Exhibit 10.3
May 9, 1996
Xx. Xxxxxxxx Xxxxxxxx
0000 Xxxxxxx Xx.
Xxxx Xxxxx, XX 00000
RE: Employment term sheet
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Dear Xxxxxxxx:
This letter will confirm the basic terms of our agreement
under which Showpower, Inc. ("SP") shall enter into an employment agreement with
you ("you" or "Executive"), which definitive agreement (Agreement) shall be
executed within fifteen business days from the date hereof. In consideration for
the terms hereof, you agree to release SP from any and all liability it may have
with respect to the payment of any other compensation due to you as of the date
hereof, other than a deferred bonus in the amount of $30,077.51, and to
terminate any and all existing agreements, whether written or oral, between you
and SP, including, but not limited to, that certain document entitled
"Compensation Agreement" and dated as of August 29, 1995 and executed by you,
Xxxx Xxxxxxx and Xxxxx Xxxxxxxxx.
For the period you are employed you shall receive
compensation as follows (where stated on an annual basis, pro-rated for the
calendar year remaining):
1. Salary, annual basis: $118,000 payable bi-weekly.
2. Term: Three years.
3. Discretionary bonus: You shall be eligible to receive a
discretionary year end bonus above and beyond the compensation stated above.
Year end bonuses shall be granted at the sole discretion of the Board of
Directors.
Xx. Xxxxxxxx Xxxxxxxx -2- May 9, 1996
4. Equity Interest:
x. Xxxxx of Option for Equity Interest. The shareholders of
SP shall grant you an option, under which, for the sum of $100.00,
sell you an equity interest in SP of twenty-four and three tenths
shares, equal to two and forty-three hundredths percent (2.43%) before
a transaction with X. Xxxxx or May 30, 1996, or an equity interest in
SP equal to one and six tenths percent (1.60) after a transaction with
X. Xxxxx or June 1, 1996. Such grant of equity is conditioned upon
your execution of a shareholders' agreement, and is personal to you,
and may not be transferred or assigned.
b. SP's Right of Repurchase. Upon the termination of
Executive's employment hereunder for any reason, Employer shall have
the right, upon sixty days written notice to Executive, to purchase
the equity interest of Executive, for a price equal to its fair market
value, as determined by an independent M.A.I.
certified appraiser.
5. Other Benefits. You shall receive health insurance for
yourself, and be eligible to continue to participate in SP's 401(k) retirement
plan. In addition, you shall other benefits, and be subject to all other
policies as noted in SP's employee handbook, of which you acknowledge receiving,
reading and understanding same.
6. Other Covenants. You agree to enter restrictive covenants
with respect to non-solicitation and non-competition under which you agree,
that, for the 24 months after termination of the Employment Agreement for any
reason, not to solicit client's, vendors or customers of SP, and, provided SP
pays you the sum of $95,000 per year, you agree not to compete in any way with
SP in the business in which SP operates at the time of such termination.
7. Termination. The Employment Agreement shall be terminable
prior to the scheduled expiration of its term as follows:
a. The Employer may terminate this Employment Agreement at
any time with good cause, whereupon all compensation to Executive
shall cease upon the effective date of termination. As used in this
Paragraph 7, the term "good cause" shall include incompetency, neglect
of duty, insubordination, dishonesty, breach of any provision of this
Agreement, any other conduct which is contrary to the faithful and
diligent performance of Executive's duties, or Executive's failure to
adequately perform any duties reasonably assigned to Executive, and
specifically shall include (i) dishonesty by Executive detrimental to
the best interests of Employer or any of its affiliates, (ii)
continuing inattention to or
Xx. Xxxxxxxx Xxxxxxxx -3- May 9, 1996
neglect of the duties to be performed by Executive, (iii) willful
disloyalty of Executive to Employer, (iv) the death of Executive, (v)
participation by Executive in any fraud, (vi) the imparting of any
material confidential information by Executive in violation of this
Agreement, or (vii) any other material violation of this Agreement by
Executive, provided however, that no finding of good cause shall
result from the Executive's prudent exercise of his business judgement
in the performance of his duties hereunder.
b. The Employer may terminate this Employment Agreement at
any time without cause, provided however, if Employer wishes to
continue to enforce the covenant not to compete contained in the
Non-Solicitation Agreement attached hereto as Exhibit "C", Employer
shall be required to continue to pay the Executive $95,000 per annum
as of the date of termination for twenty-four months after such
termination.
c. Upon the express written agreement of the parties.
If this letter agreement accurately reflects our
understanding, please execute the enclosed copy, fax back and mail the original
to me. This letter may be executed in multiple counterparts, each of which shall
be deemed an original.
Kind regards,
Showpower, Inc. Accepted and agreed.
/s/ Xxxxx X. Xxxxxxxxx /s/ Xxxxxxxx Xxxxxxxx
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Xxxxx X. Xxxxxxxxx Xxxxxxxx Xxxxxxxx
