Exhibit 10.81
XXXXXXXX TECHNOLOGIES, INC.
Employment Agreement
THIS EMPLOYMENT AGREEMENT ("Agreement"), effective as of April 2, 1999, by
and between XxxxxXxx Technologies, Inc., a Delaware corporation (the "Company"),
and Xxxxxx X. Xxxxx (the "Employee");
WHEREAS, the Company desires to continue the employment of the Employee
and the Employee desires to continue to be so employed by the Company;
NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which consideration are hereby acknowledged, the parties agree as
follows:
1. Employment
The Company hereby employs the Employee, and the Employee hereby
accepts employment with the Company, upon the terms and conditions hereinafter
set forth.
2. Duties
The Employee shall serve as President and Chief Executive Officer.
In such capacity, the Employee will report to the Board of Directors of the
Company and will perform such duties on behalf of the Company consistent with
such office as may be assigned to him from time to time by the Board of
Directors of the Company including, without limitation, (a) managing all aspects
of the Company as it enters and continues its major growth/commercialization
phase, (b) working with the Board of Directors to ensure that the best interests
of the Shareholders are met; and (c) working with the Chairman of the Board,
other members of the Board of Directors, corporate staff, and outside advisors
in support of their ongoing work with financing, corporate development, and any
regulatory issues which might arise, including, without limitation, those issues
regulated by the U.S. Securities Exchange Commission. The Employee agrees to
abide by the rules, regulations, instructions, personnel practices, and policies
of the Company and any changes therein which may be adopted from time to time by
the Board of Directors of the Company.
3. Term
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Unless sooner terminated as provided in Section 7 and subject to
Section 7, the term of the Employee's employment under this Agreement will be
three (3) years from the date first above written (such period, as it may be
extended, is referred to in this Agreement as the "Employment Period"). On April
2 of each calendar year during the Employment Period the term of this Agreement
and the Employment Period shall automatically be renewed for the three (3) year
period beginning on that April 2 unless either party gives written notice to the
other party prior to that April 2 of its intention that this Agreement not renew
in which case this Agreement shall terminate on the date which is two (2) years
less one (1) day after the April 2 which follows receipt of that written notice.
During such two (2) year period, Employee shall be required to continue to
perform his duties hereunder unless the parties agree otherwise.
4. Extent of Services
During the term of his employment, the Employee shall devote his
full time and best efforts to the performance of his duties under this
Agreement. Under no circumstances will the Employee knowingly take any action
contrary to the best interests of the Company.
5. Compensation
In consideration of his employment and the services rendered by the
Employee under this Agreement, the Company shall pay the Employee compensation
as follows:
5.1 Base Salary. A base salary ("Base Salary") of Two Hundred Thirty
Thousand Dollars ($230,000.00) per year during the Employment Period, payable in
accordance with the Company's ordinary payroll practices. Any increases in Base
Salary shall be in the sole discretion of the Board of Directors.
5.2 Deferred Compensation. The Company shall guarantee the payment
of Fifty Thousand Dollars ($50,000.00) in respect only of the Company's 1999
fiscal year ("Deferred Compensation"). The Deferred Compensation shall be paid
by the Company to Employee in equal quarterly payments during the year.
5.3 Payment in Stock. At Employee's sole option, Employee may elect,
by giving written notice to the company, to receive any amount of Base Salary,
Deferred Compensation, or expense reimbursement (as provided in Section 6.2 of
this Agreement) in the form of Company stock at a per share price equal to the
market price of such stock on the date any such amount becomes due and payable
by Company to Employee.
5.4 Incentive Compensation. In the event the net income before taxes
("NIBT") of the Company, on a consolidated basis, is (a) greater that $0, then
the Company shall pay Employee an incentive equal to five percent (5%) of the
amount by which NIBT exceeds $0 up to a maximum incentive under this clause (a)
of $50,000, plus (b) if NIBT is greater than $1,000,000.00, an additional
incentive equal to seven and five-tenths percent (7.5%) of the
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amount by which NIBT exceeds $1,000,000.00 up to a maximum incentive under this
clause (b) of $75,000.00, plus (c) if NIBT is greater than $2,000,000.00, an
additional incentive equal to two and five-tenths percent (2.5%) of the amount
by which NIBT exceeds $2,000,000.00.
5.5 Current Stock Options. The term of the Employee's current Stock
Option Agreement with the Company shall continue until the earlier termination
of this Agreement or the Stock Option Agreement. All current options ("Current
Options") are listed on Appendix A.
5.6 New Stock Options. In addition to any other stock options
previously granted by the Company to the Employee, the Company and Employee
shall enter into an additional Stock Option Agreement whereby the Company shall
grant to Employee additional options ("New Options") to purchase up to a maximum
of 385,000 shares of the Company's common stock. New Options shall vest (a) in
equal proportions over a period of seven years from the date of grant and (b)
irrespective of the schedule required by clause (a) of this Section, all Current
Options and all New Options (collectively "Options") shall vest and be
exercisable by Employee immediately prior to any transaction or series of
sequenced events in which all or substantially all of the Company's assets or
common stock are sold to a third party or third parties or are committed to be
sold to a third party or third parties as evidenced by the execution by the
Company and the third party or third parties of a letter or memorandum of
intent.
6. Other Benefits
6.1 Additional Compensation and Benefits. The Employee shall be
entitled to receive the same health, disability and other benefits as are
offered by the Company to all full-time employees from time to time. The
Company, at its expense, shall obtain the following:
(a) "keyman" insurance under which benefit payments shall be
payable to the Company;
(b) an insurance policy on Employee's life in the minimum
benefit amount of $1,500,000.00 ("Life Insurance") which benefit payments shall
first be used by the Company to purchase from Employee's estate up to a maximum
of $1,500,000 of the Company's common stock held by Employee's estate calculated
at the market price of the Company's common stock in effect at the close of the
market on the date the Company receives payment of the benefit amount from the
insurer; and
(c) officers' and directors' errors and omissions insurance in
respect of Employee's tenure as an officer and, when so elected, as a director
of the Company.
6.2 Life Insurance. Upon the expiration of the Employment Period as
provided in Section 3 or the termination of this Agreement in accordance with
Sections 7.1(a) or 7.2, Employee, at his sole option and expense, may elect to
continue in force the Life Insurance in which event the benefits payable
thereunder shall be used as described in Section 6.1(b) with the exception that
any insurance benefits paid, if any, which are in excess of the amount required
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to purchase the common stock held by Employee as described in Section 6.1(b)
shall be for the benefit of the Employee's estate. The Company shall provide
whatever non-monetary assistance it can in expediting the payment of benefits
pursuant to the Life Insurance. The provisions of this Section 6.2 shall survive
the termination of this Agreement only when terminated pursuant to Sections 3,
7.1(a), or Section 7.2.
6.3 Expenses. The Company will, upon substantiation thereof,
reimburse Employee for all reasonable expenses of types authorized by the Board
of Directors of the Company in the ordinary course of business and incurred by
the Employee in connection with the Company's business affairs. The Employee
must regularly submit, for approval by the Chief Financial Officer of the
Company, a statement of these expenses and will comply with such other
accounting and reporting requirements as the Company may from time to time
establish.
6.4 Car Allowance. The Employee shall receive a car allowance in the
amount of $600.00 per month.
7. Termination
7.1 By the Company. The Company may terminate the Employee's
employment with the Company (a) in accordance with the provisions of Section 3
of this Agreement, (b) at any time without notice for "cause", as defined below,
(c) at any time without cause upon thirty (30) days' advance notice, subject to
Section 7.4 below and subject to the requirement that the Company pay to the
Employee the amount set forth in Section 7.4 herein, (d) upon the death of the
Employee, or (e) in the event of the Employee's disability preventing him from
rendering services to the Company consistent with his duties hereunder for a
period of six (6) consecutive months.
7.2 By the Employee. The Employee may terminate his employment with
the Company in accordance with the provisions of Section 3 or at any time upon
one hundred and twenty (120) days' advance notice.
7.3 Cause. For the purposes of this Section 7, "cause" means:
(a) engaging in any crime or offense involving money or other
property of the Company, or
(b) conviction of a felony, or
(c) continuing, repeated willful failure or refusal to perform
specific written directives of the Company's Board of Directors consistent with
the Employee's duties after notice that such failure will be deemed to
constitute cause for termination and a reasonable opportunity to cure such
failure or refusal, or
(d) excessive absenteeism, or
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(e) owning, engaging in, conducting, managing, operating,
participating in, being employed by, being connected in any manner whatsoever
with, or rendering services or advice to (whether for compensation or without
compensation), any other person or business entity which is engaged in the same
business as conducted by the Company at the time, provided that nothing shall
restrict the Employee's right to invest in the securities (not to exceed 1% of
the outstanding securities of any class) of any publicly-held corporation in the
management of which the Employee does not participate.
7.4 Amounts Payable Upon Termination. Upon termination of the
Employee's employment with the Company in accordance with clause (a), (b), (d)
or (e) of Section 7.1, all compensation and benefits under this Agreement will
cease, effective the date of termination. Upon termination of the Employee's
employment with the Company in accordance with clause (c) of Section 7.1, all
compensation under Sections 5.2, 5.3, 5.4, 5.5, and 5.6 shall cease, effective
upon the date of termination, but the Employee shall receive, for one year from
the date of Employee's notice of termination given pursuant to Section 7.1(c)
the following: (i) Base Salary at the same salary rate being paid on the date of
termination and (ii) the benefits described in Section 6. Other than as
specifically set forth in Sections 6.2, 7.1, and this Section 7.4, the Employee
will not be entitled to receive any compensation or benefits after termination
of his employment with the Company.
8. Non-Disclosure: Non-Competition
8.1 Proprietary Information.
(a) The Employee agrees that all information and know-how,
whether or not in writing, of a private, secret or confidential nature
concerning the Company's business or financial affairs (collectively,
"Proprietary Information") is and will be the exclusive property of the Company.
By way of illustration, but not limitation, Proprietary Information includes
contemplated or planned marketing, sales, advertising, or public relations
plans, methods or techniques; inventions, products, projects, developments,
compositions, plans, research data, financial data, manufacturing processes or
techniques, trade secrets, personnel data, computer programs, designs, and
client and supplier lists, whether or not copyrightable, trademarketable or
licensable. The Employee will not disclose any Proprietary Information to others
outside the Company or use the Proprietary Information for any unauthorized
purposes without written approval by an officer of the Company, either during or
after his employment, unless and until such Proprietary Information has become
public knowledge without the fault of the Employee.
(b) The Employee agrees that all files, letters, memoranda,
reports, records, data sketches, drawings, notebooks, notes, specifications,
programs, computer program listings, or other written photographic, or other
tangible material containing Proprietary Information, whether created by the
Employee or others, which comes into his custody or possession, is the exclusive
property of the Company, to be used by the Employee only in the performance of
his duties for the Company.
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(c) The Employee agrees that his obligation not to disclose or
use information, know-how and records of the types set forth in Paragraphs (a)
and (b) above also extends to such types of information, know-how, records and
tangible property of customers of the Company or suppliers to the Company or
other third parties who may have disclosed or entrusted the same to the Company
or to the Employee in the course of the Company's business.
8.2 Developments.
(a) The Employee will make full and prompt disclosure to the
Company of all inventions, improvements, ideas, concepts, approaches,
discoveries, methods, developments, software, and works of authorship, whether
or not copyrightable, trademarketable or licensable, which are created, made,
conceived or reduced to practice by the Employee or under his direction or
jointly with others in connection with his employment by the Company, whether or
not during normal working hours or on the premises of the Company (all of which
are collectively referred to in this Agreement as "Developments").
(b) The Employee agrees to cooperate fully with the Company,
both during and after his employment with the Company, with respect to the
procurement, maintenance and enforcement of patents, copyrights, and trademarks
(both in the United States and foreign countries) relating to Developments. When
requested by the Company, Employee agrees to sign all papers, including, without
limitation, copyright applications, trademark applications, patent applications,
declarations, oaths, formal assignments, assignments of priority rights and
powers of attorney, which the Company, in its sole discretion, may deem
necessary or desirable in order to protect its rights and interest in any
Development.
8.3 Non-Competition.
(a) During the Employment period and for a period of two years
after Employee's employment is terminated, for any reason, by the Company or the
Employee, the Employee will not, without the Company's prior written approval,
directly or indirectly:
(i) recruit, solicit or knowingly induce, or attempt to
induce, any employee or consultant of the Company to terminate his or her
employment or consulting relationship with, or otherwise cease his relationship
with, the Company, or
(ii) solicit, divert or take away, or attempt to divert
or to take away, the business or patronage of any of the clients, customers or
accounts, or prospective clients, customers or accounts of the Company. For
purposes of this Agreement, a prospective client, customer or account is any
individual or entity whose business is solicited by the company, proposed to be
solicited by the Company, or who approaches the Company, with respect to
possibly become a client, customer or account during the Employment Period; or
(iii) engage (whether for compensation or without
compensation) as an individual proprietor, partner, stockholder, officer,
employee, director, joint
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venturer, investor, lender, or in any other capacity whatsoever (otherwise than
as the holder of not more than one percent (1%) of the total outstanding stock
of a publicly-held company), in any business activity which competes with any
business then being conducted by the Company or any business proposed to be
conducted by the Company at the time of the termination of the Employee's
employment with the Company.
(b) If any restriction set forth in this Subsection 8.3 is
found by any court of competent jurisdiction to be unenforceable because it
extends for too long a period of time or over too great a range of activities or
in too broad a geographic area, it shall be interpreted to the extent only over
the maximum period of time, range of activities or geographic areas to which it
may be enforceable.
(c) The restrictions contained in this Subsection 8.3 are
necessary for the protection of the business and goodwill of the Company and are
considered by the Employee to be reasonable for these purposes. The Employee
agrees that any breach of this Subsection 8.3 will cause the Company substantial
and irrevocable damage and, therefore, in the event of any such breach, in
addition to such other remedies which may be available, the Company will have
the right to seek equitable remedies, including, without limitation, specific
performance and injunctive relief.
8.4 Survival of Obligations. The obligations of the Employee under
this Section 8 shall survive the termination of this Agreement.
9. Notices
All notices under this Agreement must be in writing and must be
delivered by hand or mailed by certified or registered mail, postage prepaid,
return receipt requested, to the parties as follows:
If to the Company: XxxxxXxx Technologies, Inc.
0 Xxxxxxx Xxxx, Xxxxxxxx X.
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
with a copy to: Xxxx X. Xxxxxx, Xx., Esquire
Xxxxx and Xxxxxx LLP
00 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
If to the Employee: To the address set forth below the signature of
the Employee;
or to such other address as is specified in a notice complying with this Section
9. Any such notice is deemed given on the date delivered by hand or three days
after the date of mailing.
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10. Other Agreements
The Employee hereby represents that he is not bound by the terms of
any agreement with any previous employer or other party to refrain from
competing, directly or indirectly, with the business of such previous employer
or any other party. The Employee further represents that his performance of all
the terms of this Agreement and as an employee of the Company does not and will
not breach any agreement to keep in confidence proprietary information,
knowledge or data acquired by him in confidence or in trust prior to his
employment with the Company.
11. Miscellaneous
11.1 Entire Agreement. This Agreement constitutes the entire
Agreement between the parties with regard to the subject matter hereof,
superseding all prior understandings and agreements, whether written or oral and
including, without limitation, the employment agreement between the parties
dated ______________ which is of no further force and effect in respect of the
period after April 1, 1999.
11.2 Modification. This Agreement may not be amended or revised
except by a writing signed by the parties.
11.3 Successors and Assigns. This Agreement is binding upon and
inures to the benefit of both parties and their respective successors and
assigns, including any entity with which or into which the Company may be merged
or which may succeed to its assets or business, although the obligations of the
Employee are personal and may be performed only by him.
11.4 Captions. Captions have been inserted in this Agreement solely
for convenience of reference, and in no way define, limit or affect the scope or
substance of any provision of this Agreement.
11.5 Severability. The provisions of this Agreement are severable,
and the invalidity of any provision shall not affect the validity of any other
provision. In the event that any court of competent jurisdiction determines that
any provision of this Agreement or the application thereof is unenforceable
because of its duration or scope, the parties agree that the court in making
such determination shall have the power to reduce the duration and scope of such
provision to the extent necessary to make it enforceable, and that the Agreement
in its reduced form is valid and enforceable to the full extent permitted by
law.
11.6 Governing Law. This Agreement is to be construed under and
governed by the laws of the Commonwealth of Massachusetts. Any dispute arising
hereunder shall be heard by a court in Boston, Massachusetts.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
XXXXXXXX TECHNOLOGIES, INC.
By:_________________________________________
Xxxxxxx X. Xxxxxxx
Chairman of the Board of Directors
By:_________________________________________
Xxx Xxxx
Chairman of the Compensation Committee
EMPLOYEE
____________________________________________
Xxxxxx X. Xxxxx
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APPENDIX A
Stock Options Granted to Employee
Prior to the Date of this Employment Agreement
END OF APPENDIX A
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