DIGITEC 2000, INC.
EMPLOYMENT AGREEMENT
(FRANK MAGLIATO)
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into effective as of May 1,
1997 (the "Effective Date") by and between DigiTEC 2000, Inc., a Nevada
corporation, with an office at 8 West 38th Street, Fifth Floor, New York, New
York 10018 ("Company"), and Frank Magliato, with an address of 2 Whispering
Pines Road, Hohokus, New Jersey 07423 ("Executive"). The Company requires
execution of this Agreement by Executive as a condition to employing Executive.
RECITALS
Executive is currently employed by the Company as its President and CEO and
serves as Chairman of the Board of Directors of the Company.
Company and Executive desire to enter into this Agreement to provide additional
financial security and benefits to Executive, to encourage Executive to continue
employment with Company, and to enhance the motivation of Executive to increase
the profitability of Company.
In consideration of the mutual covenants herein, and in consideration of the
continuing employment of Executive with Company, the parties agree as follows:
AGREEMENT
1. Duties and Scope of Employment. Company shall employ the Executive in the
position of President and Chief Executive Officer, with such duties and
responsibilities as in effect as of the Effective Date; provided, however,
that the Board of Directors of the Company (the "Board") shall have the
right to revise such responsibilities from time to time as the Board may
deem necessary or appropriate. Such duties and responsibilities shall be
commensurate with Executive's past practices and consistent with his
position as President and Chief Executive Officer. If any such revision
constitutes "Involuntary Termination" as defined in paragraph 5(c) of this
Agreement, the Executive shall be entitled to benefits upon such
Involuntary Termination as provided under this Agreement.
2. Restriction on Outside Business Activities. During employment, Executive
shall devote Executive's full energies, interest, abilities, and
productive time to the performance of duties for Company and shall not,
without Company's prior written consent:
(a) render to others services of any kind, or engage in any other
business activity that would materially interfere with the
performance of Executive's duties under this Agreement;
(b) perform any services, directly or indirectly, whether as an
employee, consultant, independent contractor, for any person or
entity competing, directly or indirectly with Company;
(c) own, directly or indirectly, whether as partner, creditor,
shareholder, or otherwise, any interest in any entity competing,
directly or indirectly, with Company;
(d) promote, participate, or engage in any activity or other business
competitive with Company; compete, directly or indirectly, with any
products or services marketed or offered by Company; or
(e) engage in any activity which could be deemed to be a conflict of
interest.
Nothing herein contained shall prevent or be construed as preventing the
Executive from holding or purchasing five (5%) percent or less of any
class of stock or securities of a corporation which is listed on a
national securities exchange or regularly traded in the over-the-counter
market, or
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making other investments or participating in business ventures not in
competition with the business of the Company, as long as such investments
and business ventures shall not require any significant time during normal
business hours and do not conflict with Executive's duties and obligations
to the Company as provided in this Agreement.
3. Term of Employment. This Agreement shall commence on the Effective Date
and shall continue until the earliest of (a) June 30, 2000, or (b) until
such times as notice of non-renewal or termination of this Agreement is
given in writing by either Company or Executive to the other (the
"Termination Event"). The parties may renew this Agreement in their sole
discretion.
4. Executive's Compensation and Benefits.
(a) Base Salary. Company shall pay a base salary to Executive as noted
below, payable semi-monthly in arrears or at such other intervals as
other employees are paid. Such salary shall be reviewed at least
annually and may be increased from to time, in the sole discretion
of the Board. Base salary to the executive will be as follows:
For the year ended June 30,
1998 $175,000
1999 $200,000
2000 $250,000
(b) Bonus. For each fiscal year while this Agreement is in effect, the
Executive shall be paid a bonus (the "Performance Bonus") equal to
two (2) percent of the Company's adjusted annual net income before
depreciation and amortization interest and income tax, as determined
by the Company's independent auditors in connection with each fiscal
year's audit. Such payment shall be made within thirty (30) days
after such determination. Executive shall be eligible for the
Performance Bonus only if the Executive is in an employee of the
Company in good standing during the entire applicable fiscal year
and on the date the payment is due, except in the event of an
Involuntary Termination, in which case the Executive shall be paid
the Performance Bonus for each applicable fiscal year after the
Involuntary Termination as further specified below. Payment of the
Performance Bonus for the current fiscal year as of the Effective
Date shall be prorated based on the number of months remaining in
the current fiscal year. The Company reserves the right to implement
a bonus plan document to further describe the Performance Bonus
which Executive acknowledges and agrees may place additional
restrictions on the payment of the Performance Bonus consistent with
reasonable industry practice. The Board may from time to time award
Executive additional bonuses in its sole and absolute discretion.
(c) Benefits. During employment, Executive shall receive all benefits
generally available to Company's other employees of like position
when and as Executive becomes eligible for them. The Executive shall
be entitled to participate in any and all fringe benefits and/or
plans, generally afforded to other employees of the Company (to the
extent the Executive otherwise qualifies therefore under the
specific terms and conditions of each such benefit), including,
without limitation, savings or profit sharing plans, deferred
compensation plans, pension and other retirement plans (e.g. 401k),
supplemental retirement or excess benefit plans, stock option,
incentive or other bonus plans, group disability, life insurance,
and medical insurance plans, which are, or which may become
available generally to senior personnel of the Company, subject in
each case to the generally applicable terms and conditions of the
plan or program in question and to the determination of the Board or
any committee administering such plan or program. Participation
shall be consistent with Executive's position with Company.
(d) Vacation. The Executive shall be entitled to four (4) weeks paid
vacation time during each year of this Agreement or such additional
vacation as may be permitted from time to time by
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Company policy. Executive shall not be permitted to carry over
unused vacation time from one year to another.
(e) Expenses. The Company shall reimburse the Executive for all
reasonable business and travel expenses actually incurred by or paid
by the Executive in the performance of services on behalf of the
Company, in accordance with the Company's expense reimbursement
policy as in effect from time to time.
(f) Other Payments. In the event that any payment or benefit received or
to be received by the Executive pursuant to this Agreement or
otherwise from the Company (collectively, the "Payments") would be
subject to the excise tax (or interest or penalties related thereto)
imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended (the "Code"), or any similar or successor provision (the
"Excise Tax"), the Company shall pay to the Executive within ninety
(90) days of the date of Executive's termination of employment (or,
if earlier, within ninety (90) days of the date the Executive
becomes subject to the Excise Tax), an additional amount (the
"Gross-Up Payment") such that the net amount retained by the
Executive, after deduction of any Excise Tax and any federal (and
state and local) income tax on the Payments, shall be equal to the
Payments minus all applicable taxes on the Payments. For purposes of
determining whether any of the Payments will be subject to the
Excise Tax and the amount of Excise Tax, (i) any other payments or
benefits received or to be received in connection with a change of
control of the Company or the Executive's termination of employment
(whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Company), shall be treated as
"parachute payments" within the meaning of Section 280(G)(b)(2) of
the Code or any similar or successor provision, and all "excess
parachute payments" within the meaning of Section 280G(b)(1) or any
similar or successor provision shall be treated as subject to the
Excise Tax, unless in the opinion of tax counsel selected by the
Company such other payments or benefits (in whole or in part) do not
constitute parachute payments, or such excess parachute payments (in
whole or in part) represent reasonable compensation for services
within the meaning of Section 280G(b) or any similar or successor
provision of the Code in excess of the base amount within the
meaning of Section 280g(b)(3) or any similar or successor provision
of the Code, or are otherwise not subject to the Excise Tax; (ii)
the amount of the Payments which shall be treated as subject to the
Excise Tax shall be equal to the lesser of (A) the total amount of
the Payments or (B) the amount of the excess parachute payments
within the meaning of Section 280G(b)(l) (after applying clause (i)
above), and (iii) the value of any non-cash benefits or a deferred
payment or benefit shall be determined by the Company's independent
auditors in accordance with the principles of Section 280G(d)(3) and
(4) of the Code. For purposes of determining the amount of the
Gross-Up Payment, the Executive shall be deemed to pay federal
income taxes at the highest nominal marginal rate of federal income
taxation in the calendar year in which the Gross-Up Payment is to be
made and state and local income taxes at the highest nominal
marginal rate of taxation in the state and locality of the
Executive's residence on the date of termination of Executive's
employment, net of the maximum reduction in federal income taxes
which could be obtained from deducting of such state and local
taxes. In the event that the Excise Tax is subsequently determined
to be less than the amount taken into account hereunder at the time
of termination of Executive's employment, the Executive shall repay
to the Company at the time that the amount of such reduction in
Excise Tax is finally determined the portion of the Gross-Up Payment
attributable to the Excise Tax and federal (and state and local)
income tax imposed on the Gross-Up Payment being repaid by the
Executive if such repayment results in a reduction in Excise Tax
and/or a federal (and state and local) income tax deduction plus
interest on the amount of such repayment at the rate provided in
Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax
is determined to exceed the amount taken into account hereunder at
the time of termination of the Executive's employment (including by
reason of a payment the existence or amount of which cannot be
determined at the date of the Gross-Up Payment), the Company shall
make an additional Gross-Up Payment in respect of such excess (plus
any interest payable with respect to such excess) at the time that
the amount of such excess is finally determined. The Company may
contest any claim by the Internal Revenue Service which would
require the payment of the Gross-Up Payment hereunder, provided that
the
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Company shall bear directly all costs and expenses (including
interest and penalties) incurred in connection with such contest and
shall indemnify and hold the Executive harmless, on an after-tax
basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of any such
claim and payment of costs and expenses.
5. Termination of Employment; Severance.
(a) By Death or Disability.
(i) Executive's employment shall terminate automatically upon the
death of Executive. Company shall pay or provide to
Executive's beneficiaries or estate, as appropriate, the
compensation as of the date of death and benefits to which
Executive is entitled through the end of the pay period in
which death occurs and thereafter Company's obligations shall
terminate except as noted below.
(ii) If, in the sole opinion of Company, Executive shall be
prevented from properly performing Executive's duties by
reason of any physical or mental incapacity for a period of
more than six (6) months in the aggregate or four (4)
consecutive months in any twelve-month period, then, to the
extent permitted by law, Executive's employment shall
terminate on, and the compensation and benefits to which
Executive is entitled shall be paid or provided up through,
the last day of the month in which the day evidencing
incapacity (as determined above) occurs and thereafter
Company's obligations shall terminate except as noted below.
(iii) In the event of termination for death or disability, Executive
shall not be entitled to receive severance or other benefits
except (A) those (if any) as may then be established and
applicable under the Company's then-existing severance and
other benefits plans and policies at the time of such death or
disability, (B) benefits required by applicable laws, (C) a
prorated portion of the Performance Bonus based on the last
day of the month in which the death or the incapacity (as
determined above) occurs, and (D) in the case of death, the
Executive's base compensation for a period of twenty-six (26)
weeks shall be paid to the Executive's surviving spouse, or,
if none, to the Executive's estate.
(iv) In the event of termination for disability, the Executive
shall be entitled to the benefits provided under the Company's
then-existing disability or extended sick pay plan, for so
long as Executive continues to be disabled under this
Agreement or benefits otherwise terminate under such plan,
whether or not Executive is deemed to be disabled under such
plan.
(b) By Company for Cause; Voluntary Resignation.
(i) Company may terminate, without liability, Executive's
employment for cause (as defined below) at any time and
without notice. Company shall pay Executive the compensation
to which Executive is entitled through the end of the day of
such termination and thereafter Company's obligations shall
terminate. Termination shall be for cause if Executive's
employment is terminated by Company because of:
(A) any act or failure to act by Executive which involves
bad faith conduct by Executive and which is to the
material detriment of Company;
(B) Executive's willful refusal or willful failure to act in
accordance with any lawful and reasonable direction or
order of Company;
(C) Executive's exhibiting material unfitness or material
unavailability for service to Company (other than by
reason of Executive's death or disability);
(D) Executive's materially unsatisfactory performance,
material misconduct, dishonesty or theft, habitual
material neglect, material carelessness or material
incompetence in the performance of his duties for
Company;
(E) Executive's willful or intentional disclosure of
confidential information of Company, or any other
violation of paragraphs 6 or 7 below;
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(F) Executive's providing false information to Company in
connection with Executive's application for employment;
(G) Executive's violation of Company's policies regarding
insider trading;
(H) Executive's violation of Company's policies regarding
controlled substances;
(I) Executive's conviction of a crime, except a minor
traffic violation; or
(J) Executive's willfully or intentionally acting in any way
that has a direct, substantial and adverse effect on
Company's reputation.
(ii) If Executive's employment terminates by reason of the
Executive's voluntary resignation (and is not an Involuntary
Termination) or if the Executive is terminated for cause, then
the Executive shall not be entitled to receive severance or
any other benefits.
(c) Involuntary Termination. If, at any time during the term of this
Agreement, the Executive's employment terminates as a result of
Involuntary Termination (defined below), the Company shall pay the
Executive severance in the amount of one-twelfth of Executive's base
compensation at the time of such termination per month, for a period
beginning on the date of termination and ending on the date
specified in paragraph 3(a). The Executive shall receive the
Performance Bonus for each fiscal year or part thereof (in which
case, the Performance Bonus shall be prorated based on the number of
months of such period in the applicable fiscal year) during the such
period. The Executive shall also receive during such period and
Company-paid medical, disability and life insurance coverage as
provided to Executive immediately prior to the Executive's
termination, upon the terms and conditions, including deductibles
and co-payments, provided in the Company's then-existing plans,
policies and programs. In the event that Executive becomes employed
by another company, the Company shall not have any right of offset
or similar right against any earnings arising out of such subsequent
employment. Involuntary Termination shall mean:
(i) the continued assignment to Executive of any duties or the
continued material reduction of Executive's duties, either of
which is substantially inconsistent with the level of
Executive's position with the Company, for a period of thirty
(30) days after notice thereof from Executive to the Board
setting forth in reasonable detail the respects in which
Executive believes such assignments or duties are
substantially inconsistent with the level of Executive's
position;
(ii) a reduction in Executive's base compensation;
(iii) a reduction by the Company in the kind or level of employee
benefits (other than base compensation and bonus) to which
Executive is entitled immediately prior to such reduction with
the result that Executive's overall benefits package (other
than base compensation and bonus) is materially reduced (other
than any reduction applicable to other senior personnel of the
Company);
(iv) any purported termination of the Executive's employment by the
Company other than for cause or as a result of the Executive's
disability or death;
(v) the failure of the Company to obtain the assumption of this
Agreement by any successors as contemplated in paragraph 12;
or
(vi) any material breach by the Company of any material provision
of this Agreement which continues uncured for thirty (30) days
following notice thereof
provided that none of the foregoing shall constitute Involuntary
Termination to the extent that Executive has agreed thereto.
(d) Non-Renewal Without Cause. In the event that Company without cause
fails to offer to renew Executive's employment hereunder for at
least the same period of time as specified herein, and on
substantially similar terms, Company shall pay to Executive
severance in the amount of one-twelfth of Executive's base
compensation at the time of such non-renewal per month, for a period
of six (6) months beginning on the effective date of termination. In
the event that Executive becomes employed by another company, the
Company shall not have any right of offset or similar right against
any earnings arising out of such subsequent employment.
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(e) Accrued Salary, etc. In the event of termination of Executive's
employment for any reason,
(i) the Company shall pay to Executive any unpaid base
compensation for periods prior to termination,
(ii) the Company shall pay the Executive all of the Executive's
accrued and unused vacation time through the date of
termination; and
(iii) following submission of proper expense reports by the
Executive, the Company shall reimburse the Executive for all
expenses reasonably and necessarily incurred by Executive in
connection with the business of the Company prior to
termination.
All of the above payments shall be made promptly upon termination,
and within the period of time mandated by law.
(f) Certain obligations of Employee on termination. Executive hereby
acknowledges and agrees that all personal property, including,
without limitation, all books, manuals, memorandums, policy
statements, correspondence (letters, telegrams, mailgrams), minutes
of meetings, agendas, InterOffice communications, forecasts,
analyses, working papers, charts, expense account reports, ledgers,
journals, financial statements, statements of accounts, data
compilations, records, reports, notes, memoranda, computer disks,
flow charts, computer documents and computer software, data sheets,
contracts, lists, and other documents, proprietary information, and
equipment furnished to or prepared by Executive in the course of or
incident to Executive's employment, belong exclusively to the
Company and shall be promptly returned to the Company upon
termination of Executive's employment for any reason.
6. Confidentiality and Non-Disclosure: Non-Solicitation
(a) For purposes of this paragraph, the following definitions shall
apply:
(i) Inventions shall mean all inventions, processes, methods,
formulas, techniques, improvements, modifications and
enhancements, whether or not patentable, made by Executive,
whether or not during the hours of Executive's employment or
with the use of Company's facilities, materials or personnel,
either solely or jointly, during Executive's employment by
Company and all inventions, processes, methods, formulas,
techniques, improvements, modifications and enhancements made
by Executive, during a period of one year after any
termination of Executive's employment, which relate directly
to the past, present or future business of Company and which
are within the scope of Executive's duties during the last 12
months of Executive's employment by Company.
(ii) Work Product shall mean all documentation, software, creative
works, know-how and information created, in whole or in part,
by Executive during Executive's employment by Company, whether
or not copyrightable or otherwise protectable, excluding
Inventions.
(iii) Trade Secrets shall mean compensation data, marketing
strategies, new material research, pending projects and
proposals, research and development, technological data, all
proprietary information, actual and potential, customer lists,
vendor lists, pricing and credit techniques, research and
development activities, documentation, software, know-how and
information relating to the past, present or future business
of Company or any plans relating to the foregoing, or relating
to the past, present or future business of a third party that
are disclosed to Company, which Company does not disclose to
third parties without restrictions on use or further
disclosure.
(b) Executive hereby:
(i) agrees to promptly disclose to Company all Inventions and keep
accurate records relating to the conception and reduction to
practice of all Inventions. Such records shall
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be the sole and exclusive property of Company, and the
Executive shall surrender possession of the records to Company
upon any suspension or termination of Executive's employment
with Company.
(ii) Executive hereby assigns to Company, without additional
consideration to Executive, the entire right, title and
interest in and to the Inventions and Work Product and in and
to all copyrights, patents, trademarks and any and all other
proprietary rights therein or based thereon. Executive agrees
that the Work Product shall be deemed to be a "work made for
hire." Executive shall execute all such assignments, oaths,
declarations and other documents as may be prepared by Company
to effect the foregoing.
(iii) agrees that Company, without additional consideration to
Executive, shall have the exclusive worldwide and perpetual
right to use and to make, use and sell products and/or
services derived from any Inventions or Work Product.
(c) Executive shall provide Company with all information, documentation,
and assistance Company may request to perfect, enforce or defend the
proprietary rights in or based on the Inventions, Work Product or
Trade Secrets. Company, in its sole discretion, shall determine the
extent of the proprietary rights, if any, to be protected in or
based on the Inventions, Work Product. and Trade Secrets. All such
information, documentation and assistance shall be provided by
Executive at no additional expense to Company, except for
out-of-pocket expenses which Executive incurred at Company's
request.
(d) During employment and thereafter, Executive shall treat Trade
Secrets on a confidential basis and not disclose them to others
without the prior written consent of Company or use Trade Secrets
for any purpose other than for the performance of services for
Company. Executive acknowledges that the Trade Secrets are the sole
and exclusive property of Company. Executive shall surrender
possession of all Trade Secrets to Company upon any suspension or
termination of Executive's employment with Company. If, after such
time, Executive becomes aware of any Trade Secrets in Executive's
possession, Executive shall immediately surrender those Trade
Secrets to Company.
(e) Executive acknowledges that the work force of the Company
constitutes a unique, valuable and special asset of the Company.
Therefore, Executive agrees that during his or her employment with
the Company, and for a period of one year following termination of
such employment for any reason, Executive shall not, directly or
indirectly, hire any current or future employee of the Company, or
solicit or induce or attempt to solicit or induce, any current or
future employee of the Company to terminate his or her employment
with the Company for any reason.
(f) In the event of a breach or threatened breach by the Executive of
the provisions of this paragraph 6, the Company shall be entitled to
an injunction restraining the Executive from any such breach.
Nothing herein contained shall be construed as prohibiting the
Company from pursuing any other remedies available to the Company
for such breach or threatened breach, including the recovery of
damages from the Executive.
7. Restrictive Covenants.
(a) The Executive hereby acknowledges and recognizes the highly
competitive nature of the Company's business and accordingly agrees
that Executive will not from and after the date hereof, until the
Designated Date (as hereinafter defined) (i) engage, directly or
indirectly in any Competitive Activity, whether such engagement
shall be as an officer, director, employee, consultant, agent,
lender, stockholder, or other participant; or (ii) assist others in
engaging in any Competitive Activity. As used herein, the term
"Competitive Activity" shall mean and include the development,
distribution, sale, marketing and management of telecommunications
products, including, without limitation, consumer and corporate
prepaid telephone and cellular calling cards and other products and
services offered or planned to be offered by the Company during
Executive's employment with the Company.
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(b) As used in paragraph 7, the "Designated Date" shall mean the
following:
(i) if the Executive voluntarily terminates employment with the
Company in violation of this Agreement, then the "Designated
Date" shall be the second (2nd) anniversary of the effective
date of such termination;
(ii) if the Company terminates this Agreement for cause, then the
"Designated Date" shall be the second (2nd) anniversary of the
effective date of such termination;
(iii) if the Company offers to renew this Agreement for at least the
same period of time as specified herein, and on substantially
similar terms, and the Executive declines, then the term
"Designated Date" shall be the second (2nd) anniversary of the
effective date of termination;
(iv) if the Company fails to offer to renew this Agreement for at
least the same period of time as specified herein, and on
substantially similar terms, without cause, then the term
"Designated Date" shall mean the effective date of
termination; or
(v) in the event of an Involuntary Termination, then the term
"Designated Date" shall mean the effective date of such
termination.
(c) It is the desire and intent of the parties that the provisions of
this paragraph 7 shall be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction
which enforcement is sought. Accordingly, if any particular
provision of this paragraph 7 shall be adjudicated to be invalid or
unenforceable, such provision of this paragraph 7 shall be deemed
amended to delete therefrom the portion thus adjudicated to be
invalid or unenforceable, such deletion to apply only with respect
to the operation of such provisions of this paragraph 7 in the
particular jurisdiction in which such adjudication is made. In
addition, if the scope of any restriction contained in this
paragraph 7 is too broad to permit enforcement thereof to its
fullest extent, then such restriction shall be enforced to the
maximum extent permitted by law, and the Executive hereby consents
and agrees that such restriction shall be enforced to the maximum
extent permitted by law, and the Executive hereby consents and
agrees that such scope may be judicially modified accordingly in any
proceeding brought to enforce such restriction.
(d) If there is a breach or threatened breach by the Executive of the
provisions of this paragraph 7, the Company shall be entitled to an
injunction restraining the Executive from any such breach. Nothing
herein contained shall be construed as prohibiting the Company from
pursuing any other remedies available for such breach or threatened
breach or any other breach of this Agreement.
8. Executive Representations and Warranties. Executive represents and
warrants as of the date of his initial hiring by the Company and as of the
Effective Date:
(a) Executive has complied with any and all written and/or oral
conditions of Executive's former employment concerning resignation
and notice of resignation or termination of employment;
(b) Executive has returned to Executive's former employer all of the
former employer's property and confidential proprietary material and
that he or she will not disclose to Company, or use during
Executive's employment by Company, any of Executive's previous
employer's trade secrets and confidential proprietary information;
(c) Neither the execution of this Agreement, nor employment with
Company, nor performance of the duties required hereby will violate
any obligations of Executive to any former employer or breach any
agreement to keep in confidence information acquired by Executive
before Executive's employment by Company;
(d) Executive has not entered into, and will not enter into any
agreement, either written or oral, that conflicts with this
Agreement; and
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Executive understands and agrees that the representations and warranties
set forth in this paragraph are material inducements upon which Company
has relied in entering into this Agreement.
9. Survival. Certain provisions of this Agreement, including, without
limitation, paragraphs 4(f), 5(f), 6, 7, 8 and 11 are intended to continue
and survive termination or suspension of Executive's employment with
Company.
10. Notices.
(a) All notices required or permitted to be given under the provisions
of this Agreement shall be in writing and delivered personally or by
certified or registered mail, return receipt requested, postage
prepaid to the following persons at the following addresses, or to
such other persons at such other addresses as any party may request
by notice in writing to the other party to this Agreement:
If to Executive:
Frank Magliato
2 Whispering Pines Road
Hohokus, New Jersey 07423
If to Company:
DigiTEC 2000
8 West 38th Street, Fifth Floor
New York, New York 10018
(b) Any termination by the Company for cause or by the Executive as an
Involuntary Termination shall be communicated by a notice of
termination to the other party given in accordance with this
Agreement. Such notice shall indicate the specific termination
provision in this Agreement relied upon, shall set forth in
reasonable detail the facts and circumstances claimed to provide a
basis for termination under the provision so indicated, and shall
specify the termination date (which shall be not more than 30 days
after the giving of such notice). The failure by the Executive to
include in any notice any fact or circumstance which contributes to
a showing of Involuntary Termination shall not waive any right of
the Executive hereunder or preclude the Executive from asserting
such fact or circumstance in enforcing Executive's rights hereunder.
11. Confidentiality. Except as required by applicable securities' or other
laws, neither party shall disclose the contents of this Agreement without
first obtaining the prior written consent of the other party. Executive
may disclose this Agreement to Executive's spouse, attorney and financial
advisors subject to the above confidentiality restriction.
12. Successors and Assigns. Any successor of the Company (whether direct or
indirect and whether by purchase, lease, merger, consolidation,
liquidation or otherwise) to all or substantially all of the Company's
business and/or assets shall assume the obligations under this Agreement
and agree expressly to perform the obligations under this Agreement in the
same manner and to the same extent as the Company would be required to
perform such obligations in the absence of such a succession. For all
purposes of this Agreement, the term "Company" shall include any successor
to the Company's business and/or assets which executes and delivers the
assumption agreement described above or which becomes bound by the terms
of this Agreement by operation of law.
13. Assignment. This Agreement is personal in nature and may not be assigned
or transferred by the Executive without the prior written consent of the
Company.
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14. Severability. If any provision of this Agreement is held invalid or
unenforceable, the remainder of this Agreement shall nevertheless remain
in full force and effect.
15. Entire Agreement; Integration; Amendments. The terms of this are intended
by the parties to be the final expression of their Agreement with respect
to the employment of Executive by Company and may not be contradicted by
evidence of any prior or contemporaneous agreement. This Agreement
constitutes the complete and exclusive statement of its terms and no
extrinsic evidence whatsoever may be introduced in any legal proceeding
involving this Agreement. This Agreement contains the entire agreement
between the parties and supersedes all prior oral, written and implied
agreements, understandings, commitments, and practices between the
parties, including all prior employment agreements, if any. No amendments
to this Agreement may be made except by a writing signed by both parties.
16. Choice of Law. The formation, construction, and performance of this
Agreement shall be construed in accordance with the laws of the State of
New York, without regard to principles of conflicts of law, and any action
relating to this Agreement or Executive's employment with Employer shall
be brought exclusively in the state or federal courts of the State of New
York.
17. Voluntary Execution. Executive acknowledges that Executive has read and
understands the Agreement, is fully aware of its legal effect, has not
acted in reliance upon any representations or promises made by Company
other than those contained in writing herein. The Executive has been
advised to obtain independent legal counsel regarding this Agreement and
the Executive is signing this Agreement knowingly and voluntarily.
18. No Assignment of Benefits. The rights of any person to payments or
benefits under this Agreement shall not be made subject to option or
assignment, either by voluntary or involuntary assignment or by operation
of law, including without limitation bankruptcy, garnishments, attachment
or other creditor's process, and any action in violation of this paragraph
shall be void.
19. Employment Taxes. All payments made pursuant to this Agreement shall be
subject to withholding of applicable income and employment taxes.
20. Assignment by Company. The Company may assign its rights under this
Agreement to an affiliate, provided that the Company shall remain jointly
and severally liable under this Agreement, and provided further that no
assignment shall be made if the net worth of the assignee is less than the
net worth of the Company at the time of assignment. In the case of any
such assignment, the term "Company" when used in this Agreement shall mean
the corporation that actually employs the Executive.
21. Interest. In the event that the Company fails to make any payment
hereunder or afford any benefit when due, the Company shall pay interest
at the rate of the publicly announced prime rate of Citibank or its
successors plus 3% or, if lower, the maximum permitted by law.
IN WITNESS WHEREOF, this Agreement has been executed by the parties as of the
day and year first above written.
Executive Company
By: /s/ Lori Perri
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/s/ Frank Magliato Its: Lori Perri, Director
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Frank Magliato
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