EXHIBIT 6.9.5
EMPLOYMENT AGREEMENT
This Agreement is made and entered into as of October 6, 2003 ("Commencement
Date") between Digital Descriptor Systems, Inc., a Delaware corporation (the
"Company"), and Xxxxxxx X. Xxxxxx (the "Employee")
RECITALS
WHEREAS,
A. The Company desires to employ the Employee as President and Chief
Executive Officer of the Company, or for such other duties as the Board of
Directors may determine, and in such capacities Employee shall render valuable
services to the Company and will have access to proprietary and confidential
information about the Company, and
B. Employee desires to accept such employment, and,
C. The Company's Board of Directors has approved and authorized the
execution of this Agreement.
THEREFORE, in consideration of the recitals, mutual covenants and
agreements contained in this Agreement, the Company and Employee agree as
follows:
SECTION I. Employment.
(a) The Company hereby employs the Employee and the Employee hereby
accepts employment with the Company, on the terms and subject to the conditions
herein set forth. He shall provide such services and perform such functions as
shall be determined from time to time by the Board of Directors of the Company.
If elected or appointed, he shall also serve as a director or officer of the
Company or its subsidiaries or affiliates. He understands and agrees that he may
be required to undertake business travel.
(b) Employee represents and warrants that his employment under this
Agreement, and his compliance with all the terms and provisions of this
Agreement, do not and will not (I) violate or conflict with any employment
agreement, secrecy, confidentiality or non-compete agreement, or any other
agreement or instrument to which he is a party or is otherwise bound or
affected, or against, the Company, the shareholders, officers or directors of
the Company, or any of the affiliates of any of the above persons (collectively,
the "Indemnities") in connections with such employment or such compliance.
SECTION 2. Term.
The Employee's employment shall begin immediately following the
closing of re-financing the Company and the transfer of funds amounting to
$22,000.00, (plus any approved expenses) which represents 50% of the sum of
outstanding debt by the company for past consulting services provided by
Employee. The balance of $22,000.00 will be provided to Employee in Company
Common stock, valued at a price equal to market price as published on the date
of implementation. The closing is coincidental to the date of this Agreement and
shall continue, unless sooner terminated, until October 6, 2005 (the "Employment
Term"), and shall be in force so long as the Company remains in good standing
under the laws, regulations and rules to which it may be subject during the
Agreement term. The Employee's reassignment to any other capacity as the Board
of Directors may determine shall not alter the term or any other provision of
this Agreement. This Agreement shall terminate on the earlier to occur of
October 6, 2005 or the date the Employee resigns or has his employment
terminated. The provisions contained in Sections 1(b), 7, 8 and 9, and those
provisions necessary to interpret such Sections, shall survive termination of
this Agreement.
SECTION 3. Compensation.
(a) As full compensation for the performance of his services, the
Company shall pay the Employee a base salary (such annual base salary, as it may
be adjusted from time to time by the Board of Directors, the "Base Salary") of
$9,000.00 per month which shall be paid to the Employee in approximately equal
weekly installments beginning following the Commencement Date and ending on the
sooner of the Employee's termination or the last day of the Employment Term. The
amount of the Base Salary is subject to review by the Board of Directors in
July, 2004 and every July thereafter, and may be adjusted by the Company
following such review, or at any other time, in the sole discretion of the Board
of Directors; provided, that the amount of the Base Salary may not be decreased
below the amount of the initial Base Salary. To the extent required by
applicable law, the Company shall withhold from any payments under this
Agreement any applicable federal, state, local or other taxes or amounts.
The Employee shall participate in the Annual Management Bonus Plan.
As a participant in the Annual Management Bonus Plan, the Employee will be
eligible to receive bonuses in any amount from 0% to 100% of the Base Salary,
payable in March based on the Employee's performance for the immediately
preceding calendar year, and the Company's performance.
(b) The Employee shall participate in the Management Equity
Incentive Plan. As a participant in the Management Equity Incentive Plan, the
Employee will be eligible to receive options, which shall vest over a period of
time from the date of each option's issue, to purchase common shares of the
Company. The Company may grant to the employee, following the first anniversary
of the date hereof and at the sole discretion of the Board of Directors, options
to purchase common shares of the Company (subject to the vesting and the
satisfaction of the other terms and conditions of such options).
(c) The Employee shall be entitled to 20 vacation days per year at
such times as may be mutually agreed with the Board of Directors. In all other
aspects, the Employee's benefits including medical insurance, disability
insurance, life insurance, retirement and other benefits and perquisites
generally available to all senior managers of like businesses will be in
accordance with Company policy in effect from time to time but in any event not
less favorable to the Employee than benefits provided to any other employee of
the Company.
(d) The employee shall be entitled to a monthly car allowance of
Four Hundred Dollars ($400) along with related car expenses. The Employee agrees
to accrue such compensation, understanding that it is deferred until such time
as the Company is able to afford, with the approval of the Board of Directors,
to re-instate such compensation.
(e) The compensation to be paid under this Agreement shall be an
unsecured obligation of the Company, and not any of its subsidiaries, parents or
affiliates, and creates no security interest in any present or future assets of
the Company or its subsidiaries, parents or affiliates.
SECTION 4. Exclusivity.
The Employee shall devote substantially all of his time and energy
to the business of the Company, shall faithfully serve the Company, shall in all
respects conform to and comply with any directions or duties reasonably given to
him by the Board of Directors, and shall use his best efforts to promote and
serve the interests of the Company. The Employee may participate in the
activities of professional trade organizations and government sponsored programs
related to the business of the Company. Notwithstanding the above, Employee may
be permitted to serve as a director or trustee of other organizations with the
Board's approval which may be granted if it can be reasonably demonstrated that
such service does not interfere with the effective performance of Employee's
duties under this Agreement.
SECTION 5. Reimbursement for Expenses.
The Employee is authorized to incur reasonable expenses in the
discharge of his services, including expenses for travel, lodging,
telecommunications and similar items. The Company shall reimburse the Employee
for all such proper expenses upon his presentation of itemized accounts.
SECTION 6. Termination.
The employment of the Employee shall terminate upon the first to
occur of:
(a) his death or Disability(defined below);
(b) his discharge by the Company for Just Cause (defined below);
provided, that the Employee shall have received written notice from the Company
of the event giving rise to the Employee's discharge by the Company for Just
Cause at least 7 business days prior to the effective date of such discharge
during which period the Employee shall have the opportunity to correct the
breach giving rise to such just cause termination; provided, that such breach
shall not involve fraud or moral turpitude; or
(c) his discharge by the Company other than for Just Cause (defined
below).
For the purposes of this Agreement "Disability" shall mean the
Employee's inability to perform the duties required of him as reasonably
determined by the Board of Directors following a review of satisfactory medical
advice to the Board about Employee's physical or mental condition, because of
illness, incapacity, or physical or mental disability for a consecutive period
of 30 days or an aggregate period of 60 days during any 12-month period during
the term of this Agreement;
For the purposes of this Agreement "Just Cause" shall mean: (i.) the
Employee's failure, neglect or refusal to follow a lawful written order of the
Board of Directors or to perform his duties under this Agreement; (ii) any
willful or intentional act of the Employee that has the effect of injuring the
reputation or business of the Company or its affiliates in any material respect;
(iii) any continued absence from the Company unless such absence is (A) approved
or excused by the Board of Directors or (B) is the result of the Employee's
illness, disability or incapacity (in which event the provisions of Section 6(a)
hereof shall control) or a personal or family emergency; (iv) repeated
impairment of the Employee due to drunkenness; (v) conviction of the Employee
for the commission of a felony or a crime involving moral turpitude; (vi) a
material reach of the provisions of this Agreement; (vii) the commission by the
Employee of an act of fraud or embezzlement against the Company or breach of
fiduciary duty to the Company involving personal profit; or (viii)the illegal
use or possession of drugs.
SECTION 7. Right to Purchase and Right of First Refusal to Purchase
Employee's Shares; Severance Pay.
If the Employee's employment is terminated pursuant to Section 6(b),
or if the Employee resigns without Good Reason (defined below), the Employee
shall not receive any further compensation from the Company and Company shall
have the right to purchase, or if such right is not exercised and subsequently
the Employee offers to sell his shares to a third party the right of first
refusal to purchase, all shares, if any, of the Company's stock held by the
Employee at a price equal market price as published on the date of termination
or the acquisition cost, whichever is higher. If the Employee's employment under
this Agreement is terminated pursuant to Section 6(a) or 6(c), or if the
Employee resigns with Good Reason (defined below), the Company shall pay
Employee his base salary and benefits ("Severance Pay") for the greater of (the
"Severance Pay Period")(i) one year from the date of termination or resignation
and (ii) the remaining term of this Agreement, and shall have the right to
purchase, or if such right is not exercised and subsequently the Employee offers
to sell his shares to a third party the right of first refusal to purchase, all
Employee's shares, if any, of the Company's stock held by the Employee or his
estate at a price equal to the market value of such shares as published. The
Severance Pay shall be payable by the Company in equal weekly installments. The
Company shall pay for any purchase of the Employee's shares under this Section 7
immediately upon the transfer of title of the certificates.
For the purposes of this Agreement a resignation by the Employee
with Good Reason shall mean a resignation by the Employee of his employment
hereunder following a Substantial breach (as hereinafter defined) and such
Substantial Breach shall have not been corrected by the Company within 20 days
of receipt by the Board of Directors of written notice from the Employee of the
occurrence of such Substantial Breach, which notice shall specifically set forth
the nature of the Substantial Breach which is the reason for such resignation
and identify such occurrence as a "Substantial Breach" under this Agreement. The
term "Substantial Breach" means any material breach by the Company of its
obligations hereunder consisting of (i.) any material breach of the terms of
Section 3 above; (ii) a material reduction in the Employee's title or
responsibilities; or (iii) the failure of any successor to all or substantially
all of the business and/or assets of the company to assume this Agreement;
provided, however, that the term "Substantial Breach" shall not include a
termination of the employee's employment pursuant to Section 6(a) or (b) above.
The Employee's resignation without Good Reason shall not end the parties'
respective continuing rights and responsibilities under this Agreement including
but not limited to those enumerated in Sections 8, 9, 10, 12 and 15.
Notwithstanding anything contained in this Agreement to the contrary, the terms
and provisions of this Section 7 shall not apply to any shares of capital stock
issued by the Company to the Employee in consideration for the Employee's past
services.
SECTION 8. Secrecy, Non-Disclosure, Invention Rights.
(a) Nondisclosure of Confidential Information. The Employee
acknowledges that (i.) the agreements and covenants contained in this Agreement
are essential to protect the value of the Company's business and assets and (ii)
by virtue of his employment with the Company, he has obtained and will obtain
knowledge, contacts, training and experience and there is a substantial
probability that such knowledge contacts, training and experience and there is a
substantial advantage of a competitor of the Company and to the Company's
substantial detriment. Therefore, the Employee agrees that, the Employee shall
not disclose directly or indirectly to any person or entity not affiliated with
the Company or use, without prior written consent from the Company either during
the Employment Term or at any time thereafter, any Confidential Information (as
defined in the next sentence) except pursuant to and consistent with the order
of any court, legislative body or regulatory agency; provided, that the Employee
has given notice to the Company immediately after learning of such order. The
term "Confidential Information" shall mean information not in the public domain
or generally know in the industry, in any form (i.)concerning or relating to the
Company's operations and/or proprietary computer programs and software products
including but not limited to systems whether provided by or licensed from a
third party; (ii) acquired by the Employee while employed by the Company or
(iii)acquired following the Employment Term directly or indirectly, from any
person or entity owing a duty of confidentiality to the Company or any of its
affiliates, including but not limited to information regarding, trade secrets,
manuals or materials, technical information, contracts, systems, procedures,
mailing lists, know-how, financial or other data (including the revenues, costs
or profits associated with any of the Company's services), business plans, and
other financial statements, computer programs, source codes, software systems,
database, discs and printouts, software design specifications, plans (business,
technical or otherwise), customer and industry lists, correspondence, internal
reports, personnel files, sales and advertising material, telephone numbers,
names, addresses or any other compilations of information, written or unwritten,
which is or was used in the business or formation of the Company or its
affiliates.
(b) The Employee agrees and acknowledges that all Confidential
Information in any form, and copies and extracts thereof, are and shall remain
the sole and exclusive property of the Company, and upon termination of his
employment with the Company, he shall return to the Company the originals and
all copies of any such information provided to or acquired by the Employee in
connection with the performance of his duties for the Company, and shall return
to the Company all files, correspondence and/or other communications received,
maintained and/or originated by him during the course of his employment.
(c) No Interference. The Employee shall not, whether for his own
account or for the account of any other individual, partnership, firm,
corporation or other business organization (other than the Company), directly or
indirectly solicit, endeavor to entice away from the Company or its affiliates,
or otherwise directly interfere with the relationship of the Company and its
affiliates with any person who is employed by or otherwise engaged to perform
services for the Company or its affiliates or who is, or was within the then
most recent twelve-month period, a client, joint venturer or prospective client
or joint venturer of the Company, or any of its affiliates.
(d) Inventions. By this Agreement, the Employee sells, transfers and
assigns to the Company, or to any person or entity designated by the Company,
all of the right, title and interest of the Employee in and to all inventions,
sales approaches or materials, software, ideas, training materials, disclosures
and improvements, whether patented or unpatented, copyrightable material, or
materials or services subject to trademark or service xxxx registration, made or
conceived by the Employee solely or jointly, in whole or in part, during or in
preparation for his employment by the Company which are not generally known to
the public or the industry or recognized as standard practice, processes or
devices which may be sold, leased, used or under construction or development by
the Company and (ii) arise (wholly or partly) from the efforts of the Employee
during his employment with the Company (an "Invention"). The Employee shall
communicate promptly and disclose to the Company, in such form as the Company
requests, all information, details and data pertaining to any such Invention. .
SECTION 9. Injunctive Relief.
Without intending to limit the remedies available to the Company,
the Employee acknowledges that a breach of any of the covenants contained in
Section 8 hereof may result in material irreparable injury to the Company or its
affiliates for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of such a breach of threat thereof, the Company shall be entitled to obtain a
temporary restraining order and/or a preliminary or permanent injunction,
without the necessity of proving irreparable harm or injury as a result of such
breach are threatened breach of Section 8 hereof, restraining the Employee from
engaging in activities prohibited by Section 8 hereof or such other relief as
may be required specifically to enforce any of the covenants in Section 8. In an
action commenced by the Company for relief under this Section 9, the Employee
agrees to submit to the jurisdiction of any state or federal court of record in
the State of Pennsylvania or in the state and county in which such violation may
occur, or in any other court, at the election of the Company.
SECTION 10. Successors; Binding Agreement.
Neither this Agreement, or any rights or benefits hereunder, may be
assigned, delegated, transferred, pledged or hypothecated without the written
consent of both parties hereto, and any such assignment, delegation, transfer,
pledge or hypothecation shall be null and void; provided, that the Company, with
the written approval of the Employee, may assign or transfer this Agreement to
any entity into which the Company merges, or to any entity created by the
consolidation of the Company or to any entity that acquires all or substantially
all of the assets of the Company; provided, that such entity expressly assumes
all of the rights and obligations of the Company hereunder.
SECTION 11. Waiver and Modification.
Any waiver, alteration or modification of any of the terms of this
Agreement shall be valid only if made in writing and signed by the parties
hereto; provided, however, that any such waiver, alteration or modification is
consented to on the Company's behalf by a member of the Board of Directors other
than the Employee. No waiver by either of the parties hereto of their rights
hereunder shall be deemed to constitute a waiver with respect to any subsequent
occurrences o transactions hereunder unless such waiver specifically states that
it is to be construed as a continuing waiver.
SECTION 12. Severability and Governing Law.
The Employee acknowledges and agrees that the covenants set forth in
Section 8 hereof are reasonable and valid in temporal scope and in all other
respects. If any of such covenants or such other provisions of this Agreement
are found to be invalid or unenforceable by a final determination of a court of
competent jurisdiction (a) the remaining terms and provisions hereof shall be
unimpaired and (b) the invalid or unenforceable term or provision that is valid
and enforceable and that comes closest to expressing the intention of the
invalid or unenforceable term or provision. THIS AGREEMENT SHALL BE GOVERNED BY
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF PENNSYLVANIA,
WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
SECTION 13. Notices
All approvals, consents, notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given upon delivery, if delivered in person, or on the third business day
after mailing, if mailed, by registered or certified mail, postage prepaid,
return receipt requested, addressed in the case of the Company, to Digital
Descriptor Systems Inc, 000 Xxxxxxx Xxxx, Xxxxxxxx Xxxxx, XX 00000 or, in each
case, to such other address as may be designated to the other parties from time
to time as provided above.
SECTION 14. Captions and Section Headings.
Captions and section headings herein are for convenience only, are
not a part hereof and shall not be used in construing this Agreement.
SECTION 15. Arbitration of Disputes.
Subject only to the provisions of Section 9 above relating to
injunctive relief, any and all disputes, controversies and claims arising out of
or relating to this Agreement or its performance shall be settled and determined
by arbitration Pennsylvania (or the city of the Company's headquarters at the
election of the Company) before one (1) arbitrator pursuant to the Commercial
Rules then obtaining of the American Arbitration Association. The parties agree
that the arbitrators shall give effect to applicable statutes of limitation in
determining any claim and that they shall have the power to award damages,
preliminary or permanent injunctive relief and reasonable attorney's fees and
expenses to any party in such arbitration. The arbitration award shall be final
and binding upon the parties and judgement on such an award may be entered in
any court having competent jurisdiction.
SECTION 16. Entire Agreement
This Agreement constitutes the entire understanding and agreement of
the parties hereto regarding the employment of the Employee.
SECTION 17. Counterparts.
This Agreement may be executed in counterparts, each of which shall
be deemed and original, but all of which taken together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
For the Company: Employee:
-------------------------- ----------------------------
