INTELLIGENT DECISION SYSTEMS, INC.
FORM S-8
REGISTRATION STATEMENT
Exhibit No. 4.2
Employment Agreement - Xxxxxxxx Xxxxxxx
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EXECUTIVE EMPLOYMENT AND MANAGEMENT
AGREEMENT
AGREEMENT dated June 28, 1996, between Intelligent Decision Systems, Inc. a
Delaware corporation (the "Company" or "IDS"), and Xxxxxxxx Xxxxxxx (the
"Executive").
1. Employment and Duties:
The Company hereby employs the Executive, and the Executive accepts
employment, in an executive capacity for the Company and its subsidiaries to
perform such duties consistent with his position as may be assigned to him from
time to time by the Company's President. (He shall report directly to the
President of IDS). The Executive shall also serve without additional
compensation as an officer of the Company's Subsidiary, The Neptune Group, Inc.
The Executive shall devote his best efforts and his entire business time to
advancing the interests of the Company and its subsidiaries. He shall be
entitled to three (3) weeks vacation per year which must be used during the year
earned.
2. Term; Termination:
(a) This Agreement shall be effective as of July 1, 1996 and the term
hereof shall continue until June 30, 2001 (and shall be automatically renewed
for successive one year periods thereafter unless, at least 90 days before the
end of the initial term or any subsequent renewal period, either party gives
written notice to the other of his to its desire to terminate this Agreement, in
which case it shall terminate as of the end of such term period).
(b) This Agreement shall terminate upon the Executive's death and may
be terminated at the option of the Company if, as a result of any physical or
mental disability, the Executive is unable to perform his major duties hereunder
for a continuous period of 40 work days or at least 40 days in any consecutive
period of 180 days. The Executive shall continue to receive his full salary for
60 days under Section 3 hereof regardless of any illness or incapacity, unless
this Agreement is terminated. If the Executive's employment is terminated
pursuant to this Section 2(b), the Executive (or his personal representative, in
the case of death) shall be entitled to receive his full salary through the
effective date of termination and 60 days, thereafter; however, said amount
shall be reduced by any life or disability insurance proceeds the executive may
receive.
(c) This Agreement may also be terminated by the Company at any time
for "cause". "Cause" shall be defined as (i) the commission by the Executive of
an act of fraud or embezzlement, (ii) a felony conviction to a guilty plea by
the Executive with respect to a felony, (iii) willful misconduct by the
Executive as an employee of the Company or (iv) the substantial failure by the
Executive to render effective services to the Company in accordance with this
Agreement.
3. Compensation; Expenses; Benefits:
(a) As compensation for his services hereunder in whatever capacity
rendered, the Company shall pay the Executive a salary, payable in equal
semi-monthly installments at such times during the month as is customary with
the Company with respect to its Executives, at a rate of $100,000 per year. Such
salary shall be adjusted annually on July 1st of each year as agreed upon by the
Company's Board of Directors. Notwithstanding the foregoing, the salary for any
year shall not be less than the preceding year). In addition, the Executive
shall be entitled to such increases, bonuses or other
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payments as may be determined from time to time by the Board of Directors in its
discretion and, consistent with benefits provided for other executives, shall be
eligible to participate in any pension, profit sharing, incentive, retirement,
401-K or other employee benefit plans now or hereafter in effect for executives
for the Company. Additionally, the Executive shall receive term life insurance
in the amount of $50,000.
(b) The Executive shall also receive a sign-on bonus, stock warrants,
incentive bonus plan and stock option plan, during the term of this agreement,
as further described on attachment "A" attached hereto and made a part hereof.
(c) The Executive shall be entitled to reimbursement for his ordinary
and necessary business expenses incurred in the performance of his duties
hereunder provided that his claims therefor are supported by the documentation
required by the Company in accordance with its usual practice.
4. Covenants:
(a) The Executive shall not, during the term of his employment or at
any time thereafter, directly or indirectly, publish or disclose to any person,
firm or corporation or other entity, whether or not a competitor of the Company
or its subsidiaries, any confidential information concerning the assets,
business or affairs of the Company or its subsidiaries including, without
limitation, any trade secrets, sources of supply costs, pricing practices,
customer lists, financial data, employee information as to organizational
structure.
(b) During the term of his employment, the Executive shall not,
directly or indirectly, engage in or be interested in (as owner, partner,
shareholder, employee, director, officer, agent, consultant or otherwise), with
or without compensation, any business which is competitive with the business
being conducted by the Company (on the date hereof and at any time during the
term of the Executive's employment and extending for six months after the
termination of this agreement).
(c) During the term of his employment (and for one (1) year
thereafter), the Executive shall not, directly or indirectly, solicit or
contract any employee of the Company with a view toward inducing or encouraging
such employee to leave the employ of the Company for the purpose of being hired
by the Executive, an employer affiliated with the Executive or any competitor of
the Company.
(d) Any claims, actions, demands, or proceedings with respect to
compensation, benefits, ownership or other remuneration which the executive may
have or have had against its former employer, The Neptune Group, Inc. ("TNG") (a
Delaware Corporation), any of TNG's subsidiaries, Xxxxx Xxxxxxx and/or Xxxx
Xxxxxx are hereby released and discharged during the term of the Executive's
employment with the Company or its subsidiary; provided however, in the event
that the Executive's employment with the Company or its subsidiary is five (5)
years or more, any claims, actions, demands, or proceedings with respect to
compensation, benefits, ownership or other remuneration which the executive may
have or have had against its former employer, The Neptune Group, Inc. ("TNG") (a
Delaware Corporation), any of TNG's subsidiaries, Xxxxx Xxxxxxx and/or Xxxx
Xxxxxx are hereby released and forever discharged.
(e) The Executive acknowledges that the provisions of this Section 4 are
reasonable and necessary for the protection of the Company and that the Company
will be irrevocably damaged if such covenants are not specifically enforced.
Accordingly, the Executive agrees that, in addition to any other relief to which
the Company may be entitled in the form of actual or punitive damages, the
Company
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shall be entitled to seek and obtain injunctive relief from a court of competent
jurisdiction for the purposes of restraining the Executive from any actual or
threatened breach of such covenants.
5. Miscellaneous:
(a) Governing Law: This Agreement shall be governed by and
constructed in accordance with the laws of the State of Michigan.
(b) Notices: Any notice or other communication under this Agreement
shall be in writing and shall be considered given when delivered personally or
three (3) business days after mailing by U.S. registered mail, return receipt
requested, to the parties at the following addresses or at such other address as
a party may specify by notice to the other.
If to the Executive:
Xxxxxxxx Xxxxxxx
IDS' President:
Intelligent Decision Systems, Inc.
0000 Xxxxxxxx Xxx., XX., Xxxxx 000
Xxxxx Xxxxxx, XX 00000
(c) Entire Agreement Amendment: This Agreement, when it becomes
effective shall supersede all existing agreements between the Executive and the
Company relating to the terms of his employment. It may not be amended by a
written agreement signed by both parties.
(d) Waiver: The failure of a party to insist upon strict adherence to
any term of this Agreement on any occasion shall not be considered a waiver
thereof or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement.
(e) Assignment: Subject to the limitations below, this Agreement shall
inure to the benefits of and be binding upon the parties hereto and their
respective heirs, representatives, successors and assigns. This Agreement shall
not be assignable by the Executive, and shall be assignable by the Company only
to any corporation resulting from the reorganization, merger or consolidation of
the Company with any other corporation or any other corporation which the
Company may sell all or substantially all of its assets, and it must be so
assigned by the Company to, and accepted as binding upon it by such other
corporation, in connection with any such reorganization, merger, consolidation
or sale.
INTELLIGENT DECISION SYSTEMS, INC.
By: /s/ Xxxx X. Xxxxx EXECUTIVE:
Title: President By: /s/ Xxxxxxxx Xxxxxxx
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Attachment "A"
Compensation per person for five year Employment/Management contracts:
1. Sign-on Bonus $50,000 cash and 14,275 shares of IDS common stock
2. Stock Warrants: 90,000 warrants to purchase IDS common stock at a
strike price of $3.50 for a term of five years from
the effective date of this Agreement.
3. Incentive Bonus Plan: 5% of pre-tax income (net of operating expenses) of
which 50% is to be paid quarterly and the balance
is to be paid annually after the first $1,000,000 in
income is realized (this is calculated prior to Xxxxx
and Xxxx's per Vision System compensation,
consultant's fees and any other extraordinary
income or expenses created by or inherited from the
sale of the Company and/or its assets or liabilities).
4. Stock Option Plan: During the first fiscal year, 25,000 options to
purchase IDS common stock at an exercise price of
$3.50 (issuable immediately) and 25,000 options to
purchase common stock of IDS common stock (at market
when the option is issued) to be earned for each
1,000,000 generated in income, (this is calculated
prior to Xxxxx and Xxxx's per Vision System
compensation, consultant's fees and any other
extraordinary income or expenses) (or a pro rata
amount after the first $1 Million is met) in Neptune.
At the end of each fiscal year following the first
fiscal year 50,000 options to purchase IDS common
stock would be earned for each $1,000,000 generated
in income, (this is calculated prior to Xxxxx and
Xxxx's per Vision System compensation, consultant's
fees and any other extraordinary income or expenses)
(or a pro rata amount after the first $1 Million is
met) in Neptune. The exercise price for these options
will be set at the market price of IDS common stock
when the option is issued.
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