▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Employment Contract
UNIVERSAL TRADING TECHNOLOGIES CORPORATION
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
June 21, 1996
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
RE: Offer of Employment
Dear ▇▇▇▇:
In accordance with out prior discussions, Universal Trading Technologies
Corporation (UTTC) makes this offer of employment to you as Executive Vice
President of Technology and Advance Programs, subject to the following terms and
conditions of this letter Agreement.
UTTC's obligations to you under this Letter Agreement are guaranteed by The
Ashton Technology Group, Inc. (Ashton). Ashton also agrees to grant you options
for its stock, subject to the terms and conditions set forth below. Ashton
therefore joins in this Letter Agreement.
For this Letter Agreement, "Ashton" shall mean Ashton Technology Group, Inc. and
all of its subsidiaries.
1.0 Term of Offer:
This offer expires on June 21, 1996.
2.0 Acceptance of Offer:
You may accept this offer by dating and signing this Letter
Agreement and mailing or faxing the signed Letter Agreement to
UTTC by the expiration date (with the signed original to follow).
3.0 Guarantee of Obligations:
All obligations to you from UTTC under this Letter Agreement are
guaranteed by Ashton.
4.0 Term of Employment:
The term of your employment is three years beginning on July 8,
1996 and ending on July 7, 1999, unless terminated earlier, as
provided in paragraph 11.0 below (the "Term").
5.0 Employment Position and Responsibilities:
5.1 You will be employed in the position of Executive Vice
President of Technology and Advance Programs, and not
demoted during the Term.
5.2 You shall be responsible for management of the Technology
Programs of UTTC. This position shall involve coordination
with the management of Ashton and Ashton's other
subsidiaries, particularly in the formulation of Technology
Programs and the marketing/selling of Ashton/UTTC products
and services.
5.3 Your immediate supervisor shall be the Chairman of the Board
of UTTC, who shall approve UTTC's major Technology Programs,
and coordinate your activities with the UTTC Board of
Directors.
5.4 All project heads of Technology Programs undertaken by UTTC
shall report directly to you. You shall be responsible for
all technical recruiting, hiring and firing of those
individuals whom report to you or are within your
organization.
6.0 Compensation and Benefits
6.1 Your base salary during the Term is guaranteed to be no less
than $185,000 per year. Payment of salary shall be biweekly.
6.2 On each anniversary of your start of employment with UTTC,
your base salary shall be reviewed by the Board of Directors
of UTTC, to determine any increase in salary, based on your
individual performance and the overall performance of UTTC.
In no event shall your base salary be reduced. No guaranty
is made of any particular salary increase, as a result of an
annual salary review.
6.3 In addition to your base salary, you shall be paid a
semi-annual bonus every six months after the start date of
you employment (that is on the next payroll date following
January 8 and July 5 of each year). Your bonus shall be
based on your individual performance and the overall
performance of UTTC. Your semi-annual bonus is guaranteed to
be no less than $40,000 (for a total bonus per year of no
less than $80,000).
6.4 UTTC and Ashton are contemplating adoption of an Incentive
Compensation Program for UTTC and Ashton management. When
this Program is adopted, during the Term you will be
entitled to participate in any such incentive Compensation
Program on a basis no less favorable than other equivalent
UTTC or Ashton managers participating in the Program. Such
participation would be in lieu of the salary and bonus
agreements set forth herein, and accordingly would be
conditioned on your entering (at your election) into an
amendment to this Letter Agreement to terminate any such
salary and bonus agreements; but your compensation shall be
no less than this Agreement specifies.
6.5 UTTC and Ashton are each contemplating adoption of a
Retirement Program. During the term, you will be entitled to
participate in any such Retirement Plan covering members of
UTTC and Ashton management on a basis no less favorable than
other equivalent UTTC or Ashton managers participating in
the Program. Upon participation in the Program you will be
fully vested without the requirement of any qualification
period for vesting.
6.6 In addition to your base salary, bonus, and Incentive
Compensation Program, and Retirement Program, during the
Term, you shall be entitled to participate with all officers
of UTTC and Ashton in the standard fringe benefits package
made available generally to the executive management
employees of UTTC and Ashton, as such benefits may be
determined from time to time by the Board of Directors of
UTTC and Ashton or other responsible officers of UTTC and
Ashton. Presently, these benefits are administered by
Administaff. A brochure of these benefits is attached.
6.7 UTTC agrees to your previously scheduled vacation planned
for July 29 to August 9, 1996.
7.0 Relocations Allowance:
7.1 Your principal place of employment under this Letter
Agreement shall be at UTTC's offices located in
Philadelphia, PA. In addition, your presence shall be
required at the offices of Ashton (currently located in
Columbia, MD), as well as at the offices of Ashton's other
subsidiaries, clients, and potential clients. You are
responsible for relocating from your present residence in
Fairfax, VA, to the Philadelphia area to enable you to
reasonably perform your duties under this Letter Agreement.
7.2 In lieu of reimbursement of actual relocation expenses,
based on proof of payment, or payment to cover other
expenses which may be difficult to calculate (such as
"buydown" of your present home to enable you to sell
quickly), UTTC shall pay you a lump sum relocation payment
of $100,000 payable as follows:
Upon acceptance of this Letter Agreement: $50,000, and;
On September 15, 1996 or execution of a binding contract for
purchase of a new residence: $50,000.
7.3 The relocation of payments made under this paragraph shall
be due and owing, regardless of the duration of employment
or the reason that employment ends. You shall have no
obligation to return the relocation payments to UTTC under
any circumstances, if you are terminated by UTTC. In the
event you voluntarily leave UTTC prior to the end of the
term of this Letter Agreement, you shall repay to UTTC the
following relocation payments (but in no event more than the
amount of relocation monies actually paid to you prior to
the date of termination):
If termination is before you have sold your present
residence and before you have purchased a new residence
$100,000
If termination is after you have sold your present residence
and before you have purchased a new residence
$50,000 if you have received $100,000
$0 if you have received $50,000
If Termination is before you have sold your present
residence and after you have purchased a new residence
$50,000 if you have received $100,000
$0 if received if you $50,000
If termination is after you have sold your present residence
and after you have purchased a new residence $0
Sale or Purchase shall constitute signing a binding written
contract.
8.0 Commuting
8.1 It is expected that during the period July 8, 1996 through
September 15, 1996, you will average no more than three days
per week which require your presence in either Philadelphia,
PA or Columbia, MD. During this period of relocating
transition, when your presence is not required in
Philadelphia, PA or Columbia, MD, you shall be permitted to
perform your employment tasks at other locations, which are
convenient for you. By September 15, 1996, you shall
commence full-time work at Philadelphia, PA and shall have
made appropriate living arrangements in the Philadelphia
Metropolitan area to permit ready access to UTTC's
Philadelphia office.
8.2 During the period July 8, 1996 through September 15, 1996,
you shall be entitled to reimbursement of actual, documented
out-of-pocket commuting costs from Fairfax, VA to
Philadelphia, PA or Columbia, MD consisting of air fare,
train fare, or auto mileage plus overnight accommodations in
Philadelphia or Columbia. Reimbursement of such expenses
will be subject to review and approval by UTTC of reasonable
documentation therefor.
9.0 Stock Options and Rights:
9.1 Effective July 8, 1996, you shall be granted a three year
option for 250,000 shares of UTTC Common Stock at an option
price of $1.50 per share.
9.2 You will receive a Stock Option for 100,000 shares of Ashton
Stock. The price of the stock shall be the public price on
the close of the date of the signing of the option grant
(which is the date of the signing of this Letter Agreement).
The Stock Option shall be for ten years which shall vest 20
percent after the completion of each of the first two (2)
years of the Term (March 31, 1997 and March 31, 1998) and an
additional 60 percent after completion of the third year of
the term (march 31, 1999). A separate written Stock Option
document will be provided to you.
10.0 Errors and Omissions Insurance:
During the term of your employment, UTTC shall have in force
and effect (at its own cost) Officer's Errors and Omissions
Insurance, which shall include you as an incurred, with
coverage in such amounts as may be deemed appropriate by the
UTTC Board of Directors. The current policy of UTTC includes
$5,000,000 coverages, with no deductible.
11.0 Termination:
11.1 Your employment under this Letter Agreement may be
terminated by UTTC or you at any time, with or without
cause.
11.2 In the event of termination by UTTC, with or without cause,
UTTC shall pay to you one month's base salary for each whole
or partial six month period of employment under this Letter
Agreement, which remains of your three year term of
employment at the time of the notice of termination. For
example, if you are terminated four months after the start
of your employment, there remains one partial six month
period and five full six month periods of your three year
term of employment. Your termination payment would then be
six months of base salary.
11.3 In the event of termination by UTTC (with or without cause),
you shall be entitled to a prorata share of what your next
six months' semi-annual bonus based on the number of days
prior to such termination of employment included in such
six-month period.
11.4 The termination of your employment prior to the end of the
term (by either UTTC or you, and whether with or without
cause) shall not cause forfeiture of any stock options or
stock rights which you have under this Letter Agreement, or
any UTTC or Ashton Stock Plan in which you are a
participant.
11.5 As used in this Letter Agreement, "Cause" shall mean (a) a
refusal to perform Employee's lawful duties; (b) material
breach of this Agreement; (c) material misconduct; (d)
material failure to follow Ashton's policies, directives, or
orders applicable to Ashton employees holding comparable
positions; (e) intentional destruction or theft of Ashton
property or falsifications of Ashton documents; (f)
conviction of a felony or any crime involving moral
turpitude; or (g) violation of the Ashton Code of Conduct.
12.0 Disclosure of Confidential Information.
During and following your employment at UTTC, without the
written approval of UTTC, you agree not to disclose or use
any Confidential Information of Ashton, other than in
connection with authorized activities conducted in the
course of your employment at UTTC.
13.0 Non-competition.
If your employment with UTTC is terminated for Cause or you
voluntarily terminate your employment, you agree not to
engage directly or indirectly in any of the conduct set
forth in subparagraphs 13.1 through 13.3 below for a period
of one year following your termination of employment:
13.1 Hire, attempt to hire or assist any other person in
hiring or attempting to hire any employee of Ashton,
any person who was an Ashton employee within the
6-month period prior to the termination of your
employment, or any affiliated personnel of Ashton who
performed services for Ashton in the 6-month period
prior to the termination of your employment.
13.2 Solicit the business of either (i) any Ashton customer
to whom you rendered services during the 12-month
period prior to your termination of employment (a
"Specific Customer"); or (ii) any person or entity
whose business you solicited by multiple personal
contacts during the 6-month period prior to your
termination (a "Specific Contact"); or
13.3 Participate in any activity for any Specific Customer
or Contract which is the same as or substantially
similar to those activities which you performed for
such Specific Customer or proposed to perform for such
Specific Contact, unless to do so would not have a
material adverse effect on the business conducted
between Ashton and such Specific Customer or Specific
Contact.
Without affecting or limiting any other remedies to which
Ashton might be entitled, in the event you violate Paragraph
13.3, you will pay to Ashton an amount equal to 25% of the
gross fees/revenue generated from any Specific Customer or
Specific Contact for any engagement and/or services provided
as a result of an engagement during the period of
restriction on your activities.
14. Development of Methodologies.
During the course of your employment with UTTC, you may work
on or be a part of the development of non-public domain
management consulting methodologies, technologies, tools or
other systems for Ashton. You understand and agree that any
and all non-public domain methodologies, technologies, tools
and other systems developed by employees of Ashton
(including non-public domain methodologies, technologies,
tools and other systems developed by you for Ashton) and the
methodologies, technologies, tools and other systems and
business information of Ashton, shall be, and remain, the
sole and absolute property of Ashton, and that you shall
acquire no rights to any of these.
15. Assignment of Inventions and Copyrights.
In further consideration of your employment with Ashton, you
agree that any and all copyrights, inventions, improvements,
discoveries, processes, methodologies, tools or systems
authored, developed and discovered by you during and as a
result of your employment with Ashton shall be fully
disclosed to the officer in charge of Ashton Management
Consulting Services, and the same shall be the sole and
absolute property of Ashton; and upon the request of Ashton,
you shall execute, acknowledge and deliver such assignments
and other documents as Ashton may consider necessary or
appropriate to vest all rights, titles and interests therein
to Ashton. You further agree that Ashton during the term of
this Agreement may, with your written permission (such
permission not to be unreasonably withheld) use your image
as appropriate in the conduct of its business.
The Advanced Pattern Recognition Technology that you refer
to as the "Star Algorithm," invented by you prior to
employment by UTTC, and which is based on a cohort
clustering technique and dual-threaded normalization, shall
not be subject to any form of assignment (as described in
this section).
16.0 Exclusive Service.
You agree to devote your full time and best efforts to the
performance of your employment under this Agreement. While
employed by Ashton, you agree not to engage in any other
employment or business venture without the prior consent of
Ashton, unless to do so would in no way affect or conflict
with the performance of your duties for Ashton.
Continued development and enhancement of the "Star
Algorithm" (described in section 15 above) on your own
personal time shall be deemed a personal-use-only venture
and shall not in any way be deemed a breach of this
exclusive service clause. Furthermore, such enhancement and
development shall not be subject to any form of assignment
as described in section 15 above.
17.0 Drug Testing.
You understand and agree that, from time to time, you may be
tested to detect the presence or absence of any illegal
drugs or controlled substances and that the results of any
such tests shall be released to Ashton.
18. Monies Owed to Ashton.
Upon the separation of your employment from Ashton, you
agree to authorize Ashton to deduct from your final wages or
other monies due to you any debts or financial obligations
owned to Ashton by you except written loans which do not
require acceleration on termination.
19. Arbitration.
You agree that any controversy or dispute between you and
Ashton relating to or arising out of the termination of your
employment (other than disputes regarding an alleged
violation of paragraphs 12, 13, or 15) shall be fully and
finally resolved pursuant to standard Dispute Resolution and
Arbitration Procedures.
20. Remedies.
You understand and agree that Ashton will be irreparably
damaged in the event that the provisions of paragraphs 12,
13, or 15 of this Agreement are violated. You agree that
Ashton shall be entitled to (in addition to any other remedy
to which it may be entitled, at law or in equity) to an
injunction to redress breaches of paragraphs 12, 13, or 15
of this Agreement and to specifically enforce the terms and
provisions thereof.
21. Separability.
Each provision of this Agreement will be interpreted in such
a manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such
provisions, to the extent of such prohibition or invalidity,
shall be deemed not to be part of this Agreement, and shall
not invalidate the remainder of such provision or the
remaining provisions of this Agreement.
22. Governing Law.
Any action or proceeding arising out of or relating to this
Agreement may be commenced in any court of competent
jurisdiction in ▇▇▇▇▇▇ County, Maryland, or Federal Court in
the District of Maryland, and shall be governed by and
interpreted under the laws of Maryland, except for actions
or proceedings arising out of the alleged violations of
paragraph 13, which shall be governed by and interpreted
under the laws of the state in which Employee had his/her
principal Ashton office at the time of termination from
employment.
23. Amendments.
This Agreement may not be modified or amended except by
written instrument executed by you and an authorized
corporate officer of UTTC.
24. Entire Agreement.
This Agreement constitutes the parties' entire agreement,
and supersedes and prevails over all other prior, or
contemporaneous, agreements, understandings or
representations by or between the parties, whether oral or
written, with respect to the subject matters herein.
IN WITNESS WHEREOF, all parties have executed this Agreement to
be effective as of the Effective Date set forth below:
EFFECTIVE DATE June 21, 1996
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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[Employee Name]
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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[Signature]
UNIVERSAL TRADING TECHNOLOGIES
CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇
President and CEO
ASHTON TECHNOLOGY GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇
President and CEO
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice-President
ADDENDUM TO EMPLOYMENT AGREEMENT
OF ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
This addendum amends the Letter Employment Agreement (the "Letter Agreement")
dated June 21, 1996 between Universal Trading Technologies Corporation (UTTC),
Ashton Technology Group, Inc. (Ashton) and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (Employee). The
parties agree as follows:
1. Delete Paragraph 9.1 of the Letter Agreement and substitute the
following:
Effective July 8, 1996, you shall be granted a five year option for
250,000 shares of UTTC Common Stock at an option price of 51.50 per
share. The option may not be exercised in whole or in part before July
8, 1998, unless (1) UTTC files a registration statement for an initial
public offering or (2) majority control of UTTC is acquired by someone
other than Ashton, prior to July 8, 1998. In the event that the UTTC
Option is exercised the Certificate representing the shares of Common
Stock of UTTC shall contain an appropriate restricted legend under the
Securities Act of 1933, as amended.
2. In Paragraph 9.2 change the date March 31, 1997 to June 21, 1997. Add
the following sentence to the end of the paragraph: The Ashton Board
will file an S-8 Registration Statement which shall be effective no
later than June 21, 1997.
3. Renumber the original text of Paragraph 12.0 of the Letter Agreement
as 12.1.
4. Add as 12.2 the following:
"Confidential Information" shall mean, for the purposes of this Letter
Agreement, information of any type, which is owned by UTTC, at any
time during the Term, and which is not:
(i) in the public domain, or
(ii) disclosed publicly by UTTC or anyone else, or
(iii) generally known by those having a use for such type of
information, or
(iv) the same or substantially the same information that is in the
public domain, or disclosed publicly by anyone or generally known by
those having a use for such type of information.
5. Add as 12.3 the following:
Upon termination of your employment under this Letter Agreement for
any reason, you shall forthwith deliver to UTTC any and all documents,
customer lists, electronic media and any other materials, and all
copies thereof, in your possession or under your control relating to,
containing, or derived from Confidential Information (as that term is
defined in Paragraph 12.2 of this Letter Agreement).
6. Add as 13.4 the following:
Participate in any activity, in any manner, which involves the
development, or marketing, or operation of a service and/or product
which is in competition with the UTS and/or its successor System. The
"UTS and/or its successor System" shall mean, for purposes of this
Letter Agreement, a system of computer generated pricing, delivery,
and execution of securities and/or fungible commodities.
7. All provisions of the Letter Agreement which are not expressly amended
or modified by this Addendum, shall remain unchanged.
Executed this 21st day of June, 1996
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Employee
UNIVERSAL TRADING TECHNOLOGIES
CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇
President and CEO
ASHTON TECHNOLOGY GROUP, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇
President and CEO
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇
President and CEO
