EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement") is dated as of this 1st day
of March, 1997, is by and between Unidigital Inc., a Delaware corporation with
an office for purposes of this Agreement at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ (hereinafter the "Company" or "Employer") and ▇▇▇▇▇ ▇▇▇▇ with an
address at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (hereafter the
"Employee").
W I T N E S S E T H :
WHEREAS:
(a) Company wishes to engage the services of Employee to render
services for and on its behalf in accordance with the following terms,
conditions and provisions; and
(b) Employee wishes to perform such services for and on behalf of the
Company, in accordance with the following terms conditions and provisions.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
herein contained the parties hereto intending to be legally bound hereby agree
as follows:
1. EMPLOYMENT
Company hereby employs Employee and Employee accepts such employment
and shall perform his duties and the responsibilities provided for herein in
accordance with the terms and conditions of this Agreement principally in New
York City, New York.
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2. EMPLOYMENT STATUS
Employee shall at all times be Company's employee subject to the terms
and conditions of this Agreement.
3. TERM
The term of this Agreement shall commence on March 1, 1997, and shall
terminate on March 1, 1999, for a total initial term of two (2) years (the
"Term"), and may be extended upon mutually agreed to terms and conditions.
4. POSITION
During Employee's employment hereunder, Employee shall serve as Senior
Vice President and Chief Operating Officer of the Company for United States
Operations. In such positions, Employee shall have the customary powers,
responsibilities and authorities of officers in such positions of corporations
of the size, type and nature of the Company. Employee shall perform such duties
and exercise such powers commensurate with his positions and responsibilities as
shall be reasonably determined from time to time by the ▇▇▇▇▇▇▇ ▇▇▇, currently
the Chairman of the Board, President and Chief Executive Officer of the Company,
and shall report directly to ▇▇▇▇▇▇▇ ▇▇▇ and only to ▇▇▇▇▇▇▇ ▇▇▇. Employee shall
be provided with an office, staff and other working facilities consistent with
his positions and as required for the performance of his duties
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and as reasonably determined by ▇▇▇▇▇▇▇ ▇▇▇. Employee will continue to serve on
the Company's Board of Directors during the Term and so long as he is employed
by the Company hereunder. At such time as Employee's employment hereunder
ceases, for any reason whatsoever, Employee shall immediately submit his
resignation as a member of the Company's Board of Directors.
5. COMPENSATION
(a) For the performance of all of Employee's services to be rendered
pursuant to the terms of this Agreement, Company will pay and Employee will
accept the following compensation:
Base Salary. During the Term, Company shall pay the Employee an initial
base annual salary of $200,000 (the "Base Salary") payable in regular
installments in accordance with the Company's usual payment practices (which
currently is in equal biweekly installments). Employee shall be entitled to such
further increases, if any, in his Base Salary as may be determined from time to
time in the sole discretion of ▇▇▇▇▇▇▇ ▇▇▇; but, in any event, Employee shall be
entitled to receive an annual increase equal to the increase in the CPI for the
New York Metropolitan Area over the base period, as hereinafter used, on an
annual basis. The base period for determining whether Employee shall be entitled
to any increase in the Base Salary shall be the month of February 1997. The
increase in the Base Salary, if any, will be based upon the amount the CPI
increased from February 1997 to February 1998 and if there is an increase it
shall be effective in
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March 1998. Employee's Base Salary, as in effect from time to time, is
hereinafter referred to as the "Employee's Base Salary".
(b) Company shall deduct and withhold from Employee's compensation all
required taxes, including but not limited to Social Security, withholding and
otherwise, and any other applicable amounts required by law or any taxing
authority.
6. EMPLOYMENT BENEFITS
During the Term hereof and so long as Employee is not terminated,
Employee shall receive and be provided health insurance benefits including
medical, hospitalization, stock option rights (which are limited to the option
to acquire 100,000 shares of the common stock of Company previously granted in
accordance with the procedures and provisions of the Company's 1995 Long-Term
Stock Investment Plan -- with the understanding that 50,000 of such options vest
as of the date of this Agreement and 25,000 of such options vest on the six (6)
month anniversary of this Agreement and the remaining 25,000 options vest on the
twelve (12) month anniversary of this Agreement) and other such programs
established by the Company, (collectively "Employee Benefits") on the same basis
as those other benefits are generally made available to the executives of the
Company provided Employee qualifies for them.
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In the event this Agreement is terminated:
(a) by Employer with cause, any stock option rights that are then
vested shall remain vested in Employee consistent with the terms of this
Agreement and any unvested stock option rights shall be forfeited ab initio;
(b) by Employer without cause, any stock option rights that are then
vested and any stock options rights that will be vested within three (3) months
from the date of the termination shall be and remain vested in Employee
consistent with the terms of this Agreement and any unvested stock option rights
not due to vest within three (3) months shall be forfeited ab initio;
(c) by Employee, any stock option rights that are then vested shall
remain vested in Employee consistent with the terms of this Agreement and any
unvested stock option rights shall be forfeited ab initio; and
(d) by virtue of the expiration of the Term, Employee shall retain all
vested option rights for a period of ninety (90) days if the shares underlying
the options have been registered and for a period of two (2) years for the
options on underlying shares that are unregistered. Employee shall be entitled
to receive not less than six weeks vacation for year one and four weeks vacation
for year two during the Term and Employee may accrue vacation or receive
compensation at the current level.
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7. BUSINESS EXPENSES AND PERQUISITES
(a) Employee shall be entitled to receive reimbursement from the
Company for reasonable travel (business class), entertainment and other business
expenses incurred by Employee in the performance of his duties hereunder and
such amount shall be reimbursed by the Company on a monthly basis and in
accordance with Company policies then in effect.
(b) Employee shall be entitled to an automobile allowance of $750 per
month during the Term and so long as Employee's employment hereunder is not
terminated.
8. TERMINATION
(a) For Cause by the Company
(i) Employee's employment hereunder may be terminated by the
Company for cause. For purposes of this Agreement, "cause" shall mean (u)
Employee's willful dishonesty that is serious enough to have a materially
detrimental effect upon the Company's best interests, (v) Employee's gross
negligence provided such acts relate to the Company, (w) Employee's breach of a
material term or provision of this Agreement which is not cured or ceased within
thirty (30) days after forwarding to Employee written notice setting forth the
breach, (x) Employee's misconduct of a nature that is serious enough to have a
materially detrimental effect upon the Company's best interest,
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(y) Employee's unjustified failure to perform his duties hereunder or to follow
reasonable directions of ▇▇▇▇▇▇▇ ▇▇▇, the Company's Board of Directors, which is
not cured or ceased within thirty (30) days after forwarding to Employee written
notice setting forth the breach, and (z) Employee's conviction of, or plea of
nolo contendere to, any crime constituting a felony under the laws of the
United States or any State thereof, or any crime constituting or involving moral
turpitude.
(ii) If Employee is terminated for cause, he shall be entitled to
receive Employee's Base Salary from Company through the date of termination and
Employee shall be entitled to no other payments of Employee's Base Salary under
this Agreement. Under all circumstances Employee shall keep his options which
have vested. All other benefits, if any, due Employee following Employee's
termination of employment pursuant to this Subsection 8 (a) shall be determined
in accordance with the plans, policies and practices of the Company for
executives.
(b) Disability or Death.
(i) Employee's employment hereunder shall terminate upon his death
or if Employee becomes physically or mentally incapacitated and is therefore
unable (or will as a result thereof, be unable) for a period of four (4)
consecutive months or for an aggregate of eight (8) months in any twenty-four
(24) consecutive month period to perform his duties (such incapacity is
hereinafter referred to as "Disability"). Any question as to the existence of
the Disability of Employee as to which Employee and the
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Company cannot agree shall be determined in writing by a qualified independent
physician mutually acceptable to Employee and the Company. If Employee and the
Company cannot agree as to a qualified independent physician, each shall appoint
such a physician and those two physicians shall select a third who shall make
such determination in writing to the Company and Employee shall be final and
conclusive for all purposes of this Agreement.
(ii) Upon termination of Employee's employment hereunder
during the Term as a result of death, Employee's estate or named
beneficiary(ies) shall receive from the Company (x) Employee's Base Salary at
the rate in effect at the time of Employee's death through the end of the month
in which his death occurs and (y) the proceeds of any life insurance policy
maintained for his benefit by the Company.
(iii) All other benefits, if any, due Employee following
Employee's termination of employment pursuant to this Subsection 8(b) shall be
determined in accordance with the plans, policies and practices of the Company.
(c) Without Cause by the Company.
(i) If Employee's employment is terminated by the Company
without cause (other than by reason of Disability or death), then Employee shall
be entitled to payment from the Company, in an amount equal to six (6) months of
Employee's Base Salary to be paid to Employee during immediately succeeding next
bi-weekly intervals. All other benefits, if any, due Employee following
Employee's termination of employment pursuant to this Subsection 8(c)(i) shall
be paid for the first six (6) months
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immediately following Employee's termination hereunder. Also, any stock options
rights that are then vested and any stock option rights that will be vested
within three months from the date of the termination shall be and remain vested
in Employee consistent with the terms of this agreement. If Employer lawfully
terminates employment hereunder, Employee shall have two (2) years from the date
of termination to exercise vested options, if any, if the underlying shares are
unregistered; and if the underlying share are registered, then Employee shall
have ninety (90) days from the date of termination to exercise vested options,
if any.
(d) Termination by Employee. If Employee wishes to terminate his
employment with the Company for any reason, Employee must afford Company with at
least one full month's written notice of termination. Such termination by
Employee shall not be deemed a breach of this Agreement. If Employee lawfully
terminates his employment hereunder, Employee shall have two (2) years from the
date of termination to exercise vested options, if any, if the underlying shares
are unregistered; and if the underlying shares are registered, then Employee
shall have ninety (90) days from the date of termination to exercise vested
options, if any.
(e) Change of Control. For purpose of this Agreement "Change of
Control" shall mean (i) any transaction or series of transactions (including,
without limitation, a tender offer, merger or consolidation) the result of which
is that any "person" or "Group" (within the meaning of Sections 13(d) and 14(d)
(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
becomes the "beneficial" owners (as defined in
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Rule 13(d)(3) under the Securities Exchange Act of 1934) of more than fifty
percent (50%) of the total aggregate voting power of all classes of the voting
stock of the Company and/or warrants or options to acquire such voting stock,
calculated on a fully diluted basis, or (ii) a sale of assets constituting all
or substantially all of the assets of the Company (determined on a consolidated
basis). In the event of such a Change of Control the new entity shall be
obligated to perform the Company's obligation under the terms of this Agreement.
9. NON-DISCLOSURE OF INFORMATION
Employee acknowledges that by virtue of his position he will be privy
to the Company's trade secrets including but not limited to Company's customer
list and private processes, as they may exist or as Company may determine from
time to time, and that such secrets are valuable, special, and unique assets of
Company's business and constitute confidential information and trade secrets of
Employer (hereafter collectively "Confidential Information"). Employee shall
not, while employed hereunder and for a period of twenty four (24) months
thereafter, intentionally disclose all or any part of the Confidential
Information to any person, firm, corporation, association or any other entity
for any reason or purpose whatsoever, nor shall Employee and any other person
by, through or with Employee, while employed hereunder and for a period of
twenty four months (24) thereafter, intentionally make use of any of the
Confidential Information for any purpose or for the benefit of any other person
or entity, other than Company, under
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any circumstances. Company and Employee agree that a violation of the foregoing
covenants will cause irreparable injury to the Company, and that in the event of
a breach or threatened breach by Employee of the provisions of this Section,
Company shall be entitled to an injunction restraining Employee from:
(a) Disclosing, in whole or in part, any Confidential Information to
any person, firm, corporation, association or other entity to whom any such
information, in whole or in part, has been disclosed or is threatened to be
disclosed in violation of this Agreement.
(b) Continuing such injurious actions.
Nothing herein stated shall be constructed as prohibiting the Company
from pursuing any other rights and remedies, at law or in equity, available to
the Company for such breach or threatened breach, including the recovery of
damages from the Employee.
10. RESTRICTIVE COVENANT.
Without the prior written approval of the Company's Board of Directors
first obtained:
(a) For a period of three (3) months after the termination of this
Agreement irrespective of whether Employee is desirous of extending the Term or
Employer is desirous of extending the Term, Employee covenants and agrees that,
within a radius of twenty five (25) miles from each of the then present place(s)
of Company's business or any other area in which Company is engaged in business,
he shall not own, manage,
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operate, control, be employed by, participate in, or be connected in any manner
with the ownership, management, operation, or control, whether directly or
indirectly, as an individual on his own account, or as a partner, member, joint
venture, officer, director or shareholder of a corporation or other entity (this
excludes ownership of less than five (5%) percent of any public company), of any
business similar to or competitive with the type of business conducted by
Company at the time of the termination or expiration of this Agreement and for
an additional three (3) months immediately thereafter Employee further covenants
and agrees he shall not, directly or indirectly, in any manner whatsoever
interfere with, solicit or disrupt or attempt to interfere with, solicit or
disrupt the relationship, contractual or otherwise, between Company and any
customer, supplier, lessee or employee of Company, its parent or subsidiaries.
Employer shall have the absolute right to extend the three (3) month
non-compete, non-solicitation period for up to an additional eighteen (18)
months upon the transmission of written notice to Employee. Employer shall
notify Employee of its intent to exercise the option at the expiration of the
initial three (3) month cumulative period. If the Employer chooses to extend the
initial three (3) month period then the Employer shall make the contemporaneous
payment to Employee of a sum equal to fifty (50%) percent of Employee's Base
Salary for the period that Employer is desirous of extending the period. Such
right may be exercised on a month-to-month basis by Employer upon 30 days
notice.
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(b) For the periods set forth in the immediately preceding subparagraph
(a) Employee covenants and agrees that within a radius of twenty-five (25) miles
from each of the then present place (s) of Company's business or any other area
in which Company is engaged in business, he shall not render any services to any
person, firm, corporation, association or other entity to whom any confidential
information in whole or in part, has been disclosed or is threatened to be
disclosed in violation of this Agreement.
(c) Company and Employee agree that a violation of either of the
foregoing covenants will cause irreparable injury to the Company, and that in
the event of a breach or threatened breach by Employee of the provisions of this
Section, Company shall be entitled to an injunction.
(d) Employee acknowledges that the restrictions contained in this
Paragraph 10 are reasonable. In that regard, it is the intention of the parties
to this Agreement that the provisions of this Paragraph 10 shall be enforced to
the fullest extent permissible under the law and public policy applied in each
jurisdiction in which enforcement is sought. Accordingly, if any portion of this
Paragraph 10 shall be adjudicated or deemed to be invalid or unenforceable, the
remaining portions shall remain in full force and effect, and such invalid or
unenforceable portion shall be limited to the particular jurisdiction in which
such adjudication is made.
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11. BREACH OR THREATENED BREACH OF COVENANTS.
In the event of Employee's actual or threatened breach of his
obligations under either Paragraph 9 or 10, or both, of this Agreement, in
addition to any other remedies Company may have, Company shall be entitled to
obtain a temporary restraining order and a preliminary and/or permanent
injunction restraining the other from violating these provisions. Nothing in
this Agreement shall be constructed to prohibit Company from pursuing and
obtaining any other available remedies which Company may have for such breach or
threatened breach, whether at law or in equity, including the recovery of
damages from the other.
12. REPRESENTATIONS AND WARRANTIES BY EMPLOYEE.
Employee hereby warrants and represents that he is not subject to or a
party to any restrictive covenants or other agreements that in any way preclude,
restrict, restrain or limit him (a) from being an Employee of Company, (b) from
engaging in the business of Company in any capacity, directly or indirectly, and
(c) from competing with any other persons, companies, businesses or entities
engaged in the business of Company.
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13. NOTICES.
Any notice required, permitted or desired to be given under this
Agreement shall be sufficient if it is in writing and (a) personally delivered
to Employee or an authorized member of Company, (b) sent by overnight delivery,
or (c) sent by registered or certified mail, return receipt requested, to
Employer's or Employee's address as provided in this Agreement or to a different
address designated in writing by either party. In all instances of notices to be
given to Company, a copy by like means shall be delivered to Company's counsel
care of Hoffinger ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq. In all instance of
notices to be given to Employee, a copy by like means shall be delivered to
Employee's counsel care of Kleinberg, Kaplan, ▇▇▇▇▇ & ▇▇▇▇▇, P.C., ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq. Notice is
deemed given on the day it is delivered personally or by overnight delivery, or
five (5) business days after it is received, if transmitted by the United States
Post Office.
14. ASSIGNMENT.
Employee acknowledges that his services are unique and personal.
Accordingly, Employee may not assign his rights or delegate his duties or
obligations under this Agreement. Company's rights and obligations under this
Agreement shall inure to the
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benefit of and shall be binding upon the Company's successors and assigns.
Company has the absolute right to assign it's rights and benefits under the
terms of this Agreement.
15. WAIVER OF BREACH.
Any waiver of a breach of a provision of this Agreement, or any delay
or failure to exercise a right under a provision of this Agreement, by either
party, shall not operate or be construed as a waiver of that or any other
subsequent breach or right.
16. ENTIRE AGREEMENT.
This Agreement contains the entire agreement of the parties. It may not
be changed orally but only by an agreement in writing which is signed by the
parties. The parties hereto agree that any existing employment agreement between
them shall terminate as of the date of this Agreement. All options allocated for
the Term as a non-executive director are to be granted on a pro rata basis for
the time served by Employee in such capacity. These options vest upon the grant
and employee shall have ten (10) years from the date of this Agreement to
exercise these options irrespective of Employee's relationship with the Company.
17. GOVERNING LAW.
This Agreement shall be construed in accordance with and governed by
the internal laws of the State of New York.
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18. SEVERABILITY
The invalidity or non-enforceability of any provision of this Agreement
or application thereof shall not affect the remaining valid and enforceable
provisions of this Agreement or application thereof.
19. CAPTIONS
Captions in this Agreement are inserted only as a matter of convenience
and reference and shall not be used to interpret or construe any provisions of
this Agreement.
20. GRAMMATICAL USAGE
In construing or interpreting this Agreement, masculine usage shall be
substituted for those feminine in form and vise versa, and plural usage shall be
substituted or singular and vice versa, in any place in which the context so
requires.
21. CAPACITY.
Employee has read and is familiar with all of the terms and conditions
of this Agreement and has the capacity to understand such terms and conditions
hereof. By executing this Agreement, Employee agrees to be bound by this
Agreement and the terms and conditions hereof.
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22. COUNTERPARTS
This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be original, but all of which together shall constitute
one and the same Agreement.
23. ARBITRATION
Notwithstanding anything herein to the contrary, but except for any
injunction provisions provided for in this Agreement, any claim, dispute or
controversy arising from, related to, involving or pertaining to the terms or
provisions of or relationship created by this Agreement shall be submitted to
binding arbitration under the rules of the American Arbitration Association then
obtaining in the County, City and State on New York and any award or
determination by the American Arbitration Association shall be final and binding
upon the parties. Any such award or determination shall be capable of being
submitted to the United States District Court Southern District of New York or
the New York State Supreme Court for the County of New York as a final judgment
-- and the parties hereto consent to the jurisdiction of said courts as the
Courts with the sole and exclusive jurisdiction. Each party shall bear his or
its own costs, including but not limited to attorneys fees, of such arbitration
proceedings.
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24. REPRESENTATIVE BY THE COMPANY.
Company hereby represents that this Agreement is duly and validly
authorized and enforceable against the Company in accordance with its terms;
similarly all options granted herein have been duly and validly authorized.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the date first hereinabove written.
UNIDIGITAL INC.
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By:
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▇▇▇▇▇ ▇▇▇▇
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