SAZTEC INTERNATIONAL, INC. FORM 10-KSB FOR JUNE 30, 1995 -- EXHIBIT 10.10
EMPLOYMENT AGREEMENT
THIS AGREEMENT dated as of the 1st day of January, 1995, by and between
XXXX X. XXXXXXXXX ("Employee") and SAZTEC INTERNATIONAL, INC., a California
corporation (the "Company").
1. EMPLOYMENT. Company agrees to employ Employee and Employee agrees to
serve Company as Chief Executive Officer for a three (3) year term commencing on
the day and year first set forth above and ending December 31, 1997. This
Employment Agreement shall be extended for additional terms of one (1) year
each, unless notice is given at least six (6) months prior to the end of the
original or any extended term hereof.
2. DUTIES. Employee will perform all the usual and customary duties of a
Chief Executive Officer, and other duties that may be assigned from time to
time. Employee will perform all of his work to his highest standards of skill,
competence, and efficiency; Employee will devote his full business time,
attention, and energy to Company exclusively (other than as specifically allowed
in writing by the Company); and Employee will give his best efforts and skill to
further the best interests of Company.
3. COMPENSATION.
(a) BASE SALARY. Employee's Base Salary will be at the rate of One
Hundred Twenty Thousand Dollars ($120,000) per annum for each year of the
three (3) year term which Base Salary shall be payable every two (2) weeks
in arrears. Annual increases in Employee's Base Salary shall be
determined, during the term hereof, by the Board of Directors of Company.
(b) INCENTIVE COMPENSATION. It is the intent of the Company that an
incentive compensation program shall be established with respect to
Employee, which shall provide performance criteria, pursuant to which, upon
achieving such criteria, or defined components thereof, Employee shall be
entitled to incentive compensation in an amount up to and equalling one-
third (1/3) of his then current Base Salary; provided, however, that if and
in the event that the title and duties of Employee are altered as set forth
in Section 4 below then raises in Base Salary and Employee's incentive
compensation shall be subject to the discretion of the Board of Directors
of Company.
(c) AUTOMOBILE EXPENSE. Employee will use an automobile in the
discharge of his duties under this Agreement and shall be entitled to a
Five Hundred Dollar ($500) per month car allowance to be paid to Employee
in addition to the Base Salary.
(d) RELOCATION LOAN. Employee will receive a relocation loan of
Twenty-five Thousand Dollars ($25,000) seven (7) days prior to the closing
of escrow on a permanent residence in the Boston area. The loan will be
interest-free, evidenced by a promissory note executed by Employee and
secured by a second deed of trust or mortgage (whichever is
applicable) on Employee's new permanent residence. The loan will be repaid
in five annual installments of Five Thousand Dollars ($5,000) with the
first installment due one year after the loan is made. Each annual payment
will be forgiven as long as Employee has not resigned as an employee of
Company. If Employee is terminated without cause, the entire unpaid
principal balance of such loan shall immediately be forgiven. If Employee
voluntarily resigns or is terminated for cause prior to the expiration of
the loan, the remaining balance will become fully payable upon the
effective date of the resignation or termination for cause, with interest
accruing from such date at the then prime rate as reflected in THE WALL
STREET JOURNAL.
(e) MOVING EXPENSES. Company agrees to pay Employee a one-time
moving expense allowance in the amount of Nine Thousand Dollars ($9,000) at
Employee's request after Employee establishes his new residence in the
Boston area which amount shall be paid in lieu of Employee's actual costs
of moving his household furnishings.
(f) STOCK OPTIONS. Company hereby grants Employee an option to
purchase 100,000 shares of common stock of Company pursuant to Company's
1995 Stock Option Plan adopted by Company's Board of Directors by
resolution dated December 9, 1994 at a price equal to Sixty-Two and One-
Half Cents (62.5 cents) per share, which options shall vest twenty percent
(20%) per year beginning on the day and year first set forth above and
continuing on each anniversary of this Agreement. The options granted
hereunder are subject to the Stock Option Agreement between the parties
incorporated herein by reference and attached hereto as EXHIBIT A.
(g) GRANT OF STOCK. Company agrees to grant, transfer and convey to
Employee, concurrently with the execution hereof, Eighty Thousand (80,000)
shares of stock of Company. All certificates representing such shares
shall be marked with a legend indicating that the stock is unregistered
stock subject to substantial restrictions on transferability. Certificates
representing one-half (1/2) of the shares of common stock shall be marked
with a legend indicating that the stock is subject to substantial risk of
forfeiture by Employee to Company in accordance with the terms and
conditions of this Agreement, which forfeiture provisions are set forth in
detail in the next paragraph hereof.
This grant of stock is subject to and forfeitable by Employee in the
event that Company fails to meet the following financial criteria which
shall be certified by Company's regularly retained independent accountants:
(i) CRITERIA #1: Company's consolidated pre-tax net income for
the first two quarters of the 1996 fiscal year, which quarters end
December 31, 1995, shall be greater than Seven Hundred Thousand
Dollars ($700,000).
(ii) CRITERIA #2: Company's consolidated pre-tax net income for
the second two quarters of the 1996 fiscal year, which quarters end
June 30, 1006, shall be greater than Seven Hundred Thousand Dollars
($700,000).
If Company meets both criteria then Employee's grant of stock under
this subparagraph shall be fully vested and nonforfeitable. One-half (1/2)
of the shares granted to Employee under this subparagraph shall be
forfeited and returned to Company if Company fails to reach 80% of either
Criteria #1 (i.e. 1996 FY (First Half) income less than $560,000) or 80%
of Criteria #2 (i.e. 1996 FY ( 2nd half) income less than $560,000). If
Company performs or achieves between 80% and 100% of either or both
criteria, the stock granted to Employee under this subparagraph shall be
forfeited and returned to Company as follows:
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SATISFACTION OF INCOME PERCENTAGE OF
CRITERIA #1 BETWEEN STOCK FORFEITED
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90% - 99% $630,000 - 7.5%
700,000
80% - 89% $550,000 - 15.0%
629,000
0% - 79% Less than 25.0%
$559,000
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SATISFACTION OF INCOME SHARES OF
CRITERIA #2 BETWEEN STOCK FORFEITED
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0% - 99% $630,000 - 7.5%
700,000
80% - 89% $560,000 - 15.0%
629,000
0% - 79% Less than 25.0%
$553,000
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(h) EXPENSES. The duties of employment may require that Employee
incur expenses for meals, lodging, travel and entertainment in the interest of
the business. Accordingly, the Company will reimburse Employee for all
reasonable expenses incurred by Employee in connection with the performance of
Employee's duties under this Agreement.
4. CHANGE OF TITLE; DUTIES. Company specifically reserves the right to
remove Employee from the position of Chief Executive Officer at any time after
December 31, 1995 if, and in the event that (i) Employee fails to meet the
financial criteria which have been agreed to by the parties as provided in
paragraph 3(g), and (ii) if the Board has concluded that changes are in the best
interest of Company; or (iii) for other good cause. In such event, Company may
employ a Chief
Executive Officer from outside of the Company or it may promote one from within
the Company, but under such circumstances Employee shall be appointed to a
senior management position with management responsibilities and with duties
commensurate with Employee's seniority, education and experience and Employee
shall continue to receive Employee's Base Salary as provided herein.
5. TERMINATION OF EMPLOYMENT. Company may terminate this Agreement
immediately ONLY for good cause in which case all of Employee's compensation
rights as set forth herein which have not vested, shall be terminated, and shall
be null and void, and of no further force or effect. Termination of this
Agreement by Company for any reason other than good cause shall be a breach
hereof by Company and Employee shall be entitled to all applicable rights and
remedies in connection therewith. For the purposes of this Agreement, good
cause shall be deemed to include, but shall not in any manner be limited to, the
following acts of Employee:
a) recurring absence from work without cause acceptable to the Board
of Directors of Company;
b) material breach of any provision of this Agreement;
c) repeated, material and wilful failure to communicate with the
Board of Directors of Company regarding the business of the
Company;
d) material, wilful failure to properly respond to and implement
appropriate, express directives of the Board of Directors of
Company;
e) any act of deceit, misrepresentation or dishonesty in the
discharge of Employee's duties;
f) improper use or diversion of Company funds to personal use;
g) indictment for a felony or involvement in any other act of moral
turpitude; and
h) improper use of drugs and/or alcohol.
Prior to any termination hereunder, Employee shall have reasonable notice
and right to cure, except for instances involving moral turpitude.
6. FRINGE BENEFIT AND HEALTH CARE PLANS. Employee shall be entitled to
participate in various incentive or "fringe benefit" plans offered by the
Company to its executive employees pursuant to the normal policies of the
Company, including vacation benefits, disability, life and other insurance
benefits and such participation shall not be deemed to reduce or affect the
compensation payable to Employee under this Agreement. Specifically, but not in
limitation of the foregoing, Company shall pay the full premium on Employee's
behalf for family coverage for Employee and Employee's family under Company's
Health Care Plan. In addition to such other fringe benefits, Employee's current
life insurance plan shall remain in place.
7. DEATH OR INCAPACITY. Employee's death shall result in automatic
termination of his employment hereunder. In the event of termination of
Employee due to death, illness or incapacity, the Company shall forgive the
relocation loan referred to in paragraph 3(d) of this Agreement and any stock
options or grants earned pursuant to paragraph 3(f) or 3(g) as of such date
shall be considered to have fully vested as of the date of termination.
8. BUSINESS CONDUCT. During Employee's employment by the Company,
Employee will not:
(a) wilfully act contrary to the best interests of the Company, its
parent, subsidiary, or affiliated companies, or its employees, in a manner
that has a direct, material, adverse impact upon Company;
(b) (other than as specifically allowed in writing by the Company)
engage in, or have any financial or other interest in, or render any
service in any capacity to any competitor, customer, or supplier of the
Company;
(c) solicit or encourage a customer of the Company to take its
business elsewhere; or
(d) (other than as specifically allowed in writing by the Company)
solicit or encourage a Company employee to work elsewhere.
9. EMPLOYEE NOT TO COMPETE WITH COMPANY. Employee agrees that:
(a) if Company terminates Employee for good cause at any time during
the term of this Agreement; or
(b) if Employee terminates employment with Company for any reason
during the term of this Agreement,
then for a period of one (1) year immediately following termination, Employee
will not engage or participate, directly or indirectly, in any business which is
in competition with the business conducted by Company on the date of termination
within the United States of America or the United Kingdom.
10. AGREEMENT OF NON-SOLICITATION. Employee further agrees that for a
period of one (1) year immediately following the termination described in
paragraph 9, Employee will not, directly or indirectly, or in concert with any
other person or persons, firm, corporation or other entity or in any other
manner, solicit, divert or handle or attempt to solicit, divert or handle any of
the past or present customers of Company regardless of where such customers
might be located or whether such customers are persons being placed for
temporary employment or companies requesting temporary personnel, with respect
to any business that consists of or relates or pertains in any way to the
business conducted by Company.
11. AGREEMENT OF NON-DISCLOSURE. Employee agrees that he will not at any
time impart to any competitor of Company or otherwise use for the purpose of
competing with Company any customer lists or other customer information or any
confidential information which he may have acquired as an officer, director or
shareholder of Company unless the same shall have otherwise become known to
competitors of Company.
12. EQUITABLE REMEDIES. It is recognized by the parties hereto that
irreparable damage will result to Company from any violation of paragraphs 9, 10
or 11 hereof by Employee. Therefore, Employee agrees that, in addition to any
and all other remedies available to Company, it shall have the remedy of
restraining order, injunction, and other equitable relief as may be declared or
issued by a court to enforce the provisions of said paragraphs, and Employee in
any such equitable proceeding agrees not to claim that a remedy at law is
available to Company.
13. CONSTRUCTION. It is agreed that the terms and provisions hereof are
severable, and that should any clause or provisions hereof be unenforceable or
be declared invalid for any reason whatsoever, this Agreement shall be construed
and read as if such invalid or unenforceable clause or provisions were omitted.
14. SAVINGS CLAUSE. Notwithstanding anything to the contrary herein
contained and if, and only if, provisions of the type contained in this
paragraph 14 are enforceable in the jurisdiction in question, if any one or more
of the provisions contained in Sections 9 or 10 of this Agreement shall for any
reason be held to be excessively broad as to time, duration, geographical scope,
activity or subject, said provisions shall be construed by limiting and reducing
them so as to be enforceable to the extent compatible with the applicable law as
it should then be determined.
15. COMPANY POLICIES. Employee will be subject to and will adhere to all
of the Company's policies applicable to the Company's employees generally
including, but not limited to, all policies relating to standards of conduct,
conflicts of interest, and compliance with the Company's rules and obligations.
Employee represents that he has no agreements with or obligations to others that
in any way conflict with any of his obligations contained in this Agreement.
16. RECOVERY OF EXPENSES. In the event a dispute arises with respect to
this Agreement, the party prevailing in such dispute shall be entitled to
recover all expenses including, without limitation, reasonable attorneys' fees
and expenses incurred in ascertaining such party's rights, in preparing to
enforce, or in enforcing such party's rights under this Agreement, whether or
not it was necessary for such party to institute suit.
17. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Massachusetts. Any claim arising
hereunder shall be heard in a court of competent jurisdiction in the State of
Massachusetts.
18. ENTIRE AGREEMENT; AMENDMENTS. This Agreement is intended to be a
complete and exclusive statement of the terms of the Agreement between the
parties, superseding all prior agreements, and may not be changed or terminated
orally. Subject to applicable law, this Agreement
may be amended only by a writing executed by all parties hereto. Waiver of any
part of this Agreement shall not constitute a waiver of any other part of this
Agreement and shall not operate as any future waiver of the same part.
19. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which, taken together, shall constitute one Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement the date
and year first set forth above.
COMPANY:
SAZTEC INTERNATIONAL, INC.,
a California corporation
By:
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Xxxxxx X. Xxxxx, Chairman
By:
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Xxxxx X. Xxxxx, Director
EMPLOYEE:
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Xxxx X. Xxxxxxxxx
