EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of February 16, 2000 by and Xxxxxxx
Xxxxxxx Xxxxxxx] the "EMPLOYEE") and GENISYS INFORMATION SYSTEMS, INC. (the
"COMPANY"). This agreement reduces to writing the oral employment agreements
previously agreed to by the Company and Employee. 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
Senior Vice President 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 Employee, by Company or by insolvency of Company.
(i) Termination by Employee may be accomplished by provision
of written resignation delivered to the Chief Executive
Officer (CEO), by delivery of written resignation to the
Board of Directors.
(ii) Termination by Company may be accomplished by delivery of
written notification or termination and is effective
immediately.
(iii)Company may terminate Employee for good cause or without
good cause.
(iv) Employee may terminate employment upon the 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 CEO. The Employee shall serve as Senior Vice President of the
Company and shall have the usual and customary duties, responsibilities and
authority of a Senior Vice President subject to the power of the board of
directors of the Company (the "BOARD"), the CEO, or any duly designated
officer of Genisys Inc., a Colorado corporation and parent of the Company
("Genisys" executive ("GENISYS EXECUTIVE") (i) to expand or limit such duties,
responsibilities and authority and (ii) to override the actions of the
Employee. The Employee shall report to the CEO, and shall perform his duties
and responsibilities to the best of his abilities in a diligent and
professional manner. Employee represents and warrants to the Company that he
is under not contractual commitments inconsistent with his obligations under
this Agreement.
(d) Employment Commencement. Employee has been, and is a full-time
employment 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 base salary at a rate of $13,000 per month (subject to
annual increases as shall be determined by the Board of Director's) ("BASE
COMPENSATION"). Such salary shall be paid in accordance with the Company's
standard payroll procedures.
(b) The Employee will be granted options at the sole discretion of
the Board under the Genisys 1999 Equity Incentive Plan. In subsequent years,
the Employee is eligible for award of future options at the discretion of the
Board. Prior to this written agreement the Employee was granted 570,000
options under the Genisys 1999 Equity Incentive Plan having an exercise price
of $.40 per share.
(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 stipulates that it does not intend to purchase Director's and
Officer's Liability Insurance but agrees to defend the actions of the Employee
unless the action is that of the Employee as defined in 3c below (for Cause).
(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.
3. AT WILL EMPLOYMENT.
(a) Basic Rule. The Company agrees to employ the Employee and
Employee agrees to commence 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 the Company terminates Employee's Employment
without Cause, the Company shall be obligated to pay
Employee (A) his then current Base Compensation until
Employee becomes re-employed as an employee or consultant
or for a six month term (the "Termination Payment
Period"), which ever is shorter, 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 health insurance,
subject to the terms, conditions and restrictions of the
specific plans, through the end of the Termination Payment
Period. 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.
(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) other misconduct that is materially detrimental to the Company
(v) 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. This non-competition includes, but is not
limited to, development of software programs and project management consulting
services.
(c) Employee further covenants with Company that all trade secrets,
processes, designs, concepts, formulas, data, standards, specifications,
discoveries, improvements, inventions, computer software, computer programming
code, techniques and know-how of the Company, or those with whom the Company
transacts business, customer and client identity and contracts and information
contained in or derived from the Company's client and customer lists and
third-party agreements whether active, inactive or prospective, supplier and
manufacturer identity and contracts, marketing and sales plans, product
agreements, strategic contractual relationships, financial information,
pricing information, product research and development, and all other concepts
or ideas involving or reasonably related to the business or prospective
business of the Company, information received by the Company as to which there
is a bona fide obligation, contractual or otherwise, on the part of the
Company not to disclose same and not generally available to the public, and
any information of the type similar to the information described above which
the Company treats or regards as confidential or designates as proprietary or
confidential, is confidential information and will be treated by an Employee
as such, and that he will not hereafter, directly or indirectly, make use of
such information or divulge any such information nor reveal any customer lists
or other confidential information to any other person. The foregoing
restrictions on disclosure of information shall not include (i) information
that has properly come into the public domain, (ii) information learned by an
Employee from a third party without an obligation of confidentiality, (iii)
information gained or learned by an Employee independent of activities
undertaken on behalf of Company, or (iv) information otherwise protected by
applicable law, such as the information pertaining to patents or copyrights.
(d) Any and all research, reports, memoranda, developments,
inventions or discoveries, computer software, source code, modules, algorithms
and the like, made, devised or developed by Employee during such time as he
holds an Employee Position with the Company, either alone or jointly with
others, pertaining to any of the business, properties or operations of the
Company are deemed works for hire and are hereby assigned by Employee to the
Company and shall remain the Company's sole, exclusive and separate property.
Employee agrees to execute any assignments to the Company of his entire
rights, title and interest in and to any trade secrets, copyrightable
material, inventions, discoveries, reports or research, whether or not
copyrightable, that may be requested by the Company. Any and all
copyrightable and/or patentable material generated or developed by Employee
for the Company, including, without limitation, source codes and computer
programs and documentation pertaining thereto, shall be works for hire and
considered the property and copyrights of the Company, and the Company shall
have the right to register and hold same in its own name, free of any claim of
Employee. All documentation containing or relating to any Confidential
Information of the Company which Employee shall use or prepare or come into
contact with, shall remain the sole and separate property of the Company, and
upon the request of the Company, or upon termination of Employee's position as
an officer, director or stockholder of the Company, all such materials shall
be promptly returned to the Company, together with all copies thereof.
(e) Non-Competition Following Termination of Employment. Subject to
and except as set forth in Section 4(d), for purposes of this Section 4, the
restricted period shall be, the period of Employment plus the period
commencing with the date of termination of Employment and ending on (i) in the
case of a termination of Employee's Employment by the Company for Cause or a
termination of the Employee's Employment for any reason by Employee (other
than Disability), a period of six months following such termination, and (ii)
in the event of a termination of the Employee's Employment by the Company for
any reason other than for Cause, a period of six months following such
termination (the "RESTRICTED PERIOD"). During the Restricted Period, Employee
shall not, as an employee, agent, consultant, advisor, independent contractor,
general partner, officer, director, stockholder, investor, lender or guarantor
of any corporation, partnership or other entity (or as a sole proprietorship
or by way of another business), or in any other capacity, directly or
indirectly:
(i) Participate or engage in any business in which the Company
or Genisys is engaged, (or any business in which the
Company or Genisys engages in during the term of
Employment or, as at the termination of the term of
Employment, is then actively preparing to engage
(collectively, the "BUSINESS").
(ii) 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 CEO 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 five 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. Insolvent, for purposes of this agreement
means the inability to satisfy Genisys' financial
obligations for at least 90 days.
(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.
(v) The Restricted Period shall end at such time that the
Company ceases to compensate Employee.
(f) Genisys acknowledges notice of Xxxxxxx'x employment on a part-
time basis with Xxxxxxxxxx.xxx, Inc (MediaTrain) and has approved his
continuing activity with MediaTrain. Specifically, Xxxxxxx acknowledges and
Genisys approves of Xxxxxxx working with Xxxxxxxxxx.xxx up to 10 hours per
week, from the date of the execution of this agreement, and thereafter may
work with Xxxxxxxxxx.xxx, up to 5 hours per week. Xxxxxxx is authorized to
continue his engagement with MediaTrain, and is further authorized to hold an
ownership position in MediaTrain, should that opportunity occur. Xxxxxxx
agrees to provide a report each year by December 31 of his ownership
percentage. Further, Xxxxxxx acknowledges that where opportunities exist for
the referral of business from Xxxxxxxxxx.xxx, and/or its contacts, to Genisys,
he will make such referrals.
5. NON-SOLICITATIONS 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 become 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.
(i) 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.
(ii) 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.
(m) 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:
