EXHIBIT 10.2
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EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT (the "Agreement") dated November 1, 2004 by and
between SWK Technologies, Inc. , a Delaware corporation with an address at 000
Xxxxxxxxxx Xxxxxxx, Xxxxxxxxxx, XX 00000 (the "Company"), and Xxxxx Xxxxxx,
residing at ______________________________________________________ (the
"Employee").
W I T N E S S E T H
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WHEREAS, the Company desires that Employee be employed by it and render
services to it, and Employee is willing to be so employed and to render such
services to the Company, all on the terms and subject to the conditions
contained herein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and other good and valuable consideration, the receipt
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Employment
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Subject to and upon the terms and conditions contained in this
Agreement, the Company hereby employs Employee, for the period set forth in
Paragraph 2 (subject to the terms and conditions of this Agreement), to render
the services to the Company, its affiliates and/or subsidiaries described in
Paragraph 3.
2. Term
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Employee's term of employment under this Agreement shall commence on
November 1, 2004 (the "Commencement Date") and shall continue for a period
terminating on December 31, 2007 (the "Expiration Date"), unless earlier
terminated under the terms and conditions herein (the "Employment Term").
3. Duties
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(a) The Employee agrees that he will serve the Company on a
full-time basis faithfully and to the best of his ability as the Director of the
Small Business Services Division of the Company, subject to the general
supervision of the Chief Executive Officer of the Company. Employee shall be
based in the Company's offices in New Jersey.
(b) Employee agrees to abide by all By-Laws and policies of
the Company promulgated from time to time by the Company.
4. Exclusive-Services and Best Efforts
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Employee shall devote substantially his entire working time, attention,
best efforts and ability exclusively to the service of the Company, its
affiliates and subsidiaries during the term of this Agreement. The Company
acknowledges that Employee is
currently a principal of Art Industries, and that Employee will need to continue
to devote minimal working hours to that business until such time as his services
are no longer required at that company.
5. Compensation
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(a) Base Salary. Commencing on the Commencement Date, the
Employee shall receive an annual salary, payable semi-monthly during the
Employment Term, in the amount of One Hundred Twenty Thousand Dollars
($120,000), subject to all required federal, state and local payroll deductions.
The Employee's base salary shall be increased on each anniversary of the
Commencement Date as deemed appropriate by the Board of Directors of the
Company. Notwithstanding anything to the contrary, for the 2007 calendar year,
the Employee's Base Salary shall be reduced by one percent (1%) for each full
Ten Thousand Dollar ($10,000) increment that the net revenue of sales for the
2006 calendar year of the Small Business Services Division ("SBSD") falls below
Seven Hundred and Seventy Thousand Dollars ($770,000), but in no case shall such
reduction reduce the Employee's salary by more than $12,000. Additionally,
should the net revenue of sales for the 2006 calendar year of SBSD exceed Seven
Hundred Seventy Thousand Dollars ($770,000), then the Employee may be awarded an
additional bonus at the sole discretion of the Board of Directors of the
Company.
(b) Incentive Compensation. Following the first anniversary of
the Commencement Date, the Employee shall be paid an annual bonus at the sole
discretion of the Board of Directors of the Company.
(c) Stock Options. The Employee shall participate in the
Company's Incentive Stock Option Plan at the sole discretion of the Board of
Directors of the Company.
(d) Bonus. Employee shall be paid, no later than February 15,
2006, a bonus equal to ten percent (10%) of the pre-tax profit for the SBSD for
2005.
(e) Bonus Pool. Employee will participate, in 2006 and 2007,
in the Employee bonus pool created for other executives of the Company, in an
amount to be decided by the Company's Board of Directors.
(f) Other Duties. In the event that the Company acquires
another company whose business will fall within the operations of the SMSD,
Employee's salary will be adjusted upwards to take into account his increased
managerial duties.
6. Business Expenses
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Employee shall be reimbursed for only those business expenses incurred
by him (a) which are reasonable and necessary for Employee to perform his duties
under this Agreement in accordance with policies established from time to time
by the Company, which shall include and not be limited to: travel, parking,
tools and cell phone calls and
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(b) for which Employee has submitted vouchers and/or receipts. The Employee
shall receive a car allowance of Five Hundred Seventy Five Dollars ($575.00) per
month
7. Employee Benefits
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The Employee shall participate in the Company's health insurance
program covering himself and his family, in addition to the Company's group
disability and life insurance programs available to other employees of the
Company.
8. Vacation and Sick Leave
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Employee shall be entitled to three (3) weeks of vacation per annum
during the Employment Term, to be taken at such times as may be mutually agreed
upon by the Company and Employee. The Employee shall be entitled to one (1) week
of sick and/or personal leave per annum during the Employment Term.
9. Death and Disability
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(a) The Employment Term shall terminate on the date of
Employee's death, in which event Employee's salary payable pursuant to Paragraph
5 through the last day of the month in which the Employee's death did occur
shall be paid to his estate. Employee's estate will not be entitled to any other
compensation upon termination of this Agreement pursuant to this Paragraph 9(a).
(b) If during the Employment Term, Employee, because of
physical or mental illness or incapacity, shall become substantially unable to
perform the duties and services required of him under this Agreement for a
period of forty-five (45) consecutive days or ninety (90) days in the aggregate,
the Company may, upon at least ten (10) days' prior written notice given at any
time after the expiration of such 45 or 90-day period, as the case may be, to
Employee of its intention to do so, terminate this Agreement as of such date as
may be set forth in the notice. In case of such termination, Employee shall be
entitled to receive his salary payable pursuant to Paragraph 5 through the date
of termination. Employee will not be entitled to any other compensation upon
termination of this Agreement pursuant to this Paragraph 9(b).
10. Termination
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(a) The Company may terminate the employment of Employee For
Cause during the Employment Term. Upon such termination, the except as set forth
herein, the Company shall be released from any and all further obligations under
this Agreement, except that the Company shall be obligated to pay Employee the
unpaid prorated salary pursuant to Paragraph 5 earned or accrued up through the
day on which Employee is terminated.
(b) As used herein, the term "For Cause" shall mean:
(i) any material breach of this Agreement by Employee
that, in the case of a breach that may be cured or remedied, is not cured or
remedied to the
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reasonable satisfaction of the Company within 30 days after notice is given by
the Company to Employee, setting forth in reasonable detail the nature of such
breach;
(ii) Employee's willful refusal to carry out the
reasonable directives or policies of the Board of Directors that, in the case of
any such failure that may be cured or remedied, is not cured or remedied to the
reasonable satisfaction of the Company within 30 days after notice is given by
the Company to Employee, setting forth in reasonable detail the nature of such
failure;
(iii) any material act, or material failure to act,
by Employee in bad faith and to the material detriment of the Company; or
(iv) commission by Employee of a material act
involving moral turpitude, dishonesty, unethical business conduct, or any other
conduct which significantly impairs the reputation of the Company, its
subsidiaries or affiliates.
(v) the conviction of the Employee of a felony,
including the plea of nolo contendere
11. Disclosure of Information and Restrictive Covenant
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(a) The Employee acknowledges that the Employee 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. Confidential information and trade secrets include,
but are not limited to, customer and client lists, price lists, marketing and
sales strategies and procedures, operational and equipment techniques, business
plans and systems, quality control procedures and systems, special projects and
technological research, including projects, research and reports for any entity
or client or any project, research, report or the like concerning sales or
manufacturing or new technology, employee compensation plans and any other
information relating thereto, and any other records, files, drawings,
inventions, discoveries, applications or processes which are not in the public
domain (all the foregoing shall be referred to herein as the "Confidential
Information"). The Employee 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 Employee
are special and unique, and that by reason of his employment by the Company, the
Employee has and will acquire confidential information as aforesaid. The parties
confirm that it is reasonably necessary to protect the Company's (and its
Affiliates') goodwill, and accordingly the Employee does agree that the Employee
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 Employee 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
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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 eighteen (18) months after the Employee ceases to be employed by the
Company, solicit or cause or authorize directly or indirectly to be solicited,
for or on behalf of the Employee 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 eighteen (18) months after the Employee ceases to be employed by the
Company, accept or cause or authorize directly or indirectly to be accepted, for
or on behalf of the Employee 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 eighteen (18) months after the Employee 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 Employee or third parties, any persons
(excluding any individuals residing in the same immediate primary residence as
the Employee, and/or the Employee'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 eighteen (18) months after the Employee ceases to be employed by the
Company, employ or cause or authorize directly or indirectly to be employed, for
or on behalf of the Employee or third parties, any such employees of the Company
or its affiliates.
(b) The Employee agrees that, upon the expiration of his employment by
the Company for any reason, the Employee 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.
(c) The Employee agrees that any breach or threatened breach by the
Employee of any provision of this Section 11 and 12 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 Employee 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 in existence from time to time, for which the Company has operational
control.
(e) Employee will not induce or persuade other employees of the Company
to join him in any activity prohibited by Paragraph 11 or 12.
(f) This Paragraph 11 and Paragraphs 12, 13, 14, 15, 20 and 21 shall
survive the expiration or termination of the Agreement for any reason.
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(g) It is expressly agreed by Employee that the nature and scope of
each of the provisions set forth in Paragraphs 11 and 12 are reasonable and
necessary. If, for any reason, any aspect of these provisions as they apply to
Employee is determined by a court of competent jurisdiction to be unreasonable
or unenforceable, the provisions shall only be modified to the minimum extent
required to make the provisions reasonable and/or enforceable, as the case may
be. Employee acknowledges and agrees that his services are of a unique character
and expressly grants to the Company or any subsidiary, successor or assignee of
the Company, the right to enforce the provisions above through the use of all
remedies available at law or in equity, including, but not limited to,
injunctive relief.
12. Company Property
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(a) Any patents, inventions, discoveries, applications,
processes or designs, devised, planned, applied, created, discovered or invented
by Employee in the course of Employee's employment under this Agreement and
which pertain to any aspect of the Company's or its respective subsidiaries' or
affiliates' businesses shall be the sole and absolute property of the Company,
and Employee shall make prompt report thereof to the Company and promptly
execute any and all documents reasonably requested to assure the Company the
full and complete ownership thereof.
(b) All records, files, lists, including computer generated
lists, drawings, documents, equipment and similar items relating to the
Company's business which Employee shall prepare or receive from the Company
shall remain the Company's sole and exclusive property. Upon termination of the
Employment Term, or, if earlier, upon demand by the Company, Employee shall
promptly return to the Company all property of the Company in his possession.
Employee further represents that he will not copy or cause to be copied, print
out or cause to be printed out any software, documents or other materials
originating with or belonging to the Company. Employee covenants that, upon
termination of his employment with the Company, he will not retain in his
possession any such software, documents or other materials.
13. Remedy
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It is mutually understood and agreed that Employee's services are
special, unique, unusual, extraordinary and of an intellectual character giving
them a peculiar value, the loss of which cannot be reasonably or adequately
compensated in damages in an action at law. Accordingly, in the event of any
breach of this Agreement by Employee, including, but not limited to, the breach
of the non-disclosure, non-solicitation and non-compete clauses under Paragraphs
11 and 12 hereof, the Company shall be entitled to equitable relief by way of
injunction or otherwise in addition to damages the Company may be entitled to
recover. Nothing herein shall be deemed to restrict any remedy available to
Employee for breach of the Agreement by the Company.
14. Representations and Warranties of Employee and the Company
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(a) In order to induce the Company to enter into this
Agreement, Employee hereby represents and warrants to the Company as follows:
(i) Employee has the legal capacity and unrestricted right to execute and
deliver this Agreement once to perform all of his obligations hereunder: (ii)
the execution and delivery of this Agreement by Employee and the performance of
his obligations hereunder will not violate or be in conflict with any fiduciary
or other duty, instrument, agreement, document, arrangement or other
understanding to which Employee is a party or by which he is or may be bound or
subject; and (iii) Employee is not a party to any instrument, agreement,
document, arrangement or other understanding with any person (other than the
Company) requiring or restricting the use or disclosure of any confidential
information or the provision of any employment, consulting or other services.
(b) The Company hereby represents and warrants to Employee, as
follows: (i) the execution, delivery, and performance of this Agreement has been
duly authorized by all necessary corporate action of the Company; and (ii) this
Agreement constitutes the valid and binding obligation of the Company,
enforceable in accordance with its terms, except that such enforcement may be
subject to any bankruptcy, insolvency, reorganization, fraudulent transfer or
other laws, now or hereafter in effect, relating to or limiting creditors'
rights generally.
15. Notices
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All notices given hereunder shall be in writing and shall be deemed
effectively given when mailed, if sent by registered or certified mail, return
receipt requested, addressed to Employee at his address set forth on the first
page of this Agreement, and to the Company at its address set forth on the first
page of this Agreement, Attention: Chief Executive Officer, with a copy to
Meritz & Xxxxx LLP, 0000 X Xxxxxx, XX, Xxxxxxxxxx, XX 00000, Attention: Xxxxxxxx
X. Xxxxx, or at such address as such party shall have designated by a notice
given in accordance with this Paragraph 15, or when actually received by the
party for whom intended, if sent by any other means.
16. Entire Agreement
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This Agreement constitutes the entire understanding of the parties with
respect to its subject matter and no change, alteration or modification hereof
may be made except in writing signed by the parties hereto. Any prior or other
agreements, promises, negotiations or representations not expressly set forth in
this Agreement are of no force or effect.
17. Severability
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If any provision of this Agreement shall be unenforceable under any
applicable law, then notwithstanding such unenforceability, the remainder of
this Agreement shall continue in full force and effect.
18. Waivers, Modifications, Etc.
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No amendment, modification or waiver of any provision of this Agreement
shall be effective unless the same shall be in writing and signed by each of the
parties hereto, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
19. Assignment
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Neither this Agreement, nor any of Employee's rights, powers, duties or
obligations hereunder, may be assigned by Employee. This Agreement shall be
binding upon and inure to the benefit of Employee and his heirs and legal
representatives and the Company and its successors and assigns. Successors of
the Company shall include, without limitation, any corporation or corporations
acquiring, directly or indirectly, all or substantially all of the assets of the
Company, whether by merger, consolidation, purchase, lease or otherwise, and
such successor shall thereafter be deemed "the Company" for the purpose hereof.
20. Applicable Law
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This Agreement shall be deemed to have been made, drafted, negotiated
and the transactions contemplated hereby consummated and fully performed in the
State of New Jersey and shall be governed by and construed in accordance with
the laws of the State of New Jersey, without regard to the conflicts of law
rules thereof. Nothing contained in this Agreement shall be construed so as to
require the commission of any act contrary to law, and whenever there is any
conflict between any provision of this Agreement and any statute, law,
ordinance, order or regulation, contrary to which the parties hereto have no
legal right to contract, the latter shall prevail, but in such event any
provision of this Agreement so affected shall be curtailed and limited only to
the extent necessary to bring it within the legal requirements.
21. Jurisdiction and Venue
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It is hereby irrevocably agreed that all actions, suits or proceedings
between the Company and Employee arising out of, in connection with or relating
to this Agreement shall be exclusively heard and determined in, and the parties
do hereby irrevocably submit to the exclusive jurisdiction of the appropriate
New Jersey trial court located in the county in which the Company's principal
offices are located, or the Federal District Court in the district in which the
Company's principal offices are located. The parties also agree that a final
judgment in any such action, suit or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. The parties hereby unconditionally waive any objection which
either of them may now or hereafter have to the venue of any such action, suit
or proceeding brought in any of the aforesaid courts, and waive any claim that
any such action, suit or proceeding brought in any such court has been brought
in an inconvenient forum.
22. Full Understanding
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Employee represents and agrees that he fully understands his right to
discuss all aspects of this Agreement with his private attorney, that to the
extent, if any, that he desired, he availed himself of this right, that he has
carefully read and fully understands all of the provisions of this Agreement,
that he is competent to execute this Agreement. that his agreement to execute
this Agreement has not been obtained by any duress and that he freely and
voluntarily enters into it, and that he has read this document in its entirety
and fully understands the meaning, intent and consequences of this document
which is that it constitutes an agreement of employment.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date written below.
SWK TECHNOLOGIES, INC. XXXXX XXXXXX
By: By:
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Title: Dated:
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Dated:
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