EXHIBIT 10.1
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EMPLOYMENT AGREEMENT
AGREEMENT made as of March 1, 2005, by and between SWK TECHNOLOGIES,
INC., a Delaware corporation (hereinafter referred to as the "Company"), having
an office at 000 Xxxxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 and Xxxxxx
Xxxxx, currently residing at ___________________________ (hereinafter referred
to as the "Executive").
W I T N E S S E T H :
WHEREAS, the Company desires to engage the services of the Executive,
and the Executive desires to render such services;
NOW, THEREFORE, in consideration of the premises, the parties agree as
follows:
1. EMPLOYMENT. The Company hereby employs the Executive as Vice
President, and the Executive hereby accepts such employment, subject to the
terms and conditions hereinafter set forth. The Company agrees that within sixty
(60) days following the commencement of the employment agreement, it will
evaluate Executive's areas of responsibilities and shall continue to do so
during the first year of this Agreement. By the end of the first year of this
Agreement, the Company agrees that Executive's title shall be changed to more
accurately reflect his position and responsibilities.
2. TERM. The term of the Executive's employment hereunder shall
commence on the date of execution of this Agreement and shall continue to
February 29, 2008 (the "Term") unless such Term is earlier terminated in
accordance with the provisions of this Agreement.
3. DUTIES. The Executive agrees that the Executive will serve the
Company on a full-time basis faithfully and to the best of his ability as the
Vice President of the Company, subject to the general supervision of the Chief
Executive Officer and the Board of Directors of the Company. The Executive
agrees that the Executive will not, during the term of this Agreement, engage in
any other business activity which interferes with the performance of his
obligations under this Agreement and Executive will devote all of his working
time to the business and affairs of the Company; provided, however, that the
foregoing shall not be construed as precluding the Executive from (i) serving on
the board of directors of any corporation not directly competitive or
competitive in any material respect with the Company, and (ii) investing or
trading in securities or other forms of investment, in each case, so long as
such activities do not materially interfere with the performance of the
Executive's duties hereunder and such investments do not represent the ownership
of five percent (5%) or more of the capital stock of publicly traded entities.
Unless otherwise determined by the Company, Executive shall have the title of
Vice President, and in such capacity shall have such
authority and duties as may be assigned by the Chief Executive Officer.
Performance of Executive's duties hereunder shall in no event require that
Executive relocate.
4. COMPENSATION.
(a) In consideration of the services to be rendered by the Executive
hereunder, the Company agrees to pay the Executive, and the Executive agrees to
accept fixed compensation at the rate One Hundred Forty Five Thousand
Dollars($145,000), subject to all required federal, state and local payroll
deductions, that shall increase on the anniversary date of March 1, 2005 and
upon every annual anniversary thereafter, at a rate equal to the percentage of
any increase in the Consumer Price Index - All Consumers for the New
York-Northeastern New Jersey Region as reported by the Bureau of Labor
Statistics for the United States, as compared with the same Consumer Price Index
for the immediately preceding year.
(b) The Executive shall be entitled to 20 days vacation during each
calendar year, except for the first 10 months of the Agreement, when the
Executive shall be entitled to 17 days vacation. In the event that at the end of
any calendar year, the Executive has not used up to 10 days of his vacation days
for such year, Executive shall be paid an amount equal to his prorated salary at
the time such vacation time accrued each year, by no later than January 31 of
the following year. No compensation shall be paid for in excess of 10 unused
vacation days in any calendar year for any calendar year.
(c) The Executive shall be entitled to such holidays, personal and sick
days in accordance with and subject to the Company's (as defined below) policies
for its own senior executives, as in effect from time to time.
(d) The Executive shall receive medical benefits in accordance with the
plan in place at the company; such benefits may change from time to time. The
Executive shall also receive either qualified retirement benefits or be made a
beneficiary under an incentive stock option plan. The Executive shall receive
any and all benefits made available to other similar Executives of the Company
as it relates to non-compensation benefits and perquisites. Compensation
Benefits (defined as stock grants, incentive stock options, cash bonuses, etc.)
will be made on a discretionary basis, and Executive accepts and acknowledges
that all Executives may not receive the same Compensation Benefit, in either
type or size, in any given year.
(e) To the extent that the Executive becomes mentally or physically
disabled, Executive shall continue to receive his salary and other benefits
hereunder until the expiration of the term of this Agreement or the termination
of this Agreement pursuant to Paragraph 10 hereof; provided, however, that such
salary shall be reduced by any disability benefits Executive receives from
policies maintained and paid for by the Company.
(f) The Executive will receive a monthly car allowance of $650.
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(g) Upon execution of this Agreement, Executive shall be paid a signing
bonus equal to $80,000. Such bonus shall be paid in twenty-four (24) equal
installments of $3,333.33, such payments to commence on June 1, 2005.
(h) The Executive will receive a commission equal to $1,500 (to a
maximum of $60,000) plus those number of shares of Trey Resources, Inc. Class A
Common Stock equal to $1,875 (to a maximum of $75,000) for every customer of
Business Consulting Solutions LLC which Best Software, Inc. transfers the
Reseller of Record on the records maintained by Best Software, Inc to the
Company. The value of the Common Stock shall be equal to the average closing
price for the five trading days prior to the signing of this document.
(i) By no later than September 1, 2005, the Company will obtain a
policy of term life insurance on Executive's life, which policy shall provide
for $500,000 in death benefits; provided, however, that such policy is available
at standard rates or better. The beneficiaries on such policy shall be the
Company and Executive's estate and such beneficiaries shall share equally in any
proceeds of such policy. During the Term, the Company will pay the premiums on
any such policy and use its commercially reasonable efforts to keep such policy
in full force and effect.
(j) Executive will receive a bonus at the end of the first year
following the date of execution of this Agreement an amount equal to fifteen
percent (15%) of the pre-tax income of SWK's Long Island Business Unit, provided
that such unit has generated pre-tax net income of at least $75,000 in that
12-month time period.
(k) Executive's bonus in years 2 and 3 will be a function of a pooled
bonus plan that he will participate in together with the other senior executives
of SWK; consequently, it is anticipated that by no later than March 31, 2006,
the employment agreements for all SWK executives will be adjusted to reflect a
pooled bonus plan for all SWK executives.
(l) In the event that the Long Island Business Unit fails to generate
revenue of at least $650,000 in the twelve (12) months following the date of
execution of this Agreement, Executive agrees to reduce his salary by $10,000
for the second year of this Agreement. For the sole purpose of making the
determination of whether the Long Island Business Unit generated revenue of at
least $650,000 in the twelve (12) months following the date of execution of this
Agreement, the Company shall track and make allocation of the time spent by the
Executive, Xxxx Xxxxxxxxx, and Xxxxx Xxxxxx on duties relating to the activities
of the Company (as opposed to duties relating to solely to the activities of the
Long Island Business Unit), which shall represent a credit to the revenue of the
Long Island Business Unit. In addition, the Company shall allocate as a debit to
the revenue of the Long Island Business Unit the time of other Company staff
spent on activities on behalf of the Long Island Business Unit.
(m) To the extent that Executive maintains his own AICPA insurance
plan, the Company shall pay the premiums on such policy, provided that any
amounts payable by
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the Company shall not exceed $2,500 in any twelve (12) month period. The Company
will furnish the Executive a Form 1099 with respect to such payment.
(n) The Company shall pay Executive's CPA licensure renewals, AICPA and
State Society annual dues.
5. BUSINESS EXPENSES.
Employee is authorized to incur, and the Company shall pay and
reimburse him for, all reasonable ordinary and necessary business expenses
incurred in the performance of his duties hereunder in accordance with
guidelines adopted by the Board of Directors. The Company will pay and reimburse
Employee for all such reasonable expenses upon the presentation by Employee,
from time to time, of an itemized account of such reasonable expenditures and
proper documentation thereof as evidence that such expenses have been incurred.
The Company will provide the Executive with a corporate credit card to use for
his business expenses only.
6. TERMINATION BY THE COMPANY FOR CAUSE.
Termination by the Company of the Executive's employment for cause
(hereinafter referred to as "Termination for Cause), shall mean termination
upon:
(i) the willful and continued failure by the Executive to
substantially perform the Executive's material duties with the Company (other
than any such failure resulting from the Executive's incapacity due to physical
or mental illness) after a written demand for substantial performance is
delivered to the Executive by the Board, which demand specifically identifies
the material duties that the Board believes that the Executive has not
substantially performed, or
(ii) the willful engaging by the Executive in conduct that is
demonstrably and materially injurious to the Company, monetarily or otherwise.
For purposes of this Paragraph 6, no act, or failure to act, on the Executive's
part, shall be deemed "willful" unless done, or omitted to be done, by the
Executive not in good faith and without reasonable belief that the Executive's
action or omission was in the best interest of the Company, or
(iii) the conviction of the Executive of a felony, limited
solely for a crime related to the business operations of the Company, or that
results in the Executive being unable to substantially carry out his duties as
set forth in this Agreement, or
(iv) the commission of any act by the Executive against the
Company that may be construed as the crime of embezzlement, larceny, and/or
grand larceny.
Any other provision in this paragraph to the contrary notwithstanding,
the Executive shall not be deemed to have been terminated for Termination for
Cause unless and until the Board of Directors of the Company duly adopts a
resolution by the
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affirmative vote of no less than two-thirds (2/3) of the entire membership of
the Board, at a meeting of the Board called and held for such purpose (after
reasonable notice to the Executive and an opportunity for the Executive,
together with the Executive's counsel, to be heard before the Board), finding
that in the good faith opinion of the Board, the Executive was guilty of conduct
described in Subparagraphs (i), (ii) or (iii) of this paragraph and specifying
the particulars thereof in detail and a certified copy of such resolution is
delivered to the Executive.
7. TERMINATION BY THE COMPANY WITHOUT CAUSE. If the Company terminates
Executive's employment other than for Cause pursuant to Section 6 or on account
of death or disability pursuant to Sections 9 or 10, the Company shall pay or
provide the Executive with, within thirty (30) days of the date of termination:
(i) any unpaid salary earned under this Agreement prior to the date of
termination; (ii) any accrued but unused vacation prior to the date of
termination; (iii) any unpaid bonus earned through the termination date as well
as any bonus that may be due the Executive based upon his performance that was
earned but waiting solely on administrative process; (iv) any unpaid expense
reimbursement owed to his for periods through the date of termination; (v) any
unpaid signing bonus due and owing pursuant to paragraph 4(g) herein, and (vi)
the Executive's Base Salary for the remainder of the Term, except that if such
termination occurs in the third year of the Term, an amount equal to one (1)
year of the Base Salary payable in such third year.
It is expressly understood that, in the event of termination pursuant
to either Section 9 or Section 10, no payment will be due and owing Executive or
Executive's estate for payments or monies described in Section 7(vi) herein.
8. TERMINATION BY THE EXECUTIVE. The Executive may terminate his
employment hereunder for "Good Reason" within ninety (90) days of the occurrence
of any of the following events: (i) a material breach of this Agreement by the
Company; (ii) any failure to pay, within a reasonable amount of time, any part
of the Executive's compensation (including Base Salary and bonus) or to provide
the benefits contemplated herein; (iii) any material reduction or diminution
(except temporarily during any period of physical or mental impairment) in the
Executive's titles or primary job responsibilities with the Company; or (iv) a
change in control of the Company. The Executive shall give the Company written
notice of any proposed termination for Good Reason and the Company shall have
thirty (30) days from receipt of such written notice to cure any ground of
termination for Good Reason, as set forth in this Section. In the event
Executive terminates his employment for Good Reason, he shall not be considered
to be in breach of this agreement. In the event of Termination by Executive for
Good Reason, Company shall be obligated to pay to Executive that compensation
due as if Company had terminated Executive Without Cause pursuant to Section 7
of this Agreement.
9. TERMINATION DUE TO DEATH. In the event of the Executive's death
during the Term of this Agreement, the Executive's employment hereunder shall
immediately and automatically terminate, and the Company shall have no further
obligation or duty to the Executive or his estate or beneficiaries other than
for all earned
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but unpaid compensation through the date of termination, as delineated in
Section 7 (i) - (v) only, and other than as required by applicable law.
10. TERMINATION DUE TO DISABILITY. The Company may terminate the
Executive's employment hereunder, upon written notice to the Executive, in the
event that the Executive becomes disabled during the Term through any condition
of either a physical or psychological nature and, as a result is, with
reasonable accommodation, unable to perform the essential functions of the
services contemplated hereunder for a period of one hundred eighty (180) days
during any twelve (12) month period during the Term. Executive shall have the
ability to demonstrate that he can perform the duties under this agreement, but
the final determination of fitness shall remain with the Company. Furthermore,
if the Executive is receiving disability benefits from an insurance company,
this shall constitute prima facie evidence of the Executive's inability to
perform the essential functions of the services contemplated hereunder. Any such
termination shall become effective upon mailing or hand delivery of notice,
while the Executive continues to be unable to perform the essential functions of
the services contemplated hereunder, that the Company has elected to exercise
its right to terminate under this Section 10, and the Company shall have no
further obligation or duty to the Executive other than payment of monies due and
owing as delineated in paragraph 7 (i) - (v) only. For purposes of determining
the Executive's disability, the existence or nonexistence of a disability shall
be conclusively determined by a physician to be selected by the Executive and
the Company in good faith.
11. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION AND NON- COMPETITION
a The Executive acknowledges that the Executive has been informed that
it is the policy of the Company to maintain as secret and confidential
all information:
(i) relating to the products, processes, designs and/or
systems used by the Company and its Affiliates and
(ii) relating to the customers and employees of the Company
and its Affiliates (all such information hereafter referred to as "confidential
information"), and the Executive further acknowledges that such confidential
information is of great value to the Company.
For purposes of this Agreement, "Affiliates" means any person or entity
or group of persons or entities acting together that, directly or indirectly,
through one or more intermediaries controls, or is controlled by or is under
common control with the Company.
The parties recognize that the services to be performed by the
Executive are special and unique, and that by reason of his employment by the
Company, the Executive has and will acquire confidential information as
aforesaid. The parties confirm that it is reasonably necessary to protect the
Company's (and its Affiliates')
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goodwill, and accordingly the Executive does agree that the Executive will not
directly or indirectly (except where authorized by the Board of Directors of the
Company for the benefit of the Company):
A. At any time during his employment by the Company or after
the Executive ceases to be employed by the Company, divulge to any persons,
firms or corporations, other than the Company (hereinafter referred to
collectively as "third parties"), or use or allow or cause or authorize any
third parties to use, any such confidential information; and
B. At any time during his employment by the Company and for a
period of two (2) years after the Executive ceases to be employed by the
Company, solicit or cause or authorize directly or indirectly to be solicited,
for or on behalf of the Executive or third parties, any business from persons,
firms, corporations or other entities who were at any time within two (2) years
prior to the cessation of his employment hereunder, customers of the Company or
its affiliates; and
C. At any time during his employment by the Company and for a
period of two (2) years after the Executive ceases to be employed by the
Company, accept or cause or authorize directly or indirectly to be accepted, for
or on behalf of the Executive or third parties, any business from any such
customers of this Company or its affiliates ; and
D. At any time during his employment by the Company and for a
period of two (2) years after the Executive ceases to be employed by the
Company, solicit or cause or authorize directly or indirectly to be solicited
for employment, for or on behalf of the Executive or third parties, any persons
(excluding any individuals residing in the same immediate primary residence as
the Executive, and/or the Executive's immediate family) who were at any time
within one year prior to the cessation of his employment hereunder, employees of
the Company or its affiliates; and
E. At any time during his employment by the Company and for a
period of two (2) years after the Executive ceases to be employed by the
Company, employ or cause or authorize directly or indirectly to be employed, for
or on behalf of the Executive or third parties, any such employees of the
Company or its affiliates.
F. (Left blank intentionally)
b. The Executive agrees that, upon the expiration of his employment by
the Company for any reason, the Executive shall forthwith deliver up
to the Company any and all records, drawings, notebooks, keys and
other documents and material, and copies thereof in his possession
or under his control which is the property of the Company or which
relate to any confidential information or any discoveries of the
Company.
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c. The Executive agrees that any breach or threatened breach by the
Executive of any provision of this Section 7 shall entitle the
Company, in addition to any other legal remedies available to it, to
enjoin such breach or threatened breach through any court of
competent jurisdiction. The parties understand and intend that each
restriction agreed to by the Executive herein above shall be
construed as separable and divisible from every other restriction,
and that the unenforceability, in whole or in part, of any
restriction will not affect the enforceability of the remaining
restrictions, and that one or more or all of such restrictions may
be enforced in whole or in part as the circumstances warrant.
d. For the purposes of this Section, the term "Company" shall mean and
include any and all subsidiaries, parents and affiliated
corporations of the Company existing at the time of execution of
this Agreement.
12. SUCCESSORS; BINDING AGREEMENT.
Neither this Agreement nor any right or interest hereunder shall be
assignable by the Executive, nor shall it be subject to attachment, execution,
pledge or hypothecation, but this Agreement if executive shall die shall inure
to the benefit of and be enforceable by the Executive's personal or legal
representative, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive should die during the term of this
Agreement, except to the extent otherwise provided in Section 4(g) hereof, no
amounts shall be paid to the Executive's devisee, legatee or other designee or,
if there is no such designee, to the Executive's estate.
13. MISCELLANEOUS. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and such officer as may be specifically
designated by the Board. No waiver by either party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party that are not set forth in
this Agreement. Any payments provided for hereunder shall be paid net of any
applicable withholding required under federal, state or local law.
14. SEVERANCE AND VALIDITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
15. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
16. ENTIRE AGREEMENT. This Agreement contains the entire understanding
of the parties with respect to the subject matter hereof, supersedes any prior
agreement
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between the parties, and may not be changed or terminated orally. No change,
termination or attempted waiver of any of the provisions hereof shall be binding
unless in writing and signed by the party to be bound; provided, however, that
the Executive's compensation and benefits may be increased at any time by the
Company without in any way affecting any of the other terms and conditions of
this Agreement, which in all other respects shall remain in full force and
effect.
17. NEGOTIATED AGREEMENT. This Agreement has been negotiated and shall
not be construed against the party responsible for drafting all or parts of this
Agreement.
18. NOTICES. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered personally or received by United
States registered or certified mail, return receipt requested, postage prepaid,
or by nationally recognized overnight delivery service providing for a signed
return receipt, addressed to the Executive at the Executive's home address set
forth in the Company's records and to the Company at the address set forth on
the first page of this Agreement, provided that all notices to the Company shall
be directed to the attention of the Board with a copy to counsel to the Company,
at Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxx X. Xxxxxxxxx, Esq., or to such other address as either
party may have furnished to the other in writing in accordance herewith, except
that notice of change of address shall be effective only upon receipt.
19. GOVERNING LAW AND RESOLUTION OF DISPUTES. All matters concerning
the validity and interpretation of and performance under this Agreement shall be
governed by the laws of the State of New Jersey. Any dispute or controversy
arising under or in connection with this Agreement shall be settled exclusively
by arbitration in Newark, New Jersey in accordance with the rules of the
American Arbitration Association ("AAA") then in effect. Arbitration will take
place before a single experienced employment arbitrator licensed to practice law
in New Jersey and selected in accordance with the Employment Dispute Resolution
Rules of the American Arbitration Association. The arbitrator may not modify or
change this Agreement in any way. Any judgment rendered by the arbitrator as
above provided shall be final and binding on the parties hereto for all purposes
and may be entered in any court having jurisdiction. In any arbitration pursuant
to this Section 15, each party shall be responsible for the fees and expenses of
its own attorney and witnesses, and the fees and expenses of the arbitrator
shall be divided equally between the Company and the Executive. Nothing in this
Section 15 shall be construed to limited the availability of injunctive relief
in the form of a court ordered injunction in connection with an actual or
threatened violation of Section 7 hereof.
20. OTHER MATTERS.
(a) The Company will establish an office on Long Island, and will fund
the overhead of such an office, which will be charged as an expense to the Long
Island Business Unit in year 1. The location and cost of such office shall be
mutually agreed upon. A list of one time expenses associated with the opening of
the Long Island
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Business Unit will be supplied by the Executive and these charges shall not be
included in the calculation of pre-tax net income of the Long Island Business
Unit for year 1
(b) The Company will agree to continue the employment of Xxxx Xxxxxxxxx
and Xxxxx Xxxxxx, provided that such employees continue to perform their
services in a fashion consistent with their past practices. Executive shall have
hire/fire veto power over these two employees through the end of year 2 of the
employment agreement. These two (2) employees shall have automobile allowances
of not more than $735 per month on a combined or aggregate basis. Further, these
two employees will be reviewed both for performance and annual compensation by
no later than June 30, 2005. Increases to annual compensation shall be in line
with increases to other Company staff members in similar positions and shall be
as if these two employees will have been employed, for purposes of such
increases, for a full year at the Company.
(c) The parties hereto shall each be responsible for any and all of
their own expenses associated with the preparation and execution of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
SWK TECHNOLOGIES, INC. XXXXXX XXXXX
By:___________________________ ________________________________
Name: Xxxxxxx X. Xxxx Dated: 3-1-05
Title: Chief Executive Officer
Dated: 3-1-05
With respect to Sections 4(g) and 4(h), the undersigned acknowledges and accepts
its obligations.
TREY RESOURCES, INC.
By: __________________________
Name: Xxxx Xxxxxx
Title: Chief Executive Officer
Dated: 3-1-05
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