EMPLOYMENT AGREEMENT
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THIS AGREEMENT, (the "Agreement") effective as of the _____of ________,
1996 between VOICENET, Inc., a Delaware corporation ( the "Company") and XXXXX
XXXX, an individual currently residing at ______________________("Employee").
WHEREAS, Employee has been serving as President and Chief Executive Officer
of the Company.
WHEREAS, the Board of Directors of the Company (the "Board") desires to
continue employing Employee as President and Chief Executive Officer of the
Company and the parties desire to provide greater detail to his employment
arrangements with the Company which the Board has determined will encourage the
continued attention and dedication to the Company of Employee as a senior member
of the Company's management, and is in the best interest of the Company and its
shareholders.
WHEREAS, Employee is willing to continuing serving in the capacity as
President and Chief Executive Officer of the Company.
WHEREAS, in order to effect the foregoing, the Company and Employee wish to
enter into an employment agreement on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements of the parties herein contained, the parties hereto
agree as follows:
ARTICLE I
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EFFECTIVE TIME
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1.00 EFFECTIVE TIME. This Agreement shall be effective as of the date
hereof.
ARTICLE II
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EMPLOYMENT
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2.00 EMPLOYMENT. The Company hereby employs Employee and Employee hereby
agrees to continue to serve the Company on the terms and conditions set forth
herein. Employee shall hold the office of President and Chief Executive Officer
of the Company.
ARTICLE III
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TERM
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3.00 TERM. The term of employment of Employee by the Company pursuant to
this agreement shall commence on the date hereof and end three years from the
date hereof.
ARTICLE IV
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DUTIES OF EMPLOYMENT
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4.00 DUTIES. Subject to the authority of the Board of Directors of the
Company, Employee shall perform such duties and functions as the Board shall
from time to time determine and as customarily assigned to the President and
Chief Executive Officer of a corporation. Employee shall be elected or
appointed as a Director of the Company during the term of this Agreement.
Employee shall devote his full time and effort to the business and affairs of
the Company. Employee further agrees to serve, if elected or appointed thereto,
as a director of the Company's subsidiaries and affiliated entities (if any) and
in one or more executive offices of any of the Company's subsidiaries (if any),
provided that Employee is indemnified for serving in any and all such capacities
on a basis no less favorable than is currently provided by the Company's
Certificate of Incorporation or By-laws.
ARTICLE V
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COMPENSATION AND RELATED MATTERS
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5.01 SALARY. As compensation for the employment services to be rendered
by Employee hereunder, the Company shall pay to Employee a salary at a rate of
$180,000 per annum, payable in equal monthly installments, subject to increase
by the Board of Directors. If the salary is so increased, it shall not
thereafter during the term of this Agreement be decreased. Compensation of
Employee by salary payments shall not be deemed exclusive and shall not prevent
Employee from participating in any other compensation or benefit plan of the
Company. The salary payments (including any increased salary payments)
hereunder shall not in any way limit or reduce any other obligation of the
Company hereunder, and no other compensation, benefit or payment hereunder shall
in any way limit or reduce the obligation of the Company to pay Employee's
salary hereunder.
5.02 EXPENSES. During the term of Employee's employment hereunder,
Employee shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by Employee in performing the services hereunder, including,
but not limited to, automobile expense reimbursement as well as all expenses for
travel and living expenses while away from home on business or at the
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request of and in the service of the Company, its subsidiaries or affiliated
companies, provided that such expenses are incurred and accounted for in
accordance with the policies and procedures established by the Company.
Notwithstanding, Employee shall not incur an expense for in excess of $5,000
without the prior consent of the Company.
5.03 OTHER BENEFITS.
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(a) CONTINUED PARTICIPATION. Employee shall be entitled to participate in
all of the Company's employee benefit plans, if any, in effect on the date
hereof and any other plans made available by the Company in the future to its
executives and key management employees.
(b) CHANGES TO PLANS. The Company shall not make any changes in such
plans which would adversely affect Employee's rights or benefits thereunder,
unless such change occurs pursuant to a program applicable to all executives of
the Company and does not result in a proportionately greater reduction in the
rights of or benefits to Employee as compared with any other executive of the
Company.
(c) PRO-RATION. Nothing paid to Employee under any plan presently in
effect or made available in the future shall be deemed to be in lieu of the
salary payable to Employee pursuant to paragraph 5.01 of this Article. Any
payments or benefits payable to Employee hereunder in respect of any calendar
year during which Employee is employed by the Company for less than the entire
such year shall, unless otherwise provided in the applicable plan or
arrangement, be prorated in accordance with the number of days in such calendar
year during which he is so employed.
5.04 BONUS. The Company shall pay Employee during the term of his
employment hereunder, in addition to the annual salary set forth in paragraph
5.01 of this Article, an annual bonus in an amount to be determined in the sole
discretion of the Board of Directors.
ARTICLE VI
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TERMINATION
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6.01 TERMINATION. Employee's employment hereunder may be terminated
without any breach of this Agreement upon written notice from the Company to
Employee only as set forth in this Article.
6.02 DEATH. Employee's employment hereunder shall terminate upon his
death.
6.03 DISABILITY. If, as a result of Employee's incapacity due to physical
or mental illness, Employee shall have been absent from his duties on a
full-time basis for the entire period of five consecutive months or for a total
of six months (whether or not consecutive), in any twelve (12) month period
during the term of this Agreement, and within sixty (60) days after written
notice of
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termination is given (which may occur before or after the end of such six month
period) shall not have returned to the performance of his duties hereunder on a
full-time basis, the Company may terminate Employee's employment hereunder.
6.04 CAUSE. The Company may terminate Employee's employment hereunder at
any time for cause, which shall be deemed to include but not be limited to the
following:
(a) Employee's engaging in fraud, misappropriation of funds, embezzlement
or like conduct committed against the Company.
(b) Employee's conviction of a felony.
(c) Employee's material violation of a generally recognized policy of the
Company.
(d) Employee's material violation of any provision of this Agreement.
6.05 TERMINATION BY EMPLOYEE.
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(a) REASONS FOR TERMINATION. Employee may terminate his employment
hereunder (i) at any time during the life of this Agreement after the occurrence
of any of the events which constitute Good Reason (as defined below) or (ii) if
his health should become impaired to an extent that makes his continued
performance of his duties hereunder hazardous to his physical or mental health
or his life, provided that Employee shall furnish the Company with a written
statement from a qualified doctor to such effect and provided further, that at
the Company's request, Employee shall submit to an examination by a doctor
selected by the Company's Board, and such doctor shall have concurred in the
conclusion of Employee's doctor.
(b) GOOD REASON. For purposes of this Agreement, "Good Reason" shall mean
(i) a change in control of the Company (as defined below), (ii) a failure by the
Company to comply with any material provision of this Agreement which has not
been cured within sixty (60) days after notice of such noncompliance has been
given by Employee to the Company or (iii) any attempted termination of
Employee's employment which is not effected by a Notice of Termination
satisfying the requirements of paragraph 6.06 hereof (and for purposes of this
Agreement no such attempted termination shall be effective).
(c) CHANGE IN CONTROL. For purposes of this Agreement, a "change in
control of the Company", shall mean a change in control of such a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Securities and Exchange Act of 1934 (the
"Exchange Act") as if the Company was a reporting Company; provided that,
without limitation, such a change in control shall be deemed to have occurred if
(i) any "person" (as such term is used in Section 13(d) and 14(d) of the
Exchange Act), other than the Company or any "person" who on the date hereof is
a director or officer of the Company, or any employer of such person or any
affiliate (as defined by the Act) of such person or any affiliate (as defined by
the Act)
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of such person or employer, is or becomes the "beneficial owner" (as defined in
Rule 13(d)-3 under the Exchange Act), directly or indirectly, of securities of
the Company representing 50% or more of the combined voting power of the
Company's then outstanding securities; or (ii) the Board of the Company fails
to reelect Employee as President and/or as a director of the Company or removes
Employee from such offices and/or from such directorship or if at any time
during the term of employment, Employee fails to be vested by the Company with
the powers and authority of the President of the Company or if the Company in
any substantive way diminishes Employee's responsibilities, duties, power or
authority as set forth under this Agreement, other than pursuant to the
provision of section 7.01. Notwithstanding anything herein to the contrary, no
Change in Control shall be deemed to have occurred for purposes of this
Agreement by virtue of any transaction which results in Employee or a group of
persons which includes Employee, acquiring directly or indirectly, 50% or more
of the combined voting power of the Company's securities.
6.06 NOTICE OF TERMINATION. Any termination of Employee's employment by
the Company or by Employee (other than termination pursuant to paragraph 6.02
above) shall be communicated by sixty (60) days written notice of termination to
the other party hereto. For purposes of this Agreement, "Notice of Termination"
shall mean a notice which shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for the termination of Employee's
employment under the provision so indicated.
6.07 DATE OF TERMINATION. "Date of Termination" shall mean (i) if
Employee's employment is terminated by his death, the date of his death, (ii) if
Employee's employment is terminated pursuant to paragraph 6.03 above, sixty (60)
days after Notice of Termination is given (provided that Employee shall not have
returned to the performance of his duties on a full-time basis during such sixty
(60) day period), (iii) if Employee's employment is terminated pursuant to
paragraph 6.04 above, the date specified in the Notice of Termination and (iv)
if Employee's employment is terminated for any other reason, the date on which a
Notice of Termination is given; provided that, in the case of this clause (iv),
if within sixty (60) days after any Notice of Termination is given the party
receiving such notice notifies the other party that a dispute exists concerning
the termination, the Date of Termination shall be the date on which the dispute
is finally determined, either by mutual or written agreement of the parties or
by a binding and final arbitration aware in accordance with paragraph 13.01
hereof.
6.08 COMPENSATION UPON TERMINATION BY EMPLOYEE FOR GOOD CAUSE OR WRONGFUL
TERMINATION. In the event that Employee elects to terminate this Agreement for
Good Cause as defined above or is wrongfully terminated (i.e., not terminated
for cause by the Company as described above), then by way of a final severance
payment under this Agreement, Employee shall receive a sum equal to his annual
base salary then in effect. Upon such payment by the Company, it shall have no
further liabilities or obligations to the Employee in any manner.
ARTICLE VII
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SUCCESSORS, BINDING AGREEMENT
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7.01 SUCCESSORS. The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance reasonably satisfactory to Employee, to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had taken
place. Failure of the Company to obtain such agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement and
shall entitle Employee to exercise in his discretion any and all rights arising
from such a breach as provided in this Agreement. As used in this Agreement,
"Company" shall mean the Company as hereinbefore defined and any successor to
its business and/or assets as aforesaid which executes and delivers the
agreement provided for in this Article or which otherwise becomes bound by all
terms and provisions of this Agreement by operation of law.
7.02 BINDING AGREEMENT. This Agreement and all rights of Employee
hereunder shall inure to the benefit of and be enforceable by Employee's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If Employee should die while any amounts
would still be payable to him hereunder if he had continued to live, all such
amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to Employee's devisee, legatee, designee or, if there is
no such designee, to Employee's estate.
ARTICLE VIII
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REPRESENTATIONS AND AGREEMENTS OF EMPLOYEE
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8.01 ABILITY TO PERFORM. Employee represents and warrants that he is free
to enter into this Agreement and to perform the duties required hereunder, and
that there are no employment contracts or understandings, restrictive covenants
or other restrictions, whether written or oral, preventing the performance of
his duties hereunder.
ARTICLE IX
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EMPLOYEE COVENANTS
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9.01 NON-COMPETITION. Employee agrees that for a period of eighteen
months (the "Non-Competitive Period"), from his voluntary resignation from
employment with the Company or termination for Cause before the end of this
Agreement (but not for termination by Employee for Good Reason), Employee shall
not, directly or indirectly, as owner, partner, joint venturer,
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stockholder, employee, broker, agent, principal, trustee, corporate officer,
director, licensor or in any capacity whatsoever engage in, become financially
interested in, be employed by, render any consultation or business advice with
respect to, or have any connection with, any business engaged in speech
recognition technology or related products or any other material business being
conducted by the Company, in any geographic area where, at the time of the
termination of his employment hereunder, the business of the Company was being
conducted in any material respect; provided, however, that Employee may own any
securities of any corporation which is engaged in such business and is (i)
publicly owned and traded but in an amount not to exceed at any one time five
percent (5%) of any class of stock or securities of such corporation or (ii) a
non-public start-up company.
9.02 NO HIRING. During the Non-Competitive Period, Employee will not
knowingly (i) hire or attempt to hire any employee of the Company or
subsidiaries (if any); (ii) assist in such hiring by any other person; or (iii)
encourage any such employee to terminate his employment with the Company.
9.03 SEVERABILITY. If any portion of the restrictions set forth in this
section 9 should, for any reason whatsoever, be declared invalid by a court of
competent jurisdiction, the validity of enforceability of the remainder or such
restrictions shall not thereby be adversely affected.
9.04 REASONABLENESS. Employee agrees that the territorial and time
limitations set forth in this section 9 are reasonable and properly required for
the adequate protection of the business of the Company. In the event any such
territorial or time limitation is deemed to be unreasonable by a court of
competent jurisdiction, Employee agrees to the reduction of the territorial or
time limitation to the area or period which such court shall have deemed
reasonable.
ARTICLE X
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NON-DISCLOSURE OF CONFIDENTIAL INFORMATION
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10.01 NON-DISCLOSURE.
Employee will not at any time, whether during or after the termination of
my employment, reveal to any person or entity any of the know-how, trade secrets
or confidential information concerning the research, development, technology,
business or finances of the Company or of any third party which the Company is
under an obligation to keep confidential (including but not limited to trade
secrets or confidential information respecting research, inventions, products,
designs, methods, know-how, techniques, systems, processes, software programs,
works of authorship, customer lists, projects, loans and proposals), except as
may be required in the ordinary course of performing his duties as an employee
of the Company, and he shall keep secret all matters entrusted to me and shall
not use or attempt to use any such information in any manner which may injure or
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cause loss or may be calculated to injure or cause loss whether directly or
indirectly to the Company.
Further, Employee agree that during his employment he shall not make, use
or permit to be used any notes, memoranda, reports, lists, records, drawings,
sketches, specifications, software programs, data, documentation or other
materials of any nature relating to any matter within the scope of the business
of the Company or concerning any of its dealings or affairs otherwise than for
the benefit of the Company. He further agree that he shall not, after the
termination of his employment, use or permit to be used any such notes,
memoranda, reports, lists, records, drawings, sketches, specification, software
programs, data, documentation or other materials, it being agreed that all of
the foregoing shall be and remain the sole and exclusive property of the Company
and that immediately upon the termination of his employment, he shall deliver
all of the foregoing, and all copies thereof, to the Company, at its main
office.
10.02 RETURN OF DOCUMENTS. Upon termination of Employee's employment with
the Company, all documents, records, reports, writings and other similar
documents containing confidential information, including copies thereof, then in
Employee's possession or control shall be returned and left with the Company.
ARTICLE XI
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EQUITABLE RELIEF
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11.01 RIGHT TO INJUNCTION. Employee recognizes that the services to be
rendered by him hereunder are of a special unique, unusual, extraordinary and
intellectual character involving skill of the highest order and giving them
peculiar value, the loss of which cannot be adequately compensated for in
damages. In the event of a breach of this Agreement by Employee, the Company
shall be entitled to injunctive relief or any other legal or equitable
remedies. Employee agrees that the Company may recover by appropriate action
the amount of the actual damages caused the Company by any failure, refusal
or neglect of Employee to perform his agreements, representations and
warranties herein contained. The remedies provided in this Agreement shall
be deemed cumulative and the exercise of one shall not preclude the exercise
of any other remedy, at law or in equity, for the same event or any other
event.
ARTICLE XII
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MISCELLANEOUS
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12.01 ARBITRATION. Should any dispute arise between the parties
concerning the performance
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of this Agreement, the parties agree to mediation and, if not resolved through
such mediation within thirty days, final and binding arbitration in New York,
New York in accordance with the rules of the American Arbitration Association
subject to Article XI in the case of alleged breach of Articles IX or X.
The decision rendered in any arbitration proceedings shall be in writing
and shall set forth the basis therefor. The parties shall abide by the award
rendered in the arbitration proceedings, and such award may be entered as a
final, nonappealable judgment, and may be enforced and executed upon, in any
court having jurisdiction over the party against whom enforcement of such award
is sought. Each of the parties agrees (in connection with any action brought to
enforce the arbitration provisions of this paragraph) not to assert in any such
action, any claim that it is not subject to the personal jurisdiction of such
court, that the action is brought in an inconvenient forum, that the venue of
the action is improper, or that such mediation or arbitration may not be
enforced by such courts. Each party agrees that service of process may be made
upon it by any method authorized by the laws of the State of New York.
12.02 NOTICE. For the purposes of this Agreement, notices, demands and
all other communications provided for in the Agreement shall be in writing,
shall be deemed to have been duly given when delivered or unless otherwise
specified mailed by U.S. registered mail, return receipt requested, postage
prepaid, addressed as follows:
If to Employee: Xxxxx Xxxx
If to the Company: VOICENET, INC.
Xxxxx 000
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Chairman of the Board
and
Xxxxxxxx & Xxxxxxx, P.C.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx, Esq.
or to such other address as any party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
12.03 AMENDMENT OR ALTERATION. No amendment or alteration of the terms of
this
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Agreement shall be valid unless made in writing and signed by both of the
parties hereto.
12.04 GOVERNING LAW. This Agreement shall be governed by the laws of the
State of New York.
12.05 SEVERABILITY. The holding of any provision of this Agreement to be
invalid or unenforceable by a court of competent jurisdiction shall not affect
any other provision of this Agreement, which shall remain in full force and
effect.
12.06 WAIVER OR BREACH. No waiver of or failure to enforce any provisions
of this Agreement shall be deemed, or shall constitute, a waiver of any other
provision of this Agreement, nor shall such waiver or failure to enforce
constitute a continuing waiver.
12.07 ASSIGNMENT. This Agreement may not be transferred or assigned by
either party without the prior written consent of the other party.
12.08 FURTHER ASSURANCES. The parties agree to execute and deliver all
such further documents, agreements and instruments and take such other and
further action as may be necessary or appropriate to carry out the purposes and
intent of this Agreement.
12.09 ENTIRE AGREEMENT. This Agreement constitutes the entire understanding
between the parties with respect to the subject matter hereof and supercedes any
and all prior understandings and agreements, oral and written, relating hereto.
12.10 HEADINGS. The section headings appearing in this Agreement are for
purposes of each reference and shall not be considered a part of this Agreement
or in any way modify, amend or affect its provisions.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
EMPLOYER:
VOICENET, INC.
By:____________________________________
Title:_________________________________
EMPLOYEE: Xxxxx Xxxx
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