Exhibit 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into and is
effective as of the First day of January 2004, by Technology Visions Group, Inc.
(the "Company") and Xxxxx X. Xxxxx (the "Executive").
WHEREAS, the Company desires to retain the services of the Executive as
Chief Executive Officer of the Company and the Executive desires to render such
services on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the receipt and sufficiency of which is hereby acknowledged, the parties
agree as follows:
1. Employment Term. The Company employs the Executive and the Executive accepts
employment by the Company, upon the terms and subject to the conditions set
forth in this Agreement, until January 1, 2006, provided, however, that such
employment may be sooner terminated pursuant to the terms of this Agreement.
Upon expiration, this Agreement may be renewed annually upon approval by the
board of directors.
2. Management of the Company. The Executive shall devote the Executive's time,
best efforts, attention and skill to, and shall perform faithfully, loyally and
efficiently the Executive's duties as Chief Executive Officer of the Company.
Further, the Executive will punctually and faithfully perform and observe any
and all rules and regulations which the Company may now or shall hereafter
reasonably establish governing the Executive's conduct and the conduct of the
Company's business which are consistent with this Agreement.
3. Compensation; Benefits. In consideration of the services rendered to the
Company by the Executive, the Company shall pay the Executive a salary at the
annual rate of $150,000 (the "Salary"). The Salary shall be payable in
accordance with the normal payroll practices of the Company then in effect. The
Salary, and all other forms of compensation paid to the Executive hereunder,
shall be subject to all applicable taxes required to be withheld by the Company
pursuant to federal, state or local law. The Executive shall be solely
responsible for income taxes imposed on the Executive by reasons of any cash or
non-cash compensation and benefits provided by this Agreement. The Executive
will also be entitled to a reasonable car allowance in the amount of $700.00 per
month.
In addition to the Salary, during the Employment Term, the Executive
shall be entitled to: (i) all legal and religious holidays, and four (4) weeks
paid vacation per annum. The Executive shall arrange for vacations in advance at
such time or times as shall be mutually agreeable to the Executive and the
Company's Board of Directors. The Executive may not receive pay in lieu of
vacation, but may accrue vacation time through the term of this Agreement. Under
no circumstances, however, shall such accrued vacation time exceed twelve (12)
weeks; (ii) participate in all employee benefit plans and/or arrangements
adopted by the Company relating to pensions, hospital, medical, dental,
disability and life insurance, deferred salary and savings plans, and other
similar employee benefit plans or arrangements to the extent that the Executive
meets the eligibility requirements for any such plan as in effect from time to
time; (iii) payment by the Company directly, or reimbursement by the Company
for, reasonable and customary business and out-of-pocket expenses incurred by
the Executive in connection with the performance by the Executive of the
Executive's duties under this Agreement in accordance with the Company's
policies and practices for reimbursement of such expenses, as in effect from
time to time, including, without limitation, reasonable and necessary travel,
lodging, entertainment and meals incurred by the Executive in furtherance of the
Company's business and at the Company's request.
In addition to the payment of Salary, the Company hereby grants to the
Executive, 50,000 shares of Series A Convertible Preferred Stock (collectively,
the "Preferred Stock") and 100,000 non-qualified stock options per year
(collectively, the "Stock Options"). Each Stock Option provides the Executive
with the right to purchase one share of the Company's no par value common stock
at $0.05 per share. The Stock Options are non-transferable, vest immediately in
Executive, and expire at the close of business on January 1, 2007. Further, the
Options will not be subject to dilution (i.e. no adjustment to the number of
shares or the exercise price) based upon any reverse split of the Company's
common stock. The Option shall be exercisable in whole or in part with a
promissory note of less than 45 days duration or upon common "cashless exercise"
terms.
Further, the Executive shall be entitled to incentive bonuses, payable
in cash or common stock as agreed upon by the Executive, from time to time as
follows:
o $25,000 upon signing of a purchase order for the Company's
technologies; and
o $25,000 upon the initial shipment of technologies shipped
under such order.
4. Termination of Employment. The Executive's employment hereunder shall
terminate upon the earliest to occur of any the following events, on the dates
and at the times specified below:
(i) the close of business on January 1, 2006 (the "Expiration Date")
unless otherwise renewed ;
(ii) the close of business on the date of the Executive's death
("Death");
(iii) the close of business on the Termination Date (as defined below)
specified in the Notice of Termination (as defined below) which the Company
shall have delivered to the Executive due to the Executive's Disability.
"Disability" shall mean if (i) the Executive is absent from work for 30 calendar
days in any twelve-month period by reason of illness or incapacity whether
physical or otherwise) or (ii) the Company reasonably determines that the
Executive is unable to perform his duties, services and responsibilities by
reason of illness or incapacity (whether physical or otherwise) for a total of
30 calendar days in any twelve-month period during the Employment Term. The
Executive agrees, in the event of any dispute under this Section, and after
receipt by the Executive of such Notice of Termination from the Company, to
2
submit to a physical examination by a licensed physician selected by the
Company. The Executive may seek a second opinion from a licensed physician
acceptable to the Company. If the results of the first examination and the
second examination are different, a licensed physician selected by the
physicians who have performed the first and second examinations shall perform a
third physical examination of the Executive, the result of which shall be
determinative for purposes of this Section;
(iv) the close of business on the Termination Date specified in the
Notice of Termination which the Executive shall have delivered to the Company to
terminate his employment ("Voluntary Termination");
(v) the close of business on the Termination Date specified in the
Notice of Termination which the Company shall have delivered to the Executive to
terminate the Executive's employment for Cause. "Cause" as used herein means
termination based on (i) the Executive's material breach of this Agreement, (ii)
conviction of the Executive for (a) any crime constituting a felony in the
jurisdiction in which committed, (b) any crime involving moral turpitude whether
or not a felony), or (c) any other criminal act against the Company involving
dishonesty or willful misconduct intended to injure the Company (whether or not
a felony), (iii) substance abuse by the Executive, (iv) the failure or refusal
of the Executive to follow one or more lawful and proper directives of the Board
of Directors delivered to the Executive in writing, or (v) willful malfeasance
or gross misconduct by the Executive which discredits or damages the Company.
Any purported termination by the Company or the Executive (other than
by reason of Death or on the Expiration Date) shall be communicated by written
Notice of Termination to the other. As used herein, the term "Notice of
Termination" shall mean a notice which indicates the specific termination
provision in this Agreement relied upon and sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated. After receipt of a
Notice of Termination, the Executive shall continue to be available to the
Company on a part-time basis at reasonable and customary hourly rates to assist
in the necessary transition.
As used herein, the term "Termination Date" shall mean, (i) in the case
of Death, the date of the Executive's death, (ii) in the case of expiration of
the term hereof, the Expiration Date, or (iii) in all other cases, the date
specified in the Notice of Termination.
5. Employee Covenants.
TRADE SECRETS AND PROPRIETARY INFORMATION. The Executive agrees and
understands that due to the Executive's position with the Company, the Executive
will be exposed to, and has received and will receive, confidential and
proprietary information of the Company or relating to the Company's business or
affairs collectively, the "Trade Secrets"), including but not limited to
technical information, product information and formulae, processes, business and
marketing plans, strategies, customer information, other information concerning
the Company's products, promotions, development, financing, expansion plans,
business policies and practices and other forms of information considered by the
Company to be proprietary and confidential and in the nature of trade secrets.
3
Trade Secrets shall not include any such information which (A) was known to the
Executive prior to his employment by the Company or (B) was or becomes generally
available to the public other than as a result of a disclosure by the Executive
in violation of the provisions of this Section. Except to the extent that the
proper performance of the Executive's duties, services and responsibilities
hereunder may require disclosure, the Executive agrees that during the
Employment Term and at all times thereafter the Executive will keep such Trade
Secrets confidential and will not disclose such information, either directly or
indirectly, to any third person or entity without the prior written consent of
the Company. This confidentiality covenant has no temporal, geographical or
territorial restriction. On the Termination Date unless the Executive remains as
an employee of the Company thereafter in which case, on the date which the
Executive is no longer an employee of the Company), the Executive will promptly
supply to the Company all property, keys, notes, memoranda, writings, lists,
files, reports, customer lists, correspondence, tapes, disks, cards, surveys,
maps, logs, machines, technical data, formulae or any other tangible product or
document which has been produced by, received by or otherwise submitted to and
retained by the Executive in the course of his employment with the Company. Any
material breach of the terms of this paragraph shall be considered Cause.
PROHIBITED AND COMPETITIVE ACTIVITIES. The Executive and the Company
recognize that due to the nature of the Executive's engagement hereunder and the
relationship of the Executive to the Company, the Executive has had and will
have access to, has had and will acquire, and has assisted and may continue to
assist in, developing confidential and proprietary information relating to the
business and operations of the Company and its affiliates, including, without
limitation, Trade Secrets. The Executive acknowledges that such information has
been and will be of central importance to the business of the Company and its
affiliates and that disclosure of it to, or its use by, others (including,
without limitation, the Executive (other than with respect to the Company's
business and affairs)) could cause substantial loss to the Company.
The Executive and the Company also recognize that an important part of
the Executive's duties will be to develop good will for the Company and its
affiliates through the Executive's personal contact with Clients (as defined
below), employees, and others having business relationships with the Company,
and that there is a danger that this good will, a proprietary asset of the
Company, may follow the Executive if and when the Executive's relationship with
the Company is terminated. The Executive accordingly agrees as follows:
(i) Prohibited Activities. The Executive agrees that the Executive will
not at any time during the Employment Term: (A) (other than in the course of the
Executive's employment) disclose or furnish to any other person or, directly or
indirectly, use for the Executive's own account or the account of any other
person, any Trade Secrets, no matter from where or in what manner he may have
acquired such Trade Secrets, and the Executive shall retain all such Trade
Secrets in trust for the benefit of the Company, its affiliates and the
successors and assigns of any of them, (B) directly or through one or more
intermediaries, solicit for employment or recommend to any subsequent employer
of the Executive the solicitation for employment of, any person who, at the time
of such solicitation, is employed by the Company or any affiliate, (C) directly
4
or indirectly, whether for the Executive's own account or for the account of any
other person, solicit, divert, or endeavor to entice away from the Company or
any entity controlled by the Company, or otherwise engage in any activity
intended to terminate, disrupt, or interfere with, the Company's or any of its
affiliates' relationships with, Clients, or otherwise adversely affect the
Company's or any of its affiliates' relationships with Clients or other business
relationships of the Company or any affiliate thereof, or (D) publish or make
any statement critical of the Company or any shareholder or affiliate of the
Company or in any way adversely affect or otherwise malign the business or
reputation of any of the foregoing persons (any activity described in clause
(A), (B), (C) or (D) of this Section being referred to as a Prohibited
Activity"); provided, however, that if in the written opinion of Counsel, the
Executive is legally compelled to disclose Trade Secrets to any tribunal or else
stand liable for contempt or suffer other similar censure or penalty, then the
disclosure to such tribunal of only those Trade Secrets which such counsel
advises in writing are legally required to be disclosed shall not constitute a
Prohibited Activity provided that the Executive shall give the Company as much
advance notice of such disclosure as is reasonably practicable. As used herein,
the term "Clients" shall mean those persons who, at any time during the
Executive's course of employment with the Company (including, without
limitation, prior to the date of this Agreement) are or were clients or
customers of the Company or any affiliate thereof or any predecessor of any of
the foregoing.
(ii) Non-Competition. By and in consideration of the Company's entering
into this Agreement, the Executive agrees that the Executive will not, during
the Employment Term and for a period of eighteen months thereafter, engage in
any Competitive Activity. The term "Competitive Activity" means engaging in any
of the following activities: (A) serving as a director of any Competitor (as
defined below), (B) directly or indirectly through one or more intermediaries,
either (X) controlling any Competitor or (Y) owning any equity or debt interests
in any Competitor (other than equity or debt interests which are publicly traded
and, at the time of any acquisition thereof by the Executive, do not in the
aggregate exceed 5% of the particular class of interests of such Competitor then
outstanding) (it being understood that, if interests in any Competitor are owned
by an investment vehicle or other entity in which the Executive owns an equity
interest, a portion of the interests in such Competitor owned by such entity
shall be attributed to the Executive, such portion determined by applying the
percentage of the equity interest in such entity owned by the Executive to the
interests in such Competitor owned by such entity), (C) employment by (including
serving as an officer, director or partner of), providing consulting services to
(including, without limitation, as an independent contractor), or managing or
operating the business or affairs of, any Competitor or (D) participating in the
ownership, management, operation or control of or being connected in any manner
with any Competitor. The term "Competitor" as used herein (i) during the
Employment Term, means any person (other than the Company or any of their
respective affiliates) that competes, either directly or indirectly with any of
the business conducted by the Company or any affiliate.
REMEDIES. The Executive agrees that any breach of the terms of this
Section would result in irreparable injury and damage to the Company for which
the Company would have no adequate remedy at law. The Executive therefore agrees
that in the event of said breach or any threat of breach, the Company shall be
entitled to an immediate injunction and restraining order to prevent such breach
and/or threatened breach and/or continued breach by the Executive and/or any and
all persons and/or entities acting for and/or with the Executive, without having
to prove damages. The terms of this paragraph shall not prevent the Company from
5
pursuing any other available remedies to which the Company may be entitled at
law or in equity for any breach or threatened breach hereof, including but not
limited to the recovery of damages from the Executive. the provisions of this
Section 8 shall survive any termination of this Agreement. The existence of any
claim or cause of action by the Executive against the Company, whether
predicated on this Agreement or otherwise, shall not constitute a defense to the
enforcement by the Company of the covenants and agreements of this Section.
PROPRIETARY INFORMATION AND INVENTIONS. The Executive agrees that any
and all inventions, discoveries, improvements, processes, formulae, business
application software, patents, copyrights and trademarks made, developed,
discovered or acquired by him prior to and during the Employment Term, solely or
jointly with others or otherwise, which relate to the business of the Company,
and all knowledge possessed by the Executive relating thereto collectively, the
"Inventions"), shall be fully and promptly disclosed to the Board of Directors
and to such person or persons as the Board of Directors shall direct and the
Executive irrevocably assigns to the Company all of the Executive's right, title
and interest in and to all Inventions of the Company and all such Inventions
shall be the sole and absolute property of the Company and the Company shall be
the sole and absolute owner thereof. The Executive agrees that he will at all
times keep all Inventions secret from everyone except the Company and such
persons as the Board of Directors may from time to time direct. The Executive
shall, as requested by the Company at any time and from time to time, whether
prior to or after the expiration of the Employment Term, execute and deliver to
the Company any instruments deemed necessary by the Company to effect disclosure
and assignment of the Inventions to the Company or its designees and any patent
applications (United States or foreign) and renewals with respect thereto,
including any other instruments deemed necessary by the Company for the
prosecution of patent applications, the acquisition of letters patent and/or the
acquisition of patents or copyrights in any and all countries and to vest title
thereto in the Company or its nominee.
6. Representations and Warranties of the Executive. The Executive represents and
warrants to the Company that:
(i) The Executive's employment by the Company as contemplated will not
conflict with, and will not be constrained by, any prior or current employment,
consulting agreement or relationship, whether written or oral; and
(ii) The Executive does not possess confidential information arising
out of any employment, consulting agreement or relationship with any person or
entity other than the Company which could be utilized in connection with the
Executive's employment by the Company.
7. Binding Effect or Assignment. This Agreement shall inure to the benefit of
and be binding upon the parties and their respective heirs, executors,
representatives, states, successors and assigns, including any successor or
assign to all or substantially all of the business and/or assets of the Company,
whether direct or indirect, by purchase, merger, consolidation, acquisition of
stock, or otherwise; provided, however, that the Executive, or any beneficiary
or legal representative of the Executive, shall not assign all or any portion of
the Executive's rights or obligations under this Agreement without the prior
written consent of the Company.
6
8. Notices. All notices and other communications given or made pursuant hereto
shall be in writing and shall be deemed to have been duly given or made as of
the date delivered, mailed or transmitted, and shall be effective upon receipt.
9. Amendment and Modification. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by each of the Executive and the Company. No such waiver
or discharge by either party hereto at any time or any waiver or discharge of
any breach by the other 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 or discharge of similar or dissimilar provisions or conditions, or a
waiver or discharge of any breach of any provisions, at the same or at any prior
or subsequent time.
10. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of Delaware without giving effect to the
conflict of law principles of that state.
11. Severability. In the event that any one or more of the provisions of this
Agreement shall be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
portion of this Agreement, and this Agreement shall be construed as if such
provision had never been contained herein.
12. Withholding Taxes. Notwithstanding anything contained herein to the
contrary, all payments required to be made hereunder by the Company to the
Executive, or his estate or beneficiaries, shall be subject to the withholding
of such amounts as the Company may reasonably determine it should withhold
pursuant to any applicable federal, state or local law or regulation.
13. Arbitration of Disputes. The parties hereto mutually consent to the
resolution by arbitration of all claims and controversies arising out of or
relating to this Agreement.
14. Counterparts. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
15. Entire Agreement. This Agreement constitutes the entire agreement between
the parties and supersedes any and all prior agreements, written or oral,
understandings and arrangements, either oral or written, between the parties
with respect to the subject matter, and shall, as of the date hereof, constitute
the only employment agreement between the parties.
16. Further Assurances. Each party shall do and perform, or cause to be done and
performed, all further acts and things and shall execute and deliver all other
agreements, certificates, instruments, and documents as any other party
reasonably may request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions
contemplated.
7
17. Construction. The headings in this Agreement are for reference purposes only
and shall not limit or otherwise affect the meaning or interpretation of this
Agreement.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the date first above written.
"Company" "Executive"
By: /S/ X. X. Xxxxxxxxxxxx By: /S/ Xxxxx X. Xxxxx
---------------------------- -------------------------------
Name: X. X. Xxxxxxxxxxxx Xxxxx X. Xxxxx
Title: Secretary
8
