Exhibit 10.2
EMPLOYMENT AGREEMENT
BETWEEN
AssureTec Systems, Inc.
AND
Xxxxxx X. Xxxxxxx
This EMPLOYMENT AGREEMENT made effective the 20th day of January, 2003 (the
"Effective Date"), by and between AssureTec Systems, Inc., such corporation
organized under the laws of Delaware with offices at 000 Xxxxxxxxx Xxxx,
Xxxxxxxxxx, XX 00000 (the "Company"), and Xxxxxx X. Xxxxxxx, residing at 00
Xxxxxxxxx Xxxxxxx Xxxx, Xxxxxx, XX 00000 (the "Employee").
W I T N E S E T H :
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The Company and the Employee desire that he serve as President and Chief
Operating Officer, an executive management position with the Company, on the
terms and conditions hereinafter set forth.
In consideration of the premises and covenants and agreements contained
herein, the parties hereto agree as follows:
1. Employment, Duties and Acceptance.
a. The Company initially employed the Employee to render his services on
behalf of the Company or affiliated companies as Executive Vice President of
Sales and becoming President and Chief Operating Officer effective May 1, 2003
and to perform those services normally associated with such titles in accordance
with the terms of this agreement.
b. The services of the Employee shall be rendered subject to the direction
of the Company's Board of Directors, its Executive Committee or such
individual(s) designated by either of these groups.
c. The Employee will accept such additional duties and assignments within
AssureTec Systems, Inc. as may be requested from time to time. These services
and additional duties shall be consistent with the Employee's position but need
not necessarily relate to the development and sale of imaging based
authentication systems and product activities.
d. The activities of the Employee shall be performed principally in
Southern New Hampshire in which the Company's research and engineering
facilities are located. From time to time, it may be necessary for the Employee
to work out of other locations, as the Company deems necessary. The Employee
recognizes that his duties may require of him overnight travel from time to
time.
e. The Employee hereby accepts such employment by signing this Agreement.
Subject to the provisions set out at Section 3 hereof and except for such
exemptions set out in Schedule A attached which are further referred to in
Sections 7 (b) (ii) hereof, the Employee shall devote all of his business time
to the business and affairs of the Company, shall use his best efforts to
promote the interests of the Company, and shall perform his duties faithfully,
diligently and to the best of his ability.
f. The Employee represents and warrants that he understands the importance
of the provisions of this Agreement to him, and has consulted with his own legal
counsel to the extent desired by him in order that the provisions of this
Agreement and the legal and tax consequences hereof may be understood and agreed
to by him.
g. The parties acknowledge that the Company intends that the Employee's
services, salary and other benefits provided for hereunder shall commence as of
the Effective Date.
2. Term of Employment.
a. The term of the Employee's employment shall commence as of the Effective
Date hereof and shall continue for a period from the Effective Date through
December 31, 2006. Neither Employee nor the Company makes any representation as
to whether this Agreement shall be renewed.
b. Notwithstanding the foregoing, the employment of the Employee shall
sooner terminate as provided herein in respect of his death, permanent and total
disability, all as provided in Section 6 below.
3. Compensation.
a. From the Effective Date through June 30, 2003 the Employee shall earn
compensation in the form of an option to acquire 200,000 shares of the Company's
common stock at a price of $.375 per as reflected in the attached Stock Option
Agreement Number One. Effective July 1, 2003, compensation shall accrue at the
rate of $13,500 per month ($162,000 per year), such compensation being deferred
until the Company's Directors determine such deferrals is no longer necessary
but in no event longer than a period ending October 1, 2004. Following cessation
of the referenced deferral period, Employee shall receive compensation payable
in cash (subject to required withholding). A performance and salary review shall
occur periodically after commencement of employment followed by an annual salary
adjustment deemed appropriate by the Directors of the Company.
b. In addition to the compensation described in this section, Employee is
eligible to receive an annual Performance Bonus based on results achieved
against annual performance expectations mutually agreed to with the CEO and
consistent with the then prevailing policy for executive bonuses established by
the Company's Directors.
c. In addition to the compensation described in this section, on the
Effective Date hereof Employee shall receive a stock option award the terms of
which are set forth in the Stock Option Agreement Number Two attached hereto
d. No agreement exists or shall be implied to provide any other form of
compensation to Employee such as company vehicle, stock, bonus other than as
provided hereunder. The Employee shall be eligible to receive only such salary
increases, bonus or incentive compensation, if any, as the Company and its
Directors may, in its sole discretion, elect to award.
4. Expenses
a. Following the Effective Date, Employee shall be entitled to
reimbursement for all normal and reasonable approved business expenses incurred
by him on behalf of the Company upon presentation of vouchers or other evidence
of those expenses in accordance with the Company's policies.
5. Benefits.
a. Employee is eligible to participate in any group life insurance program,
hospitalization insurance program, retirement plan, or similar benefit
plans available to professional employees of the Company. Upon the approval
of the CEO, and generally, in keeping with the Company's policies which may
be in effect during the term of this Agreement, Employee may apply for
coverage under the benefit plan available to professional employees of the
Company; provided, however, that this provision shall not require the
Company to create or maintain any such programs or plans. The Company
reserves the right to limit its contribution in effect anytime after the
Effective Date hereof provided such policy is equally applied to the
engineering team as a matter of policy. Should employee elect to continue
the COBRA benefits provided by his former employer, employee will be
reimbursed $706.33 per month beginning with date of employment to date
employee receives benefits from AssureTec Systems benefit provider.
b. Employee will be permitted to take up to four (4) weeks vacation each
year, in accordance with applicable policies of the Company. Such time
shall be pro rated for each calendar year. Employee shall be eligible for
additional vacation time if and when such is made available to the
professional employees. Any vacation time not used by the Employee during
any calendar year shall be forfeited without obligation on the part of the
Company to compensate the employee, except that a maximum of
one half the annual vacation due employee may be carried over subject to
the advanced approval of the CEO of the Company.
6. Termination.
a. Termination by the Company for Cause.
If the Employee shall, during his employment (i) breach his fiduciary duty
to the Company, (ii) breach any of the material terms of this Agreement, (iii)
engage in any wrongful appropriation of any significant opportunity properly
belonging to the Company; or (iv) be convicted of a felony (any of the foregoing
shall constitute "cause" for purposes of this Agreement), the Company shall have
the right to immediately terminate the Employee's employment, whereupon the
Employee shall be entitled solely to receive any unpaid amounts associated with
his then applicable salary at the rate provided in Section 3 (a). Such unpaid
amount shall be calculated through to the day on which such termination shall
take effect. In addition to amounts called for under this Section 6 (a), amounts
payable to Employee under Section 3(b) shall be pro-rated through the day on
which such termination shall take effect however the terms governing the payment
of such amount, as set forth therein, shall not be changed.
b. Early Termination by the Company Without Cause.
In the event 1) the Company terminates the services of the Employee during
the term hereof without cause (cause as set forth in (a) above) or 2) there is a
significant change in the Employee's position, role or responsibilities (items 1
& 2 individually to be considered a "Compensatory Terminating Event") upon the
date of written notice of such Compensatory Terminating Event, the Employee
shall be entitled to receive, and the Company shall pay to the Employee an
amount equal 1) to his salary then payable pursuant to Section 3(a) and 2) the
monthly amount of the cash bonus stated in Section 3 (b) , such amounts shall be
paid for a period of twelve months from the date of written notice of such
Compensatory Terminating Event, such payments to be made on the last
day of each month of that continuation period following written notice of such
Compensatory Terminating Event provided that during such period the Employee (i)
makes himself available to, cooperates with, and assists the Company as a
consultant and otherwise to effect an orderly transition, and (ii) observes the
covenants contained in Section 7 below. During the period of salary continuance
as provided under this provision, base salary in effect at the time of
termination shall be the salary without increase for the entire term of salary
continuance.
Amounts payable to Employee under Section 3(b) of this Employment Agreement
shall be pro-rated through the day on which such termination shall take effect,
however the terms governing the payment of such amount, as set forth therein,
shall not be changed. The parties intend that such salary payments plus the
rights contained in Section 3 (c) of the Option Agreement attached hereto shall
constitute full and liquidated damages for such termination without cause, and
the Employee shall have no duty to mitigate his losses by seeking other
employment or income during or in respect of the salary continuance period
following such termination. In the event termination is a direct result of the
Company not being able to meet its financial obligations as they become due,
such salary continuance shall be payable in the form of Company common stock
valued at the higher of the most recent offering of stock to unrelated investors
or $.75 per share.
c. Benefits Payable Upon Death.
In the event of the Employee's death during the term hereof, the Employee
or the Employee's designated beneficiaries shall be entitled to receive his base
salary at the rate provided in Section 3(a) and the benefits provided in Section
5 through the end of a three month period following the payroll period in which
death occurred, such salary continuance period to be inclusive of all accrued
vacation time Employee otherwise would be eligible for at the time of Employee's
death. In addition, the Employee's designated beneficiaries shall be entitled to
receive; 1) the available proceeds under any group term or other insurance
maintained for the benefit of the Employee and 2)
Employee's interest in any stock options vested at the time of Employee's death.
In addition to amounts called for under this Section 6 (c) amounts payable to
Employee under Section 3(b) shall be pro-rated through the date of the Employees
death, however the terms governing the payment of such amount, as set forth
therein, shall not be changed.
7. Covenants During or Following the Term of This Agreement by Employee.
a. Assistance in Litigation. The Employee shall, upon reasonable notice,
furnish such information and proper assistance to the Company during or
following the term of this Agreement as may reasonably be required by the
Company in connection with any litigation in which it or any of its subsidiaries
or affiliates is, or becomes, a party.
b. Covenant Not to Compete.
(i) The Employee agrees that, during the period of his employment and for
six months thereafter, he will not, except on behalf of the Company or any
of its subsidiaries or affiliates, directly or indirectly, whether as an
officer, director, stockholder, partner, proprietor, associate, employee,
consultant, representative or in any other capacity, become involved or be
interested in, or otherwise associated with a business activity, any other
person, corporation, firm, partnership or other entity whatsoever involving
Company sales agents, employees, or customers. Employee shall not engage in
document authentication development activities reasonably similar to the
company's research and products in the field of border control, check
cashing verification, public transportation passenger control and products
reasonably similar to the company's products and technologies whether or
not protected by patent, such within any territory or area in which the
Company is then engaging in business or providing goods or services to its
customers; provided, however, that anything to the contrary
notwithstanding, the Employee may own as an inactive investor securities of
any competitor corporation listed on a national securities exchange or
traded in the over-the-counter market, so long as his holding in any one
such corporation shall not in the
aggregate constitute more than 2% of the voting stock of such corporation.
If Employee desires to have such non-compete period less than six months,
Employee shall submit such request in writing to the Company within 30 days
following termination of employment. Company shall have no obligation to
consent to such request.
(ii) Employee shall devote his exclusive and entire services to the Company
as hereinbefore described. The Employee agrees that during his employment
he shall not accept any position, employment, gratuities, compensation, or
the like from any person, corporation, firm, partnership or other entity
whatsoever without written consent from the Company.
(iii) Non-Solicitation of Fellow Employees and Agents.
The Employee further agrees that, during the period of his employment and
for a period of one (1) year after any termination thereof, for whatever
reason, he will not solicit any employee or Agent of the Company or any
subsidiary or affiliate of the Company to terminate his employment or
agency relationship with the Company or any of its subsidiaries or
affiliates.
(iv) If any restriction set forth in this Section 7(b) is found by any
court of competent jurisdiction to be unenforceable because it extends for
too long a period of time or over too great a range of activities or in too
broad a geographic area, it shall be interpreted to extend only over the
maximum period of time, range of activities or geographic area as to which
it may be enforceable.
c. Proprietary Information.
(i) Employee agrees that all information and know-how, whether or not in
writing, of a private, secret or confidential nature concerning the
Company's business or financial affairs (collectively, "Proprietary
Information") is and shall be the exclusive property of the Company. By way
of illustration, but not a limitation, Proprietary Information includes,
but is not limited to, inventions, products, processes, methods,
techniques, formulas, compositions, compounds, Projects, developments,
plans, research data, financial data, personnel data, computer programs,
and customer and
supplier lists, software and systems codes and architecture. Employee will
not disclose any Proprietary Information to others outside the Company or
use the same for any unauthorized purposes without written approval by an
Officer of the Company, either during or after his employment, unless and
until such Proprietary Information has become public knowledge without
fault by the Employee.
(ii) Employee agrees that all files, letters, memoranda, reports, formulas,
customer and agent lists, records, data, sketches, drawings, laboratory
notebooks, program listings, or other written, photographic, or other
tangible material containing Proprietary Information, whether created by
the Employee or others, which shall come into his custody or possession
during his employment by the Company, shall be and are the exclusive
property of the Company to be used by the Employee only in the performance
of his duties for the Company.
(iii) Employee agrees that his obligation not to disclose or use
information, know-how and records of the types set forth in paragraphs (i)
and (ii) above, also extends to such types of information, know-how,
records and tangible property of customers of the Company or suppliers of
the Company or other third parties who may have disclosed or entrusted the
same to the Company or to the Employee in the course of the Company's
business.
d. Patents and Other Developments. With respect to every patent, patent
application, invention, product, process, program, apparatus, design, trademark,
trade name, copyrightable work or other legally protectable form of
"intellectual property" ("Protectable Asset") which the Employee, singly or
jointly with others, during his employment by the Company or any of its
subsidiaries or affiliates or during the period of salary continuance following
termination of employment, for any reason may (during normal business hours
and/or using "company" facilities or resources) invent, create, make, discover,
conceive, originate or reduce to practice and relating in any way to the
products, devices, procedures, programs or schemes then being utilized by the
Company or its subsidiaries or affiliates or which otherwise relate to the field
of research and or product development of the Company or its subsidiaries or
affiliates, the Employee:
(i) will promptly fully disclose same to the Company and will not disclose
same to any other person, company or party without the Company's consent;
(ii) does hereby assign same and all United States and foreign patent
applications, patents, trademarks, trademark applications, trade names and
copyrights that may be filed or issued thereon to the Company;
(iii) will, but without personal expense, fully cooperate with the Company
or any of its subsidiaries or affiliates in applying for and securing in
the Company's name, or that of its nominee or designees, patents(s),
trademark(s), trade name(s) or copyright(s) on the same in each country in
the world in which the Company or its nominees or designees may desire to
secure such protection or registration and the Employee will promptly
execute all proper documents presented to him for signature by the Company
or its nominees or designees to enable it or them to secure such protection
or registration and to transfer legal title therein, to Company or its
nominees or its designees;
(iv) will, but without personal expense, give such true information and
testimony as may be requested by the Company or its nominees or designees
relative to the same or relative to such invention(s), product(s),
program(s), process (es), apparatus, design(s), trademark(s), trade name(s)
or work(s) invented, created, made, discovered, conceived, originated or
reduced to practice by any other person or persons and concerning which he
has knowledge by reason of his employment by the Company, or any of its
subsidiaries or affiliates; and
(v) states that the only patents, inventions, products, processes,
programs, apparatuses, designs, trademarks, trade names or copyrights, or
applications for any of the same, in which the Employee personally holds an
interest prior to the Effective Date are listed and described in a Schedule
attached hereto and are not subject to this Agreement. The absence of any
such Schedule means that no such exceptions exist.
Except as set forth in Schedule A, as of the Effective Date, the Employee
does not own nor is he currently developing a Protectable Asset(s) as that
term is defined in this Section
e. Other Agreements. Employee hereby represents that he is not bound by the
terms of any agreement with any previous employer or other person or
company to refrain from using or disclosing any trade secret or
confidential or proprietary information in the course of his employment
with the Company which relates directly to the Company's business or to
refrain from competing, directly or indirectly, with the business of such
previous employer or any other person or company. Employee further
represents that his performance of all the terms of this Agreement and as
an Employee of the Company does not and will not breach any agreement to
keep in confidence proprietary information, knowledge or data acquired by
him in confidence or in trust related to the Company's business prior to
his employment with the Company.
f. Company's Legal Remedies. The Company and the Employee agree that a
violation of the foregoing covenants of this Section 7 or any provision
thereof, will cause irreparable injury to the Company and its subsidiaries
and affiliates, and that the Company and its subsidiaries and affiliates
shall be entitled, in addition to any other rights and remedies they may
have at law or in equity, to an injunction enjoining and restraining the
Employee from doing or continuing to do any such act and any other
violations or threatened violations if this Section 7 or any provisions
thereof.
8. Nonassignability.
Except as otherwise provided herein), neither this Agreement nor any right
or interest hereunder shall be assignable by the Employee, his beneficiaries, or
legal representatives without the Company's prior written consent; provided,
however, that nothing in this Section (8) shall preclude (i) the Employee from
designating a beneficiary to receive any benefit payable hereunder upon his
death, or (ii) the executors, administrators, or other legal representatives of
the Employee or his estate from assigning any rights hereunder to the person or
persons entitled thereunto.
9. No Attachment.
Except as required by law, no right to receive payments under this
Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation or to execution,
attachment, levy, or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null, void
and of no effect.
10. Binding Agreement.
This Agreement shall be binding upon, and inure to the benefit of, the
Employee and the Company and their respective permitted successors and assigns.
11. Complete Agreement.
This Agreement and any agreements specifically referred to herein contain a
complete statement of all arrangements between the parties with respect to the
subject matter hereof and supersede any previous agreements, written or oral,
relating to the subject matter hereof.
12. Amendment of Agreement.
This Agreement may not be modified or amended except by an instrument in
writing signed by the parties hereto.
13. Waiver.
No term or condition of this Agreement shall be deemed to have been waived,
nor shall there by an estoppel against the enforcement of any provision of this
Agreement, except by written instrument of the party charged with such waiver or
estoppel. No such written waiver shall be deemed a continuing waiver unless it
specifically states such therein, and then, each such waiver shall operate only
as to the specific term or condition and shall not relate to any act other than
that specifically waived. A waiver of a term or condition of this Agreement on
any occasion does not imply that a waiver of the same term or condition will or
should be granted on any other occasion.
14. Severability.
If, for any reason, any provision of this Agreement is held invalid, such
invalidity shall not affect any other provisions of this Agreement not held so
invalid, and such other provisions shall to the full extent consistent with law
continue in full force and effect. If any provision of this Agreement shall be
held invalid in part, such invalidity shall in no way affect the rest of such
provision not held so invalid, and the rest of such provision, together with all
other provisions of this Agreement, shall to the full extent consistent with law
continue in full force and effect. If this Agreement is held invalid or cannot
be enforced, then, to the full extent permitted by law, any prior agreement
between the Company (or any predecessor thereof) and the Employee shall be
deemed reinstated as if this Agreement has not been executed.
15. Headings.
The headings of paragraphs herein are included solely for convenience of
references and shall not control the meaning or interpretation of any of the
provisions of this Agreement.
16. Governing Law.
This Agreement and its validity, interpretation, performance and
enforcement shall be governed by the laws of the State of New Hampshire
17. Notices.
All notices which Company is required or may desire to give to the Employee
shall be given by certified or registered mail, addressed to the Employee at the
address referred to above, or at such other place as the Employee may from time
to time designate in writing. All notices that the Employee is required or may
desire to give to the Company hereunder shall be given by certified or
registered mail, addressed to Company at its principal office, or at such other
office as Company may from time to time designate in writing. Five days after
the date of mailing any such notice shall be deemed to be the date of delivery
thereof, unless actual prior delivery occurs.
18. Miscellaneous.
This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same
instrument. The headings contained in this Agreement are for reference purposes
only and shall not affect the meaning or interpretation of this Agreement. All
pronouns shall be deemed to refer to the masculine or feminine gender, as
applicable.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
Date:
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Xxxxxx X. Xxxxxxx
Date:
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R. Xxxxx Xxxxxx, PhD
Chairman and Chief Executive Officer
AssureTec Systems, Inc.
..
Attest _____________________________________________
Xxxxx X. Xxxx, Director
AssureTec Systems, Inc.