Employment Agreement
THIS EMPLOYMENT AGREEMENT (the "Agreement"), made as of June 1, 1997 (the
"Effective Date") by and between Meta4, Inc., a corporation organized and
operating under the laws of the State of Delaware, with its principal place of
business at 00-00 Xxx Xxxxxx Xxxxx 0X, Xxxxxxx, XX 00000 (hereinafter referred
to as "The Company") and Xxxxx X. Xxxxxxxx, currently residing at 00 Xxxxxx
Xxxx, Xxxxxxxxx, Xxxxxxxxxxxx 00000 (hereinafter referred to as "Employee").
W I T N E S S E T H :
WHEREAS, the Company is a for profit corporation engaged in the business of
providing, among other things, consulting services and software development
concerning solutions to the Year 2000 problem and management of information
technology operations;
WHEREAS, Employee is a founder of the Company whose work is integral to the
Company's success;
WHEREAS, the Company and Employee desire to enter into a formal employment
arrangement;
WHEREAS, Employee currently has an agreement with another principal shareholder
and the Company under which the other Employee is entitled to receive a royalty
equal to 10 percent of the sales of the Company's proprietary software (the
"Royalty Agreement") and the Company and Employee desire that the Royalty
Agreement be conditionally superseded as provided herein;
NOW, THEREFORE, in consideration of the premises and mutual covenants contained
herein and for other good and valuable consideration, the parties hereto agree
as follows:
1. EMPLOYMENT
A. Term As of the Effective Date and continuing for a term of five
years unless terminated as herein provided, Employee shall serve
as Executive Vice President for Marketing and Sales of the
Company (the "Term"). Employee shall perform those services
consistent with his position as Executive Vice President for
Marketing and Sales.
B. Best Efforts Employee agrees at all times to faithfully,
diligently, conscientiously, and to the best of Employee's
ability, experience and talents, devote his best efforts,
energies, skills and expertise to the performance of the duties
that may be required pursuant to the terms of this Agreement;
C. Full Time and Attention Employee shall devote full business time
and attention solely to the business and affairs of the Company
and shall not, directly or indirectly engage
or participate in any activities or matters which may
adversely affect or reflect discredit on the Company ; and
D. Business Opportunities Employee shall bring to the attention of
all proposals, business opportunities or investments, other than
personal investments, of whatever nature, in areas in which the
Company is active, which are created or devised by Employee or
come to the attention of Employee and which might reasonably be
expected to interest the Company.
2. COMPENSATION
A. Base Salary The Company shall pay the Employee an annual base
salary of two hundred thousand dollars ($220,000) (the "Base
Salary"), commencing on the first full payroll cycle following
the Effective Date. The Base Salary shall be prorated for any
partial employment period. To the extent that Employee's rate of
compensation during the period from the Effective Date to the
date of the execution of this Agreement has been less than
$220,000 per annum, the Company shall pay Employee the difference
of such rates so that such difference shall be fully paid to
Employee not later than December 31, 1998. The Base Salary shall
be payable in accordance with the Company's normal payroll
practices for senior executives less usual, customary and
required payroll deductions. The Board of Directors may in its
discretion increase the Employee's Base Salary at any time.
B. Bonus At the discretion of Employee and Xxxxx X. Xxxxxxxx,
Executive Vice President, and with the approval of the Board of
Directors of the company, there may be designated on an annual
basis a certain amount of funds to be paid to the company's
employees as bonus compensation (the "Bonus Pool"). Employee
shall be entitled to receive 13% of such Bonus Pool per annum
during the Term.
C. Taxes All payments under this section shall be subject to
withholding of all applicable income and employment taxes.
3. BENEFITS
A. Employee shall be entitled to participate in or receive benefits
under any employee benefit plan, arrangement or prerequisite made
available by the Company to its employees currently, or in the
future, subject to and on a basis consistent with the terms,
conditions and overall administration of such plans, arrangements
or prerequisites. Employee shall be entitled to a vacation each
year in accordance with the Company's policies in effect from
time to time, provided, however, that Employee shall be entitled
to a minimum of four weeks vacation per year.
B. In connection with Employee's contemplated relocation, the
Company agrees to loan Employee up to the sum of $______ for
purposes of Employee's purchase of a new
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permanent residence, which sum shall be fully secured by a first
mortgage on such property.
4. STOCK OPTIONS - Concurrent with a contemplated Initial Public Offering ("IPO
Date") the Company plans to adopt a nonqualified stock option plan. In the event
that the Initial Public Offering proceeds, then in lieu of the Royalty
Agreement, which shall be terminated on the IPO Date, Employee shall be entitled
to stock options as set forth below. Employee shall be entitled to receive
options to purchase shares of the Company's common stock at the IPO price on a
per annum basis in accordance with the following formula and schedule: (i) the
number of such options on a per annum basis shall be the quotient of the
Employee's bonus as granted in Section 2(B) hereof and the IPO price and (ii)
such options shall be exercisable for sixty (60) days following Employee's
receipt of a bonus pursuant to Section 2(B) hereof. Should the Initial Public
Offering not proceed, then the Royalty Agreement shall remain in effect.
5. CONFIDENTIALITY - Employee agrees not to disclose, directly or indirectly, or
use for the personal benefit of Employee or others, directly or indirectly, any
Trade Secrets and Confidential Proprietary Information which is prepared by or
made known to Employee during the course of his employment. For purposes of this
Agreement, the term "Trade Secrets and Confidential Proprietary Information"
shall mean information or material that is not publicly known that relates to
the business of the Company or that of its clients, including, by way of example
and without limitation, "Inventions" (as defined below), trade secrets, designs,
configurations, processes, techniques, formulas, software, improvements,
copyrightable material, marketing plans and strategies, sales and financial
reports and forecasts, financial, commercial, statistical, personnel or
technical data, and customer lists. Employee will not, during his employment or
upon the termination thereof, copy or otherwise transcribe, reproduce or remove
from the premises or possession the Company, without the Company's prior written
consent in each case, any drawings, hardware, software, disks, specifications,
tapes, descriptive matter, reproductions or any materials representing any
products, ideas, machines, processes, know-how or other developments or property
whatsoever owned, made or used by the Company. Employee acknowledges that all
pricing information, sales manuals, binders, customer lists and other customer
information, financial information and other records of documents containing
Trade Secrets and Confidential Proprietary Information prepared by Employee or
coming into Employee's possession by virtue of Employee's employment by the
Company is and shall remain the property of the Company and that, upon
termination of employee's employment hereunder, Employee shall return
immediately to the Company all such items in his possession, together with all
copies thereof. Employee agrees that the Company shall suffer irreparable harm
in the event that Employee breaches the foregoing covenant and acknowledges that
the Company will lack an adequate remedy at law should Employee breach such
covenant. Accordingly, in the event of a breach of any of these covenants by
Employee, Employee agrees that in addition to being entitled to legal remedies,
including compensatory, consequential and punitive damages, this covenant may be
specifically enforced.
6. RESTRICTIVE COVENANTS - During his employment and for a period of one year
from the date of termination thereof Employee agrees not to perform services,
directly or indirectly, for any firm, person or corporation that competes or has
competed with the Company or for any
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client of the Company where Employee performs or had previously performed
services for such client as an employee of the Company. Furthermore, during his
employment and for a period of one year from the date of termination thereof
Employee agrees not to solicit or employ, on behalf of himself or others, the
services of any firm, person or corporation employed at that time by the
Company. Employee agrees that the Company shall suffer irreparable harm in the
event that Employee breaches the foregoing covenant and acknowledges that the
Company will lack an adequate remedy at law should Employee breach such
covenant. Accordingly, in the event of a breach of any of these covenants by
Employee, Employee agrees that in addition to being entitled to legal remedies,
including compensatory, consequential and punitive damages, this covenant may be
specifically enforced. In the event that, in any judicial proceeding, a court
refuses fully to enforce any part of this Section 3, then such nonenforceable
part shall be deemed eliminated herefrom or reduced or modified for the purpose
of such proceedings to the extent necessary to permit the remainder thereof to
be enforced. Nothing contained herein shall be deemed to prevent Employee after
the termination of his employment from engaging in any activity on behalf of any
firm, person or corporation whose business competes with that of the Company if
Employee's activities on behalf of such firm, person or corporation are not
related to the business of the Company as conducted currently or at such time.
7. DISCLOSURE - Employee will disclose promptly in writing to the Company all
inventions, improvements, processes, techniques, discoveries, codes, software,
and writings whether patentable or not, and any creative work that may be
subject to protection under federal copyright law (any such items hereinafter
referred to as "Inventions") which are conceived, made, discovered or written
jointly or singly:
A. In the course of or as a result of the services performed
hereunder, and
B. For a period of six months after termination of this Agreement,
Inventions that relate to, or arise out of any developments,
services or products that Employee has been concerned with during
the rendering of services hereunder.
8. OWNERSHIP OF WORK PRODUCT - Employee agrees that all Inventions and other
work products developed under this Agreement, whether before or after the date
of execution of this Agreement, are the exclusive property of the Company, that
the Company is the sole owner of all copyrights, patents and other rights in
connection therewith and that all such copyrightable works constitute works made
for hire. In consideration of his continued employment, and for no other
consideration, Employee hereby assigns and agrees to assign to the Company all
patents, copyrights and any other rights Employee may have or acquire in any and
all Inventions and other work products developed under this Agreement, whether
before or after the date of execution of this Agreement, or as a result of ideas
developed during work performed under this Agreement to the Company. In
addition, the Company may require, and Employee agrees to sign patent and
copyright assignments to the Company or the Company's clients and to assist the
Company in obtaining and enforcing all copyrights, patents and other rights to
Inventions and other work products. Employee will sign all instruments of
assignment and other papers to evidence vestiture of his right, title and
interest to all Inventions and work products in the Company or its clients at
the request and expense of the Company. Employee will do all acts and sign all
instruments of
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assignment and other papers that the Company may reasonably request relating to
applications for patents, copyrights and other rights and to the enforcement and
protection thereof. Employee agrees that the Company shall suffer irreparable
harm in the event that Employee breaches the foregoing covenant and acknowledges
that the Company will lack an adequate remedy at law should Employee breach such
covenant. Accordingly, in the event of a breach of any of these covenants by
Employee, Employee agrees that in addition to being entitled to legal remedies,
including compensatory, consequential and punitive damages, this covenant may be
specifically enforced.
9. THIRD PARTY LIABILITY - Employee represents and warrants that he has not
disclosed to the Company or any of its directors, officers, employees, agents,
or consultants any knowledge, information, inventions, discoveries or ideas that
Employee possesses under an obligation of secrecy to a third party ("Third Party
Confidential Information"), and Employee agrees that Employee shall not disclose
any Third Party Confidential Information to the Company or any of its directors,
officers, employees, agents, or consultants. Employee further represents and
warrants that Employee does not have any express or implied obligation to any
third party that conflicts with any of Employee's obligations under this
Agreement ("Third Party Conflicts").
10. WAIVER - Failure by a party to insist upon strict compliance with any of the
terms or conditions of this Agreement shall not be deemed a waiver of such term
or condition, nor shall any such failure be deemed a relinquishment or waiver of
any such right or power deemed to be a waiver at any other time.
11. NOTICES - Any notices required or authorized to be given by the terms of
this Agreement shall be deemed duly given if sent by mail, return receipt
requested, to the appropriate addressee or hand delivered to the addressee. Any
such notice, if sent to the Company shall be addressed as follows:
Xx. Xxxxxxx X. Xxxxx
META4, INC.
Riverview Historical Plaza
00-00 Xxxxxx Xxxxxx Xxxxx 0-X
Xxxxxxx, XX 00000
and if sent to Employee, it shall be mailed or delivered to the address on file
in the Company's office, such address to be supplied to the Company by Employee.
12. TERMINATION BY COMPANY - This Agreement and Employee's employment hereunder
may be terminated by the Company as set forth herein.
A. For Cause "For Cause," for purposes of this Agreement, shall mean
that Employee (i) commits fraud, embezzlement or other acts of
gross dishonesty, (ii) is convicted of a felony, or (iii) the
willful and continued failure by the Employee to substantially
perform his duties hereunder after demand for substantial
performance is delivered by the Company that specifically
identifies the manner in which the Company believes
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the Employee has not substantially performed his duties and such
failure continues for at least 30 days thereafter. Any such
termination shall be effective upon service of written notice to
Employee.
X. Xxxxxxxxx If the Company terminates Employee's employment (i)
without cause, or (ii) based on subsection A of section 13,
Employee shall receive his Base Salary through May 31, 2002 plus
a bonus calculated at the rate of $500,000 per annum from the
Effective Date. If the Company terminates Employee's employment
based on a failure to perform as set forth in subsection A(iii)
of this Section 12, Employee shall be entitled to receive one
year's Base Salary from the effective date of the termination
plus a bonus of $500,000. Additionally, if the Company terminates
Employee's employment less than six (6) months prior to May 31,
2002, Employee shall receive an additional six (6) months' Base
Salary. Base Salary paid pursuant to this Section 12(B) shall be
paid in accordance with the Company's normal payroll practices,
and bonus paid pursuant to this Section 12(B) shall be paid in
quarterly installments, the first of which shall be paid within
30 days of the effective date of termination. The Employee shall
have no duty to mitigate any damages or payments due him
hereunder by seeking other employment or otherwise, nor shall any
income earned by Employee that is not in violation of this
Agreement serve to offset any payments due Employee hereunder.
13. TERMINATION BY EMPLOYEE - This Agreement and Employee's employment hereunder
may be terminated at any time by Employee. Any such termination shall be
effective upon service of written notice pursuant to Section 11 of this
Agreement.
A. Diminution of Responsibility If the Company diminishes Employee's
responsibilities or removes from Employee the title of Executive
Vice President for Marketing and Sales, Employee may terminate
his employment, receive severance as defined under Section 12
subsection B of this Agreement, and not be subject to the
Restrictive Covenants as defined under Section 6 of this
Agreement.
14. DEATH; INCOMPETENCY; TOTAL DISABILITY - In the event of Employee's death,
judicially-declared incompetency or total and permanent disability, this
Agreement and Employee's employment hereunder shall terminate as of the date of
death, the date incompetency is judicially declared or the date Employee is
determined by a licensed physician to be totally and permanently disabled.
15. INDEMNIFICATION - Employee agrees to indemnify and hold harmless the
Company, its directors, officers, shareholders and employees against any
liabilities and expenses, including amounts paid in settlement, incurred by any
of them in connection with any Third Party Confidential Information or Third
Party Conflicts as defined in Section 9 of this Agreement.
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16. CONSTRUCTION OF AGREEMENT; JURISDICTION
A. This writing constitutes the entire agreement between the parties
hereto and merges any and all prior arrangements, understandings
or representations.
B. No modification of this Agreement shall be valid unless agreed to
in writing signed by a duly authorized representative of each
party hereto.
C. Any duty or obligation arising under this Agreement which has
been incurred and which has not been fully enjoyed, enforced
and/or satisfied shall survive termination of Employee's
employment by the Company, regardless of the reason, or lack
thereof, for such termination until such duty or obligation has
been fully observed and/or satisfied.
D. This Agreement shall be governed by the laws of the State of New
Jersey without regard to principles of choice of laws.
E. If any provision of this Agreement shall be declared invalid,
illegal or unenforceable, such provision shall be severed or
modified only to the extent necessary to make such provision
enforceable and to reflect as nearly as possible the original
intent of such provision.
F. Each of the Company and Employee hereby: (i) agrees that any
suit, action or proceeding arising out of or relating to this
Agreement may be brought only in the state or federal courts
located in Newark, New Jersey; (ii) consents to the jurisdiction
of each such court in any suit, action or proceeding relating to
or arising out of this Agreement; and (iii) waives any objection
which it may have to the designation of venue or lack of
convenient forum in any such suit, action or proceeding in any of
such courts.
G. The Section headings in this Agreement have been inserted for
convenience of reference only. They do not form a part hereof and
shall not affect the interpretation of the provisions of this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
and year first written above.
META4, INC.
by:_____________________________
(Management name)
________________________________
Xxxxx X. Xxxxxxxx
