AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
XXXX X. XXXXX AND ERGOVISION, INC.
AGREEMENT, dated as of the 1ST day of July, 1998 by and between
ERGOVISION, INC., having a place of business at Xxx Xxxxxxxxx Xxxxx, Xxxxxxxxx,
Xxx Xxxx 00000 (hereinafter designated and referred to as "Company"), and Xxxx
X. Xxxxx residing at 000 Xxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000
(hereinafter designated and referred to as "Employee" , "his" or "him").
WHEREAS, The Company and the Employee entered into an Employement
Agreement, dated as of the 1ST day of January, 1997; and
WHEREAS, the Company desires to continue to employ the Employee as
President and Chief Operating Officer and serve as Director in accordance with
the provisions hereinafter set forth;
WHEREAS, the Employee is willing to continue such employment by the
Company, all in accordance with provisions hereinafter set forth; and
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, the parties hereto agree as follows:
1. Term: The term of this Agreement shall be for a period of three
(3) years commencing July 1, 1998 and automatically terminating on June 30,
2001, subject to earlier termination as provided herein or unless extended by
mutual consent of both parties in writing ninety (90) days prior to the end of
the term of this Agreement or any extension thereof, but nothing herein shall
require the Company or Employee to agree to any specific term or condition or to
any continuation of Employee's employment beyond the end of the term of this
Agreement.
2. Employment: Subject to the terms and conditions and for the
compensation hereinafter set forth, the Company employs the Employee for and
during the term of this Agreement as President and Chief Operating Officer. The
Employee further agrees to serve, as a director of the Company's Board of
Directors. The Employee does hereby accept such employment and agrees to use his
best efforts and to devote all normal business time, during the term of this
Agreement, to the performance of his duties faithfully, diligently and to the
best of his abilities upon the conditions hereinafter set forth. Employee shall
report to the Board of Directors of the Company.
3. Compensation: During the term of this Agreement, the Company
agrees to pay Employee, and Employee agrees to accept a salary at an annual rate
of Eighty Two Thousand Five Hundred Dollars ($82,500) from July 1, 1998 through
December 31, 1998; and an annual salary of One Hundred Thousand Dollars
($100,000) per year commencing January 1, 1999, payable at least every two
weeks, less all applicable taxes, for all services rendered by
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Employee hereunder. Employee's annual salary and other benefits provided for
hereunder are subject to periodic increases ( but not decreases) at the
discretion of the Board of Directors. As additional compensation, the Company
may pay the Employee periodic bonuses as determined by the Board of Directors.
4. Expenses: The Company shall reimburse Employee, not less often
than monthly, for all actual and reasonable business expenses incurred in
connection with his service to the Company, upon submission of appropriate
vouchers and expense account reports.
5. Automobile: The Company shall be responsible or reimburse
Employee for lease anf or loan payments, insurance and registration expenses,
all maintenance and gasoline of a car approved by the Company.
6. Benefits: The Company shall provide medical insurance and such
other benefits, in accordance with the applicable Company benefit plans, as such
plans may exist from time to time. The Employee shall be entitled to annual
vacation in accordance with the Company's policy.
7. Extent of Service: The Employee during the term of this Agreement
shall devote his full normal business time, attention and energy and render his
best efforts and skill to the business of the Company.
8. Restrictive Covenant:
[A] Employee acknowledges that: (i) the business in which the
Company is engaged is intensely competitive and that his employment by the
Company will require that he have access to and knowledge of confidential
information of the Company, including, but not limited to, certain of the
Company's confidential plans for the creation, acquisition or disposition of
products, expansion plans, product development plans, methods of pricing,
special customer requirements for service, information on methods of servicing
the customer, operational information such as formulas, financial status, and
plans and personnel information, which are of vital importance to the success of
the Company's business, and are "trade secrets" of the Company; (ii) the direct
or indirect disclosure of any such confidential information to existing or
potential competitors of the Company would place the Company at a competitive
disadvantage and would cause damage, financial and otherwise, to the Company's
business; and (iii) by his training, experience and expertise, some of his
services to the Company will be special and unique.
Employee understands and agrees that such trade secrets give or may
give the Company a significant competitive advantage. Employee further
recognizes that the success of the Company depends on keeping confidential both
the trade secrets already developed or to be acquired and any future
developments of trade secrets. Employee understands that in his capacity with
the Company he will be entrusted with knowledge of such trade secrets and, in
recognition of the importance thereof and in consideration of his employment by
the Company hereunder, agrees that he will not, without the consent of the Board
of Directors in writing, make any disclosure of trade secrets now or hereafter
possessed by the Company to any person,
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partnership, corporation or entity either during or after the term hereunder,
except to such employees of the Company or its subsidiaries or affiliates, if
any, as may be necessary in the regular course of business and except as may be
required pursuant to any court order, judgment or decision from any court of
competent jurisdiction. The provisions of this Section 8[A] shall continue in
full force and effect notwithstanding any termination of this Agreement.
[B] Employee agrees that, during the term of this Agreement
and for a period of one (1) year thereafter, the Employee shall not, directly or
indirectly, engage in, or serve as, a principal, partner, joint venturer,
member, manager, trustee, agent, stockholder, director, officer or employee of ,
or consultant or advisor to, or in any other capacity, or in any manner, own,
control, manage, operate, or otherwise participate, invest, or have any interest
in , any business or company that engages in directly or indirectly the business
then being planned or conducted by the Company or its divisions and
subsidiaries. The provisions of this Section 8[B] shall continue in full force
and effect notwithstanding any termination of this Agreement.
9. Discoveries, etc.:
[A] The Company shall be the owner, without further
compensation, of all rights of every kind in and with respect to any reports,
materials, inventions, processes, discoveries, improvements, modifications,
know-how or trade secrets hereafter made, prepared, invented, discovered,
acquired, suggested or reduced to practice (hereinafter designated and referred
to as "Property Rights") by Employee in connection with Employee's performance
of his duties pursuant to this Agreement, and the Company shall be entitled to
utilize and dispose of such in such manner as it may determine.
[B] The Employee agrees to and shall promptly disclose to the
Board of Directors or their designee all Property Rights (whether or not
patentable) made, discovered or conceived of by him, alone or with others, at
any time during his employment with the Company, whether on the Company's or his
own time and irrespective of whether on or off the Company's premises, provided
only that such Property Rights (1) relate to or are useful in any phase of the
business in which the Company may be engaged during the period of employment, or
(2) relate to any subject matter or problems within the scope of Employee's
employment, or (3) relate to or involve the use of any data or information of
which the Employee has been or may become informed by reason of employment with
the Company. The Employee hereby appoints the Company as Employee's
attorney-in-fact to execute in accordance with the laws of any country patent
applications, assignments or other documents considered necessary or desirable
by the Company. Any such Property Rights will be the sole and exclusive property
of the Company, and Employee will execute any assignments requested by the
Company of his right, title or interest in any such Property Rights without
further demand or consideration, and, in addition, the Employee will also
provide the Company with any other instruments or documents requested by the
Company, at the Company's expense, as may be necessary or desirable in applying
for and obtaining patents with respect thereto in the United States and all
foreign countries. The Employee also agrees to cooperate with the Company in the
prosecution or defense of any patent claims or litigation or proceedings
involving inventions, trade secrets, trademarks, services marks, secret
processes, discoveries or improvements, during his employment by the Company.
Employee's cooperation after his employment is subject to his availability and
the Company
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agrees to reimburse Employee for loss of income and expenses incurred in
connection therewith. Said cooperation shall not be withheld by Employee.
10. Confidential Information: Employee recognizes and acknowledges
that the Company, through the expenditure of considerable time and money, will
acquire, has developed and will continue to develop in the future, information,
skills, confidential information, know-how, formulae, technical expertise and
methods relating to or forming part of the Company's services and products and
conduct of its business, and that the same are confidential and proprietary, and
are "trade secrets" of the Company. Employee understands and agrees that such
trade secrets give or may give the Company a significant competitive advantage.
Employee further recognizes that the success of the Company depends on keeping
confidential both the trade secrets already developed or to be acquired and any
future developments of trade secrets. Employee understands that in his capacity
with the Company he will be entrusted with knowledge of such trade secrets and,
in recognition of the importance thereof and in consideration of his employment
by the Company hereunder, agrees that he will not, without the consent of the
Board of Directors in writing, make any disclosure of trade secrets now or
hereafter possessed by the Company to any person, partnership, corporation or
entity either during or after the term hereunder, except to such employees of
the Company or its subsidiaries or affiliates, if any, as may be necessary in
the regular course of business and except as may be required pursuant to any
court order, judgment or decision from any court of competent jurisdiction. The
provisions of this Section shall continue in full force and effect
notwithstanding any termination of the Agreement.
11. Irreparable Harm: Employee agrees that any breach or threatened
breach by Employee of provisions set forth in Sections Eight (8), Nine (9), and
Ten (10) of this Agreement, would cause the Company irreparable harm and the
Company may obtain injunctive relief against such actual or threatened conduct
and without the necessity of a bond.
12. Return of Company Property: Employee agrees that following the
termination of his employment for any reason, he shall return all property of
the Company which is then in or thereafter comes into his possession, including,
but not limited to, documents, contracts, agreements, plans, photographs,
customer lists, books, notes, electronically stored data and all copies of the
foregoing as well as any other materials or equipment supplied by the Company to
the Employee.
13. Termination:
[A] Death: In the event of the Employee's death during the
term of his employment, this Agreement shall automatically terminate on the date
of death, and Employee's estate shall be entitled to payment of Employee's
salary until date of death and three (3) months thereafter. All other benefits
and compensation described herein shall terminate on the date of death unless
otherwise stipulated in the applicable Company plan.
[B] Disability: In the event the Employee, by reason of
physical or mental incapacity, shall be disabled for a period of at least four
(4) consecutive months or six (6) months in the aggregate in any twelve (12)
month period of this Agreement or any extension
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hereof, the Company shall have the option at any time thereafter to terminate
Employee's employment and to terminate this Agreement. Such termination to be
effective ten (10) days after the Company gives written notice of such
termination to the Employee, and all obligations of the Company hereunder shall
cease upon the date of such termination unless Employee shall have returned to
the performance of his duties prior to the effective date of the notice.
"Incapacity" as used herein shall mean the inability of the Employee to
substantially perform his normal duties. Employee's salary as provided for
hereunder shall continue to be paid during any period of incapacity prior to and
including the date on which Employee's employment is terminated for
disabilityand for three (3) months following the termination date.
[C] Company's Rights To Terminate This Agreement:
[a] The Company shall have the right, before the
expiration of the term of this Agreement, to terminate this Agreement and to
discharge Employee for cause (hereinafter "Cause"), and all compensation to
Employee shall cease to accrue upon discharge of the Employee for Cause. For the
purposes of this Agreement, the term "Cause" shall mean the Employee's (i)
violation of the Company's written policy or specific written directions of the
Board of Directors, which directions are consistent with normally acceptable
business practices or the failure to observe, or the failure or refusal to
perform any obligations required to be performed in accordance with this
Agreement, (ii) if the Board of Directors determines that Employee has committed
a demonstrable act (or omission) of malfeasance seriously detrimental to the
Company (which shall not include any exercise of business judgment in good
faith).
[b] If the Company elects to terminate Employee's
employment for Cause, the Company shall first give Employee written notice and a
period of twenty (20) days to cure such Cause, and if such Cause is not cured in
said twenty (20) days, such termination shall be effective ten (10) days after
the Company gives written notice of such failure to cure to the Employee. In the
event of a termination of the Employee's employment for Cause in accordance with
the provisions of Section 11[C][b], the Company shall have no further obligation
to the Employee, except for the payment of salary and for any other compensation
and/or expenses through the date of such termination from employment.
14. Waiver: Any waiver by either party of a breach of any provision
of this Agreement shall not operate as or be construed as a waiver of any other
breach or default hereof.
15. Governing Law: The validity of this Agreement or of any of the
provisions hereof shall be determined under and according to the laws of the
State of New York, and this Agreement and its provisions shall be construed
according to the laws of the State of New York, without reference to its choice
of law rules.
16. Notices. Any notice required to be given pursuant to the
provisions of this Agreement shall be in writing and shall be delivered in
person or by registered or certified mail to the respective parties at their
addresses set forth on the first page of this Agreement (or such other address
as the party to receive notices has given by notice hereunder to the other
party). Any such notice by personal delivery shall become effective upon receipt
and any notice by registered or certified mail shall become effective five
business days after mailed.
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17. Assignment: The Employee's assignment of this Agreement or any
interest herein, or any monies due or to become due by reason of the terms
hereof, without the prior written consent of the Company shall be void. This
Agreement shall be assignable and binding to a corporation or other business
entity that succeeds to all or substantially all of the business of the Company
through merger, consolidation, corporate reorganization or by acquisition of all
or substantially all of the assets of the Company and which assumes Company's
obligations under this Agreement.
18. Miscellaneous: This Agreement contains the entire understanding
between the parties hereto and supersedes all other oral and written agreements
or understandings between them. No modification or addition hereto or waiver or
cancellation of any provision shall be valid except by a writing signed by the
party to be charged therewith.
19. Obligations of a Continuing Nature: It is expressly understood
and agreed that the covenants, agreements and restrictions undertaken by or
imposed on either party hereunder, which are stated to exist or continue after
termination of Employee's employment with the Company, shall exist and continue
on both parties irrespective of the method or circumstances of such termination
from employment or termination of this Agreement.
20. Severability: Employee agrees that if any of the covenants,
agreements or restrictions on the part of Employee are held to be invalid by any
court of competent jurisdiction, such holding will not invalidate any of the
other covenants, agreements and/or restrictions herein contained and such
invalid provisions shall be severable so that the invalidity of any such
provision shall not invalidate any others. Moreover, if any one or more of the
provisions contained in this Agreement shall be held to be excessively broad as
to duration, activity or subject, such provisions shall be construed by limiting
and reducing them so as to be enforceable to the maximum extent allowed by
applicable law.
21. Representation: Employee represents and warrants that he has the
legal right to enter into this Agreement and to perform all of the duties and
obligations on his part to be performed hereunder in accordance with its terms
and that he is not a party to any agreement or understanding, written or oral,
which prevents Employee from entering into this Agreement or performing all of
his duties and obligations hereunder. In the event of a breach of such
representation or warranty on his part or if there is any other legal impediment
which prevents him from entering into this Agreement or performing all of his
duties and obligations hereunder, the Company shall have the right to terminate
this Agreement in accordance with Section 13[C][a]; in which event the "Cause"
shall not be deemed curable under Section 13[C] [b]. Without limiting the
foregoing, Employee represents and warrants that he is not a party to any
agreement which prohibits or limits his ability to fulfill his duties and
responsibilities contemplated herein.
22. Descriptive Headings. The paragraph headings contained herein
are for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as
of the day and year first above written.
ERGOVISION, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxxxx
Chief Executive Officer
/s/ Xxxx X. Xxxxx
--------------------------------
Xxxx X. Xxxxx
Employee
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