Continental Information Systems Corporation
One Northern Concourse
Post Office Box 4785
Syracuse, New York 13221-4785
(000) 000-0000
FAX: 000-000-0000
Internet: xxxx@xxx.xxxxxxx.xxx
June 9, 1997
Xx. Xxxxx X. Xxxx
0000 Xxxx 00xx Xxxxxx
Xxxxxxxx, XX 00000
Dear Xx. Xxxx:
This letter sets forth the agreement (this "Agreement")
between Continental Information Systems Corporation (the "Company") and Xxxxx X.
Xxxx ("Meer") with respect to the terms and conditions upon which Xxxx will
serve as Chief Financial Officer and Chief Operating Officer of the Company,
effective June 30, 1997 (the "Commencement Date").
In consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and Meer mutually agree as follows:
1. Employment.
The Company hereby employs Meer, and Xxxx hereby agrees upon
the terms and conditions set forth herein to serve as Chief Financial Officer
and Chief Operating Officer of the Company, and in such capacity Meer shall have
the duties assigned to him by the Board of Directors and the Chief Executive
Officer of the Company. Xxxx shall report to the Chief Executive Officer of the
Company. For so long as the Company employs Meer, he shall, except as the
Company may otherwise agree from time to time in writing pursuant to authority
granted by a resolution of the board of directors of the Company (the "Board"),
devote his full time and attention to the performance of his duties hereunder,
shall faithfully serve the Company, shall in all respects conform to and comply
with the lawful and good faith directions and instructions given to him by the
Chief Executive Officer and the Board, and shall use his best efforts to promote
and serve the interests of the Company.
2. Term.
Meer's term of employment under this Agreement shall begin on
the Commencement Date and end on June 30, 1999 (the "Term"), unless earlier
terminated in accordance with Exhibit A.
3. Compensation; Benefits; Stock Options.
(a) Effective the Commencement Date, for each fiscal year
during the Term, Meer shall be entitled to receive an annual base salary of
$200,000 payable in accordance with the Company's normal payroll procedure or
such greater amount approved by the Board. Meer shall also be eligible to
receive bonuses to be negotiated in good faith by Xxxx and the Company
subsequent to the Commencement Date.
(b) Effective the Commencement Date, Meer shall, during the
Term, be covered by all applicable pension and profit sharing programs and
insurance benefits in effect for all salaried employees of the Company, together
with any future improvements in such programs and benefits. In addition, Xxxx
shall be entitled, during the Term (and thereafter to the extent provided herein
or in any such plan or program), to receive such other and further benefits,
including without limitation benefits under all life insurance, medical, dental,
health and accident, and disability plans or programs, as shall be generally
made applicable to senior executive personnel of the Company, and such
additional benefits as may be granted to Meer from time to time by the Board.
Notwithstanding the foregoing, Meer shall have the right to waive the benefits
provided under this section 3(b) and to continue to be covered by his previous
employer's benefits for no more than six (6) months after the Commencement Date.
The Company shall reimburse Meer for costs he incurs to continue to be covered
by his previous employer's benefits in an amount not to exceed the costs the
Company would have incurred if Meer had been covered by the Company's benefits.
(c) Meer shall be permitted such vacations and other time off,
including paid holidays, as are consistent with the Company's general rules and
practices regarding vacations for senior executive personnel.
(d) Effective the Commencement Date, Meer shall receive
options to purchase 75,000 shares of the Company's Common Stock. The options
shall be exercisable on or after the Commencement Date for up to 25,000 shares
of the Company's Common Stock. The options shall be exercisable as to an
additional 25,000 shares on the first anniversary of the Commencement Date. The
options shall be exercisable as to the remaining 25,000 shares on the second
anniversary of the Commencement Date. The term of the options shall be three (3)
years from the date that the options become exercisable. The exercise price of
the options shall be the closing price of the Company's Common Stock on the
Commencement Date. All other terms and conditions shall be set forth in, and the
options shall be issued pursuant to, the Company's standard stock option
agreement, as executed by Meer.
4. Severance; Non-competition.
(a) Subject to Section 4(b), upon the occurrence of a
Severance Event (as defined in Exhibit A), Meer shall be entitled to receive,
until the earlier of three months from the date of the Severance Event or the
commencement by Meer of full time employment by another employer, the following:
(1) a monthly severance payment equal to one-twelfth of Xxxx's annual base
salary as in effect on the date of the Severance Event, and (2) Continued
Benefits (as defined in Exhibit A).
(b) If within one year after the Commencement Date, there
occurs a Change of Control Event (as defined in Exhibit A), and then a Severance
Event, then Meer shall be entitled to receive from the date of the Severance
Event until the earlier of the date that is one year after the date of the
Change of Control Event or the commencement by Meer of full time employment by
another employer, the following: (1) a monthly severance payment equal to
one-twelfth of Meer's annual base salary as in effect on the date of the
Severance Event but in no event less than three (3) months of severance, and (2)
Continued Benefits.
(c) If Xxxx dies or becomes disabled after a Severance Event,
he or his estate shall continue to receive the remaining benefits to which he is
entitled, subject to the terms of any plan included in the Continued Benefits.
(x) Xxxx agrees that, during the Restriction Period, he will
not engage, directly or indirectly, whether as principal or as director,
officer, employee, agent, consultant, beneficial owner of an excess of three
percent (3%) of any outstanding class of publicly-traded equity securities, or
otherwise, alone or in association with any other person, corporation, or other
entity, in any Competing Business. "Competing Business" means any person,
corporation, or other entity that is engaged, in direct competition with the
Company, in the sale of any products or services that are the same as or similar
to the products and services sold by the Company. "Restriction Period" means the
period beginning on the Commencement Date and ending on the earlier of (i) June
30, 1999, or (ii) if Xxxx's employment is terminated as a result of a Severance
Event, the date of such Severance Event. Meer further agrees that, during the
Restriction Period, he will not, directly or indirectly, in competition with the
Company, solicit the trade of, or trade with, any customer of the Company, and
will not, without the consent of the Company, directly or indirectly solicit or
induce, or attempt to solicit or induce, any employee of the Company to leave
his or her employ for any reason whatsoever nor hire any such employee away from
the Company. Without limiting the remedies available to the Company, Meer
acknowledges that any breach of these covenants may result in material
irreparable injury to the Company and its affiliates for which there is no
adequate remedy, at law, and that it will not be possible to measure damages for
such injuries precisely. Meer agrees that, in the event of such a breach or
threat thereof, the Company will be entitled to obtain a temporary restraining
order and/or a preliminary or permanent injunction restraining Meer from
engaging in activities prohibited by any of those covenants or such other relief
as may be required to specifically enforce any of those covenants.
5. General Provisions.
(a) Binding Effect. This Agreement shall be binding upon, and
inure to the benefit of, the parties hereto, any successors to or assigns of the
Company and Xxxx's heirs and the personal representatives of Xxxx's estate.
(b) Arbitration. Any disputes, controversies, or claims
arising out of or related to this Agreement ("Disputes") shall be resolved by
binding arbitration in accordance with the provisions of Exhibit B.
(c) Amendment; Waiver. This Agreement may not be modified,
amended or waived in any manner except by an instrument in writing signed by
both parties hereto; provided, however, that any such modification, amendment or
waiver on the part of the Company shall have been previously approved by the
Board. The waiver by either party of compliance with any provision of this
Agreement by the other party shall not operate or be construed as a waiver of
any other provision of this Agreement or of any subsequent breach by such party
of a provision of this Agreement.
(d) Tax Withholding. Payments to Meer of all compensation
contemplated under this Agreement shall be subject to all applicable legal
requirements with respect to the withholding of taxes and social security
contributions.
(e) Governing Law. All matters affecting this Agreement,
including the validity thereof, are to be governed by, and interpreted and
construed in accordance with, the laws of the State of New York applicable to
contracts executed in and to be performed in that State.
(f) Notices. Any notice hereunder by either party to the other
shall be given in writing by personal delivery or certified mail, return receipt
requested. If addressed to Meer, the notice shall be delivered or mailed to Meer
at the address first set forth above, or if addressed to the Company, the notice
shall be delivered or mailed to Continental Information Systems Corporation, Xxx
Xxxxxxxx Xxxxxxxxx, Xxxxx Xxxxxxxx, Xxx Xxxx 00000, Attention: Chief Executive
Officer, or such other address as the Company or Meer may designate by written
notice at any time or from time to time to the other party. A notice shall be
deemed given, if by personal delivery, on the date of such delivery or, if by
certified mail, on the date shown on the applicable return receipt.
(g) Effect on Previous Agreements. This Agreement supersedes
all prior oral or written employment agreements between Meer and the Company,
and all prior or contemporaneous negotiations, commitments, agreements, and
writings with respect to the subject matter hereof; all such other negotiations,
commitments, agreements, and writings will have no further force or effect; and
the parties to any such other negotiation, commitment, agreement, or writing
will have no further rights or obligations thereunder.
(h) Counterparts. Either of the parties hereto may execute
this Agreement in counterparts, each of which shall be deemed to be an original,
but all such counterparts shall together constitute one and the same instrument.
(i) Headings. The headings of sections herein are included
solely for convenience of reference and shall not control the meaning or
interpretation of any of the provisions of this Agreement.
This Agreement shall constitute a binding agreement between
Meer and the Company upon execution by each of Meer and the Company; provided,
that if the Company does not execute this Agreement after thirty (30) days of
the execution by Xxxx, this Agreement shall be null and void.
CONTINENTAL INFORMATION SYSTEMS CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
--------------------
Name: XXXXX X. XXXXXXX, Chairman
Authorized Signatory
Date: 6/9/97
By: /s/ XXXXX X. XXXX
-----------------
Name: XXXXX X. XXXX
Date: 6/9/97
EXHIBIT A
Definitions
1. Severance Event: During the Term, termination by the Company of
Xxxx's employment other than for Cause, or resignation by Xxxx from the Company
for Good Reason.
2. Cause: Termination by the Company of Xxxx's employment upon (a)
Xxxx's willful and continued failure to substantially perform his duties with
the Company (other than any such failure resulting from his incapacity due to
physical or mental illness), or (b) Xxxx's willfully engaging in misconduct that
is materially injurious to the Company, monetarily or otherwise. For purposes of
this paragraph, no act, or failure to act, on Xxxx's part shall be considered
"willful" unless done, or omitted to be done, by him not in good faith and
without reasonable belief that his action or omission was in the best interest
of the Company. Notwithstanding the foregoing, Xxxx's employment shall not be
deemed to have been terminated for Cause unless and until there shall have been
delivered to Meer a copy of a Notice of Termination from the Board, after
reasonable notice to Xxxx and an opportunity for him and his counsel to be heard
before the Board, finding that in the good faith opinion of the Board he has
engaged in conduct warranting termination for Cause under clauses (a) and (b)
above.
3. Good Reason: Xxxx's resignation of his employment with the Company
within 120 days following the occurrence of any of the following events:
(a) Reduction of Xxxx's annual base salary below $200,000;
(b) Without Xxxx's written consent and measured against his status
as of the Commencement Date, a reduction in his reporting
responsibilities, titles, or offices, or any removal of him
from or any failure to re-elect him to any such positions,
except in connection with the termination of his employment
for Cause, disability, or retirement or as a result of his
death, or by him other than for Good Reason, provided, that in
the event there occurs a Change of Control Event consisting of
a decision to liquidate substantially all the assets of the
Company, it shall not constitute Good Reason if Meer is
requested by the Board of Directors to remain employed by the
Company to assist in the liquidation for a period of up to six
(6) months at the annual salary of $200,000 (or such greater
amount in effect) plus benefits; or
(c) The Company does not allow Xxxx to participate in any employee
benefit plan on the same terms and conditions made available
to other senior executive personnel; provided, that the
foregoing shall not restrict the Board's discretion to award
bonuses, stock options or other incentive compensation in such
amounts as it determines.
In the event that Xxxx does not resign within 120 days of the occurrence of any
of the foregoing events, his rights with respect to such Good Reason shall be
deemed waived by Xxxx.
4. Notice of Termination: A written notice which shall indicate the
specific termination provision in this Agreement that is relied upon by the
party terminating Meer's employment and which shall summarize the basis for
termination of Xxxx's employment. Any purported termination by the Company for
Cause, or Xxxx's resignation for Good Reason shall be communicated by Notice of
Termination to the other party hereto.
5. Date of Termination: (a) if Xxxx's employment is terminated for
Cause, the date specified by the Company in the Notice of Termination, and (b)
if Xxxx's employment is terminated by Meer for Good Reason, the date on which
the Notice of Termination is given.
6. Continued Benefits: The following benefits, which shall be
maintained in full force and effect by the Company for the benefit of Meer and
his surviving dependents for the applicable period: all life insurance, medical,
dental, health and accident, and disability plans or programs in which Xxxx was
entitled to participate immediately prior to the Severance Event; provided, that
Xxxx's continued participation is possible under the general terms and
provisions of such plans and programs. In the event that Xxxx's participation in
any such plan or program is barred, the Company shall make reasonable efforts to
obtain insurance for Meer that would provide him with benefits substantially
similar to those which Meer is entitled to receive under such plans and
programs, but the Company shall not provide those benefits directly if they
cannot be obtained through insurance and shall not be obligated to pay premiums
in excess of two (2) times the group rate previously paid on his behalf. Meer
agrees that any such coverage will reduce the applicable period for which
coverage might have to be offered under applicable federal or state laws.
Nothing in this provision shall provide eligibility for bonuses, vacation, or
pension or profit sharing programs after the Severance Event, except as
otherwise required by the generally-applicable terms of those programs.
7. Change of Control Event: Either (i) any change in the composition of
the Board of Directors of the Company resulting in a majority of the directors
on the Commencement Date, or persons elected by or on the recommendation of a
majority of the directors on such date, not constituting a majority of the Board
of Directors; or (ii) a decision by the Board of Directors or the shareholders
to liquidate substantially all the assets of the Company.
EXHIBIT B
Arbitration Provisions
1. Any arbitration required under section 5(b) of this
Agreement shall be administered by the American Arbitration Association ("AAA"),
and shall be conducted in accordance with the Commercial Arbitration Rules of
the American Arbitration Association (the "Rules"), as such Rules may be amended
from time to time, with the hearing locale to be New York, New York, unless some
other location and/or arbitrator are chosen by mutual consent of the Company and
Meer.
2. A single neutral arbitrator shall preside over the
arbitration and decide the Dispute (the "Decision"). The AAA shall use its
normal procedures pursuant to the Rules for selection of an arbitrator.
3. The Decision shall be binding, and the prevailing party may
enforce such decision in any court of competent jurisdiction.
4. The parties shall cooperate with each other in causing the
arbitration to be held in as efficient and expeditious a manner as practicable
and in this connection to furnish such documents and make available such persons
as the Arbitrator may request.
5. The parties have selected arbitration in order to expedite
the resolution of Disputes and to reduce the costs and burdens associated with
litigation. The parties agree that the Arbitrator should take these concerns
into account when determining whether to authorize discovery and, if so, the
scope of permissible discovery and other hearing and pre-hearing procedures.
6. Without limiting any other remedies that may be available
under applicable law, the Arbitrator shall have no authority to award punitive
damages.
7. The Arbitrator shall render a Decision within ninety (90)
days after accepting an appointment to serve as Arbitrator unless the parties
otherwise agree or the Arbitrator makes a finding that a party has carried the
burden of showing good cause for a longer period.
8. All proceedings and decisions of the Arbitrator shall be
maintained in confidence, to the extent legally permissible, and shall not be
made public by any party or any Arbitrator without the prior written consent of
all parties to the arbitration, except as may be required by law.
9. Each party shall bear its own costs and attorneys' fees,
and the parties shall equally bear the fees, costs, and expenses of the
Arbitrator and the arbitration proceedings; provided, however, that the
Arbitrator may exercise discretion to award costs, but not attorneys' fees, to
the prevailing party.
