EXHIBIT 10.33
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement"), dated as of January 9,
2004 between CORE TECHNOLOGY SERVICES, INC., a corporation organized under the
laws of the State of Delaware (the "Company"), and XXXX X. XXXXXX ("Executive").
WHEREAS, Executive is experienced in establishing and maintaining the
operations of businesses engaged in the delivery of managed services and network
solutions;
WHEREAS, Executive desires to provide services to the Company and the
Company desires to retain the services of Executive;
WHEREAS, the Company and Executive desire to formalize the terms and
conditions of Executive's employment with the Company.
NOW, THEREFORE, the Company and Executive hereby agree as follows:
1. EMPLOYMENT.
1.1. GENERAL. The Company hereby employs Executive in the capacity
of President and Chief Operating Officer of the Company or in such other
executive position as may be mutually agreed upon by Executive and the Company.
Executive hereby accepts such employment, upon the terms and subject to the
conditions herein contained.
1.2. DUTIES. During the Executive's employment with the Company,
Executive will report directly to the Company's Chief Executive Officer ("CEO")
or such other person as the CEO shall designate. Executive will be responsible
for those duties consistent with Executive's position as may from time to time
be assigned to or requested of Executive by the CEO or the Board of Directors of
the Company (the "Board"), including duties related to the Company's parent or
affiliated companies. Executive shall perform such responsibilities faithfully
and effectively. Executive shall conduct all of his activities in a manner so as
to maintain and promote the business and reputation of the Company.
1.3. FULL-TIME POSITION. Executive, during the Term, will devote
all of his business time, attention and skills to the business and affairs of
the Company.
1.4 CERTIFICATIONS. Whenever the Chief Executive Officer of the
Company or the Chief Executive Officer of the Company's parent
Access Integrated Technologies, Inc. ("AccessIT") is required by law, rule or
regulation or requested by any governmental authority or by the Company's or
AccessIT's auditors to provide certifications with respect to the Company's or
AccessIT's financial statements or filings with the Securities and Exchange
Commission or any other governmental authority, Executive shall sign such
certifications as may be reasonably requested by the Chief Executive Officer of
the Company, the Chief Executive Officer of AccessIT and/or the Company, with
such exceptions as Executive deems necessary to make such certifications
accurate and not misleading.
2. COMPENSATION AND BENEFITS.
2.1. BASE SALARY. The Company shall pay to Executive as full
compensation for any and all services rendered in any capacity during the term
of his employment under this Agreement, an annualized base salary of $100,000
("Base Salary"), subject to increases, if any, as the Board shall determine, in
its sole discretion. Executive's Base Salary shall be payable in accordance with
the regular payroll practices of the Company, as in effect from time to time.
2.2. ADDITIONAL COMPENSATION. Executive shall have no guaranteed
bonus. Any bonus payable to Executive shall be determined by the Board in its
sole discretion. In addition, Executive shall be entitled to participate in such
bonus programs as the Company may from time to time offer or provide to
executives of the Company at similar levels.
2.3. EXECUTIVE BENEFITS.
2.3.1. EXPENSES. The Company will reimburse Executive for
expenses he reasonably and actually incurs in connection with the performance of
his duties (including pre-approved business travel and entertainment
expenses), all in accordance with the Company's policies with respect thereto,
as in effect from time to time.
2.3.2. BENEFIT PLANS. As long as Executive remains a full-time
employee of the Company, Executive shall be entitled to participate in such
executive benefit plans and programs as the Company may from time to time offer
or provide to executives of the Company at similar levels.
2.3.3. VACATION. Executive shall be eligible for three (3)
weeks of paid vacation per year pro-rated for any partial year. All vacation
must be used by December 31 of each year of Executive's employment at which time
any unused vacation shall expire and Executive shall no longer be entitled to
such vacation. No compensation shall be payable in respect of any unused
vacation days.
2.4. EMPLOYMENT TERM. Executive's employment by the Company
pursuant to this Agreement shall commence on the date of this Employment
Agreement and, except as provided in Section 3.1 hereof, will continue until
March 31, 2007 (the "Term"). Thereafter, this Agreement shall be automatically
extended for successive one-year terms unless notice shall be given in writing
by either of the Company or Employee at least ninety (90) days prior to the end
of such term (as it may be extended) that such party desires to terminate this
Agreement.
3. TERMINATION OF EMPLOYMENT.
3.1. EVENTS OF TERMINATION. Executive's employment with the Company
will terminate upon the occurrence of any one or more of the following events:
3.1.1. DEATH. In the event of E xecutive's death, Executive's
employment will terminate on the date of death.
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3.1.2. DISABILITY. In the event of Executive's Disability (as
hereinafter defined), the Company will have the option to terminate Executive's
employment by giving a notice of termination to Executive. The notice of
termination shall specify the date of termination, which date shall not be
earlier than thirty (30) days after the notice of termination is given. For
purposes of this Agreement, "Disability" means the inability of Executive to
substantially perform his duties hereunder for either 90 consecutive days or a
total of 120 days out of 365 consecutive days as a result of a physical or
mental illness, all as determined in good faith by the Board.
3.1.3. TERMINATION BY THE COMPANY FOR CAUSE. The Company may,
at its option, terminate Executive's employment for "Cause" (as defined below)
as determined in good faith by a majority of the Board (exclusive of Executive
if Executive shall then serve as a member of the Board) by giving a notice of
termination to Executive specifying the reasons for termination and if Executive
shall fail to cure same within thirty (30) days of him receiving the notice of
termination his Employment shall terminate at the end of such thirty (30) day
period; PROVIDED, however, that in the event the Board in good faith determines
that the underlying reasons giving rise to such determination cannot be cured
within such thirty (30) day period, then such cure period shall not apply and
Executive's employment shall terminate on the date of Executive's receipt of the
notice of termination. "Cause" shall mean (i) Executive's conviction of, guilty
or no contest plea to, or confession of guilt of, a felony or other crime
involving moral turpitude; (ii) an act or omission by Executive in connection
with his employment that constitutes gross negligence, malfeasance, willful
misconduct or other conduct that is materially injurious to the Company or any
of its affiliates; (iii) a material breach by Executive of this Agreement; (iv)
a continuing failure to perform such duties as are assigned to Executive by the
Company in accordance with this Agreement, other than a failure resulting from a
Disability as defined in Section 3.1.2 hereof; (v) Executive's knowingly taking
any action on behalf of the Company or any of its affiliates without appropriate
authority to take such action; (vi) Executive's knowing taking any action in
conflict of interest with the Company or any of its affiliates given Executive's
position with the Company.
3.2. CERTAIN OBLIGATIONS OF THE COMPANY FOLLOWING TERMINATION OF
THE EXECUTIVE'S EMPLOYMENT. Following the termination of Executive's employment
under the circumstances described below, the Company shall pay to Executive in
accordance with its regular payroll practices the following compensation and
provide the following benefits in full satisfaction and final settlement of any
and all claims and demands that Executive now has or hereafter may have
hereunder against the Company or any of its affiliates:
3.2.1. DEATH; DISABILITY. In the event that Executive's
employment is terminated by reason of Executive's death or Disability, Executive
or his estate, as the case may be, shall be entitled to the following payments:
(i) continuing payments of Base Salary through the date
of death of Executive or the date of termination due to Executive's Disability;
(ii) any additional compensation (including compensation
pursuant to Section 2.2 and reimbursement pursuant to Section 2.3.1 hereof)
earned but not yet paid with respect to the calendar year of termination, or, if
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based on annual performance, annualizing such performance to the date of death
of Executive or the date of termination due to Executive's Disability and pro
rating such additional compensation for the portion of the calendar year prior
to such termination, payable at the time such additional compensation would have
been payable but for such death or Disability; and
(iii) The Company shall pay to Executive or his estate,
as the case may be, the amounts and shall provide all benefits generally
available under the employee benefit plans, and the policies and practices of
the Company, determined in accordance with the applicable terms and provisions
of such plans, policies and practices, in each case, as accrued to the dateof
termination or otherwise payable as a consequence of Executive's death or
Disability.
3.2.2. TERMINATION BY THE COMPANY FOR CAUSE. In the event
Executive's employment is terminated by the Company pursuant to Section 3.1.3
hereof, Executive shall be entitled to no further compensation or other benefits
under this Agreement except that portion of any unpaid Base Salary accrued and
earned by him hereunder up to and including the effective date of such
termination in accordance with Section 3.1.3 hereof.
3.3. NATURE OF PAYMENTS. All amounts to be paid by the Company to
Executive pursuant to this Section 3 are considered by the parties to be
severance payments. In the event such payments are treated as damages, it is
expressly acknowledged by the parties that damages to Executive for termination
of employment would be difficult to ascertain and the above amounts are
reasonable estimates thereof.
4. CONFIDENTIALITY; NONSOLICITATION; NON-COMPETE.
Executive and Company shall enter into a Confidentiality,
Nonsolicitation and Noncompete Agreement, the form of which is attached as
Exhibit A hereto. The terms of that agreement and the duties and obligations
thereunder shall be a part of this Agreement and Executive agrees to perform all
of his duties and obligations thereunder.
5. INVENTION DISCLOSURE AND ASSIGNMENT.
5.1 REPORTS DURING THE TERM. During the Term, Executive agrees to
report to the Company fully and promptly in writing, all intellectual property
(including inventions, ideas and discoveries, patentable or unpatentable, trade
secrets and copyrightable works) that is made, developed, conceived or reduced
to practice by Executive either solely or jointly with others resulting from or
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arising out of the work performed by Executive, within the scope of his
responsibilities, or with the Company's or its affiliates facilities, equipment
or supplies, or in connection with or that results from his use or knowledge of
confidential or trade secret information that is proprietary to the Company or
its affiliates.
5.2 REPORTS AFTER THE TERM. Upon termination of Executive's
employment with the Company, Executive agrees to report to the Company fully and
promptly in writing, all intellectual property (including inventions, ideas and
discoveries, patentable or unpatentable, trade secrets and copyrightable works)
that is reduced to practice by Executive either solely or jointly with others,
reasonably resulting from the work performed by Executive during employment by
the Company within the scope of his or her responsibilities, or with the
Company's or its affiliates facilities, equipment or supplies, or in connection
with or which results from his or her use or knowledge of confidential or trade
secret information which is proprietary to the Company.
5.3 ASSIGNMENT TO THE COMPANY. Executive agrees to hold all such
intellectual property described in this Section 5 for the benefit of the Company
and not to assign nor attempt to assign any rights therein to anyone other than
the Company. Executive agrees to assign to the Company upon its request and
without further compensation, all rights, title and interest in such
intellectual property described in this Section 5 to which the Company is
entitled as set forth in this Section 6, at any time whether during or
subsequent to the Term. Executive shall execute and deliver in a prompt manner
all proper documents provided by the Company and presented to Executive,
including those necessary and attendant to domestic and foreign patent
applications including, but not limited to, divisional, continuation,
continuation-in-part, substitute and/or reissue applications, and all other
instruments for the perfection of intellectual property rights including related
registrations of issued patents, design patent applications and registrations,
applications for utility models and industrial models and copyrights, as well as
formal assignments thereof. The Company will pay all reasonable out-of-pocket
expenses incurred by Executive in perfecting the Company's rights as they relate
to assisting the Company in all proper ways in the acquisition and preservation
of the rights to such intellectual property as described in this subsection 5.3.
5.4 NO EXCEPTIONS. Executive represents, warrants, acknowledges and
agrees that there are no unpatented inventions, discoveries, ideas or
information currently held by Executive which are to be within the scope of this
agreement.
6. MISCELLANEOUS PROVISIONS.
6.1. SEVERABILITY. If in any jurisdiction any term or provision
hereof is determined to be invalid or unenforceable, (a) the remaining terms and
provisions hereof shall be unimpaired, (b) any such invalidity or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction, and (c) the invalid or
unenforceable term or provision shall, for purposes of such jurisdiction, be
deemed replaced by a term or provision that is valid and enforceable and that
comes closest to expressing the intention of the invalid or unenforceable term
or provision.
6.2. EXECUTION IN COUNTERPARTS. This Agreement may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement (and all signatures
need not appear on any one counterpart), and this Agreement shall become
effective when one or more counterparts has been signed by each of the parties
hereto and delivered to each of the other parties hereto.
6.3. NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed duly given when
delivered by hand, or when delivered if mailed by registered or certified mail
or overnight delivery, postage prepaid, return receipt requested as follows:
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If to the Company, to:
Access Integrated Technologies, Inc.
00 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxx Xxxxxx 00000
Telefax No.: (000) 000-0000
Attention: General Counsel
With a copy to (which shall not constitute notice):
Xxxxxxxxxxx & Xxxxxxxx, LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telefax No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
If to Executive, to:
Xxxx X. Xxxxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
or to such other address(es) as a party hereto shall have designated by like
notice to the other parties hereto.
6.4. AMENDMENT. No provision of this Agreement may be modified,
amended, waived or discharged in any manner except by a written instrument
executed by the Company and Executive.
6.5. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter hereof, and
supersedes all prior agreements and understandings of the parties hereto, oral
or written, with respect to the subject matter hereof.
6.6. APPLICABLE LAW; CONSENT TO JURISDICTION. This Agreement shall
be governed by, and construed in accordance with, the laws of the State of New
York applicable to contracts entered into and to be performed wholly within said
State. Executive and the Company hereby consent to the jurisdiction of the
Federal and State courts located in the City of New York and waive any
objections to such courts based on venue in connection with any claim or dispute
arising under this Agreement. Each of the parties hereto hereby irrevocably
waives any and all right to a trial by jury in any legal proceedings arising out
of or relating to this Agreement.
6.7. HEADINGS. The headings contained herein are for the sole
purpose of convenience of reference, and shall not in any way limit or affect
the meaning or interpretation of any of the terms or provisions of this
Agreement.
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6.8. BINDING EFFECT; SUCCESSORS AND ASSIGNS. Executive may not
delegate his duties or assign his rights hereunder. This Agreement will inure to
the benefit of, and be binding upon, the parties hereto and their respective
heirs, legal representatives, successors and permitted assigns.
6.9. WAIVER, ETC. The failure of either of the parties hereto to at
any time enforce any of the provisions of this Agreement shall not be deemed or
construed to be a waiver of any such provision, nor to in any way affect the
validity of this Agreement or any provision hereof or the right of either of the
parties hereto to thereafter enforce each and every provision of this Agreement.
No waiver of any breach of any of the provisions of this Agreement shall be
effective unless set forth in a written instrument executed by the party against
whom or which enforcement of such waiver is sought, and no waiver of any such
breach shall be construed or deemed to be a waiver of any other or subsequent
breach.
6.10. REPRESENTATIONS AND WARRANTIES. Executive and the Company
hereby represent and warrant to the other that: (a) he or it has full power,
authority and capacity to execute and deliver this Agreement, and to perform his
or its obligations hereunder; (b) such execution, delivery and performance will
not (and with the giving of notice or lapse of time or both would not) result in
the breach of any agreements or other obligations to which he or it is a party
or he or it is otherwise bound; and (c) this Agreement is his or its valid and
binding obligation in accordance with its terms. Executive represents and
warrants that he is under no other obligations, contractual or otherwise, that
could impair his ability to perform his obligations under this Agreement.
Executive hereby acknowledges that he has been advised, prior to the execution
of this Agreement, to seek the advice of legal counsel. Executive hereby further
acknowledges that he has carefully reviewed this Agreement, that he knows and
understands the contents of this Agreement, that he has been given adequate time
to consider whether to execute this Agreement, that he executed this Agreement
knowingly and voluntarily as his own free act and deed, and that this Agreement
was freely entered into without fraud, duress or coercion.
6.11. ENFORCEMENT. If any party institutes legal action to enforce
or interpret the terms and conditions of this Agreement, the prevailing party
shall be awarded reasonable attorneys' fees at all trial and appellate levels,
and the expenses and costs incurred by such prevailing party in connection
therewith.
6.12. CONTINUING EFFECT. Where the context of this Agreement
requires, the respective rights and obligations of the parties shall survive any
termination or expiration of the term of this Agreement.
6.13. EXPENSES. Each party to this Agreement agrees to bear his or
its own expenses in connection with the negotiation and execution of this
Agreement.
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, this Employment Agreement has been executed and
delivered by the parties hereto as of the date first above written.
CORE TECHNOLOGY SERVICES, INC.
By: /s/ A. Xxxx Xxxx
--------------------------------------
Name: A. Xxxx Xxxx
Title: Chief Executive Officer
EXECUTIVE:
/s/ Xxxx X. Xxxxxx
------------------------------------------
Xxxx X. Xxxxxx
