EXHIBIT 10.9
EMPLOYMENT AGREEMENT
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THIS AGREEMENT, effective the lst day of August, 1996, by and between
Plastigone Technologies, Inc., a Florida corporation, having its principal
office at 0000 Xxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxx, 00000, (the "Corporation"), and
Xxx Xxxxx, an individual residing at 0000 Xxxxx Xxxxx Xxxxx, Xxxxxxxxxx,
Xxxxxxxxx, 00000, (the "Employee").
Recitals
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WHEREAS, the Employee has been employed by the Corporation for more than
two years; and
WHEREAS, the Corporation desires that the Employee continue to be employed
by it and provide executive management and business development services to it
and the Employee is willing to be so employed and to render such services to the
Corporation, all upon the terms and conditions set forth in the Agreement.
NOW, THEREFORE, for and in consideration of the promises recited in this
Agreement, and other good and valuable consideration set forth in this
Agreement, Corporation and Employee agree as follows:
Agreement
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1. Employment. Subject to and upon the terms and conditions in this
Agreement, the Corporation hereby agrees to continue to employ the Employee and
the Employee agrees to continue in the employ of the Corporation for the period
set forth in paragraph 4 below and to render to the Corporation the services
described in paragraph 2 below.
2. Duties and Responsibilities. The Employee shall serve as the President
and Chief Executive Officer of the Corporation and shall be subject only to the
authority and direction of the Board of Directors of the Corporation (the
"Board"). The Employee shall be responsible for providing those services which
are customarily performed by the President and Chief Executive Officer of a
corporation, but shall be primarily responsible for developing and marketing a
line of specialty products and for creating an organization and management team
which will successfully support the business of the Corporation and maximize its
value. The Employee's specific responsibilities shall include, but not be
limited to, providing strategic-and business development planning; developing
and managing domestic and foreign product distribution; providing capital and
cash flow management; hiring, managing and terminating, if necessary, all
employees; negotiating and signing all corporate contracts, managing all banking
relationships; ensuring that all reports to regulatory authorities are completed
and filed on a timely basis; ensuring that all products are marketed in
accordance with applicable governmental regulations; and completing annual
budgets for approval of the Board. if elected, he shall serve on the Board of,
Directors. The Employee agrees to devote his full time and attention during
regular business hours to the performance of his duties and responsibilities
hereunder, subject to the proviso at the end of the first sentence of paragraph
10.
3. Annual Compensation.
a. The Employee shall be paid an annual base salary by the Corporation
of One Hundred Thirty-Five Thousand Dollars ($135,000), the incentive
compensation provided for in paragraph b., and an annual bonus at year end as
set from time to time by the Board. Base salary shall be paid on a bi-weekly
basis. The Compensation Committee of the Board shall review the Employee's base
salary, incentive compensation and bonus annually. The Corporation shall deduct
all appropriate withholdings, FICA amounts and other payroll taxes from any
payments made to the Employee.
b. The Employee shall also be entitled to receive incentive
compensation in an amount equal to 5% of the Annual Net Operating Income
("'NOI") of the Corporation. The Incentive Compensation shall be paid within
seventy-five (75) days after the end of each fiscal quarter that this Agreement
is in affect, provided, however, in the last year that this Agreement is in
effect, NOI shall be calculated through the end of the fiscal quarter
immediately following the termination of this Agreement. For purposes hereof,
the NOI shall be defined as: Gross Profit less Selling, General and
Administrative expenses ("SG&A"), as determined by the Corporation's independent
certified public accountants; provided, however, that there shall not be
included in SG&A for purposes of this calculation any deductions for
depreciation, taxes, interest, consultants' fees, Commissions and financing
expenses or any payments of any kind to the members of the Board.
c. In consideration for the Employee's entering into this Agreement,
the Corporation hereby agrees to issue to Employee without further consideration
fifty thousand (50,000) shares of Common Stock of the Corporation which shall be
fully paid and nonassessable. In addition, the Corporation awards to Employee in
further consideration of entering into this Agreement: (1) Three Hundred
Thousand (300,000) warrants exercisable immediately at $.20 per warrant; (2) One
Million (1,000,000) warrants exercisable at $.25 per warrant (one-third to vest
upon the execution of this Agreement and the balance to vest on January 2, 1997)
; and (3) in the event that during the term of this Agreement the Corporation
acquires (x) by merger or consolidation, (y) all or substantially all of the
assets of, or (z) a controlling interest in the voting stock of, another entity,
the Corporation will award the Employee an additional One Million (1,000,000)
warrants, exercisable at $.25 per warrant, which would be exercisable at the
rate of one-third (1/3) immediately following the consummation of the
acquisition; one-third (1/3) one year from the data of consummation of the
acquisition; and the remaining one-third (1/3) two years from the date of
consummation of the acquisition.
4. Term. The term of this Agreement shall commence on August 1, 1996 and
shall continue until July 31, 1999 unless terminated or renewed in accordance
with the provisions of this Agreement. It will automatically renew on the same
terms and conditions for additional one year terms on each August 1, commencing
on August 1, 1999, unless it is terminated in writing by the Corporation, acting
by vote of its Board or by the Employee, on at least sixty (60) days' prior
written notice to the other.
5. Credit Cards and Expenses. As soon as practical, the Employee will be
provided with Corporation telephone and VISA credit cards. Employee agrees to
make charges on these cards only for approved business of the Corporation. The
Employee shall also be reimbursed for and entitled to advances (subject to
repayment to the Corporation if not actually incurred by the Employee) with
respect to only those business expenses incurred by him (i) which are reasonable
and necessary for Employee to perform his duties under this Agreement; and (ii)
for which the Employee has submitted vouchers and/or other receipts in
accordance with policies established from time to time by the Corporation.
6. Vacation. Employee shall be entitled to twenty (20) days of paid
vacation per year which shall be taken at times mutually agreed upon by the
Employee and the Corporation. Employee will follow and abide by all policies of
vacation, holiday and sick leave established by the Corporation.
7. Insurance and Other Benefits. Employee shall be provided health
insurance benefits comparable to his existing coverage. The Corporation will
also maintain in effect during the term of the Agreement Director and Officer
Liability Insurance and Product Liability Insurance. The Employee shall also be
entitled to participate in such other plans or programs as are from time to time
generally made available to executives of the Corporation pursuant to the
policies of the Corporation; provided, however, that the Employee shall be
required to comply with the conditions contained in such plans and shall comply
with and be entitled to benefits only in accordance with the terms and
conditions of such plans. Under no circumstances shall Employee's current
medical plan be amended or terminated except with express permission of Employee
unless substituted by an amended plan made available to other executives of the
Corporation.
8. Death and Disability
a. This Agreement shall expire on the date of Employee's death, in
which event, Employee's salary, reimbursable expenses and benefits owing to
Employee through the date of the Employee's death shall be paid to his estate.
Employee's estate shall also be entitled to incentive compensation calculated in
accordance with the provisions of paragraph 3(b), and to any "Termination
Compensation" otherwise payable to Employee pursuant to paragraph 12(c). In
addition, Employee's estate shall also have the right to all warrants, in
accordance with paragraph 3(c).
b. If during the term of this Agreement, in the opinion of a duly
licensed physician selected by the Corporation, the Employee, because of
physical or mental illness or incapacity, shall become substantially unable to
perform the duties and services required of him under this Agreement for a
period of one hundred twenty (120) consecutive days or one hundred eighty (180)
days in the aggregate during any nine month period, the Corporation, may, upon
at least thirty (30) days prior written notice given at any time after the
expiration of such one hundred twenty (120) day or one hundred eighty (190) day
period, as the case may be, to the Employee of its intention to do so, terminate
his employment as of such date as may be set forth in the notice. In case of
such termination, the Employee shall be entitled to receive his salary,
reimbursable expenses and benefits owing to the Employee through the date of
termination. The Employee shall also be entitled to
receive incentive compensation calculated in accordance with the provisions of
paragraph 3(b) hereof.
9. Confidentiality. The Employee acknowledges that all materials, forms,
formulas, research, data, information, plans, specifications, advertising
materials, work orders, contracts, policy statements, budgets, products, designs
and other materials of the Corporation embody concepts and ideas which
constitute valuable intellectual property and trade secrets (the "'Intellectual
Property") which must be protected by covenants of confidentiality. The Employee
shall not during or after the term of this Agreement divulge, publish, take for
his own use, allow others to divulge or publish, or take for their own use, or
permit to be divulged or published, or distribute or disclose the Intellectual
Property directly or indirectly in any manner whatsoever to any persons, firms,
corporations or other entities, except as permitted by the Corporation. All
items, including but not limited to, research designs, ideas, products and plans
developed by the Employee during the term of this Agreement shall be the
exclusive property of the Corporation, and shall not be copied or retained by
the Employee following termination of this Agreement.
10. Covenant Not to Compete. The Employee covenants that he will not
engage, directly or indirectly, alone or in conjunction with others, as an
agent, Employee, investor, director, shareholder or partner in any business
which provides products, information and/or services to the public which are
competitive with those provided by the Corporation; provided, however, that the
ownership by the Employee of 1% or less of the issued and outstanding shares of
any class of securities which is traded on a national securities exchange or, in
the over the counter market shall not constitute a breach of the provisions of
this paragraph 10 or of the provisions of paragraph 2 hereof. Said covenant
shall continue for the term hereof and for a one year period subsequent to the
termination of this Agreement. Through the term of this Agreement and for a
period of one year thereafter the Employee will not on his own behalf or on
behalf of any other business enterprise, directly or indirectly, solicit or
induce any creditor, customer, client, supplier, officer, employee or agent of
the Corporation to sever his or its relationship with or leave the employ of the
Corporation.
11. Injunctive Relief. In the event of a breach or threatened breach of
paragraphs 9 or 10 hereof, the parties agree that, because of the potential
irreparable harm to the Corporation, the Corporation shall be entitled to an
injunction restraining the Employee from disclosing such information or from
engaging in such competitive activities; provided, however, nothing contained
herein shall be construed to prevent the Corporation from pursuing any other
remedies available to it for breach of either of said covenants, including
recovery of damages from the Employee.
12. Change in Control, Termination of Employment and Compensation in Event
of Termination.
a. For purposes hereof, a "Change in Control" shall be deemed to have
occurred (i) if there has occurred a "change in control" as such term is used in
Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as in effect at the date hereof (hereinafter referred to
as the "Act,") ; or (ii) if there has occurred a change in control as the term
""control" is defined in Rule 12(b)-2 promulgated under the Act; or (iii) when
any "person" (as such term is defined in Sections 3 (a) (9) and 13 (d) (3) of
the Act) becomes a beneficial owner,
directly or indirectly, of securities of the Corporation representing 20% or
more of the Corporation's then outstanding securities having the right to vote
on the election of directors; or (iv) if the shareholders of the Corporation
approve a plan of complete liquidation or dissolution of the Corporation or a
merger or consolidation in which the Corporation is not the surviving
corporation; or (v) if there has occurred a change in the ownership or effective
control of the Corporation or a change in the ownership of a substantial portion
of the assets of the Corporation (within the meaning of Section 28OG(b)(2)(A) of
the Internal Revenue Code of 1986, as amend (hereinafter referred to as the
"Code")) ; or. (vi) when the individuals who are members of the Board on the
date hereof shall cease to constitute at least a majority of the Board;
provided, however, that any new director whose election to the Board or
nomination for election to the Board by the Corporation's shareholders was
approved by a vote of at least 50% of the directors then still in office, shall
not be deemed to have replaced his or her predecessor.
b. The Employee may terminate his employment at any time within 12
months after a Change in Control and any of the following events have occurred:
(A) an assignment to the Employee of any duties inconsistent with the status of
the Employee's office and/or position with the Corporation as constituted
immediately prior to the Change in Control or a significant adverse change in
the nature or scope of the Employee' s authorities, powers, functions or duties
as constituted immediately prior to the Change in Control, (B) a failure by the
Corporation, after having received written notice from the Employee specifying a
breach of any of its obligations to the Employee pursuant to this Agreement, to
cure such breach within sixty (60) days after receipt of such notice, or (C) the
headquarters of the Corporation is moved to a new location which is more than
sixty (60) miles from its current location (unless Employee consents to move to
such new location). An election by the Employee to terminate his employment
following a Change in Control shall not be deemed a voluntary termination of
employment by the Employee for the purpose of interpreting the provisions of
this Agreement or any of the Corporation's employee benefit plans and
arrangements. The Employee's continued employment with the Corporation for any
period of time during the term of this Agreement after a Change in Control shall
not be considered a waiver of any right he may have to terminate his Employment
to the extent permitted under this subparagraph b. If the Corporation terminates
the Employee without Cause within six months after a Change of Control has
occurred, such termination shall be deemed an election by the Employee to
terminate his employment pursuant to this paragraph 12. In the event of a
termination under this paragraph 12, the Employee shall continue to have the
obligations provided for in paragraphs 9 and 10 hereof.
c. If the Employee's employment with the Corporation is terminated
under subparagraph b., the Employee (i) shall continue to receive his
compensation and benefits through the date as of which his employment is
terminated (the "Termination Date") and, in addition thereto, (ii) shall be paid
in a lump sum within thirty (30) days after the Termination Date, in cash,
severance pay in an amount equal to the excess of 2.99 times the Employee' s
"base amount," over the "present value" of any other "parachute payments" with
respect to the Corporation which the Employee has received or to which he may be
entitled, whether under this Agreement or otherwise (unless such other payment
is waived in writing by the Employee within twenty (20) days after the
Termination Date). Such lump sum severance payment is hereinafter referred to as
the "Termination Compensation". For purposes of this Agreement, the term "base
amount", "present value" and
"parachute payments" shall have the respective meanings set forth in Section
28OG of the Code as in effect on the date of the Change of Control, except that
"parachute payments" shall be determined without regard to whether or not they
equal or exceed three times the Employee's "base amount". The amount of
Termination Compensation shall be determined, at the expense of the Corporation,
by its regular independent certified public accountant immediately prior to the
Change in Control (the "Accountant"), whose determination shall be conclusive
and binding on the parties. Upon payment of the Termination Compensation and all
accrued but unpaid compensation and benefits, this Agreement shall terminate
(except for the Employee's obligations pursuant to paragraphs 9 and 10 hereof)
and be of no further force or effect.
d. After a Change in Control has occurred, the Corporation, will honor
the Employee's exercise of the Employee's outstanding warrants in accordance
with the terms of the Warrant Agreement under which they were issued. After a
Change in Control has occurred and the Employee's Employment is terminated as a
result thereof, the Employee (or his designated beneficiary or personal
representative) shall also receive, except to the extent already paid pursuant
to subparagraph 12(c)(i) hereof or otherwise, the sums the Employee would
otherwise have received (whether under this Agreement, by law or otherwise) by
reason of termination of employment if a Change in Control had not occurred.
e. Notwithstanding anything in this Agreement to the contrary (except
pursuant to subparagraph 12 (f ) hereof), the Employee shall have the right,
prior to the receipt by him of any amounts due hereunder, to waive the receipt
thereof or, subsequent to the receipt by him of any amounts due hereunder, to
treat some or all of such amounts as a loan from the Corporation which the
Employee shall repay to the Corporation, within ninety (90) days from the date
of receipt, with interest at the rate provided in Section 7872 of the Code.
Notice of any such waiver or treatment of amounts received as a loan shall be
given by the Employee to the Corporation in writing and shall be binding upon
the Corporation.
f. It is intended that the ""present value" of the payments and
benefits to the Employee, whether under this Agreement or otherwise, which are
includable in the computation of "parachute payments" shall not, in the
aggregate, exceed 2.99 times the Employee's "base amount". Accordingly, if the
Employee received (or is guaranteed to receive in the future) payments or
benefits from the Corporation which, when added to the Termination Compensation,
would, in the opinion of the Accountant, subject any of the payments or benefits
to the Employee to the excise tax imposed by Section 4999 of the Code, the
Termination Compensation shall be reduced by the smallest amount necessary, in
the opinion of the Accountant, to avoid such tax. In addition, the Corporation
shall have no obligation to make any payment or provide any benefit to the
Employee subsequent to payment of the Termination Compensation which, in the
opinion of the Accountant, would subject any of the payments or benefits to the
Employee to the excise tax imposed by Section 4999 of the Code. No, reduction in
Termination Compensation or release of the Corporation from any payment or
benefit obligation in reliance upon any aforesaid opinion of the Accountant
shall be permitted unless the Corporation shall have provided a copy of any such
opinion, specifically entitling the Employee to rely thereon, to the Employee no
later than the date otherwise required for payment of the Termination
Compensation or any such later payment or benefit.
g. The Employee shall not be required to Litigate the payment of the
Termination Compensation by seeking other employment. To the extent that the
Employee shall receive compensation from any other employment, the payment of
Termination Compensation shall not be adjusted.
13. Duty to Defend. To the fullest extent permitted by Florida Law the
Corporation agrees to defend, hold harmless and indemnify Employee for any
liability resulting from any lawsuit or claim of any kind which has been or
which may be brought against Employee by any third p as a result of Employee's
carrying out his duties and responsibilities on behalf of the Corporation. This
obligation shall survive the termination of Employee's employment (whether
voluntary or involuntary, with or without cause).
14. Termination. This Agreement may be terminated for "cause" by either
Party. "Cause" for the Corporation shall be that Employee has not fully and
faithfully performed the duties and responsibilities set forth in this Agreement
after written notice thereof and a sixty (60) day cure period. "Cause" for the
Employee shall be that the Corporation has breached any of its obligations under
this Agreement after written notice thereof and a sixty (60) day cure period.
15. Severance Payments. In the event that the Corporation terminates
Employee, Employee shall for the period of the Covenant Not to Compete (one
year), receive in equal monthly installments, his then current base salary. In
addition, Corporation agrees to continue to provide and pay for Employee's
current health insurance for the period of the Covenant Not to Compete. The
salary continuation and payment of health insurance will be in addition to any
other benefits to which Employee may be entitled under this Agreement. The
acceptance of the severance payments by the Employee shall constitute the
exclusive remedy of Employee with respect to any claim Employee may have against
Corporation for termination of the employment of Employee. The Corporation will
not be obligated for severance payments or provision of health insurance under
this paragraph if Employee resigns from the employment of the Corporation; or is
entitled to Termination Compensation; or Employee's employment is terminated in
good faith by the Corporation because of Employee's act or acts of fraud, theft,
or embezzlement, or any act which, if convicted would constitute a felony.
Furthermore, the Corporation shall have the right to discontinue severance
payments in the event that Employee obtains substantially equivalent employment.
16. Notice. Except as otherwise expressly provided, any notice, request,
demand or other communication permitted or required to be given under this
Agreement shall be in writing, shall be sent by one of the following means to
the Employee at his address set forth on the first page of this Agreement and to
the Corporation at its address set forth on the first page of this Agreement,
Attention: Chief Financial Officer (or to such other address as shall be
designated hereunder by notice to the other parties and persons receiving
copies, effective upon actual receipt) and shall be deemed conclusively to have
been given: (i) on the first business day following the day timely deposited
with Federal Express (or other equivalent national overnight courier) or United
States Express Mail, with the cost of delivery prepaid or for the account of the
sender; (ii) on the fifth business day following the day duly sent by certified
or registered United States Mail, postage prepaid and return receipt
requested; or (iii) when otherwise actually received by the addressee on a
business day (or on the next business day if received after the close of normal
business hours or on any non-business day).
17. Interpretation, Headings. The parties acknowledge and agree that the
terms and provisions of this Agreement have been negotiated, shall be construed
fairly as to all parties hereto, and shall not be construed in favor of or
against any party. The section headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
18. Successors and Assigns; Assignment; Intended Beneficiaries. Neither
this Agreement, nor any of Employee-s rights, powers, duties or obligations
hereunder/ may be assigned by Employee. This Agreement shall be binding upon and
inure to the benefit of Employee and his heirs and legal representatives and the
Corporation and its successors. Successors of the Corporation shall include,
without limitation, any corporation or corporations acquiring, directly or
indirectly, all or substantially all of the assets of the Corporation, whether
by merger, consolidation, purchase, lease, or otherwise, and such successor
shall thereafter be deemed "'the Corporation" for the purpose hereof.
19. No Waiver by Action, Cumulative Rights, Etc. Any waiver or consent from
the Corporation respecting any or provision of this Agreement or any other
aspect of the Employee's conduct or employment shall be effective only in the
specific instance and for the specific purpose for which given and shall not be
deemed, regardless of frequency given, to be a further or continuing waiver or
consent. The failure or delay of the Corporation at any time or times to require
performance of, or to exercise any of its powers, rights or remedies with
respect to any term or provision of this Agreement or any other aspect of the
Employee's conduct or employment in no manner (except as otherwise expressly
provided herein) shall affect the Corporation's right at a later time to enforce
any such term or provision.
20. Counterparts; Florida Governing Law; Amendments; Severability . This
Agreement may be executed in two counterpart copies, each of which may be
executed by one of the parties hereto, but all of which, when taken together,
shall constitute a single agreement binding upon all of the parties hereto. This
Agreement and all other aspects of the Employee's employment shall be governed
by and construed in accordance with the applicable laws pertaining in the State
of Florida (other than those that would defer to the substantive laws of another
jurisdiction). Each and every modification and amendment of this Agreement shall
be in writing and signed by the parties hereto, and any waiver of, or consent to
any departure from, any term or provision of this Agreement shall be in writing
and signed by each affected party to this Agreement. Should any section or
provision of this Agreement be determined illegal or invalid, the validity of
the remaining sections will not be affected.
21. Entire Agreement. This Agreement sets forth the entire Agreement
between the Parties, and supersedes all prior agreements, understandings,
negotiations and correspondence between Corporation and Employee concerning
employment. In the event of a conflict between this Employment Agreement and any
other statement, oral or in writing, the Employment Agreement will prevail and
will not be superseded or modified by any other statement, whether oral or in
writing,
unless it has been signed by both Employee and Corporation.
22. Authorization. The Corporation Representatives who sign this Agreement
represent that each has the authority to execute this Agreement and bind the
Corporation.
THEREFORE, because the Corporation and Employee intend to be legally bound,
each has executed this Agreement on the dates indicated below.
AGREED:
__________________________________ DATE:____________
XXX XXXXX, EMPLOYEE
AGREED:
PLASTIGONE TECHNOLOGIES, INC.
BOARD OF DIRECTORS
BY: ______________________________ DATE:___________
Signature
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Type or Print Name
BY: ______________________________ DATE:___________
Signature
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Type or Print Name
THEREFORE, because the Corporation and Employee intend to be legally bound,
each has executed this Agreement on the dates indicated below.
AGREED:
__________________________________ DATE:_____________
XXX XXXXX, EMPLOYEE
AGREED:
PLASTIGONE TECHNOLOGIES, INC.
BOARD OF DIRECTORS, COMPENSATION COMMITTEE
BY: ______________________________ DATE:___________
Signature
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Type or Print Name
BY: ______________________________ DATE:___________
Signature
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Type or Print Name
BY: ______________________________ DATE:___________
Signature
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Type or Print Name
