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EXHIBIT 2.2
EMPLOYMENT AGREEMENT DATED JULY 30, 1997
BETWEEN STAR TECHNOLOGIES, INC. POWERSCAN, INC.
AND XXXX X. XXXXXXXXX
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "AGREEMENT"), dated July 30, 1997,
between STAR TECHNOLOGIES, INC., a Delaware corporation ("STAR", which unless
the context otherwise requires, shall include its wholly-owned subsidiary, the
Division (as hereinafter defined)), POWERSCAN, INC., a Delaware corporation
(the "Division"), and XXXX X. XXXXXXXXX ("XX. XXXXXXXXX").
W I T N E S S E T H :
WHEREAS, Star desires to retain the services of Xx. Xxxxxxxxx, and Xx.
Xxxxxxxxx desires to be employed by Star upon the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
SECTION 1. EMPLOYMENT
Star hereby employs Xx. Xxxxxxxxx as Executive Vice President of Star
and the Division hereby employs Xx. Xxxxxxxxx as President of the Division.
Xx. Xxxxxxxxx hereby agrees to serve faithfully in such positions and in such
other executive positions as shall be reasonably assigned to Xx. Xxxxxxxxx by
Star's Board of Directors, for the period hereinafter defined; provided, that
if any such assignment is to a position unrelated to the business of the
Division, Xx. Xxxxxxxxx shall have first concurred therewith, and shall not
unreasonably withhold such concurrence. Xx. Xxxxxxxxx agrees to perform such
services customary to such positions as shall from time to time be assigned to
him by Star's Board of Directors and, in the absence of such assignment, such
services customary to such position as are necessary to the operations of Star.
Xx. Xxxxxxxxx further agrees to use his commercially reasonable best
professional efforts to promote the interests of Star and to devote his full
business time and energies during normal business hours to the business and
affairs of Star during the Term of Employment (as hereinafter defined).
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SECTION 2. TERM OF EMPLOYMENT
Xx. Xxxxxxxxx'x employment hereunder shall be for the period which
shall commence on the date hereof and shall end on July 29, 1999 (the "TERM OF
EMPLOYMENT"), unless earlier terminated (i) at the option of Star upon 30 days'
prior written notice to Xx. Xxxxxxxxx, in the event of the inability of Xx.
Xxxxxxxxx to perform his duties hereunder, whether by reason of injury or
illness (physical or mental), incapacitating Xx. Xxxxxxxxx for a continuous
period exceeding 180 days or (ii) upon the discharge of Xx. Xxxxxxxxx by the
Board of Directors of Star for cause. Termination for cause may be on account
of (a) any material breach by Xx. Xxxxxxxxx of the provisions of this Agreement
or (b) any acts or conduct inconsistent with the standards of loyalty,
integrity or care reasonably required of other executives of Star at a
comparable level of management. Upon termination for cause, Xx. Xxxxxxxxx
shall resign from the boards of Star and the Division if requested to do so by
the Board of Directors of Star.
SECTION 3. COMPENSATION
3.1 BASE SALARY
As compensation for services hereunder and in consideration of his
agreement not to compete as set forth in Section 4, during the Term of
Employment Star shall pay Xx. Xxxxxxxxx an annual base salary of $150,000.00,
which shall be payable in appropriate installments to conform with the regular
payroll dates for salaried personnel of Star or the Division, as the case may
be.
3.2 OTHER BENEFITS
Xx. Xxxxxxxxx will be entitled to substantially similar fringe
benefits taken as a whole as he received in his full-time employment during the
year immediately preceding the execution of this Agreement. These benefits are
as specified on Schedule A hereto. Xx. Xxxxxxxxx'x participation in any
applicable pension or retirement plans shall commence immediately upon
commencement of the Term of Employment unless prohibited by law or prejudicial
to the tax status of the benefit plan. For purposes of calculation of
vacation, sick leave, unpaid leave or other length of service dependent
benefits excluding pension, Xx. Xxxxxxxxx shall be credited immediately with 12
years of service without regard to accrual of time requirements which may
otherwise be applicable. Xx. Xxxxxxxxx shall be eligible to participate in any
stock option program or employee stock purchase plan to the extent that other
executives at a comparable level of management are eligible to participate and
without any length of service requirement unless required by law or the failure
to impose such requirement would be prejudicial to the tax status of any such
program or plan.
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3.3 PAYMENT UPON EARLY TERMINATION
(a) In the event of early termination of employment for any
reason specified in Section 2, or upon Xx. Xxxxxxxxx'x death, Star shall no
longer be obligated to make any salary payments either directly or indirectly
of any kind whatsoever to Xx. Xxxxxxxxx or to his estate for the period
following the effective date of any such termination, or such death. Any
salary earned but not yet paid, however, shall be paid either directly or
indirectly by Star to Xx. Xxxxxxxxx or to his estate. Upon and after
termination of employment for whatever reason specified in Section 2, Xx.
Xxxxxxxxx shall be entitled to such benefits other than salary payments to
which he is entitled under applicable law.
(b) In the event that Xx. Xxxxxxxxx'x tenure as a director of
Star or the Division is terminated during the Term of Employment except (i)
with his consent, (ii) in connection with a termination of employment pursuant
to Section 2 or (iii) otherwise for breach of fiduciary duty as a director as
determined in accordance with application of the Delaware General Corporation
Law, Xx. Xxxxxxxxx shall, at his option, be entitled to resign from his
employment by Star hereunder with a continuation of his salary and benefits
under Sections 3.1 and 3.2 until expiration of the Term of Employment. Any
such resignation shall not otherwise affect Xx. Xxxxxxxxx'x obligations
hereunder, including, without limitation, under Section 4.
SECTION 4. COVENANT NOT TO COMPETE; INTELLECTUAL PROPERTY; CONFIDENTIALITY
4.1 COVENANT NOT TO COMPETE
Xx. Xxxxxxxxx agrees that during the Term of Employment and for 12
months thereafter, so long as Xx. Xxxxxxxxx shall not have been terminated
other than for cause, he will not, directly or indirectly:
(a) Persuade or attempt to persuade any businesses or persons
with whom Star has had, or is having, or if Xx. Xxxxxxxxx'x employment has been
terminated, has had within the six months prior to such termination, material
business dealings to cease doing business with Star, or to reduce the amount of
business it does with Star.
(b) Persuade or attempt to persuade any potential business
interest, which is known or should have been known to him, to which Star has
made a formal presentation, or if Xx. Xxxxxxxxx'x employment has been
terminated, has made such a presentation within the six months prior to such
termination, or with which Star has been having substantive discussions, or if
Xx. Xxxxxxxxx'x employment has been
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terminated, has had such discussions within the six months prior to such
termination, not to do business with Star.
(c) Solicit for himself or any person other than Star, with
respect to any matter or business which is a Competing Business (as defined
below), the business of any company which is a business interest of Star, or if
Xx. Xxxxxxxxx'x employment has been terminated, was its business interest
within six months prior to the termination of Xx. Xxxxxxxxx'x employment.
(d) Persuade or attempt to persuade any employee of Star to leave
Star's employ, or persuade or attempt to persuade any employee of Star, or any
individual who was its employee during the six months prior to his termination
of employment, to become employed by any person other than Star.
Notwithstanding the above, during the Term of Employment and for 12
months thereafter, Xx. Xxxxxxxxx will not, within any jurisdiction in which
Star is duly qualified to do business, or within any marketing area in which
Star is doing a substantial amount of business, directly or indirectly own,
manage, operate, control, be employed by or participate in the ownership,
management, operation or control of, or be connected in any manner with, any
business that involves or includes (individually or collectively) the design,
development, sale, resale, marketing or servicing of (i) high-volume
document-image-capture or high-volume document-image-processing computer
software or (ii) any other product that during the Term of Employment is
designed, developed, sold, resold, marketed or serviced by Star (a "COMPETING
BUSINESS"); provided, that, so long as Xx. Xxxxxxxxx otherwise complies with
the terms of this Section 4.1, he shall not be prohibited from serving as a
consultant to end users of the products described in clauses (i) and (ii) above
following the expiration of the Term of Employment. For these purposes, Xx.
Xxxxxxxxx'x ownership of securities of a public company not in excess of five
percent of any class of such securities shall not be considered to be
competition with Star.
If, at any time, the provisions of this Section 4.1 shall be
determined to be invalid or unenforceable, by reason of being vague or
unreasonable as to area, duration or scope of activity, this Section 4.1 shall
be considered divisible and shall become and be immediately amended to cover
only such area, duration and scope of activity as shall be determined to be
reasonable and enforceable by the court or other body having jurisdiction over
the matter; and Xx. Xxxxxxxxx agrees that this Section 4.1 as so amended shall
be valid and binding as though any invalid or unenforceable provision has not
been included herein.
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In the event of a violation of Section 4.1 hereof, the remedies of
Star shall include, but shall not be limited to, the right to seek injunctive
relief in accordance with Section 7.2.
4.2 DISCLOSURE AND ASSIGNMENT OF INTELLECTUAL PROPERTY
Xx. Xxxxxxxxx agrees to disclose and hereby assigns to Star all rights
to any inventions or discoveries, whether or not patentable, that are
conceived, made, developed, built, or reduced to practice, by him solely or
jointly with others, during the Term of Employment (or conceived by Xx.
Xxxxxxxxx before the Term of Employment but made into something, developed,
built or reduced to practice, by him solely or jointly with others, during the
Term of Employment and that relate to Star's business, actual or demonstrably
anticipated research and development or any work performed by Xx. Xxxxxxxxx for
Star (collectively, the "STAR INTELLECTUAL PROPERTY"). Xx. Xxxxxxxxx agrees
that all such inventions and discoveries are the sole property of Star.
Xx. Xxxxxxxxx agrees to sign documents and, at Star's expense, to take
such other actions as are necessary to transfer complete and exclusive
ownership of the Star Intellectual Property to Star. In addition, Xx.
Xxxxxxxxx will sign such documents as Star from time to time considers
advisable in order to apply for patent or copyright protection relating to the
Star Intellectual Property in Star's name. Xx. Xxxxxxxxx further agrees to
cooperate with Star to obtain patent or copyright protection in the United
States and foreign countries for any Star Intellectual Property.
As used in this Agreement, "inventions and discoveries" shall have the
broadest meaning and shall include but not be limited to new products,
machines, methods, processes, software programs, hardware, improvements,
compositions of matter, and designs or configurations.
4.3 CONFIDENTIALITY
Xx. Xxxxxxxxx agrees that during the Term of Employment and
thereafter, except in compliance with legal process, or as required in the
performance of his duties hereunder, he will not divulge to anyone (other than
persons employed by or designated by Star) any knowledge or information of any
type whatsoever of a confidential nature relating to the business of Star or
any of its subsidiaries or affiliates, including, without limitation, all types
of trade secrets, know-how, inventions, discoveries, marketing information,
business strategies, customer lists, and other proprietary business
information. For purposes of this provision, all information relating to Star
and to Star's business shall be deemed confidential unless the information is
generally known and available to the public. Xx. Xxxxxxxxx agrees to
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employ all reasonable measures to prevent the unauthorized use by or through him
of confidential or proprietary business information. Xx. Xxxxxxxxx agrees that
in the event he has any doubt as to whether certain information is confidential
or proprietary, he will hold the information in the strictest confidence and
otherwise treat it as if it were proprietary or confidential. In the event of a
violation of this Section 4.3, the remedies of Star shall include, but shall not
be limited to, the right to seek injunctive relief in accordance with Section
7.2.
4.4 RETURN OF INFORMATION
Upon the termination of his employment for any reason and without the
necessity of recourse to legal process, Xx. Xxxxxxxxx shall promptly surrender
to Star all originals and copies of any document, letter, computer disc or
tape, or other papers or instruments in his possession or under his control
relating to the operations, business, or affairs of Star or with respect to Xx.
Xxxxxxxxx'x performance of his duties hereunder. Star agrees, upon reasonable
notice from Xx. Xxxxxxxxx and, to the extent reasonably possible and without
the necessity of recourse to legal process, to make available to Xx. Xxxxxxxxx
such Star records in its possession as may be reasonably requested by Xx.
Xxxxxxxxx in connection with Xx. Xxxxxxxxx'x defense of any claim, proceeding
or lawsuit arising out of his employment by Star.
SECTION 5. REIMBURSEMENT OF EXPENSES
Xx. Xxxxxxxxx shall be entitled to be reimbursed for reasonable and
customary travel and other expenses incurred in connection with his services to
Star pursuant to and during the Term of Employment, provided, however, that
such expenses are incurred and accounted for in accordance with the policies
and procedures established by Star or the Division.
SECTION 6. BREACH BY EMPLOYEE
Both parties recognize that the services to be rendered under this
Agreement by Xx. Xxxxxxxxx are personal in character, and that in the event of
the breach by Xx. Xxxxxxxxx of the terms and conditions of this Agreement to be
performed by him, or in the event Xx. Xxxxxxxxx performs services for any
person, firm or corporation engaged in a line of Competing Business with Star,
Star shall be entitled, if it so elects, to institute and prosecute proceedings
to obtain damages for any breach of this Agreement, or to enforce the specific
performance thereof by Xx. Xxxxxxxxx, or to enjoin Xx. Xxxxxxxxx from
performing services for any such other person, firm or corporation.
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SECTION 7. MISCELLANEOUS
7.1 GOVERNING LAW
The interpretation and construction of this Agreement, and all matters
relating hereto, shall be governed by the laws of the State of Maryland,
excluding its conflict of law rules. All payments hereunder shall be subject
to applicable federal, State and local tax withholding requirements.
7.2 DISPUTE RESOLUTION
Any dispute, controversy, or claim arising directly or indirectly from
this Agreement or from Xx. Xxxxxxxxx'x employment under this Agreement that
cannot be resolved through good faith negotiation, shall be submitted to
non-binding mediation conducted by a mutually selected mediator. If a dispute,
controversy, or claim is not resolved through mediation, it shall be fully and
finally settled by arbitration in the Commonwealth of Virginia in accordance
with the Commercial Arbitration Rules of the American Arbitration Association.
The arbitration shall be conducted by a single mutually selected arbitrator
whose decision shall be final and binding. The arbitrator shall not have
authority to award punitive or other non-compensatory damages to either party.
The claims that may be arbitrated include, but are not limited to, claims based
on contract, fraud, misrepresentation, statute, or tort. In any arbitration
under this Agreement, the parties will bear their own attorneys' fees and
costs. Either party may enter the arbitrator's award in any court in the
Commonwealth of Virginia that has jurisdiction, provided, however, that Star
shall be entitled to seek a restraining order or injunction in any court of
competent jurisdiction to prevent any continuation of any violation of Sections
4.1 or 4.3 of this Agreement. Xx. Xxxxxxxxx hereby consents that such
restraining order or injunction may be granted without the necessity of Star's
posting any bond, it being acknowledged and agreed that any breach or
threatened breach of the provisions of Sections 4.1 or 4.3 will cause
irreparable injury to Star and that money damages will not provide an adequate
remedy to Star.
7.3 THIRD-PARTY BENEFICIARIES
Each party hereto intends that this Agreement shall not benefit or
create any right or cause of action in or on behalf of any person other than
the parties hereto.
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7.4 SEVERABILITY
Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
7.5 CAPTIONS
The section captions used herein are for reference purposes only, and
shall not in any way affect the meaning or interpretation of this Agreement.
7.6 NOTICES
Any notice or other communications required or permitted hereunder
shall be in writing and be sufficiently given if delivered in person or sent by
facsimile (which provides written confirmation to the sender of its delivery)
or by registered or certified mail, postage prepaid, or by overnight courier
service, addressed as follows:
If to Star, to:
Star Technologies, Inc.
000 Xxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx Coie
000 Xxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Corporate Group
Facsimile: (000) 000-0000
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and if to the Division, to
PowerScan, Inc.
c/o Star Technologies, Inc.
000 Xxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx Coie
000 Xxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Corporate Group
Facsimile: (000) 000-0000
and if to Xx. Xxxxxxxxx, to:
Xx. Xxxx X. Xxxxxxxxx
c/o PowerScan, Inc.
0000 Xxxxx Xxxxx Xxxx
Xxxxxxxx X
Xxxxxxx, Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxx, Rothman, Goldstein, Xxxxxxxxx & Xxxxxx,
Chartered
One Bethesda Center
0000 Xxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Facsimile: (000) 000-0000
or such other address as shall be furnished in writing by any party to the
others, and such notice or communication shall be deemed to have been given as
of the date so delivered, sent by facsimile or mailed.
7.7 PARTIES IN INTEREST
This Agreement is a personal contract and, except as specifically set
forth herein, the rights and interests of Xx. Xxxxxxxxx set forth herein may
not be sold,
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transferred, assigned, pledged or hypothecated. The rights and obligations of
Star hereunder shall be binding upon and run in favor of the successors and
assigns of Star. In the event of any attempted assignment or transfer of rights
hereunder contrary to the provisions hereof, Star shall have no further
liability for payments hereunder.
7.8 COUNTERPARTS
This Agreement may be executed in one or more counterparts (or upon
separate signature pages bound together into one or more counterparts), all of
which taken together shall constitute one instrument.
7.9 WAIVER
Waiver by either party of any breach or failure to comply with any
provision of this Agreement by the other party shall not be construed as, or
constitute, a continuing waiver of such provision, or a waiver of any other
breach of or failure to comply with any other provisions of this Agreement.
7.10 ENTIRE AGREEMENT
This Agreement contains the entire understanding of the parties hereto
with respect to the subject matter contained herein. This Agreement supersedes
all prior agreements and understandings, whether written or oral, between the
parties with respect to such subject matter.
7.11 AMENDMENTS
This Agreement may not be amended or modified orally, but only by an
amendment in writing signed by both parties.
7.12 SURVIVORSHIP
The respective rights and obligations of the parties hereunder shall
survive any termination of Xx. Xxxxxxxxx'x employment to the extent necessary
to the intended preservation of such rights and obligations. These shall
include, without limitation, the provisions of Sections 2, 4 and 7.2.
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IN WITNESS WHEREOF, Star and the Division, each by their duly
authorized representative, and Xx. Xxxxxxxxx, have caused this Employment
Agreement to be duly executed on the date first set forth above.
STAR TECHNOLOGIES, INC.
By /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Chairman of the Board, President
and Chief Executive Officer
POWERSCAN, INC.
By /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Chairman of the Board
/s/ Xxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxxxxx
EMPLOYMENT AGREEMENT SIGNATURE PAGE
