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EXHIBIT 10.1
EMPLOYMENT AGREEMENT dated as
of June 1, 1998 by and between XXXX
DIGITAL TECHNOLOGIES, INC., a
Delaware corporation (the "Company"),
and XXXXXXX XXXXX (the "Executive").
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The parties hereto desire to provide for the Executive's continued
employment by the Company in accordance with the terms and provisions set forth
below:
NOW, THEREFORE, the parties agree as follows:
1. EMPLOYMENT; TERM.
The Company will employ the Executive, and the Executive will
work for the Company, as its President and Chief Operating Officer, for a term
commencing on the date hereof and terminating on December 31, 2002 unless sooner
terminated in accordance with Section 7 hereof. Such period, together with the
period of any extension or renewal of such employment, is referred to herein as
the "Employment Period."
2. DUTIES.
During the Employment Period, the Executive shall serve as the
President and Chief Operating Officer of the Company, and perform such further
duties as shall, from time to time, be reasonably assigned to the Executive by
the Chief Executive Officer of the Company consistent with his position and
abilities.
3. DEVOTION OF TIME.
During the Employment Period, the Executive shall: (i) expend
substantially all of his working time for the Company; (ii) devote his best
efforts, energy and skill to the services of the Company and the promotion of
its interests; and (iii) not take part in activities known by the Executive to
be detrimental to the best interests of the Company.
4. COMPENSATION.
In consideration for the services to be performed by the
Executive during the Employment Period hereunder, the Company shall compensate
the Executive at an annual base salary from the date hereof at the rate of
$300,000.00 per annum, with annual increases of 10% each year thereafter
commencing on January 1, 1999. In addition, the Executive shall be entitled to
receive such bonuses as recommended in the discretion of the Compensation
Committee of the Company's Board of Directors and approved by the Company's
Board of Directors.
5. USE OF AUTOMOBILE; REIMBURSEMENT OF EXPENSES; ADDITIONAL
BENEFITS.
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5.1 The Executive shall be provided with an automobile to be
owned or leased by the Company or shall be reimbursed for the expenses in
connection with one automobile of the make and type approved by the Company. In
addition, the Company shall pay or reimburse the Executive for the cost of one
parking space.
5.2 The Company shall pay directly, or reimburse the Executive
for, all other reasonable and necessary expenses and disbursements incurred by
him for and on behalf of the Company in the performance of his duties under this
Agreement, including all costs associated with the maintenance and use of one
cellular telephone. For such purposes, the Executive shall submit to the Company
itemized reports of such expenses in accordance with the Company's policies.
5.3 The Executive shall be reimbursed for all business travel
and business entertainment expenses consistent with the Company's practices and
policies.
5.4 The Executive shall be entitled to paid vacations during
the Employment Period in accordance with the Company's then prevalent practices
for executive employees.
5.5 The Executive shall be entitled to participate in, and to
receive benefits under, any employee benefit plans of the Company (including,
without limitation, pension, profit sharing, group life insurance and group
medical insurance plans) as may exist from time to time for its executive
employees.
6. RESTRICTIVE COVENANT.
6.1 The services of the Executive are unique, extraordinary
and essential to the business of the Company, particularly in view of the
Executive's access to confidential information. Accordingly, the Executive
agrees that, during the Employment Period, and for a period of one year
thereafter, the Executive will not, without the prior written approval of the
Board of Directors of the Company, directly or indirectly, engage in any
business activity competitive with the business of the Company. Furthermore, the
Executive agrees that, during such period, he shall not solicit, directly or
indirectly, or affect to the Company's detriment any relationship of the Company
with any customer, supplier or employee of the Company or cause any customer or
supplier to refrain from entrusting additional business to the Company.
Notwithstanding anything to the contrary herein, if the employment of the
Executive hereunder is terminated by the Company other than for cause (as
defined in Section 7.3), the restraints on the Executive set forth in the
preceding two sentences shall be inapplicable after the Employment Period. In
the event that any of the provisions of this Section 6.1 shall be adjudicated to
exceed the time, geographic or other limitations permitted by applicable law in
any jurisdiction, then such provision shall be deemed reformed in any such
jurisdiction to the maximum time, geographic or other limitations permitted by
applicable law.
6.2 As used in this Section 6, the term "Company" shall mean
and include any and all corporations affiliated with the Company, which either
now exist or which may hereafter be organized.
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7. EARLIER TERMINATION.
7.1 The Executive's employment hereunder shall automatically
be terminated upon the death of the Executive or Executive's voluntarily leaving
the employ of the Company and, in addition, may be terminated, at the sole
discretion of the Company, as follows:
(a) Upon thirty (30) days' prior written notice by the
Company, in the event of the Executive's disability as set forth in Section 7.2
below; or
(b) Upon thirty (30) days' prior written notice by the
Company, in the event that the Company terminates the Executive's employment
hereunder for cause as set forth in Section 7.3 below.
7.2 The Executive shall be deemed disabled hereunder, if in
the opinion of the Board of Directors of the Company, as confirmed by competent
medical advice, he shall become physically or mentally unable to perform his
duties for the Company hereunder and such incapacity shall have continued for
any period of six (6) consecutive months.
7.3 For purposes hereof, "cause" shall mean the following: (a)
the Executive's willful malfeasance or gross negligence; or (b) the material
breach of any covenant made by the Executive hereunder, and the Executive's
failure to cure such conduct or event constituting "cause" within 30 days after
written notice thereof.
7.4 In the event that this Agreement shall be terminated due
to the Executive's death or disability, then the Company shall pay to the
Executive or his personal representatives, as the case may be, severance pay in
a lump sum amount equal to base annual salary for a period of twelve months as
set forth in Section 4 hereof. If, however, this Agreement shall be terminated
for any other reason whatsoever, then the Company shall not be obligated to make
any severance payments whatsoever to the Executive hereunder, except for the
compensation set forth in Section 4 hereof which shall have accrued but be
unpaid at the effective time of termination.
8. NO REQUIREMENT OF RELOCATION.
The Company expressly agrees that the Executive, as a
condition of his employment, need not relocate his residence from the community
in which he presently resides.
9. SERVICE AS DIRECTOR.
During the Employment Period, the Executive shall, if elected
or appointed, serve as a Director of the Company and/or any subsidiary of the
Company upon such terms as shall be mutually agreed upon by the Executive and
the Company.
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10. ASSIGNMENT.
This Agreement, as it relates to the employment of the
Executive, is a personal contract and the rights and interests of the Executive
hereunder may not be sold, transferred, assigned, pledged or hypothecated,
except as otherwise set forth herein. This Agreement shall inure to the benefit
of and be binding upon the Company and its successors and assigns, including
without limitation, any corporation or other entity into which the Company is
merged or which acquires all of the outstanding shares of the Company's capital
stock, or all or substantially all of the assets of the Company.
11. NOTICES.
Any notice required or permitted to be given pursuant to this
Agreement shall be deemed given three (3) business days after such notice is
mailed by certified mail, return receipt requested, addressed as follows: (i) if
to the Executive, at 00 Xxxx Xxxxx, Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; and
(ii) if to the Company, at 00 Xxxx Xxxxx, Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, or at such other address as any such party shall designate by written
notice to the other party. Copies of all notices shall also be provided to
Feder, Kaszovitz, Isaacson, Weber, Xxxxx & Bass LLP, 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000-0000.
12. WAIVER, MODIFICATION.
The terms of this Agreement may not be waived or modified
except by an agreement in writing executed by the parties hereto. The waiver by
either party of any breach of this Agreement must be in writing and shall not be
deemed to be a waiver of any prior or succeeding breach.
13. GOVERNING LAW.
This Agreement shall be governed by, and construed and
enforced in accordance with the laws of the State of New York.
14. SEVERABILITY.
If, at any time subsequent to the date hereof, any provision
of this Agreement shall be held by any court of competent jurisdiction to be
illegal, void or unenforceable, such provision shall be of no force and effect,
but the illegality or enforceability of such provision shall have no effect upon
and shall not impair the enforceability of any other provision of this
Agreement.
15. ENTIRE AGREEMENT.
This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and there are no
representations, warranties or commitments except as set forth herein. This
Agreement supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether
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written or oral, of the parties hereto relating to the transactions contemplated
by this Agreement; provided, however, that it is the intention of the parties
that this Agreement shall be interpreted and applied in conjunction with the
terms of any option, warrant or other right now in existence or hereinafter
granted to the Executive to acquire shares of capital stock of the Company. In
the event of any conflict, however, the terms of this Agreement shall govern and
prevail. This Agreement may be amended only in writing executed by the parties
hereto affected by such amendment.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the day and year first above written.
XXXX DIGITAL TECHNOLOGIES, INC.
By: /s/ Xxxx Xxxx
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Xxxx Xxxx, Chief Executive Officer
/s/ Xxxxxxx Xxxxx
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XXXXXXX XXXXX
