EXHIBIT C-2
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of
September 23, 1997, between ▇▇▇▇ Investment Services, Inc., a Delaware
corporation (the "Company"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ("Employee").
RECITALS
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A. PMC International, Inc. ("PMCI") has entered into a stock purchase
agreement, dated as of July 25, 1997 (the "Stock Purchase Agreement"), pursuant
to which PMCI will acquire all of the outstanding capital stock of the Company
(the "Acquisition").
B. Employee is a member of the leadership team of the Company and PMCI
desires Employee to continue his affiliation with the Company in such capacity.
Therefore, the Company has offered, and Employee has accepted, employment with
the Company. This Agreement sets forth the terms on which the Company employs
Employee.
AGREEMENT
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NOW, THEREFORE, in consideration of the foregoing, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following terms have the
following meanings:
"Base Salary" has the meaning set forth in Section 3(a).
"Company" means ▇▇▇▇ Investment Services, Inc., a Delaware
corporation, its successors and assigns, and any of its present or future
subsidiaries.
"Competitive Advisory Business" means services, products or software
in the wrap-fee or privately managed account business (whether using mutual
funds or separate accounts) and/or services, products or software in the
performance reporting business to the extent such services, products or
software are provided to or through financial intermediaries, including,
but not limited to, investment advisors, broker-dealers, banks, insurance
companies, accounting firms and financial planners for use in providing
services to the retail and small institutional accounts (typically under
$30 million in assets) of such financial intermediaries. The term
"Competitive Advisory Business" includes the offering of any of the
following products or services through financial intermediaries, either
alone or in combination, whether or not such products or services are
generally or customarily understood to be included in the term "wrap-fee"
or "privately managed account" business, and whether or not such products
or services are offered for a single fee or are charged for separately: (1)
investment recommendations or portfolio management services based on or
tailored to the specific investment needs and/or risk tolerance of the
client whose assets are being managed, (2) access to the asset management
services of separate account managers, (3) automated trading services that
involve the exercise of discretionary authority, a limited power of
attorney or similar authorization granted by an asset management client and
(4) the preparation of reports or statements that show the securities
transactions in a client account and/or calculate, display or analyze the
performance or investments held in a client account. The term "Competitive
Advisory Business" does not include personally providing investment
advisory products or services directly to clients through a financial
planning, investment management or investment consulting firm, as long as
either (1) at least 75% of the clients of such firm have assets under
management or under advisement by such firm in excess of $30 million, or
(2) such clients are not primarily secured by such firm through referrals
or solicitations by individuals not employed by such firm who derive a fee
or other compensation for such referrals or solicitations. The term
"Competitive Advisory Business" specifically includes, but is not limited
to, any investment advisory services or products provided to financial
intermediaries by ▇▇▇▇▇▇▇▇ Financial Services, Inc.; ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
Advisory Services; Advisory Consulting Group; SEI Investments; ▇▇▇▇▇▇▇
Capital; Meridian Investment Management; ▇▇▇▇▇ ▇▇▇▇▇▇▇ Company and ▇▇▇▇▇▇
Associates, Inc. The term "Competitive Advisory Business" also includes
"turn key asset management programs."
"Employee" has the meaning set forth in the preamble to this
Agreement.
"Expiration Date" has the meaning set forth in Section 4.
"Inventions" means inventions, discoveries, trade secrets, products,
processes, devices, methods, designs, formulas, techniques, programs,
computer software as well as improvements thereof, in each case whether or
not patentable, that are (a) based on or comprising Proprietary
Information, (b) made or conceived by Employee, whether or not during the
hours of his engagement with the Company or with the use or assistance of
the Company's facilities, materials or personnel, either solely or jointly
with others, (c) related to or arising out of Employee's employment by the
Company, and (d) during the term of this Agreement or any extension hereof.
Notwithstanding the foregoing, "Inventions" does not include inventions of
Employee that Employee establishes, by competent proof, are neither derived
from or made in connection with Proprietary Information nor developed for
the Company.
"Participate In" means directly or indirectly, individually or with or
through any other person or entity, own, manage, operate, control, lend
money to or participate in the ownership, management, operation or control
of, or be connected to as a director, officer, employee, partner,
consultant, agent, independent contractor or otherwise, or acquiesce in the
use of his name in. Notwithstanding the foregoing, Employee will not be
deemed to Participate In a business merely because he owns 5% or less of
the outstanding common stock of a corporation if, at the time of his
acquisition thereof, such stock is listed on a national securities
exchange, is reported on Nasdaq, or is regularly traded in the over-the-
counter market by a member of a national securities exchange.
"PMCI" has the meaning set forth in the recitals to this Agreement.
"Proprietary Information" means information and materials disclosed to
or known or developed by Employee about the Company's plans, strategies,
prospects, products, processes and services, including information and
materials relating to the Company's research, development, inventions,
purchasing, accounting, engineering, marketing, merchandising and selling,
but excluding information that Employee establishes, by competent proof,
(i) was known, other than under an obligation of confidentiality, to
Employee prior to his engagement by the Company; (ii) has passed into the
public domain prior to or after its development by or for the Company other
than through acts or omissions attributable to Employee; or (iii) was
subsequently obtained other than under an obligation of confidentiality
from a third party not acquiring the information under an obligation of
confidentiality from the disclosing party.
2. Employment; Capacity; Duties; Reporting Structure; Location. The
Company will employ Employee as its President or in such other capacity as the
Company determines. During his employment by the Company, Employee will perform
the duties and bear the responsibilities commensurate with his position and will
serve the Company faithfully and to the best of his ability. Employee will
devote his entire working time, attention and energy to the business of the
Company. Employee will not at any time discredit the Company or any of its
products or services. Except for his involvement in personal investments, as
long as such involvement does not require any significant services on his part,
Employee will not engage in any other business activity that requires
significant personal services by Employee or that, in the Company's judgment,
may conflict with the proper performance of Employee's duties under this
Agreement. Employee will report directly to the President of PMCI, currently Mr.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇. Employee initially will be based at the Company's facilities
in Denver, Colorado, where he will move promptly after the date of this
Agreement if he has not already done so.
3. Base Salary; Bonuses; Benefits; Equity Incentives: Sick Leave;
Vacation; Expenses.
(a) As compensation for all services provided by Employee, the Company
will pay Employee a salary of $240,000 per year ("Base Salary"), prorated
for any portion of a year, for each year during the term of this Agreement,
payable in arrears in the same manner as the Company customarily pays the
salaries of its employees or as the parties hereto may otherwise agree. In
the event the Board of Directors of PMCI institutes across-the-board or
tiered salary reductions for employees of PMCI and its subsidiaries,
Employee agrees that his Base Salary will be subject to such salary
reductions, provided however that such reductions will not exceed a total
of 10% of his Base Salary.
Exhibit C-2 Page 2
(b) Employee will be eligible for an annual bonus of up to $50,000,
based upon criteria to be mutually agreed upon by Employee and PMCI.
(c) In addition to Base Salary, the Company will provide Employee with
the benefits of such insurance plans, hospitalization plans, pension or
profit sharing plans and other employee fringe benefit plans as are
customarily provided to employees of the Company and for which Employee is
eligible under the terms of such plans. Nothing in this Agreement requires
the Company to adopt or maintain any such plan. During Employee's
employment by the Company, Employee will be entitled to four weeks of paid
vacation. If Employee does not use all of such vacation time during a given
year, then all of such unused time up to a maximum of 40 hours may be
carried over to the following year, and any accumulated but unused vacation
time in excess of such 40 hours will be forfeited.
(d) In addition to the options to purchase up to 250,000 shares of
PMCI common stock granted to Employee by PMCI, the Company may also award
or grant Employee such stock options and other equity incentives as are
approved by the Company in its sole discretion. Nothing in this Agreement
requires the Company to establish an equity incentive program or confer on
Employee any right to receive any stock option or other equity incentive
not awarded on or before the date hereof.
(e) The Company will reimburse Employee for all reasonable out-of-
pocket expenses incurred by Employee at the request of the Company in the
performance of his duties under this Agreement and such other expenses as
may be approved by the Company in accordance with the Company's
reimbursement policies as in effect from time to time, in each case upon
presentation to the Company of an itemized accounting of such expenses with
reasonable supporting data.
(f) On the one-year anniversary of the date of this Agreement, the
Employee's salary will be reviewed with respect to the one-year period then
ended and, as appropriate, his salary may be adjusted effective as of such
date and his salary will be reviewed annually thereafter during the term of
this Agreement or any renewal term hereof. Except as provided in Section
3(a) above, for the salary review on the one-year anniversary of the date
of this Agreement Employee's salary will not be subject to reduction
without Employee's consent.
4. Term. Subject to Section 10(j), this Agreement will become effective
on the closing date of the Acquisition and, unless earlier terminated in
accordance with Section 5, will expire two years from the date hereof (the
"Expiration Date"). If this Agreement expires or is terminated, this Agreement
will forthwith become void and there will be no liability or obligation on the
part of the parties hereto, except as otherwise provided herein and except that
the provisions of this Section 4 and Sections 6, 7, 8, 9 and 10 will remain in
full force and effect and survive any termination or expiration of this
Agreement.
5. Termination.
(a) In the event of the death of the Employee, except with respect to
any benefits that have accrued and have not been paid to the Employee under
this Agreement, the provisions of this Agreement will terminate
immediately. However, the Employee's estate will have the right to receive
compensation due to the Employee as of and to the date of his death and,
furthermore, to receive an additional amount equal to one-twelfth (1/12) of
the Employee's annual compensation then in effect as specified in Section
3(a).
(b) If the Employee is prevented by illness, accident, or other
incapacity from properly performing his duties under this Agreement (and,
if required by the Company, upon the furnishing of evidence satisfactory to
the Company of such disability), the Company will, during the continuance
of his disability, but only for the remaining term of this Agreement, pay
the Employee his compensation payable under the provisions of Section 3
(other than the bonus provided for in Section 3(b) and less the amount of
any benefits paid to the Employee under any disability insurance provided
by the Company) and continue to provide the Employee all other benefits
provided under this Agreement. As used herein, the term "disability" means
the complete and total inability of the Employee, due to illness, physical
or comprehensive mental impairment to substantially perform all of his
duties as described in this Agreement for a consecutive period of 30 days
or more.
Exhibit C-2 Page 3
(c) The Company may terminate this Agreement at any time for Cause by
giving written notice of termination to Employee. For purposes of this
Agreement, "Cause" means any one or more of the following: (i) a breach of
this Agreement, which breach either (A) is not cured within 30 days after
notice from the Company specifying the action which constitutes the breach
and demanding its discontinuance, or (B) is cured and the breach recurs
during or after such 30-day period, (ii) the Employee's (A) exhibition of
willful disobedience to, or repeated failure to perform, reasonable
directions of the Company's Board of Directors or PMCI's President, (B)
commission of gross malfeasance in the performance of his duties under this
Agreement or acts resulting in an indictment charging the Employee with the
commission of a felony; engaging in fraud, misappropriation or
embezzlement; (C) disclosure of confidential information in violation of
this Agreement; (D) willfully engaging in conduct materially injurious to
the Company; or (E) breach or threatened breach by Employee of any
provision of Sections 6, 7 or 8. A material failure to perform his duties
hereunder that results from the disability of the Employee will not be
considered Cause for purposes of his termination. If Employee is terminated
for Cause, then Employee's right to receive Base Salary and benefits will
terminate as of the date of such notice and Employee will return to the
Company any and all stock options or other equity interests that have been
granted to Employee during the term of this Agreement.
(d) The Company may terminate this Agreement at any time after the
one-year anniversary of the date of this Agreement by giving six months'
prior written notice of termination to Employee. In that event Employee's
right to receive Base Salary and benefits will terminate as of the date of
termination.
6. Non-Disclosure of Information.
(a) Except as specifically permitted by the Company in writing and as
required for Employee to perform his services and duties hereunder, during
the period beginning on the date of this Agreement and ending on the date
that is two years after the expiration or termination of this Agreement
(the "Non-Disclosure Period") Employee will not disclose any Proprietary
Information to any person or entity for any purpose or use or permit the
use of any Proprietary Information. In addition, during the Non-Disclosure
Period Employee will not undertake on behalf of any other person or entity
any commercial project, employment or consultancy that would result in use
or disclosure of Proprietary Information unless the Company has consented
in writing to such undertaking, employment or consultancy. The Company may
require that Employee and any person or entity proposing to engage Employee
in such a capacity provide appropriate written assurances regarding the
avoidance of any such conflict.
(b) Upon the termination or expiration of this Agreement, Employee
will deliver to the Company or with the Company's permission cause to be
destroyed all notes, letters, prints, records, forms, contracts, studies,
reports, appraisals, financial data, lists of names or other customer data,
and any other articles or papers, software, computer tapes and materials
that have come into his possession by reason of his engagement by the
Company, whether or not prepared by him, and he will not retain any
memoranda, summaries, or copies of any of those items.
(c) Employee acknowledges that Proprietary Information of the Company
is a unique and valuable asset of the Company, the loss or unauthorized
disclosure or use of which would cause the Company irreparable harm.
7. Inventions.
(a) Employee hereby assigns and agrees to assign to the Company, or to
any person or entity designated by the Company, without royalty or other
consideration to Employee therefor other than the compensation set forth in
this Agreement, all of his right, title and interest in and to all (i)
Inventions, (ii) applications for United States of America and foreign
letters patent, (iii) United States of America and foreign letters patent
granted upon Inventions, and (iv) material related to any of the foregoing
subject to copyright. Employee further acknowledges that all copyrightable
materials developed or produced by Employee within the scope of his
engagement by the Company constitute works made for hire. Notwithstanding
anything to the contrary in this Section 7(a), Employee's obligations under
this Section 7(a) will only apply to the extent the items set forth in
clauses (i) through (iv) hereof relate to or arise out of Employee's
employment by the Company.
Exhibit C-2 Page 4
(b) Employee will communicate promptly and disclose to the Company, in
such form as the Company may reasonably request, all information, details
and data pertaining to any of the items described in Section 7(a).
(c) At the request of the Company, Employee will do all acts necessary
or appropriate to secure for the Company the full benefits of each item
described in Section 7(a), and otherwise to carry into full force and
effect the assignment contained in Section 7(a). Such acts may include
giving testimony in support of Employee's inventorship and promptly
executing and delivering to the Company such papers, instruments and
documents, without expense to Employee, as may be appropriate in the
Company's opinion to apply for, secure, maintain, reissue, extend or defend
the Company's worldwide rights in any item described in Section 7(a).
8. Covenants Not to Compete or Interfere.
(a) In view of the unique and valuable services that Employee has been
engaged to provide to the Company and Employee's current and future
knowledge of the Company's Proprietary Information, during the period
beginning on the date of the closing of the Acquisition and ending on the
earlier of (i) the two-year anniversary of the date on which Employee
ceases to be employed by the Company and (ii) the two-year anniversary of
the payment by PMCI of the Final Purchase Price Adjustment pursuant to
Section 2.3(d) of the Stock Purchase Agreement (such period, the "Non-
Compete Period"), Employee will not Participate In any Competitive Advisory
Business or any other business in which the Company is engaged, or has
taken material steps to be engaged, at the time of such termination or
expiration. Notwithstanding the foregoing, Employee will not be deemed to
Participate In a business merely because he owns 5% or less of the
outstanding stock of a corporation (measured in voting power or equity) if,
at the time of his acquisition thereof, such stock is listed on a national
securities exchange, is reported on Nasdaq, or is regularly traded in the
over-the-counter market by a member of a national securities exchange.
(b) During the Non-Compete Period, Employee will not (i) directly or
indirectly cause, or attempt to cause, to leave the employ of the Company
any employee of the Company that is an employee of the Company at any time
during the period beginning six months before the date of this Agreement
and ending at the end of the Non-Compete Period; (ii) directly or
indirectly solicit any customer of the Company as to which Employee
obtained knowledge during his affiliation with the Company as a member of
the leadership team of the Company or with any affiliate of the Company;
(iii) knowingly or recklessly interfere or attempt to interfere with any
transaction in which the Company was involved during the term of this
Agreement; or (iv) in any other way knowingly or recklessly interfere with
the relationship between the Company and any of its employees, customers or
suppliers.
(c) If any provision of this Section 8 is held to be invalid, illegal
or unenforceable in any jurisdiction by any court of competent
jurisdiction, then (i) such invalidity, illegality or unenforceability will
not affect such provision with respect to any other jurisdiction, (ii) such
invalidity, illegality or unenforceability will not affect any other
provision of this Agreement with respect to such jurisdiction, and (iii)
such court may modify such provision to make it valid, legal, and
enforceable in such jurisdiction, and such provision will thereafter be
enforced in its modified form in such jurisdiction.
9. Injunctive Relief. Employee acknowledges that the breach or threatened
breach by Employee of any of the provisions of Sections 6, 7 or 8 would cause
the Company irreparable harm. Upon the breach or threatened breach of any
provision of Sections 6, 7 or 8, the Company will be entitled to an injunction,
without bond, restraining Employee from committing such breach. This right will
not be construed to limit the Company's ability to obtain any other remedies
available to it for such breach or threatened breach, including the recovery of
damages.
10. General Provisions.
(a) Remedies. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative
with and not exclusive of any other remedy conferred hereby, or by law or
equity upon such party, and the exercise by a party of any one remedy will
not preclude the exercise of any other remedy. No failure or delay on the
part of any party hereto in the exercise of any right hereunder will impair
such right or be construed to be a waiver of, or acquiescence in, any
breach of any
Exhibit C-2 Page 5
representation, warranty or agreement herein, nor will any single or
partial exercise of any such right preclude other or further exercise
thereof or of any other right.
(b) Governing Law. This Agreement, its interpretation, and the legal
relations between the parties hereto will be governed by and construed in
accordance with the laws of the State of Colorado, without regard to the
conflict of laws rules thereof.
(c) Severability. If any provision of this Agreement is held to be
invalid, illegal or unenforceable in any jurisdiction by any court of
competent jurisdiction, then (i) such invalidity, illegality or
unenforceability will not affect such provision with respect to any other
jurisdiction, (ii) such invalidity, illegality or unenforceability will not
affect any other provision of this Agreement with respect to such
jurisdiction, and (iii) such court may modify such provision to make it
valid, legal, and enforceable in such jurisdiction, and such provision will
thereafter be enforced in its modified form in such jurisdiction if the
parties hereto agree that such modification will achieve, to the extent
possible, the economic, business and other purposes of such invalid,
illegal or unenforceable provision.
(d) Notices. All notices and other communications hereunder must be in
writing and will be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail, return receipt
requested, or sent via facsimile, with confirmation of receipt, to the
parties hereto at the following address or at such other address for a
party hereto as specified by notice hereunder:
(i) if to the Company, to:
▇▇▇▇ Investment Services, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
with copies to:
PMC International, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile No: ▇▇▇-▇▇▇-▇▇▇▇
and
Holme ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile No.: 303-866-0200
(ii) If to Employee:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
(e) Assignment; Binding Effect and Benefit. Except as otherwise
provided in this Section 10(e), neither party hereto may assign its rights
or delegate its obligations under this Agreement without the prior written
consent of the other party. The Company may assign its rights and delegate
its obligations under this Agreement to any of its affiliates or to any
person or entity that acquires all or substantially all of the business of
the Company whether through merger, purchase of assets, or otherwise. This
Agreement will be binding
Exhibit C-2 Page 6
upon and inure to the benefit of the parties hereto and their respective
legal representatives, heirs, and permitted successors and assigns.
(f) Entire Agreement. This Agreement constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings, whether oral or
written, among the parties hereto with respect to the subject matter hereof
(g) Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
(h) Headings; "Including". When a reference is made in this Agreement
to a section, such reference is to a section of this Agreement unless
otherwise indicated. The words "include," "includes" and "including" when
used herein will be deemed in each case to be followed by the words
"without limitation." The section headings contained in this Agreement are
for reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement. Whenever the context may require, each
pronoun includes the corresponding masculine, feminine and neuter forms.
(i) Representation by Counsel. The parties hereto acknowledge that
they have had the opportunity to consult with counsel and have done so to
the extent they deemed appropriate during the negotiation, preparation and
execution of this Agreement.
(j) Counterparts; Effective Date. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, and all of
which together shall be deemed to be one and the same instrument. This
Agreement will become effective when one or more counterparts have been
signed by each of the parties hereto and delivered to the other parties
hereto, it being understood that all parties hereto need not sign the same
counterpart.
(k) Enforcement Costs. In the event of any proceeding to enforce this
Agreement, the prevailing party will be entitled to receive from the other
party all reasonable costs and expenses, including the reasonable fees of
attorneys, accountants and other experts, incurred by the prevailing party
in investigating and prosecuting (or defending) such action at trial or
upon any appeal.
Exhibit C-2 Page 7
IN WITNESS WHEREOF, the parties hereto have duly executed this Employment
Agreement as of the date first written above.
THE COMPANY
▇▇▇▇ INVESTMENT SERVICES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Its: President
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EMPLOYEE
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Exhibit C-2 Page 8
