EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (this "Agreement") is made as of this 4th
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day of December, 2003 by and between Delta Communications Group, Inc., a
Delaware corporation ("Company"), and Xxxxxx Xxxxxxxx ("Executive").
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Background
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WHEREAS, simultaneously with the execution of this Agreement,
pursuant to an Agreement and Plan of Merger, dated as of November 30, 2003
(the "Merger Agreement"), by and among the Company, Zanett, Inc. ("Zanett"), a
Delaware corporation, and DeltaData, Inc., a California corporation ("DCG"),
DCG is being merged with and into the Company, with the Company surviving the
merger as a Delaware corporation named Delta Communication Group Inc. (the
"Merger") (capitalized terms not otherwise defined herein shall have the
respective meanings assigned to such terms in the Merger Agreement); and
WHEREAS, Company desires to employ Executive, and Executive desires
to be employed by Company, on the terms and conditions contained in this
Agreement. Executive will be substantially involved with Company's operations
and management and will learn trade secrets and other confidential information
relating to Company and its customers; accordingly, the noncompetition
covenant and other restrictive covenants contained in Section 14 of this
Agreement constitute essential elements hereof.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein and for other consideration, the sufficiency of
which is hereby acknowledged, intending to be legally bound hereby, the
parties hereto agree as follows:
Terms
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1. Definitions. The following words and phrases shall have the
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meanings set forth below for the purposes of this Agreement (unless the
context clearly indicates otherwise):
(a) "Board" shall mean the Board of Directors of Company
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or any successor thereto.
(b) "Disability," as determined by the Board in good
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faith, shall mean Executive's inability to perform his duties hereunder by
reason of any physical or mental impairment which is expected to result in
death or which has lasted or is expected to last for a continuous period of
not fewer than 3 months.
(c) "Chief Executive Officer" shall mean the Company's
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current Chief Executive Officer or any successor thereto.
(d) "Principal Executive Office" shall mean Company's
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principal office for executives, presently located at 00 Xxxxxxxxxx, Xxxxx
000, Xxxxx Xxxxx, XX 00000.
1. Employment. Company hereby employs Executive as
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_______________________ and Executive hereby accepts such employment and
agrees to render services to Company in such capacity (or in such other
capacity in the future as the Chief Executive Officer may reasonably deem
equivalent to such position) on the terms and conditions set forth in this
Agreement. Executive's primary place of employment shall be at the Principal
Executive Office. It is understood that Executive may from time to time be
reasonably required to travel in furtherance of or in connection with the
business of Company.
2. Term. Unless earlier terminated by Executive or Company as
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provided in Section 10 hereof, the term of Executive's employment under this
Agreement shall commence on the date of this Agreement and terminate on
November 30, 2007.
3. Duties.
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(a) Executive shall assist the Company in its sale,
installation and service of third party network infrastructure and/or
integration hardware for local and wide area networks (the "Services"). This
shall include, but not be limited to, hardware manufactured by any of 3Com,
ADC Kentrox, Adtran, Avaya, Cabletron Systems, Check Point, Cisco Systems,
Digital Link, Eastern Research, Fastcomm, General Datacomm, Larscom , Xxxxx
Networks, Motorola, Multitech Systems, Nbase - Xyplex, Nortel Networks,
OpenRoute Networks, Osicom, Paradyne, RAD Datacommunications, SonicWall, Sync
Research, Telebyte, Verilink, Vertical Networks, Visual Networks, Watchguard
Technologies, Xylan, and Zypcom. All sales of such hardware by Consultant
shall be made by or through Company with Company listed on an invoice
presented to the buyer of such hardware.
(b) Executive shall devote his full professional time,
energy, skill and best efforts to the performance of his duties hereunder, in
a manner that will faithfully and diligently further the business and
interests of Company, and shall not be employed by or participate or engage in
or in any manner be a part of the management or operations of any business
enterprise other than Company without the prior written consent of the Chief
Executive Officer, which consent may be granted or withheld in his sole
discretion.
4. Compensation. Company shall compensate Executive for his
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services at rates consistent with those paid to Executive by the Company's
predecessor, DeltaData, Inc., prior to the date hereof and as may be
determined by the Company's Chief Executive Officer.
5. Benefit Plans. Executive shall be entitled to participate in
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and receive benefits under any employee benefit plan or stock-based plan of
Company, and shall be eligible for any other plans and benefits covering
officers of Company, to the extent commensurate with his then duties and
responsibilities fixed by the Chief Executive Officer. Company shall not make
any change in such plans or benefits which would adversely affect Executive's
rights thereunder, unless such change affects all, or substantially all,
officers of Company.
6. Vacation. Executive shall be entitled to annual vacation in
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accordance with the policies established from time to time by the Board, which
in no event shall be less than four weeks per annum. Regardless of what the
Company's standard vacation policy may be, Executive shall not be entitled to
cash payments for any vacation he does not utilize.
7. Business Expenses. Company shall reimburse Executive or
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otherwise pay for all reasonable expenses incurred by Executive in furtherance
of or in connection with the business of Company, including, but not limited
to, traveling expenses, subject to such reasonable documentation and other
limitations as may be established by the Chief Executive Officer.
8. Disability. In the event Executive incurs a Disability,
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Executive's obligation to perform services under this Agreement will
terminate, and the Board may terminate this Agreement upon written notice to
Executive.
9. Termination. This Agreement may be terminated by the Company
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or the Executive upon thirty (30) days written notice (such date, the
"Termination Date"). In the event Executive terminates his employment
hereunder or Executive's employment is terminated by Company, Executive shall
have no right to compensation or other benefits pursuant to this Agreement for
any period after his last day of active employment. The provisions contained
in Section 14 hereof, shall survive the termination of this Agreement.
10. Withholding. Company shall have the right to withhold from
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all payments made pursuant to this Agreement any federal, state, or local
taxes and such other amounts as may be required by law to be withheld from
such payments.
11. Assignability. Company may assign this Agreement and its
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rights and obligations hereunder in whole, but not in part, to any entity to
which Company may transfer all or substantially all of its assets, if in any
such case said entity shall expressly in writing assume all obligations of
Company hereunder as fully as if it had been originally made a party hereto.
Company may not otherwise assign this Agreement or its rights and obligations
hereunder. This Agreement is personal to Executive and his rights and duties
hereunder shall not be assigned except as expressly agreed to in writing by
Company.
12. Death of Executive. Any amounts due Executive under this
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Agreement as of the date of Executive's death shall be paid in a single sum as
soon as practicable after Executive's death to Executive's surviving spouse,
or if none, to the duly appointed personal representative of his estate.
13. Restrictive Covenants.
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(a) Covenant Not to Compete. During the term of this
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Agreement and for a period of four years following the date of this Agreement,
Executive shall not, directly or indirectly, in the United States (i) engage
in the business of providing information technology consulting services (the
"Business"), (ii) be or become a stockholder, partner, owner, officer,
director or employee of, or a consultant to, any person or entity engaging in
such activities; (iii) solicit the employment of any person who is an employee
of Company as of the Termination Date; (iv) hire or employ any person who is
an employee of Company as of the Termination Date; or (v) solicit any Person
who is a client or customer of the Company, Zanett or any of their affiliates
to sell such Person services competitive with those being offered by the
Company, Zanett or any of their affiliates. Notwithstanding anything herein
to the contrary, nothing herein shall prohibit Executive from owning, as a
passive investor, in the aggregate not more than five percent (5%) of the
outstanding shares of capital stock or other beneficial ownership interests of
any entity (other than a successor in interest to Company) engaged in the
Business.
(b) Confidentiality. Executive acknowledges a duty of
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confidentiality owed to Company and shall not, at any time during or after his
employment by Company, retain in writing, use, divulge, furnish, or make
accessible to anyone, without the express authorization of the Board, any
trade secret, private or confidential information or knowledge of Company,
Zanett or any of their affiliates obtained or acquired by him while so
employed. All computer software, business cards, telephone lists, customer
lists, price lists, contract forms, catalogs, Company books, records, files
and know-how acquired while an employee of Company are acknowledged to be the
property of Company and shall not be duplicated, removed from Company's
possession or premises or made use of other than in pursuit of Company's
business or as may otherwise be required by law or any legal process, or as is
necessary in connection with any adversarial proceeding against Company and,
upon termination of employment for any reason, Executive shall deliver to
Company, without further demand, all copies thereof which are then in his
possession or under his control. The above restrictions do not apply to
information which is currently in the possession of Executive, which
information is not subject to any prior confidentiality agreement, shown by
written records, and shall cease when, but only to the extent that, through no
fault of Executive, such information comes into the public domain or is
received by Executive from a third party having a bona fide right to disclose
such information.
(c) Inventions and Improvements. Executive shall
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promptly communicate to Company all ideas, discoveries and inventions which
are or may be useful to Company or its business. Executive acknowledges that
all such ideas, discoveries, inventions, and improvements which heretofore
have been or are hereafter made, conceived, or reduced to practice by him at
any time during his employment with Company heretofore or hereafter gained by
him at any time during his employment with Company are the property of
Company, and Executive hereby irrevocably assigns all such ideas, discoveries,
inventions, and improvements to Company for its sole use and benefit, without
additional compensation. The provisions of this Section 14(c) shall apply
whether such ideas, discoveries, inventions, or improvements were or are
conceived, made or gained by him alone or with others, whether during or after
usual working hours, whether on or off the job, whether applicable to matters
directly or indirectly related to Company's business interests (including
potential business interests), and whether or not within the specific realm of
his duties. Executive shall, upon request of Company, but at no expense to
Executive, at any time during or after his employment with Company, sign all
instruments and documents reasonably requested by Company and otherwise coop-
erate with Company to protect its right to such ideas, discoveries,
inventions, or improvements including applying for, obtaining, and enforcing
patents and copyrights thereon in such countries as Company shall determine.
(d) Breach of Covenant. Any breach or violation of the
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provisions in this Section 14 by Executive will result in forfeiture by
Executive and all other persons of all rights to any further payments or
benefits under this Agreement, and in such event Company shall have no further
obligation to pay any amounts related thereto. Executive expressly
acknowledges that damages alone will be an inadequate remedy for any breach or
violation of any of the provisions of this Section 14 and that Company, in
addition to all other remedies, shall be entitled as a matter of right to
equitable relief, including injunctions and specific performance, in any court
of competent jurisdiction. If any of the provisions of this Section 14 are
held to be in any respect unenforceable, then they shall be deemed to extend
only over the maximum period of time, geographic area, or range of activities
as to which they may be enforceable.
14. Miscellaneous
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(a) Amendment. No provision of this Agreement may be
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amended unless such amendment is signed by Executive and such officer as may
be specifically designated by the Board to sign on Company's behalf.
(b) Prior Employment. Executive represents and warrants
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that his acceptance of employment with Company has not breached, and the
performance of his duties hereunder will not breach, any duty owed by him to
any prior employer or other person.
(c) Severability. If any provision of this Agreement or
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the application thereof to any person or circumstance shall be invalid or
unenforceable under any applicable law, such event shall not affect or render
invalid or unenforceable any other provision of this Agreement and shall not
affect the application of any provision to other persons or circumstances.
(d) Binding Effect. This Agreement shall be binding upon
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and inure to the benefit of the parties hereto and their respective
successors, permitted assigns, heirs, executors, and administrators.
(e) Notice. For purposes of this Agreement, notices and
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all other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given if hand-delivered, sent by
documented overnight delivery service or by certified or registered mail,
return receipt requested, postage prepaid, addressed to the respective
addresses set forth below:
If to the Company:
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Delta Communications Group, Inc.
00 Xxxxxxxxxx, Xxxxx 000
Xxxxx Xxxxx, XX 00000
With a copy to:
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Zanett, Inc.
000 X. 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Chief Legal Officer
Fax: (000) 000-0000
If to the Executive:
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Xxxxxx Xxxxxxxx
00000 Xxxxx Xxxxxx
Xxx Xxxx Xxxxxxxxxx, XX 00000
(f) Entire Agreement. This Agreement sets forth the
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entire understanding of the parties and supersedes all prior agreements,
arrangements and communications, whether oral or written, pertaining to the
subject matter hereof.
(g) Governing Law. The internal law, without regard for
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conflicts of law principles, of the State of New York will govern all
questions concerning the construction, validity and interpretation of this
Agreement and the performance of the obligations imposed by this Agreement.
IN WITNESS WHEREOF, this Agreement has been executed as of the date first
above written.
DELTA COMMUNICATIONS GROUP, INC.
By: /s/ Xxxxxx Xxxxxx
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Title: Chief Executive Officer
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XXXXXX XXXXXXXX
/s/ Xxxxxx Xxxxxxxx
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