1
EXHIBIT 10.20
AGREEMENT made and entered into as of the 31st day of July, 1997 by and
between MARINE MANAGEMENT SYSTEMS, INC. (the "Company"), a Delaware corporation,
and Arie Slot (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company desires to employ the Executive, and the Executive desires
to be employed by the Company, upon the terms and subject to the conditions
hereinafter set forth.
NOW, THEREFORE, the parties hereto hereby agree as follows:
FIRST: A. Upon the terms and subject to the conditions of this Agreement,
the Company hereby employs the Executive as the Vice President of the Company,
and the Executive hereby accepts such employment.
B. The Executive shall perform his duties and exercise his authority as Vice
President of the Company pursuant to such direction as may from time to
time be given by the Company's Board of Directors (the "Board") and he
shall, from time to time as and when required, report to the Chairman of
the Board of the Company with respect to his activities as Vice President.
C. If the Company shall so request, the Executive shall become and shall
during such portion of the term of this Agreement as the Company shall
request, act as a director of the Company and/or as a director and/or
officer of any of its parents or subsidiaries, or any affiliates thereof,
without any compensation in addition to that provided for in Article Third
hereof.
D. The Executive shall devote his full business time and efforts and all
reasonable energy and skill to the business of the Company, its
subsidiaries and affiliates, and shall use his best efforts to promote the
interests thereof. The Executive's services shall be rendered with due
regard by the Executive for the prompt, efficient and economical operation
of the Company's business to the end of maximizing the Company's
profitability.
During the term of this Agreement, the Executive will not, without the prior
written consent of the Board, engage in any other business or business
activity, except that he may buy, sell and hold securities of, or otherwise
invest in, corporations and other business entities for his own account and
that of his immediate family, and participate in investment decisions with
respect thereto, provided that such investment activities do not interfere
with his duties hereunder and provided further, that he does not buy, sell,
or hold shares of stock of a company traded on a national securities exchange
or in the national over-the-counter market which shall constitute two percent
(2%) or more of the outstanding shares of the stock of such company if such
company competes with the Company or with any of its
2
subsidiaries and he shall not, in any event, thereby become involved in the
management or operation of any business.
SECOND: A. This Agreement shall commence on the date herein and shall terminate
on the earliest to occur of:
(1) The first anniversary of the effective date of this Agreement;
provided, however, that this agreement shall thereafter be automatically renewed
from year to year unless either party, commencing thirty days prior to the
anniversary of the effective date of this Agreement, shall have given the other
party prior written notice of its intention to terminate this Agreement on a
specified date at least thirty days from the date of such notice;
(2) The death of the Executive; or
(3) After the Company shall have given at least thirty (30) days' prior
written notice to the Executive of its intention to terminate this Agreement on
a specified date, which specified date shall be either on or after there shall
have elapsed a consecutive period of 120 days or a non-consecutive period of 180
days during any twelve month period during which the Executive has been
incapacitated or unable to perform his duties; provided, however, that, if the
Company shall terminate this Agreement in accordance with either clause (1) or
(3) above, the Company shall continue to pay to the Executive his annual base
salary at the rate specified in Article THIRD, section A, hereof for six months
after the effective date of such termination.
B. In addition to the events specified in Paragraph A of this Article
SECOND, the Company shall at any time, at its option, be entitled to terminate
this Agreement:
(1) For cause, which for the purposes of this Agreement shall mean the
continuing inattention to, refusal to perform or neglect of the Executive's
obligations hereunder, which inattention, refusal or neglect is not the result
of the Executive's illness; or
(2) If the Executive has been indicted on charges of committing a crime
other than minor misdemeanors or traffic violations.
C. Termination in accordance with any of the foregoing provisions of
Paragraph A or B above shall be effective on the date applicable to the
particular termination section referred to above, and from and after such date,
this Agreement shall be of no further force and effect, except that (i) the
Company's rights under Articles FOURTH and FIFTH hereof shall survive the
termination of this Agreement and (ii) the Company's obligations to make any
payments under paragraph 3 of part A of this Article SECOND shall survive the
termination of this Agreement.
THIRD: A. The Executive shall receive, during his employment hereunder, an
annual base salary commencing on the date hereof, payable in such installments
as shall accord with normal pay practices of the Company but not less often than
monthly, at the following rates:
3
(i) from the date hereof to the first anniversary of the date of
employment, 1/20/97, at the rate of $100,000 per annum, and
(ii) during each subsequent yearly period (an "Employment Year"), at a
rate per annum equal to the immediately prior Employment Year's rate plus a
percentage of such prior Employment Year's amount equal to the percentage
increase, if any, in the U.S Bureau of Labor Statistics Consumer Price Index for
the Metropolitan New York Area ("CPI") as at the beginning of such subsequent
Employment Year. To illustrate the foregoing, assume that the CPI at the
beginning of the first Employment Year is 200 and at the beginning of the Second
Employment Year is 210 (or an increase of 10 points or 5%). In such case, the
rate of compensation for the second Employment Year will be increased by $5,000
(5% of $100,000) to $105,000.
B. The Executive shall also be eligible to receive, during the period of
actual employment only, quarterly bonuses to be determined based on achievement
of specific goals within the Executive's functional area of responsibility.
Details of that bonus structure and goals are included in Appendix A.
C. The Executive shall be entitled to participate, on the same basis,
subject to the same qualifications, as all other regular full time employees of
the Company in any fringe benefit plans of the Company maintained from time to
time for all its employees, as well as all fringe benefit plans maintained from
time to time for its key executives (herein collectively called the "Benefit
Plans"), including any pension, medical benefits and life insurance plans;
provided, that, the Company shall, at its sole expense, maintain in the name and
for the benefit of the Executive and his designated beneficiaries, group
insurance on the life of the Executive in an amount not less $50,000, as the
same may be adjusted from time to time hereunder, whether or not the Company
generally provides such benefit to its regular full time employees or its other
key executives and, provided further, that the Company shall not be required to
expend or accrue, in any calendar year, for benefits in addition to the benefits
normally provided any employee, an amount which, without giving effect to the
resulting federal, state and local tax benefits resulting therefrom, will exceed
25% of the Executive's salary. If and to the extent that the costs of and
accruals for the benefits provided for under the Benefit Plans shall exceed said
25% limitation in any calendar year, (i) the Executive and the Company shall
consult and determine which specific benefits under the Benefit Plans will be
reduced and the extent thereof in order to bring the total costs and accruals
within the aforesaid 25% limitation, but in the event of the failure of the
Executive and the Company to agree upon the nature and extent of such reduction,
then, the determination of the Company as to which benefit or benefits shall be
reduced, and the extent of such reduction, shall be binding
4
and conclusive between the parties hereto and (ii) if permitted by law and the
terms of the particular Benefit Plans, the benefits of which have been reduced,
the Executive will be given the opportunity to contribute his own funds to such
Benefit Plan to restore such benefits. For the purposes of this Paragraph D, all
amounts required to be expended or accrued by the Company shall be determined by
the independent certified public accountants regularly retained to audit the
books and records of the Company, in accordance with generally accepted
accounting principles, consistent with the accounting principles actually and
consistently applied by the Company in preparation of its financial statements,
and the determination of such accountants shall be final and binding on the
parties hereto.
D. The Company shall pay or reimburse the Executive for all reasonable
expenses incurred or paid by him in connection with the performance of his
services under this Agreement upon presentation of expense statements or
vouchers or such other supporting information as it may reasonably require.
E. The Executive shall be entitled to reasonable paid vacations during
each Employment Year at mutually convenient time or times in addition to usual
holidays.
FOURTH: During the term of this Agreement, the Executive shall bring any
and all business developments and potentially profitable situations related to
the Company's business to the Company for exploitation by the Company. In
addition, the Executive shall promptly and fully disclose and assign to the
Company any and all inventions, discoveries, improvements, developments,
concepts and ideas which are related to the Company's business, whether or not
patentable and whether or not conceived, developed or reduced to practice by the
Executive or by others, or both.
FIFTH: A. The Executive acknowledges that he has been informed that it is
the policy of the Company to maintain as secret and confidential all valuable
information, not generally known by others, which gives the Company a
competitive advantage in its business, as such may relate to the business and
operations heretofore or hereafter acquired, developed and/or used by the
Company and relating to the customers and employees of the Company (all such
information hereinafter referred to as "Confidential Information"). The parties
recognize that the services to be performed by the Executive are special and
unique, and that by reason of his employment hereunder, he has acquired and will
acquire Confidential Information. In consideration of the Executive's employment
with the Company pursuant to this Agreement, the Executive agrees that:
(1) except as required by the duties of his employment
with the Company, the Executive shall not, directly or indirectly, use, publish,
disseminate or otherwise disclose any Confidential Information obtained during
his employment
5
with the Company without the prior written consent of the Company's Board; and
(ii) during his employment with the Company, the Executive shall exercise all
due and diligent precautions to protect the integrity of the Company's customer
and prospective customer lists, mailing lists and sources thereof, statistical
data, compilations, agreements, contracts, manuals or any other documents
embodying any Confidential Information and, upon termination of employment he
shall return all such documents (and copies thereof) in his possession or
control.
B. During his employment with the Company, and (subject to Paragraph D of
this Article FIFTH) for a period of one year after the termination (for any
reason whatsoever) of his employment with the Company, the Executive shall not,
directly or indirectly, own, manage, operate, control, form or participate in
the ownership, management, operation or control of any business, firm or
corporation which engages in the business of developing or marketing information
processing systems directed to the maritime industry or otherwise competes with
the business of the Company or of any of its subsidiaries as conducted on such
date or as it had been conducted during the eighteen months prior to such date;
provided, however, that the provisions of this Paragraph B of this Article FIFTH
shall not apply (i) to investment in shares of stock traded on a national
securities exchange or on the national over-the-counter market which shall
constitute less than two (2%) percent of the outstanding shares of such stock
(ii) if, at the time of such termination, the Executive shall be a shareholder
of the Company unless such termination has occurred pursuant to part B of
Article SECOND hereof or (iii) if this Agreement has been terminated by the
Company in violation of the terms hereof.
C. During his employment with the Company, and (subject to Paragraph D of
this Article FIFTH) for a period of two years after the termination (for any
reason whatsoever) of his employment with the Company, the Executive shall not
seek to persuade any person who is an employee of the Company or of any of its
subsidiaries on such date or during the eighteen months prior to such date to
discontinue that individual's status or employment with the Company or any of
its subsidiaries, nor to become employed in any activity similar to or
competitive with the activities described in Paragraph B above, nor will he hire
or retain any such person (except, following the termination of the Executive's
employment hereunder, with the express prior written consent of the Company),
nor will he solicit or cause or authorize, directly or indirectly, to be
solicited, for or on behalf of himself or any third party, any business similar
to or competitive with the activities described in Paragraph B above from others
who are, or were at any time during his employment hereunder, customers of the
Company or of any of its subsidiaries, or if the
6
Executive is no longer employed by the Company, from others who were, at any
time within eighteen months prior to the cessation of his employment hereunder,
customers of the Company or of any of its subsidiaries.
D. If any of the restrictions on post-employment competitive activities
contained in this Article FIFTH shall for any reason be held by a court of
competent jurisdiction to be excessively broad as to duration, geographical
scope, activity or subject, such restrictions shall be construed so as to
thereafter be limited or reduced to be enforceable to the extent compatible with
the applicable law as it shall then appear; it being understood that by the
execution of this Agreement the parties hereto regard such restrictions as
reasonable and compatible with their respective rights.
E. The Executive acknowledges that were he to breach the provisions of
this Article FIFTH, the damages to the Company would be irreparable and he
therefore agrees that, in addition to damages and reasonable attorneys' fees,
the Company shall be entitled to enjoin any such breach in any competent court.
SIXTH: In any case where it will be necessary for the Executive to take a
medical examination, whether for insurance purposes, to verify physical
condition or otherwise, the Executive agrees to submit to such medical
examination and in general to cooperate with the Company in connection
therewith, including, without limitation, the completion of any documentation
therefor.
SEVENTH: This Agreement constitutes the entire agreement as to employment
between the parties and there are no terms other than those contained herein,
except as set forth in the Benefit Plans. No variation hereof shall be deemed
valid unless in writing and signed by the parties hereto and no discharge of the
terms hereof shall be deemed void unless in writing signed by the parties
hereto. No waiver by either party of any provision or condition of this
Agreement by him or it to be performed shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or any prior or subsequent time.
EIGHTH: This Agreement shall inure to the benefit of and be binding upon
the Company, its successors and assigns, and the Executive, his heirs,
executors, administrators and legal representatives.
NINTH: This Agreement shall be governed by and construed in accordance
with the laws of the State of Connecticut applicable to agreements made and
wholly performed within such state.
TENTH: Any notices or other communications required or permitted hereunder
shall be sufficiently given if sent by registered mail or certified mail,
postage prepaid, addressed, if to the Executive, at 000 Xxxx Xxxxxx, Xxxxxxxx,
XX 00000, and if to the Company, at 000 Xxxx Xxxxxx, Xxxxxxxx, XX 00000 with a
copy to Xxxxx X'Xxxxxx, Esq., Xxxxxxx Xxxxxx X'Xxxxxx & Xxxxxxxxxxx at 0
Xxxxxxxx Xxxxxx, Xxxxxxxx, XX 00000 or such other address as shall
7
have been specified in writing by either party to the other. Such notice or
communication shall be deemed to have been given as of the date so mailed,
except notice of change of address which shall be deemed given as of the date
received. IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the day and year first above written.
MARINE MANAGEMENT SYSTEMS, INC.
By: /s/ Xxxxxx X. Story
date 7/31/97
/s/ Arie Slot
date 7/30/97
8
APPENDIX A
The responsibilities of the Executive, as Vice President of Sales, include all
sales activities for all maritime software, hardware, engineering services
worldwide, including management of all staff and the agent distribution network.
The Executive will be eligible for a quarterly performance bonus. For 1997,
that quarterly bonus will be paid at the rate of $37,500 multiplied by the
percentage of target software sales achievement during each quarter. The
quarterly target software sales levels will be as follows:
First Quarter $ 594,000
Second Quarter $ 891,000
Third Quarter $1,386,000
Fourth Quarter $2,079,000
Total $4,950,000
The Executive will also receive 15,000 options under the MMS Key Employee
Stock Option Plan.
