CONFIDENTIAL
June 11, 1998
Xx. Xxxxxxx X. Xxxxxxxxx
0000 Xxxxxxxx
Xxxxxxx Xxxxx, XX 00000
Dear Xxxx:
I am pleased to confirm our agreement with you concerning your
employment by Xxx-Xxxxxxx Technologies, Inc. (the "Company"), which is subject
to review, approval, and ratification by the Company's Board of Directors.
I. EMPLOYMENT. Subject to the terms and conditions described in this
Employment Agreement (the "Agreement"), the Company agrees to employ
you as the Chief Financial Officer. As evidenced by your signature
below, you accept this employment on the following terms and
conditions.
II. DUTIES.
1. You agree to perform, on a full-time basis, exercising best
efforts, duties commensurate with your position as Chief
Financial Officer, including, but not limited to, preparing
monthly financial statements, complying with public reporting
requirements, timely completion of audits, tax returns,
maintenance of Company budgets, Company benefit plans, and
other duties as shall be assigned to you from time-to-time by
the President of the Company or the Chairman of the Board of
Directors. You shall report directly to the President and CEO
of the Company.
2. While you are employed by the Company, except as otherwise
permitted by the Company's Conflict of Interest policy or this
Agreement, you will not engage in any business activity or
outside employment that conflicts with the Company's interests
or adversely affect the performance of your duties for the
Company.
3. You shall be based at, and shall perform your duties at, an
office located in Chicago, Illinois, or the surrounding
suburban area. However, you shall also travel to other
locations at such times as may be appropriate for the
performance of your duties under this Agreement.
III. EFFECTIVE DATE. This Agreement is effective July 1, 1998 (the
"Effective Date"), and may be terminated by either party pursuant to
Section V of this Agreement.
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June 11, 1998
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CONFIDENTIAL
IV. COMPENSATION.
A. BASE SALARY. Commencing on the Effective Date, the Company
agrees to pay you an annual base salary of One Hundred
Thousand Dollars ($100,000) in accordance with the Company's
standard payroll practices ("Base Salary"). Beginning January
1, 1999 your Base Salary shall be increased to One Hundred and
Ten Thousand Dollars ($110,000). In subsequent years, the
Board of Directors shall have the sole discretion to establish
your Base Salary, except that, at a minimum, it shall be
adjusted upward consistent with changes to the Consumer Price
Index.
B. BONUSES. If you are still employed by the Company on January
4, 1999, you shall receive a minimum bonus of Six Thousand Two
Hundred and Fifty Dollars ($6,250). Beginning January 1, 2000
and in subsequent years, you will be eligible to receive an
annual performance bonus based upon the prior year's work, not
to exceed 30% of your Base Salary in effect during the year
under review. The amount of said bonus shall be determined in
the sole discretion of the Compensation Committee and approved
by the Board of Directors.
C. OPTIONS.
1. Upon execution of this Agreement, the Company will
grant you three hundred forty thousand (340,000)
stock options to purchase Subordinate Voting Shares
of stock of the Company at the lowest permissible
price when this agreement is executed, thirty-four
thousand (34,000) of which shall vest at the time of
the grant. The remainder shall vest in twelve equal
quarterly installments with the first installment
vesting on October 1, 1998. Any unvested options
remaining on the effective date of the termination of
this Agreement shall not vest.
2. In the event of any reorganization, merger,
consolidation, recapitalization, liquidation,
reclassification, stock dividend, reverse stock
split, combination of shares, rights offering,
extraordinary dividend or divestiture (including a
spin-off) or any other change in the corporate
structure or shares of the Company, (or, if the
Company is not the surviving corporation in any such
transaction, the board of directors of the surviving
corporation), in order to prevent dilution or
enlargement of your rights, the Company (or the
board of the surviving corporation) shall make
appropriate adjustment as to the number of
securities subject to this Option.
All of the options granted pursuant to this Section IV.C.2
(the "Anti-Dilution Options") shall automatically vest in
accordance with the same vesting schedule set forth in Section
IV.C.1 above. (As an illustration, if 68,000 of the 340,000
Xx. Xxxxxxx X. Xxxxxxxxx
June 11, 1998
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CONFIDENTIAL
options granted pursuant to Section IV.C.1 above were vested
at the time of the grant of the Anti-Dilution Options pursuant
to this Section IV.C.2, then 20% of the Anti-Dilution Options
would automatically vest immediately at the time of the grant,
and the remaining 80% would vest simultaneously with the
vesting of the remaining options granted pursuant to Section
IV.C.1).
D. BENEFITS. In addition to the other compensation to be paid
under this Section IV, you will be entitled to participate in
all benefit plans available to all full-time, eligible
employees either in existence or hereafter established by the
Company, in accordance with the terms and conditions of such
plans. These plans include, bit are not limited to, the
following: a 401(k) plan; group hospitalization; health;
dental; disability; and term life insurance.
E. REIMBURSEMENT OF BUSINESS EXPENSES. In addition to payment of
compensation under this Section IV, the Company agrees to
reimburse you for all reasonable out-of-pocket business
expenses incurred by you on behalf of the Company, provided
that you properly account to the Company for all such expenses
in accordance with the rules and regulations of the Internal
Revenue Service promulgated under the Internal Revenue Code of
1986, as amended, and in accordance with the standard policies
of the Company relating to reimbursement of business expenses.
F. AUTOMOBILE ALLOWANCE. The Company shall provide you with a
monthly stipend of Six Hundred Dollars ($600.00) for your
automobile use.
G. VACATION. You are entitled to three (3) weeks of paid vacation
per calendar year. You shall be entitled to carry forward one
(1) week of accrued but unused vacation from one year to the
next. A request that any additional accrued but unused
vacation be carried forward is subject to approval, which
shall be in the sole discretion of the President of the
Company.
V. TERMINATION.
A. EARLY TERMINATION. Subject to the respective continuing
obligations of the parties pursuant to Sections VI, VII and
VIII, this Section sets forth the terms for early termination
of this Agreement.
B. TERMINATION FOR CAUSE. The Company may terminate this
Agreement and your employment immediately for cause. For this
purpose, "cause" means any of the following: (1) fraud, (2)
theft or embezzlement of the Company's assets, (3) a violation
of law involving moral turpitude, (4) your repeated and
willful failure to follow instructions of the Board provided
that the conduct has not ceased or the offense cured within
thirty (30) days following written warning from the Company
that sets forth in reasonable detail the facts claimed to
provide the basis
Xx. Xxxxxxx X. Xxxxxxxxx
June 11, 1998
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CONFIDENTIAL
for such termination. In the event of termination for cause
pursuant to this Section V.B, you will be paid at the usual
rate your annual Base Salary, car allowance, and any
out-of-pocket expenses, through the date of termination
specified in any notice of termination and any amounts to
which you are entitled under any Company benefit plan in
accordance with the terms of such plan.
C. TERMINATION WITHOUT CAUSE. Either you or the Company may
terminate this Agreement and your employment without cause on
thirty (30) days written notice. In the event of termination
of this Agreement and of employment pursuant to this Section
V.C, compensation will be paid as follows:
1. if the termination is by you without cause, you will
be paid at the usual rate of your annual Base Salary,
car allowance, and any out-of-pocket expenses
incurred on behalf of the Company and accounted for
pursuant to Section IV.E through the date of
termination specified in such notice (but not to
exceed thirty (30) days from the date of such
notice); or
2. Notwithstanding any provision to the contrary
contained herein, in the event your employment is
terminated by the Company at any time for any reason
other than justifiable cause, disability or death,
the Company shall:
(i) pay you a severance benefit, in twelve
equal monthly installments consistent with the
Company's payroll, an amount equal to your annual
base rate of compensation at the time of termination;
(ii) continue to provide you, at the
Company's expense, with term life insurance, as
provided herein until the earlier of (A) the
expiration of the "Severance Period" which shall mean
the shorter of these two periods: one year from the
date of termination, or (B) your obtaining full-time
employment;
(iii) continue to allow you and your family
to participate, at the Company's expense, in the
Company's group hospitalization, health, dental and
disability insurance programs until the earlier of
(A) the expiration of the Severance Period, or (B)
your becoming eligible to participate in another
employer's corresponding group insurance and
disability plans;
(iv) reimburse out-of-pocket expenses
incurred by you on behalf of the Company and
accounted pursuant to Section IV.E; and
(v) reimburse you for any and all unused
vacation days accrued to the date of such
termination.
Xx. Xxxxxxx X. Xxxxxxxxx
June 11, 1998
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CONFIDENTIAL
D. TERMINATION FOR GOOD REASON. You may terminate this Agreement
upon thirty (30) days written notice to the Company for good
reason. For this purpose, "good reason" means: (i) the
assignment to you of any duties inconsistent with your
positions, duties, responsibilities and status with the
Company as of the date hereof, or a change in your reporting
responsibilities, titles or offices, or any removal of you
from or any failure to re-elect you to any of such positions;
(ii) the failure of the Company to continue in effect any
fringe benefit or compensation plan, retirement plan, life
insurance plan, health or disability plan in which you were
participating (except as such change is prompted in good faith
by a change in the law), or the taking of any action by the
Company, which could reasonably be expected to adversely
affect your participation in or materially reduce your
benefits under any such plans or deprive you of any material
fringe benefit enjoyed by you, (iii) the reduction of your
salary or car allowance or failure to increase such salary as
is provided in Section IV.A above; or (iv) the occurrence of a
Change in Control as defined in Section IX. In any such case
the Company will pay you the amounts, and provide you the
benefits, all as set forth in Section V.C.2 above.
E. TERMINATION IN THE EVENT OF DEATH OR PERMANENT DISABILITY.
This agreement and your employment will terminate in the event
of your death or permanent disability.
1. In the event of your death, Base Salary will be
terminated as of the end of the month in which death
occurs.
2. For the purposes of this Agreement, the term
"disability" shall mean your inability, due to
illness, accident or any other physical or mental
incapacity, to substantially perform your duties for
a period of four (4) consecutive months or for a
total of six (6) months (whether or not consecutive)
in any twelve (12) month period during the term of
this Agreement.
F. Upon your "disability", the Company shall have the right to
terminate your employment. Notwithstanding any inability to
perform your duties, you shall be entitled to receive your
compensation (including bonuses, if any) as provided herein
until the later of (i) the date of your termination of
employment for disability in accordance with this Agreement,
or (ii) the date upon which you begin to receive disability
insurance benefits under the policy provided by the Company
pursuant to this Agreement. Any termination pursuant to
Section V.E.2 shall be effective on the date thirty (30) days
after which you shall have received written notice of the
Company's election to terminate.
Xx. Xxxxxxx X. Xxxxxxxxx
June 11, 1998
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CONFIDENTIAL
G. ENTIRE TERMINATION PAYMENT.
1. The compensation provided for in Sections V.B, V.C,
V.D, V.E, and V.F for early termination of this
Agreement will constitute your sole remedy for such
termination. You will not be entitled to any other
termination or severance payment which might
otherwise be payable to you under any other agreement
between you and the Company or under any policy of
the Company. This Section will not have any effect on
distributions to which you may be entitled at
termination from any qualified tax plan or any other
plan (other than a severance payment or similar
plan).
2. Notwithstanding any other provisions of this
Agreement or any other agreement, contract or
understanding heretofore or hereafter entered into
between you and the Company, if any "payments"
(including, without limitation, any benefits or
transfers of property or the acceleration of the
vesting of any benefits) in the nature of
compensation under any arrangement that is
considered contingent on a Change in Control for
purposes of Section 280G of the Internal Revenue
Code of 1986, as amended (the "Code"), together with
any other payments that you have the right to
receive from the Company or any corporation that is
a member of an "affiliated group" (as defined in
Section 1504(a) of the Code without regard to
Section 1504(b) of the Code) of which the Company is
a member, would constitute a "parachute payment" (as
defined in Section 280G of the Code), such payments
will be reduced to the largest amount as will result
in no portion of such payments being subject to the
excise tax imposed by Section 4999 of the Code;
provided, however, that you will be entitled to
designate those payments that will be reduced or
eliminated in order to comply with the foregoing
provision.
X. REQUIRED RESIGNATIONS UPON EARLY TERMINATION OR EXPIRATION.
You agree that upon any termination of your employment with
the Company, such termination under this Agreement will
automatically and without further action be deemed to
constitute your simultaneous resignation from all director,
officer, trustee, agent and any other positions within the
Company, all of its affiliates (including but not limited to
any entity that is a shareholder of the Company and any
subsidiaries and any parent of the Company), the Company's
employee benefit plans, trusts and foundations (charitable or
otherwise) or any other similar position associated with the
Company. Simultaneously upon such termination of employment or
expiration of this employment agreement, you agree to execute
and deliver to the Company any and all documents, agreements,
certificates, letters or other written instruments confirming
all such resignations.
Xx. Xxxxxxx X. Xxxxxxxxx
June 11, 1998
Page 7
CONFIDENTIAL
VI. INVENTIONS.
A. You agree that all Inventions (as defined below) you make,
conceive, reduce to practice or author (either alone or with
others) during or within one year after the term of this
Agreement will be the Company's sole and exclusive property.
You will, with respect to any such Invention: (i) keep
current, accurate, and complete records, which will belong to
the Company and be kept and stored on the Company's premises
while you are employed by the Company; (ii) promptly and fully
disclose the existence and describe the nature of the
Invention to the Company in writing (and without request);
(iii) assign (and you do hereby assign) to the Company all of
your rights to the Invention, any applications you make for
patents or copyrights in any country, and any patents or
copyrights granted to you in any country; and (iv) acknowledge
and deliver promptly to the Company any written instruments,
and perform any other acts necessary in the Company's opinion
to preserve property rights in the Invention against
forfeiture, abandonment, or loss and to obtain and maintain
patents and/or copyrights on the Invention and to vest the
entire right and title to the Invention in the Company.
B. "Inventions," as used in this Section, means any discoveries,
improvements, creations, ideas and inventions, including
without limitation software and artistic and literary works
(whether or not they are described in writing or reduced to
practice) or other works of authorship (whether or not they
can be patented or copyrighted) that: (i) relate directly to
the Company's business or the Company's research or
development during the term of this Agreement; (ii) result
from any work you perform for the Company; (iii) use the
Company's equipment, supplies, facilities or trade secret
information; or (iv) you develop during any time that Section
II above obligates you to perform your employment duties.
The requirements of this Section do not apply to an Invention
for which no equipment, supplies, facility or trade secret information
of the Company was used and which was developed entirely on your own
time, and which neither (1) relates directly to the Company's business
or to the Company's actual or demonstrably anticipated research or
development, nor (2) results from any work you performed for the
Company. Except as previously disclosed to the Company in writing, you
do not have, and will not assert, any claims to or rights under any
Inventions as having been made, conceived, authored or acquired by you
prior to your employment by the Company.
VII. PROPRIETARY INFORMATION.
A. Except as required in your duties to the Company, you will
never, either during or after your employment by the Company,
use or disclose Proprietary Information to any person not
authorized by the Company to receive it. When your employment
with the Company ends, you will promptly turn over to the
Company all records and any compositions, articles, devices,
apparatus and other items that
Xx. Xxxxxxx X. Xxxxxxxxx
June 11, 1998
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CONFIDENTIAL
disclose, describe or embody Proprietary Information,
including all copies, reproductions and specimens of the
Proprietary Information in your possession, regardless of who
prepared them.
B. "Proprietary Information," as used in this Section VII, means
any nonpublic information concerning the Company, including
information relating to the Company's research, product
development, engineering, purchasing, product costs,
accounting, leasing, servicing, manufacturing, sales,
marketing, administration and finances. This information
includes, without limitation: (i) trade secret information
about the Company and its products; (ii) "Inventions," as
defined in Section VI.B; (iii) information concerning any of
the Company's past, current or possible future products.
Proprietary Information or confidential information also
includes any information which is not generally disclosed and
which is useful or helpful to the Company and/or which would
be useful or helpful to competitors. More specific examples
include financial data, sales figures for individual projects
or groups of projects, planned new projects or planned
advertising programs, areas where the Company intends to
expand, lists of suppliers, lists of customers, wage and
salary data, capital investment plans, projected earnings,
changes in management or policies of the Company, testing
data, manufacturing methods, suppliers' prices to us, or any
plans we may have for improving any of our products. This
information is confidential or Proprietary Information
regardless of its form, e.g. oral, written, electronic or
other, and whether or not it is labeled as "proprietary" or
"confidential." The Company's Proprietary Information or
confidential information includes our information and that of
our affiliates and third parties concerning or relating to us.
VIII. COMPETITIVE ACTIVITIES.
A. You agree that during your employment with the Company, you
will not alone, or in any capacity with another person or
entity, (i) directly or indirectly engage in any employment or
activity that competes with the Company's business at the time
your employment with the Company ends, within any state in the
United States or within Canada, (ii) in any way interfere or
attempt to interfere with the Company's relationships with any
of its current or potential customers, or (iii) solicit for
employment any of the Company's then employees on your own
behalf or on behalf of any other entity competing with the
Company.
B. You also agree that for a period of one year after the
termination of this Agreement for any one of the following
reasons: (i) for "cause" as defined above, or (ii) voluntarily
by you without "good reason" as defined above, you will abide
by clauses (ii) and (iii) of Section VIII.A above.
Xx. Xxxxxxx X. Xxxxxxxxx
June 11, 1998
Page 9
CONFIDENTIAL
IX. CHANGE IN CONTROL.
A. For purposes of this Agreement, a "Change in Control" of the
Company will mean the following:
(i) the sale, lease, exchange or other transfer,
directly or indirectly, of substantially all of the assets of
the Company (in one transaction or in a series of related
transactions) to a person or entity that is not controlled by
the Company;
(ii) the approval by the shareholders of the Company
of any plan or proposal for the liquidation or dissolution of
the Company;
(iii) a change in control of the Company of a nature
that would be required to be reported in response to Item 5(f)
of Schedule 14A of Regulation 14A or to Item 1 of Form 8-K
promulgated under the Securities Exchange Act of 1934, as
amended (the "Act"), provided that, without limitation, a
Change in Control shall be deemed to have occurred if (i) any
"person" (as such term is used in Sections 13(d) and 14(d)(2)
of the Act) is or shall become the beneficial owner, directly
or indirectly, of securities of the Company representing 30%
or more of the Company's then outstanding securities; or (ii)
during any period of twenty-four (24) consecutive months,
individuals who at the beginning of such period constitute the
entire Board of Directors shall cease for any reason to
constitute a majority thereof unless the election, or the
nomination for election by the Company's stockholders, of each
new director was approved by a vote of at least two-thirds of
the directors then still in office who were directors at the
beginning of the period.
B. If a Change in Control occurs, the Option will become
immediately exercisable in full and will remain exercisable
for the remainder of its term, regardless of whether you
remain in the employ or service of the Company.
C. For purposes of this Section IX, you shall be entitled to the
severance benefits provided in Section V.D if the date of
termination occurs either (i) while there is to the Company's
knowledge actively pending a proposed transaction, which, if
consummated, could reasonably be expected to result within one
(1) year in a Change in Control, or (ii) within two (2) years
following a Change in Control; unless, in the case of either
(i) or (ii), your employment is terminated or this Agreement
is not renewed because of death or disability or by the
Company for "cause" or voluntarily by you other than for "good
reason".
X. MISCELLANEOUS.
A. NO ADEQUATE REMEDY. You understand that if you fail to fulfill
your obligations under this Agreement, the damages to the
Company would be very difficult to
Xx. Xxxxxxx X. Xxxxxxxxx
June 11, 1998
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CONFIDENTIAL
determine. Therefore, in addition to any other rights or
remedies available to the Company at law, in equity, or by
statute, you hereby consent to the specific enforcement of
this Agreement by the Company through an injunction or
restraining order issued by an appropriate court.
B. GOVERNING LAW. The laws of Illinois will govern the validity,
construction, and performance of this Agreement.
C. ARBITRATION. Any and all disputes which arise concerning the
rights, duties or obligations of either party under any
provision of this Agreement shall be resolved exclusively by
binding arbitration in accordance with the following terms and
conditions. The party seeking arbitration shall commence a
proceeding in arbitration in Chicago, Illinois under the Rules
of the American Arbitration Association. Within one month from
one of the party's request for arbitration, the party
requesting arbitration shall appoint one arbitrator and within
one month of the date of such appointment, the other party
shall appoint an arbitrator. Within three weeks of the date
that the second arbitrator is appointed, and prior to any
examination of the merits of the case, the two arbitrators
shall mutually select a third arbitrator. If either of the
parties fails to appoint an arbitrator or if the two
arbitrators fail to appoint the third arbitrator within the
periods referred to above, one shall be appointed in
accordance with the Rules within fifteen (15) days of the
expiry date of the respective period referred to above. The
three arbitrators so selected shall constitute the arbitral
panel. The arbitral panel shall make its decisions by the
majority of its members. The arbitral panel shall render its
decision and award in writing within ninety (90) days from its
final constitution. There shall be no appeal from the decision
and award of the arbitral panel, which shall be final and
binding on the parties and may be entered in any court having
jurisdiction thereof.
D. RIGHTS IN THE EVENT OF DISPUTE. If, with respect to any
alleged failure by the Company to comply with any of the terms
of this Agreement, you hire legal counsel with respect to this
Agreement or institute any negotiations or institute or
respond to legal action to assert or defend the validity of,
enforce your rights under, or recover damages for breach of
this Agreement, the Company shall pay, as they are incurred,
your actual expenses for attorneys' fees and disbursements,
together with such additional payments, if any, as may be
necessary so that the net-after-tax payments to you equal such
fees and disbursements, provided that such payments shall be
reimbursed by you to the Company if the Arbitration panel
rules in favor of the Company and further decides that such
reimbursement is appropriate. Further, pending the resolution
of any such claim or dispute, you shall not be deemed
terminated for purposes of this Agreement.
E. CONSTRUCTION. Wherever possible, each provision of this
agreement will be interpreted so that it is valid under the
applicable law. If any provision of this
Xx. Xxxxxxx X. Xxxxxxxxx
June 11, 1998
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CONFIDENTIAL
agreement is to any extent invalid under the applicable law,
that provision will still be effective to the extent it
remains valid under the applicable law. The remainder of this
agreement also will continue to be valid, and the entire
agreement will continue to be valid in other jurisdictions.
X. XXXXXXX. No failure or delay by either the Company or you in
exercising any right or remedy under this agreement will waive
any provision of the agreement. Nor will any single or partial
exercise by either the Company or you of any right or remedy
under this agreement preclude either the Company or you from
otherwise or further exercising these rights or remedies, or
any other rights or remedies granted by any law or any related
document.
G. ENTIRE AGREEMENT. THIS AGREEMENT IS THE ENTIRE AGREEMENT
BETWEEN THE PARTIES AND REPLACES ALL OTHER ORAL NEGOTIATIONS,
COMMITMENTS, WRITINGS AND UNDERSTANDINGS BETWEEN THE PARTIES
CONCERNING THE MATTERS IN THIS AGREEMENT. THIS AGREEMENT CAN
ONLY BE MODIFIED BY MUTUAL WRITTEN CONSENT OF THE PARTIES. YOU
ACKNOWLEDGE THAT YOU HAVE BEEN ADVISED TO SEEK LEGAL COUNSEL
TO REVIEW THIS AGREEMENT WITH YOU BEFORE YOU SIGN IT.
X. SUCCESSORS AND ASSIGNS. Except as otherwise provided in
Section IX, this Agreement will be binding upon and inure to
the benefit of the successors and assigns of the Company
whether by way of merger, consolidation, operation of law,
purchase or other acquisition of substantially all of the
assets or business of the Company, and any such successor or
assign will absolutely and unconditionally assume all of the
Company's obligations under this Agreement.
I. NOTICES. All notices, requests and demands given to or made
pursuant hereto will, except as otherwise specified herein, be
in writing and be delivered or mailed to any such party at its
address which:
1. In the case of the Company will be:
Xxx-Xxxxxxx Technologies
000 Xxxxxxxxx Xxxxxx, XX
Xxxxx 0000, Xxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, CEO
and
Xx. Xxxxxxx X. Xxxxxxxxx
June 11, 1998
Page 12
CONFIDENTIAL
Xxxxxxx X. Xxxxxx, Esq.
Xxxxxxxxxxx Xxxxx Xxxxxxxx & Xxxx LLP
0000 Xxx Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
2. In the case of employee will be:
Xxxxxxx X. Xxxxxxxxx
0000 Xxxxxxxx
Xxxxxxx Xxxxx, XX 00000
Any party may, by notice to the other party, designate a changed
address. Any notice, if mailed properly addressed, postage prepaid,
registered or certified mail, will be deemed dispatched on the
registered date or that date stamped on the certified mail receipt, and
will be deemed received within the second business day thereafter or
when it is actually received, whichever is sooner.
J. CAPTIONS. The various headings or captions in this agreement
are for convenience only and will not affect the meaning or
interpretation of this agreement.
Xx. Xxxxxxx X. Xxxxxxxxx
June 11, 1998
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CONFIDENTIAL
Would you please confirm that this agreement is in accordance with your
understanding and that you have received a copy of this letter by signing an
dating it where indicated below, and returning an executed copy for our records.
Very truly yours,
XXX-XXXXXXX TECHNOLOGIES, INC.
/s/ Xxxxxxx X. Xxxxx
By: Xxxxxxx X. Xxxxx*
Its: Chief Executive Officer
Xxxxxx to and confirmed as of June __, 1998:
/s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxxxx
* Subject to approval by the Company's Board of Directors which shall be
recommended by Xx. Xxxxx.
CONFIDENTIAL
April 15, 1999
Xx. Xxxxxxx X. Xxxxxxxxx
0000 Xxxxxxxx
Xxxxxxx Xxxxx, XX 00000
Dear Xxxx:
As you are aware, Xxx-Xxxxxxx Technologies, Inc. (the "Company") has
agreed to sell securities (the "Transaction") to certain investors on the date
hereof pursuant to a Private Placement Memorandum dated March 19, 1999 and
certain Securities Purchase Agreements (the "Securities Purchase Agreements")
with such purchasers (the "Purchasers"). The Securities Purchase Agreements
specify, as a condition to closing, that (i) the certain letter agreement dated
as of June 11, 1998 between you and the Company regarding your employment (the
"Employment Agreement") be amended; and (ii) you waive certain rights you may
have under such Employment Agreement. Terms not defined herein shall have the
meanings ascribed to such terms in the Employment Agreement.
1. Section IV.C.3 of the Employment Agreement is hereby amended in its
entirety to read as follows:
"In the event the Company issues a stock dividend, or
effectuates a stock split or exchange of any shares of the
Company, whether by way of reorganization, reclassification,
conversion or other means, the Company shall make appropriate
adjustment to the terms of the Option in order to prevent
dilution or enlargement of your rights."
Notwithstanding the foregoing, the Company has agreed to issue to you
concurrently with the closing of the Transaction additional options to purchase
that number of subordinate voting shares of the Company equal to the product of
(i) one and five tenths percent (1.5%) multiplied by (ii) the number of
subordinate voting shares sold in the Transaction (excluding any shares issuable
pursuant to warrants). You acknowledge that any future sales of securities by
the Company will not entitle you to additional options.
2. In the event the Transaction would be deemed a "Change of Control",
or cause a "Change of Control" to have occurred, as such term is defined in
Section IX.A of the Employment Agreement, you hereby agree to waive only with
respect to any deemed "Change of Control" arising out of or related to the
Transaction (which, for greater certainty, includes the change in constitution
of the Board of Directors), any rights you have under Section IX.B. including
without limitation the right for the Option to become immediately exercisable.
3. Except as otherwise specifically set forth herein, the Employment
Agreement shall remain in full force and effect.
You hereby acknowledge that the Company and the Purchasers are entering into the
Securities Purchase Agreements in reliance upon on this letter. Please indicate
your agreement to the foregoing by signing the enclosed copy of this letter
where indicated and returning such executed copy to the Company.
Very truly yours,
Xxx-Xxxxxxx Technologies, Inc.
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------------
Its: Chairman, Board of Directors and Chairman,
Compensation Committee
ACCEPTED AND AGREED:
/s/ Xxxxxxx X. Xxxxxxxxx
---------------------------
Xxxxxxx X. Xxxxxxxxx
Dated: 4/15/99
---------------------
