Exhibit 10.5
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made as of this 4th day of April, 1994, by and
between NETWORK-1 SOFTWARE & TECHNOLOGY, INC., a Delaware corporation with a
principal place of business at 00-00 00xx Xxxxxx, Xxxx Xxxxxx Xxxx, XX 00000
(hereinafter referred to as the "Company") and XXXXXX XXXXX, residing at
00-00 00xx Xxxxxx, Xxxx Xxxxxx Xxxx, XX 00000 (hereinafter referred to as
"Executive").
W I T N E S S E T H:
WHEREAS, Executive is President and Chief Operating Officer of the
Company; and
WHEREAS, Executive's services have and will continue to constitute a
major factor in the growth and development of the Company; and
WHEREAS, the Company desires to employ and retain the experience, ability
and services of Executive as President and Chief Operating Officer;
NOW, THEREFORE, it is mutually agreed by and between the parties hereto
as follows:
1. EMPLOYMENT
The Company hereby agrees to employ Executive as its President and Chief
Operating Officer and Executive hereby accepts such employment subject to and
upon the terms and conditions of this Agreement.
2. DUTIES
Executive shall, during the term of his employment with the
Company, devote his full business time and efforts to the affairs of the
Company and shall perform such functions consistent with such office as the
Board of Directors of the Company may reasonably request.
3. COMPENSATION
As compensation for his services hereunder, the Company shall pay
Executive, a salary payable bi-weekly in the amount of $145,000 per annum for
the first year of Executive's employment; and for each year thereafter at a
rate equal to ten (10%) percent above the previous year's salary. Executive
may also receive such bonus compensation as the Board of Directors, in its
sole discretion, may determine; provided that as long as a designee of the
Purchasers (as defined in the Stock Purchase Agreement dated as of April ___,
1994, among the Company and such Purchasers) (the "Purchasers Designee") is a
member of the Board of Directors of the Company, any such bonus compensation
shall be approved by such Purchasers Designee.
4. REIMBURSEMENT OF EXPENSES
The Company shall also reimburse Executive for all reasonable expenses
incurred in connection with his performance of services hereunder, including,
but not limited to, expenses for business travel, entertainment and meals,
upon Executive's presentation of an itemized account of such expenditures.
Executive's substantiation of such expenses shall be made in a manner
acceptable to the Company and as required by the Internal Revenue Service.
5. TERM
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This Agreement shall be for a term of three (3) years commencing upon the
date hereof, unless sooner terminated pursuant to the terms herein.
6. TERMINATION
The Company shall have the right to terminate this Agreement for cause if
Executive shall commit any of the following acts of default (the "Act(s) of
Default"):
(i) Executive shall have materially breached any of the
provisions or covenants set forth herein; or
(ii) Executive shall have committed any material act of
malfeasance, disloyalty or breach of trust against the Company; or
(iii) Executive shall have committed any act of gross
negligence or bad faith in the performance of his duties and obligations
hereunder.
In the event the Company elects to terminate this Agreement as set forth
above, the Company shall send written notice of termination to Executive
describing the action of Executive constituting the Act of Default, and this
Agreement shall terminate ten (10) days after the date of postmark of such
written notice. In the event this Agreement is terminated for cause pursuant
to this paragraph, Executive shall not be entitled to receive any
compensation or additional benefits pursuant to Sections 3 and 7 hereof after
the date of termination. Nothing contained in this Agreement shall be deemed
to limit any other rights the Company may have to terminate Executive's
employment hereunder upon any ground permitted by law.
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7. ADDITIONAL BENEFITS
Nothing contained herein shall be deemed to limit or affect the right of
Executive to receive other forms of additional compensation or to participate
in any retirement, disability, profit sharing, stock option, cash bonus or
other plan or arrangement, or in any other benefits now or hereafter provided
by the Company for executives of similar position.
8. DEATH OR DISABILITY
(a) In the event that Executive shall become incapacitated by
reason of mental or physical disability or otherwise during the term of this
Agreement so that he is prevented from performing his principal duties and
services hereunder for a period of four (4) consecutive months, or for
shorter periods aggregating four (4) months in any twelve (12) month period,
the Company shall have the right to terminate this Agreement by sending
written notice of termination to Executive, and thereupon his employment
pursuant to this Agreement shall terminate; provided, however, in such event,
the Company shall pay to Executive the salary on a monthly basis as set forth
in Section 3 hereof for a period of six (6) months from the date of
termination.
(b) In the event of the death of Executive during the term of this
Agreement, the Company shall pay to his estate the salary on a monthly basis
as set forth in Section 3 hereof for the period of six (6) months from the
date of death.
9. RESTRICTIVE COVENANT
(a) Executive agrees that during the term of this Agreement or any
renewals or extensions hereof, and for a period of two (2)
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years thereafter in the event that Executive has breached this Agreement
including, without limitation, voluntary termination or has otherwise been
terminated for cause including as a result of any Act of Default as set forth
in Section 6 hereof, he will not, directly or indirectly, engage or
participate in any activity, make any financial investment, or become
employed by or become a principal or director of or render advisory or other
services to or for any person, firm or corporation located in the United
States that engages, directly or indirectly, in competition with any of the
business operations, activities or products of the Company including, but not
limited to, (i) network consulting and training and (ii) network management
and network security products (as such operations, activities and products
may exist at any time during the term of Executive's employment with the
Company). Nothing contained herein, however, shall restrict Executive from
making any investments in any business or enterprise whose securities are
listed on a national securities exchange or actively traded in the
over-the-counter market, which business or enterprise is or might be directly
or indirectly in competition with any of the business operations, activities
or products of the Company; provided, however, that such investment does not
result in Executive owning 5% or more of the outstanding voting securities of
such entity or otherwise give Executive the right to control or influence the
policy decisions of such business.
(b) Executive will not, either during the term of this Agreement or
at any time thereafter, divulge, furnish or make accessible to anyone
(otherwise than in the regular course of
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business of the Company) any knowledge or information with respect to
confidential or secret methods, plans, products, technology, materials, or
processes of the Company, or with respect to any other confidential or secret
aspects of the business, activities or products of the Company including,
without limitation, (x) products, technologies, processes, designs,
materials, developments, inventions or discoveries (whether or not subject to
patent, trademark or copyright protection) or (y) any customer or client
lists, telephone leads, prospects lists, advertising and marketing plans and
strategies and sales promotion materials, forms or literature; except as such
items set forth in clauses (x) and (y) may already be in the public domain
through no fault of Executive (all of the foregoing items set forth in
clauses (x) and (y) being referred to herein collectively as "Intangible
Property").
(c) Executive agrees that any such Intangible Property that he may
conceive, make, invent, develop or suggest during the term of this Agreement
(whether individually or jointly with any other person or persons), relating
in any way to the business or activities of the Company, shall be the sole,
exclusive and absolute property of the Company. Executive will immediately
disclose any such Intangible Property to Company, except where the same is
lawfully protected from disclosure to the Company as a trade secret of a
third party or by any other lawful bar to such disclosure. Executive shall
return all tangible evidence of Intangible Property to the Company prior to
or at the termination of his employment.
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(d) Executive agrees that during the term of this Agreement or any
renewals or extensions hereof, and for a period of two (2) year thereafter,
he will not:
(i) Directly or indirectly solicit, raid, entice or induce any
employee of the Company, or any subsidiary of the Company or any entity which
directly or indirectly is controlled by or is under common control with the
Company, to be employed by any other person, corporation or entity; or
(ii) Directly or indirectly approach any such employee for such
purposes; or
(iii) Authorize or knowingly approve the taking of such
actions by other persons on behalf of any such person, corporation or entity
or assist any such person, corporation or entity in taking such action.
(e) Executive agrees that during the term of this Agreement or any
renewals or extensions hereof, he will not at any time enter into on behalf
of the Company or cause the Company to enter into, directly or indirectly,
any transactions with any entity in which he or any member of his immediate
family may be interested as a partner, trustee, director, officer, employee,
shareholder, lender of money or guarantor, unless the material facts as to
his interest (or the interest of such family member) and as to the
transaction are disclosed or are known to the Board of Directors of the
Company and the transaction is authorized, approved and ratified by the
Directors.
(f) Executive acknowledges that the services to be rendered by him
hereunder are of a special, unique and extraordinary
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character and that it would be very difficult or impossible to replace such
services, and further that irreparable injury would be sustained by the
Company in the event of a violation by Executive of any of the provisions of
this Agreement and by reason thereof, Executive consents and agrees that if
he violates any of the provisions of this Agreement, the Company shall be
entitled to an injunction to be issued by any court of competent jurisdiction
restraining him from committing or continuing any violation of this
Agreement, in addition to all other remedies available to the Company under
this Agreement or otherwise.
10. REPRESENTATION AND WARRANTY OF EXECUTIVE
Executive represents and warrants that he is not a party to any
agreement, contract or understanding, whether of employment or otherwise, or
under any physical or mental disability which would in any way restrict or
prohibit him from undertaking or performing in accordance with the terms and
conditions of this Agreement.
11. SEVERABILITY
If any provision of this Agreement shall be held invalid or
unenforceable, the remainder of this Agreement shall nonetheless remain in
full force and effect. In the event that a court of competent jurisdiction
determines that any covenant set forth herein is impermissibly broad in
scope, duration or geographical area, then the parties intend that such court
should limit the scope duration or geographical area of such covenant to the
extent and only to the extent necessary to render such covenant reasonable
and enforceable, and enforce the covenant as so limited.
12. NOTICES
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All notices required or permitted to be given under the terms of this
Agreement shall be in writing and shall be deemed to have been duly given as
of the date of postmark if delivered to the addressee by certified mail,
return receipt requested as follows:
IF TO THE COMPANY: Network-1 Software & Technology, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxx 00000
Attn.: Xxxxxxx Xxxxxxx
Executive Vice President
WITH A COPY TO: Bizar & Xxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxx Xxxxxxxx, Esq.
IF TO EXECUTIVE: Xxxxxx Xxxxx
00-00 00xx Xxxxxx
Xxxx Xxxxxx Xxxx, XX 00000
13. BENEFIT
This Agreement shall inure to, and shall be binding upon, the parties
hereto and the successors and assigns of the Company and the personal
representatives and heirs of Executive.
14. WAIVER
The waiver by either party of any breach or violation of any provision of
this Agreement shall not operate or be construed as a waiver of any
subsequent breach or violation hereof. Any such waiver must be in writing and
signed by the party charged with making the same.
15. GOVERNING LAW
This Agreement shall be governed by and construed in all respects in
accordance with the laws of the State of New York, without regard to its
principles of conflict of laws.
16. ENTIRE AGREEMENT
This Agreement supersedes all prior agreements and
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understandings between the Company and Executive and contains the entire
agreement between the parties hereto with respect to the subject matter
hereof. No modification, addition or amendment shall be made hereto, except
by written agreement signed by both parties hereto and approved by the
uanimous consent of the Board of Directors so long as the Purchasers Designee
is a member of the Board of Directors.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
NETWORK-1 SOFTWARE & TECHNOLOGY, INC.
By:/s/ Xxxxxxx Xxxxxxx
-----------------------------
Xxxxxxx Xxxxxxx,
Executive Vice President
EXECUTIVE:
/s/ Xxxxxx Xxxxx
--------------------------------
Xxxxxx Xxxxx
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February 16, 1996
Mr. Xxxxxx Xxxxx
Network-1 Software & Technology, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Extension of Employment Agreement
Dear Xxx:
This letter agreement shall supplement the Employment Agreement, dated
April 4, 1994, between yourself and Network-1 Software & Technology, Inc. and
shall serve to extend the term of said Employment Agreement for an additional
two (2) year period expiring April 4, 1999.
If the foregoing correctly confirms our understanding, kindly execute this
agreement at the appropriate place provided below.
Very truly yours,
Network-1 Software & Technology
Inc.
By: /s/ Xxxxxxx Xxxxxxx
---------------------------------
Xxxxxxx Xxxxxxx, Vice-President
Agreed and Accepted:
/s/ Xxxxxx Xxxxx
---------------------------
Xxxxxx Xxxxx
