EMPLOYMENT AGREEMENT
AGREEMENT, effective as of November 15, 1999 (the "Agreement"), between
INFINITE GROUP, INC., a Delaware corporation, having its principal office at
0000 Xxxx Xxxx, Xxxxxxx, Xxxxx Xxxxxx 00000, (the "Company"), and Xxxxxx X.
X'Xxxxxx, residing at 00 Xxxxxxx Xxxxx, Xxxxx, Xxxxxxxxxxxxx 00000 (the
"Executive").
WITNESSETH:
WHEREAS, the Company desires to employ the Executive as the President of
the Company's Plastics Group, to devote full time to the business of the
Company, and the Executive desires to be so employed hereunder effective as of
the date thereof.
NOW, THEREFORE, in consideration of the covenants and agreements
hereinafter set forth, the parties hereto agree as follows:
1. EMPLOYMENT
1.1 The Company hereby agrees to employ the Executive and the Executive
hereby agrees to serve, as the President of The Plastics Group upon the terms
and conditions herein contained. The Executive shall report regularly and
administratively to the Chief Executive Officer of the Company and to the Board
of Directors in the exercise of their fiduciary duties and responsibilities. The
Executive shall have the executive power and authority to carry out the business
plans and policies of the Company and its Subsidiaries, and to make decisions in
connection therewith.
1.2 The term of employment under this Agreement shall commence as of the
date hereof (the "Effective Date"), and, subject to the terms thereof, shall
terminate on the earlier of: (i) December 15, 2001 (the "Termination Date"), or
the (ii) termination of the Executive's employment pursuant to this Agreement
(such term of employment referred to hereinafter as the "Employment Term");
provided, however, that on the Termination Date and on the date one year
thereafter, the Termination Date shall be extended for up to two consecutive
periods of one year each unless either party shall have given written notice to
the other party not less than six months prior to any such date that the
Termination Date shall not be so extended.
1.3 Throughout the Employment Term, the Executive shall devote his best
efforts and substantially all his business time and services to the business and
affairs of the Company and its Subsidiaries.
1.4 This Agreement shall not be interpreted to prohibit the Executive from
making passive personal investments or conducting private business affairs if
those activities do not materially affect the services required under this
Agreement.
2. SALARY
2.1 From the Effective Date, the Executive shall be entitled to receive a
base salary at a rate of not less than $125,000 for each year, payable in
arrears in equal installments not less frequently than monthly in accordance
with the Company's payroll practices, with such increases as are hereinafter
provided. Once increased, such higher amount shall constitute the Executive's
annual salary.
2.2 The Company may increase the Executive's annual base salary on each
January 1 after the Effective Date, which occurs during the Employment Term for
the 12 month period ending on each December 31.
2.3 In addition to any increase under Section 2.2, the Company at any time
may increase the Executive's base salary.
2.4 The Company shall pay the Executive a bonus of $25,000 on or before
January 31, 2001 on account of services performed during the calendar year 2000,
if the Company's operations (Plastics Group) reach $12,000,000 in revenues, and
are profitable.
3. BONUSES
3.1 The Executive shall participate in all executive bonus plans now
existing and established from time to time by the Company including the
Company's Executive Incentive Performance Plan. The Company may grant bonuses to
the Executive in such amounts and at such times, as the Board of Directors shall
determine.
4. EMPLOYEE BENEFITS
4.1 The Executive shall be included to the extent eligible thereunder
under any and all existing and future plans, programs or arrangements providing
benefits for the executives.
4.2 The Executive shall be included in all incentive, profit-sharing,
bonus, stock option or other similar or comparable plans applicable to
executives of the Company, in accordance with the terms thereof.
4.3 The Executive shall be provided with an automobile and shall be
entitled to all other perquisites or privileges of office which have been and
are made available to other senior executives of the Company and / or
Subsidiaries.
4.4 The Executive shall be provided, at the expense of the Company, a
level of disability and life insurance, the terms, conditions and amounts of
which are applicable to the executives of the Company and/ or Subsidiary.
4.5 The Executive shall be entitled to no less than two (2) weeks paid
vacation in each year. During the term of the contract, the Company may grant
additional vacation time to the Executive.
5. EXPENSES
5.1 The Executive is authorized to incur reasonable expenses necessary to
carry out his duties under this Agreement. The Company will reimburse the
Executive for all such expenses upon presentation by the Executive from time to
time of an itemized account of such expenditures in accordance with Company
practices consistently applied.
6. TERMINATION
6.1 In the event that the Executive's employment is terminated by the
Company (other than as provided in Section 7, or for Cause, as defined below) or
the Executive terminates his employment for Good Reason (as defined below) prior
to the Termination Date, as then in effect, the Executive shall be entitled to
receive (other than as provided in Section 10) up to one year's salary in effect
at the time of termination.
6.2 In addition, the Company shall provide the Executive with a
continuation of the employee benefits or substantially equivalent coverage ( or
the full value thereof in cash), for the period from the end of the Employment
Term until the Termination Date (as then in effect); provided, however, that in
the event that the Executive obtains other substantially comparable employment
during such period, the Executive is entitled under this Section 6.2 shall be
reduced (but not below zero) by any such benefits provided by the Executive's
new employer.
7. DEATH OR PERMANENT DISABILITY
7.1 In the event the Executive shall fail during the Employment Term,
because of illness, physical or mental disability or other incapacity, for a
period of six consecutive months to render the services provided for by this
Agreement ("Permanent Disability"), then the Company may terminate the
Employment Term, by notice to the Executive effective not less than 30 days
after giving such notice which sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under this Section 7.1; provided, however, that the Company shall,
after such termination due to Permanent Disability, continue to pay the
Executive's annual base salary ( as set forth in Section 2 of this Agreement)
and provide for the continuation of the employee benefits and the benefit
provided under Section 4.4 of this agreement. The Executive will use his
reasonable best efforts to cooperate with any physician engaged by the Company
to determine whether or not Permanent Disability exists. Any payments provided
for in this Section 7.1 shall be offset (but not below zero) by any salary
continuation payments received by the Executive under any plan, program or
arrangements described in Section 4.1 of this Agreement.
7.2 In the event of the death of the Executive during the Employment Term,
the Employment Term shall terminate on the date of the Executive's death, and
the Company shall pay an amount, or
provide Life Insurance, equal to the Executive's base salary for the period of
twelve (12) months, to his estate or other beneficiary designated by him.
Thereafter, the Company shall have no further obligation to compensate the
Executive, under this agreement.
8. TERMINATION FOR GOOD REASON
8.1 The Executive may terminate his employment hereunder for Good Reason
at any time during the Employment Term. For purposes of this Agreement, "Good
Reason" shall mean any of the following (except that upon written notice to the
Companies Chief executive Officer, the Company shall have 30 days to cure ).
(i) The assignment to the Executive by the Company of duties
inconsistent with the Executive's position, duties, responsibilities, titles or
offices, except in connection with the termination of the Executive's employment
for Cause, Permanent Disability as set forth herein in Section 7, or as a result
of the Executive's death or by the Executive other than for Good Reason;
(ii) A failure by the Company to continue in effect any applicable
employee benefit or compensation plan (including any pension, profit sharing,
bonus, life insurance, health, accidental death or dismemberment or disability
plan) in which the Executive is participating at the Effective Date hereof (or
in the case of plans adopted after the date hereof and providing a type of
benefit not provided by the Company at the Effective Date hereof, at the
respective dates of adoption of such plans) without providing for or
establishing plans or arrangements providing the Executive with substantially
similar benefits or the taking of any action by the Company which would
adversely affect the Executive's participation in or reduce the Executive's
benefits under any of such plans;
(iii) The taking of any action by the Company which would deprive
the Executive of any material fringe benefit enjoyed by the Executive at the
Effective Date hereof ( or in the case of a fringe benefit not provided by the
Company on the Effective Date hereof, at the respective dates of adoption of
such plans first providing such fringe benefits) or the failure by the Company
to provide the Executive with the number of paid vacation days to which the
Executive is entitled hereunder or, if greater, in accordance with the Company's
practices at the Effective Date hereof;
(iv) Any material breach by the Company of any provision of this
Agreement;
(v) Any purported termination of the Executive's employment which is
not effected pursuant to a notice of termination satisfying the requirements of
Section 7 or 9 of this Agreement, no such purported termination shall be
effective.
9. DISCHARGE FOR CAUSE
The Company shall have the right to terminate the employment of the
Executive for Cause. In the event that prior to the Termination Date the
Executive's employment is (a) terminated by the Company for Cause, as
hereinafter defined, or (b) by the Executive other than for Good Reason or (c)
other than as a result of Permanent Disability or death, the Executive shall be
entitled to receive all salary, bonuses, and
benefits to which the Executive is entitled or which have accrued up to and
including the effective date of the Executive's termination of employment
hereunder. All bonuses and similar amounts shall accrue through the date of
termination. If the Company follows the procedures specified in this Section 9,
in the case of the termination of the Executive's employment for Cause, the
Company's obligation under this Agreement to make any further payments, or
provide any benefits specified herein, to the Executive shall thereupon cease
and terminate. As used herein, the term "Cause" shall mean (i) the willful and
continued failure by the Executive to substantially perform his duties with the
Company (other than such failure resulting from his incapacity due to physical
and mental illness or any such or anticipated failure resulting from his
termination for Good Reason), after a demand for substantial performance is
delivered to the Executive by the Chief Executive Officer of the Company which
specifically identified the manner in which the Company believes that the
Executive has not substantially performed his duties, or (ii) the willful
engaging by the Executive in conduct which is demonstrably and materially
injurious to the Company or Subsidiary monetarily or otherwise, or (iii) the
Executive's willful and continued personal dishonesty, breach of fiduciary duty
involving personal profit, or conviction of a felony (other than minor traffic
violations). Termination of the Executive's employment pursuant to this Section
9 shall be communicated by a Notice of Termination. For purposes of this
Agreement a "Notice of Termination" shall mean delivery to the Executive of a
written notice constituting Cause for Termination in accordance with this
Section 9 has occurred
10. OBLIGATION TO MITIGATE DAMAGES
9.1 The Executive shall be required to mitigate damages or the amount of
any payment provided for under this Agreement by seeking other employment.
11. NONCOMPETITION
During the Employment Term, the Executive shall not, directly or
indirectly become under contract to or associated with, employed by, render
services to or own an interest (other than as a shareholder owning not more than
a 5% interest) in any business that is then in competition with the Company or
Subsidiary, unless so directed or permitted by the Chief Executive Officer in
writing.
12. INDEMNIFICATION: DIRECTORS & OFFICERS INSURANCE
12.1 The Company agrees to indemnify the Executive to the fullest extent
permitted under the applicable laws of Delaware and Rhode Island, respectively.
Such indemnification shall be in no way exclusive of any other right of
indemnification to which the Executive may be entitled.
13. CONFIDENTIALITY
13.1 The Executive shall not intentionally disclose or reveal to any
unauthorized person, during the period of the Employment Term any trade secret
or other confidential information relating to the Company or Subsidiary that has
not been previously disclosed or revealed.
14. NOTICES
14.1 All notices or communications hereunder shall be in writing,
addressed to each party at its or his address set forth above. Any such notice
or communications shall be sent certified or registered mail, return receipt
requested, postage prepaid, or by prepaid nationally-recognized courier service
addressed as above (or to such other address as such party may designate in
writing from time to time), and the actual date of receipt, as shown by the
receipt therefor, shall determine the time at which notice was given.
15. SEPARABILITY
15.1 If any provision of this Agreement shall be declared to be invalid or
unenforceable, in whole or in part, such invalidity or unenforceability shall
not affect the remaining provisions hereof, which shall remain in full force and
effect.
16. ASSIGNMENT
16.1 This Agreement shall be binding upon and inure to the benefit of the
heirs and representatives of the Executive and the assigns and successors of the
Company.
17. ENTIRE AGREEMENT
17.1 This Agreement represents the entire agreement of the parties and
shall supercede any and all previous contracts, arrangements or understandings
between the Company and the Executive; provided however, that the benefits
provided for in this Agreement are in addition to and shall in no way reduce or
diminish any right to which he is otherwise entitled that is already accrued for
or granted to the Executive pursuant to a plan, program or arrangement of the
Company. This Agreement may be amended at any time by mutual written agreement
of the parties hereto.
18. GOVERNING LAW
18.1 This Agreement shall be construed, interpreted, and governed in
accordance with the laws of the State of Rhode Island.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed and the Executive has hereunto set his hand, as of the day and year
first above written.
By: Infinite Group, Inc. /s/ Xxxxxxxx X. Xxxxxxxxx XX
Its President and Chief Executive Officer
by: /s/ Xxxxxx X. X'Xxxxxx
Executive
Witness: /s/ Xxxxxxx X. X'Xxxxxx