Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made this 1/st/ day of
February 2002, between PROSOFTTRAINING a Nevada corporation (the "Company"), and
XXXXXXX X. XXXXX ("Employee").
WHEREAS:
A. The Company is engaged in the provision of Internet and intranet
training and other computer training and services.
B. The Company and Employee are parties to an Employment Agreement
dated February 1, 2000 (the "Existing Employment Agreement"), which the parties
desire to continue pursuant to the terms of this Agreement.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein set forth, the parties do hereby agree and promise as follows:
1. Employment. The Company hereby employs Employee and Employee
hereby accepts employment under the terms and conditions set forth below. The
Employee's title shall be Chief Executive Officer.
2. Duties.
2.1 The Employee shall perform such managerial, supervisory,
development or executive duties in connection with the business of the Company
as the board of directors of the Company (the "Board of Directors") may from
time to time assign consistent with Employee's title of Chief Executive Officer.
2.2 Employee will report and be responsible to the Board of
Directors.
2.3 Employee agrees to devote his full business time, energy and
skills to such employment subject to absences and customary vacations and for
temporary illnesses.
2.4 Employee will not engage in other gainful occupation during
the term of this Agreement without prior written consent of the Company;
provided, however, that nothing contained herein shall be construed to prevent
the Employee from trading for his own account and benefit in stocks, bonds,
securities, real estate, commodities and other forms of investments.
3. Term. The term of this Agreement shall begin on February 1, 2002
and shall continue until January 31, 2003, unless earlier terminated pursuant to
the provisions hereof.
4. Compensation.
4.1 Employee shall receive a base salary of $200,000 per year
payable in equal installments on the Company's regular payroll dates ("Base
Salary"), which Base Salary the Company shall continue to pay during the term of
this Agreement until the Company is no longer obligated to pay the same pursuant
to the provisions of Section 6 hereof.
4.2 In addition to Employee's Base Salary, Employee may be
entitled to receive an annual bonus at the end of the contract year of up to
$100,000, to be determined by the Board of Directors in its absolute discretion.
The Board shall take into account various considerations including but not
limited to: Sequential Revenue Increases by the company, Profits realized by the
Company, Budgetary Discipline and the company remaining within the budget
presented to the Board, Increase in the Company Stock Price, and other matters
appropriate at the time of consideration.
The bonus shall be payable on February 1 at the termination of this
agreement. The bonus shall be paid in cash or, at the option of the Company, in
shares of Common Stock of the Company valued at the Closing Price on that
February 1 (or, if February 1 is not a business day, the first business day
prior to that date). If the bonus is paid in Common Stock, the Company will also
pay federal and state income taxes incurred as a result of the payment in this
manner using the current Supplemental Wages Withholding Rate (27% for calendar
year 2002).
5. Termination.
5.1 The Company may terminate this Agreement for cause by giving
the Employee written notice. "Cause" shall mean gross negligence or willful
misconduct in the performance of Employee's duties hereunder, willful breach or
habitual neglect of duties, defalcation, fraud, conviction of a felony, or
incarceration for not less than 30 consecutive days, all as determined by the
Board of Directors. If the Employee disputes the Company's right to terminate
this Agreement for Cause, the dispute shall be resolved in accordance with
Section 11 hereof.
5.2 The Company may terminate this Agreement if Employee is
mentally or physically disabled and such disability renders him unable to
perform his duties under this Agreement for 90 consecutive days in any 12-month
period. During the term of this Agreement, the Company will provide or reimburse
expense for a disability insurance policy providing Employee commensurate
compensation in the event of such a disability.
5.3 The Employee may terminate this Agreement voluntarily by
providing the Company with written notice specifying the date of such
termination not less than 90 days prior to the effective date of termination.
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5.4 The Company may terminate this Agreement without Cause by
providing Employee with written notice specifying the date of such termination
not less than 30 days prior to the effective date of termination.
6. Effect of Termination.
6.1 If Employee's employment hereunder is terminated without
Cause pursuant to Section 5.4, the Company shall (i) pay to Employee an amount
equal to Employee's cash compensation from the Company for the previous 12
months, plus the value of any accrued or unused vacation and (ii) provide
acceleration and immediate vesting of all of Employee's stock options from the
Company which have not yet vested at that time, and such accelerated options as
well as any other options which have vested and are then exercisable shall be
exercisable for a period of three (3) months following the date of termination
and shall then expire and be of no further force or effect. The Company shall
thereafter have no further obligations under this Agreement.
6.2 If Employee's employment hereunder is terminated pursuant to
Sections 5.1, 5.2 or 5.3, the Company shall pay to Employee the Base Salary
through the date of such termination, plus the value of any accrued or unused
vacation, and the Company shall thereafter have no further obligations to
Employee under this Agreement.
6.3 If Employee's employment is terminated as a result of the
expiration of the term of this Agreement, then the Company shall pay to Employee
the Base Salary through the expiration date, plus the value of any accrued or
unused vacation, and the Company shall thereafter have no further obligations
under this Agreement.
7. Change of Control.
7.1 For purposes of this Agreement, a "Change of Control" shall
mean the occurrence of either one of the following events:
(i) any corporation, partnership, person, other entity or
group (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended) (collectively, a "Person"), acquires shares of capital stock of the
Company representing more than fifty percent (50%) of the total number of shares
of capital stock that may be voted for the election of directors of the Company;
or
(ii) a merger, consolidation or other business combination
of the Company with or into another Person is consummated, or all or
substantially all of the assets of the Company are acquired by another Person,
as a result of which the stockholders of the Company immediately prior to the
consummation of such transaction own, immediately after consummation of such
transaction, equity securities possessing less than fifty percent (50%) of the
voting power of the surviving or acquiring Person (or any Person in control of
the surviving or acquiring Person), the equity securities of which are issued or
transferred in such transaction.
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7.2 Upon the occurrence of a Change of Control during the term
of this Agreement, all outstanding employee stock options then held by Employee
shall accelerate and immediately vest, and such accelerated options as well as
any other options which have vested and which are then exercisable shall remain
exercisable until expiration or earlier termination pursuant to the terms of the
respective original option agreements.
7.3 If upon the completion of a Change of Control Employee is
not Chairman and Chief Executive Officer of the ultimate parent organization of
which the Company is a part, then the Company shall immediately make a payment
to Employee equal to $300,000.
8. Withholding Taxes and Other Deductions. To the extent required by
law, the Company shall withhold from any payments due Employee under this
Agreement any applicable federal, state or local taxes and such other deductions
as are prescribed by law or Company policy, except in the case where a bonus is
paid in Common Stock.
9. Proprietary Information.
9.1 Employee understands that the Company possesses and will
continue to possess information that has been created, discovered, developed or
otherwise become known to the Company (including, without limitation,
information created, discovered, developed or made known by Employee during the
period of or arising out of his employment by the Company, whether prior to or
after the date hereof) or in which property rights have been assigned or
otherwise conveyed to the Company, which information has commercial value in the
business in which the Company is engaged. All such information is hereinafter
called "Proprietary Information." By way of illustration, but not limitation,
Proprietary Information includes processes, formulas, codes, data, programs,
know-how, improvements, discoveries, developments, designs, inventions,
techniques, marketing plans, strategies, forecasts, new products, unpublished
financial statements, budgets, projections, licenses, prices, costs, contracts
and customer and supplier lists.
9.2 In consideration of the compensation received by the
Employee from the Company and the covenants contained in this Agreement,
Employee agrees as follows:
9.2.1 All Proprietary Information shall be the sole property of
the Company and its assigns, and the Company and its assigns shall be the sole
owner of all patents, copyrights, and other rights in connection therewith.
Employee hereby assigns to the Company rights he may have or acquire in such
Proprietary Information. At all times, both during his employment by the Company
and after its termination, Employee will keep in strictest confidence and trust
all Proprietary Information and will not use or disclose any Proprietary
Information without the written consent of the Company, except as may be
necessary in the ordinary course of performing his duties under this Agreement.
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9.2.2 All documents, records, equipment and other physical
property, whether or not pertaining to Proprietary Information, furnished to
Employee by the Company or produced by Employee or others in connection with
Employee's employment with the Company shall be and remain the sole property of
the Company. In the event of the termination of his employment by him or the
Employee for any reason, Employee will deliver to the Company all documents,
notes, drawings, specifications, programs, data, customer lists and other
materials of any nature pertaining to his work with the Company and Employee
will not take with him or use any of the foregoing, any reproduction of any of
the foregoing, or any Proprietary Information that is embodied in a tangible
medium of expression.
9.2.3 Employee recognizes that the Company is engaged in a
continuous program of development and marketing respecting its present and
future business. Employee understands that as part of his employment by the
Company he has been and is expected to make new contributions of value to the
Company and that his employment has created a relationship of confidence and
trust between him and the Company with respect to certain information applicable
to the business of the Company or applicable to the business of any customer of
the Company, which has been or may be made known to Employee by the Company or
by any customer of the Company or which may have been or may be learned by
Employee during the period of his employment by the Company.
10. Covenant Not to Compete.
10.1 In consideration for the payments to be made under this
Agreement, Employee shall, for the greater of (a) Relating to (i), (ii), and
(iii) for a period of two years, and (b) relating to (iv) for a period the
Employee may be employed by the Company; refrain from, either alone or in
conjunction with any other person, or directly or indirectly through its present
or future affiliates
(i) employing, engaging or seeking to employ or engage any
person who within the prior twenty-four (24) months had been an officer or
employee of the Company;
(ii) causing or attempting to cause (A) any client,
customer or supplier of the Company to terminate or materially reduce its
business with the Company, or (B) any officer, employee or consultant of the
Company to resign or sever a relationship with the Company;
(iii) disclosing (unless compelled by judicial or
administrative process) or using any confidential or secret information relating
to the Company or any of their respective clients, customers or suppliers; or
(iv) participating or engaging in (other than through the
ownership of five percent (5%) or less of any class of securities registered
under the Securities Exchange Act of 1934, as amended), or otherwise lending
assistance (financial or otherwise) to any person participating or engaged in,
any of the lines of business in which the Company is participating or engaged on
the date of termination in any
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jurisdiction in which the Company participates or engages in such line of
business on the date of termination.
Notwithstanding the foregoing, the restrictive covenants set forth in this
Section 10 shall terminate immediately upon a termination of this Agreement by
the Company without Cause.
10.2 The parties hereto recognize that the laws and public policies of
the various states of the United States may differ as to the validity and
enforceability of covenants similar to those set forth in this Section. It is
the intention of the parties that the provisions of this Section be enforced to
the fullest extent permissible under the laws and policies of each jurisdiction
in which enforcement may be sought, and that the unenforceability (or the
modification to conform to such laws or policies) of any provisions of this
Section shall not render unenforceable, or impair, the remainder of the
provisions of this Section. Accordingly, if any provision of this Section shall
be determined to be invalid or unenforceable, such invalidity or
unenforceability shall be deemed to apply only with respect to the operation of
such provision in the particular jurisdiction in which such determination is
made and not with respect to any other provision or jurisdiction.
10.3 The parties hereto acknowledge and agree that any remedy at law
for any breach of the provisions of this Section would be inadequate, and
Employee hereby consents to the granting by any court of an injunction or other
equitable relief, without the necessity of actual monetary loss being proved, in
order that the breach or threatened breach of such provisions may be effectively
restrained.
10.4 The Company and the Employee acknowledge that the foregoing
restrictive covenants in this Section 10 are essential elements of this
Agreement and that, but for the agreement of the Employee to comply with those
covenants, the Company would not have agreed to enter into this Agreement. The
covenants by the Employee shall be construed as agreements independent of any
other provision in this Agreement.
10.5 The Company and the Employee intend that the covenants contained
in this Section 10 shall be construed as a series of separate covenants, one for
each county of the State of Texas and one for each State of the United States
other than Texas.
10.6 The Company and the Employee understand and agree that, if any
portion of the restrictive covenants set forth in this Section 10 is held to be
unreasonable, arbitrary, or against public policy, then that portion of those
covenants shall be considered divisible as to time and geographical area. The
Company and the Employee agree that, if any court of competent jurisdiction
determines that the specified time period or the specified geographical area of
application in any covenant is unreasonable, arbitrary, or against public
policy, then a lesser time period, geographical area, or both, that is
determined to be reasonable, nonarbitrary, and not against public policy may be
enforced against Employee. The Company and the Employee agree and acknowledge
that they are familiar with the present and proposed operations of the Company
and
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believe that the restrictive covenants set forth in this Section 10 are
reasonable with respect to their subject matter, duration, and geographical
application.
10.7 The parties acknowledge that the status of the Employee in
this business and industry is unique and the success of the Company in said
business is materially and substantially dependent upon the continued employment
of the Employee, and in the event the employment of the Employee is terminated
for any reason, such business of the Company will be substantially and
irrevocably damaged. In view thereof, the parties acknowledge that monetary
damages alone will not fully compensate the Company in the event the Employee
fails or refuses to comply with the terms of this Section 10 above when
applicable, and agree that the Company, in addition to all other remedies
provided in law and in equity, shall have the remedy of injunctive relief and
specific performance to enforce the terms of said Section.
11. Arbitration. Except as otherwise provide herein, any controversies
or claims arising out of, or relating to this Agreement or the breach thereof,
shall be settled by arbitration in Austin, Texas in accordance with the rules
of, but not subject to the jurisdiction of, the American Arbitration
Association, which decision shall be final and binding on the parties, and
judgment upon the award rendered may be entered in any court having jurisdiction
thereof. For these purposes the arbitrator shall be an individual who has
demonstrated that such individual is familiar with and has experience in the
legal issues involving employer-employee relationships and has had no prior
prejudicial contacts with either party. In addition to all other remedies
provided in law or in equity, the arbitrator is hereby authorized to assess
costs and attorneys' fees against either party if the arbitrator finds, based on
all the facts and circumstances, that the conduct of or the claims made by such
party were unreasonable or substantially without merit.
12. Notice. All notices, requests and other communications hereunder
must be in writing and will be deemed to have been duly given only if delivered
personally or by facsimile transmission or mailed (first class postage prepaid)
to the parties at the following addresses or facsimile numbers:
If to Employee: Xxxxxxx X. Xxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Facsimile No: (000) 000-0000
If to the Company: XxxxxxxXxxxxxxx.xxx, Inc.
0000 Xxx Xxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Facsimile No: (000) 000-0000
Attn: Corporate Secretary
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section, be deemed given upon receipt, and (iii) if delivered
by mail in the manner described above to the
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address as provided in this Section, be deemed given upon receipt (in each case
regardless of whether such notice, request or other communication is received by
any other person to whom a copy of such notice, request or other communication
is to be delivered pursuant to this Section). Any party from time to time may
change its address, facsimile number or other information for the purpose of
notices to that party by giving notice specifying such change to the other party
hereto.
13. Invalid Provision. The invalidity or unenforceability of any
particular provision of this Agreement in any jurisdiction shall not affect the
other provisions hereof or the validity of that particular provision in any
other jurisdiction, and the Agreement shall be construed in all respects as
though such invalid or unenforceable provisions were omitted only in the
jurisdiction in which the case is held to be invalid or unenforceable.
14. Interpretation. This Agreement shall be interpreted in accordance
with the laws of the State of Texas.
15. Successors. This Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors, assigns,
heirs, and legal representatives, including any person, firm, corporation or
other business entity which at any time, by merger, purchase or otherwise,
acquires substantially all of the assets or business of the Company. The duties
and covenants of Employee under this Agreement, being personal, may not be
delegated.
16. Entire Agreement; Modification. This Agreement replaces in its
entirety the Existing Employment Agreement, which agreement shall be of no
further force and effect. This Agreement constitutes the entire agreement
between the parties, and may be changed only by an agreement in writing signed
by the parties.
17. Headings. Sections and other headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
18. 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. Signatures may be
exchanged by telecopy, with original signatures to follow. Each of the parties
hereto agrees that it will be bound by its own telecopied signature and that it
accepts the telecopied signatures of the other parties to this Agreement. The
original signature pages shall be forwarded to the Company or its counsel and
the Company or its counsel will provide all of the parties hereto with a copy of
the entire Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officer of each party hereto as of the date first above
written.
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"COMPANY"
PROSOFTTRAINING.
By: /s/ Xxxxxxx X. Xxxx
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Name: Xxxxxxx X. Xxxx
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Title: Director
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"EMPLOYEE"
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
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