EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT dated as of the 1st day of October 2000 by and
between NETWOLVES CORPORATION, a New York corporation (hereinafter the
"Company") and Xxxxx X Xxxxxx, an individual residing at 00 Xxxxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxx 00000 (hereinafter called "Castle").
W I T N E S S E T H:
WHEREAS, the Company desires to enter into an Employment Agreement with
Castle; and
WHEREAS, Castle desires to enter into an Employment Agreement with the
Company;
NOW, THEREFORE, it is agreed as follows:
1. Prior Agreements Superseded. This Agreement supersedes any employment,
consulting or other agreements, oral or written, entered into between Castle and
the Company prior to the date of this Agreement except for stock options
previously granted to Castle, which stock options shall continue in full force
and effect.
2. Employment. The Company hereby agrees to employ Castle and Castle hereby
agrees to serve as Vice-President-Finance of the Company with commensurate
responsibilities and to perform such services as directed by the Board of
Directors. Castle's employment hereunder shall be on a full-time basis and
Castle shall not engage in any other business, except with the prior approval of
the Board of Directors of the Company. Castle shall serve in similar capacities
of such of the subsidiary corporations of the Company as may be selected by the
Board of Directors without additional compensation. Notwithstanding the
foregoing, it is understood that the duties of Castle during the performance of
employment shall not be inconsistent with his position and title as
Vice-President-Finance of the Company.
3. Term. Subject to earlier termination on the terms and conditions
hereinafter provided, the term of this Employment Agreement shall end on
September 30, 2003, provided that this agreement shall extend for additional
one-year periods unless Castle receives written notice from the Company each
year on or before July 1 of said year that the Company will be terminating the
agreement. In no event, however, shall this agreement extend beyond September
30, 2005.
4. Compensation. For all services rendered by Castle under this Agreement,
compensation shall be paid to Castle as follows:
(a) Castle shall be paid at the annual rate of One Hundred Fifty Thousand
($150,000) Dollars.
(b) During the period of employment Castle shall be eligible to participate
in the Company's stock option and stock purchase plans to the extent determined
in the discretion of the Board of Directors of the Company or committee thereof.
(c) Castle shall be entitled to participate in any short-term or long-term
incentive plan which the Company has in existence or which may be adopted.
(d) During the period of employment, Castle shall be furnished with office
space and secretarial service and facilities commensurate with his position and
adequate for the performance of his duties.
(e) Castle shall be entitled to fully participate in all benefit programs
available to executive employees of the Company throughout the term of this
Agreement.
(f) Castle shall be entitled to four (4) weeks of vacation and sick leaves
consistent with current practice of the Company.
5. Expenses. Castle shall be reimbursed for all out-of-pocket expenses,
including medical expenses, reasonably incurred by him in the performance of his
duties hereunder. Expense reports, with receipts and justifications, must be
submitted to the Chairman of the Board for approval.
6. Severance Benefits. Castle shall be entitled to the severance benefits
provided for in subsection (c) hereof in the event of the termination of his
employment by the Company without cause or in the event of a voluntary
termination of employment by Castle for good reason. In such event, Castle shall
have no duty to mitigate damages hereunder. Castle and the Company acknowledge
that the foregoing provisions of this paragraph 6 are reasonable and are based
upon the facts and circumstances of the parties at the time of entering into
this Agreement, and with this Agreement, and with due regard to future
expectations.
(a) The term "cause" shall mean:
(i) Castle's willful and continued failure to substantially perform
his duties under this Agreement (other than any such failure resulting from
his incapacity due to physical or mental illness) after demand for
substantial performance is delivered to Castle by the Chairman of the Board
of the Company which specifically identifies the manner in which the Board
believes Castle has not substantially performed his duties.
(ii) Castle's failure to refuse to follow directions from the
Company's Board of Directors provided that (a) Castle is provided written
notice of such directions and a reasonable period in which to comply and
(b) Castle's compliance with any such direction would not be illegal or
unlawful.
(iii)Any act or fraud, embezzlement or theft committed by Castle
whether or not in connection with his duties or in the course of his
employment which substantially impairs his ability to perform his duties
hereunder.
(iv) Any willful disclosure by Castle of confidential information or
trade secrets of the Company or its affiliates.
For purposes of this paragraph, no act or failure to act on Castle's
part shall be considered "willful" unless done, or omitted to be done, by
Castle not in good faith and without reasonable belief that his action or
omission was in the best interest of the Company. Notwithstanding the
foregoing, Castle shall not be deemed to have been terminated for cause
unless and until there shall have been delivered to him a copy of a notice
of termination from the Chairman of the Board of the Company after
reasonable notice to Castle and an opportunity for Castle with his counsel
to be heard before the Board of Directors of the Company finding that in
the good faith opinion of such Board of Directors Castle was guilty of the
conduct set forth in clauses (i), (ii) or (iii) of this paragraph and
specifying the particulars thereof in detail.
(b) For these purposes, Castle shall have "good reason" to terminate this
Agreement if:
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(i) the Company removes Castle from the position of
Vice-President-Finance at any time during the term of this Agreement;
(ii) Castle's place of employment is moved beyond a fifty-mile radius
from the Company's current facility in Tampa, Florida.
(c) The severance benefits under this section in the event of termination
without cause or by Castle for "good reason", shall consist of the continued
payment to Castle for the remaining term of this Agreement, of the annual salary
provided in Section 4(a) hereof plus the immediate vesting of all outstanding
options.
7. Death. In the event of Castle's death during the term of this Agreement,
Castle's legal representative shall be entitled to receive his per annum base
salary as provided in paragraph 4(a) of this Agreement to the last day of the
calendar quarter following the calendar quarter in which Castle's death shall
have occurred and thereafter to receive one-half (1/2) of the base salary
provided in paragraph 4(a) of this Agreement for the balance of the period
covered by this Employment Agreement.
8. Non-Competition.
(a) Castle agrees that, during the term of this Agreement, he will not,
without the prior written approval of the Board of Directors of the Company,
directly or indirectly, through any other individual or entity, (a) become an
officer or employee of, or render any services [including consulting services]
to, any competitor of the Company, (b) solicit, raid, entice or induce any
customer of the Company to cease purchasing goods or services from the Company
or to become a customer of any competitor of the Company, and Castle will not
approach any customer for any such purpose or authorize the taking of any such
actions by any other individual or entity, or (c) solicit, raid, entice or
induce any employee of the Company, and Castle will not approach any such
employee for any such purpose or authorize the taking of any such action by any
other individual or entity. However, nothing contained in this paragraph 8 shall
be construed as preventing Castle from investing his assets in such form or
manner as will not require him to become an officer or employee of, or render
any services (including consulting services) to, any competitor of the Company.
(b) During the term hereof and at all times thereafter, Castle shall not
disclose to any person, firm or corporation other than the Company any trade
secrets, trade information, techniques or other confidential information of the
business of the Company, its methods of doing business or information concerning
its customers learned or acquired by Castle during Castle's relationship with
the Company and shall not engage in any unfair trade practices with respect to
the Company.
9. Enforcement.
(a) The necessity for protection of the Company and its subsidiaries
against Castle's competition, as well as the nature and scope of such
protection, has been carefully considered by the parties hereto in light of the
uniqueness of Castle's talent and his importance to the Company. Accordingly,
Castle agrees that, in addition to any other relief to which the Company may be
entitled, the Company shall be entitled to seek and obtain injunctive relief
(without the requirement of any bond) for the purpose of restraining Castle from
any actual or threatened breach of the covenants contained in paragraph 8 of
this Agreement.
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(b) If for any reason a court determines that the restrictions under
paragraph 8 of this Agreement are not reasonable or that consideration therefor
in adequate, the parties expressly agree and covenant that such restrictions
shall be interpreted, modified or rewritten by such court to include as much of
the duration and scope identified in paragraph 8 as will render the restrictions
valid and enforceable.
10. Notices. Any notice to be given to the Company or Castle hereunder
shall be deemed given if delivered personally, telefaxed or mailed by certified
or registered mail, postage prepaid, to the other party hereto at the following
addresses:
To the Company: NetWolves Corporation
Xxx Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Copy to: Xxxxx X. Xxxxxxxxx, Esq.
Blau, Kramer, Wactlar & Xxxxxxxxx, P.C.
000 Xxxxxxx Xxxxxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
To Castle: Xxxxx X. Xxxxxx
00 Xxxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Either party may change the address to which notice may be given hereunder by
giving notice to the other party as provided herein.
11. Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the Company, its successors and assigns, and upon Castle,
his heirs, executors, administrators and legal representatives.
12. Entire Agreement. This Agreement constitutes the entire agreement
between the parties except as specifically otherwise indicated herein.
13. Governing Law. This Agreement shall be construed in accordance with the
laws of the State of New York.
14. Change of Control. In the event (a) the Company has been consolidated
or merged into or with any other corporation or all or substantially all of the
assets of the Company have been sold to another corporation, with or without the
consent of Employee, in his sole discretion; or (b) the Company undergoes a
Change of Control, as hereinafter defined below, without prior Board approval;
then
Employee is entitled to the following settlement benefits:
(i) a lump-sum payment for the greater of (A) twelve (12) months of
the annual salary provided in section 4(a) hereof or (B) the
balance of compensation for the term of this Employment
Agreement; and
(ii) any and all stock options and warrants held by Employee shall
become immediately vested and exercisable; if
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(A) Employee voluntarily and unilaterally resigns his position
with the Company within 60 days of an event described in
Section 14(a) or (b) hereof, or
(B) Employee is given notice of termination directly as a result
of such Change in Control within twelve (12) months of an
event described in Section 14(a) or (b) hereof, or
(C) Employee's place of employment is moved beyond a fifty-mile
radius, from its current facility in Tampa, Florida as a
direct result of an event described in this Section.
A "Change of Control" of the Company, or in any person directly or
indirectly controlling the Company, shall mean:
(i) a change of control as such term is presently defined in Regulation
240.12b-2 under the Securities Exchange Act of 0000 (xxx "Xxxxxxxx Xxx");
(ii) if during the Term of employment any "person" (as such term is used in
Section 13(d) and 14(d) of the Exchange Act) other than the Company or any
person who on the date of this Employment Agreement is a director or officer of
the Company, becomes the "beneficial owner" (as defined in Rule 13(d)03 under
the Exchange Act), directly or indirectly, of securities of the Company
representing 30% of the voting power of the Company's then outstanding
securities; or
(iii) if during the Term of employment the individuals who at the beginning
of such period constitute the Board cease for any reason other than death,
disability or retirement to constitute at least a majority thereof."
IN WITNESS WHEREOF, the parties hereto have executed this Employment
Agreement as of the day and year first above written.
NETWOLVES CORPORATION
By: /s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Chairman of the Board
/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Employee
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