EXHIBIT 10.35
[LOGO] XXXXXX TECHNOLOGIES, INC.
XXXXXX TECHNOLOGIES, INC.
EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of the 15th
day of June 2004 (the "Effective Date"), by and between Xxxxxx Technologies,
Inc., a Delaware Corporation with a business address of 00-00 00xx Xxxxxx, Xxxx
Xxxxxx Xxxx, Xxx Xxxx 11101(hereinafter referred to "Xxxxxx Technologies,"
"Xxxxxx" or "Company"), and Xxxxxxx Xxxxx residing at 00 Xxxxxxxx Xxxxx Xxxx
Xxxx, Xxx Xxxx 00000 (hereinafter referred to as "Employee").
WITNESSETH:
WHEREAS, Xxxxxx Technologies currently employs Employee as its Executive
Vice-President of Sales and Marketing, and
WHEREAS, Xxxxxx Technologies wishes to continue to employ Employee as
Executive Vice-President of Sales & Marketing; and
WHEREAS, Employee consents to be so employed.
NOW THEREFORE, in consideration of the premises, of the mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
I Employment
Xxxxxx Technologies hereby employs Employee, and Employee hereby agrees to
be employed, as Executive Vice-President of Sales & Marketing ("EVP") of the
Company upon the terms and conditions herein set forth. Employee shall report to
the Company's Chief Executive Officer.
II Duties and Responsibilities
As EVP of the Company, Employee shall have such duties, responsibilities
and powers as are customary and appropriate for such office including, without
limitation, oversight of the Company's sales and marketing department and
activities, and such other responsibilities and duties that customarily
appertain to the role of EVP, as well as those which may be assigned to him from
time to time by the Company's Chief Executive Officer.
Employee agrees to devote his reasonable best diligence and his full time
to the performance of his duties hereunder. Employee's principal place of
employment shall be at the Company's headquarters in Long Island City, New York;
Employee shall travel as reasonably required in the performance of his duties
hereunder.
III Term
The term of Employee's employment hereunder shall be two (2) years,
through June 14, 2006 (the "Term of Employment").
IV Compensation & Benefits
Xxxxxx Technologies shall pay Employee, as full consideration for the
services to be rendered hereunder, compensation consisting of the following:
(1) (i) During the first year of the Term of Employment, an annual base salary
of two hundred fifty thousand dollars ($250,000); and
(ii) During the second year of the Term of Employment, an annual base
salary of two hundred sixty thousand dollars ($260,000).
(iii) Employee's base salary shall be payable bi-monthly or in accordance
with any other payment schedule as may be adopted generally for the
payment of the Company's payroll.
(2) (i) In the event that the Company's Diluted Earnings Per Share ("Diluted
EPS"), for any fiscal year completed during the term of this Agreement, as
reported on the Company's audited Statement of Operations for such fiscal
year (the "P&L") and subject to clause (iii) below, exceeds the Company's
Diluted EPS for the immediately preceding fiscal year by more than 10%,
Employee shall receive a bonus payment from the Company, calculated as a
percentage of his annual base salary as in effect as of the last day of
the Company's fiscal year to which the bonus relates, in accordance with
the formula set forth in the following table; provided, however, that the
bonus payment shall in no event exceed 75% of such annual base salary:
Bonus Multiplier (as a
Year-Over-Year Diluted EPS Growth percentage of annual salary)*
--------------------------------- -----------------------------
0-9.99% 0%
10.00-25.00% 1.5%
>25.00% 1.8%
(ii) To illustrate the application of the foregoing bonus formula: in the
event that the Company's year-over-year Diluted EPS growth during any
fiscal year completed during the term of this Agreement is 20%, the bonus
payment to Employee shall equal 15% of his then-current annual base
salary; in the event that the Company's year-over-year Diluted EPS growth
during any fiscal year completed during the term of this Agreement is 30%,
the bonus payment to Employee shall equal 31.5% of his then-current annual
base salary; in the event that the Company's year-over-year Diluted EPS
growth during any fiscal year completed during the term
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* The figures listed in the "Bonus Multiplier" column represent percentage
points for each one percent of Diluted EPS growth in excess of 10% or 25%, as
the case may be.
of this Agreement is 40%, the bonus payment to Employee shall equal 49.5%
of his then-current annual base salary; in the event that the Company's
year-over-year Diluted EPS growth during any fiscal year completed during
the term of this Agreement is 50%, the bonus payment to Employee shall
equal 67.5% of his then-current annual base salary; and in the event that
the Company's year-over-year Diluted EPS growth during any fiscal year
completed during the term of this Agreement is 60%, the bonus payment to
Employee shall equal 75% of his then-current annual base salary.
(iii) For the purposes of calculating the Company's Diluted EPS in
connection with this bonus provision, the Company's "Income Before Income
Taxes" (as reported in the P&L) shall be divided by the "weighted average
common shares (diluted)" (as reported in the P&L); in addition, all
"extraordinary items" (as such term is defined by GAAP, as reasonably
determined by the Audit Committee of the Board of Directors) and
non-operating items (as reasonably determined by the Audit Committee of
the Board of Directors) included in the Company's Income Before Income
Taxes shall be excluded therefrom.
(iv) Any bonus payment shall be made within 15 days after the date on
which the Company's report on Form 10-K, for the year to which the bonus
relates, shall have been filed with the S.E.C.
(3) One hundred fifty thousand (150,000) employee stock options, to be issued
as of June 9, 2004, pursuant to the terms of the Company's 1996 Stock
Option Plan for Employees and of the Company's standard stock option
agreement. Said stock options shall each have an exercise price of $10.50
(which equals the closing sale price of the Company's Common Stock on June
9, 2004, as recorded on the Over-The-Counter Bulletin Board); shall vest
in arrears in equal monthly increments, commencing June 2004, over a
period of forty-eight (48) months; and, upon termination of Employee's
employment hereunder, shall immediately expire, in the case of unvested
options, or shall expire ninety (90) days following such termination, in
the case of vested options. (For the purposes of applying the foregoing
provision, all options which are to "immediately vest" subject to
Paragraph (5)(ii) of this Section shall be considered to be vested
options.)
(4) Participation in any incentive compensation plan, pension or
profit-sharing plan, annuity or group insurance plan previously adopted by
the Company or which may be adopted by the Company at some future date, on
terms and in amounts no less favorable than provided for other Xxxxxx
employees similarly employed. Notwithstanding this provision, Employee
shall not be granted any stock options pursuant to the Company's 1996
Employee Stock Option Plan, other than those granted under Section IV (3)
of this Agreement.
(5) Immediate vesting of the Company stock options issued to Employee
hereunder and under the November 2001 Agreement in the event that, and at
such time as: (i)
Xxxxxx Technologies has a change in control or is acquired by another
entity or company. (For purposes of this Agreement, "control" is defined
as any event or circumstance that would require disclosure under Item 1 or
5.01 of S.E.C. Form 8-K or any comparable requirement of the Securities
and Exchange Commission.); or (ii) Employee's employment hereunder is
terminated by the Company without cause, but only if such termination
takes place following a fiscal year in which the Company's year-over-year
Diluted EPS growth, calculated pursuant to Section IV (2) above, was
twenty percent (20%) or greater.
(6) Employment benefits generally provided to Xxxxxx employees, including
medical and dental insurance, on terms and in amounts no less favorable
than provided for other Xxxxxx employees similarly employed.
(7) Twenty (20) business days per year for vacation time, and five (5)
business days per year for sick or personal leave, during which times
Employee will be compensated the normal pro-rated portion of his base
salary.
(8) Reimbursement for all expenses incurred by Employee in the ordinary course
of his performance of duties hereunder and submitted by him with
supporting documentation to the Company's accounting department, in terms
no less favorable than provided for other Xxxxxx employees similarly
employed.
V Termination For Cause / Cure Period
The Company shall have "cause" to terminate this Agreement in the event
that: (i) a majority of the members of the Company's Board of Directors
determine that (a) the Employee has committed an act of fraud against the
Company, or (b) the Employee has committed an act of malfeasance, recklessness
or gross negligence against the Company that is injurious to the Company or its
customers; or (ii) the Employee has materially breached the terms of this
Agreement; or (iii) the Employee's indictment or conviction for or plea of no
contest to, a felony or a crime involving the Employee's moral turpitude. If
Employee's termination for cause hereunder is based upon Employee's material
breach of the terms of this Agreement, then Employee shall be given 30 days'
notice of such termination and shall have the opportunity to cure such material
breach during said 30-day period.
VI Severance
In the event that Employee is terminated by the Company for "cause,"
pursuant to the terms of Section V above, he shall receive no severance payments
from the Company.
In the event that Employee's employment hereunder is terminated by the
Company without cause, he shall continue to receive the annual base salary set
forth in Section IV (1) above for a period of twelve (12) months following such
termination, and, if applicable, a Prorated Bonus (as defined below), provided
that Employee does not violate any provision of Section VII or VIII during such
12-month severance period. For this purpose, "Prorated Bonus" shall mean a bonus
calculated pursuant to Section IV (2) above, except that (i) the relevant
Diluted EPS growth shall be determined by comparing the year-to-date Diluted EPS
reported on the Company's Form 10-Q filed with the SEC for the quarter ending
closest to (whether before or after) the effective date of such termination with
the Diluted EPS reported in the Company's Form 10-Q for the counterpart period
of the prior fiscal year, (ii) the salary amount being multiplied by the
relevant Bonus Multiplier shall be prorated based on the number of days elapsed
from June 15 most recently preceding such effective date to such effective date,
and (iii) such bonus shall be paid within 15 days after the filing of the Form
10-Q first mentioned above.
VII Non-Disclosure
(1) Employee recognizes that the Company possesses and will continue to
possess non-public information that has been created, discovered,
developed, or otherwise become known to it, and/or in which property
rights have been assigned or otherwise conveyed to it, which information
has commercial value in the business in which it is engaged or may become
engaged. All of the aforementioned information is hereinafter called
"Proprietary Information."
(2) By way of illustration, but not limitation, Proprietary Information
includes trade secrets, processes, structures, formulas, data, know-how,
improvements, inventions, product concepts, techniques, marketing plans,
strategies, forecasts, customer lists and information about the Company's
employees and/or consultants.
(3) At all times, both during Employee's employment by the Company and after
its termination, Employee shall keep in confidence and trust all
Proprietary Information, and Employee shall not use or disclose any
Proprietary Information or anything directly relating to it without the
written consent of a majority of the members of the Board of Directors of
the Company, except as may be necessary in the ordinary course of
Employee's performing his duties as an employee of the Company and only
for the benefit of the Company.
VIII Non Competition and Non Solicitation
During the period of Employee's employment by the Company and for a period
of twelve months following the termination of the Employee's Employment with the
Company, Employee shall not: (i) engage or become interested in any way (whether
as an owner, stockholder, partner, lender, investor, director, officer,
employee, consultant or otherwise) in any activity, business or enterprise,
located within the geographical area of the United States or Canada, that is
competitive with any significant part of the business conducted by the Company
or contemplated to be conducted by it (except that passive ownership of not more
than 5% of the outstanding securities of any class of any corporation that are
listed on a national securities exchange or traded in the over-the-counter
market shall not be considered a breach of this Section); or (ii) solicit or
hire for any purpose any employee of the Company, or any employee who has left
such employment within the previous six months.
IX Miscellaneous Provisions
(1) Acknowledgments and Affirmations. Employee recognizes, understands, agrees
and acknowledges that the Company has a legitimate and necessary interest
in protecting its goodwill and Proprietary Information. Employee further
affirms, represents, and acknowledges that in the event of Employee's
termination of employment with the Company, Employee's experience and
capabilities are such that the enforcement of this Agreement will not
prevent him from obtaining employment in another line of business
different from that carried on by the Company and permitted under this
Agreement. Employee further affirms, represents and acknowledges that
Employee has received good and valuable consideration for entering into
this Agreement.
(2) Remedies for Breach. Employee agrees that any breach of this Agreement by
Employee would cause irreparable damage to the Company and that, in the
event of such breach, the Company shall have, in addition to any and all
remedies at law, the right to an injunction, specific performance or other
equitable relief to prevent or redress the violation of Employee's
obligations hereunder.
(3) Separability. If any provision hereof shall be declared unenforceable for
any reason, such unenforceability shall not affect the enforceability of
the remaining provisions of this Agreement. Further, such provision shall
be reformed and construed to the extent permitted by law so that it would
be valid, legal and enforceable to the maximum extent possible.
(4) Applicable Law. Any dispute arising under or related in any manner to this
Agreement or to Employee's employment by the Company or to the termination
of said employment shall in all respects be governed by, adjudicated,
construed and enforced in accordance with the laws of the State of New
York.
(5) Jurisdiction and Venue. Employee irrevocably and unconditionally submits
to the exclusive jurisdiction of any United States federal, state or city
court sitting in New York in any action or proceeding relating in any
manner to this Agreement or to Employee's employment by the Company or to
the termination of said employment. Further, Employee irrevocably and
unconditionally agrees that all claims relating in any manner to this
Agreement or to Employee's employment by the Company or to the termination
of said employment may be heard and determined in any such court and
waives any objection Employee may now or hereafter have as to venue of any
such action or proceeding brought in such court or the fact that such
court is an inconvenient forum.
XXXXXX TECHNOLOGIES, INC. XXXXXXX XXXXX
A Delaware Corporation
00-00 00xx Xxxxxx 00 Xxxxxxxx Xxxxx
Xxxx Xxxxxx Xxxx, Xxx Xxxx 00000 Glen Cove, New York 11542
By: /s/ Xxxxxxx X. Xxxxxx /s/ Xxxxxxx Xxxxx
------------------------- -------------------------
(signature)
Title: President and CEO
