EMPLOYMENT AGREEMENT
AGREEMENT made as of the 14th day of July, 1999 by and between Vizacom
Inc., a Delaware corporation (the "Company") and Xxxx X. Xxxxxxxxx, an
individual residing at 00 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000
(hereinafter called the "Employee").
W I T N E S S E T H:
WHEREAS, this Agreement is intended to supersede and replace all prior
agreements, understandings and arrangements between or among the Company and the
Employee relating to the employment of the Employee.
NOW, THEREFORE, it is agreed as follows:
1. Retention of Services. The Company hereby retains the services of
Employee, and Employee agrees to furnish such services, upon the terms and
conditions hereinafter set forth.
2. Term. Subject to earlier termination on the terms and conditions
hereinafter provided, and further subject to certain provisions hereof which
survive the term hereof, the term of this Agreement shall be comprised of a
three (3) year period of employment commencing on the date hereof, and shall be
extended thereafter for additional one-year periods unless or until the Company
or the Employee provides ninety (90) days' notice to the other party of the
termination of this Agreement.
3. Duties and Extent of Services During Period of Employment.
(a) During the term of employment, Employee shall be employed by the
Company as President and Chief Executive Officer. In such capacity, Employee
agrees that he shall devote his full time business efforts to serving the
Company and its affiliates under the direction of the Board of Directors of the
Company, shall perform all duties incident to his position on behalf of the
Company to the best of his ability. Such duties shall be consistent with the
duties of a President and Chief Executive Officer responsible for the general
management of the business and affairs of the Company.
(b) The Company and Employee agree that Employee shall perform his
basic responsibilities and duties hereunder at the office of the Company in
northern New Jersey; subject, however, to the travel requirements of his
position, including that Employee may be required to perform services on a
temporary basis at the offices of the Company and its affiliates outside
northern New Jersey and travel to visit certain customers, suppliers or
licensors of the Company, in connection with the Company acquiring the rights or
license to market and sell certain products or otherwise in connection with the
business of the Company.
4. Remuneration. During the period of employment, Employee shall be
entitled to receive the following compensation for his services:
(a) The Company initially shall pay to Employee a salary at the rate
of $162,500 per annum, payable in equal semi-monthly installments, or in such
other manner as shall be consistent
with the Company's payroll practices. This salary shall increase by a minimum of
$10,000 per year on January 1 of each calendar year, commencing on January 1,
2000, and may be further increased by the Board of Directors or the Compensation
Committee of the Board of Directors.
(b) In addition to the salary provided in clause (a) above, not later
than one hundred ten (110) days after the end of each fiscal year of the
Company, the Company shall pay to Employee, as incentive compensation, an amount
equal to three percent (3%) of the Company's Net Income (as defined below) for
such immediately preceding fiscal year. For purposes of this Agreement, "Pre-Tax
Income" shall mean an amount equal to the net income of the Company before
extraordinary items, in each case computed in accordance with United States
generally accepted accounting principles, consistently applied. The Company
agrees to furnish to Employee a copy of the Company's financial statements not
later than one hundred and five (105) days after the end of each fiscal year of
the Company during the term of this Agreement. In the event that this Agreement
is terminated other than pursuant to Section 9(a), the Employee shall be
entitled to receive the amount which would be payable under this clause (b) for
each fiscal quarter of any fiscal year prior to the date of such termination.
(c) In addition to the foregoing, the Company shall pay to Employee a
bonus of $25,000 within fifty (50) days after the end of the first fiscal
quarter of the Company ending after the date of this agreement in which the
Company reports positive net income.
5. Employee Benefits; Expenses.
(a) During the term of this Agreement, the Company shall provide to
the Employee the right to participate in the Company's then existing medical and
dental insurance and other employee benefit plans and policies on the same terms
as are then generally available to the Company's executive and managerial
employees.
(b) Employee shall be entitled to paid vacation each year during the
term of this Agreement at the rate of four (4) weeks per annum. Vacation shall
be taken each year and, if not taken, shall be carried over for one (1) year
and, if not taken during such carry-over period, shall be forfeited.
(c) The Corporation shall reimburse Employee, in accordance with the
practice followed from time to time for other executive and managerial officers
of the Company, for all reasonable and necessary business and traveling
expenses, and other disbursements incurred by Employee for or on behalf of the
Corporation in the performance of Employee's duties hereunder, upon presentation
by Employee to the Company of an appropriate accounting or documentation of
such.
6. Disability. If Employee, during the period of employment, becomes
unable for any 120 days in any twelve-month period due to ill health or other
physical or mental incapacity, to perform his services hereunder, the Company
may thereafter, upon at least 100 days' written notice to Employee, place him on
disability status. After such action by the Company, if such action takes place
within the first nine months of this Agreement, Employee shall thereafter be
entitled to receive
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one-half of the compensation stated to be payable hereunder until the Employee
returns to full-time or, if such action takes place after nine months have been
served by Employee hereunder, then Employee shall be entitled to receive full
compensation stated to be payable hereunder until Employee returns to full-time.
7. Confidential Information.
(a) In the course of Employee's employment by the Company, Employee
will have access to and possession of valuable and important confidential or
proprietary data or information of the Company and its operations. Employee will
not during Employee's employment by the Company or at any time for a period of
two (2) years thereafter divulge or communicate to any person nor shall Employee
direct any employee, representative or agent of the Company or its affiliates to
divulge or communicate to any person or entity (other than to a person or entity
bound by confidentiality obligations similar to those contained herein and other
than as necessary in performing Employee's duties hereunder) or use to the
detriment of the Company or for the benefit of any other person or entity,
including without limitation any competitor, supplier, licensor, licensee or
customer of the Company , any of such confidential or proprietary data or
information or make or remove any copies thereof, whether or not marked or
otherwise identified as "confidential" or "secret." Employee shall take all
reasonable precautions in handling the confidential or proprietary data or
information within the Company to a strict need-to-know basis and shall comply
with any and all security systems and measures adopted from time to time by the
Company to protect the confidentiality of confidential or proprietary data or
information.
(b) The term "confidential or proprietary data or information" as
used in this Agreement shall mean information not generally available to the
public, including, without limitation, all database information, personnel
information, financial information, customer lists, account lists or other
account information, names, telephone numbers or addresses, supplier lists,
trade secrets, patented or proprietary information, forms, information regarding
products, operations, systems, methods, financing, services, know how, computer
and any other processed or collated data, computer programs, pricing, marketing,
media and advertising data.
(c) Employee will at all times promptly disclose to the Company in
such form and manner as the Company may reasonably require, any inventions,
improvements or procedural or methodological innovations, including without
limitation relating to programs, methods, forms, systems, services, designs,
marketing ideas, products or processes (whether or not capable of being
trademarked, copyrighted or patented) conceived or developed or created by
Employee during or in connection with Employee's employment hereunder and which
relate to the business of the Company ("Intellectual Property"). Employee agrees
that all such Intellectual Property shall be the sole property of the Company.
Employee further agrees that Employee will execute such instruments and perform
such acts as may reasonably be requested by the Company to transfer to and
perfect in the Company all legally protectable rights in such Intellectual
Property.
(d) All written materials, books, records and documents made by
Employee or coming into Employee's possession during Employee's employment by
the Company concerning any products, processes or equipment manufactured, used,
developed, investigated, purchased, sold or
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considered by the Company or otherwise concerning the business or affairs of the
Company, including without limitation any files, customer records such as names,
telephone numbers and addresses, lists, firm records, brochures and literature,
shall be the sole property of the Company, shall not be removed from the
Company's premises by the Employee, and upon termination of Employee's
employment by the Company, or upon request of the Company during Employee's
employment by the Company, Employee shall promptly deliver the same to the
Company. In addition, upon termination of Employee's employment by the Company,
Employee will deliver to the Company all other Company property in Employee's
possession or under Employee's control, including, but not limited to, financial
statements, marketing and sales data, customer and supplier lists, customer
lists and other customer information, database information and other documents,
and any Company credit cards.
(e) The Employee acknowledges that the covenants contained in this
Section 7 are fair and reasonable in order to protect the Company's business and
were a material and necessary inducement for the Company to agree to the terms
of this Agreement. The Employee further acknowledges that any remedy at law for
any breach or threatened or attempted breach of the covenants contained in this
Section 7 may be inadequate and that the violation of any of the covenants
contained in this Section 7 may cause irreparable and continuing damage to the
Company. Accordingly, the Company shall be entitled to specific performance or
any other mode of injunctive and/or other equitable relief to enforce its rights
hereunder, including without limitation an order restraining any further
violation of such covenants, or any other relief a court might award, and that
such injunctive relief shall be cumulative and in addition to any other rights
or remedies to which the Company may be entitled. The covenants in this Section
7 shall run in favor of the Company and its successors and assigns.
(f) The provisions of this Section 7 shall survive the termination of
this Employment Agreement for a one (1) year period.
8. Non-Competition.
(a) During the term of this Agreement and, other than with respect to
clause (i) below, for one year thereafter (the "Restricted Period"), the
Employee shall not, without the written consent of the Company, directly or
indirectly,
(i) become associated with, render services to, invest in,
represent, advise or otherwise participate in as an officer, employee, director,
stockholder, partner, promoter, agent of, consultant for or otherwise, any
business which is conducted in any of the jurisdictions in which the Company's
business is conducted and which is competitive with the business conducted by
the Company; provided, that this Section 8(a)(i) shall not prohibit the Employee
from purchasing or owning up to five percent (5%) of the outstanding capital
stock of a company which is listed or authorized for trading on any national
securities exchange, Nasdaq or the OTC Electronic Bulletin Board or is a company
with a class of securities registered under Section 12 of the Securities Act of
1934, as amended unless the Employee is terminated other than for cause;
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(ii) for the Employee's own account or for the account of any other
person or entity (A) interfere with the Company's relationship with any of its
suppliers, customers, accounts, brokers, representatives or agents or (B)
contact, telephone, meet, solicit or transact any business with any material
customer, account or supplier of the Company who or which transacts or has
transacted business with the Company at any time during the term of this
Agreement, other than any such person or entity listed on Schedule A hereto; or
(iii) employ or otherwise engage, or solicit, entice or induce on
behalf of the Employee or any other person or entity, the services, retention or
employment of any person who has been an employee, principal, partner,
stockholder, sales representative, trainee, consultant to or agent of the
Company within one year of the date of such offer or solicitation.
(b) Nothing herein contained shall be construed as prohibiting the
Company from pursuing any other remedies available to it for such violation,
including but not limited to any injunctive or other equitable relief or the
recovery of damages from the Employee.
(c) The Employee acknowledges that the covenants contained in this
Section 8 are fair and reasonable in order to protect the Company's business and
were a material and necessary inducement for the Company to agree to the terms
of this Agreement. The Employee further acknowledges that any remedy at law for
any breach or threatened or attempted breach of the covenants contained in this
Section 8 may be inadequate and that the violation of any of the covenants
contained in this Section 8 may cause irreparable and continuing damage to the
Company. Accordingly, the Company shall be entitled to specific performance or
any other mode of injunctive and/or other equitable relief to enforce its rights
hereunder, including without limitation an order restraining any further
violation of such covenants, or any other relief a court might award, and that
such injunctive relief shall be cumulative and in addition to any other rights
or remedies to which the Company may be entitled. The covenants in this Section
8 shall run in favor of the Company and its successors and assigns.
(d) In case any one or more of the terms or provisions contained in
this Section 8 shall for any reason be held invalid, illegal or unenforceable,
such invalidity, illegality or unenforceability shall not affect any other terms
or provisions hereof, but such term or provision shall be deemed modified or
deleted as or to the extent required by applicable law, and such modification or
deletion shall not affect the validity of the other terms or provisions of this
Section 8. In addition, if any one or more of the restrictions contained in this
Section 8 shall for any reason be held to be unreasonable with regard to time,
duration, geographic scope or activity, the parties contemplate and hereby agree
that such restriction shall be modified and shall be enforced to the full extent
compatible with applicable law. The parties hereto intend that the covenants
contained in this Section 8 shall be deemed a series of separate covenants for
each country, state, county and city. If, in any judicial proceeding, a court
shall refuse to enforce all the separate covenants deemed included in this
Section 8 because, taken together, they cover too extensive a geographic area,
the parties intend that those of such covenants (taken in order of the cities,
counties, states and countries therein which are lease populous) which if
eliminated would permit the remaining separate covenants to be enforced in such
proceeding shall, for the purpose of such proceeding, be deemed eliminated from
the provisions of this Section 8.
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(e) The provisions of this Section 8 shall survive the termination of
this Employment Agreement for a one (1) year period.
9. Termination.
(a) The Company may terminate the Employee's services hereunder "for
cause" by delivering to Employee not less than ten (10) days prior to the date
on which the termination is to be effective, a written notice of termination for
cause specifying the act, acts or failure to act that constitute the cause. For
the purposes of this agreement, "for cause" shall mean; (i) any act of fraud or
embezzlement adversely affecting the financial, market, reputation or other
interests of the Company, or any affiliate thereof, (ii) in the event of a
conviction of the Employee for any felony or any knowing violation of any
federal or state securities law or regulation, (iii) repeated failure to perform
Employee's material and substantial duties consistent with the terms of this
Agreement after reasonable notice and an opportunity to cure, (iv) any material
breach by the Employee of this Agreement, or (v) the death of the Employee.
(b) If the Company terminates Employee's employment hereunder for any
reason other than "for cause" as set forth in Section 9(a) hereof, the Company
shall pay to the Employee compensation pursuant to Sections 4(a) and 4(b) hereof
at the time and in the manner provided for herein for a three (3) year period
commencing on the date of such termination, and no other compensation payable
hereunder shall be payable to the Employee. If the Company terminates Employee's
employment hereunder "for cause" as set forth in Section 9(a) hereof, Employee
shall not be entitled to receive any further compensation hereunder; provided,
that the Company shall reimburse the Employee for any unpaid expenses incurred
pursuant to Section 5(c) of this Agreement. Employee and the Company acknowledge
that the foregoing provisions of this paragraph 9(b) are reasonable and are
based upon the facts and circumstances of the parties at the time of entering
into this Agreement, and with due regard to future expectations.
10. Notices. Any notice to be given to the Company hereunder shall be
deemed sufficient if addressed to the Company in writing and delivered or mailed
by certified or registered mail to it at 0X Xxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx,
Attention: President, or to such other address as the Company may hereafter
designate, and a copy to Xxxx X. Xxxxxxx, Esq., Xxxxxxx & Xxxxxxxx, LLC, 00
Xxxxxxx Xxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx Xxxxx, Xxx Xxxx 00000. Any
notice to be given to Employee hereunder shall be delivered or mailed by
certified or registered mail to him at the address set forth at the head of this
Agreement or such other address as he may hereafter designate.
11. Change of Control. (a) In the event that there shall be a change in
the control of the Company, as hereinafter defined, or in any person directly or
indirectly presently controlling the Company, as hereinafter defined, Employee
shall have the option, exercisable within six (6) months of his becoming aware
of such event, to terminate his employment by the Company pursuant to this
Employment Agreement forthwith. Upon such termination, Employee shall have the
right to immediately receive as a lump sum payment an amount equal to three (3)
times the average of the total annual cash compensation paid by the Company to
Employee, with respect to the five fiscal years of the Company prior to the
change of control, minus $1.00.
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(b) For purposes of this Agreement, a change in control of the
Company, or in any person directly or indirectly controlling the Company, shall
mean:
(i) A change in control as such term is presently defined in
Regulation 240.12b-2 under the Securities Exchange Act of 1934
("Exchange Act); or
(ii) if any "person" (as such term is used in Section 13(d)
and 14(d) of the Exchange Act) other than the Company or any
"person" who on the date of this Agreement is a director or
officer of the Company, becomes the "beneficial owner" (as
defined in Rule 13(d)-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing twenty
(20%) percent of the voting power of the Company's then
outstanding securities, unless such person becomes such a
beneficial owner as a result of a transaction approved by a
majority of the board of directors of the Company; or
(iii) if during any period of two (2) consecutive years
during the term of this Agreement, individuals who at the
beginning of such period constitute the Board of Directors cease
for any reason to constitute at least a majority thereof, unless
the election of each director who is not a director at the
beginning of such period has been approved in advance by
directors representing at least two-thirds (2/3) of the directors
then in office who were directors at the beginning of the period.
12. Successors and Assigns; Third Party Beneficiaries. This Agreement
shall be binding upon and inure to the benefit of the successors and assigns of
the Company, and unless clearly inapplicable, all references herein to the
Company shall be deemed to include any such successor. In addition, this
Agreement shall be binding upon and inure to the benefit of the Employee and his
heirs, executors, legal representatives and assigns; provided, however, that the
obligations of Employee hereunder may not be delegated without the prior written
approval of the Board of Directors of the Company. In the event of any
consolidation or merger of the Company into or with any other corporation during
the term of this Agreement, or the sale of all or substantially all of the
assets of the Company to another corporation, person or entity during the term
of this Agreement, such successor corporation shall assume this Agreement and
become obligated to perform all of the terms and provisions hereof applicable to
the Company, and Employee's obligations hereunder shall continue in favor of
such successor corporation.
13. Amendments. This Agreement may not be altered, modified, amended or
terminated except by a written instrument signed by each of the parties hereto.
14. Prior Agreements Superseded. This Agreement contains the entire
agreement of the parties relating to the subject matter hereof and supersedes
any other agreements, oral or written, entered into between Employee and the
Company prior to the date of this Agreement relating thereto.
15. Applicable Law. This Agreement shall be governed by, construed and
enforced in accordance with the laws of the State of Delaware, without regard to
conflicts of laws.
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16. Severability. If any provision of this Agreement shall be held by a
court of competent jurisdiction to be contrary to law or public policy, the
remaining provisions shall remain in full force and effect.
17. Waiver. No term or provision hereof shall be deemed waived and no
breach consented to or excused, unless such waiver, consent or excuse shall be
in writing and signed by the party claimed to have waived, consented or excused.
A consent, waiver or excuse of any breach shall not constitute a consent to,
waiver or, or excuse of any other or subsequent breach whether or not of the
same kind of the original breach.
18. Counterparts. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one and the same
agreement.
19. Acknowledgment. Employee acknowledges that he has carefully read this
Agreement, has had an opportunity to consult counsel regarding this Agreement
and hereby represents and warrants to the Company that Employee's entering into
this Agreement, and the obligations and duties undertaken by Employee hereunder,
will not conflict with, constitute a breach of or otherwise violate the terms of
any other agreement to which Employee is a party and that Employee is not
required to obtain the consent of any person, firm, corporation or other entity
in order to enter into and perform his obligations under this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
SOFTWARE PUBLISHING CORPORATION
HOLDINGS, INC.
By: /s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx
Chairman
/s/ Xxxx X. Xxxxxxxxx
Xxxx X. Xxxxxxxxx
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