<PAGE> 1
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
------------------
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): AUGUST 2, 1996
NETWORK IMAGING CORPORATION
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 0-22970 54-1590649
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification Number)
500 HUNTMAR PARK DRIVE, HERNDON, VIRGINIA 20170
(Address of principal executive offices) (Zip code)
</TABLE>
(703) 478-2260
(Registrant's telephone number, including area code)
- --------------------------------------------------------------------------------
<PAGE> 2
ITEM 5. OTHER EVENTS.
In May 1996, the number of directors of the Company was reduced from
seven to five as four members resigned and James J. Leto and C. Alan Peyser
were elected as directors. Mr. Leto was also named President and Chief
Executive Officer of the Company. Robert P. Bernardi continues to serve as
Chairman of the Board, and John F. Burton and Robert Ripp continue to serve as
directors. The Company entered into a Consulting Agreement with Mr. Bernardi
and BCG, Inc., a company owned by Mr. Bernardi, which provides for Mr.
Bernardi's services as Chairman and Secretary of the Company, provides for
compensation in substantially the same amount as provided in Mr. Bernardi's
former Employment Agreement and contains other substantive provisions that are
substantially the same as those in a Consulting Agreement that the Company had
previously entered into with its former Chairman, Robert M. Sterling, Jr. The
Company decided to extend prospectively the post-termination exercise period of
the standard form of options granted under its stock option plans from one to
three years and agreed to make this change available for certain options
previously granted to Mr. Bernardi and the four individuals who resigned from
the Board. The Company has also agreed to accelerate the vesting of options
owned by Mr. Bernardi, Mr. Mann and Mr. Sterling.
James J. Leto, 52, became President and Chief Executive Officer and a
director of the Company in May 1996. Mr. Leto has an agreement with the
Company which provides for an annual salary of $200,000, an annual bonus based
on performance of up to $200,000 of which $100,000 is guaranteed for the first
twelve months, and in the event of termination of his employment for reasons
other than cause, a nine-month severance package based on his base salary,
benefits and accrued bonus. He has been granted options on 500,000 shares of
Common Stock which have an exercise price of $4.22, become exercisable on a
cumulative basis in eight equal quarterly installments beginning September 1,
1996 and ending June 1, 1998. The vesting of the options accelerate in the
case of an acquisition of the Company. Mr. Leto is a director of Government
Technology Systems, Inc. Mr. Leto previously served as the Chairman and Chief
Executive Officer of PRC Inc., a $715 million information technology company,
from January 1993 to February 1996, and prior thereto in various capacities as
an executive officer of that company. From January 1989 until February 1992,
Mr. Leto served as the Vice President and General Manger of AT&T Federal
Systems Computer Division, a division of AT&T charged with developing a major
system integration and computer presence in the federal marketplace. Mr. Leto
first joined AT&T in November 1977. Mr. Leto earned his Bachelor of Science
degree from Wayne State University and his Executive Masters of Science from
Pace University.
C. Alan Peyser, 63, became a director of the Company in May 1996. He
has been granted options on 50,000 shares of Common Stock which have an
exercise price of $3.69, become exercisable in four equal annual installments
beginning May 1997 and expire in May 2006. Mr. Peyser is currently a
consultant to Cable & Wireless, Inc., President of Country Long Distance
Corporation and a member of the Board of Directors of Tridex Corporation and
TCI International, Inc. Mr. Peyser previously served as the Chief Executive
Officer and President of Cable & Wireless, Inc., a $700 million long distance
company, from 1980 through September 1995.
Jorge R. Forgues, 41, became Vice President of Finance and
Administration, Chief Financial Officer and Treasurer of the Company in April
1996. Mr. Forgues's annual salary is $135,000, and he is entitled to an annual
bonus based on performance of up to $50,000. He has been granted options on
125,000 shares of Common Stock which have an exercise price of $3.56, become
exercisable on a cumulative basis in four equal annual installments beginning
in April 1997 and expire in April 2006. From October 1993 through April 1996
Mr. Forgues served as the Vice President of Finance & Administration and Chief
Financial Officer of Globalink, Inc., a $25 million computer software developer
offering foreign language translation software and services in the U.S. and
internationally. From July 1992 to September 1993, Mr. Forgues served as
Director of Accounting at Spirit Cruises, Inc., a $50 million Harbor Cruise
Line with operations in nine states, and from June 1987 to June 1992 he served
as the Vice President of Finance of Best Programs, Inc., a computer software
developer. Mr. Forgues earned a Bachelor of Science in Accounting in 1983 and
a Masters of Business Administration in 1984 from George Mason University. Mr.
Forgues has been a Certified Public Accountant since November 1986.
<PAGE> 3
ITEM 7. EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Description
- -------------- -----------
<S> <C>
10 a Consulting Agreement between Network Imaging
Corporation and Robert P. Bernardi dated May 28,
1996.
10 b
Agreement between Network Imaging Corporation and
Joseph T.Pisula dated May 17, 1996.
10 c Offer of Employment to James J. Leto dated May 9,
1996.
</TABLE>
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Network
Imaging Corporation has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
NETWORK IMAGING CORPORATION
Date: August 2, 1996 By: /s/ Jorge R. Forgues
--------------------
Jorge R. Forgues
Vice President of Finance and Administration,
Chief Financial Officer and Treasurer
<PAGE> 1
EXHIBIT 10.a
Robert P. Bernardi
Consulting Agreement
AGREEMENT by and between Network Imaging Corporation, a Delaware
corporation (herein called the "Company"), BCG, Inc. (herein called the
"Consultant") and the Consultant's employee, Robert P. Bernardi (herein called
the "Employee").
WITNESSETH:
For and in consideration of the mutual promises and covenants herein contained,
the parties hereto mutually agree as follows:
Section 1. Consulting Arrangement. The Company hereby retains the
Consultant for the term and upon the terms and conditions hereinafter set
forth, the Consultant hereby accepts such retainer and agrees to make available
to the Company for such term and upon such terms and conditions the services of
the Employee, and the Employee hereby agrees to perform services for the
Company on behalf of the Consultant as provided in this Agreement.
Section 2. Term. The Consultant's retention hereunder shall be for a term
commencing on May 29, 1996 and continuing through and including January 31,
1999, renewable automatically from year to year thereafter unless either the
Company or the Consultant provides the other with written notice of non-renewal
at least 90 days prior to the expiration of the initial term or of any renewal
term.
Section 3. Duties; Control and Direction by Board of Directors.
Section 3(a). Primary Consulting Services. As a consultant to the
Company, Consultant shall provide the services of the Employee on a non-full
time basis to serve as Chairman of the Board of Directors of the Company and to
perform such other duties as from time to time may be assigned to him by the
Board of Directors of the Company.
Section 3(b). Other Services. In addition to providing the consulting
services set forth in the Agreement, the Employee agrees to be employed by the
Company as, and the Company agrees to employ the Employee to serve as,
Secretary or an Assistant Secretary of the Company, such employment to be at an
annual salary of $5,000
<PAGE> 2
and to continue through December 31, 2003.
Section 3(c). Rules and Regulations. The Employee shall comply with all
Company rules and regulations applicable to the executive employees of the
Company or to its employees generally and with all Company policies established
by the Board of Directors.
Section 4. Extent of Services. During the term of this Agreement, the
Employee shall devote his best efforts to the business of the Company and the
furthering of its interests and to the discharge of his duties, functions and
responsibilities hereunder. At the request of the Company, the Employee will
devote up to 100 hours monthly to the business of the Company.
Section 5. Compensation for Primary Consulting Services. As compensation
during the term of the Consultant's retainer hereunder, the Company shall pay
to the Consultant, and the Consultant shall accept, a fee at the rate of
$175,000 per annum, or at such higher rate as the Board of Directors, after
periodic review, at its option and in its sole discretion, may fix. The
Consultant will also receive an annual bonus based on the performance of the
Employee. Such bonus will be determined annually by the Board of Directors but
will not be less than $50,000.
Section 6. Fringe Benefits. The Company agrees to maintain a $500,000 term
life insurance policy on the life of the Employee. Such policy shall be owned
by the Company and the Employee, and the Employee shall designate the
beneficiary or beneficiaries under the policy. Furthermore, the Employee shall
have the right to participate, on the same terms and subject to the same
conditions, limitations, restrictions and requirements as the executive
employees of the Company in such medical, health, insurance, pension, profit
sharing, stock option and other plans, if any, as the Company may from time to
time provide for the benefit of its employees and in which executive employees
of the Company are eligible to participate. The Company shall provide the
Employee with an automobile allowance.
Section 7. Expenses. The Employee is authorized to incur reasonable
expenses in performing services for and in promoting the business of the
Company, including expenses for business entertainment and travel. The
Company shall promptly reimburse the Employee for such expenses provided that
the Employee presents an itemized statement of the same together with such
supporting vouchers as the
<PAGE> 3
Company may from time to time require and are normally available.
Section 8. Patents, Copyrights, etc.
Section 8(a). Patents, Copyrights, etc. The Consultant and the Employee
agree that any and all "Proprietary Property" (as defined in Section 8(b)
following) that is created, developed or discovered by or for the Company, or
acquired by the Company from others, and that comes into the Employee's
knowledge or possession during and in the course of the Employee's services
hereunder, shall be received by the Employee as an agent or employee of the
Company and not in any way for his own or the Consultant's benefit, and that
the Consultant and the Employee shall have no rights and shall acquire no
rights therein unless and until the Company shall expressly and in writing
waive the rights that it has therein and thereto under the provisions of this
sentence. The Consultant and the Employee further agree (a) that any and all
Proprietary Property that is invented, created, written, developed, furnished
or produced by the Employee during the term of the Employee's services under
this Agreement shall be the exclusive property of the Company, and that the
Consultant and the Employee shall have no right, title or interest of any kind
therein or thereto or in and to any results or proceeds therefrom, and (b) that
at any time, during the term of this Agreement, the Consultant and/or Employee
will (1) upon the request and at the expense of the Company, (i) obtain patents
or copyrights on, or (ii) permit the Company to patent or copyright, any such
material, whichever (i) or (ii) is appropriate, and/or (2) at the request of
the Company, execute any and all assignments, instruments of transfer, or other
documents, that the Company deems necessary or appropriate to transfer to the
Company all rights in or to such materials or to evidence the Company's
ownership of such rights or any of them. The Employee shall not, without
limitation as to time or place, use any Proprietary Property except on Company
business during his period of employment or disclose same to any other person,
firm or corporation, except for disclosure on Company business.
Section 8(b). "Proprietary Property." As used in this Agreement,
"Proprietary Property" means any and all ideas, creations, inventions,
improvements, know-how, methods of applying and putting into practice any
inventions or know-how and proprietary technical information which are not
generally known in the imaging industry and which are disclosed to or known or
developed by the Consultant and/or the Employee as a consequence of or through
their services under this Agreement.
<PAGE> 4
Section 9. Insurance. The Employee agrees to submit to the usual and
customary medical examinations and otherwise cooperate with the Company in its
procurement of such insurance policies on the Employee's life as the Company
may desire. If at any time in the Employee's lifetime the Employee ceases to
render services to the Company, then the Company shall promptly, if requested
by the Employee and subject to the applicable regulations of the insurance
company or companies concerned, transfer, assign and deliver to the Employee,
upon payment of the then cash surrender value thereof, if any, any and all
insurance policies on the life of the Employee then held and/or owned by the
Company. Premiums shall be adjusted to the date of such transfer, assignment
and delivery.
Section 10. Participation in Competing Business. The Employee shall not at
any time during the term of his performance of services hereunder own a
majority or controlling interest in or be connected with majority ownership,
management, operation, or control of any business that engages in a business
which deals in services or products similar to and competitive with the
Company's services or products in the United States or any other geographic
region where the Company is engaged in business, but the above shall not be
deemed to exclude Employee from acting as a director of or a consultant to
other corporations or entities with the consent of the Company's Board of
Directors.
Section 11. Termination of the Agreement and of the Employee's
Employment Hereunder.
Section 11(a). Termination for Cause by the Company. The Company shall
have the right to terminate this Agreement and Employee's services hereunder at
any time for cause (as defined in Section 18 hereunder) upon 10 days' written
notice of such termination specifying the reasons therefor. In the event of
such termination for cause, the Employee or the Consultant, as the case may be,
shall be entitled to receive accrued fees, bonuses and benefits as of the date
of termination.
Section 11(b). Termination Without Cause by the Company or for Good
Reason by the Employee. In the event that:
(1) the Company terminates this Agreement and the Employee's services
hereunder without cause, that is, for any reason other than "cause" (as defined
in Section 18 hereof), death or incapacity; or
<PAGE> 5
(2) the Consultant terminates this Agreement and the services of the
Employee hereunder for "Good Reason" (as defined in Section 18 hereof); then,
in either such case:
the Employee or the Consultant, as the case may be, shall receive from the
Company prior to the effective time of such termination: (i) all Consultant's
accrued fees and bonuses and the Employee's accrued benefits through the date
of such termination; and (ii) a sum equal in the aggregate to the full amount,
discounted by three percent (3%), of (a) the fees which the Consultant would
have received and the benefits which the Employee would have received, at the
average rate or rates in effect during the six-month period immediately prior
to termination, and (b) the annual bonus or bonuses which the Consultant would
have received, at the rate of the Consultant's annual bonus for the last full
fiscal year of the Company ending prior to termination, had, with respect to
both (a) and (b), the Employee's services under this Agreement continued for
the full initial term or renewal term thereof, as the case may be, as provided
in Section 2 hereof. The Consultant and/or Employee shall not be required to
mitigate the amount of any payments provided for in this Section 11(b) by
seeking other employment or otherwise, and any such employment, if obtained,
shall not be deemed to mitigate such amount.
Section 12. Termination by Reason of Death or Incapacity of the Employee.
(a) This Agreement will terminate upon the Employee's death.
(b) Incapacity:
(i) In the event Employee shall fail substantially to perform his
duties hereunder for a period of six (6) consecutive months
because of illness or other incapacity, he shall, upon the
furnishing by a physician (acceptable to both Company and
Employee or his family) of a written statement that Employee is
totally incapacitated or that it would be unsafe or unwise for
serious health reasons for Employee to perform his duties
hereunder, be deemed to be totally incapacitated. In the event
a physician cannot be located who is acceptable to both parties,
each shall select a physician who shall together select a
third, whose decision shall be
<PAGE> 6
final. In the event of a dispute or inability to select a
third, a physician shall be selected by the American Arbitration
Association, and such physician's decision shall be final.
(ii) If Employee shall be deemed totally incapacitated as set forth
above, the Company, unless this Agreement shall have earlier
terminated, may at its option, by giving the Consultant written
notice of its intention to do so, terminate Employee's services
hereunder effective as of the end of the calendar month in
which such notice is given, and the Company shall pay the
Consultant prior to the effective time of such termination a sum
equal in the aggregate to an additional twelve (12) months' fee,
less any amounts the Employee receives through disability
policies maintained by the Company.
(iii) In the event Employee shall not have been deemed totally
incapacitated as provided above, but shall have failed as a
result of temporary incapacitation to perform his duties
hereunder for an aggregate of more than twelve (12) months in
any period of twenty-four (24) consecutive months, the Company
may at its option, by giving the Consultant written notice of
its intention to do so, terminate Employee's services
hereunder effective as of the end of the calendar month in which
such notice is given, and the Company shall pay the Consultant
prior to the effective time of such termination a sum equal in
the aggregate to an additional twelve (12) months' fees, less
any amounts the Employee receives through disability policies
maintained by the Company.
Section 13. Demand Registration Right. At the written request of the
Employee made at any time prior to termination of this Agreement or within one
year thereafter, the Company agrees promptly to prepare and file a registration
statement with the Securities and Exchange Commission to register under the
Securities Act of 1933 for sale by the Employee of any or all shares of the
Company's Common Stock, $.0001 par value per share, held by the Employee, or
issuable to the Employee upon the exercise of stock options held by the
Employee, to use its best efforts to have such registration statement declared
effective as promptly as practica-
<PAGE> 7
ble and to maintain such registration statement in effect for not less than two
years from its effective date. The Company shall bear any and all costs of the
sale of the securities pursuant to the registration statement, except for fees
payable to broker-dealers or to counsel for the Employee which will be borne
by the Employee. Prior to the effective date of the registration statement,
the Company and the Employee will enter into an agreement providing for
reciprocal indemnification and contribution substantially in the form
customarily appearing in underwriting agreements issued by investment bankers.
The Company will use its best efforts to register or qualify the securities
under the securities laws or blue sky laws of such jurisdictions as the
Employee reasonably requires. The Company will also enter into such other
agreements (including an underwriting agreement) as are customary and take such
other actions as are reasonably required in order to expedite and facilitate
the sale of the securities. The registration rights set forth in this section
may be transferred to any transferee who acquires securities from the Employee;
provided, however, that the Company is given written notice by the Employee at
the time of such transfer stating the name and address of the transferee and
identifying the securities with respect to which the rights are being assigned,
and provided further, however, that registration rights may not be transferred
to any person in connection with the acquisition of shares in a transaction
that was registered under the Securities Act.
Section 14. Effect of Termination. Except as otherwise expressly provided
for in this Agreement, the termination of this Agreement and of the Employee's
services hereunder shall not affect (a) the Company's obligations to pay the
Employee or the Consultant, as the case may be, any fees, benefits and bonus
payments accrued to the date of such termination and unpaid, which obligations
shall continue to bind the Company, (b) the Consultant's and the Employee's
rights under Sections 11, 12 and 13 of this Agreement or under the written
terms of any stock option or other benefit plan of the Company, or (c)
any right to damages or other remedies that either party may have (under this
Agreement or otherwise) by reason of any acts or omissions of the other party
prior to such termination.
Section 15. Medical Examination. The Employee shall be required to have a
medical examination annually by a physician acceptable to the Company and at
the Company's cost, the results of which shall be submitted to the Company.
<PAGE> 8
Section 16. Waiver of Breach. Forbearance by a party to require performance
of any provision hereof shall not constitute or be deemed a waiver by such
party of such provision or of the right thereafter to enforce the same, and no
waiver by a party of any breach or default hereunder shall constitute or be
deemed a waiver of any subsequent breach or default, whether of the same or
similar nature or of any other nature, or a waiver of the provision or
provisions breached or with respect to which such default occurred.
Section 17. Notices. All notices and other communications required or
permitted hereunder shall be in writing and may be personally delivered,
deposited in the United States mail (first class postage prepaid, return
receipt requested), transmitted by telecopier or telex, or sent by a private
messenger or carrier which issues delivery receipts, addressed to the party for
whom they are intended at the following addresses:
Address for the Company: Network Imaging Corporation
500 Huntmar Park Drive
Herndon, Virginia 22070
Address for the Consultant 10607 Creamcup Lane
or the Employee: Great Falls, Virginia 22066
Such notices and other communications shall be deemed effective upon receipt.
The above addresses may be changed by notice given pursuant to this Section 17.
Section 18. Definitions. As used in this Agreement:
Person. The term "person" shall mean and include any individual, partnership,
firm, corporation, trust, unincorporated organization, or joint venture.
Cause. The term "cause" for termination by the Company of this Agreement and
of Employee's services and Consultant's retainer hereunder shall mean such act
or omission to act, or series of acts or omissions to act, or course of conduct
of the Employee that would constitute reckless or criminal misconduct in the
performance of his duties under the Agreement.
Good Reason. The term "Good Reason" for termination by the Consultant of this
Agreement and of Employee's services hereunder shall mean (i) a "change in
control" of the Company (as defined herein) to which the Employee has not given
his express written
<PAGE> 9
consent prior to its becoming effective; (ii) a good faith determination by the
Employee that as a result of a "change in control" of the Company he is unable
to discharge effectively his duties and offices under this Agreement; or (iii)
a failure by the Company to comply with any material provision of this
Agreement where such noncompliance has not been cured by the Company within
thirty (30) days after the giving of written notice thereof by the Employee to
the Company.
Change in Control. A "change in control" with respect to the Company shall be
deemed to have occurred if (i) substantially all the assets of the Company are
sold; (ii) the Company is merged or consolidated with, or becomes a subsidiary
of, another corporation; (iii) any "person" (as such term is used in Section
13(d) of the Securities Exchange Act of 1934), other than the Company or a
subsidiary of the Company, becomes the "beneficial owner" (as defined in Rule
13d-3 under the 1934 Act), directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the Company's then
outstanding securities, and is then the largest holder of such securities, or
(iv) during any period of two consecutive years during the term of this
Agreement, individuals who at the beginning of such period constitute the Board
of Directors of the Company cease for any reason to constitute at least a
majority thereof, unless the election of each director who was not a director
at the beginning of such period has been approved in advance by directors
representing at least two-thirds of the directors then in office who were
directors at the beginning of the period.
Section 19. Severability. The invalidity or unenforceability of any
provision of this Agreement shall not invalidate or render unenforceable any
other provisions of this Agreement.
Section 20. Binding Effect. The rights and obligations of the Company and
the Consultant under this Agreement shall inure to the benefit of and be
binding upon them and their respective successors and assigns. This Agreement
shall be binding upon the Employee and, except that the Employee may not
delegate his obligations hereunder, shall inure to the benefit of the Employee
and his heirs, executors and administrators.
Section 21. Governing Law. This Agreement shall be governed by, and
construed under and in accordance with, the laws of the Commonwealth of
Virginia.
<PAGE> 10
Section 22. Cancellation of Prior Agreement. The agreement effective
February 1, 1994 and amended October 1, 1995 between the Employee and the
Company with respect to the Employee's employment by the Company is superseded
by this Agreement and is hereby terminated, cancelled and annulled as of the
effective date of this Agreement.
Section 23. Entire Agreement. This instrument embodies the entire agreement
and understanding by and between the parties hereto with respect to the subject
matter hereof. This Agreement may not be changed, modified or amended in whole
or in part except by a writing signed by all the parties. No waiver of any
party's rights hereunder shall be effective or binding unless such waiver shall
be in writing and signed by the party against whom such waiver is sought to be
enforced.
IN WITNESS WHEREOF, the parties have executed this Agreement as of this
28th day of May, 1996.
Network Imaging Corporation
By /s/ Joseph T. Pisula
Joseph T. Pisula
President
BCG, Inc.
By /s/ Robert P. Bernardi
Robert P. Bernardi
President
Employee
/s/ Robert P. Bernardi
Robert P. Bernardi
<PAGE> 1
EXHIBIT 10.b
AGREEMENT
AGREEMENT made by and between Network Imaging Corporation, a Delaware
corporation (the "Company"), and Joseph T. Pisula.
WHEREAS, in connection with the departure of Joseph T. Pisula from his
position as an executive officer of the Company effective as of the close of
business on May 29, 1996, Mr. Pisula and the Company have reached certain
agreements regarding his continuing to provide services to the Company and
related matters;
NOW, THEREFORE, in consideration of the premises, the parties hereto
hereby agree as follows:
1. The Company will provide Mr. Pisula all salary, bonus, vacation,
and other benefits, normally accrued, through May 29, 1996.
2. The Company will continue to pay Mr. Pisula's base salary and
continue his current health, life and disability insurance and other benefit
plan coverages through November 30, 1996.
3. Mr. Pisula will be available through November 30, 1996 as may be
reasonably requested by the Company to consult with management regarding
matters within the scope of his former activities as an executive officer of
the Company. Mr. Pisula shall be entitled to reimbursement of his reasonable
out-of-pocket expenses incurred in connection with providing such services.
4. It is understood and agreed that the option granted by the Company
to Mr. Pisula on February 27, 1995 (the "Option") will have its exercise price
increased to $3.75 per share effective on the date of this Agreement, will
continue to vest, in accordance with all the provisions set forth in Attachment
A1 to the option agreement evidencing the Option, through the later of November
30, 1996 or such other date on which Mr. Pisula ceases to be an officer or key
employee of or consultant or adviser to the Company or any of its subsidiaries
and will be exercisable, as to any vested and unexercised portion, for a period
of three years after such date.
<PAGE> 2
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of this 17th day of May, 1996.
NETWORK IMAGING CORPORATION
- -------------------------- ----------------------------
Joseph T. Pisula Robert P. Bernardi, Chairman
<PAGE> 1
EXHIBIT 10.c
May 9, 1996
Mr. James J. Leto
392 Potowmack Drive
Great Falls, Virginia 22066
Dear Jim:
It is with great pleasure that Network Imaging Corporation (NIC)
offers you the position of President and Chief Executive Officer, reporting
directly to me as Chairman of the Board. Your responsibilities will be to
manage the day-to-day operations of NIC and your near-term goal will be to
achieve profitable operating results by the end of FY 1996. You will also be
responsible for the development and implementation of a three (3)-year
operations plan for FY 1997, FY 1998 and FY 1999. Your direct reports will
include: Mark Wasilko, Senior Vice President of Marketing and Sales of 1 View;
Brian Hajost, Senior Vice President of Marketing and Sales of COLD; Jorge
Forgues, Vice President of Finance and Administration, CFO and Treasurer; Herb
Welch, Chief Scientist; John Flowers, Vice President of Engineering; Russ Hale,
President of NIC Federal; Joel Martin, Vice President of Operations; and Jean
Phillipe-Bordes, President of Dorotech. Bernie McCrory, President of
Symmetrical Technologies will also report to you, but it is planned that
Symmetrical Technologies will be sold via MBO shortly after your arrival. You
will also be invited to become a member of the Board of Directors of NIC. After
restructuring, the total membership of the Board will be five (5), with three
outside Directors.
Your compensation package for FY 1996 will consist of a base salary of
$200,000 per annum and a bonus of $200,000 per annum to be earned quarterly
based on meeting performance objectives in the second half of a revised FY 1996
operation budget for revenues and earnings. The second half of FY 1996 budget
will be revised by you and me and submitted to the Board for approval within 90
days of your start date. For a period of 12 months, you will be guaranteed a
bonus of $100,000. Your employment will be at will, but if you are terminated
for reasons other than cause, you will be entitled to a nine (9) month
severance package to include your base salary, benefits, and any accrued bonus
as of the date of termination. You will also be entitled to receive the same
benefits as the other executives of NIC including health and life insurance,
disability income insurance, etc. A package of NIC benefits is enclosed.
As an incentive to join the NIC team, NIC will grant you a total of
500,000 stock options (a combination of a qualified and non-qualified options)
to purchase NIC Common Stock from the 1994 Key Employee Incentive Stock Option
Plan which will be issued at the fair market price on the date of your
employment. In addition, your stock options will contain a vesting acceleration
provision which covers change of control, an acquisition or merger of NIC.
<PAGE> 2
James J. Leto
May 9, 1996
Page 2
A copy of the 1994 stock option plan and a sample employee stock option
agreement is enclosed.
Jim, on behalf of the Board of Directors and senior management at NIC,
I am happy to extend you this offer and look forward to you joining the NIC
team. As discussed, your start date will be May 31, 1996. An announcement of
your appointment as President and CEO of NIC will be made public the week of
June 3, 1996.
If the above represent your understanding of your employment offer,
please indicate by signing below.
ACCEPTED BY EMPLOYEE NETWORK IMAGING CORPORATION
/s/James J. Leto /s/Robert P. Bernardi
James J. Leto Robert P. Bernardi
Chairman and CEO
dji
enclosures: 2.
