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Execution Version
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into effective as of the 7th
day of
March, 2005, by and between SCAN-OPTICS, INC., a Delaware
corporation with its
principal office in Manchester, Connecticut (the "Corporation"),
and Paul Yantus
(the "Executive").
W I T N E S S E T H:
WHEREAS, the Corporation desires to employ the Executive and to
be
assured of its rights to his services in an executive capacity
on the terms and
conditions hereinafter set forth, and the Executive is willing
to accept such
employment;
NOW THEREFORE, in consideration of the premises and the
mutual
covenants herein contained, the parties hereto agree as
follows:
1. Employment.
The Corporation hereby employs the Executive as its Chief
Operating Officer and in such other executive capacities may
from time to time
be designated by the Corporation, and the Executive accepts such
employment and
agrees to serve in such capacities upon the terms and conditions
hereinafter set
forth.
2. At-Will Employment.
The Executive shall serve as an at-will employee.
3. Compensation and Benefits.
As compensation for the services to be rendered by the
Executive hereunder:
(a) The Corporation shall pay to the Executive a base salary
of Two Hundred Twenty Five Thousand Dollars (US$225,000) per
year or such higher
amount as the Corporation may determine (the "Base Salary"),
payable on the
Corporation's regular payroll schedule.
(b) For calendar year 2005, the Executive shall be eligible
for a minimum bonus in an amount equal to 30 percent of the
Executive's Base
Salary upon achievement of certain benchmarks to be determined
by the Stock
Options and Executive Compensation Committee of the Board of
Directors, which
benchmarks shall be established not later than June 30,
2005.
(c) The Corporation shall pay the Executive an automobile
allowance of $600 per month.
(d) The Corporation shall reimburse the Executive for
reasonable and necessary relocation, travel and temporary living
expenses up to
a maximum of $50,000, upon timely submission of valid proof of
such expenses,
provided, however, that the Corporation shall not reimburse for
any relocation
expenses incurred after July 31, 2006.
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(e) The Executive shall be entitled to participate in the
Corporation's health and welfare benefits with coverage
effective as of the date
of this Agreement that are generally available to the
Corporation's executive
employees and subject to the terms and conditions of any health
or welfare
benefit plans.
4. Expense Reimbursement.
The Corporation shall reimburse the Executive for reasonable
and necessary business expenses incurred in the course of
performing his duties,
upon the Executive's timely submission of valid proof of such
expenses, except
that the Executive shall not seek or receive reimbursement for
any business
expense exceeding $500 that has not been approved in advance by
the Chief
Executive Officer of the Corporation.
5. Vacation.
The Executive shall be entitled each calendar year to four
(4)
weeks of vacation, pro-rated for any partial year.
6. Confidential Information.
The Executive understands that in the course of his
employment
by the Corporation, the Executive will receive certain trade
secrets, lists of
customers and other confidential information concerning the
business of the
Corporation (the "Confidential Information"), which the
Corporation desires to
protect. The Executive agrees that he will not, at any time
during or after his
employment by the Corporation, divulge to anyone outside the
Corporation or use
for his own benefit any Confidential Information of the
Corporation, including
but not limited to the management methods, operating techniques,
customer lists,
costs, technology, know-how, prospective acquisitions, employee
lists, training
manuals and procedures, personnel evaluation procedures,
collection procedures
and non-public financial reports of the Corporation. The
Executive further
agrees not to use any such Confidential Information in competing
with the
Corporation at any time during or after his employment by the
Corporation.
Confidential Information shall not include information that (i)
is or becomes
publicly known through no wrongful act of the Executive; (ii)
was within the
Executive's possession prior to its being obtained by the
Executive in the
course of the Executive's employment with the Corporation; (iii)
is approved for
release by written authorization of the Corporation; or (iv) the
Executive is
required to disclose by law.
7. Inventions and Discoveries.
(a) The Executive agrees that all inventions patentable or
otherwise, trade secrets, discoveries, improvements and ideas
which relate to
the products or services of the Corporation (hereinafter
collectively called
"developments"), which he, alone or jointly with others, may
conceive, make,
develop, or acquire during the period of his employment by the
Corporation
(whether or not pursuant to this Agreement) shall be the sole
property of the
Corporation.
(b) The Executive shall promptly and fully disclose all such
developments to the Board of Directors of the Corporation or to
such persons as
the Board of Directors may designate, and such developments
shall thereafter be
deemed Confidential Information of the Corporation. The
Executive, at any time
upon the request of the Corporation, whether or not then in the
Corporation's
employ, shall execute, acknowledge and deliver to the
Corporation at
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the Corporation's cost and expense all instruments which the
Corporation shall
reasonably prepare, give evidence and do all other things which
are reasonably
necessary and desirable to enable the Corporation to file and
prosecute
applications for, and to acquire, maintain and enforce, all
letters patent,
trademark registrations or copyrights in all countries covering
such
developments. The Executive shall not contest, or take any
action which might
impair, the issuance, validity or scope of any of the
foregoing.
(c) The Executive acknowledges that he shall not be entitled
to any further consideration or remuneration for the performance
of his
obligations under this Section 7.
8. Covenants Not to Compete.
(a) The Executive covenants and agrees that, while he is
employed by the Corporation and during the Restricted Period (as
hereinafter
defined), the Executive will not:
(i) directly or indirectly in any manner or under any
circumstances or conditions whatsoever be or become interested,
as an
individual, partner, principal, agent, employee, stockholder,
officer, director,
trustee, or in any other capacity whatsoever, except as an owner
of not more
than five percent (5%) of the voting or other equity stock of a
public
corporation, in any other business activities in competition
with the business
of the Corporation within the United States of America, Canada
and the other
countries and jurisdictions in which the Corporation conducts
its business at
the time of termination of the Executive's employment;
(ii) directly or indirectly establish, conduct, assist,
or lend his name to any business organization which is then
competing or
attempting to compete with any line of business engaged in by
the Corporation at
the time of termination of the Executive's employment in the
geographic area
described in Section 8(a)(i) above; or
(iii) directly or indirectly request, induce or
otherwise solicit or attempt to influence any employee of the
Corporation to
leave such employment.
(b) As used in this Agreement, "Restricted Period" shall
mean
a period beginning with the Executive's termination of
employment with the
Corporation and lasting in duration for a period of months equal
to the number
of months the Executive is employed by the Corporation under
this Agreement;
provided, however, that in no event shall the Restricted Period
exceed 12
months.
(c) The parties believe that the restrictive
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