EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made as of February 12, 1998,
between MOUND ACQUISITION, INC., an Ohio corporation ("Employer"), and XXXXX X.
XXXXXX of Centerville, Ohio ("Employee").
1. Employment. Subject to the terms and conditions of this Agreement,
Employer hereby agrees to employ Employee, and Employee accepts such employment,
as President of Employer or in such other capacity or capacities as Employer and
Employee may from time to time determine.
2. Duties of Employee. Consistent with Section 1 above, Employee shall
have such duties as the Chairman and Chief Executive Officer and Board of
Directors of Employer may from time to time determine. Employee agrees to
perform faithfully, industriously and to the best of Employee's ability,
experience and talents, all of the duties that may be required by the terms of
this Agreement, to the reasonable satisfaction of the chief executive officer
and Board of Directors of Employer.
3. Compensation of Employee. (a) As compensation for the services provided
by Employee under this Agreement during the Employment Period (as defined in
Section 11 below), Employer will pay Employee a base salary at an annual rate of
Seventy-Five Thousand Dollars ($75,000) (the "Base Salary") payable in
accordance with Employer's usual payroll procedures.
(b) During the term of this Agreement, Employee shall be entitled to
participate in any employee benefit plans, medical insurance plans, employee
education plans (collectively, "Benefit Programs"), life insurance plans,
disability plans and other benefit plans for which he is otherwise eligible and
qualified, customarily made available by Employer from time to time to its
employees generally. Such participation shall be subject to (i) the terms of the
applicable plan documents and (ii) generally applicable Employer policies.
Employer agrees that such Benefit Programs will be substantially comparable to
those offered by Laser Fare, Inc., a Rhode Island corporation which is an
affiliate of Employer.
(c) Employee shall be entitled to up to three (3) weeks paid vacation for
each year during the Employment Period. Such vacation shall be taken at a time
mutually convenient to Employer and Employee and must be approved by Employer.
(d) Employee shall be entitled to paid holidays in accordance with
Employer's normal policies.
(e) Subject to the following limitations, Employee shall also be paid a
Sales Incentive which, for purposes hereof, shall mean 2.5% of the Annual Net
Sales. The term Annual Net Sales shall mean for each year the gross annual sales
of Employer, less discounts and returns, determined by Employer's independent
certified public accountant (the "Accountant") in accordance with generally
accepted accounting principles ("GAAP"). In order to be paid such compensation,
the Annual Net Sales shall equal or be greater than the following amounts on a
yearly basis; provided, that if such amounts are achieved for the stated year
the Sales Incentive shall be paid on the entire amount of the Annual Net Sales.
Year Ending Minimum Annual
December 31 Net Sales
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1998 400,000.00
1999 600,000.00
2000 800,000.00
(f) Employee shall also be paid Profit Incentive which, for purposes
hereof, shall mean 40% of the Annual Net Profit in excess of (i) 12% of the
Annual Net Profit for 1998, (ii) 15% of the Annual Net Profit for 1999, and
(iii) 17% of the Annual Net Profit for 2000. The term Annual Net Profit shall
mean for each year the net after tax profit of Employer determined by the
Accountant in accordance with GAAP; provided, however, that any amounts of
principal paid by Employer to Employee or Xxxx Xxxxxxxx under promissory notes
assumed by Employer shall not be considered as an expense in such determination.
(g) The Sales Incentive and the Profit Incentive for any calendar year
shall be paid on or about March 31 of the following year.
4. Business Expenses. Employer will reimburse Employee for all authorized
travel and out-of-pocket expenses reasonably incurred by him for the purposes of
and in connection with performing his services to Employer hereunder. Such
reimbursement shall be made promptly upon presentation to Employer of vouchers
or other statements itemizing the expenses in reasonable detail in conformity
with Employer's policies.
5. Discoveries. Except as otherwise provided in contracts between Employer
and third parties, any and all processes, methods, designs, work of authorship
and know-how which Employee may conceive or make, either alone or in conjunction
with others, during Employee's term of employment with Employer or its
subsidiaries or Affiliates relating to, or in any way pertaining to or connected
with the business of Employer or its subsidiaries or Affiliates, shall be the
sole and exclusive property of Employer;
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and Employee, whenever requested to do so by Employer or any subsidiary or
affiliate thereof, and without further compensation or consideration, shall
promptly execute any and all applications, assignments and other instruments
which Employer shall deem necessary in order to assign and convey to Employer
the sole and exclusive right, title and interest in and to such processes,
methods, designs, works of authorship and know-how.
6. Non-Competition; Confidentiality. Employee acknowledges that he has
entered into a Non-Competition Agreement of even date (the "Non-Competition
Agreement") with Employer restricting his ability to compete with Employer and
requiring him to maintain in confidence information concerning Employer and
Mound Laser & Photonics Center, Inc. A breach of Employee's obligations under
the Non-Competition Agreement shall constitute a breach of this Agreement.
7. Non-waiver of Rights. The failure to enforce at any time of the
provisions of this Agreement or to require at any time performance by the other
party of any of the provisions hereof shall in no way be construed to be a
waiver of such provisions or to affect either the validity of this Agreement, or
any part hereof, or the right of either party thereafter to enforce each and
every provision in accordance with the terms of this Agreement.
8. Term/Termination. (a) Unless sooner terminated, Employee's employment
under this Agreement shall be for an initial period of three (3)) years,
beginning the date hereof and ending December 31, 2000 and continuing thereafter
until terminated by either party or not less than thirty (30) days prior written
notice (the "Employment Period"); provided that this Agreement may be terminated
by Employer at any time for cause. The term "cause" as used herein shall mean
gross or habitual neglect of duty, continuing default of Employee's obligations
hereunder, prolonged absence from duty without the consent of Employer, breach
of the Non-Competition Agreement or intentional harm or to the business of
Employer or willful misconduct on the part of Employee.
(b) In the event Employer's office at which Employee is required to render
the majority of services hereunder is moved to a location more than twenty-five
(25) miles from Miamisburg, Ohio, Employee shall have the right within ten (10)
days of notice of relocation, to terminate this Agreement and his obligations
under the Non-competition Agreement. In the event of such termination, Employer
shall continue to pay Base Salary to Employee and shall provide benefits under
Section 3(b) for a period of four (4) months.
9. Notices. All notices required or permitted under this Agreement shall
be in writing and shall be deemed delivered when delivered in person or
deposited in the United States mail, postage paid, addressed as follows:
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Employer:
Mound Acquisition, Inc.
c/o Infinite Group, Inc.
000 Xxxxx Xxxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxxxxx, Chairman
Employee:
Xxxxx X. Xxxxxx
0000 X. Xxxxxx Xxx Xxxx
Xxxxxxxxxxx, Xxxx 00000
Such addresses may be changed from time to time by either party by providing
written notice in the manner set forth above.
10. Entire Agreement. This Agreement contains the entire agreement of the
parties and there are no other promises or conditions in any other agreement
whether oral or written. This Agreement supersedes any prior written or oral
agreements between the parties.
11. Amendment. This Agreement may be modified or amended, if the amendment
is made in writing and is signed by both parties.
12. Severability. If any provisions of this Agreement shall be held to be
invalid or unenforceable for any reason, the remaining provisions shall to be
valid and enforceable. If a court finds that a provision of this Agreement is
invalid or unenforceable, then such provision shall be deemed to be written,
construed and enforced as so limited.
13. Applicable Law. This Agreement shall be governed by and contained in
accordance with the laws of the State of Ohio.
14. Binding Agreement. This Agreement shall bind and inure the benefit of
the parties and their respective legal representatives, successors and assigns,
except that Employee may not delegate any of his obligations under this
Agreement or assign this Agreement.
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IN WITNESS WHEREOF, the parties hereto executed this Agreement as of the
day and year first written above.
EMPLOYER:
MOUND ACQUISITION, INC.
By: /s/
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EMPLOYEE:
/s/
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INFINITE GROUP, INC., a Delaware corporation and the owner of all of the
outstanding capital stock of Employer, hereby guarantees the obligations of
Employer under the foregoing Agreement.
INFINITE GROUP, INC.
By: /s/
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