EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement") is
made and entered into this 11th day of June, 2002 (the
"Commencement Date"), by and between INTAC International, Inc., a
Nevada corporation (hereinafter called the "Employer"), and J.
Xxxxx Xxxxxxx, a resident of the State of Texas (hereinafter
called "Executive").
W I T N E S E T H:
WHEREAS, Both Employer and Executive desire for Executive to
enter into an executive employment relationship with Employer;
and
WHEREAS, Both Employer and Executive have read and
understand the terms and provisions set forth in this Agreement
and have been afforded a reasonable opportunity to review this
Agreement with their respective advisors and legal counsel;
NOW, THEREFORE, in consideration of the mutual promises of
each, and other good and valuable consideration, the parties
hereby covenant and agree as follows:
1. SERVICES AND DUTIES
a. Positions. Executive shall serve as the Senior Vice
President and Chief Financial Officer of Employer. The Executive
shall report directly to the Chief Executive Officer of Employer
and shall perform all duties consistent with these positions and
such duties as shall be prescribed from time to time by the Chief
Executive Officer or the Board of Directors of Employer (the
"Board").
b. Devotion of Time. As of the Commencement Date, the
Executive shall devote his full time and attention to Employer;
provided, however, Employer acknowledges that Executive may spend
a relatively few number of hours assisting Executive's former
employer with the transition into a new Chief Financial Officer,
provided, further, that such assistance does not in any way
interfere with Executive's responsibilities hereunder.
2. TERM
This Agreement shall begin on the Commencement Date and
end on the third (3rd) anniversary of the Commencement Date (the
"Original Term"). Thereafter, unless either party shall elect in
writing not to renew, this Agreement shall automatically renew
for successive one (1) year terms, (each, a "Successive Term").
3. COMPENSATION AND RELATED MATTERS
a. Base Salary. From and after the Commencement Date, the
Executive shall receive an initial annual base salary (the "Base
Salary") paid by Employer of $175,000, payable in accordance with
the Employer's normal payroll practices, subject to upward
adjustment as hereinafter specified. The parties agree that if,
after the date hereof, the Employer retains another senior level
executive of the Employer which ranks equal or subordinate to
Executive, Employer shall re-evaluate Executive's Base Salary and
shall, if appropriate, increase Executive's Base Salary to an
amount comparable to that of such newly retained senior level
executive.
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b. Bonus Compensation. In addition to the Base Salary, the
Executive shall receive a guaranteed annual cash bonus ("Bonus")
of $25,000, payable in January of each year for the prior year's
service (except to the extent payable sooner as hereinafter
provided). To the extent Executive shall be employed by Employer
for less than a full calendar year, the Bonus for that year shall
be prorated according to the number of days that Executive was
actually employed by Employer. In furtherance of the foregoing,
Executive shall be entitled to receive a pro rated bonus for the
period beginning on the Commencement Date and ending on December
31, 2002. The Bonus for this initial stub-year shall be payable
in January 2003.
c. Base Salary Adjustments. The Executive shall be entitled to
receive a merit increase to his Base Salary for outstanding
performance as shall be determined in the sole discretion of the
Board.
d. Expenses. During his employment hereunder, the Executive
shall be entitled to receive prompt reimbursement for all
reasonable business and entertainment expenses incurred by him in
performing services hereunder, provided that the Executive
properly accounts therefor to the Chief Executive Officer;
provided, however, Executive agrees that any single expense in
excess of $1,500 is required to be authorized by the Chief
Executive in advance of such expense being incurred.
e. Other Benefits. Executive shall be entitled to participate
in other benefit plans to which he is eligible pursuant to
Employer policy, which may be amended from time to time in
Employer's discretion, and the applicable plan documents (the
"Standard Benefit Plans").
f. Vacations. Executive shall be entitled to reasonable
vacation consistent with his position and Employer's vacation
policy; provided, however, Executive shall never be entitled to
less than three (3) full weeks of paid vacation.
g. Acknowledgment. The parties hereto acknowledge that, in
addition to the compensation available to Executive hereunder,
Executive shall be eligible to participate in the Employer's Cash
Bonus Program permitting Executive with the opportunity to
receive up to $100,000 annually (prorated for any partial year)
as follows:
i. 50% of Executive's eligible bonus will be paid upon reaching
agreed upon annual EBITDA targets; and
ii. 50% of Executive's eligible bonus will be paid upon reaching
other agreed upon targets and thresholds.
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No cash bonus shall be payable to Executive unless set
forth in writing between Executive and Employer. In addition to
the foregoing, the parties also acknowledge that, as part of
Executive's employment hereby, he has been granted options
exercisable for 300,000 shares of the Employer's common stock and
another 200,000 shares of the Employer's common stock as
restricted stock, in each case, pursuant to the terms of
applicable agreements.
4. TERMINATION
The Executive's employment hereunder may be terminated
by Employer or Executive under the following circumstances:
a. Mutual Agreement. Termination by mutual written agreement
between the Executive and Employer.
b. Death. Employment shall terminate upon the death of the
Executive.
c. Disability. Termination will result if the Executive is
unable to perform his duties on a full-time basis because of
Executive's inability to perform his duties under this Agreement,
with or without reasonable accommodation, for a period of more
than one hundred twenty (120) days ("Disability"). For all
purposes of this Agreement, termination for Disability shall
occur automatically upon the date that is one hundred twenty
(120) days after the Board has (with Executive abstaining if then
a member of the Board) formally determined that Executive meets
the definition of Disabled hereunder.
d. Cause. Termination of the Executive's employment for
"Cause." For purposes of this Agreement, Employer shall have
"Cause" to terminate the Executive's employment hereunder only
upon:
i. The failure by the Executive to substantially perform his
duties as outlined hereunder or to follow the reasonable
directions of the Board after demand for substantial performance
is delivered by the Board;
ii. The engaging by the Executive in conduct that is materially
injurious to Employer, monetarily or otherwise;
iii. The engaging by the Executive in criminal conduct or conduct
constituting moral turpitude; or
iv. The engaging by the Executive in employment practices which
violate federal, state or local law.
e. Termination Without Cause. Notwithstanding any provisions
of this Agreement to the contrary, Employer may terminate the
Executive's employment for any reason other than those specified
in the foregoing paragraphs (a), (b), (c), (d) or (g) (or for no
reason) at any time effective upon delivery of thirty (30) days
written notice by the Chief Executive Officer of Employer.
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f. Termination by the Executive with Notice. The Executive may
terminate this Agreement (i.e., may voluntarily resign) at any
time effective upon thirty (30) days written notice to the Board.
g. Expiration at End of Term. The Employer may permit this
Agreement to expire, by its terms, upon the giving of written
notice thereof to Executive at least three hundred sixty five
(365) days prior to the expiration of the Original Term or any
Successive Term.
5. COMPENSATION AND PAYMENTS UPON TERMINATION
The Executive shall be entitled to the following
compensation from Employer (in lieu of all other sums payable to
the Executive hereunder) upon the termination of Executive's
employment.
a. Mutual Agreement. If the Executive's employment is
terminated as a result of mutual agreement, Employer shall pay
the Executive's Base Salary, plus a lump sum payment for the
value of all accrued, earned and unused benefits under the
Standard Benefit Plans, in each case, through the date of
termination plus the amount of the Bonus actually earned (i.e.,
prorated for any year less than a full calendar year) as of the
date of Executive's termination, and the Executive will be
entitled to receive any vested pension and retirement benefits
(for all purposes of this Agreement, all such accrued, earned and
unpaid items through the applicable date of termination are
referred to as the "Earned Amounts").
b. Death. If the Executive's employment is terminated as a
result of death, Employer will pay to the Executive's estate the
Earned Amounts.
c. Disability. If the Executive's employment is terminated as
a result of Disability (as defined in Section 4(c) above), the
Executive will be provided long term disability benefits to which
he may be eligible (if any) in accordance with Employer's then
existing Standard Benefit Plans and Employer shall pay to
Executive the Earned Amounts.
d. Cause. If Executive's employment is terminated for Cause,
Employer shall pay the Executive the Earned Amounts and Employer
shall have no further obligations to the Executive.
e. Termination Without Cause. If, notwithstanding any other
provision of this Agreement, Employer shall elect, pursuant to
the provisions of Section 4.e. hereof, to terminate the
Executive's employment for a reason other than a., b., c., d. or
g. of Section 4 of this Agreement (or for no reason), then
Employer shall pay the Executive the following:
i. The Earned Amounts; plus
ii. Base Salary in effect as of the date of termination for a
period of one (1) year from the date of termination payable as if
Executive remained an active employee of Employer; plus
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iii. The amount of the Bonus (not included in Earned Amounts)
that would have accrued to Executive had he remained with the
Employer through the first anniversary date of the date of
termination.
f. Termination by the Executive. In the event the Executive
voluntarily elects to terminate this Agreement pursuant to the
provisions of Section 4.f., Employer will pay the Executive the
Earned Amounts and Employer shall have no further obligations to
the Executive.
g. Expiration at End of Term. In the event the Employer elects
to permit this Agreement to expire, by its own terms, pursuant to
the provisions of Section 4.g., Employer will pay the Executive
the Earned Amounts through the end of the applicable term,
whereupon, Employer shall have no further obligations to the
Executive.
6. NON-DISCLOSURE
a. Proprietary Information. By virtue of his employment with
Employer, Executive will have access to confidential,
proprietary, and highly sensitive information relating to the
business of Employer and which is a competitive asset of Employer
("Proprietary Information"). Such Proprietary Information
includes all information which relates to the business of
Employer, which is or has been disclosed to Executive orally or
in writing by Employer or obtained by virtue of work performed
for Employer, is or was developed by Employer, and is not
generally available to or known by individuals or entities within
the industry in which Employer is or may become engaged or
readily accessible by independent investigation. The Proprietary
Information sought to be protected includes, without limitation,
information pertaining to: (i) the identities of customers and
clients with which or whom Employer does or seeks to do business,
as well as the point of contact persons and decision-makers at
these customers and clients, including their names, addresses, e-
mail addresses and positions; (ii) the past or present purchasing
history and the past and/or current job requirements of each past
and/or existing customer and client; (iii) the volume of business
and the nature of the business relationship between Employer and
its customers and clients; (iv) the pricing of Employer's
products or services, including any deviations from its standard
pricing for particular customers and clients; (v) Employer's
business plans and strategy; (vi) information regarding
Employer's employees, including their identities, skills,
talents, knowledge, experience, and compensation; (vii)
Employer's financial results and business condition; and (viii)
computer programs and software developed by Employer and tailored
to Employer's needs by its employees, independent contractors,
consultants or vendors; (ix) information relating to Employer's
vendors or other key suppliers; (x) any past or present
merchandise or supply sources in the future; (xi) system designs,
procedure manuals, automated data programs, reports, personnel
procedures, and supply and service resources. Proprietary
Information may be contained on Employer's computer network, in
computerized documents or files, or in any written or printed
documents, including any written reports summarizing such
information.
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b. Non-Disclosure of Proprietary Information. Executive
acknowledges that Employer's Proprietary Information will be
disclosed to Executive throughout his employment at Employer in
order to enable Executive to perform his duties for Employer.
Finally, Executive acknowledges that the unauthorized disclosure
of Proprietary Information could place Employer at a competitive
disadvantage. Consequently, Executive agrees not to use,
publish, disclose or divulge, directly or indirectly, at any
time, any Proprietary Information for his own benefit and for the
benefit of any person, entity, or corporation other than
Employer, to any person who is not a current employee of
Employer, without the express, written consent of Employer and
except in the performance of the duties assigned to him by
Employer. Executive further agrees not to make copies of any
Proprietary Information, except as authorized in writing by
Employer.
c. Survival of Executive's Obligations. Executive understands
and agrees that his obligations under this Section shall survive
the termination of this Agreement and/or his employment with
Employer. Executive further understands and agrees that his
obligations under this Section are in addition to, and not in
limitation or preemption of, all other obligations of
confidentiality which he may have to Employer under general legal
or equitable principles, or other policies implemented by
Employer.
7. RETURN OF EMPLOYER PROPERTY.
Executive acknowledges that all memoranda, notes,
correspondence, databases, computer discs, computer files,
computer equipment and/or accessories, pagers, telephones,
passwords or pass codes, records, reports, manuals, books,
papers, letters, CD-ROM diskettes, keys, Internet database access
codes, client profile data, job orders, client and customer
lists, contracts, software programs (including source code),
information and records, drafts of instructions, guides and
manuals, and other documentation (whether in draft or final
form), and other sales, financial or technological information
relating to Employer's business, and any and all other documents
containing Proprietary Information furnished to Executive by any
representative of Employer or otherwise acquired or developed by
him in connection with his association with Employer
(collectively, "Recipient Materials") shall at all times be the
property of Employer. Within twenty-four (24) hours of the
termination of his employment for any reason, Executive will
return to Employer any Recipient Materials which are in his
possession, custody or control.
8. NON-SOLICITATION OF CUSTOMERS/CLIENTS.
a. Access to Proprietary Information. Executive acknowledges
that the special relationship of trust and confidence between
him, Employer, and its clients and customers creates a high risk
and opportunity for Executive to misappropriate the relationship
and goodwill existing between Employer and its clients and
customers. Executive further acknowledges and agrees that it is
fair and reasonable for Employer to take steps to protect itself
from the risk of such misappropriation. Executive further
acknowledges that, at the outset of his employment with Employer
and/or throughout his employment with Employer, Executive has
been or will be provided with access to and informed of
Employer's Proprietary Information, which will enable him to
benefit from Employer's goodwill and know-how.
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b. Inevitable Disclosure. Executive acknowledges that it would
be inevitable in the performance of his duties as a director,
officer, employee, investor, agent or consultant of any person,
association, entity, or company which competes with Employer, or
which intends to or may compete with Employer, to disclose and/or
use Employer's Proprietary Information, as well as to
misappropriate Employer's goodwill and know-how, to or for the
benefit of such other person, association, entity, or company.
Executive also acknowledges that, in exchange for the execution
of the non-solicitation restriction set forth in Section 8.c., he
has received substantial, valuable consideration. Executive
further acknowledges and agrees that this consideration
constitutes fair and adequate consideration for the execution of
the non-solicitation restriction set forth in this Section.
c. Non-Solicitation of Customers. Ancillary to the enforceable
promises set forth in this Agreement as well as to protect the
vital interests described in this Agreement, Executive agrees
that, while he is employed by Employer and for a period of twelve
(12) months following the termination of his employment with
Employer, regardless of the reason for such termination,
Executive will not, without the prior written consent of
Employer, directly or indirectly, alone or for his own account,
or as owner, partner, investor, member, trustee, officer,
director, shareholder, employee, consultant, distributor,
advisor, representative or agent of any partnership, joint
venture, corporation, trust, or other business organization or
entity, (i) contact, solicit sales of, or sell, deliver or place
any product, service or system of the kind and character sold,
provided, distributed or placed by Employer to any person,
association, corporation or other business organization or entity
that Executive contacted, solicited, called upon, or served, or
that he directed others to solicit, call upon, or serve, on
behalf of Employer, during his employment at Employer; or (ii)
contact, solicit, or seek to divert the business or patronage of
any person, association, corporation, or other business
organization or entity with whom or which Executive had business
relations on behalf of Employer or with whom or which he met or
communicated, or with whom or which he directed others to meet or
communicate, for the purpose of offering to sell or place or
soliciting for sale or placement any product, service, or system
of the kind and character sold, provided or distributed by him,
on behalf of Employer, during his employment at Employer.
d. Reasonable Restrictions. Executive agrees that the
restriction set forth above is ancillary to an otherwise
enforceable agreement, is supported by independent valuable
consideration, and that the limitations as to time, geographical
area, and scope of activity to be restrained by this Section are
reasonable and acceptable, and do not impose any greater
restraint than is reasonably necessary to protect the goodwill
and other business interests of Employer. Executive agrees that
if, at some later date, a court of competent jurisdiction
determines that the non-solicitation agreement set forth in this
Section does not meet the criteria set forth in Tex. Bus. & Comm.
Code Xxx. 15.50(2), this Section may be reformed by the court and
enforced to the maximum extent permitted under Texas law.
e. Breach. If Executive is found to have violated any of the
provisions of this Section, Executive agrees that the restrictive
period of each covenant so violated shall be extended by a period
of time equal to the period of such violation by him. Executive
understand that his obligations under this Section shall survive
the termination of his employment with Employer and shall not be
assignable by him.
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9. NON-SOLICITATION OF EMPLOYEES AND CONSULTANTS.
Executive acknowledges that, as part of his employment
or association with Employer, he will become familiar with the
salary, pay scale, capabilities, experiences, skill and desires
of Employer's employees. In order to protect the confidentiality
of such information, Executive agrees that, for a period of
twelve (12) months following the termination of his employment
with Employer, whether such termination occurs at the insistence
of Executive or Employer, Executive shall not recruit, hire,
solicit, or attempt to recruit, hire or solicit, directly or by
assisting others, any other employees or consultants employed by
or associated with Employer, nor shall he contact or communicate
with any other employees or consultants of Employer for the
purpose of inducing other employees or consultants to terminate
their employment or association with Employer. For purposes of
this covenant, "other employees or consultants" shall refer to
permanent employees, temporary employees, or consultants who were
employed by, doing business with, or associated with Employer
within six (6) months of the time of the attempted recruiting,
hiring or solicitation. Executive's obligations under this
Section 9 shall survive the termination of this Agreement and
Executive's employment with Employer.
10. REMEDIES.
In the event that Executive violates any of the
provisions set forth in Sections 6, 7, 8, or 9 of this Agreement,
he acknowledges that Employer will suffer immediate and
irreparable harm which cannot be accurately calculated in
monetary damages. Consequently, Executive acknowledges and
agrees that Employer shall be entitled to immediate injunctive
relief, either by temporary or permanent injunction, to prevent
such a violation. Executive further acknowledges and agrees that
this injunctive relief shall be in addition to any other legal or
equitable relief, including monetary damages, to which Employer
would be entitled.
11. NOTIFICATION OF PROSPECTIVE EMPLOYMENT.
Prior to accepting employment or an association with
any third party which is engaged in a business competitive to the
business conducted by Employer or which, because of the nature of
Executive's proposed or potential position with the third party,
may require Executive to use or disclose Employer's Proprietary
Information, Executive agrees to notify such third party that he
is bound by the terms of this Agreement. Executive also agrees
that Employer may, at any time while any of the non-disclosure or
non-solicitation covenants contained in this Agreement are in
force, provide notice of the existence of this Agreement to any
third party with whom or which Executive proposes to negotiate or
is negotiating concerning employment or an association or to
accept employment, or with whom or which Executive has accepted
employment or an association, without any liability to Executive
for any such notice.
12. INVENTIONS, IDEAS/PATENTABLE INVENTIONS.
Executive agrees to disclose, fully and promptly, and
only to Employer, all ideas, methods, plans, improvements or
patentable inventions of any kind which are made or discovered,
in whole or in part, by Executive during the performance of his
job duties; that result from any aid, support, or assistance by
Employer; or that are created during Executive's work time with
Employer.
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In connection with any invention, discovery, concept or
idea subject to the foregoing Paragraphs, Executive will promptly
execute a specific assignment of any title, shop-right or license
to Employer, and, if requested to do so, will cooperate fully
with Employer to secure a patent, shop-right, or license therefor
in the United States and/or foreign countries. However, nothing
in this Agreement shall require any assignment otherwise
prohibited by law.
Executive further agrees that any and all work product
created or performed by Executive while Executive is working with
or on behalf of Employer, is a "work for hire" under the terms of
the United States Copyright Act, and shall be and remain the
exclusive property of Employer. Executive hereby assigns any and
all rights, title, and ownership interests that he may now have
or hereafter acquire in or to such work product to Employer.
13. SUCCESSORS; BINDING AGREEMENT
This Agreement shall be binding upon, and insure to the
benefit of, Employer, Executive, and their respective successors,
assigns, personal and legal representatives, executors,
administrators, heirs, distributees, devisees, and legatees, as
applicable. Without limiting the generality of the foregoing,
Employer may assign this Agreement (or the same may remain with
Employer as a subsidiary of a larger institution), without the
consent of Executive, with such assignee being required to
perform the obligations of Employer hereunder, to any successor
of Employer.
14. COMPLETE AGREEMENT
This Agreement sets forth the entire agreement among
Employer and Executive concerning the subject matter hereof, and
supersedes all prior written or oral understandings of the
parties.
15. NOTICE
For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly given when (i) delivered
personally; (ii) sent by telecopy or similar electronic device
and confirmed; (iii) delivered by overnight express; or (iv) sent
by registered or certified mail, postage prepaid, addressed as
follows:
If to the Executive:
J. Xxxxx Xxxxxxx
0000 Xxxxxxx Xxx
Xxxxxx, Xxxxx 00000
If to Employer:
INTAC International, Inc.
Xxxx 0-0, 00/X., Xxxxxxxx Xxxxxx
000-000 Xxxxxx Xxx Xxx Xxxx
Xxxxxxx, Xxxx Xxxx
ATTN: Chief Executive Officer
or to such other address as any party may have furnished to the
other in writing in accordance herewith, except that notices of
change of address shall be effective only upon receipt.
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16. MISCELLANEOUS
No provision of this Agreement may be modified, waived,
or discharged unless such waiver, modification, or discharge is
agreed to in writing signed by the Executive and Employer. No
waiver by either party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter
hereof have been made by either party which are not set forth
expressly in this Agreement.
17. GOVERNING LAW
This Agreement is being made and is intended to be
performed in the State of Texas, and shall be governed,
construed, interpreted, and enforced in accordance with the
substantive laws of the State of Texas.
18. ATTORNEY FEES
All legal fees and costs incurred in connection with
the resolution of any dispute or controversy under or in
connection with this Agreement shall be borne by the non-
prevailing party.
19. COUNTERPARTS
This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original, but all of which
together will constitute one and the same agreement.
20. VOLUNTARY AGREEMENT.
The Parties acknowledge that each has had an
opportunity to consult with an attorney or other counselor
concerning the meaning, import, and legal significance of this
Agreement, and each has read this Agreement, as signified by
their respective signatures hereto, and each is voluntarily
executing the same after, if sought, advice of counsel for the
purposes and consideration herein expressed. Both parties
acknowledge and agree that the law firm of Xxxxx & Xxxxxx LLP and
its attorneys (including, specifically, J. Xxxxx Xxxxxxxx) have
only represented the Employer in the negotiation and preparation
of this Agreement and that no party shall be permitted to argue
or claim otherwise.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement
effective as of the date and year first above written.
(Employer)
Intac International, Inc.
By:
-----------------------------
Name: Xxx Xxxx
Title: President and Chief
Executive Officer
EXECUTIVE:
J. Xxxxx Xxxxxxx
---------------------------------
J. Xxxxx Xxxxxxx
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