Employment Agreement
This Agreement ("Agreement") dated this 1st day of January, 2005 between
Science Dynamics Corporation ("Parent"), a Delaware corporation, Systems
Management Engineering, Inc. and Xxxx X. Xxxxxxxx ("Employee"), sets forth the
terms and conditions governing the employment relationship between Employer and
Employee.
1. Employment. During the term of this Agreement, as hereinafter defined,
Employer hereby employs Employee as Chief Technology Officer of Employer at its
office located at 00000 Xxxxxx Xxxxx Xx. Xxxxx 000, Xxxxxx, Xxxxxxxx, or any
other location within a fifteen (15) mile radius of the same ("Principal
Office"). Employee hereby accepts such employment upon the terms and conditions
hereinafter set forth and agrees to faithfully and to the best of his ability
perform such duties as may from time to time be assigned by Employer, such
duties to at all times be rendered at the Principal Office and to be consistent
with the duties customarily associated with title and position of Chief
Technology Officer, generally.
2. Term. Subject to the provisions for termination hereinafter, the term of
this Agreement shall begin on the date of this Agreement and shall terminate on
December 31, 2007.
3. Compensation. For all services rendered by Employee under this Agreement
during the term hereof, Employer shall pay Employee the following compensation:
a) Salary. A base salary of One Hundred and Sixty Thousand Dollars
($160,000) per annum payable in accordance with Employer's standard payroll
practices.
b) Incentive Bonus. Employee shall have the opportunity to earn a
percentage of the base salary set forth in subparagraph 3(a) above in Employer's
bonus plans as adopted from time to time.
c) Stock Options. Employee shall be granted a one time, option for
shares in Science Dynamics Corp to be vested over three years, in accordance
with the company's employee stock option program and the pool of options granted
in accordance with the purchase agreement. The strike price for the entire
option grant shall be the stock price at the close of the acquisition of SMEI by
Science Dynamics. Employee shall be eligible to receive future options under the
stock option plan of Parent to purchase common shares of Parent or any similar
plans as may be in effect from time to time.
d) Other Benefits. Employee shall maintain current benefits and
corresponding Employer contribution (or better) or equivalent benefits for the
duration of this agreement (three years ending December 31, 2007). Current
benefits include: family health care insurance, family dental care insurance,
company paid personal $1MM life insurance policy, company paid key man $1MM life
insurance policy, short term and long term disability, 401(k) with safe harbor
matching, $500 per month car allowance, four weeks paid vacation, and all
government holidays. In addition, employer shall cover all costs related to
continuing education in coursework or training programs related to technology,
business, or other related initiatives.
4. Extent of Services. Employee shall devote his full time, attention and
energies to the business of Employer and shall act in accordance with his
fiduciary responsibility to the corporation. Employee shall not engage in any
business activity during his employment that directly competes or conflicts with
the business of the employer,. Employee warrants and represents that he has no
contracts or obligations to others which would materially inhibit the
performance of his services under this Agreement.
5. Noncompete and Disclosure or Use of Information. The Employee agrees to
sign an mutually agreeable noncompete and disclosure or use of information
agreement with the company prior to the close of the acquisition of SMEI by
Science Dynamics.
6. Notices. Any notice, request or demand required or permitted to be given
under this Agreement shall be in writing, and shall be sent by certified or
overnight mail to the residence of Employee or Principal Office of Employer,
respectively.
7. Elective Position; Effect of Termination. Nothing contained in this
Agreement is intended to abrogate, limit or affect the powers, rights or
privileges of Employer to terminate the employment of Employee with or without
cause, as those terms are described in Section 10 of this Agreement. If Employee
is terminated by Employer without cause or resigns with cause, he shall be
entitled to all compensation and benefits otherwise remaining and unpaid under
the remaining term of this Agreement, providing he remains ready willing and
able to perform the duties hereunder at the time of termination. Resignation
with cause shall include, but not be limited to: a reduction in position and/or
responsibilities; a material change in employee's reporting structure;
relocation beyond 30 miles of "Principal Office," as defined in Section 1 of
this agreement (unless mutually agreed upon in writing). Additionally, all stock
options granted under this Agreement will become immediately vested and
exercisable. In the event Employee is terminated by Employer for cause or
resigns voluntarily without cause, no compensation shall be due Employee other
than that which has been earned through the date of termination.
8. Waiver of Breach. The waiver by either party of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach.
9. Assignment. The rights and obligations of Employer under this Agreement
shall inure to the benefit of and shall be binding upon the successors and
assigns of Employer. The obligations of Employee hereunder may not be assigned
or delegated.
10. Termination of Agreement. This Agreement shall terminate upon the
following events and conditions:
(a) Upon expiration of its terms.
(b) For cause by the Employer immediately upon written notice. Cause
shall be constituted by material breach of this Agreement by Employee,
conviction of a felony by Employee or any willful act acts or omissions of
dishonesty by Employee which cause harm to Employer.
(c) For cause by Employee immediately upon written notice. Cause shall
be constituted by material breach of this Agreement by Employer.
(d) Without cause by either party upon written notice.
(e) In the event that Employee is unable to perform the services
called for hereunder by reason of incapacity or disablement for more than six
(6) months (whether consecutive or not) in any twenty-four (24) consecutive
months, Employer shall have the right to terminate this Agreement by written
notice to Employee. Notwithstanding such termination, Employee shall be entitled
to any disability benefits generally available to employees of Employer. In the
event of such termination, all non-vested obligations of Employer or Employee
pursuant to this Agreement shall terminate as of the date thereof.
11. Entire Agreement;Choice of Law. This instrument contains the entire
agreement of the parties. It may be changed only by an agreement in writing
signed by the party against whom enforcement of any waiver, change,
modification, extension, or discharge is sought. This Agreement shall be
governed by the laws of the State of Virginia, and any litigation shall be
conducted in the State of Virginia.
IN WITNESS WHEREOF, the parties have executed this Agreement on this 4th
day of February, 2005. EMPLOYEE Witness
/s/ Xxxx X. Xxxxxxxx /s/ Xxxxxxx Xxxxxxxx
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Xxxx X. Xxxxxxxx Xxxxxxx Xxxxxxxx
EMPLOYER Attest
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/s/ Xxxxxxx Xxxxxxxx ________________________
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By: Xxxxxxx Xxxxxxxx
Its: Vice President
PARENT Attest
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/s/ Xxxx Xxxxxxx ________________________
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By: Xxxx Xxxxxxx
Its: Chief Operating Officer
