EXHIBIT 10.2
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated this 16th day of August, 1999, between ebaseOne
Corporation, a Delaware corporation, currently having its principal place of
business at 0000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000 (the "Company"), and
Xxxxxxx Xxxxxxx (the "Executive") an individual currently residing at 0000
Xxxxxxxxxxx Xxxxx, Xxxxxxx, Xxxxx 00000.
WHEREAS, the Company desires to employ Executive and Executive desires to
be employed by the Company, as President and Chief Executive Officer of the
Company.
WHEREAS, the Executive is willing to enter into an agreement with the
Company upon the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the premises and covenants herein
contained, the parties hereto agree as follows:
1. Term of Agreement. Subject to the terms and conditions hereof, the term of
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employment of the Executive under this Employment Agreement shall be for the
period commencing on the date hereof (the "Commencement Date") and terminating
on December 31, 2001, unless sooner terminated as provided in accordance with
the provisions of Section 5 hereof. (Such term of employment is herein
sometimes called the "Employment Term.")
2. Employment. As of the Commencement Date, the Company hereby agrees to
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employ the Executive as President and Chief Executive Officer of the Company,
and the Executive hereby accepts such employment and agrees to perform his
duties and responsibilities hereunder in accordance with the terms and
conditions hereinafter set forth.
3. Duties and Responsibilities; Board Membership.
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(a) Duties. Executive shall perform such duties as are usually performed by a
President/Chief Executive Officer of a business similar in size and scope as the
Company and such other reasonable additional duties as may be prescribed from
time-to-time by the Company's board of directors which are reasonable and
consistent with the Company's operations, taking into account Executive's
expertise and job responsibilities. This agreement shall survive any job title
or responsibility change agreed to by Executive. Executive shall report directly
to the board of directors of the Company regarding implementation of all
business matters. All actions of Executive shall be subject and subordinate to
the review and approval of the board of directors. No other person or group
shall be given authority to supervise or direct Executive in the performance of
his duties. The board of directors shall be the final and exclusive arbiter of
all policy decisions relative to the Company's business.
(b) Board Membership. Upon commencement of this agreement, the board of
directors shall
use its best efforts to nominate and cause the election of Executive to the
Company's board of directors to fill a currently existing vacancy.
(c) Devotion of Time. During the term of this agreement, Executive agrees to
devote sufficient time and attention during normal business hours to the
business and affairs of the company to the extent necessary to discharge the
responsibilities assigned to Executive and to use reasonable best efforts to
perform faithfully and efficiently such responsibilities. During the term of
this agreement it shall not be a violation of this agreement for Executive to
(i) serve on the boards of XxxxxXxxxxx.xxx, IDT (or its successor),
AtlanticPacific Communications, and ChillOut Misters as an active director; (ii)
deliver lectures, fulfill speaking engagement to teach at educational
institutions; (iii) manage personal investments or companies in which personal
investments are made so long as such activities do not significantly interfere
with the performance of Executive's responsibilities with the Company and which
companies are not in direct competition with the Company; or (iv) provide
consulting services to Bradford Brothers, KnowledgeWire, and other companies
that are currently supported by Executive's consulting practice, New Enterprise
Solutions, however it is expressly understood that Executive will limit his
participation with the foregoing companies. Executive has agreed not to pursue
any additional clients unless they have strategic value to the Company, as
approved by the board of directors. In addition, Executive must obtain written
permission from the Company's board of directors in order to serve on any
additional boards. Any income received by Executive outside the scope of his
employment and permitted pursuant to the provisions hereof, shall inure to the
benefit of Executive, and the Company shall not claim any entitlement thereto.
Executive has agreed not to pursue any additional clients unless they have
strategic value to the Company, as approved by the board of directors.
4. Compensation and Benefits During the Employment Term.
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(a) Base Compensation. The Executive's base compensation from the Commencement
Date through December 31, 1999, shall be at the rate of $12,500 per month,
payable in regular semi-monthly installments in accordance with the
Company's practice for its executives, less applicable withholding for
income and employment taxes as required by law and other deductions as to
which the Executive shall agree. Executive acknowledges that initially
such base compensation may have to be accrued, based upon the Company's
current working capital. Thereafter, the Executive's base compensation
shall be $15,000 per month. Such base compensation shall be subject to
increases as and when determined by the Company's board of directors in its
sole discretion.
(b) Bonus Compensation. In addition to the Executive's base compensation,
Executive will be entitled to a performance bonus as follows:
(i) Before December 31, 1999, the Executive has agreed to work toward
meeting the following objectives ("MBOs"): (i) raise working capital
necessary to begin implementation of the business plan; (ii) build an
enterprise center in Houston; (ii) secure agreements to host packaged
software applications under a subscription agreement or like agreement
with one or more vendors for sales force automation,
financial management, customer relationship management, human
resource management and electronic business; (iii) hire the necessary
personnel to execute the business plan; and (iv) secure initial
customers per the business plan. After December 31, 1999, the
Company's board of directors shall determine what material progress
the Executive has made toward meeting the above captioned MBOs and
shall pay the Executive a bonus of up to $125,000 based upon the
percentage of MBOs met. Said bonus shall be paid on or before the end
of January 2000.
(ii) If, no later than December 31, 2000, the Company successfully
implements and meets certain agreed upon milestones, as determined by
the Company's board of directors in January 2000, Executive will be
entitled to receive $180,000. If the board of directors is unable to
agree on the milestones, the Executive will receive the bonus in the
event the Company attains $12 million in net revenues for December
31, 2000, as determined by the Company's independent auditors. In any
event, the bonus shall be paid upon the earlier of (x) 12 month
financial statements filed with the Securities and Exchange
Commission, or (y) March 31, 2001.
(iii) Subsequent bonuses will be determined by the board of directors.
(c) Warrants. The Executive will be entitled to receive five year warrants to
purchase an aggregate 10,000,000 shares of Company common stock having the
terms set forth in the warrant agreement attached hereto as Exhibit "A."
(d) Expense Reimbursement. The Executive shall be entitled to reimbursement of
all reasonable, ordinary and necessary business related expenses incurred
by him in the course of his duties and upon compliance with the Company's
procedures.
(e) Participation in Employee Benefit Plans. Executive shall be entitled to
participate, subject to eligibility and other terms generally established
by the Company's board or directors, in any employee benefit plan
[including but not limited to life insurance plans, stock option plans,
group hospitalization, hearth, dental care (which health insurance shall
also cover Executive's dependents) profit sharing, pension and other
benefit plans], as may be adopted or amended by the Company from time-to-
time.
5. Termination. Subject to the notice and other provisions of this Section 5,
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the Company shall have the right to terminate the Executive's employment with
the Company, and the Executive shall have the right to resign from such
employment, at any time and for no stated reason.
(a) Disability. The Company shall have the right to terminate the employment
of the Executive under this Agreement for disability in the event Executive
suffers an injury, illness or incapacity as defined in the Company's Long
Term Disability Insurance Policy in effect as of the date hereof for a
period of more than six (6) months provided that during such six month
period the Company shall have given at least ten (10) days written notice
of termination; provided further, however, that if the Executive is
eligible to receive disability payments pursuant to a disability policy
paid for by the Company, the Executive shall assign such
benefits to the Company for all periods as to which he is receiving full
payment under this agreement.
(b) Death. This agreement shall terminate upon the death of Executive.
(c) With Cause. The Company may terminate this agreement at any time because
of:
(i) Executive's material breach of any term of this agreement, which is
not cured after ten (10) days written notice from the board of
directors, or
(ii) commission by the Executive of a felony or an act of fraud against
the Company.
In the event Executive's employment with the Company is terminated pursuant
to items 5(a), (b) or (c), Executive or his beneficiary shall be entitled to
receive all base compensation earned by Executive up to the date of termination,
all unreimbursed expenses, and any bonus earned in respect of a prior year and
not yet paid. For a termination by the Company without good cause, Executive
shall be entitled to receive the greater of (i) the remaining base salary at the
then base salary rate for the remainder of the Employment Term or (ii) the base
salary rate for the period of six months, and all unreimbursed expenses, any
bonus earned in respect of a prior year and not yet paid, and the pro-rata
portion of any bonus for the current year.
6. Revealing of Trade Secrets, etc. Executive acknowledges the interest of
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the Company in maintaining the confidentiality of information related to its
business and shall not at any time during the Employment Term or thereafter,
directly or indirectly, reveal or cause to be revealed to any person or entity
the supplier lists, customer lists or other confidential business information of
the Company; provided, however, that the parties acknowledge that it is not the
intention of this paragraph to include within its subject matter (a) information
not proprietary to the Company, (b) information which is then in the public
domain, or (c) information required to be disclosed by law.
7. Arbitration. If a dispute should arise regarding this agreement, all
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claims, disputes, controversies, differences or other matters in question
arising out of this relationship shall be settled finally, completely and
conclusively by arbitration of a single arbitrator in Houston, Texas, in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association (the "Rules"). Arbitration shall be initiated by written demand.
This agreement to arbitrate shall be specifically enforceable only in the
District Court of Xxxxxx County, Texas. A decision of the arbitrator shall be
final, conclusive and binding on the Company and the Executive, and judgement
may be entered in the District Court of Xxxxxx County, Texas, for enforcement
and other benefits. On appointment, the arbitrator shall then proceed to decide
the arbitration subjects in accordance with the Rules. Any arbitration held in
accordance with this paragraph shall be private and confidential and no person
shall be entitled to attend the hearings except the arbitrator, Executive,
Executive's attorneys, and an designated representatives of the Company and
their respective attorneys. The matters submitted for arbitration, the hearings
and proceedings and the arbitration award shall be kept and maintained in
strictest confidence by Executive and the Company and shall
not be discussed, disclosed or communicated to any persons. On request of any
party, the record of the proceeding shall be sealed and may not be disclosed
except insofar, and only insofar, as may be necessary to enforce the award of
the arbitrator and any judgement enforcing an award. The prevailing party shall
be entitled to recover reasonable and necessary attorneys' fees and costs from
the non-prevailing party.
8. Covenants Not to Compete.
(a) Executive's Acknowledgment. Executive agrees and acknowledges that in
order to assure the Company that it will retain its value as a going
concern, it is necessary that Executive undertake not to utilize his
special knowledge of the business and his relationships with customers and
suppliers to compete with the Company. Executive further acknowledges
that:
(i) the Company is and will be engaged in the business;
(ii) Executive will occupy a position of trust and confidence with the
Company prior to the date of this agreement and, during such period
and Executive's employment under this agreement, Executive has, and
will become familiar with the Company's trade secrets and with other
proprietary and confidential information concerning the Company;
(iii) the agreements and covenants contained in this Section 8 are
essential to protect the Company and the goodwill of the business;
and
(iv) Executive's employment with the Company has special, unique and
extraordinary value to the Company and the Company would be
irreparably damaged if Executive were to provide services to any
person or entity in violation of the provisions of this agreement.
(b) Competitive Activities. Executive hereby agrees that for a period
commencing on the date hereof and ending one year following the later of
(i) termination of Executive's employment with the Company for whatever
reason, and (ii) the conclusion of the period, if any, during which the
Company is making payments to Executive, he will not, directly or
indirectly, as employee, agent, consultant, stockholder, director, co-
partner or in any other individual or representative capacity, own,
operate, manage, control, engage in, invest in or participate in any manner
in, act as a consultant or advisor to, render services for (alone or in
association with any person, firm, corporation or entity), or otherwise
assist any person or entity (other than the Company) that engages in or
owns, invests in, operates, manages or controls any venture or enterprise
that directly or indirectly engages or proposes in engage in the business
of the manufacturing, distribution or sale of (i) products manufactured,
distributed, sold or licensed by the Company or services provided by the
Company at the time of termination or (ii) products or services proposed at
the time of such termination to be manufactured, distributed, sold,
licensed or provided by the Company within the united States (the
"Territory"); provided, however, that nothing contained herein shall be
construed to prevent Executive from (i) investing in the stock of any
competing corporation listed on a national securities exchange or traded in
the over-the-counter market, but only if Executive is not involved in the
business of said corporation and if Executive and his associates (as such
term is defined in Regulation 14(A) promulgated under the Securities
Exchange Act of 1934, as in effect on the date hereof), collectively, do
not own more than an aggregate of two percent of the stock of such
corporation, or (ii) investments in XxxxxXxxxxx.xxx, IDT (or its
successor), AtlanticPacific Communications, and ChillOut Misters
("Permitted Investments"). With respect to the Territory, Executive
specifically acknowledges that the Company has conducted the business
throughout those areas comprising the Territory and the Company intends to
continue to expand the business throughout the Territory.
(c) Blue Pencil. If an arbitrator shall at any time deem the terms of this
agreement or any restrictive covenant too lengthy or the Territory too
extensive, the other provisions of this section 8 shall nevertheless
stand, the restrictive period shall be deemed to be the longest period
permissible by law under the circumstances and the Territory shall be
deemed to comprise the largest territory permissible by law under the
circumstances. The arbitrator in each case shall reduce the restricted
period and/or the Territory to permissible duration or size.
9. Opportunities. During his employment with the Company, and for one year
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thereafter, Executive shall not take any action which might divert from the
Company any opportunity learned about by him during his employment with the
Company (including without limitation during the Employment Term) which would be
within the scope of any of the businesses then engaged in or planned to be
engaged in by the Company.
10. Survival. In the even that this Agreement shall be terminated, then
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notwithstanding such termination, the obligations of Executive pursuant to
Sections 6,7,8 and 9 of this agreement shall survive such termination.
11. Contents of Agreement, Parties in Interest, Assignment, etc. This
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Agreement sets forth the entire understanding of the parties hereto with respect
to the subject matter hereof. All of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
respective heirs, representatives, successors and assigns of the parties hereto,
except that the duties and responsibilities of Executive hereunder which are of
a personal nature shall neither be assigned nor transferred in whole or in part
by Executive. This Agreement shall not be amended except by a written
instrument duly executed by the parties.
12. Severability. If any term or provision of this Agreement shall be held to
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be invalid or unenforceable for any reason, such term or provision shall be
ineffective to the extent of such invalidity or unenforceability without
invalidating the remaining terms and provisions hereof, and this Agreement shall
be construed as if such invalid or unenforceable term or provision had not been
contained herein.
13. Notices. Any notice, request, instruction or other document to be given
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hereunder by any
party to the other party shall be in writing and shall be deemed to have been
duly given when delivered personally or five (5) days after dispatch by
registered or certified mail, postage prepaid, return receipt requested, to the
party to whom the same is so given or made:
If to the Company addressed to:
ebaseOne Corporation
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
`with a copy to:
Xxxxxx & Xxxxxxxxx, P.C.
0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
If to Executive addressed to:
Xxxxxxx X. Xxxxxxx
0000 Xxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
or to such other address as the one party shall specify to the other party in
writing.
14. Counterparts and Headings. This agreement may be executed in one or more
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counterparts, each of which shall be deemed an original and all which together
shall constitute one and the same instrument. All headings are inserted for
convenience of reference only and shall not affect the meaning or interpretation
of this agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
EBASEONE CORPORATION
By: /s/ Xxxx Xxxxxxx Overstolz
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Xxxx Xxxxxxx Overstolz, Chairman of the Board
EXECUTIVE
By: /s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx
ADDENDUM #1
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereby agree that this Addendum, entered
into this 27/th/ day of October, 1999, shall amend, to the extent set forth in
this Addendum, the employment agreement entered into on August ___, 1999 between
EBASEONE CORPORATION, a Delaware corporation ("Company") and Xxxxxxx Xxxxxxx, an
individual ("Xxxxxxx") (the "Agreement").
Notwithstanding anything in the Agreement, the Company and Xxxxxxx agree to
amend and restate in its entirety, the following section of the Agreement as
follows:
1. Term of Agreement. Subject to the terms and conditions hereof, the term of
employment of the Executive under this Employment Agreement shall be for the
period commencing on the date hereof (the "Commencement Date") and terminating
on December 31, 2002, unless sooner terminated as provided in accordance with
the provisions of Section 5 hereof. (Such term of employment is herein
sometimes called the "Employment Term.")
IN WITNESS WHEREOF, the parties hereto have caused this Addendum to the
Agreement to be executed on the day and year set forth above.
EBASEONE CORPORATION
By: /s/ Xxxx Xxxxxxx Overstolz
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Xxxx Xxxxxxx Overstolz, Chairman of the Board
XXXXXXX XXXXXXX, an individual
By: /s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx
