EMPLOYMENT AGREEMENT
This Employment Agreement is made on the 23rd day of January, 1998 between
AmTec, Inc., a Delaware Corporation ("Employer"), and Xxxxxxx X. Xxx
("Executive").
1. Term. Employer hereby employs Executive and Executive hereby
accepts employment on the terms and conditions hereinafter set forth.
Subject to the provisions of Section 7 hereof, the term of this Agreement
shall be effective commencing as of November 8, 1997 and shall terminate on
November 7, 2002.
2. Duties. Executive agrees to serve Employer as Executive Vice
President of AmTec, Inc. and in such capacity Executive agrees to render
his services to the best of his ability. Executive will report to the
Chairman of the Board and the Chief Executive Officer of the Company.
During the term of this Agreement, Executive will devote his full time (at
least 35 hours per week) and attention to, and use his best efforts to
advance the business and welfare of Employer, subject to the directions and
control of the Board of Directors.
3. Confidential Information and Covenant Not to Compete.
(a) Executive hereby agrees that, during the term of this
Agreement and thereafter, he will not disclose to any person, or otherwise
use or exploit any of the proprietary or confidential information or
knowledge, including without limitation, trade secrets, processes, records
of research, proposals, reports, methods, processes, techniques, computer
software or programming, or budgets or other financial information,
regarding Employer, its business, properties or affairs obtained by him at
any time prior to or subsequent to the execution of this Agreement, except
in the furtherance of the interests of Employer in the execution of
Executive's duties hereunder or as may be required pursuant to a lawful
order of a judicial tribunal or legislative body of competent jurisdiction.
(b) Upon termination of employment, Executive will deliver to
Employer all processes, records of research, proposals, reports, memoranda,
computer software and programming, budgets and other financial information,
and other materials or records or writings of any other type (including any
copies thereof) made used or obtained by Executive in connection with his
employment by Employer.
(c) During the term of this Agreement, Executive agrees that
he will: (I) neither authorize his name to be used by, (ii) nor engage in
or carry on, directly or indirectly, for himself as a member of a
partnership or as a stockholder (other than as a stockholder of less than
five percent (5%) of the issued and outstanding stock of a publicly held
corporation having assets in excess of $10,000,000), investor, officer, or
director of a corporation (other than Employer, or any parent, subsidiary,
affiliate or successor of Employer), or as an employee, agent, associate,
or consultant of any person, partnership, corporation or other business
entity, in competition with any business carried on, directly or
indirectly, by Employer prior to the date hereof or hereafter conducted,
directly or indirectly, by Employer during the term of this Agreement, in
any county where business is then carried on or conducted by Employer.
(d) Executive agrees that the remedy at law for any breach by
him of any of the covenants and agreements set forth in this Section 3 will
be inadequate and that in the event of any such breach, Employer may, in
addition to the other remedies which may be available to it at law, obtain
injunctive relief prohibiting him (together with all those persons
associated with him) from the breach of such covenants and agreements.
(e) The parties hereto intend that the covenants and
agreements contained in this Section 3 shall be deemed to include a series
of separate covenants and agreements. If, in any judicial proceeding, a
court shall refuse to enforce all of the separate covenants deemed included
in such action, then such unenforceable covenants shall be deemed
eliminated from the provisions hereof for the purposes of such proceeding
to the extent necessary to permit the remaining separate covenants to be
enforced in such proceeding.
4. Compensation.
4.1 Salary. For the services to be rendered by Executive during
the first year of the term of this Agreement, Employer shall pay Executive
an annual base salary of Three Hundred Thousand Dollars ($300,000), payable
in cash in equal installments semi-monthly and subject to income tax
withholdings and other payroll deductions as customary in respect of
Employer's salaried employees in general. On the date of this agreement,
January 23, 1998, Executive shall receive ten year options to purchase
250,000 shares of common stock of the Employer at a price of $0.75 per
share, said options to vest 25% at the end of each of four (4) 180 day
periods, the first such period commencing 180 days from November 8, 1997.
While the amount of additional option awards will be determined at the
discretion of the Compensation Committee of the Board of Directors, it is
intended that Executive will receive stock options in each year of this
Agreement. The annual base salary of Executive for the second, third,
fourth and fifth years of the term of this Agreement will be determined by
the Compensation Committee of the Board of Directors, but shall be no less
than $350,000 in the second year and thereafter.
4.2 Bonus. Executive shall be entitled to participate in such
bonus plans of Employer applicable to senior executives of Employer as
determined by the Board of Directors of Employer in its sole discretion.
Notwithstanding the foregoing, for the 1996-1997 year of employment,
Employer shall pay Executive a bonus of $100,000, payable in cash on April
15, 1998. During the first year of the term of this Agreement, the bonus
shall be no less than $50,000 and will be at least $100,000 if Employer
obtains additional financing, payable in cash within thirty days of the
closing of such financing. For the second year and each succeeding year of
employment hereunder, the annual bonus will be determined by the
Compensation Committee of the Board of Directors. All bonuses payable to
Executive in the second year of the Agreement and thereafter will be
payable on March 31 of 1999, 2000, 2001 and 2002. Criteria for the
determination of the discretionary amount of bonus will be as agreed upon
by the Executive and the Chairman of the Board within forty-five days of
the date of this Agreement and within forty-five days of the commencement
of each succeeding year of employment hereunder.
4.2 (a) Stock Options. The Executive shall receive stock
options as described in section 4.1. It is expected that the Executive will
receive additional option awards in the second, third, fourth and fifth
years of the term of this Agreement as determined by the Compensation
Committee of the Board of Directors.
4.2 (b) Long Term Compensation Plan. Executive shall be
entitled to participate in a long-term compensation plan which will be
multi-year performance based over a number of years starting with the first
contract year. It is the intention of the Employer to pay the Executive on
an incentive basis to be determined by the Compensation Committee of the
Board of Directors under a performance based plan after a number of years
stipulated by the Board of Directors.
4.3 Vacation. Executive shall be entitled to four weeks' paid
vacation for each year during the term of this Agreement.
4.4 Medical Insurance. During the term of this Agreement
Employer shall furnish Executive with the same medical and hospital
insurance furnished to other employees of Employer.
4.5 Disability Insurance. During the term of this Agreement,
Employer shall furnish Executive with Long Term Disability insurance on the
same terms available to all senior executives of Employer.
4.6 Pension and Profit Sharing. Executive shall participate
in such pension and profit sharing plans as are established for senior
executives of Employer.
4.7 Other Rights and Options. In addition to the foregoing,
Executive shall be entitled to such additional rights and options as may be
granted or established for the benefit of senior executive officers of the
Company, including, without limitation, in connection with, any
recapitalization, reorganization, consolidation or merger of the Company.
5. Expenses. Employer will pay or reimburse Executive for such
reasonable travel, entertainment, or other expenses as he may incur at the
request of Employer during the term of this agreement in connection with
the performance of his duties hereunder. Executive shall furnish Employer
with such evidence that such expenses were incurred as Employer may from
time to time require or request.
6. Death or Total Disability of Executive.If Executive dies, or
becomes totally disabled (for a period of more than six(6) consecutive
weeks), during the term of this Agreement, Executive's employment under
this Agreement shall automatically terminate; provided that, in such event
of death or total disability, Executive's stock options under paragraph 4.1
hereof, to the extent not already vested, shall vest immediately.
7. Termination for Cause. Executive's employment under this
Agreement may be terminated by Employer for "good cause." The term "good
cause" is defined as any one or more of the following occurrences:
(a) Executive's breach of any of the covenants contained in
Section 3 of this Agreement;
(b) Executive's conviction by, or entry of a plea of guilty or
nolo contendere to a felony;
(c) Executive's commission of an act of fraud, whether prior
to or subsequent to the date hereof, upon Employer;
(d) Executive's continuing failure or refusal to perform his
duties as required by this Agreement;
(e) Executive's gross negligence, insubordination, material
violation of any duty or loyalty to Employer or any other material
misconduct relating to the business or good will of Employer.
8. Miscellaneous.
8.1 Modification and Waiver of Breach. No waiver or
modification of this Agreement shall be binding unless it is in writing
signed by the parties hereto. No waiver of a breach hereof shall be deemed
to constitute a waiver of a future breach, whether of a similar or
dissimilar nature.
8.2 Complete Agreement. The Agreement contains the entire
agreement between the parties hereto with respect to the transactions
contemplated by this Agreement and supersedes all previous oral and written
and all contemporaneous negotiations, commitment, writings, and
understandings and is and shall be binding upon the inure to the benefit of
Employer, its successors and permitted assigns and Executive, his heirs,
executors and administrators.
8.3 Legal Fees. If any legal action, arbitration or other
proceeding is brought for the enforcement of this Agreement, or because of
any alleged dispute, breach, default or misrepresentation in connection
with this Agreement, the successful or prevailing party shall be entitled
to recover reasonable attorneys' fees and other costs it incurred in that
action or preceding, in addition to any other relief to which it may be
entitled.
8.4 Assignment. This Agreement may not be assigned in any
manner whatsoever.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first above written.
EXECUTIVE: EMPLOYER:
AMTEC, INC.
/s/ Xxxxxxx X. Xxx /s/ Xxxxxx X. Xxxxxx, Xx.
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XXXXXXX X. XXX XXXXXX X. XXXXXX, XX.
CHAIRMAN
