This Agreement (herein so called) is made and entered into as of the
23rd day of October, 2000, by and between Query Object Systems Corporation, a
Delaware corporation (hereinafter referred to as "QO"), and JOSEPH M. VALLEY
JR., (hereinafter referred to as "Valley").
In consideration of the premises and of the mutual covenant
hereinafter set forth, the parties hereto agree as follows:
1. Employment, Duties and Acceptance. QO and Valley agree that Valley
will be employed to render exclusive full-time services to QO as President and
Chief Operating Officer from its offices located in Roslyn Heights, New York
and, in connection therewith, to perform such duties that are consistent with
such position as Valley shall reasonably be directed to perform by the Chairman
and Chief Executive Officer of QO.
2. Employment Period. The "Employment Period" as used herein shall be
for a period of one(1) year from the effective date, hereof (the "Effective
Date"), subject to the termination provisions of sections 5.1 through 5.6
hereof.
3. Compensation.
3.1 Base Compensation. During the Employment Period, for all
services rendered by Valley under this Agreement, QO shall pay Valley an Annual
Base Salary of not less than $200,000, payable in accordance with the customary
payroll policy of QO in effect at the time such payment is made (or as may
otherwise be mutually agreed upon by the parties). This Annual Base Salary shall
be subject to review and increase as appropriate on or before October 23 of each
year in accordance with the salary review policies generally applicable to QO
executives.
3.2 Incentive Compensation. For Fiscal Years 2000 and 2001, Valley
shall be eligible to receive incentive compensation of $10,000 per quarter based
on achievement of objectives agreed to between Valley and the Chairman and CEO.
This incentive will be guaranteed payable at 100% for the fourth quarter of 2000
and the first quarter 2001. Valley will also be eligible to receive a
performance bonus based upon recorded revenues of QueryObject Systems
Corporation (the "Plan"). This incentive will begin to be earned at 85% of Plan
and is targeted at $60,000 (at 100% of
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Plan) for 2001. The Plan will be agreed upon, in advance, between Valley and the
Chairman and CEO and such Incentive Compensation will be in accordance with
incentive compensation policies generally applicable to QO executives.
3.3 Payment of Incentive Compensation Under Certain Circumstances.
If Valley's employment shall terminate due to his death or disability, as
defined in section 5.2 hereof, the incentive compensation as provided in section
3.2 for the year in which such termination shall have taken place shall be paid
to Valley or his legal representative on a pro rata basis based on the number of
days during such incentive year prior to the date of termination. Such incentive
shall be based on the highest incentive award, on a pro rata basis, to be paid
for the year of termination.
3.4 Stock Options. Valley shall receive an initial grant to purchase
100,000 common shares of QO. Valley is also eligible for a performance grant
targeted at 50,000 common shares of the Company (at 100% of Plan) based upon
recorded revenues of QueryObject Systems Corporation for 2001. The performance
grant will begin to be earned at 85% of Plan and will include levels, which if
attained, would provide for a total of 100,000 common shares of the Company. The
Plan will be agreed upon, in advance, between Valley and the Chairman and CEO.
4. Benefits. Valley shall be entitled to such paid vacation, holidays,
sick leave, and shall be eligible for participation in such group insurance,
hospitalization, major medical, dental, disability insurance, profit sharing,
pension, stock options, and other fringe benefit programs as those afforded
officers of QO. In addition, QO understands that the location of Valley's
primary residence represents a hardship in commuting to QO headquarters and
therefore agrees to provide Valley with reasonable local living accommodations
or commutation expense reimbursement.
5. Termination.
5.1 Termination upon Death. If Valley dies, this Agreement shall
terminate, except that the representative of Valley's estate shall be entitled
to receive the compensation
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herein provided for the month in which death occurs and the amount payable under
section 3.3 hereof.
5.2 Termination upon Disability. If Valley becomes physically or
mentally disabled, whether totally or partially, so that Valley is unable
substantially to perform his services hereunder for a period of six (6)
consecutive months and so that Valley qualifies for benefits under QO long term
disability plan, (Valley's disability for such period is herein referred to as
"Disability"), QO may at any time after the last day of the six consecutive
months of disability, by written notice to Valley, terminate the Valley's
employment hereunder. Upon receipt of said written notice, Valley shall be
entitled to receive the compensation herein provided for the month in which
termination occurs and the amount payable under section 3.3 hereof.
5.3 Termination by QO for Cause. If Valley willfully disregards his
duties hereunder and such willful disregard shall not be discontinued within a
reasonable period of time after written notice setting forth with specificity
the facts upon which the claimed willful disregard of duties is based, QO may at
any time by ninety days written notice to Valley terminate Valley's employment
hereunder. Valley shall be entitled to receive accrued and unpaid salary to the
date of termination.
"Cause" shall mean:
(i) Valley's failure to substantially perform his duties or
responsibilities hereunder for a period of fifteen (15) days after written
notice thereof from the Board setting forth in reasonable detail the respects in
which QO believes that Valley has not substantially performed his duties or
responsibilities hereunder or continued failure to substantially perform such
duties or responsibilities for a period of thirty (30) days after such written
notice;
(ii) Valley personally engaging in knowing and intentional illegal
conduct which is seriously injurious to QO or its affiliates;
(iii) Valley being convicted of a felony, or committing an act of
dishonesty or fraud against, or the misappropriation of property belonging to,
QO or its affiliates;
(iv) Valley knowingly and intentionally breaches in any material
respect the terms of any confidentiality agreement or invention or proprietary
information agreement QO;
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(v) Valley's commencement of employment with another employer while
he is an Executive of QO, without QO's written consent.
5.4 Termination by QO For Reasons Other than Death, Disability or
Cause. If Valley's employment hereunder shall be terminated for reasons other
than death, disability or the willful disregard of his duties, QO shall pay to
Valley, in accordance with standard QO practices afforded to officers of QO , as
liquidated damages and not as a penalty, the highest of an amount equal in the
aggregate to an amount equal to one (1) times Valley's Annual Base Salary at the
time of termination, less any amounts otherwise paid pursuant to this Agreement
for Base Salary pursuant to Section 3.1.
In addition, if in the event of a termination, Valley's stock options
which are outstanding as of the date of termination shall become fully vested
and exercisable in accordance with the Stock Option Plan.
Valley will also receive the following benefit if in the event of a
termination under this Section 5.4: (i) the company shall maintain in full force
and effect for one year from the date of termination, or sooner, until Valley is
employed in a full time capacity by another employer, all non cash employee
benefit plans and programs in which Valley participated immediately prior to the
date of termination provided that Valley's continued participation is possible
under the general terms and provisions of such plans and programs. In the event
that Valley's participation in any such plan or program is barred, the company
shall arrange to provide Valley with benefits substantially similar to those
which Valley is entitled to receive under such plans and programs; (ii) Valley
will be paid for any accrued any unused vacation; and (iii) outplacement
services will be provided by a firm of Valley's choosing, providing services
comparable to which would be provided for a comparable level to which Valley
occupies at the time of separation.
5.5 Termination by Valley for Material Breach or for Good Reason or
for a Change in Control. Valley shall be entitled to terminate his employment
with QO (i) if QO defaults or otherwise commits a breach of a material term or
condition of this Agreement or (ii) for "Good Reason" as defined below or (iii)
upon the occurrence of a "Change in Control."
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For purposes of this Agreement "Good Reason" shall mean any of the
following:
1. The assignment to Valley of any duties inconsistent with, or the
reduction of powers or functions associated with Valley's position, title,
duties, responsibilities and status with QO as set forth herein, or as later
agreed upon by Valley and QO;
2. Any removal of Valley from, or any failure to re-elect Valley to,
any position(s) or office(s) Valley held immediately prior to such action;
3. A reduction by QO in Valley's annual base salary;
4. QO's transfer of Valley to another geographic location from this
present office location, except for required travel on QO's business to an
extent substantially consistent with Valley's business travel obligations
immediately prior to the date hereof;
5. The failure by QO to continue in effect any employee benefit
plan, program or arrangement (including, without limitation QO's retirement
plan, life insurance plan, medical insurance plan, disability plan, deferred
compensation plan, or incentive plan) in which Valley is participating
immediately prior to the date hereof (except that QO may institute or continue
plans, programs or arrangements providing Valley with substantially similar
benefits); the taking of any action by QO which would adversely affect Valley's
participation in or materially reduce Valley's benefits under, any of such
plans, programs or arrangements; the failure to continue, or the taking of any
action which would deprive Valley of any material fringe benefit enjoyed by
Valley immediately prior to the date hereof;
6. The failure by the company to continue in effect any compensation
plan provided by the company in which Valley participated on the date hereof
which by itself, or in the aggregate, is material to Valley's total compensation
unless there shall have been instituted a replacement or substitute plan
providing comparable remuneration opportunities.
For purpose of this Agreement, a "Change in Control" shall mean and
shall be deemed to have occurred, if at any time during the Employment Period,
directly or indirectly, in one or a series of transactions:
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1. Any person or group (as defined in Sections 13(d) and 14(d) or
the Securities Exchange Act of 1934, as amended, (15 U.S.C. 78m(d) and 15 U.S.C.
78(d) other than the holders of record as of the effective date of this
Agreement acquires:
(a) More than fifty (50%) percent of the outstanding common
stock of QO or equivalent in voting power of any class or classes of outstanding
securities of QO ordinarily entitled to vote in elections of directors;
(b) Irrevocable proxies representing more than fifty (50%)
percent of any class of voting stock of QO;
(c) Any combination of voting stock and irrevocable proxies
representing more than fifty (50%) percent of any class of voting stock of QO;
(d) The ability to control in any manner the election of a
majority of the directors of QO;
2. Any merger or consolidation of QO into or with another entity has
occurred and the holders of a majority of the voting stock of the surviving
entity shall not have been shareholders of QO immediately prior to such
transaction; or
3. Any transfer or sale of all or substantially all of the assets of
QO has occurred.
In the event that Valley elects to terminate his employment pursuant
to this Paragraph 5.5, that termination will be deemed to be the equivalent for
purposes of this Agreement to a "Termination by QO For Reasons Other than Death,
Disability or Willful Disregard of Duties" within the meaning of Paragraph 5.4,
and QO shall pay the amount provided for in Paragraph 5.4 as liquidated damages.
5.6 Voluntary Termination by Valley. In the event Valley voluntarily
terminates his employment with QO, Valley shall be entitled to receive accrued
and unpaid salary to the date of termination.
6. Indemnification. QO shall indemnify and defend Valley if Valley is
made a party, or threatened to be made a party, to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that Valley is or was an officer or
director of QO or any of its affiliates, in which capacity Valley is or was
serving, against expenses (including reasonable attorneys'
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fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding to the
fullest extent and in the manner set forth in and permitted by the general
corporation law of the state of incorporation of QO, and any other applicable
law, as from time to time in effect.
7. Effective Date. This Agreement shall become effective on the signing
of this Agreement.
8. Other Provisions.
8.1 Guarantee by QO. In consideration of the obligations undertaken
hereunder by Valley, QO hereby guarantees and warrants that, in the event that
QO fails to fulfill any of its obligations hereunder, QO will be jointly and
severably liable to Valley for the payment of any damages incurred by Valley as
a result of QO's nonperformance.
8.2 Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements, written or oral, with respect thereto.
8.3 Waivers and Amendments. This Employment Agreement may be
amended, modified, superseded, cancelled, renewed or extended, and the terms and
conditions hereof may be waived, only by a written instrument signed by the
parties or, in the case of a waiver, by the party waiving compliance. No delay
on the part of any party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any waiver on the part of any party
of any right, power or privilege hereunder, nor any single or partial exercise
of any right, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder.
8.4 Severability. If, for any reason, any provision of this
Agreement is held invalid, such invalidity shall not effect any other provision
of this Agreement not held so valid and each such other provision shall to the
full extent consistent with law continue in full force and effect. If any
provision of this Agreement shall be held invalid in part, such invalidity shall
in no way affect the rest of such provision together with all provisions of this
Agreement shall to the full extent consistent with law continue in full force
and effect.
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8.5 Governing Law. The parties hereto have relied on New York law in
negotiating this Agreement, which has been negotiated, prepared and executed in
New York, and it is expressly agreed that this Agreement shall be governed and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely within such State.
8.6 Arbitration. Any controversy or claim arising out of, or
relating to, this Agreement or the breach thereof, shall be promptly settled by
arbitration in New York, New York in accordance with the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association, and
judgment upon the award rendered may be entered in any court having jurisdiction
thereof. It is expressly understood that the arbitrator shall have the authority
to grant legal and equitable relief, including both temporary restraints and
preliminary injunctive relief to the same extent as could a court of competent
jurisdiction, and that the arbitrator is empowered to order either side to fully
cooperate in promptly resolving any controversies or claims under this
Agreement. In the event that QO terminates Valley for cause as provided for in
Section 5.3, or in the event that QO contends (i) QO terminates Valley for cause
as provided for in Section 5.3; or (ii) QO contends that a termination of
employment by Valley which Valley contends was a Termination by Executive for
Material Breach or for Good Reason or for a Change in Control within the meaning
of Paragraph 5.5 hereunder was a Voluntary Termination by Executive within the
meaning of Paragraph 5.6, and in the further event that Valley promptly
initiates arbitration proceedings to contest that termination as not properly
for a cause set forth in that Section 5.3, for a period of up to a maximum of
six (6) months pending the outcome of that arbitration (notwithstanding the
provisions of that Section 5.3), QO shall continue to pay to Valley the
compensation provided under Section 3.1, and shall continue to provide to Valley
the benefits set forth in Section 4, and, in turn, Valley shall not work on his
own behalf or for any person, firm, corporation, trust, joint venture or
partnership, as an individual, partner, shareholder, officer, director,
principal, agent, employee, trustee or other consultant or in any other
relationship or capacity; provided, however, that Valley may own, directly or
indirectly, solely as an investment, securities of any person which are traded
on any national securities exchange or in the over the counter market if Valley
(a) is not a controlling person of, or a member of a group which controls, such
person or (b) does not, directly or indirectly own 1% or more of any class of
securities of such person.
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9. Noncompete;Confidentiality
(a) If Valley's employment terminates by reason of voluntary
resignation (including an Involuntary Termination) or for Cause, Valley for a
period of one (1) year after such termination, will not (i) solicit, accept or
perform directly or indirectly any work with, nor will Valley, directly or
indirectly, engage in, undertake planning for or organization of, or have any
interest in (whether as an employee, officer, director, agent, security holder,
consultant, investor or similar position) any individual, entity or organization
that is engaged in the design, development, provision or sales and marketing of
any products or services which directly compete with QO or its affiliates
business, including, without limitation, any product for the creation,
compression, storage, retrieval or analysis of relational databases or any other
data warehousing, data mining and business intelligence products, or any
products that Valley was directly engaged in with QO (collectively "Restricted
Business"), or (ii) (A) solicit for employment or other engagement any person
who is employed by QO or its affiliates or (B) induce or influence, any person
who is employed by the Company or may be so employed by QO or its affiliates
during the one year period following Valley's termination, to terminate his or
her employment with QO, without prior written agreement of QO.
(b) Valley agrees that during his employment with QO, he shall not
engage in, own, manage or control, or participate in the ownership, management
or control, directly or indirectly, of any person, firm, corporation or other
entity engaged in a Restricted Business anywhere in the United States of America
(the "Restricted Area"). Notwithstanding the foregoing, Valley may acquire
shares representing not more than 5% of the outstanding securities of any
publicly traded company engaged in the Restricted Business. The covenant not to
compete contained in this Section 6 shall be construed as a series of separate
covenant, one for each state. If, in any judicial proceeding, a court shall
refuse to enforce any of such separate covenants, such unenforceable covenant
shall be deemed deleted from this Agreement to the extent necessary to permit
the remaining separate covenants not to compete included in this Section 6 to be
enforced.
(c) Any inventions, processes, methods, formulas,
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discoveries, concepts or ideas or expressions thereof ("Inventions"), whether or
not subject to patent, copyright, trademark or service mark protection, and
whether or not reduced to practice, conceived or developed by Valley, either
solely or jointly, while employed by QO or within one (1) year following
termination of such employment which relate to or result from the actual or
anticipated business, research or investigation of QO or which are suggested by
or result from any task assigned to or performed by Valley for QO shall be the
sole and exclusive property of QO. Valley hereby assigns to QO and its assignees
the entire right, title and interest in and to any Inventions. Valley without
any additional consideration from QO shall sign such other documents as may be
prepared by QO and provide other reasonable assistance to effect the foregoing.
(d) Valley agrees to protect all of QO's Confidential Information as
provided in this Agreement. (i) Confidential Information shall mean compensation
data, employee lists, financial and legal information, marketing plans and
strategies, pending projects and proposals, methods, concepts, skills,
techniques, writings, cases, exercises, program outlines, business problems or
issues, organizational charts or other information of possible use by a
competitor; research and development, technological data, all proprietary and
tradesecret information, actual and potential customer and vendor lists,
documentation, software, know-how and information relating to the past, present
or future business of Company or any plans relating to the foregoing and the
confidential and proprietary information of third parties that do business with
QO and learned during Valley's employment and shall include the physical or
electronic embodiment of such information, including but not limited to written,
computer or video materials, audio-visual aids, customer lists, contracts,
reports, formats, manuals, memoranda and correspondence. This Agreement shall
not apply to any Confidential Information after it becomes publicly available
through no fault of Valley. (ii) Valley shall not use or disclose any of QO's
Confidential Information without QO's prior written permission, except for
publicly available information. Valley agrees to hold in confidence and not
disclose to third parties, including QO, and not use for Valley's own or other's
benefit, Confidential Information received from or about third parties under an
obligation of confidentiality. To the extent that Valley lawfully receives
Confidential Information of third parties in the course of Valley's employment
with QO, Valley may use such third party Confidential Information for the
benefit of QO. Valley agrees that he will not, without the written permission of
QO, use QO's Confidential Information for any
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purpose other than in the course of his employment. (iii) Valley represents that
he has no obligations or commitments inconsistent with this Agreement. (iv)
Valley agrees to limit disclosure of QO's Confidential Information only to those
other employees, agents, contractors and representatives of QO who reasonably
require such information in the ordinary course of employment. Valley shall not
discloseQO's Confidential Information to any third party and shall use all
reasonable safeguards to prevent the unauthorized disclosure of such
Confidential Information. (v) Upon termination of Employee's association with
QO, Valley agrees to promptly return all materials containing QO's Confidential
Information including all extracts and copies thereof, to QO and all personal
property QO in his possession. (vi) Valley agrees that the remedy at law of QO
would be inadequate as to any unauthorized use or disclosure of QO's
Confidential Information by Valley and agrees that QO shall be entitled to
preliminary and permanent injunctions in any court of competent jurisdiction to
prevent such unauthorized use or disclosure by Valley.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first above written.
Query Object Systems Corp.
BY: /s/
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TITLE: Chairman & CEO /s/ Joseph M. Valley, Jr.
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JOSEPH M. VALLEY
DATE:________________________ DATE:_________________________
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