EMPLOYMENT AGREEMENT
This document constitutes an Employment Agreement (hereinafter the
"Agreement") dated May 1, 1996 (hereinafter "Date of this Agreement"), by and
between Visual Information Service Corp., an Illinois corporation
(hereinafter "Company" or "VIScorp"), and Xxxxxxx X. Xxxxxx (hereinafter the
"Employee").
INTRODUCTION
The Employee has extensive experience in general accounting, office
administration and historically as the Company's Controller.
From Jan. 24, 1991, through May 1, 1996, the Employee has performed all the
duties associated with Controller for the Company and has performed these as
well as all other assigned tasks in a fully satisfactory manner. The Company
wishes to secure the Employee's talents and services, and Employee wishes to
provide them to the Company.
Now therefore, in consideration of the mutual promises and agreements
contained herein, the parties agree as follows:
1. EMPLOYMENT AND TERM:
1.1 The terms of this Agreement shall be for two (2) years (hereinafter
"Term of this Agreement"), commencing on the Date of this Agreement.
Company hereby agrees to employ Employee, and Employee hereby accepts such
employment for the Term of this Agreement.
1.2 This Agreement may be terminated prior to the end of the Term of this
Agreement only as provided in the below Sections 6 and 7 of this Agreement.
2. PERFORMANCE AND SCOPE:
2.1 During the Term of this Agreement, unless otherwise mutually agreed to
in writing by Employee and Company, Employee agrees to devote his full time
and best efforts in the discharge of his duties on behalf of Company.
2.2 During the Term of this Agreement, Employee will, at a minimum, serve
as Director.
2.3 During the Term of this Agreement, Employee will report to the Chief
Financial Officer.
2.4 During the Term of this Agreement, Employee will be responsible for
all related accounting and Controller duties for the Company and other
efforts related to fulfilling to Company's overall business mission.
Employee shall perform all such other duties as may be assigned to his
which are consistent with Employee's stature, position and experience.
3. CASH & OTHER COMPENSATION
3.1 Effective as of the Date of this Agreement, Company shall provide
Employee with an initial base cash salary of sixty thousand dollars
($60,000.00) per year. Payment will be made twenty six (26) times per year
on every other Friday during the Term of this Agreement. The initial base
cash salary will be effective for twelve (12) months from the Date of this
Agreement.
3.2 Employee's base cash salary compensation level will be reviewed at
least annually during the Term of this Agreement and be increased at a rate
no less than five percent (5.0%) effective upon the first (1st) day of the
thirteenth (13th) and twenty-fifth (25th) months of employment, as measured
from the Date of this Agreement.
3.3 Company agrees to provide Employee with any and all fringe benefits
generally provided to Company's Senior Executives, Officers, Directors and
employees, and their dependents.
3.4 Employee will be entitled to participate in any Company cash, stock
incentive or bonus plans provided to Executives, Officers, or Directors of
the Company.
4. EQUITY INCENTIVES
4.1 In consideration for services to be provided by Employee during the
Term of this Agreement, Company will provide Employee with fully vested
common stock options at a par value of $0.625 per option on a fully diluted
basis (as defined in Section 5 below), as provided for in Sections 4.2, 4.3
and 4.4 below. Stock options may only be exercised in accordance with all
applicable laws and regulations.
Note that Section 6 and 7 below cover arrangements regarding stock option
incentives in event of early termination of Employee's services and/or
this Agreement.
4.2 Effective as of the Date of this Agreement, Company will initially
grant to Employee an incentive stock option (hereinafter "ISO") at a par
value of $0.625 per option on a fully diluted basis. This initial ISO grant
shall consist of two hundred and fifty thousand (250,000) fully diluted
shares of Company's common stock.
Vesting of this ISO shall be as follows:
-At Date of this Agreement 25,000 shares
-At end of first year: 100,000 shares
-At end of second year: 125,000 shares
At the end of the first (1st) year of this Agreement, Company will, if
necessary, accelerate the vesting of the initial ISO to the Employee to
increase to the total amount of all non-vested shares.
4.3 Any additional ISOs provided pursuant to Section 4.2 will be
exercisable on the same basis as the options set forth under Section 4.1.
4.4 If in the case that Company is acquired or sold during the period of
the Term of this Agreement, any and all non-vested shares will be fully
vested at time of such acquisition or sale.
4.5 The exercise period during which Employee may exercise his/her rights
regarding all ISOs granted to Employee under the Term of this Agreements
shall extend for a minimum of three (3) years after expiration or
termination of this Agreement, without regard to the reason for expiration
or termination of this agreement, except as my be otherwise noted in
Section 6.1 and 6.2 below.
5. DEFINITION OF "FULLY DILUTED" SHARES:
For purposes of this Agreement, "fully diluted" shares is defined as the
total common equivalent shares consisting of all outstanding common stock,
preferred stock, stock purchase warrants, stock options, debt convertible
to stock, and any other outstanding securities or rights to acquire equity
interests in Company.
6. TERMINATION
6.1 COMPANY TERMINATION FOR JUST CAUSE: The Company may only terminate
the employment of Employee for just cause limited only to nonperformance of
duties as defined in Section 2 (above) or for proven malfeasance.
If Employee is terminated for just cause, Employee will be compensated at
Employee's then-current rate of base cash compensation up to the date of
termination, plus accrued vacation or other vested benefits, if any, in
accordance with Company policy.
For the period from effective Date of this Agreement to the date of
termination, employee will be entitled to vested stock options as specified
in Section 4.2 (above). Company will, if necessary, accelerate the vesting
on options issued pursuant to Sections 4.2 and 4.3 (above) and Company
shall grant additional vested stock options, if necessary, to achieve the
vested share value pursuant to this section.
In the event of termination for just cause, Employee will have ninety (90)
day period from the date of termination to exercise any vested stock
options as of the date of termination. Employee will not be entitled to any
further benefits under this Agreement following the date of termination.
6.2 COMPANY TERMINATION FOR OTHER THAN JUST CAUSE: If Company terminates
the employment of Employee for any reason other than just cause, Employee
will be entitled to the following:
6.2.1 Six (6) months current base cash salary and continuance of full
benefits for a period not to exceed six (6) months from the employee's
last day of work plus payment of accrued vacation and other vested
benefits, if any;
6.2.2 Accelerated vesting of all outstanding incentive stock options
held by Employee as of the date of termination;
6.2.3 Extension of the exercise period on all vested options to ninety
(90) days from the date of termination.
6.3 EMPLOYEE VOLUNTARY TERMINATION: Employee may terminate his employment
at any time by providing two (2) months' advance notice in writing. In the
event of voluntary termination, Employee will be entitled to the
compensation arrangements set forth in Section 6.1 (above), unless such
termination is in connection with the relocation of the Company, the
acquisition or sale of the Company, or disability or death (see Sections
6.4, 6.5 and 7.3 below).
6.4 TERMINATION DUE TO COMPANY RELOCATION: If Company relocates the
facilities where Employee normally reports to work outside of a fifty (50)
mile driving distance from the Company offices as of the Date of this
agreement, at any time during the Term of this Agreement, Employee may
elect to terminate employment and will be entitled to financial
compensation arrangements set forth in Section 6.2.2 and the stock
compensation set forth in Section 6.1.
6.5 Termination due to disability or death: In the event of forced
termination of Employee's services under this Agreement due to disability
or death, Employee or Employee's estate will be entitled to the stock
compensation arrangement set forth in Sections 4.2 and 6.2
7. OTHER TERMINATION EVENTS
7.1 In addition to termination of employment pursuant to the above Section
6, this Agreement will also be terminated upon occurrence of any one, or
combination, of the following events:
7.1.1 The closing of a public offering of the Company's common stock
7.1.2 the sale of all or substantially all of the Company's assets to
another individual, corporation or other entity, or
7.1.3 the merger or acquisition of the Company into or by any other
entity.
For the purpose of Section 7.1.3, "merger" or "acquisition" is defined
as a new investor (i.e., with no equity ownership on the date of this
Agreement), existing investor, or any combination of new and/or
existing investors, acquiring a fifty (50) percent or greater ownership
position in a single transaction or a series of transactions within
the Term of this Agreement. In case of a merger or acquisition
occurring during the Term of this Agreement, Employee will be entitled
to the benefits set forth in Section 7.2 (below).
7.2 In the event of early termination of this Agreement pursuant to
Section 7.1, the vesting of options previously issued pursuant to Sections
4.2 and 4.3 will be accelerated and Employee will be issued fully vested
options immediately prior to the terminating event at the stated par value
(i.e., $0.625 per share).
Employee will also be entitled to the severance benefits defined in Section
6.2 (above).
7.3 In the event of termination of this Agreement due to a merger or
acquisition of the Company as defined in Section 7.1, Employee and Company
will have thirty (30) days following the date of the merger or acquisition
in which to agree to a replacement employment agreement. If no new
agreement is reached within thirty (30) day period, the Employee may , at
Employee's sole option, terminate employment with the Company and will be
entitled to all the severance benefits set forth in Section 6.2 (above),
regarding "Company termination for other than just cause".
8. NON-COMPETITION & CONFIDENTIAL INFORMATION:
Employee shall execute the Company's standard agreement regarding
noncompetition and the protection of the Company's confidential information
which shall survive the termination of this Agreement for a period of one
(1) year.
9. ENTIRE AGREEMENT, AMENDMENT:
This Agreement constitutes the entire agreement between the parties
pertaining to the subject matter and supersedes all prior agreements,
representations and understandings of the parties hereto with respect to
the subject matter hereof. This Agreement may be supplemented, modified or
amended only by a written instrument executed by each of the parties
hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
below written.
/s/ Xxxxxxx X. Xxxxxx
--------------------- -------------------------------
Xxxxxxx X. Xxxxxx Xxxxxxx X. Xxxx, CEO
Visual Information Service Corp.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, XX, 00000
/s/ Xxxxxxx X. Xxxxxx /s/ Xxxxxxx X. Xxxx
--------------------- -------------------------------
Xxxxxxx X. Xxxxxx Xxxxxxx X. Xxxx, CEO
Visual Information Service Corp.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, XX, 00000
