EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of December 31, 1997, by and between
XXXXXX TECHNOLOGIES, INC., a North Carolina corporation with its principal
office located at 000 Xxxxx Xxxx Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000 (the
"Company"), and XXXXXXX X. XxXXXXXXX, residing at 00 Xxxxxx Xxxxx, Xxxxxxx, Xxx
Xxxx 00000 (the "Executive").
W I T N E S S E T H :
WHEREAS, the Company is engaged in the development and licensing of
thermal management technologies and products (the "Company's Business"); and
WHEREAS, the Company wishes to assure itself of the services of the
Executive for the period provided in this Agreement, and the Executive is
willing to serve in the employ of the Company on a full-time basis for said
period, and upon the other terms and conditions hereinafter provided.
NOW, THEREFORE, the Company and the Executive, intending to be legally
bound, agree as follows:
1. Employment.
The Company hereby employs the Executive and the Executive
hereby accepts employment with the Company, all in accordance with the terms and
conditions hereof, for a term commencing on January 1, 1998 and ending (subject
to the provisions of Article 5 hereof) on December 31, 2000 (the "Term").
2. Duties.
2.1 During the Term, the Executive shall be employed by the
Company and shall serve as its Vice President of Market Development, and shall
perform such duties relating to the Company, comparable to such duties and
powers performed and had by him for the past two (2) years.
2.2 During the Term, the Executive shall devote his full time
and best efforts exclusively for the benefit of the Company and shall not, as
more fully provided in paragraph 7, engage, directly or indirectly, in any other
business, employment or occupation which is competitive with the business of the
Company.
2.3 The Company acknowledges and agrees that the Executive
shall be permitted to engage in activities with not-for-profit, educational
and/or governmental entities which are, in the sole discretion of the Board of
Directors of the Company, consistent with the Company's interests and prospects.
3. Compensation.
3.1 As full compensation for his services and undertakings
pursuant to the terms of this Agreement, the Executive shall receive a base
salary at the rate of Eighty Eight Thousand Four Hundred ($88,400) Dollars per
year during 1998, and Ninety Six Thousand Two Hundred ($96,200) Dollars and One
Hundred Five Thousand Three Hundred ($105,300) Dollars per year during 1999 and
2000, respectively (collectively, the "Base Compensation"). The Base
Compensation shall be payable at such regular times and intervals as the Company
customarily pays its employees. If elected as a corporate officer or director of
the Company, or any subsidiary, the Executive shall serve in such capacities
without additional compensation.
3.2 The Executive shall be entitled to participate in and
receive, on the same basis as other executive employees of the Company, the
benefits under any pension plans or bonus plans of the Company and shall be
included in the Company's health plan (including hospitalization, medical and
major medical), life, prescription drug, accident and disability insurance plans
or programs and any other employee benefit or fringe benefit plans, perquisites
or arrangements which the Company makes available generally to other executive
employees of the Company.
3.3 At the sole discretion of the Board of Directors of the
Company, the Executive may be awarded bonuses, stock options or rights to profit
sharing.
3.4 The Executive shall be entitled to up to Four Hundred
($400) Dollar per month as reimbursement for actual automobile lease payments on
an appropriate executive vehicle (payable on the first day of each month
commencing February 1, 1998) for the Term of this Agreement. The Company shall
not purchase, or reimburse Executive for the cost of, any relevant insurance for
said automobile, fuel, mileage, or repairs.
3.5 The Company shall deduct from the Executive's Base
Compensation and bonus any federal, state or city withholding taxes, social
security contributions and any other amounts which may be required to be
deducted or withheld by the Company pursuant to any federal, state or city laws,
rules or regulations.
3.6 The Company shall reimburse the Executive, or cause him to
be reimbursed, for all reasonable out-of-pocket expenses incurred by him in the
performance of his duties hereunder or in furtherance of the business and/or
interests of the Company; provided, however, that the Executive shall have
previously furnished to the Company an itemized account, satisfactory to the
Company, in substantiation of such expenditures.
4. Indemnification.
The Company undertakes, to the extent permitted by law, to
indemnify and hold the Executive harmless from and against all claims, damages,
losses and expenses by third parties, including reasonable attorneys' fees and
disbursements, arising out of the performance by the Executive of his duties
pursuant to this Agreement, in furtherance of the Company's business and within
the scope of his employment.
5. Termination.
5.1 (a) The Executive's employment hereunder shall terminate
automatically as of the date of his death or upon the Executive becoming
eligible for benefits under the Company's long term disability plan as in effect
from time to time, or if no disability plan is in effect, upon the Executive
becoming permanently disabled. For purposes of this Agreement, the Executive
shall be deemed to be permanently "disabled" if he has been unable to perform
his duties for six (6) consecutive months or any nine (9) months in any twelve
(12) month period, all as conclusively determined in good faith by the Board of
Directors of the Company.
(b) Upon termination of the Executive's employment
under circumstances described in Section 5.1(a) above, the Company shall
promptly pay and provide to the Executive (or, in the event of his death, to his
surviving spouse or such other beneficiary as the Executive may designate in
writing, or if there is neither, to his estate):
(i) his earned but unpaid Base Compensation
and accrued vacation pay as of the date of termination of his employment with
the Company;
(ii) the benefits, if any, to which he is
entitled as a former employee under the Company's employee benefit plans and
programs and compensation plans and programs in which he was a participant;
(iii) any reimbursements due to him under
Section 3.6 the benefits, if any, to which he is entitled as a former employee
under the Company's employee benefit plans and programs and compensation plans
and programs in which he was a participant; and
(iv) an amount of Base Compensation at the
then current rate equal to the Base Compensation payable for a period of two (2)
months.
5.2 The Company may, at any time at its option, terminate the
employment of Executive under this Agreement for "cause" and Executive shall
forfeit the right to receive any and all further payments hereunder, other than
the right to receive any compensation then due and payable to Executive pursuant
to Article 3 hereof through to the date of termination. "Cause" shall be deemed
to be the commission of any of the following acts by the Executive:
(a) The Executive shall have committed any material
breach of any of the provisions or covenants of this Agreement;
(b) The Executive shall have committed any act of
willful misconduct or gross negligence in the performance of his duties or
obligations hereunder, or, without proper cause, shall have willingly refused or
habitually neglected to perform his employment duties or obligations under this
Agreement;
(c) The Executive shall have committed any act of
dishonesty, breach of trust, fraud or embezzlement; or
(d) The Executive shall have been convicted of, or
shall have plead guilty or nolo contendere to, a felony or indictable offense
(unless committed in the reasonable, good faith belief that the Executive's
actions were in the best interests of the Company and its stockholders and would
not violate criminal law).
5.3 If the Company elects to terminate this Agreement as set
forth above, it shall deliver notice of such intention to Executive, describing
with reasonable detail, the action or omission of the Executive constituting the
act of default (the "Termination Notice"), and thereupon no further payments of
any type shall be made or shall be due or payable to Executive hereunder, except
as provided in the first sentence of Article 5.2; provided, however, with
respect to any act of default set forth in clauses (a) and (b) of Article 5.2,
prior to any termination by the Company of Executive's employment, Executive
shall first have an opportunity to cure or remedy such act of default within
thirty (30) days following the Termination Notice.
5.4 The Company may terminate the Executive's employment in
its sole discretion for any reason on not less than thirty (30) days written
notice to the Executive. If the Executive is terminated for reasons other than
death, disability or the occurrence of any of the acts set forth in Article 5.2
(a) - (d) hereof, Executive shall be entitled to receive as severance pay (in
addition to any compensation then due and payable to Executive pursuant to
Article 3 hereof through the date of termination) an amount equal to four (4)
months of his Base Compensation which shall be calculated based on his Base
Compensation on the date of termination. The Executive shall also continue to
receive his automobile reimbursement under Paragraph 3.4 for an additional four
(4) months. The Executive shall also be entitled to the prorated portion of any
bonus or stock options that have been declared by the Board of Directors of the
Company but which are unpaid at the time of termination.
5.5 The Executive may terminate his employment by written
notice to the Board of Directors of the Company, under circumstances where the
Company has committed a material breach of its obligations under this Agreement
and such termination shall be effective if such breach continues for a period of
thirty (30) days following such notice.
5.6 If the Executive elects to terminate this Agreement as set
forth in Section 5.5, Executive shall be entitled to receive as severance pay
(in addition to any compensation then due and payable to Executive pursuant to
Article 3 hereof through the date of termination) an amount equal to four (4)
months of his Base Compensation which shall be calculated based on his Base
Compensation on the date of termination. The Executive shall also continue to
receive his automobile reimbursement under Paragraph 3.4 for an additional four
(4) months.
6. Vacation Policy.
The Executive shall receive three (3) weeks paid vacation for
each year of Term. Notwithstanding anything else herein, if Executive is
terminated for any reason, he shall receive compensation for the pro-rated
portion of any unused vacation time that he has accrued. Vacation leave may not
be carried forward to any subsequent year unless the Executive has been
requested to delay his vacation due to business circumstances, as conclusively
determined in good faith by the Board of Directors of the Company.
7. Covenants and Representations.
(a) The Executive has not, and unless authorized or instructed
in writing by the Board of Directors of the Company the Executive shall not,
except as required in the conduct of the Company's business, use or disclose to
others, any of the Company's inventions or discoveries or its secret or
confidential information, knowledge or data (oral, written, or in
machine-readable form) which the Executive may have obtained or will obtain
during the course of or in connection with the Executive's employment,
including, without limitation, such inventions, discoveries, information,
knowledge, know-how or data relating to machines, equipment, products, services,
systems, software, research and/or development, designs, compositions, formulae,
processes, manufacturing procedures or business methods, information relating to
present and prospective marketing, sales and advertising programs and agreements
with representatives or prospective representatives of the Company, present or
prospective sources of supply or any other business arrangements of the Company,
including but not limited to, customers, customer lists, costs, prices and
earnings, whether or not developed by the Executive, by others in the Company or
obtained by the Company from third parties, and irrespective of whether or not
such inventions, discoveries, information, knowledge, know-how or data have been
identified by the Company as secret or confidential, unless and until, and then
only to the extent that, such inventions, discoveries, information, knowledge,
know-how or data become available to the public otherwise than by the
Executive's act or omission.
(b) (i) The Executive agrees to disclose immediately to the
Company or any persons designated by it and to assign to the Company at its
option, or its successors or assigns, all inventions made, discovered, conceived
or first reduced to practice by the Executive, solely or jointly with others, at
any time during the time while employed by the Company which inventions are
made, discovered or conceived either in the course or such employment or within
one (1) year of termination of his employment (whether such termination of
employment is voluntary or involuntary, such invention shall be deemed to have
arisen out of and been made, discovered or conceived by the Executive during his
employment by the Company, unless established to have been made, discovered or
conceived after the termination of such employment), or with the use of the
Company's time, material, facilities or funds, or which relate to or are
suggested by any subject matter with which the Executive's employment by the
Company may bring the Executive into contact, or which relate to any
investigations or obligations undertaken by the Company; and the Executive
hereby grants and agrees to grant the right to the Company and its nominees to
obtain, for its own benefit and in its own name (entirely at its expense)
patents and patent applications including original, continuation, reissue,
utility and design patents, and applications, patents of addition, confirmation
patents, registration patents, xxxxx patents, utility models, etc., and all
other types of patents and the like, and all renewals and extensions of any of
them for those inventions in any and all countries; and the Executive shall
assist the Company without further charge during the period of the Executive's
employment and thereafter, through counsel designated by the Company to execute,
acknowledge, and deliver all such further papers, including assignments,
applications for Letters Patent (of the United States or of any foreign
country), oaths, disclaimers or other instruments and to perform such further
acts, including giving testimony or furnishing evidence in the prosecution or
defense of appeals, interferences, suits and controversies relating to any of
the aforesaid inventions, applications and patents as may be deemed necessary by
the Company or its nominees to effectuate the vesting or perfecting in the
Company or its nominees of all right, title and interest in and to said
inventions, applications and patents.
(ii) The Executive agrees to disclose immediately to
the Company or any persons designated by it and to assign to the Company, at its
option, or its successors or assigns, all works of authorship, including all
writings, manuals, computer programs, software and hardware, written or created
by the Executive solely or jointly with others, at anytime during the course of
his employment by the Company, which works are made or conceived either in the
course of such employment, or with the use of the Company's time, material,
facilities or funds, or which relate to or are suggested by any subject matter
with which the Executive's employment by the Company may bring the Executive
into contact or which relate to any investigations or obligations undertaken by
the Company; and the Executive hereby agrees that all such works are works made
for hire, of which the Company is the author and the beneficiary of all rights
and protections afforded by the law of copyright in any and all countries; and
the Executive will assist the Company without further charge during the term of
his employment and thereafter, through counsel designated by the Company, to
execute, acknowledge, and deliver all such further papers, including
assignments, applications for copyright registration (in the United States or in
any foreign country), oaths, disclaimers or other instruments, and to perform
such further acts, including giving testimony or furnishing evidence in the
prosecution or defense of appeals, interferences, suits and controversies
relating to any of the aforesaid works, as may be deemed necessary by the
Company or its nominees to effectuate the vesting or perfecting in the Company
or its nominees of all rights and interest in and to said works and copies
thereof, including the exclusive rights of copying and distribution.
(iii) Executive agrees to submit to the Board of
Directors of the Company, within a reasonable length of time prior to
dissemination, the text of any speech, professional paper, article or similar
communication created by Executive which relates to the Company's present or
future business or research and development endeavors. The Company will
determine whether any Confidential Information is contained in the
communication, and will notify Executive if the dissemination of the
communication is permitted under the terms of this Agreement.
(c) The Executive shall not during the
"Non-Competition Period," (i) engage in business of the type conducted (or
proposed to be conducted) by the Company or its subsidiaries or solicit business
of the type conducted (or proposed to be conducted) by the Company from any
person, firm or entity which was a licensee, customer or prospective customer of
the Company during the period of his employment hereunder or induce or attempt
to induce any such licensee or customer of the Company to reduce its business
with the Company, solicit (or attempt to solicit) any employees of the Company
to leave the employ of the Company or offer or cause to be offered employment to
any person who was employed by the Company during the period of his employment
hereunder; (ii) engage in, represent or be connected with, as a shareholder,
member of a limited liability entity, partner or owner, or as an officer,
director, employee, sales representative, proprietor, consultant, associate,
agent, co-venturer, investment adviser or otherwise, any business or activity
competing with the business of the Company or its subsidiaries or affiliates or
any part thereof as conducted by them (or proposed to be conducted) during the
Term. The term "Non-Competition Period" as used herein means a period commencing
on the date hereof and ending three (3) years after the end of the Term. For
purposes of determining whether the Executive is permitted to be a shareholder
of a corporation, the Executive's ownership of less than 5% of the issued and
outstanding securities of a company whose securities are publicly-traded in any
U.S. or non-U.S. securities exchanges shall be permitted.
(d) All computer software, computer programs, source
codes, object codes, magnetic tapes, printouts, samples, notes, records,
reports, documents, customer lists, photographs, catalogs and other writings,
whether copyrightable or not, relating to or dealing with the Company's business
and plans, and those of others entrusted to the Company which are prepared or
created by the Executive or which may come into his possession at any time
during his employment, are the property of the Company, and upon termination of
his employment, the Executive agrees to return all such computer software,
computer programs, source codes, object codes, magnetic tapes, printouts,
samples, notes, records, reports, documents, customer lists, photographs,
catalogs and writings and all copies thereof to the Company.
(e) If any of the rights or restrictions contained or
provided for in this Agreement shall be deemed by a court of competent
jurisdiction to be unenforceable by reason of the extent, duration or
geographical scope, the parties hereto contemplate that the court shall reduce
such extent, duration, geographical scope and enforce this Agreement in its
reduced form for all purposes in the manner contemplated hereby. Should any of
the provisions of this Agreement require judicial interpretation, it is agreed
that the court interpreting or construing this Agreement shall not apply a
presumption that any provision shall be more strictly construed against one
party by reason of the rule of construction that a document is to be construed
more strictly against the party who itself or through its agents prepared the
same, it being agreed that both parties and their respective agents have
participated in the preparation of this Agreement.
8. Injunction.
It is recognized and hereby acknowledged by the Executive that
a breach or violation by the Executive of any of the covenants or agreements
contained in this Agreement may cause irreparable harm and damage to the Company
hereto, the monetary amount of which may be virtually impossible to ascertain.
As a result, the Executive recognizes and acknowledges that the Company shall be
entitled to an injunction, without posting any bond or security in connection
therewith, from any court of competent jurisdiction enjoining and restraining
any breach or violation of any of the restrictive covenants contained in Article
7 of this Agreement by the Executive or his associates, partners or agents,
either directly or indirectly, and that such right to injunction shall be
cumulative and in addition to whatever other rights or remedies the Company may
possess. Nothing contained in this Article 8 shall be construed to prevent the
Company from seeking and recovering from the Executive damages sustained as a
result of any breach or violation by the Executive of any of the covenants or
agreements contained in this Agreement, and that in the event of any such
breach, the Company shall avail itself of all remedies available both at law and
at equity.
9. Compliance with Other Agreements.
The Executive represents and warrants to the Company that the
execution of this Agreement by him and his performance of his obligations
hereunder will not, with or without the giving of notice, the passage of time or
both, conflict with, result in the breach of any provision of or the termination
of, or constitute a default under, any agreement to which the Executive is a
party or by which the Executive is or may be bound.
10. Miscellaneous.
10.1 Notices. Any notice or other communication to a party
under this Agreement shall be in writing, and if by use of the mail shall be
considered given when mailed by certified mail, return receipt requested, to the
party at the following address or at such other address as the party may specify
by notice to the other in the manner provided for herein:
(a) If to the Company:
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: President
with a copy to:
Ruskin, Moscou, Xxxxx & Faltischek, P.C.
000 Xxx Xxxxxxx Xxxx
Xxxxxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxx, Esq.; and
(b) If to the Executive:
00 Xxxxxx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
with a copy to:
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10.2 Benefit. This Agreement shall be binding upon and inure
to the benefit of the respective parties hereto and their legal representatives,
successors and assigns. Insofar as the Executive is concerned this Agreement,
being personal, cannot be assigned.
10.3 Validity. The invalidity or unenforceability of any
provisions hereof shall in no way affect the validity or enforceability of any
other provision.
10.4. Entire Agreement. The Agreement constitutes the entire
Agreement between the parties, and supersedes all existing agreements between
them, with the sole exception of the ___________ Confidentiality Agreement,
dated ___________, which shall remain in full force and effect and which has
been attached hereto. It may only be changed or terminated by an instrument in
writing signed by both parties. The covenants of the Executive contained in
Article 7 of this Agreement shall survive the termination of this Agreement and
the expiration of the Term.
10.5 New York Law to Govern. This Agreement shall be governed
by, construed and interpreted in accordance with the laws of the State of New
York.
10.6 Corporate Action. The execution and delivery of this
Agreement by the Company has been authorized and approved by all requisite
corporate action.
10.7 Waiver of Breach. The failure of a party to insist on
strict adherence to any term of this Agreement on any occasion shall not be
considered a waiver or deprive that party of the right thereafter to insist upon
strict adherence to that term or any term of this Agreement. Any waiver hereto
must be in writing.
10.8 Counterparts. This Agreement may be executed in one (1)
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. 10.9 Paragraph
Headings. Paragraph headings are inserted herein for convenience only and are
not intended to modify, limit or alter the meaning of any provision of this
Agreement. 10.10 Survival. All provisions hereof which by their nature shall
survive the termination of the Executive's employment, including, without
limitation, the provisions in Section 7, shall survive the termination of the
Executive's employment.
IN WITNESS WHEREOF, the parties hereto have set their hands and
executed this Agreement as of the day and year first above written.
XXXXXX TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxx, Chief Executive Officer
/s/ Xxxxxxx X. Xxxxxxxxx
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XXXXXXX X. XxXXXXXXX
