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Exhibit 10.4
EMPLOYMENT AND NON COMPETITION AGREEMENT
THIS AGREEMENT is made and entered into this 24th day of August, 1998,
by and between INTERACTIVE PICTURES CORPORATION (IPIX) having its principal
place of business at 0000 Xxxxxxxx Xxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxx 00000,
hereinafter referred to as the "Employer", and XXXX X. XXXXX whose present
address is 0000 Xxxxxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxx 00000, hereinafter
referred to as the "Employee".
1. EMPLOYMENT. The Employer hereby agrees to employ the Employee
and Employee hereby accepts employment with Employer in the capacity of VICE
PRESIDENT AND CHIEF FINANCIAL OFFICER, upon the terms and conditions set out
herein.
2. TERM. The term of this Agreement shall begin on AUGUST 24,
1998, and shall continue indefinitely unless notification of either party of a
change in the employment status under the guidelines of paragraph 12 or 13.
3. COMPENSATION. The Employer shall pay the Employee, as
compensation for the services rendered by the Employee, a starting salary of
FOURTEEN THOUSAND FIVE HUNDRED EIGHTY-THREE DOLLARS AND THIRTY-THREE CENTS
($14,583.33) per month, payable monthly on the 25th. Salary payments shall be
subject to withholding and other applicable taxes. Compensation will be reviewed
on a regular basis per corporate policies. Expectation is for a 40 hour work
week with vacation and holidays described by the benefits plan.
4. DUTIES. The Employee shall perform for the Employer, the
duties set out in the attached Exhibit "A".
5. EXTENT OF SERVICES. The Employee shall devote his entire time,
attention, and energies to the Employer's business and shall not, during the
term of this Agreement, be engaged in any other business activity, whether or
not such business activity is pursued for gain, profit, or other pecuniary
advantage without written approval of the Employer. The Employee further agrees
that he will perform all of the duties assigned to him to the best of his
ability and in the manner satisfactory to the Employer, that he will truthfully
and accurately maintain all records, preserve all such records, and make all
such reports as the Employer may require; that he will fully account for all
money and all of the property of the Employer of which he may have custody and
will pay over and deliver the same whenever and however he may be directed to do
so. Services will be appraised on an annual basis through a corporate employee
appraisal system.
6. DISCLOSURE OF INFORMATION. The Employee agrees not to disclose
to anyone, either during or for a period of three years after his employment,
any confidential information obtained by him as a result of his employment by
the Employer without the consent of the Employer in writing. He further agrees
that, on leaving his employment, he will not take with him, without permission
of the Employer in writing, any drawing, blueprint, or other reproduction,
customer names, price list, plans, names of operating processes, nor any
material of any kind including, but not limited to, software and electronic
designs. Unless specifically prohibited by statutory law, the Employee
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agrees that, in the event of a breach or threatened breach by the Employee of
the provisions of this paragraph, the Employer shall be entitled to a temporary
restraining order and a preliminary injunction restraining the Employee from
disclosing, in whole or in part, the list of the Employer's customers, or from
rendering any services to any person, firm, corporation, association or other
entity to whom such list, in whole or in part, has been disclosed or is
threatened to be disclosed. Nothing here shall be construed as prohibiting the
Employer from pursuing any other remedies available to the Employer for such
breach or threatened breach, including recovery of damages from the Employee.
7. COVENANT NOT TO COMPETE. In recognition of Employee's
acknowledgment that his services to be rendered to Employer are of a special and
unusual character which have a unique value to Employer, the loss of which
cannot adequately be compensated by damages in action at law; in view of (1) the
unique value to Employer of the services of Employee for which Employer has
employed Employee; and (2) the confidential information to be obtained by or
disclosed to Employee as an employee of Employer; and as a material inducement
to Employer to employ Employee and to pay to Employee the compensation for such
services to be rendered to Employer by Employee (it being understood and agreed
by the parties hereto that such compensation shall also be paid and received in
consideration hereof), Employee covenants and agrees as follows:
(i) PERIOD OF COVENANT. The period of this non-competition
covenant shall begin on the date hereof and shall terminate on
the second anniversary following the termination of Employee's
employment (whether or not such employment is pursuant to this
Agreement) with Employer for any reason (the "Non-competition
Period").
(ii) NATURE AND AREA OF COMPETITION. Employee agrees that for
the Non-competition Period, through the world, he shall not,
directly or indirectly, as owner or operator of any
corporation, partnership, association or agency or as
employee, agent, consultant or independent contractor, engage
in the business of designing or selling video image processing
or telerobotic devices ("Competitive Business"). Employee
hereby warrants that the execution of this Agreement shall not
violate any other agreements previously entered into by
Employee.
(iii) SOLICITATION. Employee agrees that during the
Non-competition Period he will not directly or indirectly, on
behalf of himself or on behalf of any person, firm,
partnership, corporation, association or entity.
(1) Call upon any of the customers of Employer who
are such at the time of Employee's termination for the
purpose of soliciting or providing any Competitive
Business;
(2) Call upon any of the other employees or
representatives of Employer who are such at the time
of Employee's termination for the purpose
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of soliciting or inducing such employees or
representatives to discontinue their relationship with
Employer or to establish a relationship with Employee;
(3) Call upon any providers of data to the
Company's database for the purpose of obtaining data
for any Competitive Business; or
(4) Solicit, divert or take away or attempt to
solicit, divert or take away any of the customers,
clients, business or patrons of Employer or the other
employees or representatives maintaining a relationship
with Employer who are such at the time of Employee's
termination.
(iv) ACCOUNTING FOR PROFITS. Employee covenants and agrees
that, if he shall violate any of his covenants or agreements
under this Section 1, Employer shall be entitled to an
accounting and repayment of all profits, compensation,
commissions, remunerations or benefits which Employee directly
or indirectly has realized and/or may realize as a result of,
growing out of or in connection with any such violation; such
remedy shall be in addition to and not in limitation of any
injunctive relief or other rights or remedies to which
Employer is or may be entitled at law or in equity or under
this Agreement.
(v) REASONABLENESS OF RESTRICTIONS. Employee has carefully
read and considered the provision of this Section 7 and,
having done so, agrees that the restrictions set forth in
such Section (including, but not limited to, the time period
or restriction and the geographical areas of restriction set
forth in this Section 7) are fair and reasonable and are
reasonably required for the protection of the interests of
Employer, its officers, directors and other employees.
In the event that, notwithstanding the foregoing, any
part of the covenants set forth in this Section 7 shall be
held to be invalid or unenforceable, the remaining parts
hereof shall nevertheless continue to be valid and enforceable
as though the invalid or unenforceable parts had not been
included therein. In the event that any provision of this
Section 7 relating to time period and/or areas of restriction
shall be declared by a court of competent jurisdiction to
exceed the maximum time period and/or areas such court deems
reasonable and enforceable, said time period and/or areas of
restriction shall be deemed to become and thereafter be the
maximum time period and/or areas which such court deems
reasonable and enforceable.
(vi) INJUNCTION. In the event of a breach or threatened
breach by Employee of the provisions of this Agreement,
Employer shall, in addition to any other rights and remedies
available to it, at law or otherwise, be entitled to an
injunction to be issued by any court of competent jurisdiction
enjoining and restraining Employee from committing any
violation of this Agreement.
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(vii) COSTS. Should it become necessary for Employer to file
suit to enforce the covenants contained herein, the prevailing
party shall be entitled to cover, in addition to all other
damages provided for herein, the costs incurred in conducting
the suit including a reasonable attorney's fee.
8. EXPENSES. N/A
9. NOTICES. Any notice required or desired to be given under this
Agreement shall be given in writing, sent by certified mail, return receipt
requested, to his residence in the case of the Employee, or to its principal
place of business, in the case of the Employer.
10. WAIVER OF BREACH. The waiver by the Employer of a breach of
any provision of this Agreement by the Employee shall not operate or be
construed as a waiver of any subsequent breach by the Employee. No waiver shall
be valid unless in writing and signed by the Employer.
11. ASSIGNMENT. The Employee acknowledges that the services to be
rendered by him are unique and personal. Accordingly, the Employee may not
assign any of his rights or delegate any of his duties or obligations under this
Agreement. The rights and obligations of the Employer under this Agreement shall
inure to the benefit of and shall be binding upon the successors and assigns of
the Employer.
12. TERMINATION UPON SALE OF BUSINESS. Notwithstanding anything to
the contrary, the Employer may terminate this Agreement upon twenty-one (21)
days notice to the Employee upon the happening of any of the following events:
(a) The sale of the Employer's business or substantially all
of its assets to a single purchaser or to a group of associated
purchasers;
(b) The sale, exchange, or other disposition, in one
transaction, of at least a fifty (50%) percent interest in the
Employer's business;
(c) The merger or consolidation of the Employer's business in
a transaction in which the owners of the business receive less than a
fifty (50%) percent interest in the new or continuing operation.
13. TERMINATION WITHOUT CAUSE. The Employer may terminate this
Agreement without cause at any time upon fourteen (14) days written notice to
the Employee. In such event, the Employee, if requested by the Employer, shall
continue to render his services, and shall be paid his regular compensation and
earned vacation up and to the date of termination and, in addition, there shall
be paid to the Employee, on the date of termination, a severance allowance equal
to one week's compensation for each full year of employment after the third
year. The Employee may terminate this Agreement without cause upon fourteen (14)
days written notice to the Employer. The Employee shall continue to render his
services and shall be paid his regular compensation and earned
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vacation days up to the date of termination. If the employee is terminated
without cause prior to August 24, 2000, the employee shall receive a lump sum
severance payment from the company in an amount equal to $175,000.
14. TERMINATION WITH CAUSE. Employment terminated for cause -- as
used herein, "for cause" shall mean dishonesty, fraud, gross neglect or gross
malperformance of duty, intentional damage to substantial property of Employer,
conviction of a crime involving moral turpitude or the performance of any act
materially detrimental to the interest of Employer which was intended by the
Employee to have such affect. In such event, no severance allowance shall be
paid to the Employee; but the Employee shall continue to render services and
shall be paid his regular compensation and earned vacation days up to the date
of termination.
15. ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties. It may be changed only by an Agreement in writing,
signed by the parties hereto.
16. GOVERNING LAW. This agreement, and all transactions
contemplated hereby, shall be governed by, construed and enforced in accordance
with the laws of the State of Tennessee. The parties herein waive trial by jury
and agree to submit to the personal jurisdiction and venue of a court of subject
matter jurisdiction located in Xxxx County, State of Tennessee. In the event
that litigation results from or arises out of this Agreement or the performance
thereof, the parties agree to reimburse the prevailing party's reasonable
attorney's fees, court costs, and all other expenses, whether or not taxable by
the court as costs, in addition to any other relief to which the prevailing
party may be entitled. In such event, no action shall be entertained by said
court or any court of competent jurisdiction if filed more than one year
subsequent to the date the cause(s) of action actually accrued regardless of
whether damages were otherwise as of said time calculable.
17. INDEMNITY. The Employer shall indemnify the Employee and hold
him harmless for any acts or decisions made by him in good faith while
performing services for the Employer and will use its best efforts to obtain
coverage for the Employee under any insurance policy now in force or hereinafter
obtained during the term of this Agreement covering the other officers, and/or
employees of the Employer against lawsuits.
18. WORKING FACILITIES. The Employee shall be provided such other
facilities and services as are suitable to his position and appropriate for the
performance of his duties.
19. CONTRACTUAL PROCEDURES. Unless specifically disallowed by law,
should litigation arise hereunder, service of process, therefore, may be
obtained through certified mail, return receipt requested; the parties hereto
waiving any and all rights they may have to object to the method by which
service was perfected.
20. BENEFITS. The Company provides extensive benefits in
accordance with the policies established by the Board of Directors. These
benefits are reviewed annually by the Board of
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Directors and may be changed without breaching this contract. Exhibit "B" gives
the present benefits program in effect at the time of employment.
21. MISCELLANEOUS
In consideration of my employment by IPIX and the wages, salaries and
other benefits which I will acquire, I agree:
(a) To assign and transfer to IPIX all right, title and
interest to all inventions, discoveries or improvements, patentable or
unpatentable, conceived or made by me, either alone or with others,
during the period of my employment which fall within or arise out of
the nature of my employment, arise as a result of my employment or fall
within or arise out of the fields of business, work or investigation of
IPIX and to make and maintain adequate and current written records of
all of the foregoing, and
(b) To execute any and all instruments and do all things which
IPIX deems necessary to vest and maintain and protect and enforce in
IPIX the entire right, title and interest to all such inventions,
discoveries and improvements in any and all countries at IPIX's request
and without additional remuneration to me.
This Agreement shall be subject to and governed by the laws of the
State of Tennessee, County of Xxxx.
Failure to insist upon strict compliance with any provision hereof
shall not be deemed a waiver of such provision or any other provision hereof.
This Agreement may not be modified except by an agreement in writing
executed by the parties hereto.
The invalidity or unenforceability of any provision hereof shall not
affect the validity or enforceability of any other provision.
Any controversy or claim arising out of or relating to this Agreement,
other than a claim which would entitle Employer to injunctive relief pursuant to
Section 7(vi) hereof, shall be settled by arbitration in Xxxx County, Tennessee
in accordance with the rules of the American Arbitration Association.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
this 7th day of August, 1998.
"EMPLOYER":
Interactive Pictures Corp., Inc.
By:
/s/ Xxxxxx X. Xxxxxxxx
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"EMPLOYEE":
/s/ Xxxx X. Xxxxx
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Exhibit A
JOB DESCRIPTION: VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
You will be responsible for all financial functions, including an annual audit,
accounting and investment banker relations. You will be expected to travel in
support of the company's sales efforts including participation at trade shows,
public relations efforts, and attendance at regular meetings at our corporate
headquarters in Knoxville, Tennessee. You will also be a member of the executive
staff and attend and contribute to the effectiveness of the executive staff
meetings.
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EXHIBIT B
MAJOR MEDICAL INSURANCE
IPIX provides insurance through FORTIS. Physician services require a $15 co-pay
within the network. A $500 deductible (3 x family) applies to hospital, 100%
coverage after deductible is met. IPIX covers the total cost for the employee
and their dependents.
DENTAL/VISION INSURANCE
IPIX provides dental and vision insurance through The Guardian Insurance
Company. IPIX covers the total cost for the employee and their dependents.
DISABILITY INSURANCE
IPIX provides long term disability insurance that takes effect after 90 calendar
days of disability. It pays 60% of salary up to $5,000 per month until age 70.
BASIC GROUP LIFE INSURANCE
Presently with FORTIS, 2 x base salary, IPIX covers the total cost.
UNEMPLOYMENT INSURANCE
IPIX provides unemployment insurance in compliance with the laws of the State of
Tennessee.
PAID LEAVE
Nine Corporate holidays are observed during the year. Vacation is earned at a
rate of 1 day per month for the first 4 years, from 5-9 years of service at a
rate of 1.25 days per month, and in the 10th year of service at a rate of 1.5
days per month. Vacations greater than one week duration must have prior
approval. Unused vacation will be reimbursed at the current salary when an
associate terminates in good standing. Snow days will follow the announced
policy of Lockheed-Xxxxxx Energy Systems.
UNPAID LEAVE
Associates may arrange for planned unpaid leave with prior approval.
SICK LEAVE
Three days paid sick leave each year are provided, with no accrual. Management
will oversee extended sick leave on a case by case basis.
WORK WEEK
The standard work week is a minimum of 40 hours per week consisting of five 8
hour days. IPIX allows associates to reschedule, with prior approval, up to 4
hours of their work week for personal activities, provided the minimum hours are
worked each week. Attendance is expected at the scheduled weekly staff meeting.
PENSION PLAN
IPIX provides a 401(k) plan for associates who have been with IPIX 6 months or
longer. IPIX currently matches $.65 per dollar up to 4% of the associates'
salary. The match amount is reviewed each year by the board of directors.
EDUCATION BENEFITS
IPIX accrues annually $1,000, up to $5,000 total, for associates educational
expenses (tuition, fees, and books) for job related technical education upon
satisfactory completion of the course. This benefit also applies to direct
dependents. The accrued value extinguishes upon termination.
PROFESSIONAL SOCIETY MEMBERSHIP
IPIX encourages active participation in professional societies and will fund 50%
of the membership fees in any related professional society. This benefit does
not extend to union dues.
PROFIT SHARING
Associates will be provided annual bonuses set by the Board of Directors and
administered by the President based on corporate profitability, team
achievements, and individual contributions.
SEVERANCE PAY
In the event IPIX terminates an associate due to lack of available work, IPIX
will pay a severance equal to 1% of the present annual base pay for each full
year of company service, after 5 years of company service. This payment is not
paid for voluntary termination (associate voluntarily resigns) or termination
with cause (illegal activities, unsatisfactory performance, etc.).
