Exhibit 10.3
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT ("Agreement") made and entered into as of
January 1, 1997 by and between IFS INTERNATIONAL, INC., a Delaware
corporation (the "Company"), and XXXXXXX X. XXXXXXX residing at 00 Xxxxxx
Xxxx Xxx, Xxxxxxxx Xxxx, Xxx Xxxx 00000 (the "Executive").
The Executive is being employed by the Company as an executive
officer. The parties desire to enter into an employment agreement and to
set forth herein the terms and conditions of the Executive's continued
employment by the Company and its subsidiaries.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and the mutual benefits to be derived
herefrom, the Company and the Executive agree as follows:
. EMPLOYMENT.
. DUTIES. The Company shall employ the Executive, on the
terms set forth in this Agreement, as its President. The Executive
accepts such employment with the Company and shall perform and fulfill
such duties as are assigned to him hereunder consistent with his status
as a senior executive of the Company, devoting his best efforts and
entire professional time and attention to the performance and fulfillment
of his duties and to the advancement of the interests of the Company,
subject only to the direction, approval, control and directives of the
Company's Board of Directors (the "Board"). Nothing contained herein
shall be construed, however, to prevent the Executive from trading in or
managing, for his own account and benefit, in stocks, bonds, securities,
real estate, commodities or other forms of investments (subject to law
and Company policy with respect to trading in Company securities).
Without any additional consideration, Executive shall also continue to
serve as an employee and officer of any or all subsidiaries of the
Company. Unless otherwise indicated by the context, the term "Company"
shall include the Company and all its subsidiaries.
. PLACE OF PERFORMANCE. In connection with his employment by
the Company, the Executive shall be based at the Company's principal
place of business in the Albany metropolitan area except when required
for travel on Company business.
. TERM. The Executive's employment under this Agreement shall
commence as of January 1, 1997 (the "Commencement Date") and shall,
unless sooner terminated in accordance with the provisions hereof,
continue uninterrupted until December 31, 1999 (the "Term"). As used
herein "Year" shall refer to a twelve month period ending December 31st.
Unless notice of nonrenewal is given by either party at least sixty (60)
days prior to the end of the Term or prior to the end of any Year
thereafter, the Term of this Agreement shall be automatically extended
for an additional period of one year.
. COMPENSATION.
. BASE SALARY. During the first two (2) Years of the Term,
the Executive shall be entitled to receive an annual salary (the "Base
Salary") of One Hundred Ten Thousand Dollars ($110,000) payable in
installments at such times as the Company customarily pays its other
executive officers (but in any event not less often than monthly). For
each Year thereafter, the Company shall increase the Base Salary by an
amount to be determined by the Board of Directors.
. COMMISSIONS. Except as described hereinafter or in
Schedule A, during each year, Executive shall also receive a commission
of 8% of revenues in excess of $425,000 derived from installations of the
Company's products pursuant to license agreements obtained hereinafter
through the efforts of Executive. The board of directors shall resolve
any dispute with Executive concerning whether commissions shall be
credited to Executive as a result of his efforts in obtaining any license
agreement. The maximum commission payable to all personnel of the
Company on revenues derived from any agreement shall not exceed 8% of
such revenues.
. BONUS. The Board of Directors may at its sole discretion
grant bonuses to the Executive.
. HEALTH INSURANCE AND OTHER BENEFITS. During the Term, the
Executive shall be entitled to all employee benefits generally offered by
the Company to its executive officers and key management employees,
including, without limitation, all pension, profit sharing, retirement,
stock option, salary continuation, deferred compensation, disability
insurance, hospitalization insurance, major medical insurance, medical
reimbursement, survivor income, life insurance or any other benefit plan
or arrangement established and maintained by the Company, subject to the
rules and regulations then in effect regarding participation therein.
. OPTIONS. Executive shall receive stock options to
purchase 75,000 shares of the Company's Common Stock at an exercise price
of $5.00 per share at any time during the ten year period following the
commencement of this Agreement. Such options shall not be pursuant to
any stock option plan and shall be in a form mutually agreeable to the
Executive and the Company.
. REIMBURSEMENT OF EXPENSES. The Executive shall be reimbursed
for all items of travel, entertainment and miscellaneous expenses that
the Executive reasonably incurs in connection with the performance of his
duties hereunder, provided the Executive submits to the Company such
statements and other evidence supporting said expenses as the Company may
reasonably require.
. AUTOMOBILE ALLOWANCE. The Executive shall be reimbursed for the
expenses of owning or leasing an automobile suitable for his position
and consistent with Company practices during 1996, including the expenses
of operating, insuring and parking such automobile, provided the
Executive submits to the Company such statements and other evidence
supporting such expenses as the Company may require.
. VACATION. The Executive shall be entitled to not less than
three (3) weeks of vacation in any calendar year.
. TERMINATION OF EMPLOYMENT.
. DEATH OR TOTAL DISABILITY. In the event of the death of
the Executive during the Term, this Agreement shall terminate as of the
date of the Executive's death. In the event of the Total Disability (as
that term is defined below) of the Executive for sixty (60) days in the
aggregate during any consecutive nine (9) month period during the Term,
the Company shall have the right to terminate this Agreement by giving
the Executive thirty (30) days' prior written notice thereof, and upon
the expiration of such thirty (30) day period, the Executive's employment
under this Agreement shall terminate. If the Executive shall resume his
duties within thirty (30) days after receipt of such a notice of
termination and continue to perform such duties for four (4) consecutive
weeks thereafter, this Agreement shall continue in full force and effect,
without any reduction in Base Salary and other benefits, and the notice
of termination shall be considered null and void and of no effect. Upon
termination of this Agreement under this Paragraph 7(a), the Company
shall have no further obligations or liabilities under this Agreement,
except to pay to the Executive's estate or the Executive, as the case may
be, (i) the portion, if any, that remains unpaid of the Base Salary for
the Year in which termination occurred, but in no event less than six (6)
months' Base Salary; and (ii) the amount of any expenses reimbursable in
accordance with Paragraph 4 above, and any automobile allowance due under
Paragraph 5 above; and (iii) any amounts due under any Company benefit,
welfare or pension plan. Except as otherwise provided by their terms, any
stock options not vested at the time of the termination of this Agreement
under this Paragraph 7(a) shall immediately become fully vested.
The term "Total Disability," as used herein, shall mean a
mental or physical condition which in the reasonable opinion of an
independent medical doctor selected by the Company renders the Executive
unable or incompetent to carry out the material duties and
responsibilities of the Executive under this Agreement at the time the
disabling condition was incurred. In the event the Executive disagrees
with such opinion, the Executive may, at his sole expense, select an
independent medical doctor and, in the event that doctor disagrees with
the opinion of the doctor selected by the Company, they shall select a
third independent medical doctor, and the three doctors shall, by
majority vote, determine whether the employee has suffered Total
Disability. The expense of the third doctor shall be shared equally by
the Company and the Executive. Notwithstanding the foregoing, if the
Executive is covered under any policy of disability insurance under
Paragraph 3(d) above, under no circumstances shall the definition of
Total Disability be different from the definition of that term in such
policy.
. DISCHARGE FOR CAUSE. The Company may discharge the
Executive for "Cause" upon notice and thereby immediately terminate his
employment under this Agreement. For purposes of this Agreement the
Company shall have "Cause" to terminate the Executive's employment if the
Executive, in the reasonable judgment of the Company, (i) materially
breaches any of his agreements, duties or obligations under this
Agreement and has not cured such breach or commenced in good faith to
correct such breach within thirty (30) days after notice; (ii) fails to
carry out a lawful directive of the Board; (iii) embezzles or converts to
his own use any funds of the Company or any client or customer of the
Company; (iv) converts to his own use or unreasonably destroys,
intentionally, any property of the Company, without the Company's
consent; (v) is convicted of a crime; (vi) is adjudicated an incompetent;
or (vii) is habitually intoxicated or is diagnosed by an independent
medical doctor to be addicted to a controlled substance (any disagreement
of Executive shall be resolved using the procedure provided in Paragraph
7(a) above).
. TERMINATION BY EXECUTIVE. Executive may terminate this
Agreement for the failure by the Company to comply with the material
provisions of this Agreement which failure is not cured within thirty
(30) days after notice ("Good Reason").
. RESTRICTIVE COVENANT.
. COMPETITION. Executive undertakes and agrees that during
the term of this Agreement and for a period of two (2) years after the
date of termination of this Agreement pursuant to Section 7(b) or for a
period of one (1) year after the date of termination if this Agreement is
not renewed, he will not compete, directly or indirectly, or participate
as a director, officer, employee, agent, consultant, representative or
otherwise, or as a stockholder (except as a stockholder in a corporation
whose shares are traded on The Nasdaq Stock Market or a national
securities exchange, provided that such ownership shall not exceed 3% of
the outstanding stock of such corporation), partner or joint venturer, or
have any direct or indirect financial interest, including, without
limitation, the interest of a creditor, in any business competing
directly or indirectly with the business of the Company or any of its
subsidiaries. Executive further undertakes and agrees that during the
term of the Agreement and for a period of two (2) years after the date of
termination of this Agreement pursuant to Section 7(b) or for a period of
one (1) year after the date of termination if this Agreement is not
renewed, he will not, directly or indirectly employ, cause to be
employed, or solicit for employment any of Company's or its subsidiaries'
employees. The provisions of this Section 8(a) shall not apply if the
Agreement is terminated by Executive pursuant to Section 7(c).
. SCOPE OF COVENANT. Should the duration, geographical area
or range or proscribed activities contained in Paragraph 8(a) above be
held unreasonable by any court of competent jurisdiction, then such
duration, geographical area or range of proscribed activities shall be
modified to such degree as to make it or them reasonable and enforceable.
. NON-DISCLOSURE OF INFORMATION.
() The Executive shall (i) never, directly or
indirectly, disclose to any person or entity for any reason, or use for
his own personal benefit, any "Confidential Information" (as hereinafter
defined) either during his employment with the Company or following
termination of that employment for any reason (ii) at all times take all
precautions necessary to protect from loss or disclosure by him of any
and all documents or other information containing, referring or relating
to such Confidential Information, and (iii) upon termination of his
employment with the Company for any reason, the Executive shall promptly
return to the Company any and all documents or other tangible property
containing, referring or relating to such Confidential Information,
whether prepared by him or others.
() Notwithstanding any provision to the contrary in this
Paragraph 8(c), this paragraph shall not apply to information which the
Executive is called upon by legal process regular on its face (including,
without limitation, by subpoena or discovery requirement) to disclose or
to information which has become part of the public domain or is otherwise
publicly disclosed through no fault or action of the Executive.
() For purposes of this Agreement, "Confidential
Information" means any information relating in any way to the business of
the Company disclosed to or known to the Executive as a consequence of,
result of, or through the Executive's employment by the Company which
consists of technical and nontechnical information about the Company's
products, processes, computer programs, concepts, forms, business
methods, data, any and all financial and accounting data, marketing,
customers, customer lists, and services and information corresponding
thereto acquired by the Executive during the term of the Executive's
employment by the Company. Confidential Information shall not include any
of such items which are published or are otherwise part of the public
domain, or freely available from trade sources or otherwise.
() Upon termination of this Agreement for any reason,
the Executive shall turn over to the Company all tangible property then
in the Executive's possession or custody which belongs or relates to the
Company. The Executive shall not retain any copies or reproductions of
computer programs, correspondence, memoranda, reports, notebooks,
drawings, photographs, or other documents which constitute Confidential
Information.
. INJUNCTIVE RELIEF. The parties hereto agree that the
remedy at law for any breach of the provisions of this Section 8 will be
inadequate and that the Company or any of its subsidiaries or other
successors or assigns shall be entitled to injunctive relief without
bond. Such injunctive relief shall not be exclusive, but shall be in
addition to any other rights and remedies Company or any of its
subsidiaries or their successors or assigns might have for such breach.
. MISCELLANEOUS.
. NOTICES. Any notice, demand or communication required or
permitted under this Agreement shall be in writing and shall either be
hand-delivered to the other party or mailed to the addresses set forth
below by registered or certified mail, return receipt requested or sent
by overnight express mail or courier or facsimile to such address, if a
party has a facsimile machine. Notice shall be deemed to have been given
and received when so hand-delivered or after three (3) business days when
so deposited in the U.S. Mail, or when transmitted and received by
facsimile or sent by express mail properly addressed to the other party.
The addresses are:
To the Company:
IFS International, Inc.
000 Xxxxxx Xxxx
Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000 Attn: President
To the Executive:
Xxxxxxx X. Xxxxxxx
00 Xxxxxx Xxxx Xxx
Xxxxxxxx Xxxx, Xxx Xxxx 00000
The foregoing addresses may be changed at any time by notice given in the
manner herein provided.
. INTEGRATION; MODIFICATION. This Agreement constitutes the
entire understanding and agreement between the Company and the Executive
regarding its subject matter and supersedes all prior negotiations and
agreements, whether oral or written, between them with respect to its
subject matter. This Agreement may not be modified except by a written
agreement signed by the Executive and a duly authorized officer of the
Company.
. ENFORCEABILITY. If any provision of this Agreement shall
be invalid or unenforceable, in whole or in part, 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.
. BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the parties, including and their respective
heirs, executors, successors and assigns, except that this Agreement may
not be assigned by the Executive.
. WAIVER OF BREACH. No waiver by either party of any
condition or of the breach by the other of any term or covenant contained
in this Agreement, whether by conduct or otherwise, in any one (1) or
more instances shall be deemed or construed as a further or continuing
waiver of any such condition or breach or a waiver of any other
condition, or the breach of any other term or covenant set forth in this
Agreement. Moreover, the failure of either party to exercise any right
hereunder shall not bar the later exercise thereof with respect to other
future breaches.
. GOVERNING LAW. This Agreement shall be governed by the
internal laws of the State of New York.
. HEADINGS. The headings of the various sections and
paragraphs have been included herein for convenience only and shall not
be considered in interpreting this Agreement.
. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.
. DUE AUTHORIZATION. The Company represents that all
corporate action required to authorize the execution, delivery and
performance of this Agreement has been duly taken.
IN WITNESS WHEREOF, this Agreement has been executed by the
Executive and, on behalf of the Company, by its duly authorized officer
on the day and year first above written.
IFS INTERNATIONAL, INC.
By: /S/ XXXXX X. XXXXXXXX
Xxxxx X. Xxxxxxxx,
Chief Executive Officer
/S/ XXXXXXX X. XXXXXXX
Xxxxxxx X. Xxxxxxx, Executive
SCHEDULE A
No commissions shall be paid on license agreements relating to
the first seven sites of the Visa Smart Card pilot program and thereafter
only if the license agreement was obtained through the efforts of
Executive.
Commissions may be reduced on designated house accounts. The
accounts and commissions shall be determined by the Board of Directors.
