Exhibit 10.7
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated this 15th day of
September, 1995, by and between MICROGRAPHIC TECHNOLOGY CORPORATION, a Delaware
corporation (the "Company"), SoftNet Systems, Inc., a New York corporation
("SoftNet"), and A.J.R. OOSTHUIZEN (the "Employee").
W I T N E S S E T H:
WHEREAS, the Company is engaged in the business of providing Computer
Output Microfilm ("COM") products and services; and
WHEREAS, the Employee is familiar with the administration and management of
a COM business; and
WHEREAS, the parties acknowledge that the Employee's abilities and services
are unique and essential to the prospects of the Company; and
WHEREAS, the Employee, SoftNet, and the Company are desirous of entering
into an agreement providing for the employment by the Company of the Employee in
the positions and upon the terms provided herein.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Employment, Duties and Term. The Company hereby employs the Employee
and the Employee hereby accepts employment upon the terms and conditions
hereinafter set forth.
(a) The Company agrees to employ the Employee in the position of
President and Employee agrees to perform such duties and tasks as the board of
directors of the Company may from time to time reasonably request, during the
three year period from the date hereof through September 15, 1998 (the
"Employment Period").
(b) The Employee hereby accepts such employment and agrees to devote
his full time and attention to such duties, except during usual vacation periods
and for personal and sick leave in accordance with the Company's policies.
2. Compensation.
(a) During the Employment Period the Company shall pay to the
Employee compensation equal to an annual base salary (the "Base Salary") of
$200,000.00, payable in accordance with the Company's normal payroll practices.
The Company shall reimburse the Employee for all expenses necessarily and
reasonably incurred by the Employee in connection with the business of the
Company, against presentation of proper receipts or other proof of expenditure,
and subject to such reasonable guidelines or limitations provided to the
Employee, and which are to be applied prospectively only as the Board of
Directors of the Company may impose. The Employee may receive such greater
compensation, including incentive bonuses and stock bonuses, as may from time to
time be determined by the Board of Directors of the Company, consistent with
compensation arrangements for other executives with similar responsibilities.
(b) The Employee shall have the option to receive his bonus arising
out of the operating results of Micrographic Technology Corporation, a
California corporation, for its fiscal year ended June 30, 1995, if any such
bonus shall be payable, in the form of cash or SoftNet common stock (based on
the 30-day trailing average closing price of SoftNet's common stock traded on
the American Stock Exchange).
3. Benefits. During the Employment Period, the Employee shall be
entitled to participate in any profit sharing plan, stock option or other
benefit plan or program, retirement plan, group life insurance plan or other
insurance plan or medical expense plan maintained by the Company and SoftNet for
its senior executives generally. In the event the Company does not maintain a
disability insurance plan that provides coverage for Employee, the Company
agrees to provide such coverage to Employee upon Employee's request, the cost of
which shall be deducted from Employee's compensation hereunder.
4. Termination. The employee's employment hereunder shall terminate
upon the earlier of (a) the expiration of the Employment Period, (b) the death
of the Employee, (c) the expiration of a continuous period of 120 days during
which the Employee is unable to perform his assigned duties due to physical or
mental incapacity, (d) termination by the Company due to a material breach of
this Agreement by the Employee, or for Just Cause (as defined below), or (e)
termination by the Employee due to a material breach of this Agreement by the
Company. The exercise of the right of the Company or the Employee to terminate
this Agreement pursuant to clause (d) or (e) hereof, as the case may be, shall
not abrogate the rights and remedies of the terminating party in respect of the
breach giving rise to such termination. The Company shall only be deemed to
have materially breached this Agreement and the terms of the Employee's
employment if it fails to comply with Sections 1, 2, or 3 in all material
respects. The Employee shall only be deemed to have materially breached the
Agreement if he fails to comply with Sections 1, 5 or 6 in all material
respects. For purposes of this Agreement, "Just Cause" shall be limited to one
of the following grounds:
(i) The Employee's failure or refusal, after notice thereof, to
perform specific directives of the Board of Directors which are
consistent with the scope and nature of the Employee's duties and
responsibilities as set forth herein; or
(ii) Dishonesty of the Employee directly or indirectly and
materially affecting the Company; or
(iii) Drunkenness or use of drugs (unless medically prescribed)
which interferes with the performance of the Employee's obligations
under this Agreement; or
(iv) The Employee's conviction of a felony or of any crime
involving moral turpitude, fraud, or misrepresentation; or
(v) Any gross or willful misconduct of the Employee resulting in
loss to the Company, damage to the Company's reputation or theft or
defalcation from the Company; or
(vi) Any intentional act having the purpose and effect of
injuring the reputation, business or business relationships of the
Company; or
(vii) Gross incompetence on the part of the Employee in the
performance of the duties undertaken by the Employee under the terms
of this Agreement.
In the event of any dispute regarding the existence of the Employee's
incapacity hereunder, the matter will be resolved by the determination of a
majority of three physicians qualified to practice medicine in California, one
to be selected by each of the Employee and the Board of Directors and the third
to be selected by the two designated physicians. For this purpose, the Employee
will submit to appropriate medical examinations. In the event that the Company
determines to relieve the Employee of his employment duties for any reason other
than as stated above, then the Company shall continue to pay the Employee his
Base Salary for the remainder of the year in which he is terminated plus a
prorated portion of his bonus for such year and, thereafter, to continue to pay
the Employee his base salary which would otherwise be payable hereunder. The
Company shall also reimburse Employee for the costs of COBRA or conversion
premium expense for the remaining Employment Period.
In the event Employee is terminated for any reason hereunder, the Company
shall assign to Employee any life insurance policies maintained by the Company
upon Employee's life upon the written request of Employee and payment by
Employee to the Company of any unexpired premiums and the cash surrender value,
if any, of such policies.
5. Confidential Information; Non-solicitation; Covenant Not to Compete .
(a) The Employee shall at all times hold in strictest confidence any
and all confidential information that may have come and may come into the
Employee's possession or within the Employee's knowledge concerning the
products, services, processes, businesses, suppliers, customers and clients of
the Company. For purposes of this Section, confidential information shall not
include information generally available to the public other than as a result of
Employee's disclosure thereof. The Employee agrees that neither he nor any
person or enterprise controlled by the Employee will for any reason, directly or
indirectly, for himself or any other person or enterprise, use or disclose any
trade secrets, proprietary information, inventions, manufacturing and industrial
processes and procedures, confidential information, patents, trademarks, trade
names, customer lists, service marks, service names, copyrights, applications
therefor, and license or other rights in respect thereof ("Confidential
Materials"), owned or used by, or licensed to, the Company or any of its
affiliates or otherwise relating to the Company's businesses.
(b) The Employee agrees that from the date hereof and continuing for
a period of one (1) year after the Employee's employment with the Company has
terminated (the "Non-Compete Period"), neither the Employee nor any person or
enterprise controlled by the Employee will solicit for employment any person
employed by the Company at any time within one (1) year prior to the time of the
act of solicitation.
(c) The Employee agrees that during the Non-Compete Period, neither
the Employee nor any person or enterprise controlled by the Employee or any
enterprise of which Employee is a stockholder, director, officer, agent or
employee shall canvas, solicit, or accept any business in connection with the
business of the Company or Softnet from (a) any customer of the Company or
Softnet, or (b) any person or entity to whom the Company or Softnet has
delivered a quote or proposal during the one (1) year period immediately prior
to the commencement of the Non-Compete Period; provided, however, that the
foregoing shall not prohibit the ownership of less than two percent (2%) of the
outstanding shares of the stock of any corporation engaged in any business,
which shares are regularly traded on a national securities exchange or in any
over-the-counter market.
(d) The Employee agrees that the restrictive covenants in subsections
(a) through (c) above are reasonable in their scope and duration and may be
enforced by specific performance or otherwise. The Employee shall not raise any
issue of reasonableness as a defense in any proceeding to enforce any of such
covenants. Notwithstanding the foregoing, in the event that a covenant included
in this Agreement shall be deemed by any court to be unreasonably broad in any
respect, it shall be modified in order to make it reasonable and shall be
enforced accordingly; provided, however, that in the event that a court shall
refuse to enforce any of the covenants contained in subsections (a) through (c)
above, then the unenforceable covenant shall be deemed eliminated from the
provisions of this Agreement for the purpose of those proceedings to the extent
necessary to permit the remaining covenants to be enforced so that the validity,
legality or enforceability of the remaining provisions of this Agreement shall
not be affected thereby.
6. Inventions. The Employee hereby assigns to the Company his entire
right, title and interest in all discoveries and improvements, patentable or
otherwise, trade secrets and ideas, writings and copyrightable material, which
may be conceived by the Employee or developed or acquired by him during the term
of this Agreement, which may pertain directly or indirectly to the Company's
business. The Employee agrees to promptly and fully disclose in writing all
such developments. The Employee will, upon the Company's request, execute,
acknowledge and deliver to the Company all instruments and do all other acts
which are necessary or desirable to enable the Company to file and prosecute
applications for, and to acquire, maintain and enforce all letters, patents,
trademark registrations, or copyrights in all countries.
7. Remedies. The Employee acknowledges that any material breach of this
Agreement will cause irreparable harm to the Company, difficult if not
impossible to ascertain, and that the Company shall be entitled to equitable
relief, including injunction, against any actual or threatened breach hereof,
without bond and without liability should such relief be denied, modified or
vacated. Neither the right to obtain such relief nor the obtaining of such
relief shall be exclusive of or preclude the Company from any other remedy. In
addition, the parties agree that in the event either party is found by a court
of law or equity to have breached this Agreement and relief is granted, the
breaching party shall be liable to the prevailing party for all attorneys' fees
and costs incurred by such prevailing party in such proceeding.
8. Assignment. The rights and benefits of the Employee hereunder are not
assignable whether by voluntary or involuntary assignment or transfer. This
Agreement shall be binding upon and inure to the benefit of the successors of
the Company and shall be assignable by the Company to any entity acquiring
substantially all of the assets of the Company.
9. Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and sent by registered mail, or
overnight courier service to the Employee at 00000 Xxxxxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxx or to the Company c/o Softnet Systems, Inc., 000 Xxxxxx Xxxxxx, Xxxx
Xxxxxx, Xxxxxxxx 00000, Attention: President.
10. Waiver of Breach. A waiver by the Company or the Employee of a breach
of any provision of this Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach by the other party.
11. Entire Agreement. This instrument contains the entire agreement of
the parties. It may be changed only by an agreement in writing signed by a
party against whom enforcement of any waiver, change, modification, extension or
discharge is sought.
12. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal substantive laws of the State of Illinois, and the
parties hereby irrevocably and unconditionally consent and submit to the in
personam jurisdiction of Illinois courts over all matters relating to this
Agreement. Each party agrees that service of process in any action or
proceeding hereunder may be made upon such party by certified mail, return
receipt requested to the address for notice set forth herein. Each party
irrevocably waives any objection it may have to the venue of any action, suit or
proceeding brought in such courts or to the convenience of the forum and each
party irrevocably waives the right to proceed in any other jurisdiction. Final
judgment in any such action, suit or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment, a certified or true
copy of which shall be conclusive evidence of the fact and the amount of any
indebtedness or liability of any party therein described.
13. Arbitration. Any dispute between the parties arising under this
Agreement which cannot be amicably resolved between the parties, shall be
resolved by arbitration in Chicago, Illinois in accordance with the following
terms and conditions. Either party may deliver a notice to all other parties
which shall set forth in detail all issues which it believes constitutes a
dispute or grievance. Within twenty (20) days of the delivery of such notice,
counsel for the parties shall mutually select as an arbitrator an attorney
practicing in Chicago, Illinois who is experienced in commercial arbitration.
If counsel for the parties are unable to agree upon the selection of this
arbitrator, the arbitrator shall be an attorney selected by the President of the
Chicago Bar Association. The Arbitrator so selected shall schedule a hearing on
the disputed issues within forty-five (45) days after his appointment, and the
arbitrator shall render his decision after the hearing, in writing as
expeditiously as is possible. Except as set forth herein, the arbitration shall
be conducted in accordance with the rules of the American Arbitration
Association, unless the parties hereto agree otherwise in writing. A default
judgment may be entered against any party who fails to appear at the arbitration
hearing. The decision of the arbitrator shall be final and unappealable and
shall be confirmed by a court in any jurisdiction designated by the prevailing
party. The arbitrator shall assess the costs of the arbitration to the parties
as he determines to be appropriate. The parties to this Agreement agree that
this paragraph has been included to resolve rapidly and inexpensively any
disputes which may arise, and that submission of a dispute to arbitration in
accordance with this Agreement paragraph shall constitute grounds for dismissal
of any action commenced by any party with respect to a dispute arising out of or
from any provisions of this Agreement, except for actions for equitable
remedies, which shall survive the submission of a dispute for arbitration.
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the day and year first above written.
MICROGRAPHIC TECHNOLOGY CORPORATION
By /s/ X.X. Xxxxx
Its Secretary
SOFTNET SYSTEMS, INC.
By /s/ Xxxx Xxxxxxxx
Its___________________________
/s/ Xxxxxx X.X. Oosthuizen
A.J.R. Oosthuizen
