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EXHIBIT 10.50
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made this 29th day of July, 1997, between
IMAGE CONVERSION SYSTEMS, INC., a Delaware corporation, the address of which is
000 Xxxx Xxxxxxxxx Xxxx, Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000 (the "CORPORATION")
and XXXX X. XXXXXXXXX, whose address is 00 Xxxxx Xxxxx Xxxxx, Xxxxxxxxx Xxxxx,
XX 00000 ("EMPLOYEE").
R E C I T A L S:
The Corporation is engaged in the business of photocopying,
imaging, scanning and conversion, related services ancillary to all of the
foregoing and outgrowths thereof.
Employee is currently employed by the Corporation as
President and Chief Executive Officer.
Concurrently herewith, LASON SYSTEMS, INC. ("LASON") has
acquired all of the issued and outstanding capital stock of the Corporation
pursuant to an Agreement Of Purchase And Sale Of Stock (the "STOCK PURCHASE
AGREEMENT") among the Corporation, Lason, Lason, Inc., a Delaware corporation
("Lason, Inc.") and the shareholders of the Corporation, including the Employee.
The Corporation and Lason desire to continue to benefit from
the knowledge and experience of Employee relating to the Corporation's business
by employing Employee as President and Chief Executive Officer of the
Corporation, and Employee desires to continue to serve as President and Chief
Executive Officer of the Corporation, upon the terms and subject to the
conditions set forth herein.
THEREFORE, the parties agree as follows:
1. ENGAGEMENT OF EMPLOYEE. The Corporation hereby agrees to
continue to employ Employee for the term of this Agreement as set forth in
Paragraph 4 and, during the term of this Agreement, Employee agrees to accept
continued employment with the Corporation and to serve upon the terms and
conditions herein contained as President and Chief Executive Officer of the
Corporation. In such capacity, Employee shall perform the duties and have the
powers customarily incident to the office of a President and Chief Executive
Officer, including, but not limited to, having general responsibility for the
day-to-day management and operations of the Corporation and general supervision
of all subordinate officers, employees and agents of the Corporation. Employee
shall devote his full working time and attention to discharging the duties of
his position. Employee shall report to the Corporation's Chairman of the Board.
In addition, Employee shall perform those additional duties set forth in Exhibit
A attached hereto.
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2. COMPENSATION.
A. BASE SALARY. Commencing July 29, 1997, the
Corporation shall pay to Employee a base
salary at the annual rate of $150,000.00 per
year during each year of the term hereof;
provided, however, that effective January 1,
1999, the aforesaid annual salary rate shall
be adjusted to a mutually acceptable amount
but, in no event, shall such base salary
rate be adjusted by a percentage factor of
less than 10% per annum. Such base salary
shall be paid in equal bi-weekly
installments (less appropriate and necessary
withholdings for employment taxes),
commencing on the Corporation's next regular
payday and continuing on the Corporation's
regular payday every other week thereafter
during the term of this Agreement.
B. BONUS.
i. ICS COMPENSATION PLAN. Employee shall
be paid an annual bonus of $75,000.00
(the "Bonus Payment") pursuant to the
ICS Compensation Plan with adjusted
goals for the post- Lason acquisition
operation of the Corporation in 1997
and for 1998, as set forth on Exhibit
B attached hereto. For 1997, the
payment shall be pro-rated. In 1999,
the Bonus Amount shall be adjusted to
a mutually acceptable amount but, in
no event, shall such Bonus Amount be
adjusted by a percentage factor of
less than 10% per annum.
ii. LASON STOCK BONUS PLAN. Pursuant to
the Stock Purchase Agreement, in
consideration of the sale of their
shares of Common Stock in the
Corporation to Lason, certain of the
Management Shareholders, as defined in
the Stock Purchase Agreement and
including Employee, received the
consideration specified in Exhibit D
attached hereto comprised of cash and
shares of Common Stock of Lason, Inc.
("LASON SHARES") in the amounts and
values set forth in Exhibit D.
Employee received the number of shares
of the Lason Shares set forth in
Exhibit D ("EMPLOYEE SHARES").
Pursuant to the Stock Purchase
Agreement, the Employee Shares are
being held in escrow (the "STOCK
PURCHASE ESCROW AGREEMENT") to
facilitate any indemnification owed to
Lason by the Management Shareholders
thereunder.
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Retention of the Employee Shares by
Employee is subject to the following
bonus plan:
LASON STOCK BONUS PLAN
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97 97 97 98 98 98 98 98
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3rd Qtr. 4th Qtr. Final Six 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr. Year-
Months End
Year-End
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% TO EARN 15% 15% 10% 12% 12% 12% 12% 12%
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OP. INCOME - 730* 870 1600* 855 930 1010 1100 3895
MAXIMUM
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OP. INCOME - 630* 750 1380* 700 760 810 900 3170
MINIMUM
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OP. INCOME - BASE 600* 700 1300* 650 700 750 800 2900
*Amounts shall be prorated based on number of days remaining in third quarter
from and including the commencement date of the Agreement. For example, if the
Agreement commences on August 1, 1997, the Base requirement for the 1997 third
quarter will be 61 divided by 92 times $600,000 or $397,826 and the Base for the
1997 Six Months Year End will be $397,826 plus $700,000 or $1,097,826.
1) Depending on the amount of the
Corporation's operating
income, Employee may earn
during each of the six (6)
quarters and the six (6)
months ended December 31,
1997, and the twelve (12)
months ended December 31, 1998
(hereinafter each a
"YEAR-END") (in an amount per
quarter and Year- End shown
opposite the "% to Earn"): (i)
100% of his Employee Shares
earned for that particular
quarter or year end, and (ii)
100% of that percentage
referenced on Exhibit C hereto
of $3,000,000.00 (the "$3
MILLION INCENTIVE") earned for
that particular quarter or
year end, payable 66-2/3% in
cash and 33-1/3% in shares of
Lason, Inc. Common Stock at
the average closing price for
the five (5) trading days
prior to the end of the
quarter as reported in the
Wall Street Journal index of
NASDAQ National Market Issues.
Employee acknowledges and
agrees that he is only
entitled to that percentage
amount of the $3 Million
Incentive with the balance
being distributed among Xxxxxx
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Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxx
Xxxxx and six other employees
of the Corporation, as set
forth on Exhibit C attached
hereto and incorporated herein
by reference.
2) The $3 Million Incentive shall
become subject to the terms of
the Stock Purchase Escrow
Agreement except that the
shares of Lason, Inc. Common
Stock ("$3 MILLION INCENTIVE
SHARES") shall be valued at
the price set forth is
Subsection 1 above. The $3
Million Incentive will be
determined as soon as
practicable after the
applicable quarterly and Year-
End operating income have been
determined by Lason, Inc.'s
Chief Financial Officer in
accordance with sub-section 10
below following the end of (i)
the 1997 fourth quarter; (ii)
the 1998 second quarter; and
(iii) the 1998 fourth quarter.
The cash portion of the $3.0
Million Incentive shall be
released from escrow within
five (5) business days after
the cash portion has been
determined if no claim(s) for
indemnification is pending or
overtly threatened under the
Stock Purchase Agreement at
such time; provided, however,
if a claim(s) is pending or
overtly threatened, and is
quantifiable, and the cash
portion exceeds such amount,
the excess cash portion of the
$3.0 Million Incentive shall
be released within five (5)
business days from escrow.
3) The Employee Shares are
subject to a 24-month lock-up
agreement pursuant to the
Stock Purchase Agreement. Any
of the $3 Million Incentive
Shares issued to Employee
shall also be subject to
similar lock-up agreements as
follows: (i) shares of Lason,
Inc. issued with respect to
the third and fourth quarters
and Year-End of 1997--24 month
lock-up from December 31, 1997
(the "1997 LOCK-UP"); and (ii)
shares of Lason, Inc. issued
with respect to the four
quarters and Year-End of 1998
shall be subject to a lock-up
terminating on the same date
as the 1997 Lock-Up. At the
termination of the 1997
Lock-Up and the subsequent
lock-up, Employee shall enjoy
the same registration rights
viz a viz the $3 Million
Incentive Shares as he enjoys
with regard to the Employee
Shares pursuant to Section 4.6
of
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the Stock Purchase Agreement
provided that he makes
investment representations
substantially similar in form
and content as those set forth
in Section 2.31 of the Stock
Purchase Agreement.
4) If the Corporation's operating
income is the Base amount or
less for any quarter or
Year-End, Employee shall
receive none of the % to Earn
for that quarter or Year-End
of his Employee Shares or of
the $3 Million Incentive. Such
Employee Shares shall be
re-assigned to Lason, Inc. but
will not be credited against
any indemnification amount
owed to Lason pursuant to the
Stock Purchase Agreement.
5) If the Corporation's operating
income for a quarter or
Year-End is an amount between
the Base and the Minimum,
Employee shall (i) earn that
proportion of the % to Earn of
the Employee Shares obtained
by multiplying the % to Earn
by the quotient obtained by
dividing the difference
between the operating income
for the quarter or Year-End
and the Base by the difference
between the Minimum and the
Base for that quarter or
Year-End, respectively, and
(ii) not earn any of the % to
Earn of the $3 Million
Incentive. All Employee Shares
not earned by Employee for
such quarter or Year-End shall
be reassigned to Lason, Inc.
but will not be credited
against any indemnification
amount owed to Lason pursuant
to the Stock Purchase
Agreement.
6) If the Corporation's operating
income for a quarter or
Year-End is equal to the
Minimum for that quarter or
Year-End, Employee shall (i)
earn all of the % to Earn of
the Employee Shares for that
quarter or Year-End; and (ii)
not earn any of the % to Earn
of the $3 Million Incentive.
7) If the Corporation's operating
income for a quarter or
Year-End is an amount between
the Minimum and the Maximum,
in addition to earning all of
the Employee Shares for that
quarter or Year-End, Employee
shall earn that proportion of
the % to Earn of the $3
Million Incentive obtained by
multiplying the % to Earn by
the quotient obtained by
dividing the difference
between the operating
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income for the quarter or
Year-End and the Minimum by
the difference between the
Minimum and the Maximum for
that quarter or Year-End,
respectively.
8) If the Corporation's operating
income for the third or fourth
quarter or Year-End in 1997 is
an amount between the Minimum
and the Maximum, that
proportion of the % to Earn of
the $3 Million Incentive not
earned by Employee for such
quarter or Year-End, as
provided in Paragraph 7 above,
shall be added to and evenly
distributed among the % to
Earn in the 1998 four quarters
and Year-End.
9) If the Corporation's operating
income for a quarter or
Year-End is equal to or
greater than the Maximum for
that quarter or Year-End,
Employee shall earn (i) all of
the % to Earn of the Employee
Shares for that quarter or
Year-End and (ii) all of the %
to Earn of the $3 Million
Incentive for that quarter or
Year-End.
10) Operating income shall mean
for any quarter or Year-End,
the operating income of the
Corporation, determined on a
stand-alone basis in
accordance with generally
accepted accounting principles
in a manner which is
materially consistent with the
Corporation's practices prior
to its acquisition by Lason
and including amortization
expense fixed at $93,000.00
per quarter, subject to the
upward adjustments relating to
amortization and interest
costs resulting from
acquisitions as referenced
below.
Subject to the ultimate
governance authority of its
Board of Directors (i.e., the
Board of Directors of the
Corporation, Lason, Lason,
Inc. or another affiliate, as
the case may be), in order to
create no material impediment
to Employee's opportunity to
earn the Bonus during the term
of this Agreement, the
Corporation whether it remains
a subsidiary of Lason or is
merged or consolidated with or
otherwise transferred to Lason
or another subsidiary of
Lason, will be operated in all
material respects in
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a manner consistent with the
manner in which it was
operated prior to the
acquisition of control of the
Corporation by Lason except
that: (i) the Corporation will
participate in Lason's
centralized accounting, record
keeping, cash management and
budgeting process in a fair
and consistent manner as
Lason's other divisions and
subsidiaries; (ii) the
Corporation will participate
in Lason's centralized
purchasing system as may be in
place from time to time in a
fair and consistent manner as
Lason's other divisions and
subsidiaries; (iii) the
Corporation will participate
in other similar centralized
functions in a fair and
consistent manner as Lason's
other divisions and
subsidiaries; (iv) the
Corporation will participate
in Lason's benefit program;
and (v) the business conducted
by Corporation prior to the
acquisition of control by
Lason will continue to be done
by Corporation, but if such
business is diverted to other
divisions or subsidiaries
within Xxxxx, Xxxxx will
fairly credit such business to
the operating income of
Corporation. Further, in no
event will any of the
corporate overhead of Lason or
Lason, Inc. be allocated to
the Corporation (or its
successor business unit), it
being agreed that only direct
costs of the Corporation's (or
its successor business unit's)
business shall be so
attributed. In the event that
Employee believes that a
change in operational policy
will unduly impinge upon his
opportunity to earn the Bonus
he and a person or persons
designated by Lason shall meet
in order to discuss in good
faith an equitable resolution
to Employee's concerns to the
extent possible and if no such
resolution can be reached to
submit its' claim arbitration
pursuant to Section 6 hereof.
For the entire approximate 18
month period during which the
bonus set forth in
subparagraph B(ii) is
calculated, operating income
shall include up to an
aggregate of $1,200,000 of the
operating income of
acquisitions which are either
made by the Corporation or
made by Lason or an affiliate
but due to the efforts of the
Corporation's current senior
management team (i.e., Messrs.
Messinger, Hendricks, Xxxxxx
and Xxxxx) for purposes of
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determining whether Employee
has earned the % to Earn of
the Employee Shares or $3
Million Incentive for any
quarter or Year-End, but only
if the Corporation, as a
result of the acquisition,
includes, as a deduction in
determining operating income,
the good will, amortization
expense and increased interest
costs of the acquisition. The
failure of the Corporation or
its parent to make an
acquisition, the decision by
the Corporation or its parent
not to pursue an acquisition,
or the decision by the
Corporation or its parent to
structure an acquisition in a
manner which excludes the
operating income from
inclusion in the Corporation's
operating income, whether
reasonable or unreasonable or
with reason or for no reason,
shall not be used by Employee
to claim that (i) the
Corporation's operating income
is understated as a result of
such failure or decision; or
(ii) Employee has been denied
the opportunity to earn the
Employee Shares or the $3
Million Incentive.
Employee will escrow his
Employee Shares and his
portion of the $3 Million
Incentive with Seyburn, Kahn,
Ginn, Bess, Xxxxxx and Xxxxxx,
P.C., counsel to Lason, Inc.
pursuant to the Stock Purchase
Escrow Agreement modified to
include the foregoing, and
execute assignments separate
from certificate in blank to
enable a re-assignment of his
Employee Shares and the $3
Million Incentive Shares in
case such re-assignment is
required as set forth above.
For purposes of this
Agreement, Employee Shares and
$3 Million Incentive Shares
include any securities of
Lason, Inc. issued in addition
to, in substitution of, or in
exchange for, any of the
Employee Shares or $3 Million
Incentive Shares (whether as a
distribution in connection
with any recapitalization,
reorganization or
reclassification, a stock
dividend or otherwise).
Employee shall promptly
deliver such securities to the
Escrow Agent together with
duly executed forms of
assignment.
C. BENEFITS. During the term of his Agreement,
Employee shall have the right to receive or
participate in any fringe benefits,
including, but not limited to, personal
days, group term life insurance programs,
disability insurance programs, medical
expense reimbursement plans, flexible
benefit plans, so-called qualified
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"pension or profit sharing plans," and other
reasonable and customary fringe benefits
which may from time-to-time be made
available by Corporation's Board of
Directors and which shall be generally
comparable to the benefits made available to
all similarly situated executive officers of
any of Lason, Inc. or Lason and its
subsidiaries; provided, however, that the
availability of such benefits is subject to
any applicable eligibility requirement of
each such program. Additionally, for a
period of 18 months from and after the date
of this Agreement, the Corporation shall
provide Employee with a policy of term life
insurance in the amount of $1,848,669
provided that Employee is insurable at
commercially reasonable rates. Further, it
is understood and agreed that compensation
arrangements among the executives of Lason,
Inc., Lason, and its subsidiaries vary and,
accordingly, a particular benefit may not be
made available to Employee even though it is
made available to another executive.
D. RELOCATION EXPENSES. Corporation agrees to
pay to Employee for his relocation expenses
in moving to Lason's headquarters the amount
of $100,000, subject to customary state and
federal tax withholdings. This payment
constitutes the Corporation's sole and
entire obligation with respect to Employee's
relocation expenses. To the extent
Employee's relocation expenses exceed
$100,000, Employee will personally be
responsible for such excess expenses. At his
request, Employee shall be entitled to a
$20,000 advance with regard to such payment.
If within twelve (12) months from the date
of this Agreement, there is a "Change in
Control" (as defined below) of Lason, Inc.,
and, at any time after the Change in
Control, Employee, while still in the employ
Corporation and/or Lason and its affiliates,
is required to relocate to another state
(except for a relocation to Chicago,
Illinois) or is Terminated without Cause (as
that term is defined herein), Employee shall
be paid, in addition to any other amounts
due hereunder, a cash bonus of $100,000. For
the purposes of this paragraph, a "Change in
Control" shall be deemed to have taken place
if (i) a third person (but not Lason, Inc.
or any of its affiliates), including a group
of individuals or entities, becomes a
beneficial owner of shares of Lason, Inc. or
the Corporation having fifty percent (50%)
or more of the total number of votes that
may be cast for the election of directors of
the Lason, Inc. or the Corporation, as the
case may be, or (ii) as a result of, or in
connection with any cash tender or exchange
offer, merger into or with any third party
not including Lason, Inc. or any of its
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affiliates, consolidation or other business
combination, or sale of assets, or any
combination of the foregoing events, the
persons who are the directors of Lason, Inc.
or the Corporation before the occurrence of
such event or events cease to constitute
fifty percent (50%) of the Board of
Directors of Lason, Inc. or Corporation, as
the case may be.
3. GRANT OF OPTION. As a key employee of a corporation
controlled by Lason, Employee shall be eligible to participate in the Lason,
Inc. 1995 Stock Option Plan (the "PLAN") pursuant to the terms and conditions of
an Employee Stock Option Agreement entered into between Employee and Lason, Inc.
on this date (the "STOCK OPTION AGREEMENT"). Subject to the terms and conditions
of the Plan and the Stock Option Agreement: (i) Employee has been granted the
right and option (the "OPTION") to purchase up to 15,000 shares of Common Stock
of Lason, Inc. (the "OPTION SHARES") at an option price equal to $27.1875 per
share of Common Stock (the fair market value of the Shares of Common Stock of
Lason, Inc. as determined by the Board of Directors of Lason, Inc. in accordance
with generally accepted accounting principles on the date of this Agreement;
(ii) Employee may only exercise his Option to purchase Option Shares to the
extent that such Option Shares have vested and become exercisable with respect
to such Option Shares in accordance with the terms and conditions of the Stock
Option Agreement; and (iii) the Option Shares shall vest and become exercisable
in accordance with the following schedule, if as of each such date Employee is
still employed by the Corporation:
CUMULATIVE PERCENTAGE OF
OPTION SHARES
DATE VESTED AND EXERCISABLE
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July 29, 1998 20%
July 29, 1999 40%
July 29, 2000 60%
July 29, 2001 80%
July 29, 2002 100%
4. TERM AND TERMINATION. The term of this Agreement shall be
for two (2) years from July 29, 1997 to July 29, 1999 unless sooner terminated
for "Cause." The term of this Agreement shall be automatically extended for an
additional period of one (1) year if the Company shall have given notice to
Employee of its intent to extend such term. Such notice, to be effective, is to
be given not less than ninety (90) days prior to the last day of the term. In
the event the Company provides notice of extension to Employee, Employee's base
salary and other compensation will be increased in an amount mutually agreed to
by the Corporation and Employee.
For the purposes hereof, "CAUSE" shall mean:
A. Employee shall have materially breached his
lawful duties to Corporation or any material
written rules, regulations or policies of
Corporation now existing or hereafter arising,
which breach shall
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remain unremedied for a period of 30 days after
Employee's receipt of written notice thereof
describing the breach in reasonable detail or
shall have acted with gross negligence or with
willful misconduct in the performance of his
material duties under this Agreement.
B. Employee shall have been convicted of a violation
of a felony or any law involving moral turpitude;
C. Employee shall have embezzled or otherwise
misappropriated any property belonging to
Corporation;
D. Employee shall have performed such other
commissions or omissions of a kind or nature
substantially similar to those enumerated in
subsections a, b, or c above, which commission or
omission seriously xxxxx Corporation or the
employment relation of Corporation and Employee,
and which commission or omission shall remain
unremedied for a period of 30 days after
Employee's receipt of written notice thereof
describing the commission or omission in
reasonable detail; or
E. Employee dies or becomes unable to perform his
duties as contained in this Agreement
("DISABILITY") for a period of twelve (12)
consecutive weeks.
In the event that Employee quits his employment for other than
Good Reason (as defined below) or is terminated for Cause as set forth above,
then, and in that event, Employee shall be entitled to receive his base pay and
Bonus described in Paragraphs 2B(i) and (ii) and fringe benefits only through
the end of the week of termination but, in all events, including accrued bonus
amounts through the week of termination. "Good Reason" is defined as the
assignment to Employee (without his express written consent) of duties
materially inconsistent with and inferior to Employee's duties as set forth in
Paragraph 1 above or a required relocation by Employee to another state, other
than to the Chicago metropolitan area, which relocation is unacceptable to
Employee.
Notwithstanding the foregoing, in the event that Employee's
termination for Cause is occasioned by his Disability as defined in E above,
Employee shall be paid the Bonus described in Paragraph 2B(i) and (ii) for the
shorter of (i) one (1) additional quarter past the quarter in which his
Disability was established or (ii) the remaining term of the Agreement.
In the event that Employee is terminated by Corporation other
than for Cause or quits his employment for Good Reason, Employee shall be paid
his salary, the Bonus described in Paragraph 2B(i) if earned pursuant to
Paragraph 2B(i) during the applicable six-month term and fringe benefits at the
level in effect immediately prior to the giving of notice of termination for six
months following termination, and shall be paid the Bonus described in Paragraph
2B(ii) if earned pursuant to Paragraph 2B(ii) during the remaining term of the
Agreement.
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5. NON-COMPETITION/CONFIDENTIALITY.
A. NON-COMPETITION AND SOLICITATION. Subject to
Section 4, in consideration of: (i) the
compensation described in this Agreement; and
(ii) the economic benefits accruing to Employee
under the Stock Purchase Agreement, Employee
agrees that while he is employed by Corporation
and for the two (2) year period following the
conclusion of his employment with the Corporation
(the "NON-COMPETE PERIOD"), Employee shall not,
either directly or indirectly (and whether or not
for compensation), work for, be employed by, own,
participate or engage in, or have any interest
in, any person, firm, entity, partnership,
limited partnership, limited liability company,
corporation or business (whether as an employee,
owner, partner, member, shareholder, officer,
director, agent, creditor, consultant or in any
capacity which calls for the rendering of
personal services, advice, acts of management,
operation or control) which is substantially the
same as or competitive with the activities
engaged in by Corporation or Lason, including but
not limited to the following: photocopying,
imaging, scanning and conversion, related
services ancillary to all of the foregoing and
outgrowths thereof (the "BUSINESS") so long as
Corporation or Lason shall, directly or
indirectly, be engaged in such activity in the
following states: Arkansas, California,
Connecticut, Delaware, Florida, Georgia, Idaho,
Illinois, Indiana, Kansas, Kentucky, Louisiana,
Massachusetts, Michigan, Minnesota, Missouri, New
Jersey, New York, Ohio, Oklahoma, Rhode Island,
South Carolina, Tennessee, Texas, Vermont and
Virginia (the "RESTRICTED TERRITORY"). The
foregoing shall not, however, be deemed to
prevent Employee and the Shareholders named in
the Stock Purchase Agreement from individually
and collectively owning in the aggregate up to 5%
of the securities of any corporation the shares
of which are traded on a securities exchange or
in the over-the-counter market.
Notwithstanding the above, in the event Employee
is terminated other than for Cause or Employee
terminates for Good Reason, the foregoing
restrictions shall not apply.
Employee further agrees that he shall directly or
indirectly, at any time during the Non-Compete
Period: (i) divert or attempt to divert from
Corporation or Lason any Business whether in the
Restricted Territory or not: (ii) solicit,
contact, call upon or attempt to solicit, or
provide services to, any of Corporation's or
Lason's customers, suppliers or actively sought
potential customers or suppliers for the purpose
of doing anything within the definition of the
Business or any work reasonably related to the
Business whether in the Restricted Territory or
not; or (iii) induce or attempt to induce any
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person who is an employee of Corporation or Lason
to leave the employ of Corporation or Lason.
B. CONFIDENTIALITY. During the Non-Compete Period,
Employee shall keep secret and inviolate and
shall not divulge, communicate, use to the
detriment of Corporation or Lason or for the
benefit of any other person or persons or misuse
in any way any knowledge or information of the
confidential nature, including, without
limitation, all trade secrets, information,
computer programs, technical data, customer lists
and unpublished matters relating to the business,
assets, accounts, books, records, customers and
contracts of Corporation or Lason which he may
know as a result of his association with and
which is unique to Corporation or Lason
("CONFIDENTIAL INFORMATION"). Employee may
disclose Confidential Information if required by
any judicial or governmental request, requirement
or order; provided that Employee will take
reasonable steps to give Corporation and Lason
sufficient prior notice in order to contest such
request, requirement or order.
C. REMEDIES. Employee has had knowledge of the
affairs, trade secrets, customers, potential
customers and other proprietary information of
Corporation and Lason, and Employee acknowledges
and agrees that compliance with the covenants set
forth in this Paragraph 5 is necessary for the
protection of the Business, good will and other
proprietary interests of Corporation and Lason
and that violation of this Paragraph 5 will cause
severe and irreparable injury to the Business and
good will of Corporation and Lason, which injury
is not compensable by money damages. Accordingly,
in the event of a breach (or threatened or
attempted breach) of this Paragraph 5,
Corporation and Lason shall, in addition to any
other rights and remedies, be entitled to
immediate appropriate injunctive relief or a
decree of specific performance, without the
necessity of showing any irreparable injury or
special damages.
If, in any judicial proceeding, a court shall refuse to
enforce any of the covenants included herein, then said unenforceable
covenant(s) shall be deemed eliminated from these provisions for the purpose of
those proceedings to the extent necessary to permit the remaining separate
covenants to be enforced. It is the intent and agreement of Lason and Employee
that these covenants be given the maximum force, effect and application
permissible under law.
The provisions of this Paragraph 5 shall survive the
termination of this Agreement.
6. ARBITRATION. If there is a disagreement(s) as to any of the
terms of this Agreement, including without limitation any disagreement relating
to the determination of operating income under Section 2.B.ii.(10), Employee
and/or Corporation shall provide notice to
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the other of the disagreement. Following receipt of such notice, Employee and
Corporation agree to meet and attempt, in good faith, to resolve such
disagreement. If Employee and Corporation are unable to resolve the disagreement
to their mutual satisfaction within 10 business days from the notice, Employee
or Corporation, as applicable, shall each appoint within 5 business days an
arbitrator, and the two arbitrators so appointed shall appoint a third
arbitrator. If said two arbitrators cannot agree on the selection of a third
arbitrator within the next 10 business days, then either Employee or
Corporation, as applicable, shall be entitled to apply to the American
Arbitration Association sitting in the Chicago metropolitan area for the
selection of a third arbitrator who shall then participate in such arbitration
proceedings, and who shall be selected from a list of arbitrators possessing the
qualifications set forth below. Any arbitrator appointed pursuant to this
Section 6 shall be a qualified expert with generally recognized current
competence in employment matters. Except as otherwise provided herein, such
arbitration shall be conducted at Chicago, Illinois in accordance with the then
applicable Commercial Arbitration Rules of the American Arbitration Association.
Within 30 business days of the date of selection of the last of the
arbitrators to be selected by the foregoing procedure, the arbitrators shall
furnish the parties with their written determination. Such written determination
shall be certified and signed by at least a majority of the arbitrators, and
shall be final and binding on the parties. Judgment may be entered on any award
rendered by the arbitrators in any federal or state court having jurisdiction
over the parties. Each of Employee or Corporation, as applicable, shall pay the
arbitrator selected by it, and the costs of the third arbitrator shall be paid
1/2 by Employee and 1/2 by Corporation, as applicable.
It is understood and agreed that all claims under this Agreement shall
be resolved pursuant to arbitration as provided herein, however, in all cases
involving enforcement of a covenant not to compete or a confidentiality
agreement, if after attempting to resolve any such claim through good faith
negotiations as provided above, if a party in good faith believes that
resolution of its claim through good faith negotiations as provided above, will
require equitable relief, it may file suit in a court of competent jurisdiction
in lieu of arbitration.
7. MISCELLANEOUS. Neither party shall assign its or his rights
and obligations hereunder, except that Corporation may assign its rights and
obligations hereunder to Lason or an affiliate of Lason with the consent of
Employee, which consent shall not be unreasonably withheld. Subject to the
foregoing, all of the terms and conditions of this Agreement shall be binding
upon and shall inure to the benefit of the heirs, successors, administrators,
legal representatives and assigns, as the case may be, of the parties hereto.
Notwithstanding the above, however, Lason and its affiliates may merge
Corporation into Lason and/or its affiliates at any time without the consent of
Employee.
8. PARTIAL INVALIDITY. If any provision of this Agreement is
held by a court of competent jurisdiction to be invalid, void or unenforceable
in any manner, the remaining provisions of this Agreement shall nonetheless
continue in full force and effect without being impaired or invalidated in any
way. In addition, if any provision of this Agreement may be modified by a court
of competent jurisdiction such that it may be enforced, then that provision
shall be so modified and as modified shall be fully enforced.
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9. ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties hereto with respect to the subject matter contained
herein, supersedes all prior and contemporaneous agreements, consulting
agreements, understandings and negotiations, and any and all employment
agreement(s) between Corporation and Employee dated prior to the date hereof;
and no evidence of prior or contemporaneous agreements, understandings and
negotiations shall govern or be used to construe or modify this Agreement.
Except as provided in this Agreement, no modification or alteration hereof shall
be deemed effective unless in writing and signed by the parties hereto. Neither
this Agreement nor any of its provisions may be changed, waived, or discharged
orally, but only by an instrument duly signed by the party against which
enforcement of the change, waiver, or discharge is sought.
10. NOTICES. Any notice, consent, approval or other
communication given pursuant to the provisions of this Agreement shall be in
writing and shall be (i) mailed by certified mail or registered mail, return
receipt requested, postage prepaid, or (ii) delivered by a nationally recognized
overnight courier, U.S. Post Office Express Mail, or similar overnight courier
which delivers only upon signed receipt of the addressee, and addressed as
follows:
TO EMPLOYEE AT: XXXX X. XXXXXXXXX
00 Xxxxx Xxxxx Xxxxx
Xxxxxxxxx Xxxxx, XX 00000
WITH A COPY TO: XXXXX X. XXXXX, ESQ.
Xxxxx & Xxxxxxx
One IBM Plaza - Suite 3300
000 X. Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
TO BUYER AT: LASON SYSTEMS, INC.
0000 Xxxxxxxxxx Xxxxxxx
Xxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxx, President and
Chief Executive Officer
WITH A COPY TO: XXXXXXXX X. XXXXXX, ESQ.
Seyburn, Kahn, Ginn, Bess, Xxxxxx
and Xxxxxx
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000-0000
The time of the giving of any notice shall be the time of receipt thereof by the
addressee or any agent of the addressee, except that in the event the addressee
or such agent of the addressee shall refuse to receive any notice given by
registered mail or certified mail as above provided or there shall be no person
available at the time of the delivery thereof to receive such notice, the time
of the giving of such notice shall be the time of such refusal or the time of
such delivery, as the case may be. Any party hereto may, by giving five (5) days
written notice to the other party hereto, designate any other address in
substitution of the foregoing address to which notice shall be given.
11. CHOICE OF LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois, without giving
effect to any choice of law or conflict provision or rule, whether of the State
of Illinois (or any other jurisdiction) that would
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cause the laws of any jurisdiction other than the State of Illinois to be
applied. In furtherance of the foregoing, the internal law of the State of
Illinois will control the interpretation and construction of this Agreement,
even if under such jurisdiction's choice of law or conflict of law or analysis,
the substantive law of some other jurisdiction would ordinarily apply. Further,
the parties hereto agree that jurisdiction and venue shall properly lie in the
courts of the State of Illinois or in the United States District Court for the
Northern District of Illinois.
12. HEADINGS. The headings in this Agreement are for reference
only and shall not limit or otherwise affect any of the terms or provisions
hereof.
13. COUNTERPARTS. This Agreement may be executed in two (2) or
more counterparts, each of which shall be considered an original, but all of
which together shall constitute one and the same instrument.
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THIS AGREEMENT was executed as of date and year first set
forth above.
"CORPORATION"
IMAGE CONVERSION SYSTEMS, INC.,
a Delaware corporation
By:
--------------------------------------
X.X. XXXXXXXXX
Its: CHIEF FINANCIAL OFFICER
-------------------------------------
"EMPLOYEE"
-----------------------------------------
XXXX X. XXXXXXXXX
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