<PAGE>
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-KSB/A-1
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended October 31, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
------ ------
Commission file number 0-2401
-----------
WILTEK, INC.
-----------------------------------------------------------
(Name of small business issuer in its charter)
Connecticut 06-0625999
- ------------------------------- -----------------------------
(State or other jurisdiction of I.R.S. Employer Identification No.)
incorporation or organization)
542 Westport Ave., Norwalk, CT 06851
- --------------------------------------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (203) 853-7400
Securities registered under Section 12(b) of the Exchange Act:
Title of each class Name of each exchange on which registered
None None
- ------------------ -----------------------------------------
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, No Par Value
-------------------------------
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
--- -
Check if no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is contained in this form, and no disclosure will be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]The issuer's revenue for its most recent
fiscal year was $7,584,300.
<PAGE>
The aggregate market value of voting stock held by non-affiliates of the
registrant as of December 29, 1998 was:
$1,491,890
----------
THE ISSUER WAS NOT INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE
YEARS.
As of December 29, 1998, there were 3,892,128 shares of Common Stock, No Par
Value outstanding.
Documents Incorporated by Reference. None.
- -----------------------------------
Transitional Small Business Disclosure Format
---------------------------------------------
Yes NO X
---- ----
This amendment to the Annual Report on Form 10-KSB of Wiltek, Inc. (the
"Company") for the fiscal year ended October 31, 1998 (the "Original Form
10-KSB) amends and modifies the Original Form 10-KSB as follows:
(1) The cover page is amended to indicate that no documents are incorporate
by reference in the Original Form 10-KSB, as amended hereby.
(2) "Item 9(a), Identification of Directors" is amended to include such
disclosure, rather than to incorporate such disclosure by reference to
the Company's proxy statement for the upcoming Annual Meeting of
Shareholders.
(3) "Item 10. Management Remuneration and Transactions" is amended to
include such disclosure, rather than to incorporate such disclosure by
reference to the Company's proxy statement for the upcoming Annual
Meeting of Shareholders.
(4) "Item 11. Security Ownership of Certain Beneficial Owners and
Management" is amended to include such disclosure, rather than to
incorporate such disclosure by reference to the Company's proxy
statement for the upcoming Annual Meeting of Shareholders.
(5) The Index to Exhibits is amended to correct certain typographical
errors and to add certain Exhibits thereto, which Exhibits
are filed herewith.
2
<PAGE>
Item 9(a) Identification of Directors
The following sets forth the Directors of the Company,1 the present principal
occupation, including position, if any, with the Corporation, of each Director,
his age and his business experience during the past five years. This information
based in part on information received from the respective Directors and in part
from the records of the Corporation. Each Director serves until the next Annual
Meeting of Shareholders and until his successor is duly elected or qualified:
Graeme MacLetchie, 60, had been Senior Vice President of C. J. Lawrence
Deutsche Bank Securities Corporation from 1970 to 1995, and presently he is a
Vice President of BT Alex Brown, Inc., an investment securities company. He was
appointed to Wiltek's Board of Directors in 1994.
David S. Teitelman, 41, has served as President since 1995 and served
as CEO of the Company from 1995 until February, 1999. He was appointed to
Wiltek's Board of Directors in 1997.
John C. Maxwell III, 40, serves as the Chairman of the Board and Chief
Executive Officer of the Company. Mr. Maxwell is also the Managing Director of
the New York based venture fund CECAP. From 1996 to 1997, he was the Vice
President of Business Development and Market Research for the Advanced
Technology and Corporate Development Group of Compaq Computer Corporation. Prior
to joining Compaq Mr. Maxwell was Managing Director of the Research/Investment
Banking Boutique at SoundView Financial Group where he served from 1990 to 1996.
He also served as Vice President for Dillon Read & Co.,one of Wall Street's
leading investment banking firms. Mr. Maxwell also serves on the board of
directors of E-Certify, PCSat, and CompuCom Systems.
Peter J. Boni, 53, is Chairman of the Board of SageMaker, Inc. From
1998 to 1999, he worked as an independent consultant. In 1993, Mr. Boni joined
Bachman Information Systems where he served as President and CEO until 1998. In
1996, Bachman Information Systems merged with Cadre Technologies and changed its
name to Cayenne Software. Cayenne Software was acquired by Sterling Software in
1998.
- ----------------
1 As reported in the Company's Form 8-K filed February 12, 1999,
on January 28, 1999, Commercial Electronics Capital Partnership, L.P. ("CECAP"),
and a related entity, Commercial Electronics, L.L.C. (collectively,
"Purchaser"), purchased (a) from Messrs. Jay Fitzpatrick, Boris Frenkel and F.
Spencer Pooley (the "Selling Directors"), who had previously constituted a
majority of the Board of Directors of the Company, an aggregate amount of
732,160 shares of the Company's common stock at a price of $0.85 per share, and
(b) from the Company, (i) 1,000,000 shares of a new series of the Company's
preferred stock, convertible into common stock at any time at the option of the
holder on the basis of 2.5 shares of common stock for each share of preferred
stock (and mandatorily converted on such basis on January 28, 2002), and (ii) a
warrant to purchase up to 1,500,000 shares of the Company's common stock for 18
months at a price of $1.00 per share, for an aggregate cash consideration paid
to the Company of $3,000,000. Simultaneously with such purchases, each of the
Selling Directors resigned from the Company's Board of Directors and the
Purchaser's three designees, Messrs. Peter Boni, John Maxwell and Richard
Rankin, were elected to fill the newly-created vacancies on the Company's Board
of Directors. Mr. Rankin has since resigned from the Board of Directors of the
Company in compliance with certain policies of his employer, Morgan Stanley.
3
<PAGE>
Item 10. Management Remuneration and Transactions
Executive Compensation
The following table sets forth for the fiscal years ended October 31, 1998, 1997
and 1996, certain information regarding the total remuneration paid or accrued
to the Company's chief executive officer and its three other executive officers.
Summary Compensation Table
<TABLE>
<CAPTION>
Long Term
Annual Compensation Compensation
------------------------------------------------ ---------------------
All Other Shares of Common
Annual Stock Underlying
Name and Compensation Options (#)
Principal Position Year Salary ($) Bonus ($) (1) (2)
- ----------------------------- --------- -------------- ---------------- ---------------- ---------------------
<S> <C> <C> <C> <C> <C>
David S. Teitelman, 1998 160,000 40,982 1,663 50,000 (3)
President & CEO
1997 118,333 34,200 (6) 3,853 -
1996 108,603 23,320 (7) 460 -
William P. Bunce (12) 1998 106,667 15,480 - 25,000 (3)
Vice President, Marketing
1997 110,052 25,501 (8) - -
1996 72,031 18,811 - -
Kevin P. Carathanasis, 1998 106,667 20,491 - 25,000 (3)
Vice President, Messaging
Services
1997 85,625 20,650 (9) - -
1996 44,000 - - 50,000 (4)
David P. Holst-Grubbe, 1998 115,000 32,412 733 25,000 (3)
Vice President, Sales
1997 85,487 70,098 (10) - 50,000 (5)
1996 14,296 19,186 (11) - -
</TABLE>
- -------------------------
(1) Represents compensation related to personal use of corporate vehicles.
(2) All options expire on the earlier of the expiration date or 60 days from
the termination of employment with the Company
(3) Represents options currently exercisable at a price of $0.87 per share.
Options expire December 30, 2007. Mr. Bunce's options expire on April 1,
1999, as he ceased to be an employee of the Company effective January 31,
1999.
(4) Represents options currently exercisable at a price of $0.56 per share.
Options expire June 17, 2006.
(5) Represents options currently exercisable at a price of $0.25 per share.
Options expire December 20, 2006.
(6) Includes $15,000 representing the fair market value of stock accrued in
fiscal 1997 and granted in fiscal 1998 to Mr. Teitelman.
(7) Includes $13,320 representing the fair market value of stock accrued in
fiscal 1996 and granted in fiscal 1997 to Mr. Teitelman.
(8) Includes $10,325 representing the fair market value of stock accrued in
fiscal 1997 and granted in fiscal 1998 to Mr. Bunce.
(9) Includes $10,325 representing the fair market value of stock accrued in
fiscal 1997 and granted in fiscal 1998 to Mr. Carathanasis.
(10) Includes $1,823 representing the fair market value of stock accrued in
fiscal 1997 and granted in fiscal 1998 to Mr. Holst-Grubbe.
4
<PAGE>
(11) Includes $3,436 representing the fair market value of stock accrued in
fiscal 1996 and granted in fiscal 1997 to Mr. Holst-Grubbe.
(12) Mr. Bunce ceased to be an officer of the Company effective September 30,
1998 and left the Company on January 31, 1999.
There are in effect employment agreements with Messrs. Teitelman,
Carathanasis, Holst-Grubbe and Walter R. Keisch, the Company's Chief
Financial Officer and an executive officer of the Company effective
January 1, 1999 providing for employment for one year from Janaury 1,
1998, at an annual base compensation of $168,000 for Mr. Teitelman,
$120,000 for Mr. Holst-Grubbe, $120,000 for Mr. Keisch and $110,000 for
Mr. Carathanasis. These agreements are terminable, but except for
certain circumstances, upon such termination the officer will be
entitled to severance payments equal to one-half of, to one and one-half
times their last pertaining annual base compensation rate. The
employment agreements do not preclude the payment of bonuses in addition
to the specified base compensation.
<TABLE>
<CAPTION>
Option Grants in Last Fiscal Year
Individual Grants
-------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
Number of % of Total
Shares of Options Exercis
Common Stock Granted to e Price Expiration
Underlying Employees ($/Share Date
Name Options Granted in Fiscal
(#) (2) Year
----------------------------------------- ------------- -----------------------
<S> <C> <C> <C> <C>
David S. Teitelman 50,000 25.6% $0.87 December 30,
2007
William P. Bunce (1) 25,000 12.8% $0.87 December 30,
2007
Kevin Carathanasis 25,000 12.8% $0.87 December 30,
2007
David P. Holst-Grubbe 25,000 12.8% $0.87 December 30,
2007
</TABLE>
(1) Mr. Bunce ceased to be an officer of the Corporation effective September
30, 1998.
(2) Options were issued on December 30, 1997 and are fully exercisable on
December 30, 1998.
5
<PAGE>
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last
Fiscal Year and FY-End Option Values
Value of Unexercised
In-the Money
Number of Shares of Common Stock Options at FY-End
Name Underlying Unexercised Options at FY-End (#) ($) (1) (2)
- ---- ------------------------------------------------ --------------------
Exercisable / Unexercisable
------------------------------------------------
<S> <C> <C>
David S. Teitelman 101,000 Options Exercisable/ $15,630
50,000 Options Unexercisable
William P. Bunce (3) 0 Options Exercisable/ -
25,000 Options Unexercisable
Kevin P. Carathanasis 50,000 Options Exercisable/ -
25,000 Options Unexercisable
David P. Holst-Grubbe 50,000 Options Exercisable/ $7,815
25,000 Options Unexercisable
</TABLE>
(1) Based on last trade price as of October 31, 1998, being $0.41
(2) All In-the Money options were fully exercisable at fiscal year-end.
(3) Mr.Bunce ceased to be an officer of the Corporation effective September 30,
1998.
-----------------------
6
<PAGE>
Item 11. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of January 28, 1999, the shares of Common
Stock beneficially owned by (a) each person who is known by the Company to be
the beneficial owner of more than 5% of the Company's outstanding Common Stock
(based on information furnished to the Company on behalf of such persons or
otherwise known to the Company), (b) each director of the Company, (c) each of
the executive officers of the Company named in the Executive Compensation
Section, and (d) all executive officers and directors as group.
Common Stock
------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
Name and Address of Amount and Nature of % of
Beneficial Owner Beneficial Ownership Class(1)
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Commercial Electronics Capital Partnership, L.P. 1,183,040(2)(3) 23.8%
c/o Commercial Electronics, L.L.C.
375 Park Avenue, Suite 1604
New York, New York 10152
- ------------------------------------------------------------------------------------------------------------------
Electronics Investments, L.L.C. 1,183,040(4) 23.8%
c/o Commercial Electronics, L.L.C.
375 Park Avenue, Suite 1604
New York, New York 10152
- ------------------------------------------------------------------------------------------------------------------
Commercial Electronics, L.L.C. 3,549,120(2)(5) 51.0%
375 Park Avenue, Suite 1604
New York, New York 10152
- ------------------------------------------------------------------------------------------------------------------
Michael P. Schulhof 4,732,160(6) 59.4%
c/o Commercial Electronics, L.L.C.
375 Park Avenue, Suite 1604
New York, New York 10152
- ------------------------------------------------------------------------------------------------------------------
John C. Maxwell III 0(7) *
c/o Wiltek, Inc.
542 Westport Avenue
Norwalk, Connecticut 06851
- ------------------------------------------------------------------------------------------------------------------
Peter J. Boni 0(7) *
138 Marlborough Street
Boston, MA 02116
- ------------------------------------------------------------------------------------------------------------------
Graeme MacLetchie 338,439(7)(8) 8.5%
1 Dunham Place
Irvington, New York 10533
</TABLE>
7
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
David S. Teitelman 258,341(7)(9)(10) 6.3%
14 Clinton Street
Fairfield, Connecticut 06430
- ------------------------------------------------------------------------------------------------------------
David Holst-Grubbe 91,513 (16)
38 Suncrest Court 2.3%
Torrington, CT 06790
- ------------------------------------------------------------------------------------------------------------
William P. Bunce 124,628 (9)(13)(14)
389 Washington Avenue 3.1%
Glencoe, IL 60022
- ------------------------------------------------------------------------------------------------------------
Kevin P. Carathanasis 101,868 (9)(15)
8515 Manassas Road 2.5%
Tampa, FL 60022
- ------------------------------------------------------------------------------------------------------------
All executive officers and directors as a group (8 21.3%
persons)
- ------------------------------------------------------------------------------------------------------------
</TABLE>
Senior Convertible Series A Preferred Stock
<TABLE>
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Commercial Electronics Capital Partnership, L.P. 250,000(2) 25.0%
c/o Commercial Electronics, L.L.C.
375 Park Avenue, Suite 1604
New York, New York 10152
- --------------------------------------------------------------------------------------------------
Electronics Investment, L.L.C. 250,000(11) 25.0%
c/o Commercial Electronics, L.L.C.
375 Park Avenue, Suite 1604
New York, New York 10152
- --------------------------------------------------------------------------------------------------
Commercial Electronics, L.L.C. 750,000(2) 75.0%
375 Park Avenue, Suite 1604
New York, New York 10152
- --------------------------------------------------------------------------------------------------
Michael P. Schulhof 1,000,000(12) 100.0%
c/o Commercial Electronics, L.L.C.
375 Park Avenue, Suite 1604
New York, New York 10152
- --------------------------------------------------------------------------------------------------
</TABLE>
* Less than one percent.
(1) In each case where shares of Common Stock subject to warrants, options
or preferred shares are included as being beneficially owned by an
individual or entity, the percentage of such shares owned by such
individual
8
<PAGE>
or entity is calculated as if all such warrants, options or preferred
shares have been exercised or converted prior to such calculation.
(2) Directly owned by such entity.
(3) Comprised of 183,040 shares of Common Stock, 375,000 shares of Common
Stock acquirable upon the exercise of warrants at a price of $1.00 per
share and 625,000 shares of Common Stock acquirable upon the conversion
of preferred stock.
(4) Comprised of the shares of Common Stock beneficially owned by
Commercial Electronics Capital Partnership, L.P. ("CECAP"). Electronics
Investment, L.L.C. ("EI") is the general partner of CECAP.
(5) Comprised of 549,120 shares of Common Stock, 1,125,000 shares of Common
Stock acquirable upon the exercise of warrants at a price of $1.00 per
share and 1,875,000 shares of Common Stock acquirable upon the
conversion of preferred stock.
(6) Comprised of the shares of Common Stock directly owned by CECAP and
Commercial Electronics, L.L.C. ("CE"). Mr. Schulhof is the manager of
both EI and CE (as well as an investor therein).
(7) A director of the Company.
(8) Mr. MacLetchie disclaims beneficial ownership of 5,000 of such shares
which are owned by his wife.
(9) An executive officer of the Company.
(10) Includes 151,000 shares of Common Stock acquirable upon the exercise of
stock options at a price of $0.87 per share.
(11) Comprised of shares of preferred stock directly owned by CECAP.
(12) Comprised of shares of preferred stock directly owned by CECAP and CE.
(13) Mr. Bunce ceased being an officer of the Company effective September
30, 1998, and left the Company's employ on January 31, 1999.
(14) Comprised of 99,268 shares of Common Stock and 25,000 shares of Common
Stock acquirable upon the exercise of options of a price of $0.87 per
share.
(15) Comprised of 26,868 shares of Common Stock, 25,000 shares of Common
Stock acquirable upon the exercise of options at a price of $0.87 per
share and 50,000 shares of Common Stock acquirable upon the exercise of
options at a price of $0.56 per share.
(16) Comprised of 16,513 shares of Common Stock, 25,000 shares of Common
Stock acquirable upon the exercise of options at a price of $0.87 per
share and 50,000 shares of Common Stock acquirable upon the exercise of
options at a price of $0.25 per share.
9
<PAGE>
Changes in Control
------------------
Pursuant to the Securities Purchase Agreement, dated January 28, 1999,
among the Company, CECAP and CE (the "Securities Purchase Agreement"), the
Company caused Messrs. Peter Boni, John Maxwell and Richard Rankin, individuals
designated by CECAP and CE, to be elected to the Company's Board of Directors.
The Securities Purchase Agreement provides that for at least two years after
January 28, 1999, one member of the Board of Directors will be an independent
director (i.e., independent of CECAP and CE), and one member of the Board of
Directors will be the Chief Executive Officer of the Company. In addition, the
Securities Purchase Agreement provides that commencing with the next succeeding
annual meeting of stockholders of the Company, and at each subsequent annual
meeting of stockholders of the Company thereafter so long as CECAP and CE, in
the aggregate, beneficially own 25% or more of the total number of outstanding
shares of the Company's Common Stock, CECAP and CE will have the right to
nominate a majority of the Company's Board of Directors and the Company will
cause such nominees to be included in the slate of nominees recommended by the
Board of Directors to the Company's stockholders for election and use its best
efforts to cause the election of such nominees. Other than as is set forth in
this paragraph, the Company is not aware of any arrangements which may result in
a change of control of the Company.
10
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
WILTEK, INC
Date: March 1, 1999 By:/s/ David S. Teitelman
----------------------
David S. Teitelman
President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ David S. Teitelman President and Director March 1, 1999
- -----------------------
David S. Teitelman
/s/ John C. Maxwell III CEO, Director and March 1, 1999
- ----------------------- Chairman of the Board
John C. Maxwell (Principal Executive Officer)
/s/ Walter R. Keisch Chief Financial Officer and Secretary March 1, 1999
- -----------------------
Walter R. Keisch
/s/ Peter J. Boni Director March 1, 1999
- -----------------------
Peter J. Boni
/s/ W. Richard Rankin Director March 1, 1999
- -----------------------
W. Richard Rankin
/s/ Graeme MacLetchie Director March 1, 1999
- -----------------------
Graeme MacLetchie
</TABLE>
11
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description Sequential Page Number
- ---------- ----------- ----------------------
<S> <C> <C>
21 Subsidiary (1)
23 Consent of Independant (1)
Certified Accountant
10.1 David S. Teitelman (2)
Employment Agreement
10.2 Walter R. Keisch (2)
Employment Agreement
10.3 David P. Holst-Grubbe (2)
Employment Agreement
10.4 Kevin P. Carathanasis (2)
Employment Agreement
</TABLE>
- -------------------------------------------
(1) Incorporated by reference to the Company's Annual Report on Form 10-KSB for
the fiscal year ended October 31, 1998, as filed with the Commission on
December 31, 1998.
(2) Filed herewith.
12
<PAGE>
Exhibit 10.1
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 1st day of January, 1999, by and between WILTEK,
INC., a Connecticut corporation, with its principal offices located at 542
Westport Avenue, Norwalk CT 06851 (the "Company") and David S. Teitelman, an
individual, residing at 14 Clinton Street, Fairfield, Connecticut 06430 (the
"Employee").
W I T N E S S E T H:
--------------------
WHEREAS, the Company desires that the Employee shall be employed by the
Company, and the Employee is desirous of such employment, upon the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein, the parties hereto agree as follows:
1. Defining Terms. As used in this Agreement, the following terms
--------------
shall have the following meanings:
(a) "Company" shall mean and include Wiltek, Inc., and its
parents, subsidiaries and affiliates and the respective
successors and assigns of any of them, whether now
existing or hereafter arising: provided, however, that
references to the Company in Paragraphs 6, 7 and 9 of
this Agreement shall be limited solely to Wiltek, Inc.
(b) "Customer" shall mean any individual, firm, partnership,
corporation, company, joint venture or governmental or
military unit or any other entity or any parent,
subsidiary or affiliate of any of them which is
negotiating or has a contract with the Company for the
purchase or lease of the Company's equipment, products
or services or which has been solicited by the Company
with respect to such purchase or lease during the
Employee's employment with the Company.
(c) "Confidential Information" shall mean information
concerning the Company, its products, processes and
services and its customers, suppliers, contractors,
agents, consultants and employees (herein-after referred
to as "Company Affiliates"), including, but not limited
to, information relating to research, development.
inventions, manufacture, purchasing, accounting,
finances, costs, profit margins, patents, methods,
programs, apparatus, engineering, marketing,
merchandising, selling, Customer lists, Customer
requirements and personnel, pricing, pricing methods and
data processing and any other materials or information,
heretofore or hereafter during the term of this
Agreement, conceived, designed, created, used or
developed by or relating to the Company or any of the
Company Affiliates; provided, however, that Confidential
Information shall not include any information which may
be in the public domain or come into the public domain
not as a result of a breach by the Employee of any of
the terms and provisions of this Agreement.
13
<PAGE>
(d) "Proprietary Property" shall mean discoveries, concepts
and ideas and expressions thereof, whether or not
subject to patent, copyright, trademark, trade name or
service mark protection, including, but not limited to,
software, services, processes, methods, formulae,
techniques, apparatus, designs and writings as well as
improvements thereon, revisions thereof and know-how
related thereto, concerning any present or future
activities of the Company; provided, however, that
Proprietary Property shall not include anything which
may be in the public domain or come into the public
domain not as a result of a breach by the Employee of
any of the terms and provisions of this Agreement.
(e) "Competing Product" shall mean any product, process or
service of any person or legal entity other than the
Company, in existence or under development, which,
during the term of this Agreement, competes with or is
an alternative to any present or future product,
process, or service of the Company whether or not
actively marketed by the Company.
(f) "Competing Organization" shall mean any person or legal
entity engaged in, about to engage in or intending to
engage in research on or development, use, production,
marketing, or selling of a Competing Product.
2. Employment. The Company hereby employs the Employee, and the Employee
----------
hereby accepts such employment, upon the terms and conditions set forth in this
Agreement.
3. Duties. The Employee shall be employed by the Company as President
------
and he shall perform such duties and render such services consistent therewith
as may from time to time be required of him by the Board of Directors of the
Company or the Chairman of the Company.
4. Extent of Service. During the term of his employment, the Employee
-----------------
agrees that (a) he will serve the Company faithfully, diligently and to the best
of his ability under the direction of the Chairman or the Board of Directors of
the Company; (b) he will devote his best efforts and substantially his entire
working time, attention and energy to the performance of his duties hereunder
and to promoting and furthering the interests of the Company, taking, however,
from time to time, reasonable vacations consistent with the performance of his
obligations hereunder, and (c) he will not, without the prior written approval
of the Board of Directors of the Company, which approval shall not be
unreasonably withheld, become an officer, director, employee or consultant of,
or otherwise become associated with or engaged in, any business other than that
of the Company, and he will do nothing inconsistent with his duties to the
Company.
5. Terms of Employment. The term of employment of the Employee under
-------------------
this Agreement shall be for a period commencing on the date of this Agreement
and terminating twelve (12) months thereafter, unless sooner terminated pursuant
to Paragraph 9 of this Agreement (the "Term"), and for successive one-year Terms
thereafter; provided, however, that with respect to each such successive Term,
the Company and the Employee shall have mutually agreed, in writing, to basic
compensation for such successive Term. If the Company decides not to renew the
Employee's Employment Agreement, then the Employee shall be entitled to the
termination provisions provided for in Clause 9(b) of this Employment Agreement.
6. Basic Compensation. As basic compensation for the services to be
------------------
rendered hereunder by the Employee for the initial Term, the Company agrees to
pay to the Employee, and the Employee agrees to accept, a minimum salary at the
rate of $168,000 per annum. The salary payable to the Employee hereunder shall
be paid in equal semi-monthly installments during the Term, or in such other
manner as shall be mutually agreed upon by the parties hereto.
14
<PAGE>
7. Other Benefits. The Employee shall be entitled to participate in any
--------------
retirement, disability, profit-sharing, medical or life insurance or other
similar plan or arrangement provided by the Company to its employees, or its
other executive employees. The Employee shall also receive benefits as stated
within the attached "Schedule of Benefits."
8. Disability. If Employee shall be disabled, he shall receive full
----------
compensation (less any payments received from Worker's Compensation, Wiltek's
disability plans or other governmental payment for such disability) for all
periods of disability even if a period of disability extends beyond the Term;
provided, however, that the maximum number of consecutive days during which
disability occurs and for which Wiltek shall be obligated to pay such
compensation shall be one-hundred-and-eighty (180) days. Disability means the
inability of Employee to perform his duties hereunder on account of mental or
physical illness or physical incapacity.
9. Termination.
-----------
(a) The employment of the Employee hereunder shall terminate in
the event of the death of the Employee and, at the option of
the Company, upon written notice to the Employee, (i) in the
event that Base Salary payments are terminated due to
disability pursuant to Paragraph 8 of this Agreement, or (ii)
in the event that the Employee shall breach any of the terms
and provisions of this Agreement.
(e) In addition to the provisions of Paragraph 9(a) above, the
Company may also, in its sole discretion, elect to terminate,
without cause, the employment of the Employee hereunder by
thirty (30) days prior written notice to the Employee;
provided, however, that if the Company shall so terminate this
Agreement pursuant to this Paragraph 9(b), the Company shall
pay the Employee guaranteed severance pay in accordance with
the next sentence, continue the benefits set forth in Item 4
of the attached "Schedule of Benefits" for so long as the
severance payments are being made, will continue the benefit
set forth in Item 1 thereof for the terms thereof and will pay
the bonuses set forth in Items 8 and 9 thereof per their
respective terms. During the twelve-month period following the
receipt of written notice by the Employee, the Company shall
pay the Employee guaranteed severance pay at a rate equal to
the Employee's base compensation immediately prior to such
termination and such guaranteed severance pay shall be paid to
the Employee in the manner and at the time or times that such
base compensation would otherwise have been paid to the
Employee. Following the twelve-month guaranteed severance pay
period, if the Employee does not become employed, the Company
shall pay the Employee additional supplemental severance pay
in accordance with the next sentence. During the six-month
period following the conclusion of Company payment to the
Employee of twelve months of guaranteed severance pay, the
Company shall pay the Employee additional supplemental
severance pay at a rate equal to the Employee's base
compensation immediately prior to such termination and such
additional supplemental severance pay shall be paid to the
Employee in the manner and at the time or times that such base
compensation would otherwise have been paid to the Employee.
10. Representations and Warranties of the Employee as to Conflicts.
--------------------------------------------------------------
The Employee hereby represents and warrants to the Company that his employment
by the Company does not and will not violate any provision of law or fiduciary
duty by which he is bound and will not conflict with or result in a breach of
any agreement or instrument to which he is a party or by which he is bound, and
the Employee agrees that he will indemnify and hold harmless the Company, its
directors, officers and employees against any claims, damages, liabilities and
expenses (including attorneys' fees) which may be incurred, including amounts
paid in settlement, by any of them in connection with any claim based upon or
related to a breach of the Employee's representation and warranty set forth in
this Paragraph. In the event of any claim based upon or related to a breach of
the Employee's representation and warranty set forth in this Paragraph 10, the
Company will give prompt notice thereof, in writing, to the Employee and the
Employee shall have the right to defend such claim with counsel reasonably
satisfactory to the Company.
11. Proprietary Property. With respect to Proprietary Property made or
--------------------
conceived by the Employee in the field of data communications, whether or not
during the hours of his employment or with the use of the Company's facilities,
materials or
15
<PAGE>
personnel, either individually or jointly with others during the period of his
employment by the Company, the Employee shall, without the payment of royalty or
any other considerations to him therefor:
(a) Inform the Company promptly and fully of such Proprietary
Property by a written report satisfactory to the Company;
(b) Apply, at the Company's requests and expense, for United
States and foreign letters patent, copyright, trademark or
service mark, as the case may be, either in the Employee's
name or otherwise as the Company shall direct;
(c) Assign to the Company all of his right, title and interest
in such Proprietary Property, and to applications for United
States and/or foreign letters patent, copyright, trademark
and service mark and to any letters patent, copyright,
trademark and service mark which may be issued upon such
Proprietary Property;
(d) Deliver promptly to the Company, without charge to the
Company but at its expense, such written instruments, and do
such other acts, as may be necessary, in the opinion of the
Company, to obtain and maintain United States and/or foreign
letters patent, copyright, trademark or service mark on the
Proprietary Property and to vest the entire right, title and
interest thereto in the Company; and
(e) Grant to the Company, prior to assignment of the Employee's
right title and interest to the Company in any Proprietary
Property as required above, the royalty-free right to use in
its business, and to make, have made, use and sell products,
processes, services, writings and/or marks based upon or
related to Proprietary Property made or conceived by the
Employee.
12. Confidentiality.
---------------
(a) During the Term and at all times thereafter, the Employee
will not use Confidential Information for his own benefit or
for the benefit of any person or legal entity other than the
Company nor will he disclose the same to any other person or
legal entity, except as required to conduct the business of
the Company in the ordinary course.
(b) Except with the prior written approval of the Company or
except as required to conduct the business of the Company in
the ordinary course, the Employee will not, at any time,
directly or indirectly, use, disseminate, disclose, lecture
upon or publish articles concerning any Confidential
Information.
(c) Upon the termination of his employment with the Company, all
documents, records, notebooks and similar repositories of or
containing Confidential Information, including any copies
thereof, then in the Employee's possession, or under his
control, whether prepared by him or others, will be left
with or immediately returned to the Company by the Employee.
16
<PAGE>
13. Non-Compete. The Employee agrees that, during the term of his
-----------
employment with the Company and also for one year following the Employee's
termination or departure from the Company he will not, without the written
approval of the Company, directly or indirectly, under any circumstances
whatsoever, own, manage, operate, engage in, control or participate in the
ownership, management, operation or control of, or be connected in any manner
with, whether as an individual, partner, stockholder, director, officer,
principal, agent, employee or consultant, or in any other relation or capacity
whatsoever, any Competing Organization, and will not in any such manner compete
with the Company or solicit or call on any Customer of the Company, wherever
located, which was a Customer of the Company at any time during the period one
(1 year prior to the termination of the Employee's employment with the Company
for the purpose of inducing such Customer to purchase or lease a Competing
Product. Notwithstanding the foregoing, nothing contained in this Paragraph 13
shall restrict the Employee from making any investment in any company whose
stock is listed on a national securities exchange or actively traded in the
over-the-counter market, so long as such investment does not give him the right
to control or influence the policy decisions of any such business or enterprise
which is or might be in competition with any business of the Company.
14. Non-Interference. The Employee will not, for a period of one (1) year
----------------
following the termination of the Employee's employment by the Company, directly
or indirectly, employ, hire, solicit or, in any manner, encourage any employee
of the Company to leave the employ of the Company.
15. Injunctive Relief. In addition to any other rights or remedies
-----------------
available to the Company as a result of the breach of the Employee's obligations
hereunder, the Company shall be entitled to enforcement of such obligations by
an injunction or a decree of specific performance from a court with appropriate
jurisdiction and in the event that the Company is successful in any suit or
proceeding brought or instituted by the Company to enforce any of the provisions
of this Agreement or on account of any damages sustained by the Company by
reason of the violation by the Employee of any of the terms and/or provisions of
this Agreement to be performed by the Employee, the Employee agrees to pay to
the Company all attorneys' fees reasonably incurred by the Company.
16. Withholding. The Employee hereby agrees that he will make such
-----------
arrangements as the Company may deem necessary to discharge any obligations of
the Company to withhold Federal, state or local taxes imposed upon the Company
in respect of this Agreement.
17. Severability. The provisions of this Agreement shall be severable
------------
and if any part of any provision shall be held invalid or unenforceable or any
separate covenant contained in any provision is held to be unduly restrictive
and void by a final decision of any court or other tribunal of competent
jurisdiction, such part, covenant or provision shall be construed to give it
maximum lawful validity and the remaining provisions of this Agreement shall
nonetheless remain in full force and effect.
18. Entire Agreement. This Agreement and the attached "Schedule of
----------------
Benefits" contains the entire agreement of the parties relative to the subject
matter hereof, superseding and terminating all prior agreements or
understandings, whether oral or written, between the parties hereto relative to
the subject matter hereof, and this Agreement may not be extended, amended,
modified or supplemented without the written consent of the parties hereto.
19. Waivers. Any waiver of the performance of the terms or provisions of
-------
this Agreement shall be effective only if in writing and signed by the party
against whom such waiver is to be enforced. The failure of either party to
exercise any of his or its rights under this Agreement or to require the
performance of any term or provision of this Agreement, or the waiver by either
party of any breach of this Agreement, shall not prevent a subsequent exercise
or enforcement of such rights or be deemed a waiver of any subsequent breach of
the same or any other term or provision of this Agreement.
20. Notices. Any notice required or permitted to be given under this
-------
Agreement shall be in writing and shall be deemed given when personally
delivered or sent by registered or certified mail, postage prepaid, return
receipt requested, to the respective address of the parties hereto as set forth
above or to such other address as either party may designate to the other party
in the manner provided herein for giving notice.
17
<PAGE>
21. Successors and Assigns. This Agreement shall be binding upon and
----------------------
inure to the benefit of the heirs, executors, administrators, successors and
legal representatives of the Employee, and shall inure to the benefit of and be
binding upon the Company and any successor to the business of the Company
pursuant to a merger or acquisition of all or substantially all of its assets,
but the obligations of the Employee may not be delegated and the Employee may
not assign, transfer, pledge, encumber, hypothecate or otherwise dispose of this
Agreement, or any of his rights hereunder (whether by operation of law or
otherwise), except as expressly permitted by this Agreement, and any such
attempted delegation or disposition shall be null and void and without effect.
22. Governing Law. This Agreement shall be governed by and construed and
-------------
enforced in accordance with the laws of the State of Connecticut.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
WILTEK, INC.
By: /s/ Jay W. Fitzpatrick
------------------------------
Chairman of the Board
By: /s/ David S. Teitelman
------------------------------
David S. Teitelman
President & CEO
18
<PAGE>
Schedule of Benefits
1. Company Car. Company obligation is direct payment of, or reimbursement to
------------
the Employee, for all lease payments, tax payments, insurance payments,
gasoline payments, service payments, repair payments, maintenance payments.
This benefit will continue for two (2) months after termination.
2. Complete Annual Physical Examination. Company obligation is reimbursement
-------------------------------------
to the Employee for the cost of any fees or charges not covered under the
Company's standard health insurance plan. This benefit is eliminated upon
termination.
3. Disability Policy. Company obligation is reimbursement to the Employee for
------------------
the cost of the Employee maintaining a long-term disability insurance policy
providing up to 70% of Annual Minimum Base Salary. This benefit is eliminated
upon termination.
4. Company Standard Benefits. Health, major medical, dental, eye care,
--------------------------
orthodontia, life insurance, short-term disability, long-term disability,
401K contribution, in addition to individual benefits provided within this
section ("Schedule of Benefits") to the Employee.
5. Annual Minimum Base Salary. $168,000.
---------------------------
6. Guaranteed Severance Pay. Twelve (12) months of Annual Minimum Base Salary.
-------------------------
7. Supplemental Severance Pay. If employment not found by Employee following
---------------------------
Guaranteed Severance Pay Period, an additional six (6) months of Annual
Minimum Base Salary.
8. Consulting Division Sale Bonus. Ten percent (10%) of the selling price of
-------------------------------
the consulting division paid by the Company and allocated by the Employee to
himself, other officers and other employees. The Company's obligation remains
until the latter of December 31, 1999 or three (3) months after termination.
The Company shall make full payment within five (5) business days of
consulting division selling transaction.
9. Revenue Bonus. If Wiltek reports fiscal year 1999 revenue (excluding any
--------------
revenue for business's acquired after January 1, 1999) of at least
$6,800,000 then a cash bonus of .60% of total fiscal year 1999 revenue
$7,000,000 then a cash bonus of .64% of total fiscal year 1999 revenue
$7,200,000 then a cash bonus of .68% of total fiscal year 1999 revenue
$7,400,000 then a cash bonus of .72% of total fiscal year 1999 revenue
$7,600,000 then a cash bonus of .76% of total fiscal year 1999 revenue
$7,800,000 then a cash bonus of .80% of total fiscal year 1999 revenue
$8,000,000 then a cash bonus of .84% of total fiscal year 1999 revenue
$8,200,000 then a cash bonus of .88% of total fiscal year 1999 revenue
$8,400,000 then a cash bonus of .92% of total fiscal year 1999 revenue
$8,600,000 then a cash bonus of .96% of total fiscal year 1999 revenue
$8,800,000 then a cash bonus of 1.00% of total fiscal year 1999 revenue
The Company shall make full cash bonus payment to Employee within 60 days
(December 30, 1999) of close of fiscal year 1999. In the event of termination
any bonus accumulated as of the date of termination will be payable by the
Company to the Employee within 30 days of termination.
19
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Schedule of Benefits as
of the date first above written.
WILTEK, INC.
By: /s/ Jay W. Fitzpatrick
------------------------------
Chairman of the Board
By: /s/ David S. Teitelman
------------------------------
David S. Teitelman
President & CEO
WITNESS:
/s/ Cindy Hampton
- --------------------------
20
<PAGE>
Exhibit 10.2
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 1st day of January, 1999, by and between WILTEK,
INC., a Connecticut corporation, with its principal offices located at 542
Westport Avenue, Norwalk CT 06851 (the "Company") and Walter R. Keisch, an
individual, residing at 27 Christianna Drive, Monroe, Connecticut 06468 (the
"Employee").
W I T N E S S E T H:
--------------------
WHEREAS, the Company desires that the Employee shall be employed by the
Company, and the Employee is desirous of such employment, upon the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein, the parties hereto agree as follows:
1. Defining Terms. As used in this Agreement, the following terms
--------------
shall have the following meanings:
(a) "Company" shall mean and include Wiltek, Inc., and its
parents, subsidiaries and affiliates and the respective
successors and assigns of any of them, whether now existing
or hereafter arising: provided, however, that references to
the Company in Paragraphs 6, 7 and 9 of this Agreement shall
be limited solely to Wiltek, Inc.
(b) "Customer" shall mean any individual, firm, partnership,
corporation, company, joint venture or governmental or
military unit or any other entity or any parent, subsidiary
or affiliate of any of them which is negotiating or has a
contract with the Company for the purchase or lease of the
Company's equipment, products or services or which has been
solicited by the Company with respect to such purchase or
lease during the Employee's employment with the Company.
(c) "Confidential Information" shall mean information concerning
the Company, its products, processes and services and its
customers, suppliers, contractors, agents, consultants and
employees (herein-after referred to as "Company
Affiliates"), including, but not limited to, information
relating to research, development. inventions, manufacture,
purchasing, accounting, finances, costs, profit margins,
patents, methods, programs, apparatus, engineering,
marketing, merchandising, selling, Customer lists, Customer
requirements and personnel, pricing, pricing methods and
data processing and any other materials or information,
heretofore or hereafter during the term of this Agreement,
conceived, designed, created, used or developed by or
relating to the Company or any of the Company Affiliates;
provided, however, that Confidential Information
21
<PAGE>
shall not include any information which may be in the public
domain or come into the public domain not as a result of a
breach by the Employee of any of the terms and provisions of
this Agreement.
(d) "Proprietary Property" shall mean discoveries, concepts and
ideas and expressions thereof, whether or not subject to
patent, copyright, trademark, trade name or service mark
protection, including, but not limited to, software,
services, processes, methods, formulae, techniques,
apparatus, designs and writings as well as improvements
thereon, revisions thereof and know-how related thereto,
concerning any present or future activities of the Company;
provided, however, that Proprietary Property shall not
include anything which may be in the public domain or come
into the public domain not as a result of a breach by the
Employee of any of the terms and provisions of this
Agreement.
(e) "Competing Product" shall mean any product, process or
service of any person or legal entity other than the
Company, in existence or under development, which, during
the term of this Agreement, competes with or is an
alternative to any present or future product, process, or
service of the Company whether or not actively marketed by
the Company.
(f) "Competing Organization" shall mean any person or legal
entity engaged in, about to engage in or intending to engage
in research on or development, use, production, marketing,
or selling of a Competing Product.
2. Employment. The Company hereby employs the Employee, and the Employee
----------
hereby accepts such employment, upon the terms and conditions set forth
in this Agreement.
3. Duties. The Employee shall be employed by the Company as Vice President
------
and he shall perform such duties and render such services consistent
therewith as may from time to time be required of him by the President
of the Company.
4. Extent of Service. During the term of his employment, the Employee
-----------------
agrees that (a) he will serve the Company faithfully, diligently and to
the best of his ability under the direction of the Chairman or the Board
of Directors of the Company; (b) he will devote his best efforts and
substantially his entire working time, attention and energy to the
performance of his duties hereunder and to promoting and furthering the
interests of the Company, taking, however, from time to time, reasonable
vacations consistent with the performance of his obligations hereunder,
and (c) he will not, without the prior written approval of the President
of the Company, which approval shall not be unreasonably withheld,
become an officer, director, employee or consultant of, or otherwise
become associated with or engaged in, any business other than that of
the Company, and he will do nothing inconsistent with his duties to the
Company.
5. Terms of Employment. The term of employment of the Employee under this
-------------------
Agreement shall be for a period commencing on the date of this Agreement
and terminating twelve (12) months thereafter, unless sooner terminated
pursuant to Paragraph 9 of this Agreement (the "Term"), and for
successive one-year Terms thereafter; provided, however, that with
respect to each such successive Term, the Company and the
22
<PAGE>
Employee shall have mutually agreed, in writing, to basic compensation
for such successive Term. If the Company decides not to renew the
Employee's Employment Agreement, then the Employee shall be entitled to
the termination provisions provided for in Clause 9(b) of this
Employment Agreement.
6. Basic Compensation. As basic compensation for the services to be
------------------
rendered hereunder by the Employee for the initial Term, the Company
agrees to pay to the Employee, and the Employee agrees to accept, a
minimum salary at the rate of $120,000 per annum. The salary payable to
the Employee hereunder shall be paid in equal semi-monthly installments
during the Term, or in such other manner as shall be mutually agreed
upon by the parties hereto.
7. Other Benefits. The Employee shall be entitled to participate in any
--------------
retirement, disability, profit-sharing, medical or life insurance or
other similar plan or arrangement provided by the Company to its
employees, or its other executive employees. The Employee shall also
receive benefits as stated within the attached "Schedule of Benefits."
8. Disability. If Employee shall be disabled, he shall receive full
----------
compensation (less any payments received from Worker's Compensation,
Wiltek's disability plans or other governmental payment for such
disability) for all periods of disability even if a period of disability
extends beyond the Term; provided, however, that the maximum number of
consecutive days during which disability occurs and for which Wiltek
shall be obligated to pay such compensation shall be ninety (90) days.
Disability means the inability of Employee to perform his duties
hereunder on account of mental or physical illness or physical
incapacity.
9. Termination.
-----------
(a) The employment of the Employee hereunder shall terminate in the
event of the death of the Employee and, at the option of the
Company, upon written notice to the Employee, (i) in the event
that Base Salary payments are terminated due to disability
pursuant to Paragraph 8 of this Agreement, or (ii) in the event
that the Employee shall breach any of the terms and provisions
of this Agreement.
(b) In addition to the provisions of Paragraph 9(a) above, the
Company may also, in its sole discretion, elect to terminate,
without cause, the employment of the Employee hereunder by
thirty (30) days prior written notice to the Employee; provided,
however, that if the Company shall so terminate this Agreement
pursuant to this Paragraph 9(b), the Company shall pay the
Employee guaranteed severance pay in accordance with the next
sentence, continue the benefits set forth in Item 2 of the
attached "Schedule of Benefits" for so long as the severance
payments are being made, will continue the benefit set forth in
Item 1 thereof for the terms thereof and will pay the bonuses
set forth in Item 6 thereof per the terms thereof. During the
six-month period following the receipt of written notice by the
Employee, the Company shall pay the Employee guaranteed
severance pay at a rate equal to the Employee's base
compensation immediately prior to such termination and such
guaranteed severance pay shall be paid to the Employee in the
manner and at the time or times that such base compensation
would otherwise have been paid to the Employee. Following the
six-month guaranteed severance pay period, if the Employee does
not become employed, the Company shall pay the Employee
additional supplemental severance pay in accordance with the
next sentence. During the six-month period following the
conclusion of Company payment to the Employee of six months of
guaranteed severance pay, the Company shall pay the Employee
additional supplemental severance pay at a rate equal to the
Employee's base compensation immediately prior to such
termination and such additional supplemental severance pay shall
be paid to the Employee in the
23
<PAGE>
manner and at the time or times that such base compensation would otherwise
have been paid to the Employee.
10. Representations and Warranties of the Employee as to Conflicts. The
--------------------------------------------------------------
Employee hereby represents and warrants to the Company that his employment by
the Company does not and will not violate any provision of law or fiduciary duty
by which he is bound and will not conflict with or result in a breach of any
agreement or instrument to which he is a party or by which he is bound, and the
Employee agrees that he will indemnify and hold harmless the Company, its
directors, officers and employees against any claims, damages, liabilities and
expenses (including attorneys' fees) which may be incurred, including amounts
paid in settlement, by any of them in connection with any claim based upon or
related to a breach of the Employee's representation and warranty set forth in
this Paragraph. In the event of any claim based upon or related to a breach of
the Employee's representation and warranty set forth in this Paragraph 10, the
Company will give prompt notice thereof, in writing, to the Employee and the
Employee shall have the right to defend such claim with counsel reasonably
satisfactory to the Company.
11. Proprietary Property. With respect to Proprietary Property made or
--------------------
conceived by the Employee in the field of data communications, whether or not
during the hours of his employment or with the use of the Company's facilities,
materials or personnel, either individually or jointly with others during the
period of his employment by the Company, the Employee shall, without the payment
of royalty or any other considerations to him therefor:
(a) Inform the Company promptly and fully of such Proprietary
Property by a written report satisfactory to the Company;
(b) Apply, at the Company's requests and expense, for United
States and foreign letters patent, copyright, trademark or
service mark, as the case may be, either in the Employee's
name or otherwise as the Company shall direct;
(c) Assign to the Company all of his right, title and interest
in such Proprietary Property, and to applications for United
States and/or foreign letters patent, copyright, trademark
and service mark and to any letters patent, copyright,
trademark and service mark which may be issued upon such
Proprietary Property;
(d) Deliver promptly to the Company, without charge to the
Company but at its expense, such written instruments, and do
such other acts, as may be necessary, in the opinion of the
Company, to obtain and maintain United States and/or foreign
letters patent, copyright, trademark or service mark on the
Proprietary Property and to vest the entire right, title and
interest thereto in the Company; and
(e) Grant to the Company, prior to assignment of the Employee's
right title and interest to the Company in any Proprietary
Property as required above, the royalty-free right to use in
its business, and to make, have made, use and sell products,
processes, services, writings and/or marks based upon or
related to Proprietary Property made or conceived by the
Employee.
12. Confidentiality.
---------------
(a) During the Term and at all times thereafter, the Employee
will not use Confidential Information for his own benefit or
for the benefit of any person or legal entity other than
24
<PAGE>
the Company nor will he disclose the same to any other person
or legal entity, except as required to conduct the business
of the Company in the ordinary course.
(b) Except with the prior written approval of the Company or
except as required to conduct the business of the Company in
the ordinary course, the Employee will not, at any time,
directly or indirectly, use, disseminate, disclose, lecture
upon or publish articles concerning any Confidential
Information.
(c) Upon the termination of his employment with the Company, all
documents, records, notebooks and similar repositories of or
containing Confidential Information, including any copies
thereof, then in the Employee's possession, or under his
control, whether prepared by him or others, will be left with
or immediately returned to the Company by the Employee.
13. Non-Compete. The Employee agrees that, during the term of his
-----------
employment with the Company and also for one year following the Employee's
termination or departure from the Company, he will not, without the written
approval of the Company, directly or indirectly, under any circumstances
whatsoever, own, manage, operate, engage in, control or participate in the
ownership, management, operation or control of, or be connected in any manner
with, whether as an individual, partner, stockholder, director, officer,
principal, agent, employee or consultant, or in any other relation or capacity
whatsoever, any Competing Organization, and will not in any such manner compete
with the Company or solicit or call on any Customer of the Company, wherever
located, which was a Customer of the Company at any time during the period one
(1 year prior to the termination of the Employee's employment with the Company
for the purpose of inducing such Customer to purchase or lease a Competing
Product. Notwithstanding the foregoing, nothing contained in this Paragraph 13
shall restrict the Employee from making any investment in any company whose
stock is listed on a national securities exchange or actively traded in the
over-the-counter market, so long as such investment does not give him the right
to control or influence the policy decisions of any such business or enterprise
which is or might be in competition with any business of the Company.
14. Non-Interference. The Employee will not, for a period of one (1) year
----------------
following the termination of the Employee's employment by the Company, directly
or indirectly, employ, hire, solicit or, in any manner, encourage any employee
of the Company to leave the employ of the Company.
15. Injunctive Relief. In addition to any other rights or remedies
-----------------
available to the Company as a result of the breach of the Employee's obligations
hereunder, the Company shall be entitled to enforcement of such obligations by
an injunction or a decree of specific performance from a court with appropriate
jurisdiction and in the event that the Company is successful in any suit or
proceeding brought or instituted by the Company to enforce any of the provisions
of this Agreement or on account of any damages sustained by the Company by
reason of the violation by the Employee of any of the terms and/or provisions of
this Agreement to be performed by the Employee, the Employee agrees to pay to
the Company all attorneys' fees reasonably incurred by the Company.
16. Withholding. The Employee hereby agrees that he will make such
-----------
arrangements as the Company may deem necessary to discharge any obligations of
the Company to withhold Federal, state or local taxes imposed upon the Company
in respect of this Agreement.
17. Severability. The provisions of this Agreement shall be severable and
------------
if any part of any provision shall be held invalid or unenforceable or any
separate covenant contained in any provision is held to be unduly restrictive
and void by a final decision of any court or other tribunal of competent
jurisdiction, such part, covenant or provision shall be construed to give it
maximum lawful validity and the remaining provisions of this Agreement shall
nonetheless remain in full force and effect.
18. Entire Agreement. This Agreement and the attached "Schedule of
----------------
Benefits" contains the entire agreement of the parties relative to the subject
matter hereof, superseding and terminating all prior agreements or
understandings, whether oral or
25
<PAGE>
written, between the parties hereto relative to the subject matter hereof, and
this Agreement may not be extended, amended, modified or supplemented without
the written consent of the parties hereto.
19. Waivers. Any waiver of the performance of the terms or provisions of
-------
this Agreement shall be effective only if in writing and signed by the party
against whom such waiver is to be enforced. The failure of either party to
exercise any of his or its rights under this Agreement or to require the
performance of any term or provision of this Agreement, or the waiver by either
party of any breach of this Agreement, shall not prevent a subsequent exercise
or enforcement of such rights or be deemed a waiver of any subsequent breach of
the same or any other term or provision of this Agreement.
20. Notices. Any notice required or permitted to be given under this
-------
Agreement shall be in writing and shall be deemed given when personally
delivered or sent by registered or certified mail, postage prepaid, return
receipt requested, to the respective address of the parties hereto as set forth
above or to such other address as either party may designate to the other party
in the manner provided herein for giving notice.
21. Successors and Assigns. This Agreement shall be binding upon and
----------------------
inure to the benefit of the heirs, executors, administrators, successors and
legal representatives of the Employee, and shall inure to the benefit of and be
binding upon the Company and any successor to the business of the Company
pursuant to a merger or acquisition of all or substantially all of its assets,
but the obligations of the Employee may not be delegated and the Employee may
not assign, transfer, pledge, encumber, hypothecate or otherwise dispose of this
Agreement, or any of his rights hereunder (whether by operation of law or
otherwise), except as expressly permitted by this Agreement, and any such
attempted delegation or disposition shall be null and void and without effect.
22. Governing Law. This Agreement shall be governed by and construed and
-------------
enforced in accordance with the laws of the State of Connecticut.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
WILTEK, INC.
By: /s/ David S. Teitelman
------------------------------
President & Board Member
By: /s/ Walter R. Keisch
------------------------------
Walter R. Keisch
Vice President
WITNESS:
/s/ Cindy Hampton
- --------------------------
26
<PAGE>
Schedule of Benefits
1. Company Car. Company obligation is direct payment of, or reimbursement to
------------
the Employee, for all lease payments, tax payments, insurance payments,
gasoline payments, service payments, repair payments, maintenance payments.
This benefit will continue for two (2) months after termination.
2. Company Standard Benefits. Health, major medical, dental, eye care,
--------------------------
orthodontia, life insurance, short-term disability, long-term disability,
401K contribution, in addition to individual benefits provided within this
section ("Schedule of Benefits") to the Employee.
3. Annual Minimum Base Salary. $120,000.
---------------------------
4. Guaranteed Severance Pay. Six (6) months of Annual Minimum Base Salary.
-------------------------
5. Supplemental Severance Pay. If employment not found by Employee following
---------------------------
Guaranteed Severance Pay Period, an additional six (6) months of Annual
Minimum Base Salary.
6. Revenue Bonus. If Wiltek reports fiscal year 1999 revenue (excluding any
--------------
revenue for business's acquired after January 1, 1999) of at least
$6,800,000 then a cash bonus of .30% of total fiscal year 1999 revenue
$7,000,000 then a cash bonus of .32% of total fiscal year 1999 revenue
$7,200,000 then a cash bonus of .34% of total fiscal year 1999 revenue
$7,400,000 then a cash bonus of .36% of total fiscal year 1999 revenue
$7,600,000 then a cash bonus of .38% of total fiscal year 1999 revenue
$7,800,000 then a cash bonus of .40% of total fiscal year 1999 revenue
$8,000,000 then a cash bonus of .42% of total fiscal year 1999 revenue
$8,200,000 then a cash bonus of .44% of total fiscal year 1999 revenue
$8,400,000 then a cash bonus of .46% of total fiscal year 1999 revenue
$8,600,000 then a cash bonus of .48% of total fiscal year 1999 revenue
$8,800,000 then a cash bonus of .50% of total fiscal year 1999 revenue
The Company shall make full cash bonus payment to Employee within 60 days
(December 30, 1999) of close of fiscal year 1999. In the event of termination
any bonus accumulated as of the date of termination will be payable by the
Company to the Employee within 30 days of termination.
IN WITNESS WHEREOF, the parties have executed this Schedule of Benefits as
of the date first above written.
WILTEK, INC.
By: /s/ David S. Teitelman
------------------------------
President & Board Member
By: /s/ Walter R. Keisch
------------------------------
Walter R. Keisch
Vice President
WITNESS:
/s/ Cindy Hampton
- --------------------------
27
<PAGE>
Exhibit 10.3
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 1st day of January, 1999, by and between WILTEK,
INC., a Connecticut corporation, with its principal offices located at 542
Westport Avenue, Norwalk CT 06851 (the "Company") and David P. Holst-Grubbe, an
individual, residing at 58 Suncrest Court, Torrington, Connecticut 06790 (the
"Employee").
W I T N E S S E T H:
--------------------
WHEREAS, the Company desires that the Employee shall be employed by the
Company, and the Employee is desirous of such employment, upon the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein, the parties hereto agree as follows:
1. Defining Terms. As used in this Agreement, the following terms
--------------
shall have the following meanings:
(a) "Company" shall mean and include Wiltek, Inc., and its
parents, subsidiaries and affiliates and the respective
successors and assigns of any of them, whether now existing
or hereafter arising: provided, however, that references to
the Company in Paragraphs 6, 7 and 9 of this Agreement shall
be limited solely to Wiltek, Inc.
(b) "Customer" shall mean any individual, firm, partnership,
corporation, company, joint venture or governmental or
military unit or any other entity or any parent, subsidiary
or affiliate of any of them which is negotiating or has a
contract with the Company for the purchase or lease of the
Company's equipment, products or services or which has been
solicited by the Company with respect to such purchase or
lease during the Employee's employment with the Company.
(c) "Confidential Information" shall mean information concerning
the Company, its products, processes and services and its
customers, suppliers, contractors, agents, consultants and
employees (herein-after referred to as "Company
Affiliates"), including, but not limited to, information
relating to research, development, inventions, manufacture,
purchasing, accounting, finances, costs, profit margins,
patents, methods, programs, apparatus, engineering,
marketing, merchandising, selling, Customer lists, Customer
requirements and personnel, pricing,
28
<PAGE>
pricing methods and data processing and any other materials
or information, heretofore or hereafter during the term of
this Agreement, conceived, designed, created, used or
developed by or relating to the Company or any of the
Company Affiliates; provided, however, that Confidential
Information shall not include any information which may be
in the public domain or come into the public domain not as a
result of a breach by the Employee of any of the terms and
provisions of this Agreement.
(d) "Proprietary Property" shall mean discoveries, concepts and
ideas and expressions thereof, whether or not subject to
patent, copyright, trademark, trade name or service mark
protection, including, but not limited to, software,
services, processes, methods, formulae, techniques,
apparatus, designs and writings as well as improvements
thereon, revisions thereof and know-how related thereto,
concerning any present or future activities of the Company;
provided, however, that Proprietary Property shall not
include anything which may be in the public domain or come
into the public domain not as a result of a breach by the
Employee of any of the terms and provisions of this
Agreement.
(e) "Competing Product" shall mean any product, process or
service of any person or legal entity other than the
Company, in existence or under development, which, during
the term of this Agreement, competes with or is an
alternative to any present or future product, process, or
service of the Company whether or not actively marketed by
the Company.
(f) "Competing Organization" shall mean any person or legal
entity engaged in, about to engage in or intending to engage
in research on or development, use, production, marketing,
or selling of a Competing Product.
2. Employment. The Company hereby employs the Employee, and the Employee
----------
hereby accepts such employment, upon the terms and conditions set forth in this
Agreement.
3. Duties. The Employee shall be employed by the Company as Vice
------
President and he shall perform such duties and render such services consistent
therewith as may from time to time be required of him by the President of the
Company.
4. Extent of Service. During the term of his employment, the Employee
-----------------
agrees that (a) he will serve the Company faithfully, diligently and to the best
of his ability under the direction of the Chairman or the Board of Directors of
the Company; (b) he will devote his best efforts and substantially his entire
working time, attention and energy to the performance of his duties hereunder
and to promoting and furthering the interests of the Company, taking, however,
from time to time, reasonable vacations consistent with the performance of his
obligations hereunder, and (c) he will not, without the prior written approval
of the President of the Company, which approval shall not be unreasonably
withheld, become an officer, director, employee or consultant of, or otherwise
become associated with or engaged in, any business other than that of the
Company, and he will do nothing inconsistent with his duties to the Company.
29
<PAGE>
5. Terms of Employment. The term of employment of the Employee under
-------------------
this Agreement shall be for a period commencing on the date of this Agreement
and terminating twelve (12) months thereafter, unless sooner terminated
pursuant to Paragraph 9 of this Agreement (the "Term"), and for successive one-
year Terms thereafter; provided, however, that with respect to each such
successive Term, the Company and the Employee shall have mutually agreed, in
writing, to basic compensation for such successive Term. If the Company decides
not to renew the Employee's Employment Agreement, then the Employee shall be
entitled to the termination provisions provided for in Clause 9(b) of this
Employment Agreement.
6. Basic Compensation. As basic compensation for the services to be
------------------
rendered hereunder by the Employee for the initial Term, the Company agrees to
pay to the Employee, and the Employee agrees to accept, a minimum salary at the
rate of $120,000 per annum. The salary payable to the Employee hereunder shall
be paid in equal semi-monthly installments during the Term, or in such other
manner as shall be mutually agreed upon by the parties hereto.
7. Other Benefits. The Employee shall be entitled to participate in any
--------------
retirement, disability, profit-sharing, medical or life insurance or other
similar plan or arrangement provided by the Company to its employees, or its
other executive employees. The Employee shall also receive benefits as stated
within the attached "Schedule of Benefits."
8. Disability. If Employee shall be disabled, he shall receive full
----------
compensation (less any payments received from Worker's Compensation, Wiltek's
disability plans or other governmental payment for such disability) for all
periods of disability even if a period of disability extends beyond the Term;
provided, however, that the maximum number of consecutive days during which
disability occurs and for which Wiltek shall be obligated to pay such
compensation shall be ninety (90) days. Disability means the inability of
Employee to perform his duties hereunder on account of mental or physical
illness or physical incapacity.
9. Termination.
-----------
(a) The employment of the Employee hereunder shall terminate in the
event of the death of the Employee and, at the option of the
Company, upon written notice to the Employee, (i) in the event
that Base Salary payments are terminated due to disability
pursuant to Paragraph 8 of this Agreement, or (ii) in the event
that the Employee shall breach any of the terms and provisions
of this Agreement.
(b) In addition to the provisions of Paragraph 9(a) above, the
Company may also, in its sole discretion, elect to terminate,
without cause, the employment of the Employee hereunder by
thirty (30) days prior written notice to the Employee; provided,
however, that if the Company shall so terminate this Agreement
pursuant to this Paragraph 9(b), the Company shall pay the
Employee guaranteed severance pay in accordance with the next
sentence, continue the benefits set forth in Item 2 of the
attached "Schedule of Benefits" for so long as the severance
payments are being made, will continue the benefit set forth in
Item 1 thereof for the terms thereof and will pay the bonuses
set forth in Item 6 thereof per the terms thereof. During the
six-month period following the receipt of written notice by the
Employee, the Company shall pay the Employee guaranteed
severance pay at a rate equal to the Employee's base
compensation immediately prior to such termination and such
guaranteed severance pay shall be paid to the Employee in the
manner and at the time or times that such base compensation
would otherwise have been paid to the Employee. Following the
six-month guaranteed severance pay period, if the Employee does
not become employed, the Company shall pay the Employee
additional supplemental severance pay in accordance with the
next sentence. During the six-month period following the
conclusion of Company payment to the Employee of six months of
guaranteed severance pay, the Company shall pay the Employee
additional supplemental severance pay at a rate equal to the
Employee's base compensation immediately prior to such
termination and such additional supplemental severance pay shall
be paid to the Employee in the manner and at the time or times
that such base compensation would otherwise have been paid to
the Employee.
30
<PAGE>
10. Representations and Warranties of the Employee as to Conflicts. The
--------------------------------------------------------------
Employee hereby represents and warrants to the Company that his
employment by the Company does not and will not violate any provision
of law or fiduciary duty by which he is bound and will not conflict
with or result in a breach of any agreement or instrument to which he
is a party or by which he is bound, and the Employee agrees that he
will indemnify and hold harmless the Company, its directors, officers
and employees against any claims, damages, liabilities and expenses
(including attorneys' fees) which may be incurred, including amounts
paid in settlement, by any of them in connection with any claim based
upon or related to a breach of the Employee's representation and
warranty set forth in this Paragraph. In the event of any claim based
upon or related to a breach of the Employee's representation and
warranty set forth in this Paragraph 10, the Company will give prompt
notice thereof, in writing, to the Employee and the Employee shall
have the right to defend such claim with counsel reasonably
satisfactory to the Company.
11. Proprietary Property. With respect to Proprietary Property made or
--------------------
conceived by the Employee in the field of data communications, whether
or not during the hours of his employment or with the use of the
Company's facilities, materials or personnel, either individually or
jointly with others during the period of his employment by the
Company, the Employee shall, without the payment of royalty or any
other considerations to him therefor:
(a) Inform the Company promptly and fully of such
Proprietary Property by a written report satisfactory to
the Company;
(b) Apply, at the Company's requests and expense, for United
States and foreign letters patent, copyright, trademark
or service mark, as the case may be, either in the
Employee's name or otherwise as the Company shall
direct;
(c) Assign to the Company all of his right, title and
interest in such Proprietary Property, and to
applications for United States and/or foreign letters
patent, copyright, trademark and service mark and to any
letters patent, copyright, trademark and service mark
which may be issued upon such Proprietary Property;
(d) Deliver promptly to the Company, without charge to the
Company but at its expense, such written instruments,
and do such other acts, as may be necessary, in the
opinion of the Company, to obtain and maintain United
States and/or foreign letters patent, copyright,
trademark or service mark on the Proprietary Property
and to vest the entire right, title and interest thereto
in the Company; and
(e) Grant to the Company, prior to assignment of the
Employee's right title and interest to the Company in
any Proprietary Property as required above, the royalty-
free right to use in its business, and to make, have
made, use and sell products, processes, services,
writings and/or marks based upon or related to
Proprietary Property made or conceived by the Employee.
12. Confidentiality.
---------------
31
<PAGE>
(a) During the Term and at all times thereafter, the Employee
will not use Confidential Information for his own benefit or for the
benefit of any person or legal entity other than the Company nor will he
disclose the same to any other person or legal entity, except as
required to conduct the business of the Company in the ordinary course.
(b) Except with the prior written approval of the Company or
except as required to conduct the business of the Company in the
ordinary course, the Employee will not, at any time, directly or
indirectly, use, disseminate, disclose, lecture upon or publish articles
concerning any Confidential Information.
(c) Upon the termination of his employment with the Company, all
documents, records, notebooks and similar repositories of or containing
Confidential Information, including any copies thereof, then in the
Employee's possession, or under his control, whether prepared by him or
others, will be left with or immediately returned to the Company by the
Employee.
13. Non-Compete. The Employee agrees that, during the term of his employment
-----------
with the Company and also for one year following the Employee's termination
or departure from the Company, he will not, without the written approval of
the Company, directly or indirectly, under any circumstances whatsoever,
own, manage, operate, engage in, control or participate in the ownership,
management, operation or control of, or be connected in any manner with,
whether as an individual, partner, stockholder, director, officer,
principal, agent, employee or consultant, or in any other relation or
capacity whatsoever, any Competing Organization, and will not in any such
manner compete with the Company or solicit or call on any Customer of the
Company, wherever located, which was a Customer of the Company at any time
during the period one (1 year prior to the termination of the Employee's
employment with the Company for the purpose of inducing such Customer to
purchase or lease a Competing Product. Notwithstanding the foregoing,
nothing contained in this Paragraph 13 shall restrict the Employee from
making any investment in any company whose stock is listed on a national
securities exchange or actively traded in the over-the-counter market, so
long as such investment does not give him the right to control or influence
the policy decisions of any such business or enterprise which is or might
be in competition with any business of the Company.
14. Non-Interference. The Employee will not, for a period of one (1) year
----------------
following the termination of the Employee's employment by the Company,
directly or indirectly, employ, hire, solicit or, in any manner, encourage
any employee of the Company to leave the employ of the Company.
15. Injunctive Relief. In addition to any other rights or remedies
-----------------
available to the Company as a result of the breach of the Employee's
obligations hereunder, the Company shall be entitled to enforcement of such
obligations by an injunction or a decree of specific performance from a
court with appropriate jurisdiction and in the event that the Company is
successful in any suit or proceeding brought or instituted by the Company
to enforce any of the provisions of this Agreement or on account of any
damages sustained by the Company by reason of the violation by the Employee
of any of the terms and/or provisions of this Agreement to be performed by
the Employee, the Employee agrees to pay to the Company all attorneys' fees
reasonably incurred by the Company.
16. Withholding. The Employee hereby agrees that he will make such
-----------
arrangements as the Company may deem necessary to discharge any obligations
of the Company to withhold Federal, state or local taxes imposed upon the
Company in respect of this Agreement.
17. Severability. The provisions of this Agreement shall be severable
------------
and if any part of any provision shall be held invalid or unenforceable or
any separate covenant contained in any provision is held to be unduly
restrictive and void by a final decision of any court or other tribunal of
competent jurisdiction, such part,
32
<PAGE>
covenant or provision shall be construed to give it maximum lawful validity
and the remaining provisions of this Agreement shall nonetheless remain in
full force and effect.
18. Entire Agreement. This Agreement and the attached "Schedule of
----------------
Benefits" contains the entire agreement of the parties relative to the
subject matter hereof, superseding and terminating all prior agreements or
understandings, whether oral or written, between the parties hereto
relative to the subject matter hereof, and this Agreement may not be
extended, amended, modified or supplemented without the written consent of
the parties hereto.
19. Waivers. Any waiver of the performance of the terms or provisions of this
-------
Agreement shall be effective only if in writing and signed by the party
against whom such waiver is to be enforced. The failure of either party to
exercise any of his or its rights under this Agreement or to require the
performance of any term or provision of this Agreement, or the waiver by
either party of any breach of this Agreement, shall not prevent a
subsequent exercise or enforcement of such rights or be deemed a waiver of
any subsequent breach of the same or any other term or provision of this
Agreement.
20. Notices. Any notice required or permitted to be given under this
-------
Agreement shall be in writing and shall be deemed given when personally
delivered or sent by registered or certified mail, postage prepaid, return
receipt requested, to the respective address of the parties hereto as set
forth above or to such other address as either party may designate to the
other party in the manner provided herein for giving notice.
21. Successors and Assigns. This Agreement shall be binding upon and inure
----------------------
to the benefit of the heirs, executors, administrators, successors and
legal representatives of the Employee, and shall inure to the benefit of
and be binding upon the Company and any successor to the business of the
Company pursuant to a merger or acquisition of all or substantially all of
its assets, but the obligations of the Employee may not be delegated and
the Employee may not assign, transfer, pledge, encumber, hypothecate or
otherwise dispose of this Agreement, or any of his rights hereunder
(whether by operation of law or otherwise), except as expressly permitted
by this Agreement, and any such attempted delegation or disposition shall
be null and void and without effect.
22. Governing Law. This Agreement shall be governed by and construed and
-------------
enforced in accordance with the laws of the State of Connecticut.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
WILTEK, INC.
By: /s/ David S. Teitelman
------------------------------
President & Board Member
By: /s/ David P. Holst-Grubbe
------------------------------
David P. Holst-Grubbe
Vice President
WITNESS:
/s/ Cindy Hampton
- ------------------------
33
<PAGE>
Schedule of Benefits
1. Company Car. Company obligation is direct payment of, or reimbursement to
------------
the Employee, for all lease payments, tax payments, insurance payments,
gasoline payments, service payments, repair payments, maintenance payments.
This benefit will continue for two (2) months after termination.
2. Company Standard Benefits. Health, major medical, dental, eye care,
--------------------------
orthodontia, life insurance, short-term disability, long-term disability,
401K contribution, in addition to individual benefits provided within this
section ("Schedule of Benefits") to the Employee.
3. Annual Minimum Base Salary. $120,000.
---------------------------
4. Guaranteed Severance Pay. Six (6) months of Annual Minimum Base Salary.
-------------------------
5. Supplemental Severance Pay. If employment not found by Employee following
---------------------------
Guaranteed Severance Pay Period, an additional six (6) months of Annual
Minimum Base Salary.
6. Revenue Bonus. If Wiltek reports fiscal year 1999 revenue (excluding any
--------------
revenue for business's acquired after January 1, 1999) of at least
$6,800,000 then a cash bonus of .30% of total fiscal year 1999 revenue
$7,000,000 then a cash bonus of .32% of total fiscal year 1999 revenue
$7,200,000 then a cash bonus of .34% of total fiscal year 1999 revenue
$7,400,000 then a cash bonus of .36% of total fiscal year 1999 revenue
$7,600,000 then a cash bonus of .38% of total fiscal year 1999 revenue
$7,800,000 then a cash bonus of .40% of total fiscal year 1999 revenue
$8,000,000 then a cash bonus of .42% of total fiscal year 1999 revenue
$8,200,000 then a cash bonus of .44% of total fiscal year 1999 revenue
$8,400,000 then a cash bonus of .46% of total fiscal year 1999 revenue
$8,600,000 then a cash bonus of .48% of total fiscal year 1999 revenue
$8,800,000 then a cash bonus of .50% of total fiscal year 1999 revenue
The Company shall make full cash bonus payment to Employee within 60 days
(December 30, 1999) of close of fiscal year 1999. In the event of termination
any bonus accumulated as of the date of termination will be payable by the
Company to the Employee within 30 days of termination.
IN WITNESS WHEREOF, the parties have executed this Schedule of Benefits
as of the date first above written.
WILTEK, INC.
By: /s/ David S. Teitelman
------------------------------
President & Board Member
By: /s/ David P. Holst-Grubbe
------------------------------
David P. Holst-Grubbe
Vice President
WITNESS:
/s/ Cindy Hampton
- -----------------------
34
<PAGE>
Exhibit 10.4
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 1st day of January, 1999, by and between WILTEK,
INC., a Connecticut corporation, with its principal offices located at 542
Westport Avenue, Norwalk CT 06851 (the "Company") and Kevin P. Carathanasis, an
individual, residing at 8515 Manassas Road, Tampa, Florida 33635 (the
"Employee").
W I T N E S S E T H:
--------------------
WHEREAS, the Company desires that the Employee shall be employed by the
Company, and the Employee is desirous of such employment, upon the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein, the parties hereto agree as follows:
1. Defining Terms. As used in this Agreement, the following terms shall
--------------
have the following meanings:
(a) "Company" shall mean and include Wiltek, Inc., and its
parents, subsidiaries and affiliates and the respective
successors and assigns of any of them, whether now existing
or hereafter arising: provided, however, that references to
the Company in Paragraphs 6, 7 and 9 of this Agreement shall
be limited solely to Wiltek, Inc.
(b) "Customer" shall mean any individual, firm, partnership,
corporation, company, joint venture or governmental or
military unit or any other entity or any parent, subsidiary
or affiliate of any of them which is negotiating or has a
contract with the Company for the purchase or lease of the
Company's equipment, products or services or which has been
solicited by the Company with respect to such purchase or
lease during the Employee's employment with the Company.
(c) "Confidential Information" shall mean information concerning
the Company, its products, processes and services and its
customers, suppliers, contractors, agents, consultants and
employees (herein-after referred to as "Company
Affiliates"), including, but not limited to, information
relating to research, development. inventions, manufacture,
purchasing, accounting, finances, costs, profit margins,
patents, methods, programs, apparatus, engineering,
marketing, merchandising, selling, Customer lists, Customer
requirements and personnel, pricing, pricing methods and
data processing and any other materials
35
<PAGE>
or information, heretofore or hereafter during the term of
this Agreement, conceived, designed, created, used or
developed by or relating to the Company or any of the
Company Affiliates; provided, however, that Confidential
Information shall not include any information which may be
in the public domain or come into the public domain not as a
result of a breach by the Employee of any of the terms and
provisions of this Agreement.
(d) "Proprietary Property" shall mean discoveries, concepts and
ideas and expressions thereof, whether or not subject to
patent, copyright, trademark, trade name or service mark
protection, including, but not limited to, software,
services, processes, methods, formulae, techniques,
apparatus, designs and writings as well as improvements
thereon, revisions thereof and know-how related thereto,
concerning any present or future activities of the Company;
provided, however, that Proprietary Property shall not
include anything which may be in the public domain or come
into the public domain not as a result of a breach by the
Employee of any of the terms and provisions of this
Agreement.
(e) "Competing Product" shall mean any product, process or
service of any person or legal entity other than the
Company, in existence or under development, which, during
the term of this Agreement, competes with or is an
alternative to any present or future product, process, or
service of the Company whether or not actively marketed by
the Company.
(f) "Competing Organization" shall mean any person or legal
entity engaged in, about to engage in or intending to engage
in research on or development, use, production, marketing,
or selling of a Competing Product.
2. Employment. The Company hereby employs the Employee, and the Employee
----------
hereby accepts such employment, upon the terms and conditions set forth in
this Agreement.
3. Duties. The Employee shall be employed by the Company as Vice President
------
and he shall perform such duties and render such services consistent
therewith as may from time to time be required of him by the President of
the Company.
4. Extent of Service. During the term of his employment, the Employee
-----------------
agrees that (a) he will serve the Company faithfully, diligently and to the
best of his ability under the direction of the Chairman or the Board of
Directors of the Company; (b) he will devote his best efforts and
substantially his entire working time, attention and energy to the
performance of his duties hereunder and to promoting and furthering the
interests of the Company, taking, however, from time to time, reasonable
vacations consistent with the performance of his obligations hereunder, and
(c) he will not, without the prior written approval of the President of the
Company, which approval shall not be unreasonably withheld, become an
officer, director, employee or consultant of, or otherwise become
associated with or engaged in, any business other than that of the Company,
and he will do nothing inconsistent with his duties to the Company.
36
<PAGE>
5. Terms of Employment. The term of employment of the Employee under this
-------------------
Agreement shall be for a period commencing on the date of this Agreement
and terminating twelve (12) months thereafter, unless sooner terminated
pursuant to Paragraph 9 of this Agreement (the "Term"), and for successive
one-year Terms thereafter; provided, however, that with respect to each
such successive Term, the Company and the Employee shall have mutually
agreed, in writing, to basic compensation for such successive Term. If the
Company decides not to renew the Employee's Employment Agreement, then the
Employee shall be entitled to the termination provisions provided for in
Clause 9(b) of this Employment Agreement.
6. Basic Compensation. As basic compensation for the services to be
------------------
rendered hereunder by the Employee for the initial Term, the Company agrees
to pay to the Employee, and the Employee agrees to accept, a minimum salary
at the rate of $110,000 per annum. The salary payable to the Employee
hereunder shall be paid in equal semi-monthly installments during the Term,
or in such other manner as shall be mutually agreed upon by the parties
hereto.
7. Other Benefits. The Employee shall be entitled to participate in any
--------------
retirement, disability, profit-sharing, medical or life insurance or other
similar plan or arrangement provided by the Company to its employees, or
its other executive employees. The Employee shall also receive benefits as
stated within the attached "Schedule of Benefits."
8. Disability. If Employee shall be disabled, he shall receive full
----------
compensation (less any payments received from Worker's Compensation,
Wiltek's disability plans or other governmental payment for such
disability) for all periods of disability even if a period of disability
extends beyond the Term; provided, however, that the maximum number of
consecutive days during which disability occurs and for which Wiltek shall
be obligated to pay such compensation shall be ninety (90) days. Disability
means the inability of Employee to perform his duties hereunder on account
of mental or physical illness or physical incapacity.
9. Termination.
-----------
(a) The employment of the Employee hereunder shall terminate in the event
of the death of the Employee and, at the option of the Company, upon
written notice to the Employee, (i) in the event that Base Salary
payments are terminated due to disability pursuant to Paragraph 8 of
this Agreement, or (ii) in the event that the Employee shall breach
any of the terms and provisions of this Agreement.
(b) In addition to the provisions of Paragraph 9(a) above, the Company may
also, in its sole discretion, elect to terminate, without cause, the
employment of the Employee hereunder by thirty (30) days prior written
notice to the Employee; provided, however, that if the Company shall
so terminate this Agreement pursuant to this Paragraph 9(b), the
Company shall pay the Employee guaranteed severance pay in accordance
with the next sentence, continue the benefits set forth in Item 2 of
the attached "Schedule of Benefits" for so long as the severance
payments are being made, will continue the benefit set forth in Item 1
thereof for the terms thereof and will pay the bonuses set forth in
Item 6 thereof per the terms thereof. During the six-month period
following the receipt of written notice by the Employee, the Company
shall pay the Employee guaranteed severance pay at a rate equal to the
Employee's base compensation immediately prior to such termination and
such guaranteed severance pay shall be paid to the Employee in the
manner and at the time or times that such base compensation would
otherwise have been paid to the Employee. Following the six-month
guaranteed severance pay period, if the Employee does not become
employed, the Company shall pay the Employee additional supplemental
severance pay in accordance with the next sentence. During the six-
month period following the conclusion of Company payment to the
Employee of six months of guaranteed severance pay, the Company shall
pay the Employee additional supplemental severance pay at a rate equal
to the Employee's base compensation immediately prior to such
termination and such additional supplemental
severance pay shall be paid to the Employee in the manner and at the
time or times that such base compensation would otherwise have been
paid to the Employee.
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<PAGE>
10. Representations and Warranties of the Employee as to Conflicts.
--------------------------------------------------------------
The Employee hereby represents and warrants to the Company that his
employment by the Company does not and will not violate any provision of
law or fiduciary duty by which he is bound and will not conflict with or
result in a breach of any agreement or instrument to which he is a party or
by which he is bound, and the Employee agrees that he will indemnify and
hold harmless the Company, its directors, officers and employees against
any claims, damages, liabilities and expenses (including attorneys' fees)
which may be incurred, including amounts paid in settlement, by any of them
in connection with any claim based upon or related to a breach of the
Employee's representation and warranty set forth in this Paragraph. In the
event of any claim based upon or related to a breach of the Employee's
representation and warranty set forth in this Paragraph 10, the Company
will give prompt notice thereof, in writing, to the Employee and the
Employee shall have the right to defend such claim with counsel reasonably
satisfactory to the Company.
11. Proprietary Property. With respect to Proprietary Property made
--------------------
or conceived by the Employee in the field of data communications, whether
or not during the hours of his employment or with the use of the Company's
facilities, materials or personnel, either individually or jointly with
others during the period of his employment by the Company, the Employee
shall, without the payment of royalty or any other considerations to him
therefor:
(a) Inform the Company promptly and fully of such Proprietary
Property by a written report satisfactory to the Company;
(b) Apply, at the Company's requests and expense, for United
States and foreign letters patent, copyright, trademark or
service mark, as the case may be, either in the Employee's
name or otherwise as the Company shall direct;
(c) Assign to the Company all of his right, title and interest
in such Proprietary Property, and to applications for United
States and/or foreign letters patent, copyright, trademark
and service mark and to any letters patent, copyright,
trademark and service mark which may be issued upon such
Proprietary Property;
(d) Deliver promptly to the Company, without charge to the
Company but at its expense, such written instruments, and do
such other acts, as may be necessary, in the opinion of the
Company, to obtain and maintain United States and/or foreign
letters patent, copyright, trademark or service mark on the
Proprietary Property and to vest the entire right, title and
interest thereto in the Company; and
(e) Grant to the Company, prior to assignment of the Employee's
right title and interest to the Company in any Proprietary
Property as required above, the royalty-free right to use in
its business, and to make, have made, use and sell products,
processes, services, writings and/or marks based upon or
related to Proprietary Property made or conceived by the
Employee.
12. Confidentiality.
---------------
(a) During the Term and at all times thereafter, the Employee
will not use Confidential Information for his own benefit or for the benefit of
any person or legal entity other than the Company nor will he disclose the same
to any other person or legal entity, except as required to conduct the business
of the Company in the ordinary course.
38
<PAGE>
(b) Except with the prior written approval of the Company or
except as required to conduct the business of the Company in the ordinary
course, the Employee will not, at any time, directly or indirectly, use,
disseminate, disclose, lecture upon or publish articles concerning any
Confidential Information.
(c) Upon the termination of his employment with the Company, all
documents, records, notebooks and similar repositories of or containing
Confidential Information, including any copies thereof, then in the Employee's
possession, or under his control, whether prepared by him or others, will be
left with or immediately returned to the Company by the Employee.
13. Non-Compete. The Employee agrees that, during the term of his
-----------
employment with the Company and also for one year following the
Employee's termination or departure from the Company, he will not,
without the written approval of the Company, directly or
indirectly, under any circumstances whatsoever, own, manage,
operate, engage in, control or participate in the ownership,
management, operation or control of, or be connected in any manner
with, whether as an individual, partner, stockholder, director,
officer, principal, agent, employee or consultant, or in any other
relation or capacity whatsoever, any Competing Organization, and
will not in any such manner compete with the Company or solicit or
call on any Customer of the Company, wherever located, which was a
Customer of the Company at any time during the period one (1 year
prior to the termination of the Employee's employment with the
Company for the purpose of inducing such Customer to purchase or
lease a Competing Product. Notwithstanding the foregoing, nothing
contained in this Paragraph 13 shall restrict the Employee from
making any investment in any company whose stock is listed on a
national securities exchange or actively traded in the over-the-
counter market, so long as such investment does not give him the
right to control or influence the policy decisions of any such
business or enterprise which is or might be in competition with
any business of the Company.
14. Non-Interference. The Employee will not, for a period of one (1)
----------------
year following the termination of the Employee's employment by the
Company, directly or indirectly, employ, hire, solicit or, in any
manner, encourage any employee of the Company to leave the employ
of the Company.
15. Injunctive Relief. In addition to any other rights or remedies
-----------------
available to the Company as a result of the breach of the
Employee's obligations hereunder, the Company shall be entitled to
enforcement of such obligations by an injunction or a decree of
specific performance from a court with appropriate jurisdiction
and in the event that the Company is successful in any suit or
proceeding brought or instituted by the Company to enforce any of
the provisions of this Agreement or on account of any damages
sustained by the Company by reason of the violation by the
Employee of any of the terms and/or provisions of this Agreement
to be performed by the Employee, the Employee agrees to pay to the
Company all attorneys' fees reasonably incurred by the Company.
16. Withholding. The Employee hereby agrees that he will make such
-----------
arrangements as the Company may deem necessary to discharge any
obligations of the Company to withhold Federal, state or local
taxes imposed upon the Company in respect of this Agreement.
17. Severability. The provisions of this Agreement shall be
------------
severable and if any part of any provision shall be held invalid
or unenforceable or any separate covenant contained in any
provision is held to be unduly restrictive and void by a final
decision of any court or other tribunal of competent jurisdiction,
such part, covenant or provision shall be construed to give it
maximum lawful validity and the remaining provisions of this
Agreement shall nonetheless remain in full force and effect.
18. Entire Agreement. This Agreement and the attached "Schedule of
----------------
Benefits" contains the entire agreement of the parties relative to
the subject matter hereof, superseding and terminating all prior
agreements or understandings, whether oral or written, between the
parties hereto relative to the subject matter hereof,
39
<PAGE>
and this Agreement may not be extended, amended, modified or
supplemented without the written consent of the parties hereto.
19. Waivers. Any waiver of the performance of the terms or
-------
provisions of this Agreement shall be effective only if in writing
and signed by the party against whom such waiver is to be
enforced. The failure of either party to exercise any of his or
its rights under this Agreement or to require the performance of
any term or provision of this Agreement, or the waiver by either
party of any breach of this Agreement, shall not prevent a
subsequent exercise or enforcement of such rights or be deemed a
waiver of any subsequent breach of the same or any other term or
provision of this Agreement.
20. Notices. Any notice required or permitted to be given under this
-------
Agreement shall be in writing and shall be deemed given when
personally delivered or sent by registered or certified mail,
postage prepaid, return receipt requested, to the respective
address of the parties hereto as set forth above or to such other
address as either party may designate to the other party in the
manner provided herein for giving notice.
21. Successors and Assigns. This Agreement shall be binding upon and
----------------------
inure to the benefit of the heirs, executors, administrators,
successors and legal representatives of the Employee, and shall
inure to the benefit of and be binding upon the Company and any
successor to the business of the Company pursuant to a merger or
acquisition of all or substantially all of its assets, but the
obligations of the Employee may not be delegated and the Employee
may not assign, transfer, pledge, encumber, hypothecate or
otherwise dispose of this Agreement, or any of his rights
hereunder (whether by operation of law or otherwise), except as
expressly permitted by this Agreement, and any such attempted
delegation or disposition shall be null and void and without
effect.
22. Governing Law. This Agreement shall be governed by and construed
-------------
and enforced in accordance with the laws of the State of
Connecticut.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
WILTEK, INC.
By: /s/ David S. Teitelman
------------------------------
President & Board Member
By: /s/ Kevin P. Carathanasis
------------------------------
Kevin P. Carathanasis
Vice President
WITNESS:
/s/ Cindy Hampton
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40
<PAGE>
Schedule of Benefits
1. Company Car. Company obligation is direct payment of, or reimbursement to
------------
the Employee, for all lease payments, tax payments, insurance payments,
gasoline payments, service payments, repair payments, maintenance payments.
This benefit will continue for two (2) months after termination.
2. Company Standard Benefits. Health, major medical, dental, eye care,
--------------------------
orthodontia, life insurance, short-term disability, long-term disability,
401K contribution, in addition to individual benefits provided within this
section ("Schedule of Benefits") to the Employee.
3. Annual Minimum Base Salary. $110,000.
---------------------------
4. Guaranteed Severance Pay. Six (6) months of Annual Minimum Base Salary.
-------------------------
5. Supplemental Severance Pay. If employment not found by Employee following
---------------------------
Guaranteed Severance Pay Period, an additional six (6) months of Annual
Minimum Base Salary.
6. Revenue Bonus. If Wiltek reports fiscal year 1999 revenue (excluding any
--------------
revenue for business's acquired after January 1, 1999) of at least
$6,800,000 then a cash bonus of .30% of total fiscal year 1999 revenue
$7,000,000 then a cash bonus of .32% of total fiscal year 1999 revenue
$7,200,000 then a cash bonus of .34% of total fiscal year 1999 revenue
$7,400,000 then a cash bonus of .36% of total fiscal year 1999 revenue
$7,600,000 then a cash bonus of .38% of total fiscal year 1999 revenue
$7,800,000 then a cash bonus of .40% of total fiscal year 1999 revenue
$8,000,000 then a cash bonus of .42% of total fiscal year 1999 revenue
$8,200,000 then a cash bonus of .44% of total fiscal year 1999 revenue
$8,400,000 then a cash bonus of .46% of total fiscal year 1999 revenue
$8,600,000 then a cash bonus of .48% of total fiscal year 1999 revenue
$8,800,000 then a cash bonus of .50% of total fiscal year 1999 revenue
The Company shall make full cash bonus payment to Employee within 60 days
(December 30, 1999) of close of fiscal year 1999. In the event of termination
any bonus accumulated as of the date of termination will be payable by the
Company to the Employee within 30 days of termination.
IN WITNESS WHEREOF, the parties have executed this Schedule of Benefits
as of the date first above written.
WILTEK, INC.
By: /s/ David S. Teitelman
------------------------------
President & Board Member
By: /s/ Kevin P. Carathanasis
------------------------------
Kevin P. Carathanasis
Vice President
WITNESS:
/s/ Cindy Hampton
- --------------------------
41
