EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of April 11, 2000 by and between Xxxxxxx X.
Xxxxx, (the "EMPLOYEE") and GENISYS INFORMATION SYSTEMS, INC. (the "COMPANY").
In consideration of the mutual covenants and agreements set forth herein and
for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows, effective as of
the date hereof:
1. DUTIES AND SCOPE OF EMPLOYMENT.
(a) Position. For the term of his employment under this Agreement
("EMPLOYMENT"), the Company agrees to employ Employee in the position of Chief
Financial Officer (CFO) or in such other comparable position consistent with
the Employee's experience, stature, and Base Compensation (as defined below),
as the Company may subsequently assign to Employee.
(b) Term of Employment. Employment shall continue until terminated by
Employeeor the Company subject to the following:
(i) Termination by Employee may be accomplished by provision of
Notice of Intent to Resign, written and delivered 60 days
prior to effective date of resignation, delivered to the
Chairman of the Board of Directors of Company.
(ii) Termination by Company may be accomplished by delivery of
written notification of termination and employee may be
terminated for cause or insolvency only during the first year
of employment. After one year of employment EMPLOYEE is subject
to at will employment and notice of termination is effective
immediately.
(iii)Company may terminate Employee for good cause at any time .
Company may terminate without good cause after one year of
employment. Employment shall commence as of date employee
begins earning compensation from company.
(iv) Employee may terminate employment upon a formal declaration of
insolvency of Company.
(c) Obligations. During the term of his Employment, Employee shall
devote his best effort to the business of the Company and shall not render
business services to any competing person or entity whether on a compensated
or non-compensated basis ("OTHER EMPLOYMENT") without the express prior
approval of the Company's Chief Executive Officer. The Employee shall serve
as Chief Financial Officer of the Company and shall have the usual and
customary duties, responsibilities and authority of a CFO subject to the power
of the board of directors of the Company (the "BOARD"), the Company's Chief
Executive Officer ("CEO"), or any duly designated officer of Genisys.
(d) Employment Commencement. Employee shall be a full-time employee with
the Company at the time that this agreement is executed.
2. CASH AND INCENTIVE COMPENSATION.
(a) Salary. The Company shall pay Employee as compensation for his
services a starting salary of $90,000 yearly (subject to annual increases as
shall be determined by the Board of Director's) ("BASE COMPENSATION"). Such
salary shall be payable in accordance with the Company's standard payroll
procedures.
(b) The employee shall have the right to participate in the Companies
employee stock option plan. (see 2.(e))
(c) Benefits. Employee shall be eligible to participate in such benefit
programs offered by the Company, such as health, dental, life insurance,
vision, employee stock purchase plan, vacations and 401(k). The Company
agrees that during the Employment Term it will provide to Employee, at its own
expense, a level of indemnification and coverage under any applicable
Officer's and Director's liability guidelines, bylaws or insurance policies
commensurate with Employee's actions as an officer of the Company.
(d) Business Expenses. During the term of his Employment, Employee shall
be authorized to incur necessary and reasonable travel, entertainment and
other business expenses in connection with his duties hereunder. The Company
may advance such expenses, and shall reimburse Employee for such expenses upon
presentation of an itemized account and appropriate supporting documentation,
all in accordance with the Company's (and/or Genisys's) generally applicable
policies.
(e) Bonuses and Other Incentives. The Employee shall be entitled to
participate in any bonuses or other incentive programs made available by the
Company as the Board of Directors may determine to award in its sole
discretion. In addition to normal bonus awards, Employee is to be awarded
options for 100,000 shares of class A common stock as part of and in
accordance with the terms and conditions of the current employee stock option
program now in effect. If during the vesting period of these 100,000 options,
iGenisys is sold and a change of control occurs, other than through a public
offering, all of these options will vest immediately prior to sale.
(g) An additional bonus of $5000.00 shall be paid to Employee subject
to Companies completion of first $600,000 of public stock offering.
3. AT WILL EMPLOYMENT.
(a) After the first year of employment the Employee shall be subject to
the following Basic Rule. The Company agrees to employ the Employee and
Employee agrees to employment with the Company, from the time set forth in
Section 1(d). Employee's Employment with the Company shall be "at will." This
means that either Employee or the Company may terminate the Employee's
Employment at any time for any reason, with or without Cause (as defined
below). Any contrary representations which may have been made to the Employee
shall be superseded by this Agreement. This Agreement shall constitute the
full and complete agreement between the Employee and the Company on the "at
will" nature of the Employee's Employment, which may only be changed in an
express written agreement signed by the Employee and the CEO.
(b) Rights Upon Termination.
(i) Upon Employee's voluntary termination of employment or the
Company's termination of Employee's Employment for Cause,
Employee shall only be entitled to the compensation, benefits
and reimbursements described in Sections 1 and 2 for the period
preceding the effective date of the termination and for such
payments as may be required in Section 3, (b), (ii) of this
document.
(ii) In the event ,after the first year of employment, the Company
terminates Employee's Employment without Cause, the Company
shall be obligated to pay Employee (A) his then current Base
Compensation for a one month term (the "Termination Payment
Period"), plus (B) all accrued but unpaid amounts payable to
Employee pursuant to Section 2(d) of this Agreement (other than
Base Compensation). Base Compensation payable under this
subsection shall be payable, at the Company's option, either
(i) in accordance with the payroll practices of the Company or
(ii) in a single lump sum payment equal to the aggregate amount
of the payments, upon such termination, the Company shall also
continue to provide Employee with all insurance (including
self-insurance) medical and disability benefits, subject to the
terms, conditions and restrictions of the specific plans,
through the end of the Termination Payment Period. The Company
shall arrange for and pay for group or private health insurance
and disability benefits similar to those which Employee was
receiving immediately prior to the termination. If Employee
meets eligibility terms, conditions and restrictions of COBRA,
the Company will pay the COBRA premiums for Employee and, if
covered prior to the termination, Employee's dependents.
Insured benefits otherwise receivable by Employee pursuant to
this Section 3(b)(ii) will be reduced to the extent comparable
benefits are actually received by Employee during such period
from another source. Thereafter, the Company shall have no
obligation to make any further payments to or to provide any
further benefits hereunder to Employee except those required by
COBRA.
(c) Cause. "CAUSE" as used herein shall mean Employee's (i) commission
of fraud or embezzlement, an act of moral turpitude, or of any
tortious or unlawful act or a felony causing harm to the Company's
business, standing or reputation, (ii) act of material dishonesty or
fraud with respect to the Company, (iii) breach of his/her duty of
loyalty or care to the Company, (iv) ongoing refusal or failure to
perform Employee's duties other than as a result of Disability after
receiving written notice describing his non-performance and being
given a reasonable opportunity to cure such non-performance; (v)
deliberate and consistent refusal to conform to or follow any
reasonable policy adopted by the Company's Board or lawful
instructions of the CEO or any Genisys Executive officer after
receiving written notice describing his/her non-compliance and being
given a five (5) business days opportunity to cure (to the extent
curable) such non-compliance; or (vii) material breach of this
Agreement, the Proprietary Information and Inventions Agreement
between Employee and the Company.
4. NON-COMPETITION.
(a) General Terms. The parties acknowledge that it would be detrimental
to the Company if Employee were to compete with the Company in any part of the
Business (as defined below). As a result of the foregoing, the parties
expressly acknowledge that the intention of the non-competition provisions
contained in this Agreement are so that such provisions shall be enforceable
pursuant to the provisions of Texas law.
(b) Non-Competition During Employment. Employee agrees that during his
Employment with the Company, Employee will not engage in Other Employment in
competition with the Company.
(c) Permit the name of Employee to be used in connection with a
competitive Business.
(d) Exceptions. Notwithstanding Subsection (c) above:
(i) Employee may engage in a business that relates to the Business
if Employee receives the prior written approval of the Board
(as evidenced by a duly adopted Board resolution) to do so.
Such written approval will not be unreasonably withheld if such
outside employment business or activity would not be
detrimental to the Company.
(ii) Employee may own, directly or indirectly, solely as an
investment, up to one percent (5%) of any class of "publicly
traded securities" of any person or entity which owns a
business that relates to the Business. For the purposes of
this paragraph, the term "publicly traded securities" shall
mean securities that are traded on a national securities
exchange or listed on the Nasdaq Stock Market or SmallCap
Markets.
(iii)Employee shall not be prohibited from competing with the
Business, if the Company or Genisys or their respective
successors, and any entity deriving title to their goodwill or
shares, cease to carry on a like Business therein or becomes
insolvent or became insolvent prior to termination.
(iv) Nothing in this section is intended to prevent Employee from
engaging in any activity which does not compete with the
Company, and is not detrimental to the Company.
5. NON-SOLICITATION AND NON-DISCLOSURE.
(a) Non-Solicitation. During the period commencing on the date of this
Agreement and continuing through the "restricted period" in 4(c), Employee
shall not directly or indirectly, personally or through others, solicit or
attempt to solicit (on Employee's own behalf or on the behalf of any other
person or entity) (i) any employee or independent contractor of the Company
or any of the Company's affiliates to cease performing work or services for
the Company or to perform work or services for any other party, (ii) any
customer, supplier, licensee, or other business relations of the Company or
Genisys (and/or its affiliates) for purpose of encouraging them to terminate
their relationship with the Company or Genisys (and/or its affiliates) or in
any way interfere with the relationship between such customer, supplier,
licensee, or business relationship, on the one hand, and the Company or
Genisys (and/or its affiliates), on the other hand, or (iii) any person who
was an employee or independent contractor of the Company or Genisys (on any of
its affiliates) within six (6) months after Employee's Employment was
terminated, unless Genisys (and/or its affiliates) becomes or is insolvent.
(b) Non-Disclosure. Employee shall enter into a Non-Disclosure/Trade
Secrets Agreement with the Company, which is attached hereto as Exhibit B
6. MISCELLANEOUS PROVISIONS.
(a) Notice. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or three days after deposit in the U.S. registered mail,
return receipt requested and postage prepaid. In the case of Employee, mailed
notices shall be addressed to him at the home address which he most recently
communicated to the Company in writing. In the case of the Company, mailed
notices shall be addressed to its corporate headquarters, and all notices
shall be directed to the attention of its Secretary; with copy to Genisys, 000
Xxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000 or such other address
properly changed.
(b) Waiver. No provision of this Agreement shall be modified, waived or
discharged unless the modification, waiver or discharge is agreed to in
writing and signed by Employee and by an authorized officer of the Company
(other than Employee). No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement by the other
party shall be considered a waiver of any other condition or provision or of
the same condition or provision at another time.
(c) Whole Agreement; Modifications. Except for the Proprietary
Information and Inventions Agreement, and the Non-Disclosure/Trade Secrets
Agreement, and no other agreements, representations or understandings (whether
oral or written and whether express or implied) which are not expressly set
forth in this Agreement have been made or entered into by either party with
respect to the subject matter hereof. A modification of this Agreement shall
be valid only if it is made in writing and executed by both parties hereto.
(d) Withholding Taxes. All payments made under this Agreement shall be
subject to reduction to reflect taxes or other charges required to be withheld
by law.
(e) CHOICE OF LAW. THE VALIDITY, INTERPRETATION, CONSTRUCTION AND
PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
TEXAS.
(f) Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions hereof shall not be in any way impaired, unless the
provisions held invalid, illegal or unenforceable shall substantially impair
the benefits of the remaining provisions hereof. The parties hereto further
agree to replace such invalid, illegal or unenforceable provision of this
Agreement with a valid, legal and enforceable provision that will achieve, to
the extent possible, the economic, business and other purposes of such
invalid, illegal or unenforceable provision.
(g) No Assignment of this agreement may be made by either party.
(h) Company's Successors. This Agreement shall be binding upon any
successor (whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company's business and/or assets. For all purposes under this Agreement, the
term "COMPANY" shall include any successor to the Company's business and/or
assets which becomes bound by this Agreement.
(i) Employee's Successors. This Agreement and all rights of Employee
may not be transferred or assigned by Employee at any time without the prior
written consent of the Company authorized by a duly adopted Board resolution;
and shall inure to the benefit of, and be enforceable by, Employee's personal
or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
(j) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(k) Joint Participation in Preparation of Agreement. The parties hereto
participated jointly in the negotiation and preparation of this Agreement and
each party has had the opportunity to obtain the advice of legal counsel and
to review, comment upon, and redraft this Agreement. Accordingly, it is agreed
that no rule of construction shall apply against any party in favor of any
party. This Agreement shall be construed as if the parties jointly prepared
it, and any uncertainty or ambiguity shall not be interpreted against any one
party and in favor of the other.
(l) Remedies.
(m) In the event of a breach or threatened breach by the Company or
Employee of any of the provisions of this agreement, the Employee or Company
shall be entitled to an injunction restraining the Employee or the Company
from such breach and/or in the case of an injunction in favor of the Company
or Employee, from rendering any services to any person, firm, corporation,
association, or other entity receiving (or to receive) the benefit of such
breach, since the remedy at law would be inadequate and insufficient.
(n) In addition, the Employee or Company shall be entitled to such
damages as he or it can show he or it has sustained by reason of such breach.
As among themselves, the parties agree that the prevailing party shall bear
the costs and expenses of enforcing the provisions of the Agreement. Nothing
herein contained shall be construed as prohibiting the Employee or Company
from pursuing any other remedies available for such breach or threatened
breach or any other breach of this Agreement at law or in equity or otherwise.
(o) IN WITNESS WHEREOF, each of the parties has executed this Agreement,
in the case of the Company by its duly authorized officer, as of the day and
year first above written.
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[EMPLOYEE]
GENISYS INFORMATION SYSTEMS, INC.
BY:
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NAME:
TITLE:
