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EXHIBIT 10.8
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of the 1st day of January, 1998
between OPTICAL TECHNOLOGY GROUP, INC. D/B/A OTG SOFTWARE (the "Corporation")
and F. XXXXXXX XXXXX (the "Executive").
WHEREAS, the Corporation desires to have the full time services of
Executive and Executive is desirous and willing to so serve the Corporation; and
WHEREAS, for the purpose of establishing the terms and conditions of
Executive's service for the Corporation and the respective rights and
obligations of the Executive and the Corporation, the parties wish to amend and
supersede their prior agreement by entering into this Agreement.
NOW THEREFORE, in consideration of the above premises and the mutual
covenants and conditions contained herein, the parties agree as follows:
1. EMPLOYMENT
1.1 Employment and Title. The Corporation agrees to employ Executive as
Executive Vice President, and Executive hereby accepts such employment and
agrees to perform the services specified herein upon the terms and conditions
hereinafter set forth. Employment under the terms hereof shall begin January 1,
1998 (the "Effective Date").
1.2 Duties. Executive shall perform managerial duties and shall
otherwise perform all duties reasonably necessary and commensurate with the
positions of Executive Vice President.
1.3 Extent of Service. Executive shall be a full-time employee, and
shall, during customary reasonable business hours, devote his full time,
attention and energy to the business of the Corporation.
1.4 Term of Employment and Termination
1.4.1 Term. This Agreement shall commence on the Effective
Date, and shall continue for a three year term; and shall automatically renew
for consecutive one-year terms unless terminated by either party pursuant to
written notice provided to the other party not less than 30 days prior to the
expiration of the then-effective term. Notwithstanding the foregoing, Executive
and/or the
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Corporation may terminate Executive's employment with the Corporation, as
otherwise set forth below.
1.4.2 Termination by the Corporation with Cause. The
Corporation may terminate Executive with and for cause should Executive
willfully breach or repeatedly breach the restrictions, obligations or duties
which he is required to satisfy or perform under this Agreement, or engage in
any of the acts specified in Exhibit A hereto. Executive's termination for cause
hereunder shall be effective 5 days following receipt by Executive of written
notice of termination with the reason for termination specified therein.
1.4.3. Termination by the Corporation without Cause. The
Corporation may terminate Executive without cause provided the Corporation
delivers to Executive written notice thereof 90 days prior to the actual date of
termination. In the event Executive is terminated without cause, Executive shall
be paid a severance amount equal to six months of Executive's then current Base
Salary, payable over a six month period commencing on the 91st day following
Executive's receipt of the above written notice of termination without cause.
1.4.4 Termination by Executive. The Executive may terminate
this Agreement upon providing the Corporation with 90 days prior written notice
thereof.
2. COMPENSATION
2.1 Base Salary. As base salary compensation for services rendered
under this Agreement, Executive shall receive through December 31, 1998, a
salary in the amount of $125,000 (the "Base Salary"). The Base Salary shall be
paid to Executive in the ordinary pay period installments currently utilized by
the Corporation. The Base Salary amount shall be reviewed and subject to change
annually at the commencement of each calendar year.
2.2 Bonus Compensation. ln addition to the Base Salary, Executive shall
receive a bonus equal to 33.33% of Base Salary payable in equal monthly amounts.
Executive's bonus compensation shall be reviewed and subject to change annually
at the commencement of each calendar year.
2.3 Initial Public Offering Bonus. In the event that at any time before
May 1, 1999 the Corporation, or any successor or affiliated entity, should
effectively register and file with the Securities & Exchange Commission a
registration statement pursuant to the Securities Act of 1933, as amended,
whereby securities of the Corporation (or a successor entity) are sold to the
public for a minimum of $20,000,000 in aggregate proceeds (the "IPO"), Executive
shall receive an IPO
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bonus in the amount of $100,000. In the event that the Corporation, or any
successor or affiliated entity, does not effect an IPO by May 1, 1999,
Executive's IPO bonus shall be reviewed and subject to change but in no event
shall such bonus be less than the above $100,000. This IPO bonus shall be
payable to Executive as soon as possible following the closing of the IPO
transaction. Executive's IPO bonus shall be payable in one lump cash sum or in
registered, publicly tradeable securities, or any combination of the two, as
desired by Executive.
2.4 Stock Option/Employee Equity Plans. Executive shall participate in
the Corporation's to-be-established Employee Stock Option/Employee Equity Plan
or Plans (the "Plan(s)") as determined by the Corporation's Board of Directors
and/or the appropriate Corporation committee charged with the responsibility of
administering the Plan(s).
2.5 Other Benefits
2.5.1 Paid Vacation. Executive shall be entitled to two weeks
paid vacation per year or such other reasonable vacation time as agreed upon by
Executive and the Corporation, or as otherwise provided pursuant to established
policies of the Corporation.
2.5.2 Health Insurance. During the term of this Agreement, the
Corporation shall pay all premiums for health insurance for Executive and his
family.
2.5.3 Expense Reimbursement. Upon submission of appropriate
written expense reports, receipts or other substantiating evidence, Executive
shall be entitled to reimbursement for all expenses incurred by Executive in the
performance of his duties hereunder and/or the furtherance of the Corporation's
business, including reimbursement for cellular/mobile phone expenses.
2.5.4 Other Benefits. Executive shall be entitled to and
receive all other benefits and privileges offered to other senior executives of
the Corporation.
3. PROTECTION OF CONFIDENTIAL INFORMATION
3.1 Executive recognizes and acknowledges that he will have access to
confidential, proprietary and/or sensitive business information, including but
not limited to actual and potential customer information, marketing information,
financial information, techniques, proprietary data and trade secrets of the
Corporation (hereinafter all forms of information referenced above shall
collectively be referred to as "Protected Information"); and that such Protected
Information constitutes valuable, special, and unique property of the
Corporation.
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3.2 During or after the term of his employment by the Corporation,
Executive will not make any unauthorized use of, will not disclose and will
maintain in secrecy and in confidence, as the secret and sole property of the
Corporation, the Protected Information. Executive will not, in any event,
disclose or use any Protected Information unless Executive receives specific
permission from the CEO of the Corporation to disclose or use such Protected
Information; and Executive will disclose or use such information only as
directed or permitted by the Corporation. Upon termination of his employment for
any reason, Executive shall promptly deliver to the Corporation all documents,
computer software, drawings, manuals, letters, notes, notebooks, reports and all
other material and records of any kind pertaining to Protected Information which
have been acquired by Executive during the term of his employment.
3.3 Executive acknowledges that a breach of the terms of this Section 3
will cause immediate and irreparable harm to the Corporation, and money damages
may not be sufficient to compensate the Corporation for a breach. In the event
of a breach or threatened breach of the provisions of this Section 3, the
Corporation shall be entitled to an injunction restraining Executive from
disclosing and/or using, in whole or in part, such Protected Information.
Nothing contained herein shall be construed as prohibiting the Corporation from
pursuing any other remedy for such breach or threatened breach, including the
recovery of damages from Executive.
3.4 The provisions of this section shall survive any termination of
Executive's employment.
4. NON-COMPETITION
4.1 During the term of his employment with the Corporation, and for a
period of two years immediately following the termination of his employment for
any reason whatsoever, or, if Executive's employment with the Corporation has
been for a shorter period than two years, for a time period equal to Executive's
employment period with the Corporation (such two year or shorter employment
period being hereinafter referred to as the "Restrictive Period"), Executive
will not either directly or indirectly be connected with the management,
operation or control of any Conflicting Organization (as defined in Section
4.1.1) doing business within 500 miles of any of the Corporation's operating
offices.
4.1.1 "Conflicting Organization" means any person or
organization which is engaged in or is about to become engaged in research on or
the development, production, marketing or sale of any Conflicting Product or
Service.
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"Conflicting Product or Service" means any product or service of any person or
organization which is the same as or similar to or improves upon a product or
service of the Corporation about which Executive acquired Protected Information
as a result of employment by the Corporation.
4.2 During the term his employment with the Corporation and during the
Restrictive Period, Executive's obligations under subparagraph 4.1 shall
specifically include but not be limited to the agreement by Executive not,
either directly or indirectly, to call on or solicit, or to attempt to call on
or solicit, in any manner which could have the effect of taking away, or
attempting to take away, any of the customers of the Corporation with whom he
became acquainted during his employment with the Corporation, either for himself
or for any other person, firm, corporation or other entity. The term "customer"
shall include, but not be limited to, both existing and prospective customers
during the term of Executive's employment.
4.3 During the term of his employment with the Corporation and for a
two year period following Executive's termination of his employment with the
Corporation, Executive shall not, either directly or indirectly, enter into an
agreement with, or solicit or offer employment to, employees of the Corporation
for the purpose of causing them to leave the employment of the Corporation.
4.4 The provisions of this Section 4 shall survive any termination of
this Agreement. Executive acknowledges that a breach of the terms of this
Section 4 will cause immediate and irreparable harm to the Corporation, and
money damages may not be sufficient to compensate the Corporation for a breach.
In the event of a breach or threatened breach of the provisions of this Section
4, the Corporation shall be entitled to an injunction restraining or mandating
action by Executive to enforce the terms hereof; and nothing contained herein
shall be construed as prohibiting the Corporation from pursuing any other remedy
for such breach or threatened breach, including the recovery of damages from
Executive.
5. NO ASSIGNMENT
Neither Executive nor the Corporation may assign their rights or
obligations hereunder.
6. INVENTIONS/DESIGNS/IMPROVEMENTS
6.1 Executive recognizes and acknowledges that during the course of his
employment, he may either individually or jointly with others, and either on
behalf
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of the Corporation or on his own, discover, conceive, make, perfect or develop
inventions, improvements, discoveries, patents, patent applications, design
patents, models, prototypes, trade secrets, computer programs, ideas,
techniques, know-how and data, technical or otherwise, that are related to or in
furtherance of the business or activities of the Corporation (hereinafter
collectively referred to as "Inventions"). Inventions which are related to or in
furtherance of the business or activities of the Corporation include any
business or activity in progress at the Corporation at the date of or during
Executive's employment with the Corporation and projects or other operations at
the Corporation planned for the future.
6.2 Executive further recognizes and agrees that any and all
Inventions, including all rights in patents, patent applications, design
patents, models, prototypes, copyrights, registrations, trade secrets and any
and all right, title and interest that he might have therein, are the sole and
exclusive property of the Corporation. Executive agrees that any participation
by Executive in the design, discovery, conception, production, perfection,
development or improvement of an Invention by Executive is work done for hire
for the sole and exclusive benefit of the Corporation; and Executive hereby
assigns to the Corporation all of his rights, title and interest in and to any
and all Inventions. Executive's obligations under this Section 6 apply without
regard to whether the Invention or an idea for an Invention, or the design,
discovery, conception, production, perfection, development or improvement of an
Invention, occurs on the job, at home, or elsewhere.
6.3 Executive also agrees to disclose and does hereby assign to the
Corporation any and all Inventions conceived, made, perfected or developed, and
any and all patent and copyright applications filed, during the six months
immediately subsequent to the termination of his employment, whether such
applications are made individually or jointly with others, so long as those
applications relate to the subject matter of Executive's employment on behalf of
the Corporation during the one-year period immediately preceding termination of
said employment.
6.4 At the Corporation's request, from time to time, Executive shall
promptly sign and deliver all documents necessary to vest in the Corporation all
of his right, title and interest in and to such Inventions and, at the
Corporation's request and expense, shall assist the Corporation in obtaining and
defending any patents, or copyright registrations, or any other form of
protection accorded to such Inventions in the United States or anywhere
throughout the world, and shall assign the same and any patents issued thereon
or copyright or registrations granted thereon, to the Corporation.
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6.5 Executive acknowledges that a breach of the terms of this Section 6
will cause immediate and irreparable harm to the Corporation, and money damages
may not be sufficient to compensate the Corporation for a breach. In the event
of a breach or threatened breach of the provisions of this Section 6, the
Corporation shall be entitled to an injunction restraining or mandating action
by Executive to enforce the terms hereof; and nothing contained herein shall be
construed as prohibiting the Corporation from pursuing any other remedy for such
breach or threatened breach, including the recovery of damages from Executive.
7. MISCELLANEOUS
7.1 Governing Law. This Agreement shall be subject to and governed by
the internal laws of the State of Maryland without regard to its conflict of
laws provisions, and without regard to the place of execution or the place of
performance thereof.
7.2 Waiver. Failure to insist upon strict compliance with any provision
hereof shall not be deemed a waiver of such provision or any other provision
hereof.
7.3 Amendment. This Agreement may not be modified or amended except by
an agreement in writing executed by the parties hereto.
7.4 Severability. If any one or more of the provisions contained in
this Agreement shall, for any reason, be held to be excessively broad as to
time, duration, geographical scope, activity, or subject, it shall be construed
by limiting and reducing it so as to be enforceable to the extent compatible
with the applicable law. If any provision of this Agreement is contrary to any
federal, state, or local statute, ordinance, or regulation, the parties hereby
declare that such provision shall be amended to conform to any such statutory or
regulatory provision; and the invalidity or unenforceability of any provision
hereof shall not affect the validity or enforceability of any other provision.
The remaining provisions shall remain in full force and effect as if the
Agreement had been executed with the invalid or unenforceable provisions
eliminated.
7.5 Entire Agreement. This Agreement, together with Exhibit A hereto,
constitutes the entire understanding between the Corporation and Executive with
respect to the subject matter hereof, and supersedes any and all previous
agreements and understandings between Executive and the Corporation concerning
the subject matter hereof.
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7.6 Non-Disclosure. Executive shall not disclose or confirm to any third
party the existence of, or any material term contained in, this Agreement (other
than disclosure and discussion with legal counsel which is permitted); and any
such disclosure, if due to the Executive's willful act or gross negligence,
shall subject the Executive to termination for cause pursuant to Section 1.4.2.
above.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
OPTICAL TECHNOLOGY GROUP, INC.
By: /s/ XXXXXXX XXX
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Xxxxxxx Xxx
President
EXECUTIVE:
/s/ F. XXXXXXX XXXXX
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F. Xxxxxxx Xxxxx
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EXHIBIT A TO EXECUTIVE EMPLOYMENT AGREEMENT
REASONS FOR TERMINATION WITH CAUSE
1 Misappropriation of Corporation funds.
2. Embezzlement of Corporation funds.
3. Soliciting a customer's business for personal or competitive gain.
4. Use or sale of illegal drugs in the work place.
5. Physical/mental/sexual abuse of any employee of the Corporation.
6. Criminal activity in the work place.
7. Theft or destruction of Corporation property.
8. Flagrant violation of Corporation policy/procedure.
9. Providing professional services to a competitor while in the employ of
the Corporation without the Corporation's knowledge.
10. Use of Corporation information for material personal gain.
11. Breach of any covenant or obligation contained in Section 6 of the
covenant or obligation contained in Section 6 of the Agreement.
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FIRST AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT
THIS AMENDMENT is entered into as of the 1st day of January, 1999 by and between
Optical Technology Group, Inc. d/b/a OTG Software (the "Corporation") and F.
Xxxxxxx Xxxxx (the "Executive").
WHEREAS, the Corporation and Executive have entered into an Executive Employment
Agreement dated January 1, 1998 (the "Agreement"), and desire to amend such
Agreement.
NOW, THEREFORE, in consideration of the above premises and mutual covenants and
conditions contained herein, the parties agree as follows:
1. Section 1.4.1 of the Agreement, entitled Term, is hereby amended
in the first sentence by substituting "five year term" for "three
year term".
2. Section 1.4.3 of the Agreement, entitled Termination by the
Corporation Without Cause, is hereby amended by deleting the second
sentence in its entirety and replacing it with the following: "In
the event Executive is terminated without cause, Executive shall be
paid a severance amount equal to Executive's then current Base
Salary, payable in two installments, the first of which shall be
paid on the date of termination of Executive's employment with the
Corporation and the second of which shall be paid 90 days following
payment of the first installment."
3. Section 2.1 of the Agreement, entitled Base Salary, shall be
amended by deleting the first sentence in its entirety and
replacing it with the following: "As base annual salary
compensation for services rendered under this Agreement, Executive
shall receive through December 31, 1999, an annual salary in the
amount of $150,000 (the "Base Salary")."
4. Section 2.2 of the Agreement, entitled Bonus Compensation, shall be
amended in the first sentence by substituting "33.33%" for "40%".
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first written above.
EXECUTIVE: OPTICAL TECHNOLOGY GROUP, INC.
By: /s/ F. XXXXXXX XXXXX By: /s/ XXXXXXX XXX
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F. Xxxxxxx Xxxxx Xxxxxxx Xxx
Title: Executive Vice President Title: President
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SECOND AMENDMENT TO
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AMENDMENT (the "Amendment") is entered into as of the 15th day of
November, 1999, by and between Online Technologies Group, Inc. (The
"Corporation") and F. Xxxxxxx Xxxxx (the "Executive").
WHEREAS the Corporation and the Executive have entered into an
Executive Employment Agreement, dated January 1, 1998, as amended by the first
amendment, dated January 1, 1999 (the "Agreement");
NOW THEREFORE, in consideration of the above premises and mutual
covenants and conditions contained herein, the parties agree as follows:
1. Section 2.1 of the Agreement is hereby amended by deleting the first
sentence in its entirety and substituting the following language in lieu
thereof:
"As base annual salary, for services rendered under this Agreement,
Executive shall receive through December 31, 2000, an annual salary
in the amount of $175,000 (the "Base Salary")."
2. Section 2.1 of the Agreement is hereby amended by deleting the third
sentence in its entirety and substituting the following language in lieu
thereof:
"The Base Salary amount shall automatically increase by 10% on
January 1, 2001 and by 10% on each subsequent January 1 for the
remaining term of the Agreement."
3. Section 2.3 of the Agreement is hereby deleted in its entirety and
shall be of no further force or effect.
4. Except as expressly amended hereby, the Agreement, as previously
amended, remains in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first written above.
ONLINE TECHNOLOGIES GROUP, INC. EXECUTIVE
By: /s/ XXXXXXX X. XXX /s/ F. XXXXXXX XXXXX
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Xxxxxxx X. Xxx X. Xxxxxxx Xxxxx
President
