NeoMedia Technologies, Inc.
Employment Agreement Dated August 30, 1997
By and Between NeoMedia Technologies, Inc.
and Xxxxxx Xxxxx
Exhibit 99.4
E M P L O Y M E N T A G R E E M E N T
THIS AGREEMENT is made and entered into as of the 30th day of August, 1997,
by and between NEOMEDIA TECHNOLOGIES, INC., a Delaware corporation with offices
at 0000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx (the "Company") and XXXXXX
XXXXX (hereinafter referred to as the "Employee").
WHEREAS, the Company desires to enter into an agreement for the employment
of Employee by the Company and to be assured of the continued services of
Employee and Employee desires to enter into employment by the Company on the
terms provided herein.
NOW, THEREFORE, in consideration of the premises and of the terms,
covenants and conditions hereinafter contained, the parties hereto agree as
follows:
1. EMPLOYMENT, DUTIES AND AUTHORITY.
The Company hereby employs Employee and Employee hereby accepts employment
by the Company on the terms, covenants and conditions herein contained. The
Employee shall have such duties, responsibilities and authority as recited on
Exhibit A. During the term of Employee's employment hereunder, Employee shall
devote his full time to the performance of his duties and responsibilities
hereunder and will perform such duties and responsibilities faithfully and with
reasonable care for the welfare of the Company. During the term of his
employment hereunder, Employee shall not perform any services for compensation
for any person, firm, partnership or corporation other than the Company without
the express written consent of the President of the Company.
2. COMPENSATION.
2.1 BASE SALARY. The Company shall pay to Employee during the initial term
of employment hereunder and each renewal term the compensation as described in
Exhibit B.
Employee hereby elects to defer the amount of $450,000 of the amount due to
Employee under this Agreement. In no event shall Employee accept, nor should
Company pay any such sums due Employee until Employee affirmatively makes
written election to receive such funds.
2.2 STOCK OPTIONS. In further consideration of Employee's agreement not to
compete with Company as recited herein, Company grants to Employee under the
Company's stock option plan currently in existence upon execution of this
Agreement 15,000 stock options at an exercise price equal to the price of the
underlying shares on the date of execution.
2.3 INCENTIVE PLAN. Employee shall be entitled to participate in Company's
Management Incentive Plan based on his Base Salary on Exhibit B at the same
level as other Vice-Presidents and Directors of the Company.
2.4 PAYMENT DURING ABSENCES. If Employee shall be absent from work on
account of personal injuries or sickness, he shall continue to receive the
payments provided for in paragraph 2.1 hereof; provided, however, that any such
payment may, at the Company's option, be reduced by the amount which the
Employee may receive, for the period covered by any such payments, in disability
payments (i) pursuant to any disability insurance which the Company, in its sole
discretion, may maintain, or (ii) under any governmental program for disability
compensation.
2.5 CLOSING OF STOCK PURCHASE AGREEMENT. This Employment Agreement is
conditional on the closing ("Closing") of that certain Stock Purchase Agreement
between the Company and Xxxxxx Xxxxx and Xxxxxx X. Xxxxxx. In the event of a
failure to close such transaction, this Agreement, the stock options granted
hereunder and all remaining rights of Employee arising hereunder shall be void
and of no force and effect.
3. BENEFITS; VACATION; EXPENSE REIMBURSEMENT.
3.1 BENEFITS. The Employee shall be entitled to, and shall receive, all
other benefits of employment available to other Employees of the Company
generally, including, without limitation, participation in any medical, dental
or other group health plans or accident benefits, life insurance benefits,
pension or profit-sharing plans, as shall be instituted by the Company, in its
sole discretion.
3.2 VACATION. Employee shall be entitled to annual vacation in accordance
with Company policy.
3.3 EXPENSE REIMBURSEMENT. During the term hereof, the Company shall
reimburse Employee for all reasonable and necessary business related expenses
incurred by Employee in the performance of his duties hereunder, including
without limitation, travel, meals, lodging, office supplies or equipment subject
to such reasonable limitations, restrictions and reporting standards the Company
may from time to time establish. Employee shall provide to the Company promptly
after incurring any such expenses a detailed report thereof and such
documentation as the Company shall from time to time require and as shall be
sufficient to support the deductibility of all such expenses by the Company for
federal income tax purposes.
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4. TERM.
The employment of Employee hereunder shall be for a term commencing on
August 30, 1997 and expiring on August 29, 1999. Upon the expiration of the
initial term or any renewal term of Employee's employment hereunder, the term of
such employment automatically shall be renewed for an additional term of one
year unless Employee or the Company shall give notice of the termination of
Employee's employment and this Agreement by written notice to the other no less
than 60 days prior to the date of expiration of the initial or any renewal term.
5. TERMINATION BY COMPANY.
5.1 COMPANY'S RIGHT TO TERMINATE PRIOR TO EXPIRATION OF TERM. The Company
shall be entitled to terminate this Agreement prior to the expiration of its
term or any renewal term on the occurrence of either:
(a) an event of default with respect to Employee, as provided herein,
or
(b) Death or Total Disability of Employee, as defined herein, occurring
during the term or any renewal term of Employee's employment hereunder.
5.2 EVENT OF DEFAULT BY EMPLOYEE. For purposes of this paragraph, an event
of default with respect to Employee shall include:
(a) any gross misfeasance by Employee in the performance of his duties
as recited on Exhibit A and the failure by Employee to cure such
misfeasance within 30 days after written notice thereof shall have been
given to Employee by the Company;
(b) embezzlement or conversion by Employee of any funds of Company or
any client of Company;
(c) destruction or conversion by Employee of any property of Company,
without Company's consent;
(d) Employee's conviction of a felony;
(e) Employee's adjudication as an incompetent;
(f) Employee's habitual intoxication; or
(g) Employee's drug addiction.
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No termination for Cause under (a) can occur until Company provides written
notice of the specific items which it alleges constitute the misfeasance by
Employee and afford Employee no less than thirty (30) days to correct such
misfeasance.
5.3 TOTAL DISABILITY. Total Disability of Employee shall be deemed to have
occurred hereunder when Employee shall have failed or been unable to
substantially perform his duties hereunder on a full-time basis for an aggregate
of 180 days ("Disability Period") and with a certification from Employee's
licensed physician in the State of Ohio that Employee is permanently disabled
from performing his duties hereunder. Where the conclusion of one Disability
Period is followed within six months by the start of a second Disability Period
and the disabilities are the same or related, both Disability Periods shall be
aggregated for purpose of this paragraph.
5.4 EFFECT OF TERMINATION. In the event of termination of this Agreement
and Employee's employment pursuant to Paragraph 5.1 hereof, all rights and
obligations of the Company and Employee hereunder shall terminate on the date of
such termination, subject to the following:
(a) Employee shall be entitled to receive (subject to any rights of
setoff or counterclaim by the Company) all salary, additional compensation
and benefits which shall have accrued prior to the date of such
termination, and the obligation of the Company for the payment of salary,
additional compensation or benefits shall terminate as of the date of such
termination; and
(b) All rights of the Company or Employee which shall have accrued
hereunder prior to the date of such termination, and all provisions of this
Agreement which are to survive termination of employment of Employee
hereunder, shall survive such termination, and the Company and Employee
shall continue to be bound by such provisions in accordance with the terms
thereof.
5.5 DEATH OF EMPLOYEE. This Agreement and all rights and obligations of the
parties hereunder shall terminate immediately upon the death of Employee except
that the Company shall pay to the heirs, legatees or personal representative of
Employee all compensation or benefits hereunder accrued but not paid to the date
of Employee's death.
6. TERMINATION BY EMPLOYEE.
6.1 EMPLOYEE'S RIGHT TO TERMINATE. Employee shall be entitled to terminate
his employment with the Company under this Agreement prior to the expiration of
its term upon the occurrence of an event of default with respect to the Company.
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6.2 EVENT OF DEFAULT BY COMPANY. For purposes of this paragraph, an event
of default with respect to the Company shall include:
(a) Any failure by the Company to perform its obligations to Employee
under this Agreement and (if such failure can be cured) the failure by the
Company to cure such failure within thirty (30) days after written notice
thereof shall have been given to the Company by Employee;
(b) Company's filing a petition for relief under any chapter of Title
11 of the United States Code or a petition to take advantage of any
insolvency laws of the United States of America or any state thereof;
(c) Company's making an assignment for the benefit of its creditors;
(d) Company's consent to the appointment of a receiver of itself or of
the whole or any substantial part of its property; or
(e) Company's filing a petition or answer seeking reorganization under
the Federal Bankruptcy Laws or any other applicable law or statute of the
United States of America or any state thereof.
6.3 EFFECT OF TERMINATION. In the event of termination of the Agreement by
Employee in accordance with Paragraph 6.1 hereof, all rights and obligations of
the Company and Employee hereunder shall terminate on the date of such
termination, subject to the following:
(a) Employee shall be entitled to receive all salary, additional
compensation and benefits which shall have accrued prior to the date of
such termination and salary, incentive compensation and other payments due
for the remaining term of the Agreement; and
(b) All rights of the Company or Employee which shall have accrued
hereunder prior to the date of such termination and all provisions of this
Agreement which are to survive termination of employment of Employee
hereunder except those arising under Section 7 shall survive such
termination, and the Employee shall continue to be bound by such provisions
in accordance with their terms.
7. NON-COMPETITION AND NON-SOLICITATION.
7.1 NON-COMPETITION. Employee agrees that, so long as he is employed by
Company pursuant to this Agreement, and for a period of two years following
expiration of the term or termination of this Agreement, other than termination
by Employee pursuant to
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Paragraph 6.1 hereof, he will not, directly or indirectly, as a sole proprietor,
member of a partnership, stockholder, investor, officer or director of a
corporation, or as an employee, agent, associate or consultant of any person,
partnership or corporation other than Company or in any other capacity do any of
the following:
(a) Employee shall not, in any manner or way whatsoever, own, manage,
operate, participate in, perform services for or otherwise carry on a
business anywhere in the world performing any of the services provided at
any time by, or utilizing or selling any of the products, software or tools
developed or owned at any time by, the Company which are related in any
manner or way whatsoever, to the business and services of the Company's:
(i) Year 2000 business;
(ii) Migration business;
(iii) Intelligent Document business;
(iv) Systems Transition Solutions business; and
(v) Document Systems Solutions business.
(b) Employee shall not induce or attempt to persuade any employee of
Company to terminate such employment relationship in order to enter into
any such relationship with such person or to enter into any such
relationship on behalf of any other business organization in competition
with Company or any of its affiliates;
(c) Employee shall not solicit any business related to the business
conducted by Company from any clients, agencies of clients, customers, or
agencies of clients or customers of Company; or
(d) Employee shall not perform services of any nature for any entity
which engages in or conducts any business that competes with, restricts or
interferes with the business of Company, other than the business performed
by ALS on August 30, 1997.
7.2 NON-SOLICITATION. During the term of this Agreement and for a period of
twenty-four (24) months after the termination hereof, for any reason, Employee
shall not, in any manner or way whatsoever, solicit any employee of the Company
for employ by the Employee or by any third party.
7.3 REASONABLENESS. Employee acknowledges and agrees that the limitations
set forth in this Agreement are reasonable with respect to scope, duration,
geographic area and
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otherwise, and are properly required to protect the legitimate business
interests of the Company.
8. CONFIDENTIAL INFORMATION AND INTELLECTUAL PROPERTY.
8.1. CONFIDENTIAL INFORMATION. The term "Confidential Information" shall
mean all information (whether or not specifically labeled or identified as
confidential), in any form or medium, that is disclosed to, or developed or
learned by, Employee in the performance of services for the Company and that
relates to the business, products, services, research or development of the
Company or its suppliers, clients or customers. Such Confidential Information
shall include, without limitation, the following: (i) internal business
information (including, without limitation, information relating to strategic
and staffing plans and practices, business, marketing, promotional and sales
plans, practices and programs, training practices and programs, costs, rate and
pricing structures and accounting and business methods); (ii) identities of,
individual requirements of, specific contractual arrangements with, and
information about, the Company's suppliers, clients and customers and their
confidential information, suppliers, clients and customers; (iii) compilations
of data (including, without limitation, the form or format of information that
may comprise or include information otherwise not deemed confidential as
provided in the following paragraph) and analyses, processes, methods,
techniques, systems, research, records, reports, manuals, documentation, data
and data bases relating thereto; (iv) computer software (including, without
limitation, operation systems, source code, applications and programs listings),
documentation, data and data bases; and (v) trade secrets, inventions, designs,
developments, devices, methods and processes (whether or not patentable or
reduced to practice). Confidential Information shall not include any information
that Employee can demonstrate: (i) has been made publicly known through no
wrongful act or breach of obligation of confidentiality; (ii) was lawfully known
to Employee prior to the time it was disclosed to, or learned by, Employee
during Employee's employment by the Company; (iii) was rightfully received by
Employee from a third party without a breach of any obligation of
confidentiality by such third party; or (iv) is independently developed by
Employee without any use of the Confidential Information.
8.2 INTELLECTUAL PROPERTY. The term "Intellectual Property" shall mean all
trade secrets, inventions, designs, developments, ideas, devices, methods and
processes (whether or not patented or patentable, reduced to practice or
included in the Confidential Information) and all patents and patent
applications related thereto, all copyrights, copyrightable works and xxxx works
(whether or not included in the Confidential Information) and all registrations
and applications for registration related thereto, all Confidential Information,
and all other proprietary rights contributed to, or conceived or created by,
Employee (whether alone or jointly with others) at any time during Employee's
engagement by the Company that: (i) relate to the business or to the actual or
anticipated research or development of the Company; (ii) result from any work
that Employee performs for the
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Company; or (iii) are created using the equipment, supplies or facilities of the
Company or any Confidential Information.
8.3 OWNERSHIP. All Intellectual Property is, shall be and shall remain the
exclusive property of the Company. Employee assigns to the Company all right,
title and interest in and to the Intellectual Property; provided, however, that,
when applicable, Company shall own the copyrights in all copyrightable works
included in the Intellectual Property pursuant to the "work-made-for-hire"
doctrine (rather than by assignment), as such term is defined in the United
States Code, Title 17, entitled "Copyrights". All Intellectual Property shall be
owned by the Company irrespective of any copyright notices or confidentiality
legends to the contrary which may have been placed on such works by Employee or
by others. Employee shall enure that all copyright notices and confidentiality
legends on all work product authored by Employee shall conform to the Company's
practices and shall specify the Company as the owner for the work.
8.4 KEEP RECORDS. Employee shall keep and maintain adequate and current
written records of all Intellectual Property in the form of notes, sketches,
drawings, computer files, reports or other documents relating thereto. Such
records shall be and shall remain the exclusive property of the Company and
shall be available to the Company at all times during Employee's engagement and
shall be turned over to Company at the conclusion of such engagement and keep
original documents and computer files at the office and password to computer
made known to Director of Human Resources.
8.5 FURTHER ASSURANCES. During the period of Employee's engagement by the
Company and at all times thereafter, Employee shall promptly execute any and all
declarations, assignments, applications and other instruments which the Company
shall deem necessary to apply for and obtain patents and copyright registrations
in any country or otherwise to protect the Company's interests in the
Intellectual Property.
9. NON-DISCLOSURE AND NON-USE.
9.1 NON-DISCLOSURE. Employee acknowledges and agrees that Employee may have
access and contribute to information and materials of a highly sensitive nature
(including Confidential Information and Intellectual Property) and that a
purpose of this Agreement is to protect the legitimate business interests of the
Company therein. Employee agrees that, during the period of Employee's
employment by the Company and at all times thereafter, unless Employee first
secures the written consent of the Company, Employee shall not use for Employee
or anyone else, and shall not disclose to others, any Confidential Information,
except to the extent such use or disclosure is required in the performance of
Employee's assigned duties for the Company or by law or court order. Employee
further agrees to use Employee's best efforts and utmost diligence to safeguard
the Confidential Information and to protect it against disclosure, misuse,
espionage, loss and theft.
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9.2 REQUIRED DISCLOSURES. In the event that Employee is required by law or
court order to disclose any Confidential Information, Employee: (i) shall notify
the Company in writing as soon as possible, but in no event later than twenty
(20) business days prior to any such disclosure except as required by court of
law; (ii) shall cooperate with the Company to preserve the confidentiality of
such Confidential Information consistent with applicable law; and (iii) shall
use Employee's best efforts to limit any such disclosure to the minimum
disclosure necessary to comply with such law or court order.
10. WRITINGS AND WORKING PAPERS.
Employee covenants and agrees that any and all books, textbooks, letters,
pamphlets, drafts, memoranda or other writings of any kind written by him for or
on behalf of the Company or in the performance of Employee's duties hereunder,
Confidential Information referred to in paragraph 8 hereof and all notes,
records and drawings made or kept by him of work performed in connection with
his employment by the Company shall be and are the sole and exclusive property
of the Company and the Company shall be entitled to any and all copyrights
thereon or other rights relating thereto. Employee agrees to execute any and all
documents or papers of any nature which the Company or its successors, assigns
or nominees deem necessary or appropriate to acquire, enhance, protect, perfect,
assign, sell or transfer its rights under this paragraph. Employee also agrees
that upon request he will place all such notes, records and drawings in the
Company's possession and will not take with him without the written consent of a
duly authorized officer of the Company any notes, records, drawings, blueprints
or other reproductions relating or pertaining to or connected with his
employment of the business, books, textbooks, pamphlets, documents work or
investigations of the Company. The obligations of this paragraph shall survive
the term of employment hereunder or the termination or expiration of the term or
any renewal term hereof.
11. INJUNCTIVE RELIEF.
Without limiting the right of Company or any of its successors or permitted
assigns to pursue all other legal and equitable rights available to them for
violation of the covenants set forth in Paragraphs 7, 8 and 9, it is agreed that
such other remedies cannot fully compensate Company and its successors and
assigns for such a violation and that Company and its successors and assigns
shall be entitled to injunctive relief to prevent violation or continuing
violation hereof. It is the intent and understanding of each party that if, in
any action before any court or agency legally empowered to enforce this
covenant, any term, restriction, covenant or promise is found to be unreasonable
and for that reason unenforceable, then such term, restriction, covenant or
promise shall be deemed modified to the extent necessary to make it enforceable
by such a court or agency.
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12. GENERAL.
12.1 ASSIGNMENT. The rights and duties of a party hereunder shall not be
assignable by that party, without the express written consent of the other
party.
12.2 BINDING EFFECT. This Agreement shall be binding upon the parties
hereto and their respective successors in interest, heirs and personal
representatives and, to the extent permitted herein, their assigns.
12.3 SEVERABILITY. If any provision of this Agreement or any part hereof or
application hereof to any person or circumstance shall be finally determined by
a court of competent jurisdiction to be invalid or unenforceable to any extent,
the remainder of this Agreement, or the remainder of such provision or the
application of such provision to persons or circumstances other than those as to
which it has been held invalid or unenforceable, shall not be affected thereby
and each provision of this Agreement shall remain in full force and effect to
the fullest extent permitted by law. The parties also agree that, if any portion
of this Agreement, or any part hereof or application hereof, to any person or
circumstance shall be finally determined by a court of competent jurisdiction to
be invalid or unenforceable to any extent, any court may so modify the
objectionable provision so as to make it valid, reasonable and enforceable.
12.4 SURVIVAL. Paragraphs 7, 8 and 9 shall survive any expiration or
termination of this Agreement.
12.5 NOTICES. All notices, or other communications required or permitted to
be given hereunder shall be in writing and shall be delivered personally or
mailed, certified mail, return receipt requested, postage prepaid, to the
parties as follows:
If to the Company: NeoMedia Technologies, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxx, XX 00000
If to Employee: Xxxxxx Xxxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Any notice mailed in accordance with the terms hereof shall be deemed received
on the third day following the date of mailing. Either party may change the
address to which notices to such party may be given hereunder by serving a
proper notice of such change of address to the other party.
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12.6 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior written or oral negotiations, representations, agreements,
commitments, contracts or understandings with respect thereto and no
modification, alteration or amendment to this Agreement may be made unless the
same shall be in writing and signed by both of the parties hereto.
12.7 WAIVERS. No failure by either party to exercise any of such party's
rights hereunder or to insist upon strict compliance with respect to any
obligation hereunder, and no custom or practice of the parties at variance with
the terms hereof, shall constitute a waiver by either party to demand exact
compliance with the terms hereof. Waiver by either party of any particular
default by the other party shall not affect or impair such party's rights in
respect to any subsequent default of the same or a different nature, nor shall
any delay or omission of either party to exercise any rights arising from any
default by the other party affect or impair such party's rights as to such
default or any subsequent default.
12.8 GOVERNING LAW; JURISDICTION. For purposes of construction,
interpretation and enforcement, this Agreement shall be deemed to have been
entered into under the laws of the State of Ohio and its validity, effect,
performance, interpretation, construction and enforcement shall be governed by
and subject to the laws of the State of Ohio.
12.9 JURISDICTION AND VENUE. Any and all suits for any and every breach of
this Agreement may be instituted and maintained in any court of competent
jurisdiction in the State of Ohio and the parties hereto consent to the
jurisdiction and venue in such court and the service of process by certified
mail to the addresses for the parties provided for notices herein.
13. ACKNOWLEDGMENT.
Employee acknowledges and agrees that Employee has fully read and
understands this Agreement, has had the opportunity to discuss this Agreement
with Employee's attorney, has had any questions regarding its effect or the
meaning of its terms answered to Employee's satisfaction, and, intending to be
legally bound hereby, has freely and voluntarily executed this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
NEOMEDIA TECHNOLOGIES, INC.
By: /s/ XXXXXXX X. XXXXXX
----------------------------------------
Xxxxxxx X. Xxxxxx, Vice President,
Treasurer and Chief Financial Officer
EMPLOYEE:
/s/ XXXXXX XXXXX
----------------------------------------
Xxxxxx Xxxxx
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EXHIBIT A
XXXXXX XXXXX will be called the General Manager of Year 2000 and Migration
Practices. He will be responsible for the delivery, integration and development
of those programs. He will have the overall responsibility for the practices and
reports to Xxxxx Xxxxxxxxx, Vice President of Business Development. Xx. Xxxxx
will be a regular full time employee.
EXHIBIT B
YEAR 1 YEAR 2
------ ------
Base Salary $132,000 Base Salary $132,000
Additional Salary $137,500 Additional Salary $148,500
-------- --------
$269,500 $280,000
Payment for Non-Compete Agreement $200,000
At End of Year 2
