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EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT made as of the 1st day of July, 1994, between
DAVID M. SAMPLE, of Ridgefield, Connecticut (hereinafter referred to as the
"Employee") and IMRS Operations Inc. d/b/a IMRS INC., a Delaware corporation
with offices at 777 Long Ridge Road, Stamford, Connecticut 06902 (hereinafter
referred to as the "Corporation").
WHEREAS, the Corporation desires to employ the Employee, and the
Employee desires to serve as an employee of the Corporation on the terms and
conditions hereinafter set forth.
NOW THEREFORE, in consideration of the mutual covenants and promises of
the parties hereto, the Corporation and the Employee agree as follows:
1. EMPLOYMENT: The Corporation hereby agrees to employ the Employee
as Senior Vice President to perform managerial and executive functions of the
Corporation, specific responsibilities to include North American sales and all
international operations, and the Employee hereby agrees to perform such
services for the Corporation on the terms and conditions hereinafter stated,
subject to the directives of the Board of Directors of the Corporation.
2. TERM OF EMPLOYMENT: The term of this Agreement shall begin on
July 1, 1994 and shall continue in full force and effect until June 30, 1997;
provided, however, that this Agreement shall be automatically renewed on a
year-to-year basis thereafter unless terminated by either party on at least six
(6) months prior written notice during any given year, unless sooner terminated
as provided herein. Notwithstanding the foregoing, the Corporation may
terminate this Agreement at any time without cause upon thirty (30) days
written notice to Employee in which event the Corporation shall pay severance
to Employee pursuant to Section 8(g) hereof.
3. COMPENSATION: During the term of this Agreement, for all
services rendered by Employee under this Agreement, the Corporation shall pay
the Employee such compensation (including base salary and any bonus) as shall
be mutually agreed upon and set forth in a written compensation schedule (the
"Compensation Schedule") signed by the Employee and the Corporation's President
and Chief Executive Officer. The Compensation Schedule shall be agreed upon
and executed not later than June 30 of each year during the term hereof and
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shall be effective for the immediately succeeding fiscal year. The Employee's
compensation may be increased by the Board of Directors from time to time in
its sole and absolute discretion.
4. Stock Option:
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All options to purchase shares of the Common Stock of the Corporation's
parent, IMRS Inc. ("Parent") previously granted to the Employee by agreement
between the Parent and the Employee, under the 1991 Stock Plan of the Parent
or otherwise, shall continue in full force and effect in accordance with their
respective terms and conditions notwithstanding any provision of this
Agreement.
5. Fringe Benefits:
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(a) During the term hereof, commencing on the day and year first
above written, the Corporation shall (i) provide the Employee and his
immediate family with medical and hospitalization insurance substantially
similar to that provided for the other executive personnel of the Corporation
in similar management positions, (ii) reimburse the Employee and his immediate
family for dental expenses incurred each year in excess of $200, including but
not limited to orthodontics for the Employee's children under the age of
twenty- one (21) years only, provided that the aggregate amount of such
reimbursement in any year shall not exceed $4,000 (such reimbursement shall be
in addition to any dental insurance provided to the Employee and his immediate
family under any dental plan from time to time maintained by the Corporation),
(iii) reimburse the Employee for expenses incurred in connection with the
purchase by Employee of fitness or exercise equipment or membership .in a
fitness or exercise program reasonably acceptable to the Corporation in an
aggregate amount equal to the lesser of (x) seventy-five (75%) percent of all
such expenses each year and (y) $500 each year, (iv) reimburse the Employee
for the reasonable and customary cost of an annual physical examination, (v)
provide to the Employee dependent group medical coverage upon terms and
conditions satisfactory to the Corporation without charge to the Employee,
(vi) if the Employee is not covered by group long-term disability insurance
in an amount equal to at least 100% of Employee's base salary, the Corporation
will provide to Employee additional long-term disability insurance in an
amount reasonably determined by the insurer
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based on the Employee's total earned income and personal financial
circumstances, the cost of such coverage to be reported by the Corporation as
compensation for income tax purposes on the employee's Form W-2 each year, and
(vii) life insurance in an amount equal to three times (3X's) Employee's annual
base salary.
(b) The Employee is authorized to incur on behalf of the
Corporation only such reasonable expenses (including travel and entertainment)
in connection with the business of the Corporation as are in conformity with
the Corporation's published guidelines. The Corporation shall reimburse
Employee for all such reasonable expenses incurred in connection with the
business of the Corporation upon the presentation by the Employee, from time to
time, of an itemized account of such expenditures, which account shall be in
form and substance in conformity with the rules and regulations of the Internal
Revenue Service. Any single expenditure in excess of $5,000 shall require the
prior approval of the Chief Executive Officer or the Chief Financial Officer of
the Corporation.
(c) During the term hereof, the Corporation shall provide Employee with
an automobile expense allowance equal to $600.00 per month.
6. DUTIES AND EXTENT OF SERVICES; Upon the execution of this Agreement
and throughout its term, the Employee shall assume the position of Senior Vice
President for the Corporation and shall undertake all of the duties incident to
such office in addition to rendering all such other management duties as the
Board of Directors may reasonably request. The parties hereto shall take
whatever action is necessary to cause the election or appointment of the
Employee to such position. The Employee shall exert his best efforts and shall
devote his full time and attention to the affairs of the Corporation. During
the term of this Agreement the Employee shall not, directly or indirectly,
alone or as a member of a partnership (in the capacity of a general partner) or
limited liability company (in the capacity of a manager), or as an officer,
director, significant shareholder (i.e., owning or holding beneficially or of
record 5% or more of the voting shares of an entity), or employee of any other
corporation or entity, be engaged in or concerned with any other duties or
pursuits whatsoever for pecuniary gain requiring his personal services without
the prior written consent of the Corporation.
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7. VACATION: During each year of the term of this Agreement, the
Employee shall be entitled to four (4) weeks vacation, the time of which shall
be subject to the prior approval of the Chief Executive Officer of the
Corporation.
8. TERMINATION: Unless renewed as provided herein, the Employee's
employment hereunder shall terminate on June 30, 1997, or sooner upon the
occurrence of any of the following events:
(a) The Employee's death;
(b) The termination of the Employee's employment hereunder by the
Corporation, at its option, to be exercised by written notice from the
Corporation to the Employee, upon the Employee's incapacity or inability to
perform his services as contemplated herein for a period of at least sixty (60)
consecutive days or an aggregate of ninety (90) consecutive or non-consecutive
days during any twelve (12) month period during the term hereof due to the fact
that his physical or mental health shall have become impaired so as to make it
impossible or impractical for him to perform the duties and responsibilities
contemplated for him hereunder; or
(c) The termination for cause of the Employee's employment
hereunder by the Corporation, at its option, to be exercised by written notice
from the Corporation to the Employee in the event the Employee is derelict in
his duties or commits any misconduct with respect to the Corporation's affairs
and such dereliction or misconduct shall continue for a period of fifteen (15)
days after the Corporation shall have given the Employee written notice
specifying such dereliction or misconduct, and advising him that the
Corporation shall have the right to terminate his employment hereunder in the
event such misconduct continues through such fifteen (15) day period.
(d) In the event that the Employee commits an act constituting
common law fraud or any crime, which could reasonably be expected to have an
adverse impact on the Corporation, its business or assets.
(e) In the event that the Employee should fail (otherwise than on
account of illness or other incapacity) or refuse to carry out the reasonable
directives of the Board of Directors of the Corporation, and such failure or
refusal shall continue for a period of fifteen
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(15) days after the Corporation shall have given the Employee written notice
specifying such directives and wherein the Employee has failed or refused to
carry out the same, and advising him that the Corporation shall have the right
to terminate his employment hereunder in the event such failure or refusal
continues through such fifeen (15) day period.
(f) Cessation of the Corporation's business.
(g) On thirty (30) days written notice from the Corporation
pursuant to Section 2 hereof. If (i) the Corporation terminates this
Agreement pursuant to Section 2 hereof on thirty (30) days notice without cause
or (ii) there is a Change in Control (as hereinafter defined) that occurs prior
to the expiration or termination of this Agreement and, within twelve (12)
months after the Change in Control, (A) Employee's employment is terminated by
the Corporation otherwise than for the reasons set forth in Sections (8) (a),
(b), (c), (d), (e) and/or (f') hereof or (B) Employee terminates his employment
for Good Reason (as hereinafter defined), then Corporation shall pay to
Employee as severance pay, a total amount equal to (i) his annual base salary,
payable in twelve (12) equal consecutive monthly installments (without
interest) beginning one (1) month after such termination plus (ii) the fringe
benefits described in Section 5(a) for the twelve (12) month period commencing
on the effective date of such termination.
Employee expressly understands that payment of such severance pay and
benefits (or portion thereof if such payments terminate pursuant to the last
sentence of this paragraph) represents liquidated damages in full and final
settlement of any and all amounts owed by Corporation to Employee under this
Agreement or otherwise except for the accrued portion, if any, of any bonus,
any guaranteed additional compensation (including any amounts set forth in
Employee's Compensation Schedule), stock option, commission, vacation or other
benefit to which Employee is expressly entitled pursuant to any formal, written
plan or agreement maintained by the Corporation. Notwithstanding the foregoing,
if Employee obtains full time employment from any person or entity or accepts
an engagement as a self-employed consultant or similar position during
such twelve (12) month period, then, upon commencement of any such
employment or engagement, the severance pay and benefits payable under this
Section 8(g) shall immediately be and be deemed reduced by an amount
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equal to the compensation and/or benefits payable by such other employment or
engagement and the Corporation shall have no further obligation to Employee
under this Agreement or otherwise.
(h) As used in this Agreement, the following terms have the meanings set forth
below:
(i) "Affiliate" of a person means any person directly. or indirectly
controlling, controlled by or under common control with the first
person.
(ii) "Associate" has the meaning ascribed thereto in Rule 12b-2 under the
Exchange Act as in effect on the date hereof.
(iii) "Change in Control" means the occurrence of any of the following
events:
(A) A consolidation, merger, combination or other transaction
between Parent or Corporation, and any other corporation or other
legal entity (other than an Affiliate of Parent or Corporation) in
which shares of common stock of Parent or Corporation are exchanged
for or changed into other stock or securities, cash and/or other
property, if as a result of such transaction less than 20% of the
combined voting power of the common stock (or other securities
entitled to vote generally in the election of directors) of the
surviving or resulting entity is beneficially owned (as hereinafter
defined) by the beneficial owners of the Parent's or Corporation's
common stock as the case may be as of the date hereof ("Current
Shareholders") and the number of persons serving on the Board of
Directors of the surviving or resulting entity who are Affiliates,
Associates, designees or nominees of any single "person" (as defined
in Section 13(d)(3) of the Exchange Act) other than the Current
Shareholders is greater than the number of persons serving on such
Board of Directors who are Affiliates, Associates, designees or
nominees of the Current Shareholders;
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(B) A sale of all or at least 80% (measured by book value as of the
most recent annual or quarterly balance sheet) of the assets of Parent
or Corporation to another corporation or other legal entity (other
than one of the Current Shareholders or any Affiliate of Parent or
Corporation); and
(C) A sale or other disposition of shares of common stock of Parent
or Corporation by the Current Shareholders to any Corporation or other
legal entity (other than one of the Current Shareholders or any
Affiliate of Parent or Corporation) as a result of which less than 20%
of the then-outstanding common stock of Parent or Corporation is
beneficially owned (as hereinafter defined) by the Current
Shareholders and the number of persons serving on Parent's or
Corporation's Board of Directors who are Affiliates, Associates,
designees or nominees of any single "person" (as defined in Section
13(d)(3) of the Exchange Act) other than the Current Shareholders is
greater than the number of persons serving on Parent's or
Corporation's Board of Directors who are Affiliates, Associates,
designees or nominees of the Current Shareholders.
Beneficial ownership will be determined by applying the definition set
forth in Rule 13d-3 under the Exchange Act as in effect on the date
hereof. Also, for purposes of this Agreement, any person who, on the
date on which a Change in control occurs, is serving on Parent's or
Corporation's Board of Directors will deemed to be an Affiliate,
Associate, designee or nominee of the Current Shareholders after the
Change in Control for as long as such person serves as a director of
Parent or Corporation or of any entity that survives or results from a
transaction described in Section 8(h)(iii).
(iv) "Corporation" includes any successor to all or substantially all of
the business or assets of the Corporation.
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(v) "Exchange Act" means the Securities Exchange Act of 1934, as amended
form time to time.
(vi) "Good Reason" means that, following a Change in Control and without
Employee's written consent, (A) there has been a material and
significant adverse change in the nature or scope of Employee's
authority, duties or responsibilities in effect immediately prior to
the Change in Control; (B) there has been a reduction in Employee's
annual base salary in effect immediately prior to the Change in
Control or an adverse change in Employee's total compensation such
that Employee's compensation and benefits in the aggregate are not
materially comparable to his aggregate compensation and benefits in
effect immediately prior to the Change in Control; or (C) the
principal place of Employee's employment is relocated to a place that
is more than 25 miles from the principal place of Employee's
employment immediately prior to the Change in Control or Employee is
required to be away from his office in the course of discharging his
duties and responsibilities materially and significantly more than
was required prior to the Change in Control.
In the event of any termination (other than by the Corporation without
cause on thirty (30) days notice pursuant to Section 2), the Corporation shall
pay to the Employee such portion of his annual base salary payable and any
additional accrued guaranteed compensation set forth in his Compensation
Schedule to the date such termination becomes effective (reduced by any amount
payable pursuant to any disability insurance policies), and thereafter the
Employee shall have no claim for any further compensation hereunder; provided,
however, that in the event of the Employee's death, his death shall be deemed
to have occurred on the last day of the month in which he dies. Upon any
termination Employee shall also receive all the benefits to which he is
entitled under the Consolidated Omnibus Budget Reconciliation Act ("COBRA"),
provided that if the Employee is entitled to receive severance and fringe
benefits described in Section 8(g), COBRA benefits shall commence at the
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expiration of the twelve (12) month (or such shorter period) as is provided in
such Section.
9. RESTRICTIONS ON THE EMPLOYEE: During the period commencing on the
date hereof and ending two (2) years after the termination of the Employee's
employment by the Corporation for any reason, the Employee shall not directly
or indirectly induce or attempt to induce any of the employees of the
Corporation to leave the employ of Corporation. If this Agreement is terminated
by the Corporation pursuant to Section 2 hereof, the foregoing two (2) year
period shall be reduced to one (1) year. -
10. COVENANT NOT TO COMPETE: During the period commencing on the date
hereof, and ending two (2) years after the termination of the Employee's
employment for any reason, the Employee shall not, except as a passive investor
in publicly held companies, engage in, or own or control any interest in, or
act as principal, director, officer or employee of, or consultant to, any firm
or corporation which is in competition with the Corporation or its Parent. If
this Agreement is terminated by the Corporation pursuant to Section 2 hereof,
the foregoing two (2) year period shall be reduced to one (1) year.
11. Proprietary Information:
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(a) For purposes of this Agreement, "proprietary information" shall
mean any proprietary information relating to the business of the Corporation or
its Parent or any entity in which the Corporation or its Parent has a
controlling interest that has not previously been publicly released by duly
authorized representatives of the Corporation and shall include (but shall not
be limited to) information encompassed in all proposals, marketing and sales
plans, financial information, costs, pricing information, computer programs
(including without limitation source code, object code, algorithms and models),
customer information, customer lists, and all methods, concepts, know-how or
ideas in or reasonably related to the business of Corporation or any entity in
which the Corporation has a controlling interest. The Employee agrees to regard
and preserve as confidential all proprietary information, whether he has such
information in his memory or in writing or other tangible or intangible form.
The Employee will not, without written authority from the Corporation to do so,
directly or indirectly, use for his benefit or purposes, nor disclose to
others, either during the term of his employment hereunder or thereafter, any
proprietary information except as required by the conditions of
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his employment hereunder or pursuant to court order (in which case Employee
shall give the Corporation prompt written notice [not less than 24 hours] so
that the Corporation may seek a protective order or other appropriate remedy
and/or waive compliance with the provisions of this Agreement. The Employee
agrees not to remove from the premises of the Corporation or any subsidiary or
affiliate of the Corporation, except as an employee of the Corporation in
pursuit of the business of the Corporation or any of its subsidiaries,
affiliates or any entity in which the Corporation has a controlling interest,
or except as specifically permitted in writing by the Corporation, any document
or object containing or reflecting any proprietary information. The Employee
recognizes that all such documents and objects, whether developed by him or by
someone else, are the exclusive property of the Corporation. Proprietary
information shall not include information which is presently in the public
domain or which comes into the public domain through no fault of the Employee
or which is disclosed to the Employee by a third party lawfully in possession
of such information with a right to disclose same.
(b) All proprietary information and all of the EmpIoyee's interest
in trade secrets, trademarks, computer programs, customer information, customer
lists, employee lists, products, procedure, copyrights, patents and
developments hereafter to the end of the period of employment hereunder
developed by the Employee as a result of, or in connection with, his employment
hereunder, shall belong to the Corporation; and without further compensation,
but at the Corporation's expense, forthwith upon request of the Corporation,
Employee shall execute any and all such assignments and other documents and
take any and all such other action as Corporation may reasonably request in
order to vest in Corporation all the Employee's right, title and interest in
and to all of the aforesaid items, free and clear of liens, charges and
encumbrances.
(c) The Employee expressly agrees that the covenants set forth in
Sections 9, 10 and 11 of this Agreement are being given to Corporation in
connection with the employment of the Employee by Corporation and that such
covenants are intended to protect Corporation against the competition by the
Employee, within the terms stated, to the fullest extent deemed reasonable and
permitted in law and equity. In the event that the foregoing
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limitations upon the conduct of the Employee are beyond those permitted by law,
such limitations, both as to time and geographical area, shall be, and be
deemed to be, reduced in scope and effect to the maximum extent permitted by
law.
12. INJUNCTIVE RELIEF: The Employee acknowledges that the injury to
the Corporation resulting from any violation by him of any of the covenants
contained in this Agreement will be of such a character that it cannot be
adequately compensated by money damages, and, accordingly, the Corporation may,
in addition to pursuing its other remedies, obtain an injunction from any court
having jurisdiction of the matter restraining any such violation.
13. REPRESENTATION OF EMPLOYEE: The Employee represents and warrants
that neither the execution and delivery of this Agreement nor the performance
of his duties hereunder violates the provisions of any other agreement to which
he is a party or by which he is bound.
14. PARTIES; NON-ASSIGNABILITY: As used herein, the term the
"Corporation" shall mean and include the Corporation, its Parent and any
subsidiary thereof and any successor thereto unless the context indicates
otherwise. Any assignment of this Agreement shall be subject to the provisions
of Section 8(g). This Agreement and all rights hereunder are personal to the
Employee and shall not be assignable by him and any purported assignment shall
be null and void and shall not be binding on the Corporation.
15. ENTIRE AGREEMENT: This Agreement contains the entire agreement
between the parties hereto with respect to the transactions contemplated herein
and supersedes all previous representations, negotiations, commitments, and
writing with respect thereto, including, but not limited to, the Employment
Agreement between the Employee and the Corporation dated as of October 1, 1990
provided, however, that the option to purchase the Corporation's Common Stock
contained in such agreement, as amended, shall survive the termination of said
Employment Agreement.
16. AMENDMENT OR ALTERATION: No amendment or alteration of the terms
of this Agreement shall be valid unless made in writing and signed by all of
the parties hereto.
17. CHOICE OF LAW: This Agreement shall be governed by the laws of
the State of
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Connecticut.
18. ARBITRATION: Any controversy, claim, or breach arising out of or
relating to this Agreement or the breach thereof shall be settled by
arbitration in Stamford, Connecticut in accordance with the rules of the
American Arbitration Association and the judgment upon the award rendered
shall be entered by consent in any court having jurisdiction thereof.
19. NOTICES: Any notices required or permitted to be given under this
Agreement shall be sufficient if in writing, and if sent by registered mail to
the residence of the Employee, or to the principal office of the Corporation,
respectively.
20. WAIVER OF BREACH: The waiver by any party hereto of a breach of
any provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach by any of the parties hereto.
21. BINDING EFFECT: The terms of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective personal
representatives, heirs, administrators, successors, and permitted assigns.
22. GENDER: Pronouns in any gender shall be construed as masculine,
feminine, or neuter as the context requires in this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
As to Section 4 only: CORPORATION:
IMRS Operations Inc. d/b/a
IMRS INC. IMRS INC.
By /s/ JAMES PERAKIS By /s/ JAMES PERAKIS
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James Perakis, Its James Perakis, Its
President and Chief President and Chief
Executive Officer Executive Officer
EMPLOYEE:
/s/ DAVID M. SAMPLE
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David M. Sample