Exhibit 10.20
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of this 14th day of
January, 1999, by and between Allin Corporation, a Delaware corporation
("Employer"), and Xxxxxxx X. X'Xxxx ("Employee"), a resident of Pennsylvania.
WITNESETH:
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WHEREAS, Employer desires to employ Employee on a full-time and exclusive
basis and Employee is willing to serve on a full-time and exclusive basis, all
upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises and agreements herein
contained and intending to be legally bound hereby, the parties agree as
follows:
Section 1 Employment. Subject to the terms and conditions of this Agreement,
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Employer agrees to employ Employee as President of Employer, and Employee
accepts such employment. Employee will diligently and faithfully and in
conformity with the directions of the Board of Directors of Employer perform the
duties of his employment hereunder, and he will devote his best efforts and
attention on a full-time basis to the performance of said duties.
Section 2. Employment Period. The term of Employee's employment hereunder
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shall begin on January 25th, 1999 and shall continue through December 31, 2001
unless sooner terminated in accordance with the terms of this Section 2
("Employment Period"). The Employment period shall terminate upon (i)
Employee's death or, unless waived by Employer, his disability, either physical
or mental (as determined by Employer's physician) which may reasonably be
anticipated to render him unable, for a period of at least three (3) months,
effectively to perform the obligations, duties and responsibilities of
Employee's employment with Employer; or (ii) the termination of Employee's
employment by the Board of Directors with cause (as hereinafter defined); or
(iii) the passage of fourteen (14) days from the date of delivery by either
party to the other of his or its election to terminate this Agreement. As used
herein, "cause" shall mean (i) dishonest, fraudulent or illegal conduct; (ii)
misappropriation of Employer funds; (iii) conviction of a felony; (iv) excessive
use of alcohol; (v) use of controlled substances or other addictive behavior;
(vi) unethical business conduct; (vii) breach of any statutory or common law
duty of loyalty to Employer; and (viii) action by Employee which is prejudicial
or injurious to the business or goodwill of Employer or a material breach of
this Agreement.
Section 3. Employment Compensation and Other Benefits.
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(a) Salary. For services performed by Employee during the
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Employment Period, Employer will pay to Employee a salary of One
Hundred Fifty Thousand dollars ($150,000) per annum, payable in
equal semi-monthly installments of $6250.00, prorated for any
partial period of employment.
(b) Benefits. During the term of his employment hereunder, Employee
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will be entitled to the following:
(i) payment by Employer of the premiums for medical insurance
coverage for himself and his family consistent with programs
from time to time in effect for the employees of Employer;
(ii) up to four weeks of paid vacation each year of
employment;
(iii) such other benefits as are available to other employees
of Employer generally.
(c) Business Expenses. Employer will reimburse Employee for
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reasonable out-of-pocket expenses incurred by him, in accordance
with Employer's policies as in effect from time to time, for
entertainment, travel, lodging and similar items
Page Exh. 10.20-A
in connection with the business of Employer, provided that Employee
properly accounts for and promptly submits appropriate supporting
documentation with respect to all such expenses.
(d) Discretionary Bonus. The Board of Directors of Employer
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may, on an annual basis, in its sole and absolute discretion,
award a bonus to Employee. Such bonus, if any, shall be
determined based on Employee's performance and the performance of
Employer for the respective twelve (12) month periods ending at
fiscal year end 12/31/99, 12/31/00 and 12/31/01. After
consultation with the Board of Directors and the Employee,
parameters and objectives will be set by the chief executive
officer of Employer on an annual basis to be utilized as
guidelines for payment of any discretionary bonus.
(e) Stock Options. Employee acknowledges receipt of options to
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purchase 60,000 shares of Allin Corporation common stock at $____
per share. These options are governed by the "1998 Stock Plan of
Allin Corporation" dated December 31, 1998. The options vest
ratably at 20% per year on the anniversary of issuance, however,
all options that have not previously expired or been terminated
will become fully vested on the date on which (i) Employer sells
all or substantially all of its assets, (ii) Employer merges with
another entity in a transaction in which Employer is not the
surviving corporation, or (iii) any person or group of affiliated
persons other than the shareholders of Allin Corporation as of
the date of this Agreement owns or controls 40% or more of
Employer. At the sole discretion of Employer's Board of
Directors, additional options may be issued to Employee, however,
Employer's Board of Directors is under no obligation to issue
Employee additional options.
(f) Annual Merit Review. Annually, on or before January 25th of
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each year, Employer will conduct an annual review of Employee's
performance under this Agreement and, if deemed appropriate,
implement adjustments to this Section 3 for such year.
(g) Liability as an Officer. Employee will be covered by any
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directors and officers insurance policy procured by Employer.
Employee shall also be entitled to the indemnification set forth
in Employer's Bylaws with respect to actions taken by officers
and directors of Employer.
Section 4. Conditions of Employment. As conditions of his employment
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and in consideration of his employment, Employee covenants and agrees as
follows:
(a) that, during the Employment Period, he will devote his full
time, services and attention and best efforts to the performance of
his duties and to the promotion of the business and interests of
Employer;
(b) that, during the Employment Period he will not, without the
prior written consent of the Board of Directors of Employer,
directly or indirectly, as a stockholder (except as a stockholder
owning beneficially or of record less than five percent (5%) of the
outstanding shares of any class of stock of any issuer listed on a
national securities exchange), or as an officer, director, manager,
member, employee, partner, joint venturer, proprietor or otherwise,
engage in, become interested in, consult with, lend to or borrow
from, advise or negotiate for or on behalf of, any business which is
of the type in which Employer or any affiliate or subsidiary of
Employer engages during the Employment Period; provided that the
prohibition contained in this subsection 4(b) shall not apply to any
business which Employer was engaged during the Employment Period if,
during the three year period thereafter, Employer permanently ceases
to be engaged in such business;
Page Exh. 10.20-B
(c) that, during the Employment Period, and for a period one (1)
year thereafter, he will not directly or indirectly influence or
attempt to influence any customer of Employer to terminate or modify
any written or oral agreements in place with Employer;
(d) that, during the Employment Period, and for a period of one (1)
year thereafter, he will not solicit other employees of Employer or
any affiliate or subsidiary of Employer, directly or indirectly, for
the purpose of enticing them to leave their employment with Employer
or any affiliate or subsidiary of Employer;
(e) that, during the Employment Period and for a period of one (1)
year thereafter he will make full and complete disclosure of the
existence of this Agreement and the content of this Section 4 to all
prospective employers with whom he may discuss possible employment.
(f) that, he will refrain from directly or indirectly disclosing,
making available or using or causing to be used in any manner
whatsoever, any information of Employer of a proprietary or
confidential nature (including without limitation, information
regarding inventions, processes, formulas, systems, plans, programs,
studies, techniques, "know-how," trade secrets, income or earnings,
tax data, customer lists and contracts to which Employer is a party,
but excluding any such information which may be in the public domain
through proper means) and, upon termination of his employment, such
information, to the extent that it has been reduced to writing
(including any and all copies thereof), together with all copies of
all forms, documents and materials of every kind, whether
confidential or otherwise, shall forthwith be returned to the
Employer and shall not be retained by Employee or furnished to any
third party, either by sample, facsimile or by verbal communication;
(g) that, during the Employment Period, and for a period of one (1)
year thereafter, he will refrain from any disparagement, direct or
indirect, through innuendo or otherwise, of Employer or any of its
employees, agents, officers, directors, shareholders or affiliates;
(h) that, during the Employment Period, he will not, without the
prior written consent in each case of the Board of Directors of
Employer: (i) participate actively in any other business interests
or investments which would conflict with his responsibilities under
this Agreement, or (ii) borrow money from, or lend to, customers
(except those commercial institutions whose business it is to lend
money) or individuals or firms from which Employer or any affiliate
or subsidiary of Employer buys services, materials, equipment or
supplies, or with whom Employer or any affiliate or subsidiary does
business;
(i) that, during the Employment Period, he will not, without the
prior written consent in each case of the Board of Directors of
Employer (i) exchange goods, products or services of Employer in
return for goods, products or services of any individual or firm or
(ii) accept gifts or favors from any outside organization or agency
which, individually or collectively, may cause undue influence in
his selection of goods, products or services for Employer;
(j) that, after the termination of his employment, he will not
secure, or attempt to secure, from any employee or former employee
of Employer or any affiliate or subsidiary of Employer, any
information relating to Employer or any affiliate or subsidiary of
Employer or their business operations; and
Page Exh. 10.20-C
(k) that he will promptly and voluntarily advise the Board of
Directors of Employer of any activities which might result in a
conflict of interest with his duties to Employer hereunder, and,
further, will make such other and further disclosures as Employer
may reasonably request from time to time.
Employee represents and warrants to Employer that, notwithstanding
the operation of the covenants contained in this Section 4, upon the
termination of his employment hereunder, Employee will be able to
obtain employment for the purpose of earning a livelihood.
Section 5. Injunctive Relief. Because the services to be performed
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by Employee hereunder are of a special, unique, unusual, confidential
extraordinary and intellectual character which character renders such services
unique and because Employee will acquire by reason of his employment and
association with Employer an extensive knowledge of Employer's trade secrets,
customers, procedures, and other confidential information, the parties hereto
recognize and acknowledge that, in the event of a breach or threat of breach by
Employee of any of the terms and provisions contained in Section 4 or Section 7
of this Agreement, monetary damages alone to Employer would not be an adequate
remedy for a breach of any of such terms and provisions. Therefore, it is
agreed that in the event of a beach or threat of a breach of any of the
provisions of Section 4 or Section 7 of this Agreement by Employee, Employer
shall be entitled to an immediate injunction from any court of competent
jurisdiction restraining Employee, as well as any third parties including
successor employers of Employee whose joinder may be necessary to effect full
and complete relief, from committing or continuing to commit a breach of such
provisions without the showing or proving of actual damages. Any preliminary
injunction or restraining order shall continue in full force and effect until
any and all disputes between the parties to such injunction or order regarding
this Agreement have been finally resolved. Employee hereby agrees to pay all
costs of suit incurred by Employer, including but not limited to reasonable
attorneys' fees, in obtaining any such injunction or order. Employee hereby
waives any right he may have to require Employer to post a bond or other
security with respect to obtaining or continuing any such injunction or
temporary restraining order and, further, hereby releases Employer, its
officers, directors, employees and agents from and waives any claim for damages
against them which he might have with respect to Employer obtaining in good
faith any injunctions or restraining order pursuant to this Agreement.
Section 6. Absence of Restrictions. Employee will promptly submit to
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Employer written disclosures of all inventions, improvements, discoveries,
technological innovations and new ideas, relating to Employer's business,
whether or not patentable (hereinafter called "Inventions"), which are directly
or indirectly made, conceived, created or prepared by Employee, alone or jointly
with others, during the Employment Period. Worldwide right, title and interest
in and to the intellectual property rights (including but not limited to
copyrights created in, patents to, or any other form of legal protection as may
be obtained or obtainable in the United States of America or any foreign
country), relating to all such Inventions that shall be within the existing or
contemplated scope of Employer's business at the time such inventions are made
or conceived or which result from or are suggested by any work Employee or
others may do for or on behalf of Employer, shall belong to Employer. Employee
will assign all right, title and interest in and to such intellectual property
rights to Employer, and upon request of Employer, will at any time during the
Employment Period and after termination of Employee's employment for any reason,
execute all proper papers for use in applying for, obtaining, maintaining and
enforcing such copyrights, patents or other legal protection as Employer may
desire and will execute and deliver all proper assignments thereof, when so
requested, without remuneration but at the expense of Employer.
Page Exh. 10.20-D
Section 7. Patents and Inventions. Employee will promptly submit to
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Employer written disclosures of all inventions, improvements, discoveries and
new ideas, relating to Employer's business, whether or not patentable
(hereinafter called "Inventions"), which are made or conceived by Employee,
alone or jointly with others, during the period during which Employee is
employed by Employer. Title to all such Inventions that shall be within the
existing or contemplated scope of Employer's business at the time such
Inventions are made or conceived or which result from or are suggested by any
work Employee or others may do for or on behalf of Employer, together with such
patent, patents or other legal protection as may be obtained thereon in the
United States of America and all foreign countries, shall belong to Employer.
Employee will assign any rights or interest in such title to Employer, and upon
the request of Employer, will at any time during the period during which
Employee is employed by Employer and after termination of Employee's employment
for any reason, execute all proper papers for use in applying for, obtaining,
maintaining and enforcing such patents or other legal protection as Employer may
desire and will execute and deliver all proper assignments thereof, when so
requested, without remuneration but at the expense of Employer.
Section 8. General.
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(a) Interpretation. If the provisions of subsections 4(b), 4(c)
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or 4(d) of this Agreement should be held to be invalid, illegal
or unenforceable by a court of competent jurisdiction because of
time limitation or geographical area therein provided, such
provisions shall nevertheless be effective and enforceable for
such period of time and/or such geographical area as may be held
to be reasonable by such court. Any provision of this Agreement
that is invalid, illegal or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without
invalidating or rendering unenforceable the remaining provisions
of this Agreement, any such invalidity, illegality or
unenforceability shall not, of itself, affect the validity,
legality or enforceability of such provision in any other
jurisdiction.
(b) Notices. In any case where any notice or other
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communications is to be given or made pursuant to any provision
of this Agreement, such notice or communication shall be deemed
to be delivered when actually received on the date specified in
the return receipt for a notice or communication mail by
registered or certified mail, postage prepaid, addressed as
follows:
If to Employer:
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Allin Corporation
000 Xxxxxxxxx Xxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxx
Chief Executive Officer
with copies to:
Xxxxx X. Xxxxxxxxxxx, Esq.
Xxxxxx Xxxxxxx Xxxxxx & Xxxxxxx
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, XX 00000
If to Employee:
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Xxxxxxx X. X'Xxxx
0000 Xxxx Xxxx Xxxxx
Xxxxxxxxxx, XX 00000
or such other address or addresses as any party may specify by notice to the
other party given as herein provided.
Page Exh. 10.20-E
(c) Headings. The headings in this Agreement are inserted for
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convenience and identification and in no way describe, interpret,
define or limit the scope, extent or intent of this Agreement or
any provision hereof.
(d) No Presumption on Interpretation. Nothing herein shall be
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construed more strongly against or more favorably toward either
party by reason of either party having drafted this Agreement or
any portion hereof.
(e) Binding Effect. This Agreement shall be binding upon, and
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inure to the benefit of, the parties hereto and their respective
heirs, beneficiaries, executors, administrators, personal
representatives, successors and permissible assigns.
(f) Integration. This Agreement constitutes and contains the
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entire Agreement and understanding between the parties with
respect to the subject matter hereof and supersedes any all prior
agreements, if any, understandings and negotiations relating
thereto. No promise, understanding, representation, inducement,
condition or warranty not set forth herein has been made or
relied upon by any party hereto.
(g) Waivers: Modification. This Agreement, or any provision
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hereof, may be amended, supplemented or modified only by a
writing signed by both parties and may be waived only by a
writing signed by the party to be bound thereby. A written
waiver of any provision shall be valid only in the instance for
which given and shall not be deemed to be a continuing waiver or
construed as a waiver of any other provisions.
(h) Governing Law. This Agreement shall be construed in
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accordance with and governed in all respects by the laws of the
Commonwealth of Pennsylvania (without giving effect to the
conflicts of laws provisions thereof).
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
WITNESS: ALLIN CORPORATION
/s/ Xxxx X. Xxxxxxxx /s/ Xxxxxxx X. Xxxxxxxx
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Name Printed: Xxxxxxx X. Xxxxxxxx
Title: Chairman & CEO
WITNESS: EMPLOYEE
/s/ Xxxxxx Xxxxx /s/ Xxxxxxx X. X'Xxxx
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Page Exh. 10.20-F
