EXHIBIT 10.3
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made and entered into
as of November 12, 1994, by and between VISUAL INFORMATION SERVICES CORP., an
Illinois corporation (the "Company"), and XXXXXX XXXXXXXXX ("Officer") with
reference to the following:
WHEREAS, the Company desires to engage officer as Chief Executive Officer
of the Company and Officer desires to be so engaged by the Company in such
position, on the terms and conditions set forth and described herein.
NOW, THEREFORE, in consideration of the mutual covenants and obligations
hereinafter set forth, the Company and Officer agree as follows:
1. EMPLOYMENT. The Company shall employ Officer in the capacity and on
the terms and subject to the conditions set forth in this Agreement. Officer
hereby accepts such employment.
2. TERM; RENEWAL.
(a) TERM. Unless sooner terminated as hereinafter provided or
renewed as provided below in this paragraph 2, the term of this Agreement and of
Officer's employment hereunder shall be for a period of three (3) years,
commencing on the date hereof (the "Commencement Date"). Such period of
employment is hereinafter referred to as the "Employment Period."
(b) RENEWAL. Unless either party hereto notifies the other party not
less than 120 days prior to the expiration of the Employment Period of such
party's intent to allow this Agreement and Officer's employment hereunder to
expire, this Agreement and Officer's employment hereunder shall, without further
act by either party, be deemed to be renewed as of the date this Agreement would
otherwise expire for an additional one-year period. Any renewal of this
Agreement pursuant to this subparagraph 2(b) shall be at the annual salary and
bonus and on the other terms and conditions of this Agreement then in effect.
3. DUTIES. Subject to the provisions of this Agreement, during the
Employment Period, the Company shall employ Officer and Officer shall serve the
Company as Chief Executive Officer of the Company. During the Employment
Period, Officer shall discharge the obligations and responsibilities normally
associated with such office and shall also perform such other duties and
responsibilities as the Board of Directors of the Company (the "Board") shall
determine from time to time. Officer agrees to perform such duties faithfully
and to the best of his ability, to devote his full working time and efforts to
the performance of such duties and not to accept any other gainful employment
without the prior written consent of the Board. During the Employment Period,
Officer shall report to the Board.
4. COMPENSATION; FRINGE BENEFITS. For all services rendered by Officer
pursuant to this Agreement, during the Employment Period, the Company shall
compensate Officer as follows:
(a) ANNUAL SALARY. Commencing on the Commencement Date, Officer
shall be entitled to an annual base salary equal to $60,000, which shall be
payable in equal installments by the Company pursuant to the Company's normal
payroll procedures. Officer's annual base salary shall be subject to increase
annually on each year following the Commencement Date by a percentage equal to
the percentage increase, if any, in the Consumer Price Index during that year of
service.
(b) DISCRETIONARY BONUS. In addition to Officer's annual base
salary, the Company may pay Officer a bonus during the Employment Period.
(c) EMPLOYEE BENEFIT PLANS. During the Employment Period, in
addition to the annual base salary and bonus provided in subparagraphs 4(a) and
(b), Officer shall be entitled to (i) participate under any medical and dental
insurance, death, disability, retirement, profit sharing or other benefit plan
of the Company generally available to similar officers of the Company and for
which he is eligible and (ii) any additional fringe benefits that may be
authorized and approved from time to time by the Executive Compensation
Committee of the Board or, if there is no such committee, by the Board.
Officer's participation in each such benefit plan shall commence on the date
hereof, with respect to existing plans, and as of the earliest practicable date
with respect to plans hereafter instituted by the Company, and shall be subject
to the terms and conditions of each such plan.
(d) EXPENSE REIMBURSEMENTS. During the Employment Period, the
Company shall reimburse Officer promptly for all travel, entertainment, business
meeting and similar expenditures reasonably incurred by Officer in pursuit and
furtherance of the Company's business to the extent such expenditures comply
with the reimbursement requirements and policies established by the Company and
published from time to time.
(e) WITHHOLDING. The Company shall deduct from any payments to be
made by it to the Officer under this Section 4 or under Section 7 any amounts
required to be withheld in respect of any Federal, state or local income or
other taxes and related deductions as required by law.
(f) VACATION. Officer shall be entitled to a paid vacation annually
in accordance with the Company's vacation policy as determined by the Executive
Compensation Committee of the Board or, if there is no such committee, by the
Board.
(g) INDEMNIFICATION AGREEMENT. Upon the request of Officer, the
Company shall promptly take such steps as are necessary to authorize, and shall
enter into, an indemnification agreement with Officer providing for Officer's
indemnification by the Company to the fullest extent of applicable law for all
costs, liabilities and expenses incurred by Officer arising out of Officer's
performance of his duties hereunder. The terms of any such indemnification
agreement will be set forth in a separate agreement between the Company and
Officer on terms mutually agreeable to both.
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(h) ISSUANCE OF OPTIONS. In addition to the compensation described
above, Officer shall receive options to purchase 25,000 shares of the Company's
common stock under (and subject to the provisions of) the Company's Stock Option
Plan. All of such options shall be immediately vested. Such options shall have
an exercise price of $2.50 per share and shall be exercisable for a period of
ten years.
5. REPRESENTATIONS AND WARRANTIES. Officer represents and warrants to
the Company that there are no agreements or arrangements, whether written or
oral, or any legal considerations applicable to unfair competition, trade
secrets or proprietary information that would be breached or violated by Officer
upon execution of this Agreement or that would prevent or impair Officer from
rendering exclusive services to the Company during the Employment Period.
6. TERMINATION. This Agreement and Officer's employment hereunder may be
terminated prior to the expiration of the term hereof upon the first to occur of
(for convenience of reference, the date upon which any termination of the
employment of Officer pursuant to Section 6 shall be effective shall be
hereinafter referred to as the "Termination Date"):
(a) TERMINATION FOR CAUSE. Officer's employment hereunder and all
of the Company's obligations hereunder (except as hereinafter provided) may be
terminated by the Company immediately for "cause" by giving written notice of
such termination to Officer. For purposes of this Agreement, "cause" shall
mean: (i) Officer's material, willful misconduct which could reasonably be
expected to have a material adverse effect on the business, assets, operations,
results of operations, condition (financial or otherwise), performance or
prospects of the Company (a "Material Adverse Effect"), (ii) Officer's willful
disregard of lawful instructions of the Board consistent with Officer's position
relating to the business of the Company or material neglect of duties or
material failure to act, (iii) the commission by Officer of an act constituting
common law fraud or embezzlement, or a felony or criminal act (other than
traffic violations), (iv) Officer's abuse of alcohol or other drugs or
controlled substances, or conviction of a crime involving moral turpitude, in
each case which has or could be reasonably expected to have a Material Adverse
Effect or impairs Officer's ability to perform his duties hereunder, (v)
Officer's material breach of a material provision of this Agreement or (vi)
Officer's resignation hereunder. Each of the matters referred to in the
preceding sentence shall be determined in good faith by the Board. A
termination contained in Section 6(a)(i), (ii), (iv) (other than as a result of
a conviction of a crime involving moral turpitude) or (v) shall take effect 30
days after the giving of the notice contemplated hereby unless Officer shall,
during such 30-day period, remedy to the satisfaction of the Board the
misconduct, disregard, abuse or breach specified in such notice; PROVIDED,
HOWEVER, that such termination shall take effect immediately upon the giving of
such notice if the Board shall have determined that such misconduct, disregard,
abuse or breach is unremediable (which determination shall be stated in such
notice). A termination pursuant to Section 6(a)(iii), (iv) (as a result of a
conviction of a crime involving moral turpitude) or (vi) shall take effect
immediately upon the giving of the notice contemplated hereby.
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(b) TERMINATION DUE TO DISABILITY OR DEATH. Officer's employment
hereunder may be terminated by the Company (i) upon thirty (30) days' notice
to Officer in the event that Officer has been unable to perform at least eighty
(80%) of his duties under this Agreement for an aggregate of one hundred twenty
(120) days within any 12-month period, or can reasonably be expected to be
unable to do so for such period, as the result of Officer's incapacity due to
physical or mental impairment, and within 30 days of receipt of such notice,
Officer shall not have returned to the full-time, continuing performance of his
duties hereunder (an "Involuntary Termination") and (ii) immediatel yupon the
death of Officer.
7. EFFECT OF TERMINATION OF EMPLOYMENT.
(a) Upon the termination of Officer's employment pursuant to Section
6(a) hereof, neither Officer nor Officer's beneficiaries or estate shall have
any further rights under this Agreement or any claims against the Company
arising out of this Agreement, except the right to receive, within 30 days of
the Termination Date:
(i) the unpaid portion of the annual base salary provided for in
Section 4(a) and payment for any accrued vacation provided for in Section 4(f),
in each case computed on a PRO RATA basis to the Termination Date; and
(ii) reimbursement for any expenses for which Officer shall not
have theretofore been reimbursed, as provided in Section 4(c) and (d).
(b) Upon the termination of Officer's employment pursuant to Section
6(c) hereof, neither Officer nor Officer's beneficiaries or estate shall have
any further rights under this Agreement or any claims against the Company
arising out of this Agreement, except the right to receive:
(i) the payments, if any, referred to in Sections 7(a)(i) and
(ii); and
(ii) payment of any annual bonus provided for in Section 4(b), if
any, computed on a PRO RATA basis to the Termination Date.
(c) Upon the termination of Officer's employment pursuant to Section
6(b) hereof, neither Officer nor Officer's beneficiaries or estate shall have
any further rights under this Agreement or any claims against the Company
arising out of this Agreement, except the right to receive:
(i) the payments, if any, referred to in Sections 7(a)(i) and
(ii) and 7(b)(ii);
(ii) so long as officer complies with the terms of Sections 8 and
9 hereof following the Termination Date, severance compensation equal to the
annual base salary provided for in Section 4(a) for the greater of (A) the
remainder of the three-year period commencing on the Commencement Date and (B)
the 12-month period commencing on the
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Termination Date, payable in equal installments in accordance with the Company's
normal payroll procedures; and
(iii) continued coverage under the benefit arrangements
provided pursuant to Section 4(c)(ii) (or substantially equivalent benefit
arrangements) for the greater of (A) the remainder of the three-year period
commencing on the Commencement Date and (B) the 12-month period commencing on
the Termination Date.
(d) Officer's obligations under Sections 8 and 9 of this Agreement
shall survive the termination of Officer's employment hereunder.
8. CONFIDENTIAL INFORMATION.
(a) Officer acknowledges that by reason of his employment hereunder
he will have access to Confidential Information (as defined below) concerning
the business and policies of the Company and any affiliate thereof. From and
after the date hereof, Officer shall not (i) divulge or disclose, directly or
indirectly, any Confidential Information to any person, firm, corporation or
other entity, for any purpose or reason whatsoever, or (ii) make use of any of
the Confidential Information for Officer's purposes or for the benefit of any
person, firm, corporation or other business entity except the Company or any
affiliate thereof, except, in each case, to the extent (A) such Confidential
Information is obtainable from public sources (other than as a result of
Officer's breach of this Agreement) or is known to Officer by reason of his
prior employment by any entity other than the Company or any predecessor thereof
or (B) such disclosure is required by applicable law or authorized in writing by
the Company or (C) in connection with Officer's enforcement of his rights under
this Agreement.
(b) For purposes of this Agreement, "Confidential Information" shall
mean all proprietary information relating to the Company and its business (as
currently conducted and as proposed to be conducted), properties and assets.
(c) Officer agrees that at the time of termination of his employment
with the Company, regardless of the reasons therefor, or upon the expiration of
this Agreement, he will deliver to the Company and not deliver to anyone else
any and all originals and copies of all notes, files, memoranda, papers and in
general, any and all physical matter containing Confidential Information or any
other information related to the conduct of the business of the Company, except
for any document for which the Company has given written consent to removal at
the time of termination of Officer's employment. Officer acknowledges that all
such materials are and shall remain the sole and exclusive property of the
Company.
9. NONCOMPETITION.
(a) Officer and the Company acknowledge and recognize that the
Company's business has been conducted, and sales of its Products have been and
will be made, in each State of the United States and world-wide, that the nature
of the industry in which the Company
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competes is highly competitive and that the Company would find it extremely
difficult or impossible to replace Officer. Accordingly, in consideration of
the premises and the covenants contained herein, the consideration to be
received hereunder, Officer shall not, during the Employment Period and the
Noncompete Period (as hereinafter defined), (i) directly or indirectly engage
in, whether such engagement shall be as an employee, consultant, officer,
director, partner, stockholder (other than ownership of up to 3% of the
outstanding securities of any public company with a market capitalization of
less than $1,000,000,000, ownership of up to 1% of the outstanding securities of
any public company with a market capitalization of $1,000,000,000 or more or
investments in mutual funds or similar investment vehicles), affiliate or other
participant in any Competitive Business (as hereinafter defined), or represent
in any way, any Competitive Business, whether such engagement or representation
shall be for profit or not, (ii) interfere with, disrupt or attempt to disrupt
the relationship, contractual or otherwise, between the Company and any third
party, including, without limitation, any customer, supplier, employee, or
consultant of the Company, or (iii) affirmatively assist, solicit or induce
others to engage in any Competitive Business in any manner described in the
foregoing clauses (i) and (ii). As used herein, "Competitive Business" shall
mean any business involving the sale of products in any city or county in any
State of the United States or any other jurisdiction outside of the United
States if such business or the products sold by it are competitive, directly or
indirectly, with (A) the business of the Company, (B) any of the Products or (C)
any product or business being developed or conducted by the Company or any
subsidiaries of the Company during the Employment Period. As used herein,
"Noncompete Period" shall mean (x) in the event that Officer's employment
hereunder is terminated pursuant to Section 6(a) hereof, the 18-month period
commencing on the Termination Date or (y) in the event that Officer's employment
hereunder is terminated pursuant to Section 6(b), the later of (1) the one-year
period commencing on the Termination Date or (2) 6(b) hereof, the period of time
during which Officer is receiving any severance payments pursuant to Section
7(c)(ii).
(b) Anything to the contrary contained herein notwithstanding,
subject to Section 3 hereof, nothing in this Section 9 is intended to prohibit
Officer from making any passive or personal investments, conducting his private
business affairs, donating his time for charitable purposes or giving seminars
or speeches so long as such activities are not competitive with or adverse to
the Company, the Business or the Products.
(c) Officer acknowledges and agrees that the breadth of the
territorial restriction in this Section 9 is reasonable and necessary to protect
the Company because, among other things, the Company conducts the Business
throughout the United States and outside the United States; the Business could
be located in any jurisdiction in the United States or outside the United
States; and any lesser restriction would unfairly infringe upon the Company's
conduct of the Business.
(d) Officer understands that the foregoing restrictions may limit his
ability to earn a livelihood in a business similar to the Business, but he
nevertheless believes that he has received and will receive sufficient
consideration and other benefits from the transactions contemplated by the
Documents and as an employee of the Company and as
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otherwise provided hereunder to clearly justify such restrictions which, in any
event, given his education, abilities and skills, Officer does not believe would
prevent him from earning a living.
10. ASSIGNMENT. This Agreement shall inure to the benefit of and shall be
binding upon the Company, its successors and assigns. The obligations and
duties of Officer hereunder are personal and not assignable, whether voluntarily
or involuntarily or by operation of law or otherwise.
11. NOTICES. All notices, requests, consents and other communications
hereunder to any party shall be deemed to be sufficient if contained in a
written instrument delivered in person or sent by telecopy (if automated
confirmation of full transmission is received), nationally-recognized overnight
courier or first class registered or certified mail, return receipt requested,
postage prepaid, addressed to such party at the address set forth below or such
other address as may hereafter be designated in writing by such party to the
other parties:
(i) if to the Corporation, to:
Visual Information Service Corp.
0000 Xxxxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: President
(ii) If to Officer, to:
Xx. Xxxxxx Xxxxxxxxx
0000 Xxxxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
All such notices, requests, consents and other communications shall be deemed to
have been delivered (a) in the case of personal delivery or delivery by telecopy
(if automated confirmation of full transmission is received), on the date of
such delivery, (b) in the case of dispatch by nationally-recognized overnight
courier, on the next business day following such dispatch and (c) in the case of
mailing, on the third business day after the posting thereof.
12. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
Company and Officer relating to the subject matter hereof, and it replaces and
supersedes any and all prior agreements between the parties relating to the same
subject matter.
13. WAIVER; AMENDMENT. No provision hereof may be waived except by a
written agreement signed by the waiving party. The waiver of any term or
condition of this Agreement shall not be deemed to constitute a waiver of any
other term or condition hereof. This Agreement may be amended only by a
subsequent writing signed by a party or parties to be bound thereby.
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14. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois.
15. REMEDIES. All remedies hereunder are cumulative, are in addition to
any other remedies provided for by law and may, to the extent permitted by law,
be exercised concurrently or separately, and the exercise of any one remedy
shall not be deemed to be an election of such remedy or to preclude the exercise
of any other remedy. Officer acknowledges that in the event of any breach of
Officer's covenants contained in Sections 8 and 9, the Company shall be entitled
to immediate relief enjoining such violations in any court or before any
judicial body having jurisdiction over such claim.
16. SEVERABILITY. In the event that any provision of this Agreement would
be held in any jurisdiction to be invalid, prohibited or unenforceable for any
reason, such provision, as to such jurisdiction, shall be ineffective, without
invalidating the remaining provisions of this Agreement in any other
jurisdiction. Notwithstanding the foregoing, if such provision could be more
narrowly drawn so as not to be invalid, prohibited or unenforceable in such
jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without
affecting the invalidity or enforceability of such provision in any other
jurisdiction.
17. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed an original and all of which, taken together, shall
constitute one and the same instrument.
18. HEADINGS. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be a part
of this Agreement.
19. ATTORNEYS' FEES. In the event that any party hereto brings an action
or proceeding for a declaration of the rights of the parties under this
Agreement, for injunctive relief, for an alleged breach or default of, or any
other action arising out of, this Agreement or the transactions contemplated
hereby, or in the event any party is in default of its obligations pursuant
hereto, whether or not suit is filed or prosecuted to final judgment, the
prevailing party
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in any such action or proceeding shall be entitled to reasonable attorneys'
fees, in addition to any court costs incurred and in addition to any other
damages or relief awarded.
IN WITNESS WHEREOF, the Company and Officer have executed this Agreement as
of the date first above written.
VISUAL INFORMATION SERVICE CORP.
By:
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Name:
Title:
OFFICER:
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Xxxxxx Xxxxxxxxx
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