EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into as of January 1, 1997, by and
between BCAM INTERNATIONAL, INC., a New York corporation (the "Company"), with
offices at 0000 Xxxx Xxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000 and XXXXXXX XXXXXXX
(the "Executive"), residing at Seven Xxxxxxxx Xxxx, Xxxxxx Xxx Xxxx, Xxx Xxxx
00000.
WHEREAS, the Company wishes to continue the employment of the Executive
as of January 1, 1997, upon the terms and conditions set forth in this
Agreement; and
WHEREAS, the Executive is willing to continue to serve in the employ of
the Company as of January 1, 1997, upon the terms and conditions set forth in
this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and agreements hereinafter set forth, the Company and the Executive
agree as follows:
1. Employment and Duties. The Company hereby employs the Executive to
render full-time exclusive services to the Company during the Term (as defined
in Section 2 hereof) as President, Chief Executive Officer, Chief Operating
Officer and Chairman of the Board of Directors of the Company. The Company
agrees that the Executive shall have such power and authority as should
reasonably be required to fulfill all duties in an efficient manner. The Company
agrees that the Company's headquarters, where the Executive will be performing
his duties, shall remain in Nassau or Suffolk Counties, within a twenty (20)
mile radius of the Company's present headquarters. The Executive hereby accepts
such employment and agrees to devote his full time, attention and best efforts
exclusively to performing the duties described above. During the Term of this
Agreement, the Company will use its best efforts to have the Executive elected
to the Board of Directors of the Company and its subsidiaries, and elected
Chairman of the Board of Directors. In the event the Executive is employed with
the Company until December 31, 2000, the Company will discuss the possibility of
a renewable employment agreement with terms (including base compensation) at
least as favorable to the Executive as in effect on December 30, 1999.
2. Term. This Agreement shall become effective on January 1, 1997 (the
"Effective Date"). The Executive will be employed by the Company for a period of
three years commencing on the Effective Date and terminating on December 31,
1999, subject to the earlier termination at any time during the Executive's
period of employment, as hereinafter provided (the "Term").
3. Compensation.
(a) The Company shall pay the Executive a salary for the
services to be rendered by him pursuant to this Agreement at the annual rate of
$200,000; provided, however, on or before July 1, 1997, the Company's Board of
Directors will consider an increase in the annual rate by $25,000, such increase
to be retroactive to January 1, 1997 (the Executive's annual rate of payment is
herein called "Salary"). The Salary shall be payable in periodic installments
commencing after the Effective Date in accordance with the Company's regular
payroll practices as in effect from time to time. On January 1 of each year of
the Term, beginning with January 1, 1998, the Salary shall automatically
increase by an amount equal to the Salary then in effect multiplied by the
increase in the Consumer Price Index (Xxx Xxxx xxxx) from January 1 of the prior
year to January 1 of the then current year.
(b) The Executive shall be entitled to receive a bonus, which
amount for the period ending December 31, 1997 shall not exceed $100,000 nor be
less than $25,000. The amount of the bonus for the years ending December 31,
1998 and December 31, 1999 shall be agreed to by the Executive and the Company
by December 31, 1997, and be based upon mutually agreed to objectives for the
Executive.
(c) The provisions of Paragraphs 3(c)(i) and (ii) of the
Executive's prior Employment Agreement, dated as of February 16, 1995, with
respect to options are hereby confirmed, specifically:
"(i) The Executive shall receive, in addition to his
Salary, options to purchase at the fair market value on the date hereof [i.e.,
November 13, 1994] or on January 2, 1995, whichever is lower (mean of bid and
ask), an aggregate of 300,000 shares of common stock of the Company which shall
vest and become exercisable for 100,000 shares on January 2, 1996, for 100,000
shares on January 2, 1997, and for 50,000 shares on January 2, 1998 and 1999,
respectively, to the extent available under the Company's 1989 Stock Option Plan
(the "Plan") or if options are not available under the Plan, upon the terms and
subject to the conditions which shall be similar to the Plan options. The
Company will use its best efforts to seek shareholder approval of any options
that require such approval. All options granted to the Executive under the Plan
that are not vested on his date of termination shall be automatically cancelled.
The options granted hereunder shall be incentive stock options to the extent
they may qualify for such treatment.
(ii) The Executive has also been granted options to
purchase at the fair market value on February 16, 1995, an aggregate of 200,000
shares of common stock of the Company which shall vest and become exercisable
50,000 shares on February 16, 1996, 50,000 shares on February 16, 1997, 50,000
shares on February 16, 1998, and 50,000 shares on February 16, 1999 on terms and
conditions similar to those issued under the Plan. The Company will use its best
efforts to seek shareholder approval of any option that requires such approval.
All options granted pursuant to an option plan that are not vested on
termination of the Executive shall be automatically cancelled. The options
granted hereunder shall be incentive stock options to the extent they may
qualify for such treatment. All options described in (c)(1) and (ii) shall
provide that if there is a change of control in the Company, all options shall
vest and shall be exercisable immediately prior to the change of control."
(d) The Executive shall receive, in addition to his Salary and
any bonus, options to purchase at the fair market value on January 2, 1997, an
aggregate of the greater of (i) 1,000,000 shares of common stock of the Company
(such options called the "New Options"). The New Options shall vest and become
exercisable 33 1/3% of such shares on January 2, 1997, 33 1/3% of such shares on
January 2, 1998, and 33 1/3% of such shares on January 2, 1999, to the extent
available under the Plan, or if options are not available under the Plan, upon
the terms and subject to the conditions which shall be similar to the Plan
options. The Company will use its best efforts to seek shareholder approval of
any New Options that require such approval. All options (including New Options)
granted to the Executive under the Plan that are not vested on his date of
termination for Cause (defined herein) or upon the voluntary termination by the
Executive of his employment hereunder under circumstances not set forth in
Section 4(d), shall be automatically cancelled. The New Options granted
hereunder shall be incentive stock options to the extent they may qualify for
such treatment.
(e) The Executive shall be entitled to participate in and
receive the benefits under any pension plans or bonus plans of the Company or of
any subsidiary (i.e., Drew Shoe), whichever is more beneficial to the Executive,
and shall be included in, at no cost to Executive, the Company's health plan
(including hospitalization, medical and major medical), life, prescription drug,
accident and disability insurance plans or programs and any other employee
benefit or fringe benefit plans, perquisites or arrangements which the Company
makes available generally to other employees of the Company.
(f) The Executive shall be entitled to an automobile allowance
for the Term of this Agreement which shall be used for automobile expenses,
including lease payments, insurance, fuel, maintenance, registration and taxes.
(g) The Executive shall be entitled to five (5) weeks paid
vacation each year which shall accrue pursuant to the Company's vacation policy.
The Executive shall be entitled to carry two (2) weeks of unused vacation time
to any subsequent year without being paid for such vacation time, provided,
however, on termination by the Company pursuant to either Section 4(c) or 4(d)
hereof, the Executive shall also be paid for all unused vacation time.
(h) The Executive shall be entitled to reimbursement for all
reasonable travel and other expenses incurred by the Executive in connection
with his service under the Agreement.
4. Termination of Employment.
(a) (1) The Executive's employment hereunder shall terminate
automatically as of the date of his death of upon the Executive's becoming
eligible for benefits under the Company's long term disability plan as in effect
from time to time, or if no disability plan is in effect, upon the Executive
becoming permanently disabled as defined in the first sentence of Internal
Revenue Code Section 22(e)(3). In the event of death, the Executive's estate
shall have one (1) year from the date of his death to exercise any outstanding
and unexercised options. In the event the Executive is permanently disabled as
defined herein, he or his designee will have one (1) year to exercise any
outstanding and unexercised options.
(2) Upon termination of the Executive's employment
under circumstances described in Section 4(a)(1) above, the Company shall pay
and provide to the Executive (or, in the event of his death, to his surviving
spouse or such other beneficiary as the Executive may designate in writing, or
if there is neither, to his estate):
(i) his earned but unpaid Salary and bonus and accrued
vacation pay as of the date of termination of his employment with the Company;
(ii) the benefits, if any, to which he is entitled as a
former employee under the Company's employee benefit plans and programs and
compensation plans and programs in which he was a participant; and
(iii) any reimbursements due to him under Section 3(h).
(b) The Company may at any time at its option, immediately
terminate the Executive's employment for "Cause" (as hereinafter defined). In
the event of termination for Cause, the Executive shall receive the earned
Salary and benefits (except he shall not receive any bonus earned but not yet
paid) described in Sections 4(a)(2)(i), (ii) and (iii) and no other
compensation. For purposes of this Agreement, the term Cause means (i) any
conviction of the Executive of a felony under the laws of the United States or
any state thereof; or (ii) gross or willful misconduct of the Executive in
connection with the performance of his duties that has caused or is highly
likely to cause severe harm to the Company; or (iii) intentional dishonesty by
the Executive in the performance of his duties hereunder which has a material
adverse effect on the Company.
(c) The Company may terminate the Executive's employment in
its sole discretion for any reason on not less than one-hundred eighty (180)
days written notice to the Executive.
(d) The Executive may terminate his employment under
circumstances where the Company has committed, during a thirty (30) day period
after written notice has been delivered to the Company, a continuing material
breach of its obligations under this Agreement.
(e) In the event (1) termination by the Company pursuant to
Section 4(c), (2) termination by the Executive pursuant to Section 4(d) (which
includes the failure of the Company to elect the Executive the Chairman of its
Board of Directors), or (3) in the event the Company does not reach an agreement
with Executive to extend his employment after January 1, 2000, the Executive
shall receive (A) the Salary and benefits described in Sections 4(a) (2) (i),
(ii) and (iii), (B) payment of his then Salary in monthly installments for a
period of one (1) year after the date of termination, provided, however, so long
as the Company is willing to enter into an extension/renewal of this Agreement
for a period of at least three (3) years following January 1, 2000 on terms
substantially similar to the terms of this Agreement in effect on December 30,
1999, the Company shall not be obligated to pay the Executive his salary for
this additional one (1) year period if an agreement between the Company and the
Executive is not achieved.
(f) The Company and the Executive hereby stipulate that the
damages which may be incurred by the Executive following any such termination of
employment are not capable of accurate measurement as of the date first above
written and that such liquidated damages set forth above constitute reasonable
damages under the circumstances and the sole amounts due to the Executive, and
do not require mitigation by the Executive or are subject to set-off or
counterclaim by the Company.
(g) In the event that a transaction or circumstance occurs or
eventuates, which reasonably may be construed as effecting or constituting a
clear and present probability of effecting a change in "control" of the Company,
then the Executive may elect by written notice to the Company, to treat any such
transaction or circumstance as a continuing material breach of this Agreement
and terminate his employment with the Company. It is agreed that, in such event,
Executive will suffer irreparable damage and harm which will be incapable or
very difficult of accurate estimation. Accordingly, in lieu of amounts that the
Executive would be entitled under Section 3 of this Agreement, the Company will
pay to the Executive, within three (3) days of such event, an amount equal to
299% of such Executive's base salary, such amount to be determined as defined in
Section 280G of the Internal Revenue Code. The term "control" means the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of the Company, whether through the ownership of
voting securities, by contract or otherwise.
5. Covenants and Representations.
(a) The Executive has not and unless authorized or instructed
in writing by the Company, the Executive shall not, except as required in the
conduct of the Company's business, disclose to others, or use, any of the
Company's inventions or discoveries or its secret or confidential information,
knowledge or data (oral, written, or in machine-readable form) which the
Executive may have obtained or will obtain during the course of or in connection
with the Executive's employment, including, without limitation, such inventions,
discoveries, information, knowledge, know-how or data relating to machines,
equipment, products, services, systems, software, research and/or development,
designs, compositions, formulae, processes, manufacturing procedures or business
methods, whether or not developed by the Executive, by others in the Company or
obtained by the Company from third parties, and irrespective of whether or not
such inventions, discoveries, information, knowledge, know-how or data have been
identified by the Company as secret or confidential, unless and until, and then
only to the extent that, such inventions, discoveries, information, knowledge,
know-how or data become available to the public otherwise than by the
Executive's act or omission.
(b) During the course of his employment by the Company the
Executive shall not, except as required in the conduct of the Company's
business, disclose to others, or use, any of the information relating to present
and prospective marketing, sales and advertising programs and agreements with
representatives or prospective representatives of the Company, present or
prospective sources of supply or any other business arrangements of the Company,
including but not limited to, customers, customer lists, costs, prices and
earnings, whether or not such information is developed by the Executive, by
others in the Company or obtained by the Company from third parties and
irrespective of whether or not such information has been identified by the
Company as secret or confidential, unless and until, and than only to the extent
that, such information becomes available to the public otherwise than by the
Executive's act or omission.
(c) (i) The Executive agrees to disclose immediately to the
Company or any persons designated by it and to assign to the Company at its
option, or its successors or assigns, all inventions made, discovered, conceived
or first reduced to practice by the Executive, solely or jointly with others, at
any time during the time while employed by the Company which inventions are
made, discovered or conceived either in the course or such employment, or with
the use of the Company's time, material, facilities or funds, or which relate to
or are suggested by any subject matter with which the Executive's employment by
the Company may bring the Executive into contact, or which relate to any
investigations or obligations undertaken by the Company; and the Executive
hereby grants and agrees to grant the right to the Company and its nominees to
obtain, for its own benefit and in its own name (entirely at its expense)
patents and patent applications including original, continuation, reissue,
utility and design patents, and applications, patents of addition, confirmation
patents, registration patents, xxxxx patents, utility models, etc., and all
other types of patents and the like, and all renewals and extensions of any of
them for those inventions in any and all countries; and the Executive shall
assist the Company without further charge during the period of the Executive's
employment, through counsel designated by the Company to execute, acknowledge,
and deliver all such further papers, including assignments, applications for
Letters Patent (of the United States or of any foreign country), oaths,
disclaimers or other instruments and to perform such further acts, including
giving testimony or furnishing evidence in the prosecution or defense of
appeals, interferences, suits and controversies relating to any of the aforesaid
inventions, applications and patents as may be deemed necessary by the Company
or its nominees to effectuate the vesting or perfecting in the Company or its
nominees of all right, title and interest in and to said inventions,
applications and patents.
(ii) the Executive agrees to disclose immediately to
the Company or any persons designated by it and to assign to the Company, at its
option, or its successors or assigns, all works of authorship, including all
writings, manuals, computer programs, software and hardware, written or created
by the Executive solely or jointly with others, at anytime during the course of
his employment by the Company, which works are made or conceived either in the
course of such employment, or with the use of the Company's time, material,
facilities or funds, or which relate to or are suggested by any subject matter
with which the Executive's employment by the Company may bring the Executive
into contract or which relate to any investigations or obligations undertaken by
the Company; and the Executive hereby agrees that all such works are works made
for hire, of which the Company is the author and the beneficiary of all rights
and protections afforded by the law of copyright in any and all countries; and
the Executive will assist the Company without further charge during the term of
his employment, through counsel designated by the Company, to execute,
acknowledge, and deliver all such further papers, including assignments,
applications for copyright registration (in the United States or in any foreign
country), oaths, disclaimers or other instruments, and to perform such further
acts, including giving testimony or furnishing evidence in the prosecution or
defense of appeals, interferences, suits and controversies relating to any of
the aforesaid works, as may be deemed necessary by the Company or its nominees
to effectuate the vesting or perfecting in the Company or its nominees of all
rights and interest in and to said works and copies thereof, including the
exclusive rights of copying and distribution.
(d) As a matter of record, attached hereto as Exhibit A is a
complete list and brief description of all inventions, patented or unpatented,
which the Executive has made or conceived prior to his employment by the
Company, and which shall be excluded the terms from this Agreement, and as
Exhibit B, is a complete list and brief description of all works of authorship,
patented or unpatented, which the Executive has made or conceived prior to his
employment by the Company, which shall be excluded from the terms of this
Agreement. The Executive covenants that such lists are complete and accurate.
(e) (i) The Executive shall not during the "Non-Competition
Period," determined as hereinafter provided, engage in, represent or be
connected with, an officer, director, partner, employee, sales representative,
proprietor, consultant, associate, agent, co-venturer, or otherwise, any
business or activity competing with the business of the Company or its
subsidiaries or affiliates or any part thereof as conducted by them prior to the
termination of his employment in any geographic location where the Company
conducts business at the time of the termination of the employment. The term
"Non-Competition Period" as used herein means a period, immediately following
the termination of the employment of the Executive hereunder, of (A) 6 months,
or (B) a period shorter than 6 months if so designated by the Company by written
notice given to the Executive at least 20 days before the end of such shorter
period so designated by the Company.
(ii) The prohibitions in Subsection (i) of Section (e)
shall bind the Executive only so long as the Company pays him monthly, upon
demand, a sum at least equal to one hundred (100%) percent of the Executive's
monthly base pay at termination, as defined below, for each amount of such
unemployment during the Non-Competition Period. The term "monthly base pay"
means the Executive's monthly Salary, in all cases including bonus or other
extra compensation or benefits, and is subject to regular deductions for taxes,
social security payments, etc. If the Executive is being paid after his
termination of employment pursuant to the provisions of Subsection (c) and (d)
of Section 4, no payments are required to be made pursuant to this Subsection
(ii) of Section (e) so long as the payments under subsections (c) and (d) of
Section 4 are being made.
(f) (i) During the time employed by the Company, and for six
(6) months thereafter, the Executive shall not engage in business of the type
conducted by the Company with or solicit business of the type conducted by the
Company from any person, firm or entity which was a customer of the Company at
any time within two (2) years preceding the termination of his employment,
induce or attempt to induce any such customer of the Company to reduce its
business with the Company, solicit or attempt to solicit any employees of the
Company, to leave the employ of the Company or offer or cause to be offered
employment to any person who was employed by the Company at any time during the
two (2) years prior to the termination of his employment with the Company, while
employed by the Company, and for six (6) months thereafter, the Executive shall
also not engage in business of the type conducted by the Company with or solicit
business of the type conducted by the Company from any prospective customer of
the Company.
(ii) All computer software, computer programs, source
codes, object codes, magnetic tapes, printouts, samples, notes, records,
reports, documents, customer lists, photographs, catalogs and other writings,
whether copyrightable or not, relating to or dealing with the Company's business
and plans, and those of others entrusted to the Company which are prepared or
created by the Executive or which may come into his possession at any time
during his employment, are the property of the Company, and upon termination of
his employment, the Executive agrees to return all such computer software,
computer programs, source codes, object codes, magnetic tapes, printouts,
samples, notes, records, reports, documents, customer lists, photographs,
catalogs and writings and all copies thereof to the Company.
(g) If any of the rights or restrictions contained or provided
for in this Agreement shall be deemed top be unenforceable by reason of the
extent, duration or geographical scope, or other provisions hereof, or any other
provisions of this Agreement, the parties hereto contemplate that the court
shall reduce such extent, duration, geographical scope or other provisions and
enforce this Agreement in its reduced form for all purposes in the manner
contemplated hereby.
(h) The Executive agrees to cooperate with the Company with
respect to the Company obtaining life insurance on the life of the Executive
with the Company named as the beneficiary or disability insurance with respect
to Executive or both.
6. Indemnification and Attorneys' Fees. During the Term of his
employment and thereafter, the Company shall indemnify, hold harmless and defend
the Executive from all damages, claims, losses, and costs and expenses
(including reasonable attorney's fees) arising out of, in connection with, or
relating to all acts or omissions taken or not taken by him in good faith while
performing services for the Company, and shall further reimburse the Executive
for all expenses (including attorney's fees) incurred in enforcing the benefits
of this Agreement. If and to the extent that the Company maintains, at any time
during the Term, an insurance policy covering the other officers and directors
of the Company against lawsuits, the Company shall use its best efforts to cause
the Executive to be covered under such policy upon the same terms and conditions
as other similarly situated officers and directors during the Term and for a
period of at least five (5) years thereafter.
7. Miscellaneous.
(a) Neither of the parties hereto shall have the right to
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the other party; provided, however, that this Agreement shall
inure to the benefit or and be binding upon the successors and assigns of the
Company upon any sale of all or substantially all of the Company's assets, or
upon any merger or consolidation of the Company with or into any other
corporation, all as though such successors and assigns of the Company and their
respective successors and assigns were the Company.
(b) This Agreement and the relationships of the parties in
connection with the subject matter of this Agreement shall be construed and
enforced according to the laws of the State of New York without giving effect to
the conflicts of laws rules thereof.
(c) This Agreement contains the full and complete agreement or
the parties relating to the employment of the Executive hereunder and supersedes
all prior agreements, arrangements or understandings, whether written or oral,
relating thereto. This Agreement may not be amended, modified or supplemented,
and no provision or requirement hereof may be waived, except by written
instrument signed by the Party to be charged.
(d) If any provision of this Agreement is held to be invalid
or unenforceable by any judgment of a tribunal of competent jurisdiction, the
remainder of this Agreement shall not be affected by such judgment, and this
Agreement shall be carried out as nearly as possible according to its original
terms and intent.
(e) Except for applications for injunctive relief, any dispute
or question arising from this Agreement or its interpretation shall be settled
by arbitration in accordance with the commercial rules then in effect of the
American Arbitration Association. Hearings of the arbitrator(s) shall be held in
the county of Nassau, State of New York, unless the parties agree otherwise.
Judgment upon an award rendered by the arbitrator(s) may be entered in any court
of competent jurisdiction, including courts in the State of New York. Any award
so rendered shall be final and binding upon the parties hereto. All costs and
expenses of the arbitrator(s) shall be paid as determined by such arbitrator(s),
and all costs and expenses of experts, witnesses and other persons retained by
the parties shall be borne by them respectively, subject to the provisions of
Section 6 hereof. In the event that injunctive relief is requested, either of
the parties shall have the right to seek provisional remedies prior to an
ultimate resolution by arbitration, service of process to commence the
arbitration may be given as provided in Subsection (f) below.
(f) All notices which either party hereto is required or
permitted to give to the other will be given by certified mail or by personal
delivery, addressed to such other at the address referred to above, or at such
other place as either may from time to time designate by notice to the other in
writing. Three days after the date of mailing of any such notice and the date of
actual delivery if made by personal delivery will be deemed to be the date of
delivery thereof.
(g) No waiver by either party of any breach or nonperformance
of any provision or obligation of this Agreement shall be deemed to be a waiver
of any preceding or succeeding breach of the same or any other provision of this
Agreement.
(h) The enumeration and headings contained in this Agreement
are for convenience of reference only and are not intended to have any
substantive significance in interpreting this Agreement.
(i) Unless the context otherwise requires, whenever used in
this Agreement the singular shall include the plural, the plural shall include
the singular, and the masculine gender shall include the neuter or feminine
gender and vice versa.
(j) Whenever any determination is to be made or action to be
taken on a date specified in this Agreement, if such date shall fall upon a
Saturday, Sunday or a legal holiday, the date for such determination or action
shall be extended to the first business day immediately thereafter.
(k) This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original document, but all
of which counterparts shall together constitute one and the same instrument.
This Agreement shall not be effective unless and until executed by all parties
hereto.
(l) Should any of the provisions of this Agreement require
judicial interpretation, it is agreed that the court or arbitrator interpreting
or construing this Agreement shall not apply a presumption that any provision
shall be more strictly construed against one party by reason of the rule of
construction that a document is to be construed more strictly against the party
who itself or through its agents prepared the same, it being agreed that both
parties and their respective agents have participated in the preparation of this
Agreement.
(m) All provisions hereof which by their nature shall survive
the termination of the Executive's employment, including, without limitation,
the provisions in Section 5, shall survive the termination of the Executive's
employment.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
BCAM INTERNATIONAL, INC.
By:\s\ Xxxxx Xxxxxxxx
---------------------
Authorized Board Member
\s\ Xxxxxxx Xxxxxxx
--------------------
Xxxxxxx Xxxxxxx
