EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT is made as of March 5, 1999 between
CADAPULT GRAPHIC SYSTEMS INC., a New Jersey corporation with offices at 000
Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 ("Employer"), and XXXXXX XXXXXX
("Employee") residing at 000 Xxxxxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000.
W I T N E S S E T H:
WHEREAS, Employer desires to retain the services of Employee and
Employee desires to be employed by Employer upon the terms and conditions
hereinafter set forth;
NOW THEREFORE, in consideration of the agreements herein contained, the
parties hereto agree as follows:
1. EMPLOYMENT. Employer hereby employs Employee, and Employee hereby
agrees to serve, as Vice President of Technical Services of Employer, or such
other position and with such title as Employer may reasonably designate, for
the Term of Employment (as defined in Section 2). Employee agrees to perform
such services as are customary for such office or to such other offices as
shall from time to time be assigned to Employee by Employer's Board of
Directors or its designee, and, in the absence of such assignment, such
services customary to such offices as are necessary to the operations of
Employer. Employee further agrees to use Employee's best efforts to promote
the interest of Employer and to devote Employee's full business time and
energies during normal business hours to the business and affairs of Employer
during the Term of Employment.
2. TERM OF EMPLOYMENT. The employment hereunder which commenced on
May 1, 1998 and shall continue for a term of three (3) years (the "Term of
Employment"), unless earlier terminated: (a) upon death of Employee; (b) at
the option of Employer upon 30 days' prior written notice to Employee, in the
event Employee, by reason of physical injury or illness, is unable to
materially perform his duties hereunder for a period of 60 days and has no
proof of expectation of returning to work within a reasonable time
thereafter; or (c) upon the discharge of Employee by the Board of Directors
of Employer for "cause" (as defined in Section 7 hereof).
3. COMPENSATION.
A. Base Salary. As compensation for the services to be
provided hereunder and in consideration of Employee's agreement not to
compete as set forth in Section 4, during the Term of Employment, Employer
shall pay Employee an annual salary of ninety-five thousand dollars ($95,000)
with adjustments of not less than the change in the Consumer Price Index, or
such greater amount as may be established by Employer's Board of Directors,
which shall be payable in appropriate installments to conform with the
regular payroll dates for salaried personnel of Employer.
B. Incentive Earnings Bonus. In addition to any bonus to be
determined by the Board of Directors, Employee is eligible for certain
incentive bonuses contingent upon certain corporate earnings milestones.
Employee is hereby granted five year options to purchase 100,000 shares of
the Company's common stock, par value $.001 per share. These options will
vest upon the achievement of certain corporate earnings milestones as set
forth herein. Options to purchase 25,000 shares at $2.00 per share shall
vest following the first fiscal year end in which the Company's EBITDA
exceeds $500,000; additional options to purchase 25,000 additional shares at
$2.00 per share shall vest following the first fiscal year end in which the
Company's EBITDA exceeds $1,000,000; additional options to purchase 25,000
additional shares at $2.00 per share shall vest following the first fiscal
year end in which the Company's EBITDA exceeds $1,500,000; and additional
options to purchase 25,000 additional shares at $2.00 per share shall vest
following the first fiscal year end in which the Company's EBITDA exceeds
$2,000,000. These options are cumulative and are subject to anti-dilution
rights.
C. Other Benefits. Employee shall be entitled to the
following fringe benefits, perquisites, and other benefits of employment
during the Term of Employment to the extent that the Board of Directors
determines such benefits are to be made available to Employer's employees in
general: (i) medical and dental insurance under such group medical and
dental insurance policies as Employer may provide to its employees; (ii) sick
days in accordance with Employer's policy regarding officers; (iii) up to
four (4) weeks vacation in each year fully worked, and it is not to be deemed
to have any cash value; (iv) participation in Employer's 401(k) plan or such
other plan as Employer may adopt; and (v) participation in Employer's
employee stock option plan when and if established.
D. Payment Upon Early Termination. In the event of early
termination of employment for any reason specified in Section 7 hereof,
Employer shall no longer be obligated to make any payments of compensation to
Employee or Employee's estate under this Agreement. However, any salary or
bonus earned and/or vested for prior periods, but not yet paid, shall be paid
by Employer to Employee or Employee's estate.
E. Bonus. Employee shall, during the term of this
Agreement, be entitled to a performance bonus as the Board of Directors may
determine from time to time. A grant of any bonus or other compensation to
another of Employer's employee, shall not be, in any way, interpreted so as
to entitle Employee to such bonus or other compensation.
4. COVENANT NOT TO COMPETE; INTELLECTUAL PROPERTY; CONFIDENTIALITY.
A. Covenant Not to Compete and Solicit. During the Term of
Employment and for a period of three (3) years after termination of
Employer's employment with Employee, Employee will not, within any
jurisdiction in which Employer or any affiliate conducts its business
operations, or in any way materially competing with Employer, directly or
indirectly, own, manage, operate, control, be employed by or participate in
the ownership, management, operation or control of, or be connected in any
manner with, any business of the type or character engaged in or competitive
with that conducted by Employer. The decision of Employer's Board of
Directors as to what constitutes a competing business shall be final and
binding upon Employee, and such decision shall be made in good faith. For
these purposes, ownership by Employee or any affiliate of Employee of
securities of a public company not in excess of 1% of any class of such
securities shall not be considered to be competition with Employer.
For a period of three (3) years after termination of Employee's
employment with Employer, Employee further agrees to refrain from
interfering with the employment relationship between Employer and its other
employees by soliciting any of such individuals to participate in any way in
any other business ventures and agrees to refrain from soliciting business
from any client or prospective client (as disclosed in a list to be provided
to Employee by Employer at the time he ceases to be employed, which list
shall be binding upon Employee) of Employer's for Employee's benefit or for
any other entity.
It is the desire and intent of the parties that if any provisions
of this Section 4(A) shall be adjudicated to be invalid or unenforceable,
this Section 4(A) shall be deemed amended to delete therefrom such provisions
or portion adjudicated to be invalid or unenforceable, such amendment to
apply only with respect to the operation of this paragraph in the particular
jurisdiction in which such adjudication is made.
B. Intellectual Property. During the Term of Employment,
Employee will disclose to Employer all ideas, inventions and business plans
developed by Employee during such period which relates directly or indirectly
to the business of Employer or affiliates, including without limitation any
process, operation, product or improvement which may be patentable or
copyrightable. Employee agrees that such will be the property of Employer
and that Employee will, at Employer's request and cost, do whatever is
necessary to secure the rights thereto by patent, copyright or otherwise to
Employer.
C. Confidentiality. Employee agrees to not divulge to anyone
(other than Employer or any other persons employed or designated by Employer)
any knowledge or information of any type whatsoever of a confidential nature
relating to the business of Employer or any of its subsidiaries or
affiliates, including without limitation all types of trade secrets (unless
readily ascertainable from public or published information or trade sources).
Employee further agrees not to disclose, publish or make use of any such
knowledge or information of a confidential nature without prior written
consent of Employer.
5. REIMBURSEMENT OF EXPENSES. Employee shall be entitled to be
reimbursed for pre-approved reasonable travel and other pre-approved expenses
incurred in connection with Employee's services to Employer pursuant to and
during the Term of Employment upon a basis consistent with the policies
established or announced by Employer.
6. BREACH BY EMPLOYEE. Both parties recognize that the services to be
rendered under this Agreement by Employee are special, unique and
extraordinary in character, and that in the event of a breach by Employee of
the terms and conditions of this Agreement to be performed by Employee, or in
the event Employee performs services during the Term of Employment for any
person, firm, corporation or other entity engaged in a competing line of
business with Employer, or otherwise breaches this Agreement, Employer shall
be entitled, if it so elects, to take all actions, either in law or in
equity, that it deems necessary to protect its rights and interests.
7. TERMINATION FOR CAUSE. Employer may terminate Employee for cause
upon ten days' prior written notice to Employee. For purposes of this
Agreement, an event or occurrence constituting "cause" shall mean:
A. Employee's willful failure or refusal after notice thereof,
to perform specific directives of Employer's Board of Directors, when such
directives are consistent with the scope and nature of Employee's duties and
responsibilities as set forth in Section 1 and elsewhere herein;
B. Dishonesty of Employee affecting Employer;
C. Employee's conviction of a felony or of any crime involving
moral turpitude, fraud or misrepresentation;
D. Any gross or wilful conduct of Employee resulting in
substantial loss to Employer, substantial damage to Employer's reputation or
theft from Employer;
E. Other than physical injury or illness, Employee's failure to
perform the duties and responsibilities under this Agreement; or
F. Any material breach (not covered by any of the clauses (A)
through (E)) of any of the provisions of this Agreement, causing damage to
Employer, if such breach is not cured within ten days after written notice
thereof to Employee by Employer.
8. ASSIGNMENT. This Agreement is a personal contract and, except as
specifically set forth herein, the rights and interests of Employee herein
may not be sold, transferred, assigned, pledged or hypothecated by Employee.
The rights and obligations of Employer hereunder shall be binding upon and
run in favor of the successors and assigns of Employer. In the event of any
attempted assignment or transfer of rights hereunder contrary to the
provisions hereof, Employer shall have no further liability for payments
hereunder. Employee specifically consents to assignment of this Agreement by
Employer pursuant to any reorganization or business combination that Employer
may effect hereafter.
9. GOVERNING LAW; CAPTIONS. This Agreement contains the entire
agreement between the parties and shall be governed by the laws of the State
of New York. It may not be changed orally, but only by agreement in writing
signed by the party against whom enforcement of any waiver, change,
modification or discharge is sought, and consented to in writing by the
President of Employer. Section headings are for convenience or reference
only and shall not be considered a part of this Agreement.
10. PRIOR AGREEMENTS. This Agreement supersedes and terminates all
prior agreements between Employer and Employee relating to the subject matter
herein addressed.
11. NOTICES. Any notice or other communication required or permitted
hereunder shall be sufficiently given if delivered in person to Employer by
delivery to its Chairman of the Board of Directors or sent by telex, telecopy
or by registered or certified mail, postage prepaid, addressed as follows:
If to Employee, to:
Xxxxxx Xxxxxx
000 Xxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000.
If to Employer, to:
Cadapult Graphic Systems Inc.
Attn: Xxxxxxx Xxxxx, President
000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
fax: 000-000-0000
IN WITNESS WHEREOF, Employer has by its appropriate officer signed this
Agreement and Employee has signed this Agreement, on and as of the date and
year first above written.
CADAPULT GRAPHIC SYSTEMS INC.
By: /s/ Xxxxxxx X. Xxxxx,
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Xxxxxxx X. Xxxxx, Chairman of the Board
EMPLOYEE
/s/ Xxxxx Xxxxxx
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Xxxxxx Xxxxxx
