1MAGE SOFTWARE, INC.
XXXX XXXX XXXXXXX
EMPLOYMENT AGREEMENT
1 SEPTEMBER 1999
This agreement made as of the 1st day of September 1999, by and between
1MAGE Software, Inc., (ISI), located at 0000 X. Xxxxxx Xx. Xxxxxxxxx,
Xxxxxxxx and Xxxx Xxxx XxXxxxx (Employee).
RECITALS
WHEREAS, ISI desires to assure itself of the service of Employee and to
that end desires to enter into a contract of employment with her, upon the
terms and conditions herein set forth and
WHEREAS, Employee is desirous of entering into such a contract of
employment on the terms and conditions set forth herein,
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein set forth, the parties hereto agree as follows:
1. EMPLOYMENT. ISI hereby employs Employee and the Employee hereby
accepts employment upon the terms and conditions hereinafter set forth.
Although ISI may not and does not legally bind itself that Employee shall
have the title of Vice-President, the Board which has authorized this
Agreement has elected her to that office to serve in accordance with the
Company's Bylaws, and it is the present intention of the Board to retain
and continue her in that position.
2. TERM. Subject to the provisions for termination as hereinafter
provided, the term of this Agreement shall begin on the date of this
Agreement and shall terminate on August 31, 2002. This Agreement can
thereafter be modified annually by mutual consent of both parties.
3. COMPENSATION.
a. SALARY. For all services rendered by this Agreement, Company
will pay Employee an annual salary of One Hundred Thousand Dollars
($100,000), such salary to be paid in equal amounts in accordance with
ISI's payroll policy. This salary may be adjusted from time to time by
mutual agreement on the basis of the value of Employee's services to
Company and for unusual absences from duty because of illness, accident,
or time spent in other activities on leaves of absence; and any such
adjustments may increase or decrease said annual salary.
b. BONUS. Employee will be paid a quarterly bonus based on the
financial performance of the Company. This bonus will be paid at the rate
of 4% of the Company's accumulative pre-tax profit. The bonus will be
adjusted for bonus amounts paid in prior quarters of the same fiscal year.
An additional, annual bonus may be paid to the Employee, based on the
performance of the Company and at the discretion of the Board of
Directors.
c. INCENTIVE OPTIONS. Upon the authorization of this agreement, the
Board will grant Employee options to purchase 60,000 shares under the
current equity incentive plan, with the strike price being the FMV of the
stock as of the date of grant. The options are to vest immediately.
4. EXPENSES. ISI shall reimburse Employee for all business expenses
incurred in pursuit of the business of ISI, upon presentation by the
Employee from time to time of an itemized account of such expenditures in
accordance with the standard policies of ISI.
5. VACATION. Employee shall be entitled each year to a vacation of five
weeks, which shall be taken on a pre-scheduled basis.
6. FRINGE BENEFITS. ISI shall pay for the Employee in the regular fringe
benefit plan available to ISI employees, including medical, disability,
and life insurance. Benefits incurred during the previous term of the
previous Employment Agreement will not be reduced by this Agreement.
7. EXTENT OF SERVICES. Employee shall devote her time, attention and
energies to managing ISI and shall not during the term of this Agreement
be engaged in any other business activity whether or not such business
activity is pursued for gain, profit, or other pecuniary advantage; but
this shall not be construed as preventing the Employee from investing her
assets in such form or manner as will not require substantial service on
the part of the Employee in the operation of the affairs of the companies
in which investments are made.
8. DUTY OF LOYALTY. During the term of employment under this Agreement
and thereafter, Employee will neither disclose any confidential
information as to ISI nor at any time remove or retain without Company's
express consent any figures, calculations, letters, papers, or other
confidential information of any type or description. Furthermore, Employee
binds herself to the terms of the ISI standard agreement relating to
protection of trade secrets.
9. DEATH DURING EMPLOYMENT. Should Employee die during the term of her
employment, ISI shall pay to the estate of the Employee the compensation,
which would otherwise be payable to the Employee for six months after the
date on which her death occurs. In addition, all bonuses earned prior to
Employee's date of death shall be paid to Employee's estate.
10. TERMINATION OTHER THAN BY DEATH.
a. Employment under this Agreement will terminate for reasons other
than death of Employee upon the first of the following events to occur:
i. in the absence of any breach, upon not less than sixty (60)
days' written notice by either party to the other party or
ii. upon not less than three (3) days' written notice by the
non-breaching party to the other party upon any breach of any of the
obligations provided herein.
b. For purposes of clause 10.a.ii,
i. breach by Employee will include, but not be limited to:
failure to perform duties or refusal to obey legal direction or
instruction of the Board, substance abuse (including any use of an
illegal substance), dishonesty, acts of moral turpitude, fraud,
defalcation, and illegal acts and
ii. breach by Company will include, but not be limited to:
failure to pay Employee as agreed and knowingly issuing illegal
instructions or directions to Employee.
11. RIGHTS UPON TERMINATION.
a. In the event employment under this Agreement is terminated:
i. by the Company pursuant to the terms of clause 10.a.i, or
by Employee pursuant to clause 10.a.ii, the Company will pay Employee
as liquidated damages the greater of (A) that pro rata portion
remaining under this Agreement based on Employee's annual salary as
set out herein or (B) one year's cash compensation (salary and bonus)
or
ii. by Employee pursuant to the terms of clause 10.a.i, above,
or by the Company pursuant to clause 10.a.ii, above, the Company will
pay Employee that pro rata portion of Employee's annual salary up to
and including the date of termination of employment.
b. For all purposes of this section 11, the term "salary" will
include accrued and un-forfeited but unpaid vacation, but exclude unused
sick leave. In any event, reimbursable expenses will be paid up through
the date of termination in accordance with the provisions of paragraph 4,
above.
c. In the circumstances of clause 11.a.i,
i. all incentive compensation and bonus compensation
established by a written plan is to continue through the full term of
employment under this Agreement and
ii. the Employee shall receive immediate vesting of any and all
outstanding options and warrants, which shall remain exercisable by
Employee for a period of twelve months from the effective date of
termination.
In the circumstances of clause 11.a.ii, all incentive and bonus
compensation is to terminate as of the first day of the month following
the date of termination. d. Notwithstanding the foregoing, should
termination occur within two years of a change in control of ISI, such
termination will be treated as having been by the Company pursuant to the
terms of clause 10.a.i, regardless of the actual circumstances of
termination.
e. Termination pursuant to Section 12 will be treated as having
been by the Employee pursuant to the terms of clause 10.a.i, regardless of
the actual circumstances of termination.
12. DISABILITY. Should Employee become Disabled during the term of
employment, Employee's base salary and other benefits shall continue at
the same rate and in the same manner as on the date of such disability.
Should Employee remain disabled for six consecutive months, the Company,
at its option, may thereafter, upon written notice to Employee or
Employee's personal representative, terminate the employment, subject,
however, to Employee's right to receive disability benefits under the
Company's general employee disability insurance policy and under any
supplemental disability policy provided to Employee. If Employee receives
any disability payments from any insurance policies paid for by the
Company, the annual base salary, the severance amount, and bonuses due to
Employee hereunder shall be reduced by the amount of any payments received
by Employee from such disability insurance policies.
13. NOTICES. Any notice required or permitted to this Agreement must be
in writing and delivered by certified US mail to the parties of this
Agreement.
14. WAIVER OF BREACH. The waiver by ISI of a breach of any provision of
this Agreement by the Employee shall not operate or be construed as a
waiver of any subsequent breach by the Employee.
15. ASSIGNMENT. The rights and obligations of ISI under this Agreement
shall inure to the benefit of and shall be binding upon the successors and
assigns of ISI. The rights and obligations of the Employee under its
Agreement shall inure to the benefit of and shall be binding upon the
Employee's heirs, successors, and assigns, except that Employee's
obligation to perform such further services and rights to receive payment
therefore are expressly declared to be non-assignable and non-
transferable.
16. SEVERABILITY. Should any part of this agreement be found by a Court
of competent jurisdiction to be void or against public policy, such part
is to be deleted; but the contract, as so amended, is to remain in full
force and effect.
17. ARBITRATION. If any controversy or claim arising out of this contract
cannot be settled by the parties, the controversy or claim must be
submitted to mediation under the Mediation Rules of the Judicial Arbiter
Group of Denver, Colorado (JAG). Should the mediation not be successful in
resolving the issue, the matter will be submitted to arbitration in
accordance with the rules of the JAG then in effect (as modified herein).
The discovery rules, including sanctions, of the Federal Rules of Civil
Procedure are to be applied in any such arbitration, modified as may be
necessary in the opinion of the arbitrator(s) to give effect to the JAG
rules governing timeliness.
18. ENTIRE AGREEMENT. This instrument contains the entire Agreement of
the parties. It may not be changed orally but only by an agreement in
writing signed by the party against whom enforcement of any waiver,
change, modification, extension or discharge is sought.
IN WITNESS WHEREOF, the parties have executed this agreement on this 1st
day of October 1999.
EMPLOYEE: 1MAGE SOFTWARE, INC.
/s/Xxxx Xxxx XxXxxxx /s/Xxxxx X. XxXxxxx
Xxxx Xxxx XxXxxxx, individually Xxxxx X. XxXxxxx, President
ATTEST:
/s/Xxxxxx Xxxxxxx XX
Xxxxxx Xxxxxxx XX, Secretary
Ratified by the Compensation Committee:
/s/Xxxxxx Xxxxxxx XX /s/Xxxxxxx X. Xxxxx
Xxxxxx Xxxxxxx XX Xxxxxxx X. Xxxxx
