Exhibit 10.6
EMPLOYMENT AGREEMENT
AGREEMENT dated June 1, 1998 by and between Level 8 Technologies, Inc., a New
York corporation ("Level 8") and Xxxxxx Xxxxxxxx ("Executive").
BACKGROUND
Level 8 desires to employ Executive as a Vice President, Group Product Manager
of Xxxxx 0, and Executive desires to be employed by Xxxxx 0 as the Vice
President, Group Product Manager upon the terms and conditions herein stated.
NOW THEREFORE, INTENDING TO BE LEGALLY BOUND, and in consideration of the mutual
covenants and agreements stated below, Executive and Level 8 agree as follows:
1. Employment and Term. Level 8 hereby employs Executive and Executive
accepts such employment, subject to all the terms and conditions of this
Agreement, for a term of three (3) years beginning with the date of this
agreement (the "Commencement Date"), unless sooner terminated in
accordance with other provisions hereof.
2. Duties.
2.1 Executive shall be employed as the Vice President, Group Product
Manager of Level 8 and shall perform such duties and functions and hold
such positions as the Board of Directors of Level 8 shall from time to
time determine and in the performance of his duties, comply with the
policies of and be subject to the reasonable direction of the Board of
Directors of Level 8 and the Chief Operating Officer.
2.2 Executive agrees to devote his entire working time, attention and
energies to the performance of the business of Level 8; and Executive
shall not, directly or indirectly, alone or as a member of any
partnership, or as an officer, director or employee of any other
corporation, partnership or other organization, be actively engaged in or
concerned with any other duties or pursuits which interfere with the
performance of his duties hereunder, or which, even if not interfering,
may be inimical to or contrary to the best interest of Level 8.
3. Compensation, Benefits and Exl2enses.
3.1 Salary. Level 8 shall pay Executive as his base compensation for all
services rendered hereunder an annual gross salary of one hundred and
sixty thousand dollars ($160,000), payable no less frequently than in
monthly installments. Level 8 shall also pay to Executive a
non-recoverable draw of seven thousand five hundred dollars ($7,500) per
month. Level 8 shall deduct or cause to be deducted from such salary all
taxes and amounts required by law to be withheld.
3.2 Performance Bonus. `Me Board of Directors and Chief Executive Officer
of Level 8 shall establish a performance bonus for the Executive at the
beginning of each subsequent fiscal year based on the then current
responsibilities of the Executive provided that total compensation shall
be no less favorable to Executive than the one in effect in the previous
year, The performance bonus for 1998 shall be based on all gross sales of
both products and services within the group of products and services
Executive has under his control. Executive shall receive a bonus of one
percent (1%) on all gross sales up to a level of $50k per month, two
percent (2%) on all gross sales between $51k and $150k, three percent (3%)
on all gross sales between $15 Ik and $250k and five percent (5%) on all
gross sales over $25 1 k per month. This performance bonus shall be
applied towards Executive's draw and Executive shall receive on a monthly
basis all bonuses over and above this monthly draw once this monthly draw
has been satisfied.
3.3 Benefits. Executive shall be entitled to participate and shall be
included in any vacation, savings, pension, profit sharing, group
insurance, disability or similar plan or program of Level 8 that is
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established for the Company executive level employees, to the extent he is
eligible under the general provisions thereof Executive shall receive
three (3) weeks vacation per year as part of this agreement.
3.4 Business Expenses. Executive shall be reimbursed by Xxxxx 0 for all
actual, ordinary, necessary and reasonable expenses incurred by Executive
in the course of his performance of services hereunder. Executive shall
keep an itemized account of such expenses to be rendered to Level 8
monthly in accordance with the Company's travel and living policy.
3.5 Stock Options. As an inducement to Executive to accept employment and
as an incentive for Executive to enhance the value of Xxxxx 0 xxxxx, Xxxxx
0 agrees to provide the Executive with seventy five thousand (75,000)
stock options. These seventy five thousand (75,000) stock options will
vest 25% immediately and 25% each year over the next three years. The
stock options will be granted at fair value in accordance with Level 8's
stock option program at the next board meeting or meeting of the stock
option committee of the board of directors whichever comes first and in no
case shall the date of this grant be more than thirty (30) days from the
date of this signed agreement.
3.6 Sale of Framework Intellectual Property. Level 8 and Executive desire
to use the Framework intellectual property, as described in Exhibit A
hereto, as the basis for future product development for Level 8. At such
time as Executive becomes vested in one hundred thousand (100,000) options
of Level 8 stock, Executive shall be prohibited from selling the Framework
intellectual property other than in the normal course of selling product
to Level 8 customers.
3.7 Incentive Stock Options. Executive shall receive a total of seventy
five thousand (75,000) stock options. Such stock options shall vest upon
Level 8 achieving cumulative gross product sales targets; twenty-five
thousand (25,000) options upon Level 8 achieving cumulative gross product
sales of five million dollars ($5,000,000) in Framework product or in any
product where the Framework has been embedded; an additional twenty five
thousand (25,000) stock options upon Level 8 achieving cumulative gross
product sales of ten million dollars ($ 1 0,000,000) in Framework product
on in any product where the Framework has been embedded; an additional
twenty five thousand (25,000) stock options upon Level 8 achieving
cumulative gross product sales of fifteen million dollars ($15,000,000) in
Framework product on in any product where the Framework has been embedded.
These seventy five thousand (75,000) options shall be granted to Executive
at the fair value in accordance with Level 8's stock option program at the
next board meeting or meeting of the stock option committee of the board
of directors whichever comes first and in no case shall the date of this
grant be more than thirty (30) days from the date of this signed
agreement. This incentive shall remain in effect until the end of the term
of this agreement.
4. Termination.
4.1 Termination by Death. If Executive dies, Executive's employment and
his rights to salary and benefits in accordance with Section 3 hereunder
shall terminate as of the date of death.
4.2 Termination by Disability. If Executive becomes disabled, Executive
shall continue to receive all of his compensation and benefits in
accordance with Section 3 for a period of three (3) months following the
Onset of Disability (as defined in this section). Any amounts due to
Executive under this section shall be reduced, dollar-for-dollar, by any
amounts received by Executive under any disability insurance policy or
plan provided to Executive by Level 8. "Onset of Disability" means the
first day on which Executive shall be unable to attend to the regular
affairs of Level 8 on a full time basis by reason of physical or mental
incapacity, sickness or infirmity. If Executive remains disabled for three
(3) months following the Onset of Disability, Level 8 may terminate the
Executive's employment and his right to further compensation and benefits
under Section 3.
4.3 Termination for Cause. Xxxxx 0 may terminate Executive's employment
and his rights to compensation and benefits in accordance with Section 3
hereunder for Cause (as defined in this Section),
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except that Executive shall be entitled to any unpaid portion of his
salary and accrued benefits under Section 3 hereof up to the date of
termination. For the purpose of this Agreement, "Cause" shall mean, (a)
willful misconduct in connection with the Executive's employment (b)
willful failure to perform his employment responsibilities in the best
interest of Level 8 (including, without limitation, breach by the
Executive of any provision of any employment, nondisclosure,
non-competition or other similar agreement between the Executive and Level
8), (c) an act or omission by Executive constituting a felony or resulting
or intended to result directly or indirectly in material gain to or
material personal enrichment of Executive at Level 8's expense or (d)
Executive's habitual drunkenness or misuse of drugs. Level 8 shall provide
written notice to Executive specifying conduct giving rise to such cause.
4.4 Termination By Company other than for Cause. At no time earlier than
the end of the fourth (4) full month from the date of the signing of this
agreement, Level 8 may upon prior two (2) months written notice to
Executive terminate Executive's employment hereunder without Cause.
Executive shall be entitled to two months severance and any accrued
benefits under Section 3 hereof up to the date of termination. Upon such
written notice, Executive may, at his option, elect to terminate
employment at an earlier date and receive pay and benefits for the
duration of the notice period. In the event that Level 8 terminates
Executive for other than cause, the provisions in sections 5 & 6 shall be
nullified, except that executive may not solicit customers of Level 8
insofar as such solicitation would interfere with an active engagement by
Level 8 with a customer.
4.5 Termination by Executive. Executive may upon prior two (2) months
written notice to Level 8 terminate Executive's employment hereunder. Upon
such written notice, Level 8 may, at its option, elect to terminate at an
earlier date Executive's employment and his right to compensation and
benefits in accordance with Section 3 hereunder.
4.6 Procedure upon Termination. Upon termination of his employment,
Executive shall promptly return to Xxxxx 0 all materials and property of
Level 8.
5. Non-Competition; Confidentiality. During the term of this Agreement and
for a period of one year thereafter, Executive agrees not to engage in any
business activity which is in competition with business conducted by Level
8 and/or its affiliates. Executive shall keep in confidence, and shall not
divulge or use any information of Level 8 and or its Affiliates which is
confidential by its nature except for purposes of performing his
obligation hereunder.
6. Non-Solicitation. Executive agrees that he will not, during the term of
his employment with Level 8 and for a period of one year thereafter
directly or indirectly, individually or on behalf of other persons, aid or
endeavor to solicit or induce: (a) any employees or consultants of Level 8
or its Affiliates to leave their positions with Level 8 and or its
Affiliates in order to accept a position with another person or entity; or
(b) any clients of Level 8 or its Affiliates to purchase products or
services sold or provided by Xxxxx 0 or its Affiliates from another person
or entity. Executive will not otherwise in any manner interfere with the
business of Level 8 or any other clients or customers of Xxxxx 0, or its
business or business relationships with any of its clients or customers or
any other person.
7. Applicable Law. This Agreement shall be governed by and construed in
accordance with the Laws of, and litigated in the State of New York
without regard to the conflict of laws rules thereof.
8. Notices. All notices, consents or other communications required or
permitted to be given under this Agreement shall be in writing and shall
be deemed to have been duly given (a) when delivered personally, (b) five
business days after being mailed by first class certified mail, return
receipt requested, or (c) two business days after being sent by a
nationally recognized express courier service, to the parties at their
respective addresses as follows: if to Xxxxx 0, xx Xxxx Xxxxxx, Xxxxx
Executive Officer, I Xxxx Xxxxx, Xxxxx 000 0, Xxx Xxxx, XX 10 1 19, and if
to Executive, Xxxxxx Xxxxxxxx at, 0 Xxxxxxxx Xxxxxxx, Xxxxxxxxx, XX 00000
In the event of a change in address each party shall notify the other in
writing of the change.
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9. Other Provisions. This Agreement sets forth the entire understanding of
the parties hereto with respect to the subject matter hereof and
supersedes all prior and contemporaneous, oral or written, expressed or
implied, agreements and understandings. This Agreement shall not be
modified or terminated except in writing. No action taken by Level 8
hereunder, including without mutation any waiver, consent or approval,
shall be effective unless approved by the Chief Operating Officer or the
President and Chief Technology Officer of Level 8. Neither the failure nor
the delay on the part of either party to exercise any right, remedy, power
or privilege under this Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of any right, remedy, power or
privilege with respect to any occurrence be construed as a waiver of such
right, remedy, power or privilege with respect to any occurrence. No
waiver shall be effective unless it is in writing and is signed by the
party asserted to have granted such waiver. Any headings preceding the
text of any of the Sections or Subsections of this Agreement are inserted
for the convenience of reference only, and shall neither constitute a part
of this Agreement nor affect its construction, meaning or effect.
WITNESS THE DUE EXECUTION AND DELIVERY HEREOF on the date first above written.
Xxxxx 0 Technologies, Inc.
BY:
/s/ Xxxx Xxxxxx
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Xxxx Xxxxxx, CEO
EXECUTIVE:
/s/ Xxxxxx Xxxxxxxx
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Xxxxxx Xxxxxxxx
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Level 8 Technologies, Inc. - Xxxxxx Xxxxxxxx
Addendum to Termsheet dated April 1, 1997
Level 8 Technologies, Inc. ("Level 8") and Hanover Square Systems, Inc.
(the "Contractor"), a company wholly-owned by Xxxxxx Xxxxxxxx ("Xxx")
hereby agree to amend paragraph 3 (f) of the Termsheet dated April 1, 1997
as follows:
Options issued pursuant to the terms of the employee stock option plan of
Level 8 Systems, Inc. (the "Parent"), to acquire shares of the Parent,
which options would be granted, and when granted would be immediately
vested, with respect to 1 0,000 shares on the date hereof. The exercise
price of such options shall not exceed the market price of the Parent's
common stock on the date of grant. The number of shares covered by the
options shall be adjusted to reflect any stock splits, dividends, etc.
Any additional options referred to in the Termsheet dated April 1, 1997
are considered terminated as of January 1, 1998 as a result of this
Addendum.
Level 8 Technologies, Inc. Hanover Square Systems, Inc.
/s/ Xxxxxx Xxxxxxxx
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By: /s/ Xxxx Xxxxxx By: /s/ Xxxxxx Xxxxxxxx Xxxxxx Xxxxxxxx
------------------------- -------------------------- Date: 2/15/98
Xxxx Xxxxxx Xxxxxx Xxxxxxxx
CEO President
Date: Feb. 15, 1998 Date: 2/15/98
