EMPLOYMENT
AGREEMENT
This Employment
Agreement (the “Agreement”) is made and entered into
this 1 st day of January, 2005, by and between LEVEL 8
SYSTEMS, INC., a Delaware corporation (the “Company”),
and John P. Broderick, a resident of the New Jersey (the
“Employee”).
In
consideration of the mutual covenants, promises and conditions set
forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
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Employment . The Company hereby employs Employee and
Employee hereby accepts such employment upon the terms and
conditions set forth in this Agreement.
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Duties of
Employee .
Employee’s title will be Chief Financial Officer, Chief
Operating Officer and Corporate Secretary and Employee will report
directly to the President of the Company. Employee will be based in
New Jersey, but will travel to the Cary, North Carolina office as
often as the job requirements dictate. Employee agrees to perform
and discharge such other duties as may be assigned to Employee from
time to time by the Company to the reasonable satisfaction of the
Company, and such duties will be consistent with those duties
regularly and customarily assigned by the Company to the position
of Chief Financial Officer and Secretary. Employee agrees to comply
with all of the Company's policies, standards and regulations and
to follow the instructions and directives as promulgated by the
President of the Company. Employee will devote Employee's full
professional and business-related time, skills and best efforts to
such duties and will not, during the term of this Agreement, be
engaged (whether or not during normal business hours) in any other
business or professional activity, whether or not such activity is
pursued for gain, profit or other pecuniary advantage, without the
prior written consent of the President of the Company. This Section
will not be construed to prevent Employee from (a) investing
personal assets in businesses which do not compete with the Company
in such form or manner that will not require any services on the
part of Employee in the operation or the affairs of the companies
in which such investments are made and in which Employee's
participation is solely that of an investor; (b) purchasing
securities in any corporation whose securities are listed on a
national securities exchange or regularly traded in the
over-the-counter market, provided that Employee at no time owns,
directly or indirectly, in excess of one percent (1%) of the
outstanding stock of any class of any such corporation engaged in a
business competitive with that of the Company; or (c) participating
in conferences, preparing and publishing papers or books, teaching
or joining or participating in any professional associations or
trade group, so long as the President of the Company approves such
participation, preparation and publication or teaching prior to
Employee’s engaging therein.
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Term .
The term of this Agreement will be at-will, and can be terminated
by either party at any time, with or without cause, subject to the
provisions of Section 4 of this Agreement.
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Termination
by Company for Cause .
The Company may terminate this Agreement and all of its obligations
hereunder immediately, including the obligation to pay Employee
severance, vacation pay or any further benefits or remuneration, if
any of the following events occur:
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Employee
materially breaches any of the terms or conditions set forth in
this Agreement and fails to cure such breach within ten (10) days
after Employee's receipt from the Company of written notice of such
breach (notwithstanding the foregoing, no cure period shall be
applicable to breaches by Employee of Sections 6, 7 or 8 of this
Agreement);
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Employee
commits any other act materially detrimental to the business or
reputation of the Company;
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Employee
engages in dishonest or illegal activities or commits or is
convicted of any crime involving fraud, deceit or moral turpitude;
or
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Employee dies
or becomes mentally or physically incapacitated or disabled so as
to be unable to perform Employee's duties under this Agreement even
with a reasonable accommodation. Without limiting the generality of
the foregoing, Employee's inability adequately to perform services
under this Agreement for a period of sixty (60) consecutive days
will be conclusive evidence of such mental or physical incapacity
or disability, unless such inability adequately to perform services
under this Agreement is pursuant to a mental or physical incapacity
or disability covered by the Family Medical Leave Act, in which
case such sixty (60) day period shall be extended to a one hundred
and twenty (120) day period.
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Termination
by Company Without Cause . The Company may terminate Employee's
employment pursuant to this Agreement for reasons other than those
stated in Section 4(a) upon at least thirty (30) days' prior
written notice to Employee. In the event Employee's employment with
the Company is terminated by the Company without cause, the Company
shall be obligated to pay Employee a lump sum severance payment
equal to six (6) months of Employee’s then base salary
payable within thirty (30) days of the date of termination. Other
than the severance payment set forth in this Section 4(b), Employee
will be entitled to receive no further remuneration and will not be
entitled to participate in any Company benefit programs following
his termination by the Company, whether such termination is with or
without cause.
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Termination
by Employee for Cause .
In the event there occurs a Change in Control (as defined below) of
the Company, Employee shall have the right to
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resign his
employment and will be entitled to a lump sum severance payment
equal to twelve (12) months of Employee’s then base salary
payable within thirty (30) days of the date of termination and an
additional severance payment of 250,000 shares of the
Company’s common stock. The stock award will not subject to
any customary adjustments for stock splits, stock dividends and the
like undertaken by the Company. In addition, all Employee’s
then outstanding but unvested stock options shall vest one hundred
percent (100%). Employee shall have thirty (30) days from the date
written notice is given to Employee about the announcement and
closing of a transaction resulting in a Change in Control of the
Company to resign or this Section 4(c) shall not apply. In the
event Employee resigns from the Company for any other reason,
Employee will not be entitled to receive or accrue any further
Company benefits or other remuneration under this Agreement, and
Employee specifically agrees that he will not be entitled to
receive any severance pay.
For purposes of
this Section 4, a Change in Control shall be deemed to have
occurred if any of the following occur:
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the merger of
consolidation of the Company with or into another unaffiliated
entity, or the merger of another unaffiliated entity into the
Company or another subsidiary thereof with the effect that
immediately after such transaction the stockholders of the Company
immediately prior to such transaction hold less than fifty percent
(50%) of the total voting power of all securities generally
entitled to vote in the election of directors, managers or trustees
of the entity surviving such merger or consolidation;
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the sale or
transfer of more than fifty-one percent (51%) of the
Company’s then outstanding voting stock (other than a
restructuring event which results in the continuation of the
Company’s business by an affiliated entity) to unaffiliated
person or group (as such term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended); or
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the adoption by
the stockholders of the Company of a plan relating to the
liquidation or dissolution of the Company.
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5.
Compensation and
Benefits .
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Annual
Salary . During the term
of this Agreement and for all services rendered by Employee under
this Agreement, the Company will pay Employee a base salary of Two
Hundred Thousand Dollars ($200,000.00) per annum in equal
bi-monthly installments. Such annual salary will be subject to
adjustments by any increases given in the normal course of
business.
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Incentive
Compensation . Employee
shall be eligible to receive incentive compensation in the form of
a cash bonus, the amount of such cash bonus is
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explained on
Exhibit C, upon the Company reaching sales goals for the calendar
year as set forth in the operating plan for the Company which was
approved by the Board of Directors. Said bonus will be payable
after the annual accounts have been presented to the Compensation
Committee. Exhibit C attached hereto provides the benchmarks
associated with achieving the Incentive Compensation.
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Vacation. Employee shall be eligible for four (4) weeks of
paid vacation annually, provided that such vacation is scheduled at
such times that do not interfere with the Company’s
legitimate business needs.
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Other
Benefits . Employee will
be entitled to such fringe benefits as may be provided from
time-to-time by the Compan
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