts
paid to him hereunder during the twelve (12) months prior to said
termination;
(2) In the event that Employee is otherwise terminated by the Company from
employment hereunder without cause, Employee shall receive, in a
lump-sum payment upon termination, all amounts (including base salary
and bonus) to be paid to him hereunder during the remainder of the
Initial Term or any Renewal Term.
VI Non-Disclosure
(1) Employee recognizes that the Company possesses and will continue to
possess non-public information that has been created, discovered,
developed, or otherwise become known to it, and/or in which property
rights have been assigned or otherwise conveyed to it, which
information has commercial value in the business in which it is
engaged or may become engaged. All of the aforementioned information
is hereinafter called "Proprietary Information."
(2) By way of illustration, but not limitation, Proprietary Information
includes trade secrets, processes, structures, formulas, data,
know-how, improvements, inventions, product concepts, techniques,
marketing plans, strategies, forecasts, customer lists and information
about the Company's employees and/or consultants.
(3) At all times, both during Employee's employment by the Company and
after its termination, Employee shall keep in confidence and trust all
Proprietary Information, and Employee shall not use or disclose any
Proprietary Information or anything directly relating to it without
the written consent of the Chief Executive Officer of the Company,
except as may be necessary in the
Page 3 of 5
February 18, 1999
ordinary course of Employee's performing his duties as an employee of
the Company and only for the benefit of the Company.
VII Non-Solicitation
During the period of the Employee's employment by the Company, and for a
period of twelve months following the termination of the Employee's Employment
with the Company for cause (as defined in Paragraph IV of this Agreement),
Employee shall not, directly or indirectly, without the prior written consent of
the Company (a) solicit or induce any employee of the Company to leave his or
her employment; or (b) hire for any purpose any employee of the Company or any
employee who has left such employment within the previous six months; or (c)
solicit or accept the business for any competing products of any party who was a
client or customer of the Company at any time during the term of Employee's
employment hereunder.
VIII Non Competition
During the period of Employee's employment by the Company and for a period
of twelve months following the termination of the Employee's Employment with the
Company for cause (as defined in Paragraph IV of this Agreement), Employee shall
not, directly or indirectly, engage or become interested in any way (whether as
an owner, stockholder, partner, lender, investor, director, officer, employee,
consultant or otherwise) in any activity, business or enterprise, located within
the geographical area of the United States or Canada, that is competitive with
any significant part of the business conducted by the Company or as contemplated
to be conducted by it [which, for purposes of this Paragraph VI, shall be deemed
to be competitive if it involves predominantly similar types of products or
services and is directed at predominantly similar types of customers as any
business of the Company (except that ownership of not more than 5% of the
outstanding securities of any class of any corporation that are listed on a
national securities exchange or traded in the over-the-counter market shall not
be considered a breach of this Paragraph VIII)].
IX Miscellaneous Provisions
(1) Acknowledgments and Affirmations: Employee recognizes, understands,
agrees and acknowledges that the Company has a legitimate and
necessary interest in protecting its goodwill and Proprietary
Information. Employee further affirms, represents, and acknowledges
that in the event of Employee's termination of employment with the
Company, Employee's experience and capabilities are such that the
enforcement of this Agreement will not prevent him from obtaining
employment in another line of business different from that carried on
by the Company and permitted under this Agreement. Employee further
affirms, represents and acknowledges that Employee has received good
and valuable consideration for entering into this Agreement.
(2) Remedies for Breach. Employee agrees that any breach of this Agreement
by Employee would cause irreparable damage to the Company and that, in
the event of such breach, the Company shall have, in addition to any
and all remedies at law, the right to an injunction, specific
performance or other equitable relief to prevent or redress the
violation of Employee's obligations hereunder.
Page 4 of 5
February 18, 1999
(3) Separability. If any provision hereof shall be declared unenforceable
for any reason, such unenforceability shall not affect the
enforceability of the remaining provisions of this Agreement. Further,
such provision shall be reformed and construed to the extent permitted
by law so that it would be valid, legal and enforceable to the maximum
extent possible.
(4) Applicable Law. Any dispute arising under or related in any manner to
this Agreement or to Employee's employment by the Company or to the
termination of said employment shall in all respects be governed by,
adjudicated, construed and enforced in accordance with the laws of the
State of New York.
(5) Jurisdiction and Venue. Employee irrevocably and unconditionally
submits to the exclusive jurisdiction of any United States federal or
state court sitting in New York in any action or proceeding relating
in any manner to this Agreement or to Employee's employment by the
Company or to the termination of said employment. Further, Employee
irrevocably and unconditionally agrees that all claims relating in any
manner to this Agreement or to Employee's employment by the Company or
to the termination of said employment may be heard and determined in
any such court and waives any objection Employee may now or hereafter
have as to venue of any such action or proceeding brought in such
court or the fact that such court is an inconvenient forum.
XXXXXX TECHNOLOGIES, INC. XXXXXX X. ROUGH, JR.
00-00 00XX Xxxxxx
Xxxx Xxxxxx Xxxx, XX 00000
By: /s/ Xxxxx Xxxxxx /s/ Xxxxxx X. Rough, Jr.
------------------------------------ -----------------------------------
(signature)
Title: President and CEO
------------------------------------
Date: 2/25/99 Date: 2/25/99
------------------------------------ -----------------------------------
Page 5 of 5
February 18, 1999
