Exhibit 10.6
Employment Agreement - Xxxxx X. Xxxxxx
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of the 14th day of April 1998
between ICC TECHNOLOGIES, INC, a Delaware corporation (the Company") and Xxxxx
X. Xxxxxx, an individual (the "Employee").
In consideration of their mutual promises and covenants set
forth herein, and intending to be legally bound hereby, Company and Employee
agree as follows:
1. Employment. The Company hereby employs the Employee and
the Employee accepts such employment on the terms and conditions hereinafter set
forth.
2. Term. The term of this Agreement shall begin on April 15,
1998 and shall terminate on April 15, 2003 unless sooner terminated in
accordance with Paragraph 7 hereof.
3. Duties. The Employee is engaged hereunder as President
and Chief Executive Officer and he agrees to perform the duties and services
incident to that position, and shall have they customary powers,
responsibilities and authority of a Chief Executive Officer of a publicly traded
company similar to the Company. Employee shall at all times be subject to the
supervision of the Board of Directors of the Company.
The Employee shall devote his full business time, attention,
energies and best efforts to the performance of his duties hereunder and to the
promotion of the business and interests of the Company and of any corporate
subsidiaries or affiliated companies. The foregoing shall not be construed,
however, as preventing the Employee from being a member of the Board of
Directors of other companies provided however, that during the 18 month period
following the commencement of this Agreement, Employee shall not serve on the
Board of more than 3 other companies investing his assets in such form or manner
as will not require more than a minimal amount of services on the part of the
Employee in the operations of the business in which such investment is made and
provided such business is not in competition with the Company or, if in
competition, such business has a class of securities registered under the
Securities Exchange Act of 1934 and the interest of Employee therein is solely
that of an investor owning not more than 3% of any class of the outstanding
equity securities of such business.
The Employee recognizes that he may be required by the
Company to travel outside of the New York metropolitan area in order to perform
a portion of the services to be rendered hereunder, but the nature or extent of
such travelling shall not be such as to make it reasonably necessary for the
Employee to relocate his permanent residence from the New York metropolitan
area.
4. Compensation: Expenses.
(a) Base Salary. The Employee shall be paid a salary at
the rate of not less than $250,000 per year (the "Base Salary"). The Base Salary
shall be paid in installments in arrears in accordance with the Company's
regular payroll practices. The Company may, in its discretion, increase the
Employee's Base Salary; provided, however, that Employee shall receive a minimum
annual increase of his Base Salary of not less than 4% per annum.
(b) Incentive Compensation. In addition to Base
Compensation, Employee shall be entitled to receive for each calendar year
during the Employment Term, Incentive Compensation equal to 2% of Company's
revenues for such calendar year in excess of the revenues for the preceding year
("Base Revenues"). For the purposes of this Agreement, Revenues shall mean the
revenues derived from the activities conducted by RareMedium and that for the
first year ending December 31, 1998 the Base Revenues shall be $4,000,000.
Revenues for the Company shall be determined by the Company's auditors as
reflected on the Company's audited statements for the years ending December 31.
Any incentive compensation shall be payable within 30 days after the delivery of
the audited financial statements of the Company.
(c) Stock Options. Concurrently with the execution of
this Agreement, the Company shall grant to Employee Incentive Stock Options and
Non-Statutory Stock Options to purchase an aggregate of 2,000,000 shares of
Common Stock of the Company in such proportions which will enable Employee to
take full advantage of the benefits afforded Incentive Stock Options at exercise
prices equal to $2.50 per share which shall become exercisable ratably on a
monthly basis over a period of 60 months from the date of grant and shall expire
ten years from the date of grant. Such options shall entitle the Holder to
exercise them with cashless exercise and the Option Agreement shall so provide.
(d) Fringe Benefits.
(i) The Employee shall be entitled to participate in
all insurance, vacation and other fringe benefit programs of the Company to the
extent and on the same terms and conditions as are accorded to other management
employees of the Company, provided, however, that nothing herein shall be deemed
to require grants or awards to Employee under any benefit plans which provide
for awards or grants at the discretion of the Board of Directors or of any
committee or administrator , and that entitlement to vacations shall be governed
solely by clause (ii) of this subparagraph (b).
(ii) The Employee shall be entitled in each calendar
year commencing with 1998 to a vacation of four (4) weeks, without loss of or
reduction in his compensation. Each vacation shall be taken by the Employee at
such time or times as agreed upon by the Company and Employee. Any portion of
Employee's vacation not used during the calendar year accrued and carried
forward to a subsequent year during the Employment Term.
(e) Business Expenses. The Company will pay, or reimburse
the Employee for, all ordinary and reasonable out-of-pocket business expenses
customarily incurred by a CEO of a company similar to the Company in connection
with his performance of services hereunder during the Employment Term in
accordance with the Company's expense authorization and approval procedures then
in effect upon presentation to the Company of an itemized account and written
proof of such expenses which shall include a monthly automobile allowance of
$1,000.
(b) Entire Compensation. The compensation provided for in
this Agreement is in full payment of the services to be rendered by the Employee
to the Company hereunder.
5. Death or Total Disability of the Employee.
(a) Death. In the event of the death of the Employee
during the term of this Agreement, this Agreement shall terminate effective as
of the date of the Employee's death, and the Company shall not have any further
obligation or liability hereunder except that the Company shall pay to
Employee's designated beneficiary or, if none, his estate the portion, if any,
of the Employee's Base Salary for the period up to the Employee's date of death
which remains unpaid.
(b) Total Disability. In the event of the Total
Disability (as that term is hereinafter defined) of the Employee, the Company
shall have the right to terminate the Employee's employment hereunder by giving
the Employee 10 days' written notice thereof and, upon expiration of such 10-day
period, the
Company shall not have any further obligation or liability under this Agreement
except that the Company shall pay to the Employee the portion, if any, of the
Employee's Base Salary for the period up to the date of termination which
remains unpaid, provided that if the Employee, during any period of disability,
receives any periodic payments representing lost compensation under any health
and accident policy or under any salary continuation insurance policy, the
premiums for which have been paid by the Company, the amount of Base Salary that
the Employee would be entitled to receive from the Company during such period of
disability shall be decreased by the amounts of such payments.
The term "Total Disability," when used herein, shall mean a
mental or physical condition which either has rendered the Employee for a period
of 120 consecutive days, or for a total of 180 days during any period of 12
consecutive months, during the term of this Agreement, unable to carry out, on a
substantially full-time basis, the job responsibilities he held or tasks that he
was assigned at the time the disability was incurred. To determine whether there
is a "Total Disability" hereunder, the Employee shall submit to a physical or
other examination by a licensed physician mutually acceptable to the Company and
Employee, the cost of which examination shall be paid by the Company. If the
Employee and the Company cannot agree as to a qualified independent physician,
each shall appoint a physician and those two physicians shall select a third who
shall make such determination
6. Termination of Employment. In addition to termination
pursuant to paragraph 5, the Company may discharge the Employee and thereby
terminate his employment hereunder for the following reasons ("for cause"): (i)
habitual intoxication; drug addiction; or conviction of a felony which
materially and adversely affects the Company or the Employee's ability to
perform his duties hereunder; (ii) adjudication as an incompetent; or (iii) the
Employee's breach of this Agreement in any other material respect.
In the event that the Company shall discharge the Employee
pursuant to this paragraph 6, the Company shall not have any further obligations
or liability under this Agreement, except that the Company shall pay to Employee
the portion, if any, of the Employee's Base Salary for the period up to the date
of termination which remains unpaid, except the Employee shall not be entitled
to such unpaid Base Salary for termination pursuant to paragraph 6(a).
In the event of either a breach of this Agreement by the
Company or a "Change in Control" of the Company, as defined below, at Employee's
option, Employee shall have the right to terminate this Agreement. Upon such
election to terminate by Employee: (a) Employee shall receive a lump sum payment
from the Company which shall equal to (i) the total of Employee's salary plus
all incentive compensation for the remaining portion of the term of this
Agreement, plus (ii) the cash value of all benefits which would have been
received by Employee for the remaining potion of the term of this Agreement,
plus (iii) the cash value of all unexercised stock options (whether or not
vested) or the cashless exercise value thereof.
For purposes of this Agreement, a "Change of Control" means
the happening of any of the following: When any "person" as defined in Section
3(a)(9) of the Securities Exchange Act of 1934 ("Exchange Act") and as used in
Section 13(d) and 14(d) thereof, including a "group" as defined in Section 13(d)
of the Exchange Act but excluding the Company and any Subsidiary and any
employee benefit plan sponsored or maintained by the Company or any Subsidiary
(including any trustee of such plan acting as trustee), directly or indirectly
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act,
as amended from time to time), of securities of the Company representing 30
percent or more of the combined voting power of the Company's then outstanding
securities excluding the options written relating to a financing by the Company.
7. Non-Disclosure.
(a) Non-Disclosure. The Employee recognizes and
acknowledges that he will have access to certain confidential information of the
Company and that such information constitutes valuable,
special and unique property of the Company. The Employee agrees that he will
not, for any reason or purpose whatsoever, during or after the term of his
employment, use any of such confidential information or disclose any of such
confidential information to any party without express authorization of the
Company, except as necessary in the ordinary course of performing his duties
hereunder. The obligation of confidentiality imposed by this subparagraph shall
not apply to information which appears in issued patents or printed publications
or which otherwise becomes generally known in the industry through no act of the
Employee in breach of this Agreement.
(b) Inventions, Designs and Product Developments. All
inventions, discoveries, concepts, improvements, formulas, processes, devices,
methods, innovations, designs, ideas and product developments (collectively, the
"Developments"), developed or conceived by Employee, solely or jointly with
others, whether or not patentable or copyrightable, at any time during the
Employment Term or within one year after the termination hereof and which relate
to the actual or planned business activities of the Company and all of the
Employee's right, title and interest therein, shall be the exclusive property of
the Company. The Employee hereby assigns, transfers and conveys to the Company
all of his right, title and interest in and to any and all such Developments.
Employee shall disclose fully, as soon as practicable and in writing, all
Developments to the Board of Directors of the Company. At any time and from time
to time, upon the request of the Company, the Employee shall execute and deliver
to the Company any and all instruments, documents and papers, give evidence and
do any and all other acts which, in the opinion of counsel for the Company, are
or may be necessary or desirable to document such transfer or to enable the
Company to file and prosecute applications for and to acquire, maintain and
enforce any and all patents, trademark registrations or copyrights under United
States or foreign law with respect to any such Developments or to obtain any
extension, validation, reissue, continuance or renewal of any such patent,
trademark or copyright. The Company will be responsible for the preparation of
any such instruments, documents and papers and for the prosecution of any such
proceedings and will reimburse the Employee for all reasonable expenses the
Employee incurs upon authorization of the Board of Directors of the Company.
8. Noncompetition. The Employee agrees that during the term
of this agreement and for a period of one (1) year thereafter, the Employee
shall not, unless acting pursuant hereto or with the prior written consent of
the Board of Directors of the Company, directly or indirectly:
(a) solicit business from or perform services for, any
persons, company or other entity which at any time during the Employee's
employment by the Company is a client or customer of the Company if such
business or services are of the same general character as those engaged in or
performed by the Company;
(b) solicit for employment or in any other fashion hire
any of the employees of the Company;
(c) own, manage, operate, finance, join, control or
participate in the management, operation, control of, or be connected as an
officer, director, employee, partner, principal, agent, representative,
consultant or otherwise with any business or enterprise engaged in the business
of designing, developing, and implementing Internet web site applications and
strategies, or any other business engaged in by the Company or any of its
affiliates (collectively, the "Business") within a radius of 20 miles from
Company's or any of Company's affiliates principal places of business (the
"Restricted Area");
(d) use or permit his name to be used in connection with,
any business or enterprise engaged in the Business within the Restricted Area;
or
(e) use the name of the Company or any name similar
thereto, but nothing in this clause shall be deemed, by implication, to
authorize or permit use of such name after expiration of such period;
provided, however, that this provision shall not be-construed to prohibit the
ownership by the Employee of not more than 3% of any class of the outstanding
equity securities of any corporation which is engaged in any of the foregoing
businesses having a class of securities registered pursuant to the Securities
Exchange Act of 1934. In the event that the provisions of this Section should
ever be adjudicated to exceed the time, geographic, service or product
limitations permitted by applicable law in any jurisdiction, then such
provisions shall be deemed reformed in such jurisdiction to the maximum time,
geographic, service or product limitations permitted by applicable law.
9. Equitable Relief; Survival.
(a) The Employee acknowledges that the restrictions
contained in paragraphs 7(a), 7(b) and 8 hereof are, in view of the nature of
the business of the Company, reasonable and necessary to protect the legitimate
interests of the Company, and that any violation of any provisions of those
Sections will result in irreparable injury to the Company. The Employee also
acknowledges that the Company shall be entitled to temporary and permanent
injunctive relief, without the necessity of proving actual damages, and to an
equitable accounting of all earnings, profits and other benefits arising from
any such violation, which rights shall be cumulative and in addition to any
other rights or remedies to which the Company may be entitled. In the event of
any such violation, the Company shall be entitled to commence an action for
temporary and permanent injunctive relief and other equitable relief in any
court of competent jurisdiction and Employee further irrevocably submits to the
jurisdiction of any New York State court or Federal court sitting in the
Southern District of New York over any suit, action or proceeding arising out of
or relating to paragraph 7 or 8. The Employee hereby waives, to the fullest
extent permitted by law, any objection that he may now or hereafter have to such
jurisdiction or to the venue of any such suit, action or proceeding brought in
such a court and any claim that such suit, action or proceeding has been brought
in any inconvenient forum.
(b) Survival of Covenants. The provisions of paragraphs 7
and 8 shall survive the termination of this Agreement.
10. Remedies Cumulative; No Waiver. No remedy conferred upon
the Company by this Employment Agreement is intended to be exclusive of any
other remedy, and each and every such remedy shall be cumulative and shall be in
addition to any other remedy given hereunder or now or hereafter existing at law
or in equity. No delay or omission by the Company in exercising any right,
remedy or power hereunder or existing at law or in equity shall be construed as
a waiver thereof-, and any such right, remedy or power may be exercised by the
Company from time to time and as often as may be deemed expedient or necessary
by the Company in its sole discretion.
11. Enforceability. If any provision of this Agreement shall
be invalid or unenforceable, in whole or in part, then such provision shall be
deemed to be modified or restricted to the extent and in the manner necessary to
render the same valid and enforceable, or shall be deemed excised from this
Agreement, as the case may require, and this Agreement shall be construed and
enforced to the maximum extent permitted by law, as if such provision had been
originally incorporated herein as so modified or restricted, or as if such
provision had not been originally incorporated herein, as the case may be.
12. Notices. All notices, requests, demands, claims, and
other communications hereunder will be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given if (and then
two business days after) it is sent by registered or certified mail, return
receipt requested, postage prepaid, and addressed to the intended recipient as
set forth below:
If to Company: Copy to:
RareMedium, Inc. Xxxxxxx X. Xxxxx, Esq.
c/o ICC Technologies, Inc. Mesirov Xxxxxx Xxxxx Xxxxxx &
Xxxxxxxx, LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
If to Xxxxx X. Xxxxxx: 00 Xxxx 00xx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Copy to: [Legal Counsel]
Any party hereto may give any notice, request, demand, claim or other
communication hereunder using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail, or
electronic mail), but no such notice, request, demand, claim, or other
communication shall be deemed to have been duly given unless and until it
actually is received by the individual for whom it is intended. Any party hereto
may change the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other parties hereto
notice in the manner herein set forth.
13. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
14. Contents of Agreement: Amendment and Assignment. This
Agreement sets forth the entire understanding between the parties hereto with
respect to the subject matter hereof and supersedes and is instead of all other
employment arrangement between the Employee and the Company. This agreement
cannot be changed, modified or terminated except upon written amendment duly
executed by the parties hereto. All of the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective heirs, representatives, successors and assigns of the parties
hereto, except that the duties and responsibilities of the Employee hereunder
are of a personal nature and shall not be assignable in whole or in part by the
Employee.
IN WITNESS WHEREOF, this Agreement has been executed by the
parties on the date first above written.
ICC TECHNOLOGIES, INC.
By:________________________________
Name:
Title:
-----------------------------------
Xxxxx X. Xxxxxx (EMPLOYEE)
