EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made and entered into
this 1st day of March, 1997, by and among Electronic Transmission
Corporation, a Delaware corporation ("ETC"), and Xxx Xxxxxxx XxXxxxxxx ("Xx.
XxXxxxxxx").
ETC now desires to employ Xx. XxXxxxxxx as Executive Vice President,
Marketing and Xx. XxXxxxxxx desires to accept such employment with ETC, all
on the following terms and subject to the following conditions.
NOW, THEREFORE, ETC and Xx. XxXxxxxxx hereby agree as follows.
1. EMPLOYMENT. ETC hereby employs Xx. XxXxxxxxx, and Xx. XxXxxxxxx hereby
accepts employment by ETC, for the term and compensation and subject to the
terms and conditions hereinafter set forth.
2. DUTIES OF XX. XXXXXXXXX. Xx. XxXxxxxxx shall serve in the capacity of
Executive Vice President and Director of Marketing, subject at all times to the
terms and conditions hereof and to the ultimate control and direction of the
President, the Chief Executive Officer, and the Board of Directors of ETC. In
that capacity, Xx. XxXxxxxxx shall have a substantial role in the marketing
by ETC of the services it offers to its clients. Xx. XxXxxxxxx shall not
make any agreements, representations, or performance guarantees, or execute
or agree to any instruments or contracts, on behalf of ETC or any of its
subsidiaries or affiliates without prior consent of ETC's chief executive
officer or Board of Directors. During the term of this Agreement, Xx. XxXxxxxxx
shall devote her entire business day and efforts to the performance of the
duties and responsibilities contained in this Agreement.
3. COMPENSATION. As compensation for her services rendered to ETC in the
capacities set forth above, ETC shall pay to Xx. XxXxxxxxx a base salary of
sixty thousand dollars ($60,000) per year and shall receive a commission of
five percent (5%) of all gross income generated from sales to companies
brought to ETC by her; however, she shall not receive a commission from
Electra-Net, L.C. revenue attributable to the accounts of Wal-Mart and MAPCO.
Gross income shall be calculated for each calendar month during the term
hereof by (i) determining the gross income received by ETC in immediately
available funds during such calendar month from commissions, administrative
and other fees, fees for editing and transmitting claims and other direct
sources, from accounts credited to Xx. XxXxxxxxx, and (ii) subtracting any
third party subcontractor or consultant or other third party expenses
incurred by ETC with respect to such accounts during such calendar month. The
percentages specified above of the gross income so calculated for each
calendar month during the term hereof, less any authorized deductions, shall
be paid to Xx. XxXxxxxxx in the next calendar month. There shall be no
carry-over from one month to the next of any negative net income.
Employment and Settlement Agreement Between ETC and Xxx
XxXxxxxxx
Page 2
Commissions shall continue for the life of the above described accounts
so long as this Agreement or any extension thereof is in effect. If this
Agreement is terminated or not renewed, commissions shall be paid on said
accounts for one year after termination or non-renewal. Should this Agreement
be terminated without cause by ETC, the liquidated damages shall be payment
of commissions to Xx. XxXxxxxxx for the remainder of the term of this
Agreement and for one year thereafter.
Xx. XxXxxxxxx is also herein granted an option to purchase two hundred
fifty thousand (250,000) shares of ETC stock at a price of one dollar and
twenty-five cents ($1.25) per share. This option will be effective for the
life of this agreement and one year thereafter. Should Xx. XxXxxxxxx die,
this option will be extended, if necessary, to give her heirs one year from
her death to exercise this option.
4. BENEFITS. During the term hereof, Xx. XxXxxxxxx shall be entitled to
participate in any benefit plans, stock option plans, and medical insurance
programs, provided by ETC on the same basis as other ETC employees.
5. REIMBURSEMENT OF EXPENSES. ETC shall reimburse Xx. XxXxxxxxx for all
expenses actually incurred by her in connection with ETC business, provided
that such expenses are reasonable and are in accordance with ETC policies.
Such reimbursement shall be made to Xx. XxXxxxxxx upon appropriate
documentation of such expenditures in accordance with ETC policies.
6. TERM. The term of this Agreement shall be for the period commencing
on March 1, 1997, and ending on December 31, 2000, subject to earlier
termination as provided in Section 7. The term of this Agreement will be
automatically extended for five years unless either party gives 60 days
notice that it will not be extended.
7. TERMINATION. This Agreement and Xx. XxXxxxxxx'x employment hereunder
shall terminate in the event of Xx. XxXxxxxxx'x death or if Xx. XxXxxxxxx
becomes permanently disabled as determined by the ETC Board of Directors
using current medical standards for disability. This Agreement and Xx.
XxXxxxxxx'x employment hereunder may be terminated by ETC "for cause" at any
time the ETC Board of Directors determines, in the exercise of its good faith
judgment, that Xx. XxXxxxxxx has engaged in gross malfeasance or willful
misconduct in performing her duties hereunder and that her continued
employment by ETC no longer is in the best interests of ETC. Xx. XxXxxxxxx
may terminate this agreement at any time.
8. NONCOMPETITION FOR EXISTING CLIENTS AFTER TERMINATION. Xx. XxXxxxxxx
agrees, for a period of six months after the termination of this Agreement,
not to solicit, on her own behalf or on behalf of any future employer or
other entity, any business from any entity with which ETC or any of its
subsidiaries did business during the term hereof; unless Xx. XxXxxxxxx
purchases Claims, Etc. In that event, she may continue that business but may
not solicit any ETC business outside of Claims, Etc. The parties recognize
that this covenant not to compete for specified
Employment and Settlement Agreement Between ETC and Xxx
XxXxxxxxx
Page 3
customers for a limited time period is an integral part of this Agreement and
that ETC would not enter into this Agreement, or would do so only on the
basis of decreased compensation to Xx. XxXxxxxxx, without this covenant.
9. NONDISCLOSURE OF INFORMATION AND TRADE SECRETS. During her employment
hereunder and thereafter, Xx. XxXxxxxxx will not disclose to any person or
entity not directly connected with ETC, or use for her own benefit, any of
the trade secrets, financial information, systems, records, or business
methods of ETC or its subsidiaries or affiliates, or any of the business
relationships between ETC or its subsidiaries or affiliates and any of their
business partners or customers, unless such disclosure shall be in direct
connection with or a part of Xx. XxXxxxxxx'x performance of her duties
hereunder. All software development code written while Xx. XxXxxxxxx is
employed by ETC will be the intellectual property of ETC and will be
protected by ETC copyrights. The provisions of this section shall survive
any termination of this Agreement.
10. UNAUTHORIZED TERMINATION. If ETC shall terminate Xx. XxXxxxxxx'x
employment hereunder prior to the expiration of the term hereof, other than
"for cause" as set forth above, and recognizing that there is no right so to
terminate such employment, then ETC shall promptly pay to Xx. XxXxxxxxx as
liquidated damages an amount equal to twenty-five percent (25%) of all salary
due for the remainder of the term hereof under Section 3 above, such amount
payable at Xx. XxXxxxxxx'x current salary rate until the balance is paid.
Additionally, she shall receive all commissions she would have received for
one year after termination. Should there be a sale of ETC or change of
control from ETC's current management, the following provisions will apply.
Xx. XxXxxxxxx shall receive an amount each year until the end of this
contract term equal to what her yearly salary, raises and bonuses would have
been had she remained employed by ETC. If ETC shall remove Xx. XxXxxxxxx from
the office set forth in Section 2 above, or significantly change her duties
as set forth therein, without her consent, then Xx. XxXxxxxxx at her option
may treat such actions as an unauthorized termination under this Section 10.
As further liquidated damages, Xx. XxXxxxxxx shall be treated as an early
retiree and ETC must provide free medical insurance coverage to Xx. XxXxxxxxx
for the rest of her life, and Xx. XxXxxxxxx shall have the option to
participate in all pension and profit sharing programs as other ETC officers
and employees.
11. NOTICES. All notices hereunder shall be in writing and delivered
personally or sent by U.S. Mail or recognized courier service, addressed as
follows or to such other address for itself as any party may specify
hereunder:
If to ETC: Electronic Transmission Corporation
0000 Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Mr. L. Xxxx Xxxxxx, Chief Executive Officer
Employment and Settlement Agreement Between ETC and Xxx
XxXxxxxxx
Page 4
If to Xx. XxXxxxxxx: Xx. Xxx XxXxxxxxx
0000 X. Xxxxx
Xxxxxx, Xxxxx 00000
12. ENTIRE AGREEMENT COUNTERPARTS GOVERNING LAW. This Agreement
expresses the complete understanding of the parties with respect to the
subject matter hereof, superseding all prior or contemporaneous
understandings, arrangements, or agreements of the parties, and may be
amended, supplemented, or waived in whole or in part only by an instrument in
writing executed by the parties hereto. This Agreement replaces all other
agreements between the parties, including but not limited to the Employment
Agreement dated December 27, 1995 and the Employment Agreement dated May 1,
1996, save and except the conveyance of Xx. XxXxxxxxx'x interest in Claims,
Etc., L.C. to ETC, such conveyance being in full force and effect. No party
may assign this Agreement or its rights or obligations hereunder without the
written consent of all other parties hereto. This Agreement must be approved
by the Board of Directors to be effective. Subject to the foregoing, this
Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, administrators, successors, and assigns.
The headings herein are for convenience of reference only and shall not
affect the meaning or interpretation of this Agreement. This Agreement may be
executed in multiple counterparts, and by the parties in separate
counterparts, each of which shall be an original but all of which together
shall constitute one and the same instrument. This Agreement shall be
governed by and construed in accordance with the laws of the State of Texas.
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
duly executed and delivered by its duly authorized representatives, on and
effective as of the Effective Date.
ELECTRONIC TRANSMISSION CORPORATION
By: /s/ L. Xxxx Xxxxxx
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L. Xxxx Xxxxxx
Chairman and Chief Executive Officer
XX. XxXXXXXXX
/s/ Xxx Xxxxxxx XxXxxxxxx
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Xxx Xxxxxxx XxXxxxxxx
