EXHIBIT 10.11
-------------
EMPLOYMENT AGREEMENT
AGREEMENT made as of June 2, 2004, by and between SWK TECHNOLOGIES,
INC., a Delaware corporation (hereinafter referred to as the "Company"), having
an office at 000 Xxxxxxx 00, Xxxxxxx, Xxx Xxxxxx 00000 and Xxxx Xxxxxx, with
offices at 000 Xxxxxxxxxx Xxxxxxx, Xxxxxxxxxx, XX 00000 and currently residing
at ********************************(hereinafter referred to as the "Executive").
W I T N E S S E T H :
WHEREAS, the Company desires to engage the services of the Executive,
and the Executive desires to render such services;
NOW, THEREFORE, in consideration of the premises, the parties agree as
follows:
1. Employment. The Company hereby employs the Executive as President,
and the Executive hereby accepts such employment, subject to the terms and
conditions hereinafter set forth.
2. Term. The term of the Executive's employment hereunder shall
commence on the date of execution of this Agreement and shall continue to
December 31, 2009 (the "Term") unless such Term is earlier terminated in
accordance with the provisions of this Agreement.
3. Duties. The Executive agrees that the Executive will serve the
Company on a full-time basis faithfully and to the best of her ability as the
President of the Company, subject to the general supervision of the Board of
Directors of the Company. The Executive agrees that the Executive will not,
during the term of this Agreement, engage in any other business activity which
interferes with the performance of her obligations under this Agreement and will
devote Executive's entire working time to the business and affairs of the
Company; provided, however, that the foregoing shall not be construed as
precluding the Executive from (i) serving on the board of directors of any
corporation not directly competitive or competitive in any material respect with
the Company, and (ii) investing or trading in securities or other forms of
investment, in each case, so long as such activities do not materially interfere
with the performance of the Executive's duties hereunder and such investments do
not represent the ownership of five percent (5%) or more of the capital stock of
publicly traded entities. Unless otherwise determined by the Company executive
shall have the title of President, and in such capacity shall have such
authority and duties as may be assigned by the Chief Executive Officer.
Performance of Executive's duties hereunder shall in no event require that
Executive relocate to any location outside the New York City metropolitan area.
4. Compensation.
(a) In consideration of the services to be rendered by the Executive
hereunder, including, without limitation, any services rendered by the Executive
as director of the Company or of any parent, subsidiary or affiliate of the
Company, the Company agrees to pay the Executive, and the Executive agrees to
accept fixed compensation at the rate One Hundred Forty Five Thousand
($145,000), subject to all required federal, state and local payroll deductions,
that shall increase on the anniversary date of January 1, 2005 and upon every
annual anniversary thereafter, at a rate equal to percentage of any increase in
the Consumer Price Index - All Consumers for the New York-Northeastern New
Jersey Region as reported by
the Bureau of Labor Statistics for the United States, as compared with the same
Consumer Price Index for the immediately preceding year.
(b) The Executive shall be entitled to 10 days vacation in 2004 and 20
days vacation during each calendar year thereafter. In the event that at the end
of any calendar year, the Executive has not used up to 10 days of her vacation
days for such year, Executive shall be paid an amount equal to her prorated
salary at the time such vacation time accrued each year by no later than January
31 of the following year. No compensation shall be paid for in excess of 10
unused vacation days in any calendar year for any calendar year.
(c) The Executive shall be entitled to such holidays, personal and sick
days in accordance with and subject to Trey's (as defined below) policies for
its own senior executives, as in effect from time to time.
(d) The Executive shall receive medical benefits substantially similar
to those provided by SWK, Inc. immediately prior to the date of this Agreement.
The Executive shall also receive either qualified retirement benefits or be made
a beneficiary under an incentive stock option plan.
(e) To the extent that the Executive becomes mentally or physically
disabled, Executive shall continue to receive her salary and other benefits
hereunder until the earlier of expiration of the term of this Agreement or the
termination of this Agreement pursuant to Paragraph 10 hereof; provided,
however, that such salary shall be reduced by any disability benefits Executive
receives from policies maintained and paid for by the Company.
(f) The Executive will receive a monthly car allowance of $715 until
such time as her existing car lease terminates, after which time she will
receive a monthly car allowance equal to $650 per month.
(g) By no later than March 1, 2005, the Company will use its
commercially reasonable efforts to obtain a policy of insurance on Executive's
life, which policy shall provide for $500,000 in death benefits. The
beneficiaries on such policy shall be the Company and Executive's estate and
such beneficiaries shall share equally in any proceeds of such policy. During
the Term, the Company will pay the reasonable premiums on any such policy and
use its commercially reasonable efforts to keep such policy in full force and
effect.
(h) An annual cash bonus will be paid to the Executive based upon the
operating income, if any, of the Company. The amount paid in the aggregate to
the Chief Executive Officer, President, and Chief Technical Officer as a group
will be based on the operating income (defined for this purpose as earnings
before interest, taxes, depreciation and amortization) of the Company and any
other Subsidiary of Trey for which the Company has responsibility for profits
and losses. The parent company of the Company, Trey Resources, Inc. ("Trey")
will not allocate any expenses of Trey to the Company including salaries of Trey
officers, Trey lease obligations, SEC expenses, investor relation or public
relation expense (unless the Company retains a public relations firm in the
ordinary course of its business), and/or professional expenses to the Company
associated with legal or audit fees related to Trey for the purpose of the
operating income computation. The Company will, however, pay directly for legal
expenses incurred in the ordinary course of the operation of its business, and
such fees shall constitute a reduction in operating income.
The formula for such bonus shall be as follows:
Year Bonus
Balance
Of 2004 15% of excess of operating income over $175,000
2005 15.75% of excess of operating income over $225,000
2006 16.54% of excess of operating income over $300,000
2007 17.37% of excess of operating income over $335,000
2008 18.24% of excess of operating income over $365,000
The Executive will be entitled to receive 25% of any bonus paid under the
formula, with the balance being paid to the other executives participating in
the bonus plan. Payment of the bonus will be made at such time that the Company
has sufficient cash reserves to make such payment. It is expressly understood
that Trey will not provide funds to the Company for the purpose of paying this
bonus.
(i) At the discretion of the Company's Board of Directors, the
Executive will be eligible for an additional bonus based upon successfully
completed merger and acquisition transactions. The payment of this bonus, which
shall be made in unregistered Class A Common Stock of Trey, is subject to the
approval of the Board of Directors from time to time.
(j) (i) In the event that the Company operates at a loss in fiscal year
2005 or any subsequent fiscal year covered by this Agreement, the Executive
agrees to immediately cut operating expenses for the following fiscal year by at
least 75% of the operating loss. Furthermore, at least 50% of the expense
cutbacks shall come from reduction of compensation of the employment contracts
of the Executive, Xxxx Xxxxxx, and Xxxxxxx Xxxx, in such proportion as they
decide amongst themselves. For example, if the Company has an operating loss of
$100,000, management will immediately cut expenses by at least $75,000. Of this
$75,000, at least $37,500 will come via a reduction of the compensation of the
Executive, Xxxx Xxxxxx, and Xxxxxxx Xxxx for the ensuing fiscal year.
(ii) In the event that the Company has an operating profit in the
ensuing fiscal year, the executives' compensation will be paid in accordance
with the terms of their employment agreement, as if the compensation reduction
in the previous year had never occurred.
5. Business Expenses.
Employee is authorized to incur, and the Company shall pay and
reimburse her for, all reasonable and necessary business expenses incurred in
the performance of her duties hereunder in accordance with guidelines adopted by
the Board of Directors. The Company will pay and reimburse Employee for all such
reasonable expenses upon the presentation by Employee, from time to time, of an
itemized account of such reasonable expenditures and proper documentation
thereof as evidence that such expenses have been incurred.
6. Termination by the Company for Cause.
Termination by the Company of the Executive's employment for cause
(hereinafter referred to as "Termination for Cause"), shall mean termination
upon:
i. the willful and continued failure by the Executive to
substantially perform the Executive's material duties with the
Company (other than any such failure resulting from the
Executive's incapacity due to physical or mental illness)
after a written demand for substantial performance is
delivered to the Executive by the Board, which demand
specifically identifies the material duties that the Board
believes that the Executive has not substantially performed,
or
ii. the willful engaging by the Executive in conduct that is
demonstrably and materially injurious to the Company,
monetarily or otherwise. For purposes of this Paragraph 6, no
act, or failure to act, on the Executive's part, shall be
deemed "willful" unless done, or omitted to be done, by the
Executive not in good faith and without reasonable belief that
the Executive's action or omission was in the best interest of
the Company, or the conviction of the Executive of a felony,
limited solely for a crime related to the business operations
of the Company, or that results in the Executive being unable
to substantially carry out her duties as set forth in this
Agreement, or
iii. the commission of any act by the Executive against the Company
that may be construed as the crime of embezzlement, larceny,
and/or grand larceny.
Any other provision in this paragraph to the contrary notwithstanding,
the Executive shall not be deemed to have been terminated for Termination for
Cause unless and until the Board duly adopts a resolution by the affirmative
vote of no less than two-thirds (2/3) of the entire membership of the Board, at
a meeting of the Board called and held for such purpose (after reasonable notice
to the Executive and an opportunity for the Executive, together with the
Executive's counsel, to be heard before the Board), finding that in the good
faith opinion of the Board, the Executive was guilty of conduct described in
Subparagraphs (i), (ii) or (iii) of this paragraph and specifying the
particulars thereof in detail and a certified copy of such resolution is
delivered to the Executive.
7. Termination by the Company Without Cause. If the Company terminates
Executive's employment other than for Cause pursuant to Section 6 or on account
of death or disability pursuant to Sections 9 or 10, the Company shall pay or
provide the Executive with, within thirty (30) days of the date of termination:
(i) any unpaid salary earned under this
Agreement prior to the date of termination; (ii) any accrued but unused vacation
prior to the date of termination; (iii) any unpaid bonus actually earned with
respect to the fiscal year ending on or preceding the date of termination; (iv)
any unpaid expense reimbursement owed to her for periods through the date of
termination; and (v) the Executive's Base Salary for the remainder of the Term,
except that if such termination occurs in the fifth year of the Term, an amount
equal to one (1) year of the Base Salary payable in such fifth year.
8. Termination by the Executive. The Executive may terminate her
employment hereunder for "Good Reason," within ninety (90) days of the
occurrence of any of the following events: (i) a material breach of this
Agreement by the Company; (ii) any failure to pay, within a reasonable amount of
time, any part of the Executive's compensation (including Base Salary and bonus)
or to provide the benefits contemplated herein; (iii) any material reduction or
diminution (except temporarily during any period of physical or mental
impairment) in the Executive's titles or primary job responsibilities with the
Company; or (iv) a change in control of the Company. The Executive shall give
the Company written notice of any proposed termination for Good Reason and the
Company shall have thirty (30) days from receipt of such written notice to cure
any ground of termination for Good Reason, as set forth in this Section. In the
event Executive terminates her employment for Good Reason, she shall not be
considered to be in breach of this agreement. In the event of Termination by
Executive for Good Reason, Company shall be obligated to pay to Executive that
compensation due as if Company had terminated Executive Without Cause pursuant
to Section 7 of this Agreement.
9. Termination Due to Death. In the event of the Executive's death
during the Term of this Agreement, the Executive's employment hereunder shall
immediately and automatically terminate, and the Company shall have no further
obligation or duty to the Executive or her estate or beneficiaries other than
for all earned but unpaid compensation through the date of termination, and
other than as required by applicable law.
10. Termination Due to Disability. The Company may terminate the
Executive's employment hereunder, upon written notice to the Executive, in the
event that the Executive becomes disabled during the Term through any condition
of either a physical or psychological nature and, as a result is, with
reasonable accommodation, unable to perform the essential functions of the
services contemplated hereunder for a period of one hundred eighty (180) days
during any twelve (12) month period during the Term. Any such termination shall
become effective upon mailing or hand delivery of notice, while the Executive
continues to be unable to perform the essential functions of the services
contemplated hereunder, that the Company has elected to exercise its right to
terminate under this Section 7, and the Company shall have no further obligation
or duty to the Executive other than for all earned but unpaid compensation
through the date of termination, and other than as required by applicable law.
For purposes of determining the Executive's disability, the existence or
nonexistence of a disability shall be conclusively determined by a physician to
be selected by the Executive and the Company in good faith.
11. Non-Disclosure of Confidential Information and Non- Solicitation
(a) The Executive acknowledges that the Executive has been informed
that it is the policy of the Company to maintain as secret and confidential all
information
(i) relating to the products, processes, designs and/or
systems used by the Company and its Affiliates and
(ii) relating to the customers and employees of the Company
and its Affiliates (all such information hereafter referred to as "confidential
information"), and the Executive further acknowledges that such confidential
information is of great value to the Company.
For purposes of this Agreement, "Affiliates" means any person or entity
or group of persons or entities acting together that, directly or indirectly,
through one or more intermediaries controls, or is controlled by or is under
common control with the Company.
The parties recognize that the services to be performed by the
Executive are special and unique, and that by reason of her employment by the
Company, the Executive has and will acquire confidential information as
aforesaid. The parties confirm that it is reasonably necessary to protect the
Company's (and its Affiliates') goodwill, and accordingly the Executive does
agree that the Executive will not directly or indirectly (except where
authorized by the Board of Directors of the Company for the benefit of the
Company):
A. At any time during her employment by the Company or after the
Executive ceases to be employed by the Company, divulge to any persons, firms or
corporations, other than the Company (hereinafter referred to collectively as
"third parties"), or use or allow or cause or authorize any third parties to
use, any such confidential information; and
B. At any time during her employment by the Company and for a period
of two (2) years after the Executive ceases to be employed by the Company,
solicit or cause or authorize directly or indirectly to be solicited, for or on
behalf of the Executive or third parties, any business from persons, firms,
corporations or other entities who were at any time within two (2) years prior
to the cessation of her employment hereunder, customers of the Company or its
affiliates; and
C. At any time during her employment by the Company and for a period
of two (2) years after the Executive ceases to be employed by the Company,
accept or cause or authorize directly or indirectly to be accepted, for or on
behalf of the Executive or third parties, any business from any such customers
of this Company or its affiliates ; and
D. At any time during her employment by the Company and for a period
of two (2) years after the Executive ceases to be employed by the Company,
solicit or cause or authorize directly or indirectly to be solicited for
employment, for or on behalf of the Executive or third parties, any persons
(excluding any individuals residing in the same immediate primary residence as
the Executive, and/or the Executive's immediate family) who were at any time
within one year prior to the cessation of his employment hereunder, employees of
the Company or its affiliates; and
E. At any time during her employment by the Company and for a period
of two (2) years after the Executive ceases to be employed by the Company,
employ or cause or authorize directly or indirectly to be employed, for or on
behalf of the Executive or third parties, any such employees of the Company or
its affiliates.
(b) The Executive agrees that, upon the expiration of her employment by
the Company for any reason, the Executive shall forthwith deliver up to the
Company any and all records, drawings, notebooks, keys and other documents and
material, and copies thereof in his possession or under his control which is the
property of the Company or which relate to any confidential information or any
discoveries of the Company.
(c) The Executive agrees that any breach or threatened breach by the
Executive of any provision of this Section 7 shall entitle the Company, in
addition to any other legal remedies available to it, to enjoin such breach or
threatened breach through any court of competent jurisdiction. The parties
understand and intend that each restriction agreed to by the Executive herein
above shall be construed as separable and divisible from every other
restriction, and that the unenforceability, in whole or in part, of any
restriction will not affect the enforceability of the remaining restrictions,
and that one or more or all of such restrictions may be enforced in whole or in
part as the circumstances warrant.
(d) For the purposes of this Section, the term "Company" shall mean and
include any and all subsidiaries, parents and affiliated corporations of the
Company in existence from time to time, for which the Company has operational
control.
12. Successors; Binding Agreement.
Neither this Agreement nor any right or interest hereunder shall be
assignable by the Executive, nor shall it be subject to attachment, execution,
pledge or hypothecation, but this Agreement if executive shall die shall inure
to the benefit of and be enforceable by the Executive's personal or legal
representative, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive should die during the term of this
Agreement, except to the extent otherwise provided in Section 4(g) hereof, no
amounts shall be paid to the Executive's devisee, legatee or other designee or,
if there is no such designee, to the Executive's estate.
13. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and such officer as may be specifically
designated by the Board. No waiver by either party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party that are not set forth in
this Agreement. Any payments provided for hereunder shall be paid net of any
applicable withholding required under federal, state or local law.
14. Severance and Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
15. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
16. Entire Agreement. This Agreement contains the entire understanding
of the parties with respect to the subject matter hereof, supersedes any prior
agreement between the parties, and may not be changed or terminated orally. No
change, termination or attempted waiver of any of the provisions hereof shall be
binding unless in writing and signed by the party to be bound; provided,
however, that the Executive's compensation and benefits may be increased at any
time by the Company without in any way affecting any of the other terms and
conditions of this Agreement, which in all other respects shall remain in full
force and effect.
17. Negotiated Agreement. This Agreement has been negotiated and shall
not be construed against the party responsible for drafting all or parts of this
Agreement.
18. Notices. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered personally or received by United
States registered or certified mail, return receipt requested, postage prepaid,
or by nationally recognized overnight delivery service providing for a signed
return receipt, addressed to the Executive at the Executive's home address set
forth in the Company's records and to the Company at the address set forth on
the first page of this Agreement, provided that all notices to the Company shall
be directed to the attention of the Board with a copy to counsel to the Company,
at Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxx X. Xxxxxxxxx, Esq., or to such other address as either
party may have furnished to the other in writing in accordance herewith, except
that notice of change of address shall be effective only upon receipt.
19. Governing Law and Resolution of Disputes. All matters concerning
the validity and interpretation of and performance under this Agreement shall be
governed by the laws of the State of New Jersey. Any dispute or controversy
arising under or in connection with this Agreement shall be settled exclusively
by arbitration in Newark, New Jersey in accordance with the rules of the
American Arbitration Association ("AAA") then in effect. Arbitration will take
place before a single experienced employment arbitrator licensed to practice law
in New Jersey and selected in accordance with the Employment Dispute Resolution
Rules of the American Arbitration Association. The arbitrator may not modify or
change this Agreement in any way. Any judgment rendered by the arbitrator as
above provided shall be final and binding on the parties hereto for all purposes
and may be entered in any court having jurisdiction. In any arbitration pursuant
to this Section 15, each party shall be responsible for the fees and expenses of
its own attorney and witnesses, and the fees and expenses of the arbitrator
shall be divided equally between the Company and the Executive. Nothing in this
Section 15 shall be construed to limited the availability of injunctive relief
in the form of a court ordered injunction in connection with an actual or
threatened violation of Section 7 hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
SWK TECHNOLOGIES, INC.
By:___________________________ Dated:______________________
Title:________________________
______________________________ Dated ______________________
Xxxx Xxxxxx
With respect to Sections 4(h) and 4(i), the undersigned acknowledges and accepts
its obligations.
TREY RESOURCES, INC.
By: __________________________ Dated ______________________
Title: _______________________
