EXHIBIT 10.28
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made as of the __ day of March, 2003
(the "Effective Date"), by and between AVATECH SOLUTIONS SUBSIDIARY, INC., a
Delaware corporation (the "Company") and XXXXX XXXXX ("Executive").
Whereas, the Company desires to employ Executive as a Senior Vice President for
Sales and Marketing, and Executive desires to be so employed.
Now, Therefore, in consideration of the mutual promises of the parties and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Executive agree as follows:
Section 1. Employment. The Company agrees to employ Executive, and Executive
agrees to be employed, as Senior Vice President for Sales and Marketing of the
Company on the terms and subject to the conditions of this Agreement.
Section 2. Term. The term of Executive's employment under this Agreement (the
"Term") will commence on the Effective Date and will continue for one (1) year
(the "Initial Term"). The Term will be extended automatically in successive
one-year periods unless either party gives notice of nonextension to the other
not less than thirty (30) days before the end of the then-current Term.
Notwithstanding the foregoing, Executive's employment is subject to termination
during the Term as provided in Section 5 of this Agreement.
Section 3. Duties. Executive will report to, and Executive's specific
responsibilities and authority will be established by, the Chief Executive
Officer of the Company. Executive will diligently and conscientiously devote her
full and exclusive business time and attention and best efforts in discharging
her duties to the Company.
Section 4. Compensation and Benefits.
4.1 Base Compensation. During the Initial Term, the Company will pay
Executive a base salary (the "Base Salary") at an annual rate of $125,000.
During each succeeding year during the Term, Executive's Base Salary may be
increased (but may not be decreased) by an amount determined by the Company's
Chief Executive Officer and its Board of Directors based upon the Executive's
performance during the prior year.
4.2 Incentive Compensation.
4.2.1 The Company will pay Executive an incentive bonus (the
"Incentive Compensation") in an amount determined by the Company in its sole
discretion and based on Executive's achievement of specific performance measures
during the company's fiscal year, ending June 30. The Company and the Executive
will agree on each fiscal year's performance measures on or before July 1 of
each year, except that the Company and Executive have agreed to the performance
measures set forth as Exhibit A for the period of time between the Effective
Date and June 30, 2003.
4.2.2 The Company will pay Incentive Compensation, if any, to the
Executive in quarterly installments, as soon as administratively feasible after
the end of each of the Company's fiscal quarters, in an amount equal to
one-quarter of the incentive compensation that Executive would earn if
Executive's performance in all four quarters of the fiscal year were identical
to Executive's performance in the most-recently completed fiscal quarter.
4.3 Benefit Plans and Fringe Benefits.
4.3.1 During the Term, Executive will be entitled to participate
in any and all employee benefit programs (including but not limited to medical,
vision, prescription drug, dental, disability,
employee and group life, accidental death and travel accident, and section
401(k) plans and programs) offered by the Company to its executives or to its
employees generally, and Executive may receive such other benefits as the
Company may determine from time to time.
4.3.2 Executive will accrue _____ weeks of paid time off annually
to be taken at times reasonably agreed upon between Executive and the Company's
Chief Executive Officer. Executive will be paid a pro rata portion of her salary
for each week of accrued and unused paid time off, in accordance first with the
provisions of Section 5 and otherwise with Company policies of general
application in effect at the time of the termination of her employment.
4.3.3 Executive will be entitled to perquisites comparable to
those that the Company from time to time extends to its senior executive staff.
4.3.4 The Company will reimburse Executive for business, travel,
lodging, meals, and other reasonable business expenses incurred by her in the
performance of services hereunder subject to submission of documentation in
accordance with the Company's business expense reimbursement policies from time
to time applicable to its senior executives.
4.4 Payments; Withholding of Taxes, etc. The Company will make
payments of Base Salary in accordance with the Company's general payroll
practices from time to time in effect. All payments to Executive pursuant to
this Agreement will be reduced by taxes and other amounts that the Company is
required by law or authorized by Executive to withhold.
Section 5. Termination. The Company may, at its election and upon written notice
to the Executive, terminate the Executive's employment for any reason or no
reason, with or without cause. Where this Agreement or plan provides for payment
other than by cash lump sum, the Company may, in its sole discretion, choose to
make payment in whole or in part by cash lump sum, including converting any
benefits due to be provided over a period of time into a cash lump sum equal to
the present value, computed at the short-term applicable federal rate under ss.
1274 of the Internal Revenue Code, of the cost of the cost of providing such
benefit(s) to the Executive over a period of time.
5.1 Change in Control. For purposes of this Agreement, "Change of
Control" means:
(a) a merger, acquisition, consolidation or other transaction
involving the Company after which the individuals who constituted members of the
Board of Directors of the Company or Avatech twelve (12) months before the
consummation of such transaction do not constitute a majority of the Board of
Directors or other similar governing body of the most senior resulting business
entity after such transaction;
(b) a sale, lease or exchange of more than 50% of the assets of
Avatech, the Company, or any subsidiaries of either, or more than 50% of the
stock or other equity interests in Avatech, the Company, or any subsidiaries of
either, to one or more organizations or entities not more than 50% owned by the
Avatech, the Company, or any subsidiaries of either after the consummation of
such transaction; or
(c) during any period of twenty four (24) consecutive months,
individuals who at the beginning of such period constituted the Board of the
Company or Avatech cease for any reason to constitute at least a majority
thereof unless the election of each new director was approved by a vote of at
least two-thirds of the directors then still in office who were directors at the
beginning of the twenty-four-month period.
Notwithstanding the foregoing, a Change Of Control will in no event be deemed to
have occurred if the Company is placed in receivership or files for protection
under title 11 of the United States Code, and Executive will not receive any
severance pay under Section 5 of this Employment Agreement if any local, state,
or federal regulator assumes control of the Company.
5.2 Without a Change in Control (including Nonextension). Except as
provided in Section 5.3, the Company may elect not to extend the Term as
provided in Section 2 or may elect, at any time, to terminate
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Executive's employment under this Agreement upon written notice of such
termination to Executive for any reason or no reason, with or without cause. The
Executive may terminate her employment at any time and for any reason upon
thirty (30) days' written notice to the Company.
5.2.1 If the Executive's employment terminates under this Section
5.2, then the Company will pay Executive her Base Salary through the effective
date of termination and any other compensation and benefits that may be accrued,
due, or provided to the Executive upon termination of employment under such
circumstances in accordance with the terms and conditions of any applicable
employee benefit plans of the Company.
5.2.2 Notwithstanding any provisions of this Agreement to the
contrary, if Executive's employment is terminated by reason of her death, then
the Company will make any payments due under this Agreement to the Executive's
estate or other successor in interest, and will continue any benefits to her
surviving spouse or other successor in interest in accordance with the terms of
the Company's benefit plans and programs then in effect.
5.3 Change in Control. If the Executive's employment is terminated
during the term this Agreement and within twelve (12) months before or twelve
(12) months following a Change of Control, the Company will pay Executive
through six (6) months after the effective date of such termination. Such
severance pay will be at a rate equal to Executive's Base Salary in effect on
the effective date of termination and will be paid in accordance with the
Company's general payroll practices.
5.4 Release. As a condition to receiving payment of amounts payable
under this Section 5, Executive will execute a release of all claims against the
Company in form reasonably satisfactory to the Company.
Section 6. Certain Restrictions.
6.1 Confidentiality. Executive acknowledges that she will acquire
confidential information relating to the business of Avatech, the Company, its
subsidiaries and affiliates, including but not limited to business plans, sales
and marketing plans, financial information, acquisition prospects, and
"customer" and "supplier" lists (as such terms may relate to the business or the
systems and other trade secrets or know-how of Avatech, the Company, its
subsidiaries and affiliates) as they may exist from time to time (collectively,
"Confidential Information"), which are valuable, special, and unique assets of
the Company's business, access to or knowledge of which is essential to the
performance of Executive's duties hereunder. Accordingly, Executive will not
disclose at any time (during her employment under this Agreement or thereafter)
any such Confidential Information other than in connection with and reasonably
required for the performance of her duties under this Agreement, unless required
to do so pursuant to law, subpoena, court order, or other legal process. These
restrictions will not apply to, and Confidential Information will not be deemed
to include, information that is then in the public domain (other than as a
result of action by the Executive).
6.2 Competitive Activity. Due to the unique position of Executive in
her role of Senior Vice President of the Company, Executive agrees that if she
voluntarily resigns from her employment, Executive will not, for a period of six
(6) months after the effective date of her termination of employment, without
prior written consent of the Company:
6.2.1 Directly or indirectly, knowingly engage or be interested
in (as owner, partner, shareholder, employee, director, officer, agent,
consultant or otherwise), with or without compensation, any business entity or
operation that engages in the business of selling computer-aided design software
or providing professional, consulting, technical or training services related to
computer-aided design software within fifty (50) miles of any location where the
Company, its affiliates or subsidiaries, maintains a place of business, except
that Executive may own up to a five percent (5%) interest in the publicly-traded
securities of a publicly traded corporation;
6.2.2 Employ or retain or participate in or arrange the
employment or retention of any person who was employed or retained by the
Company, any successor to the Company's business, or any of their affiliates or
subsidiaries during the period of Executive's employment; or
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6.2.3 Directly or indirectly solicit any customers or clients of
the Company, its affiliates, or subsidiaries.
6.3 Remedy for Breach and Modification. Executive acknowledges that
the provisions of this Section 6 are reasonable and necessary for the protection
of the Company and that the Company will be irrevocably damaged if these
provisions are not specifically enforced. Accordingly, Executive agrees that, in
addition to any other relief or remedies available to the Company, including
reasonable attorneys' fees and costs, the Company is entitled to seek and obtain
an appropriate injunction or other equitable remedy for the purposes of
restraining the Executive from any actual or threatened breach of or otherwise
enforcing these provisions and no bond or security will be required in
connection with such equitable remedy. If any provision of this Section 6 is
deemed invalid or unenforceable in any jurisdiction, such provision will be
deemed modified and limited in such jurisdiction to the extent necessary to make
it valid and enforceable in such jurisdiction.
Section 7. Arbitration of Certain Disputes. Any dispute or controversy arising
under or in connection with this Agreement, other than with respect to an
alleged breach of any of any of the provisions of Section 6, shall be resolved
by binding arbitration held in Baltimore, Maryland. before a single arbitrator.
Such arbitration will be conducted in accordance with the Commercial Arbitration
Rules of the American Arbitration Association then in effect and otherwise in
accordance with principles that would be applied by a court of law or equity.
Judgment on any award may be entered and enforced in any court having
jurisdiction.
Section 8. Miscellaneous.
8.1 Certain Permitted Changes in Executive's Position. Anything in
this Agreement to the contrary notwithstanding, in the event of a merger,
consolidation, reorganization, sale of substantially all of the Company's
assets, or similar transaction (a "Transaction") (whether or not such
Transaction constitutes a Change of Control as defined in Section 5.1) a change
only in Executive's title (but not a material reduction in the actual scope of
Executive's responsibilities, authority, or duties) does not constitute a
failure by the Company to perform any term or provision of this Agreement. In
the event of such a change in the Executive's title, any reference, whether
express or implied, in this Agreement to Executive's title will be deemed to
refer to Executive's title as so changed.
8.2 Entire Agreement; Amendment. This Agreement supersedes all prior
agreements between the parties with respect to its subject matter, is intended
as a complete and exclusive statement of the terms of the agreement between the
parties with respect thereto, and may be amended only by a writing signed by
both parties hereto.
8.3 Nonwaiver. The failure of either party to insist upon strict
adherence to any term of this Agreement on any occasion will not operate as a
waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement. Any waiver must be
in a writing signed by the party to be charged therewith.
8.4 Assignment. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective heirs, representatives,
successors and assigns. This Agreement may not be assigned by either party
without the consent of the other, except that the Company may assign all of its
rights and delegate performance of all of its obligations hereunder in
connection with a Transaction.
8.5 Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be an original, but all of which together will
constitute the same instrument.
8.6 Headings. The headings in this Agreement are for convenience of
reference only and should not be given any effect in the interpretation of this
Agreement.
8.7 Governing Law. This Agreement is governed by the laws of the
State of Maryland, without regard to any provision that would result in the
application of the laws of any other state or jurisdiction.
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8.8 Severability. The invalidity or unenforceability of any provision
of this Agreement will not affect the validity or enforceability of any other
provision of this Agreement.
8.9 Company Policies, Plans and Programs. Whenever any rights under
this Agreement depend on the terms of a policy, plan, or program established or
maintained by the Company, any determination of these rights will be made on the
basis of the policy, plan, or program in effect at the time as of which such
determination is made. No reference in this Agreement to any policy, plan, or
program established or maintained by the Company precludes the Company from
prospectively or retroactively changing or amending or terminating that policy,
plan, or program or adopting a new policy, plan, or program in lieu of the then
existing policy, plan, or program.
8.10 Board Action. Any action that may be taken hereunder by the Board
of Directors of the Company with respect to the compensation and benefits of
Executive may be taken by an authorized committee of the Board.
IN WITNESS WHEREOF, the parties have executed this Agreement under seal as
of the date first above written.
Witness/Attest: AVATECH SOLUTIONS SUBSIDIARY, INC.
____________________________ By: ________________________________(SEAL)
Xxxxxx "Xxxxxx Xxxxx,
Chief Executive Officer
AVATECH SOLUTIONS, INC.
____________________________ By: ________________________________(SEAL)
Xxxxxx "Xxxxxx Xxxxx,
Chief Executive Officer
____________________________ ____________________________________(SEAL)
Xxxxx Xxxxx
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