Exhibit 10.35
RAVISENT TECHNOLOGIES INC.
Employment Agreement
THIS EMPLOYMENT AGREEMENT (the "Agreement") is dated as of the sixth
day of August 2001, and is by and between RAVISENT Technologies Inc., a Delaware
corporation and its wholly owned subsidiary RAVISENT Operating Company, Inc.
(hereinafter\\2\\, collectively, the "Company"), and Xxxxxx X. Xxxxxxx, Xx. with
an address at c/o Brenner, Xxxxxxxx & Xxxxxxx llp, 000 Xxxxxxx Xxxxxx, Xxx
Xxxxx, Xxxxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxx, Esq. (hereinafter
"Employee").
W I T N E S S E T H
WHEREAS:
A. Company wishes to retain the services of Employee to render
services for and on behalf of Company, in accordance with the following terms,
conditions and provisions; and
B. Employee wishes to perform such services for and on behalf of
Company, in accordance with the following terms, conditions and provisions; and
C. The Company is currently in the process of acquiring eMation,
Ltd., as a means to accelerate the Company's entry into the pervasive computing
market and anticipates that such acquisition (the "eMation Transaction") will be
completed prior to December 31, 2001.
NOW, THEREFORE, in consideration of the mutual covenants and
conditions herein contained the parties hereto intending to be legally bound
hereby agree as follows:
I. EMPLOYMENT. Company hereby employs Employee and Employee accepts
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such employment and shall perform his duties and the responsibilities provided
for herein in accordance with the terms and conditions of this Agreement.
II. EMPLOYMENT STATUS. Employee shall at all times be Company's
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employee subject to the terms and conditions of this Agreement.
III. TITLE AND DUTIES. Company agrees to employ Employee and Employee
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accepts such employment as a full time employee and agrees as per the terms and
conditions of this agreement to serve as and have the title of Chief Executive
Officer and Chairman of the Board reporting to the Board of Directors and
perform diligently, faithfully, and to the best of his ability, duties as
reasonably assigned and instructions given by the Company's Board of Directors.
As of the date of this Agreement, the Board members are as follows:
Xxxxx Xxxxx, Xxxx X. Xxxx, Xxxxxxxxx X. Xxxxx III, Xxxxxx X.
Threadgrill and Xxxxxx X. Xxxxxxx, Xx.
Post closing of the eMation Transaction, the Company anticipates that
the Board members will be as follows for their individual terms of service as
set forth in the Company's Bylaws:
Xxxxx Xxxxx, Xxxxxx X. Xxxxxxxxxx, Xxxxxx X. Xxxxxxx, Xxxx
Xxxxxx, Xxxxxxxxx Xxxxxxxx and Xxxxxx X. Xxxxxxx, Xx.
IV. TERM OF SERVICES. The initial term of this Agreement is for a
period commencing on August6, 2001 and ending on August 31, 2004, subject to
paragraph IV Termination of this Agreement. The Agreement shall renew
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automatically for one-year terms unless either party notifies the other of its
determination not to renew at least 90 days prior to expiration.
V. BASE COMPENSATION. Employee's base salary for rendered services
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for the initial term of this Agreement shall be three hundred thirty thousand
dollars ($330,000), an annual amount payable in accordance with Company's
payroll procedures and policies as implemented during the term of this
Agreement. All reference to payments in this Agreement are in U.S. dollars.
VI. ADDITIONAL COMPENSATION. During the term of this Agreement, the
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Company and its Board of Directors shall have complete discretion to grant
Employee a bonus, or any other specific additional compensation packages
proposed for payment or for vesting to Employee.
VII. EMPLOYER PERQUISITES. Employee shall be entitled to and shall
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receive all employer perquisites as would normally be granted to employees of
Company. Such perquisites to include the following, at the Company's cost,
through the entire term of this Agreement:
1. Health insurance for Employee and his spouse
and children under terms and conditions substantially
similar to those provided to Employee by Thomson Learning.
Additionally, Life insurance in the amount of three times
Employee's then-applicable base salary; Long term disability
insurance in the amount of 75% of Employee's then-applicable
base salary; and Short term disability in the amount of 100%
of Employee's then-applicable base salary (payable after 90
days of disability). Company agrees to use best efforts to
establish a deferred compensation plan for key executives in
the Company;
2. A quarterly performance bonuses of $25,000
per calendar quarter ($100,000 annually), payable within
thirty (30) days after the end of each calendar quarter,
based on Company performance during such quarter against
targets to be agreed upon in advance by Employee and the
Company; provided, however, that such quarterly bonus for
the period September 1, 2001 through and including
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December 31, 2002 shall be guaranteed. Such bonus shall be
prorated for the period of September 1, 2001 to September
30, 2001;
3. An additional annual bonus of $100,000 for
exceeding 2001 end of year gross revenue (including eMation
revenues, assuming the eMation Transaction closes) of $12.4
million, payable by no later than February 15, 2002. Such
bonus shall be prorated for actual days Employee was
employed by Company during 2001. For each year of the
Agreement thereafter, a $100,000 bonus per year for
exceeding end of year revenue targets that shall be mutually
agreed upon by the Company and Employee;
4. An additional bonus equal to 0.5% of the
amount by which the Company's gross revenue (including
eMation revenues, assuming the eMation Transaction closes)
exceeds $12.4 million for 2001, payable by no later than
February 15, 2002. For each year of the Agreement
thereafter, an additional bonus per year equal to 0.5% of
the amount by which the Company's gross revenue exceeds a
certain end of year revenue target. Each end of year target
shall be mutually agreed upon by the Company and Employee
from year to year;
5. In addition to the bonus set forth in
subsection 4 above, a bonus equal to 0.5% of the amount by
which the Company's gross revenue (including eMation
revenues, assuming the eMation Transaction closes) exceeds
$14 million for 2001, payable by no later than February 15,
2002. For each year of the Agreement thereafter, an
additional bonus per year equal to 0.5% of the amount by
which the Company's gross revenue exceeds a certain revenue
target that shall be higher than the annual revenue target
that will be set in accordance with subsection 4 above and
shall be mutually agreed upon by the Company and Employee;
6. Four weeks paid vacation pursuant to
Company's stated policy;
7. Paid holidays pursuant to Company's stated
policy;
8. A $36,000 annual education allowance for
Employee's professional development;
9. 300,000 stock options (grant effective as of
the date hereof) under the Ravisent Technologies Inc. 1999
Stock Incentive Plan (the "Plan"), subject to RAVISENT's
standard vesting schedule. Such options will be and remain
Incentive Stock Options, to the extent permissible by law
and the Plan and shall have a term of ten
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(10) years from the date of grant thereof (irrespective of
employment termination);
10. Upon commencement of employment, the
following grants of options to purchase shares of Company's
common stock: 1) 100,000 non-qualified stock options with a
strike price of one-cent ($0.01), vesting at 1/24 per month
commencing on the date hereof; 2) 110,000 non-qualified
stock options with a strike price of one-cent ($0.01) with a
vesting schedule of 1/24 per month commencing on the first
anniversary of employment; and 3) 121,000 non-qualified
stock options with a strike price of one-cent ($0.01) with a
vesting schedule of 1/12 per month commencing on the second
anniversary of employment. Such options shall have a term of
ten (10) years from the grant date. In accordance with the
Company's current accounting policies, the Company will not
report income to Employee in respect of such options until
Employee exercises such options;
11. $950 monthly car allowance;
12. Company paid tax and financial services not
to exceed $5,000 per year;
13. Such benefits as the Company generally makes
available to its employees at the executive officer level.
All such perquisites shall be provided to Employee in addition to any amounts
earned under Sections V and VI hereof. Any payments or benefits payable to
Employee in connection with any such perquisites in respect of any calendar year
(or quarter) during which Employee is employed by the Company for less than the
entire year (or quarter, as the case may be) shall be pro-rated in accordance
with the number of days during such calendar year Employee was employed.
Amounts payable based on Company performance shall be determined with reference
to Company performance through and including the last day on which Employee was
employed hereunder (annual targets to be pro-rated).
VIII. EXTENT OF SERVICES. Employee shall devote his entire business
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time, attention, and energies to the business of Company, but this shall not be
construed as preventing Employee from (i) investing his assets in the future as
a passive investor in such form or manner as he sees fit or (ii) serving on the
board of directors or board of trustees or in any similar capacity of any
publicly or privately-held company or not-for-profit organization, so long as,
in either case, the organization in question is not competitive with the Company
and provided that any services required of Employee do not materially interfere
(either singly or in the aggregate) with Employee's duties to the Company.
IX. TERMINATION.
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1. A termination for "Cause" shall mean a termination for any
of the following reasons: (i) Employee's substantial and willful refusal or
failure to materially perform the duties of his position, if such refusal
continues and is not remedied by Employee within thirty
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(30) days after receipt of a written warning from the Company's Board of
Directors, which warning specifies the manner in which the Company believes
Employee has refused or otherwise failed to discharge such duties; (ii) Employee
engaged in misconduct materially injurious to the Company, if such conduct
continues and is not remedied by Employee within thirty (30) days after receipt
of a written warning from the Company's Board of Directors, which warning
specifies the nature of the conduct in question; (iii) Employee is convicted of
a felony, or pleads guilty to, a crime that has or is likely to have a material
detrimental effect on the business or reputation of the Company; (iv) Employee
commits an act of fraud against, or misappropriates property belonging to,
Company; or (v) Employee commits a material breach of the Non-Competition and
Confidentiality Agreement between Employee and Company entered into
simultaneously herewith (the "Non-Competition Agreement"). The Company will
provide written notice of termination in the case of any termination for Cause,
which notice shall consist of a written resolution, duly adopted by not less
than three-fourths of the entire Board of Directors (other than Employee) after
notice to Employee and a reasonable opportunity for Employee, together with his
attorney, to be heard before the Board prior to such vote, finding that in the
good faith opinion of the Board, Employee was guilty of the conduct set forth in
this Section IX(1).
2. "Involuntary Termination" shall mean Employee's termination
which occurs by reason of: (i) Employee's involuntary dismissal or discharge by
the Company other than for Cause; (ii) the Company's determination not to renew
this Agreement for an additional term, or (iii) Employee's voluntary resignation
following (A) a material reduction in Employee's duties or responsibilities
(including the failure to elect or re-elect Employee as the Chief Executive
Officer and Chairman of the Board of Directors), (B) a reduction in his level of
compensation (including base salary, fringe benefits and target bonus under any
performance based bonus or incentive programs), (C) the assignment to Employee
of duties materially inconsistent with Employee's position, duties,
responsibilities, titles and offices as set forth in Section III hereof, (D) a
relocation of Employee's place of employment by the Company without the
individual's consent, (E) job abolishment, mutually agreed upon separation or
position elimination due to liquidation or dissolution of the Company, or (F)
acquisition of the Company whereby the Company is controlled by an acquirer,
merger, acquisition of control of the Company by a single investor or related
group (or group acting in concert), or sale of assets.
3. It is understood and agreed that this is a personal services
contract, and that Company shall have the right to terminate this agreement on
ten (10) days notice to Employee, if appropriate, in the event of the disability
or death of Employee, which would otherwise prevent him from performing his
duties. For purpose of this provision, "disability" shall be defined in
accordance with the definition of "disability" as contained in Company's
disability insurance policy and shall be determined by the Board of Directors in
good faith.
4. In the event: (a) of Employee's Involuntary Termination, or
(b) Employee's employment is terminated as a result of his death or disability
(as provided in paragraph 3 above), then, in addition to the payment of all
amounts earned by Employee as of the date of termination, Company will pay the
amounts due to Employee as salary, bonuses and other perquisites described in
Section VII and continue coverage under Employee's benefit plans under this
Agreement (collectively, "Severance Benefits") for the remaining term of this
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Agreement or one year, whichever is longer (the "Severance Period") and all of
Employee's stock options will immediately vest and become exercisable. For
purposes of Severance Benefits, bonuses payable to Employee shall be equal to
the highest bonuses earned by Employee prior to termination; provided that if no
quarterly bonus is earned under Section VII (2) for any period after January 1,
2003, then no bonus shall be payable as Severance Benefits in respect of Section
VII (2). Company shall make such payment no later than the next regular Company
pay period. However, if Employee terminates his employment during the initial
term of this Agreement, then Employee receives all amounts earned by Employee
prior to the date of termination but no further benefits. Upon any employment
termination, Employee's options shall remain exercisable for their full ten-year
terms; however, any options qualifying for incentive stock option treatment
under the Internal Revenue Code shall lose such beneficial treatment if Employee
exercises such options at any time after ninety (90) days from his termination
date.
5. Employee shall have the right to terminate this Agreement on
ten (10) day's written notice in the event that the eMation Transaction fails to
close on or prior to December 31, 2001. If Employee does not exercise such right
by February 28, 2002, such right shall terminate. In such event, the Company
shall pay Employee Severance Benefits and provide such other benefits as would
be applicable had the Employee's employment terminated as a result of an
Involuntary Termination, except that the Severance Period for determining the
amount of Severance Benefits and the period for maintaining Employee's benefits
shall be six (6) months.
6. In the event that the Company fails to timely pay any amount
due hereunder in connection with a termination of Employee's employment,
Employee shall, upon ten (10) days' written notice to the Company, be relieved
of any restrictions on Employee's ability to compete with the Company contained
in the Non-Competition Agreement. The relief of such restrictions shall be in
addition to, and not in substitution for, any other remedies Employee may have
against the Company at law or in equity.
X. NO OBLIGATION TO MITIGATE DAMAGES. Employee shall not be
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required to mitigate damages or the amount of any payment provided for under
this Agreement, by seeking other employment or otherwise, nor will any payments
hereunder be subject to offset in any respect against any claims which the
Company may have against Employee.
XI. INDEMNIFICATION. In accordance with Delaware law, the Company
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shall (a) indemnify, hold harmless, and defend Employee against all claims,
damages, losses and expenses (including attorneys' fees and costs) arising out
of or resulting from Employee's performance of the duties covered by this
Agreement, to the full extent that the Company indemnifies its other senior
executives and directors, and (b) pay all reasonable expenses and attorneys'
fees and costs that Employee incurs in connection with or relating to the
matters for which Employee is indemnified under this Section, to the full extent
of the indemnity set forth above, unless the applicable adjudicating body
determines Employee is ineligible for indemnification, in which case Employee
must reimburse the Company for all such fees, expenses and costs.
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XII. ATTORNEY'S FEES. The Company shall reimburse Employee for
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Employee's reasonable legal fees and costs incurred in connection with the
negotiation, execution and delivery of this Agreement and the other agreements
referred to herein, but in no event for an amount to exceed ten thousand dollars
($10,000).
XIII. NO CONFLICT. Employee represents and warrants to Company that
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he is not a party to or otherwise bound by any other employment or services that
may, in any way, restrict his right or ability to enter into this agreement or
otherwise be employed by Company.
XIV. NOTICES. Any written notice required to be given pursuant to
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this Agreement shall be delivered by certified or registered U.S. Mail to the
parties at their respective addresses for notice set forth on the first page
hereof. A party may change its address for notice hereunder by giving notice
thereof to the other party in accordance with this paragraph.
XV. JURISDICTION AND DISPUTES. This Agreement shall be governed by
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the laws of the Commonwealth of Massachusetts. The parties agree to binding
arbitration in accordance with the policies of the American Arbitration
Association. The substantially prevailing party in any such dispute shall have
the right to recover such party's reasonable attorneys' fees and costs in
prosecuting such dispute.
XVI. AGREEMENT BINDING ON SUCCESSORS. This Agreement shall be
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binding on and shall inure to the benefit of the parties hereto, and their
heirs, administrators, and permitted successors and assigns. In the event of
Employee's death or a judicial determination of his incompetence, references in
this Agreement to Employee shall be deemed, where appropriate, to refer to his
beneficiary, estate or other legal representative. If Employee should die while
any amounts are still payable to him hereunder, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to Employee's devisee, legatee or other designee or, if there be no
such designee, to Employee's estate.
XVII. WAIVER. No waiver by either party of any default shall be
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deemed as a waiver of any prior or subsequent default of the same or other
provisions of this Agreement.
XVIII. SEVERABILITY. If any provision hereof is held invalid or
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unenforceable by court of competent jurisdiction, such invalidity shall not
affect the validity or operation of any other provision, and such invalid
provision shall be deemed to be severed from the Agreement.
XIX. ASSIGNABILITY. This Agreement and the rights and obligations
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thereunder are personal with respect to Employee and may not be assigned by any
action of Employee or by operation of law. Company shall, however, have the
right to assign this Agreement to a successor in interest to the business or
assets of Company or to any affiliate of Company, provided, however, that no
such assignment shall relieve the Company of liability hereunder.
XX. INTEGRATION. The Non Competition Agreement is incorporated here
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by reference. This Agreement, together with the Non- Competition Agreement,
constitute the entire understanding of the parties and are intended as the final
expression of their agreement. They shall not be modified or amended except in
writing signed by the parties thereto and
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specifically referring to this
Agreement. This Agreement, together with the Non- Competition Agreement shall
take precedence over any other documents that may be in conflict therewith.
IN WITNESS WHEREOF, Company and Employee confirm the foregoing
accurately sets forth the parties' respective rights and obligations and agrees
to be bound by having the evidenced signature affixed thereto.
RAVISENT TECHNOLOGIES INC.
By: /s/ Xxxxx Xxxxx /s/ Xxxxxx X. Xxxxxxx, Xx.
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Name: Xxxxx Xxxxx Xxxxxx X. Xxxxxxx, Xx.
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Title: CEO & President
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Date: August 15, 2001 Date: August 15, 2001
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FIRST AMENDMENT TO THE
EMPLOYMENT AGREEMENT BY AND BETWEEN
RAVISENT TECHNOLOGIES INC. ("RAVISENT")
AND
XXXXXX X. XXXXXXX XX. ("EMPLOYEE")
This is an amendment ("Amendment") to the employment agreement by and
between RAVISENT and Employee dated August 6, 2001 ("Agreement") shall be
effective as of August 6, 2001.
In consideration of the mutual promises set forth herein, and intending to
be legally bound, the parties agree as follows:
1. Initial capitalized terms used herein without definition shall have
the meanings ascribed to them in the Agreement.
2. The parties hereby agree that this Amendment modifies the Agreement,
where applicable, to the extent of and under the terms as set forth below:
a. The Company may, on or prior to January 6, 2002, provide
Employee with written notice of its desire to terminate
Employee's employment other than for Cause and, provided that
the parties mutually agree, Employee's employment shall
terminate on February 6, 2002. In such event, then, in addition
to the payment of all amounts earned by Employee as of the
date of termination, the Company will pay Employee Severance
Benefits and provide such other benefits as would be applicable
had the Employee's employment terminated as a result of an
Involuntary Termination, except that (I) the Severance Period
for determining the amount of Severance Benefits and the
period for maintaining Employee's benefits shall be one (1)
year, and (II) the accelerated vesting of stock options shall
be limited to those options which would have vested on or prior
to February 6, 2002;
b. If the parties have not mutually agreed to terminate Employee's
employment as provided above, on February 6, 2002 (the
"Anniversary Date"), the following shall occur
(i) One hundred thousand (100,000) options to purchase common
stock of the Company with a strike price of $.01 granted
to Employee under the Plan on August 6, 2001 which, by
their terms, would have vested during the period February
6, 2002 to August 6, 2003 shall become vested and
immediately exercisable; and
(ii) The Company shall grant to Employee one hundred thousand
(100,000) options under the Plan to purchase common stock
of the Company with a strike price equal to the fair
market value of the common stock on the Anniversary Date,
determined in accordance with the Plan, such options to
otherwise have terms and conditions consistent with
incentive stock options granted to Employee under the
Agreement.
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2. Except as expressly set forth in this Amendment to the contrary, all
terms and conditions set forth in the Agreement remain in full force and effect,
and such terms and conditions are incorporated herein by this reference.
RAVISENT Technologies Inc.
By: /s/ Xxxxxxx X. Xxxxx /s/ Xxxxxx X. Xxxxxxx Xx.
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Xxxxxxx X. Xxxxx Xxxxxx X. Xxxxxxx Xx.
CEO and President
Date: August 15, 2001 Date: August 15, 2001
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