EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") made as of this 30th
day of September, 1998 by and between THE NETPLEX, GROUP INC., a New York
corporation with its principal place of business at 0000 Xxxxxxxxxx Xxxxx,
XxXxxx, Xxxxxxxx 00000 ("Netplex"), and Xxxxxx Xxxxxx (the "Employee").
WHEREAS, Netplex and Applied Intelligence Group, Inc.
("Seller") have entered into an Asset Acquisition Agreement dated the 31st day
of August, 1998, and
WHEREAS, Employee was an officer and employee of Seller, and
WHEREAS, as a material part of the consideration of said Asset
Acquisition Agreement, Employee was to be employed by Netplex during the
Earn-Out Period ("Earn-Out Period") as defined in the Earn-Out Agreement
("Earn-Out Agreement") executed between Seller and Netplex pursuant to the Asset
Acquisition Agreement to assist in accomplishing the goals and intent of said
Earn-Out Agreement as further set forth in said Earn-Out Agreement, and
WHEREAS the employment of Employee was a substantial portion
of the consideration received by Netplex, without which Netplex would not have
consummated the Asset Acquisition Agreement, and
WHEREAS, Netplex desires to employ the Employee and the
Employee is willing to undertake such employment, and the parties hereto wish to
set forth certain terms of the Employee's employment with Netplex.
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter set forth, the parties hereto do agree as follows:
1. Employment. Netplex hereby employs the Employee, and the Employee
hereby accepts such employment, as the President of AIG, a division of
Netplex, upon the terms and subject to the conditions contained herein.
2. Duties.
A. The Employee shall perform all duties commensurate with the
Employee's position and which are assigned by the President of
Netplex, or his designee; provided however and notwithstanding
anything to the contrary herein, during said Earn-Out Period,
Employee shall be assigned such duties as are reasonably
necessary to carry out the terms and conditions of the
Earn-Out Agreement. Said Earn-Out Agreement is incorporated
herein by reference and Employee shall not be assigned any
duties which are contrary to the terms and conditions of said
Earn-Out Agreement.
B. Throughout his employment hereunder, but subject to the
limitations set forth in paragraph 2(A) above, the Employee
shall devote his full time, attention, knowledge
and skills during normal business hours in furtherance of the
business of Netplex and will faithfully, diligently, and to
the best of his ability, perform the duties described above
and further Netplex's best interests.
C. During his employment, the Employee shall not knowingly
engage, and shall not knowingly solicit any employees of
Netplex, or its subsidiaries or other affiliates to engage, in
any commercial activities which are in any way in competition
with the activities of Netplex, or which in any way materially
interfere with the performance of his duties or
responsibilities to Netplex.
D. Subject to the limitations set forth in paragraph 2(A) of this
Agreement, the Employee shall at all times be subject to,
observe and carry out such reasonable rules, regulations,
polices, directions and restrictions as Netplex, consistent
with Employee's rights and duties under this Agreement, may
from time to time establish and those imposed by law, provided
that the same are generally applicable to all similarly
situated employees.
3. Employee Covenants. In order to induce the Company to enter into this
Agreement, the Employee hereby agrees as follows:
A. Except when he is directed to do otherwise by the President of
Netplex, his designee, or any successor to him, and except as
required by law, court order or subpoena, the Employee shall
keep confidential and shall not divulge to any other person or
entity, during the term of the Employee's employment or
thereafter, any of the business secrets or other confidential
information regarding Netplex or its subsidiaries (i) which
have not otherwise become public knowledge, (ii) which were
already known to Employee or learned by Employee from
independent sources, or which have been disclosed by Netplex
to others without substantial restriction on further
disclosure.
B. All papers, books and records of every kind and description
relating to the business and affairs of Netplex, whether or
not prepared by the Employee, shall be the sole and exclusive
property of Netplex, and the Employee shall surrender them to
Netplex at any time upon request by the President.
C. Subject to the limitations set forth in paragraph 2(A) above,
during the term of employment by Netplex or one of its
subsidiary companies, Employee shall devote substantially all
of his time, attention and energies during normal working
hours to the performance of the business of Netplex, and
Employee shall not, directly or indirectly, alone or as a
partner, officer, director, employee, stockholder, consultant
or agent of any other corporation, partnership or other
business organization, be actively engaged in or concerned
with any other duties or pursuits which materially interfere
with the performance of his duties as an Employee of Netplex.
4. Compensation. As full compensation for Employee's services hereunder
and in exchange for his promises contained herein, the Company shall compensate
the Employee in the manner set
2
forth below. The amounts set forth below shall be subject to any withholding or
other deductions required by law.
A. For the period beginning on October 1, 1998 and ending
December 31, 2000, Employee shall receive a biweekly salary of
$6,730.77 ($175,000 per year), paid one week in arrears.
Netplex may increase Employee's salary during the term of this
Agreement in Netplex's sole discretion.
B. Bonuses. Employee shall be eligible to receive quarterly
bonuses based on the Net Profit of AIG, a Division of Netplex
(as "Net Profit" is defined in said Earn-Out Agreement.)
Employee's quarterly bonus will equal three percent (3%) of
the quarterly Net Profit, plus an additional one and one-half
percent (1.5%) of the Net Profit above the quota for the
quarter. Losses from the previous quarter will carry forward
to the next quarter for the purposes of calculating any bonus
hereunder. No bonus will be paid for a quarter if the
cumulative minimum Net Profit for the AIG operations is less
than the minimum set forth in the attached Quota Schedule. The
payment due for each quarter under this Section 4.B. shall be
paid on the next regular payroll after sixty (60) days after
the end of each quarter for which a bonus is earned. On or
before the first payroll date after December 1, 1998, Employee
shall receive from Netplex a bonus equal to three percent (3%)
of the Net Profit in excess of $50,000 for the month of
September, 1998, plus an additional one and one-half percent
(1.5%) of any Net Profit for September, 1998 above $200,000.
C. Vacation. Employee shall accrue vacation at the rate of 6.154
hours per biweekly pay period beginning October 1, 1998.
Employee shall be credited with any prior service and with any
vacation which was accrued and unused as of September 30,
1998.
D. Benefits. Employee shall be eligible for Netplex's customary
group benefits programs.
E. Stock Options. Upon execution of this agreement, Netplex shall
grant to Employee options to purchase sixty-five thousand
(65,000) shares of Netplex Common Stock in accordance with the
Stock Option Agreement attached hereto as Exhibit 1.
5. Non-competition.
A. If Employee terminates his employment, then for a period of
one (1) year after such termination of this Agreement, or
after cessation of Employee's employment with Netplex for any
reason (including termination of employment by Netplex without
Cause), whichever period is longer, Employee shall not,
directly or indirectly, alone, or as a partner, officer,
director, employee, stockholder, consultant or agent of any
other corporation, partnership or other business organization,
engage in any business activity which is directly or
indirectly in competition with the products or services owned,
sold, manufactured, marketed, provided or developed by Netplex
and its
3
subsidiaries during Employee's employment by Netplex. Employee
acknowledges and agrees that his employment may extend beyond
the termination date of this Agreement, and that Employee's
obligations hereunder begin upon termination of employment,
and not upon the expiration date of this Agreement.
B. If Netplex terminates Employee's employment without Cause, the
provisions of this Agreement shall be enforceable against the
Employee only as long as Employee is receiving the
compensation set forth in Paragraph 4.A and 4.E above, but in
no event past December 31, 2000. The provisions of this
Agreement shall not apply if Employee is no longer receiving
any such compensation.
C. In any event, for a period of two (2) year after the
termination of this Agreement or for a period of two (2) years
after cessation of Employee's employment with Netplex for any
reason (including termination of employment by Netplex without
Cause), whichever period is longer, Employee shall not,
directly or indirectly, alone, or as a partner, officer,
director, employee, stockholder, consultant or agent of any
other corporation, partnership or other business organization,
knowingly solicit the employment of, or hire, any employee of
Netplex, or any Netplex subsidiary, or cause any such employee
to terminate the employee's relationship with Netplex or any
Netplex subsidiary, without the prior written approval of
Netplex. Employee acknowledges and agrees that his employment
may extend beyond the termination date of this Agreement, and
that Employee's obligations hereunder begin upon termination
of employment, and not upon the expiration date of this
Agreement.
D. In any event, for a period of two (2) years after the
termination of this Agreement or for a period of two (2) years
after cessation of Employee's employment with Netplex for any
reason (including termination of employment by Netplex without
Cause), whichever period is longer, but only if during such
period Netplex shall continue to pay employee the greater of
(i) his salary at the time of his termination or cessation of
employment or (ii) the salary set forth in Section 4A above,
Employee shall not, directly or indirectly, alone, or as a
partner, officer, director, employee, stockholder, consultant
or agent of any other corporation, partnership or other
business organization, knowingly solicit any of the accounts
of Netplex which were customers of the Employee's business
unit or which were directly or indirectly managed by the
Employee unless such solicitation is undertaken on behalf of a
business venture which does not compete, directly or
indirectly, with the products or services owned, sold,
manufactured, marketed, provided or developed by Netplex and
its subsidiaries during Employee's employment by Netplex. For
the purposes of this subsection, a business shall be deemed to
be in competition with Netplex and its subsidiaries only if
the products or services of such business are substantially
similar in purpose, function or capability to the products or
services then being developed, manufactured, marketed,
provided or sold by Netplex or a Netplex subsidiary. Employee
acknowledges and agrees that his employment may extend beyond
the termination date of this Agreement, and that Employee's
obligations hereunder begin upon termination of employment,
and not upon the expiration date of this Agreement.
4
E. The parties agree that the Employee's services are unique,
that this Agreement is being entered into in connection with
Asset Acquisition Agreement dated August 31, 1998 between
Netplex and Applied Intelligence Group, Inc., and that any
breach or threatened breach of the provisions of this
Agreement will cause irreparable injury to Netplex and that
money damages will not provide an adequate remedy.
Accordingly, Netplex shall, in addition to other remedies
provided by law, but subject nonetheless to the terms and
conditions of this Agreement, be entitled to such equitable
and injunctive relief as may be necessary to enforce the
provisions of this agreement against the Employee or any
person or entity participating in such breach or threatened
breach. Nothing contained herein shall be construed as
prohibiting Netplex from pursuing any other and additional
remedies available to it, at law or in equity, for such breach
or threatened breach including any recovery of damages from
the Employee and the immediate termination of his employment.
F. Nothwithstanding anything to the contrary in this Agreement,
Netplex acknowledges and agrees that Employee engages in
certain activities, to wit: (i) Employee shall continue to
serve on the board of directors of Applied Intelligence Group,
Inc., which shall become known as The viaLink Company, (ii)
Employee shall continue to serve on the board of directors of
Duckwalls-Alco Stores, Inc., and (iii) Employee shall retain
certain other private business interests. Netplex agrees and
acknowledges that the foregoing activities shall not be
construed or claimed by Netplex to constitute a conflict of
interest with regard to Employee's duties toward Netplex.
The provisions of this Section 5 shall survive termination of this Agreement.
6. Duration and Termination.
A. Duration. The term of this Agreement shall commence on October
1, 1998, and shall terminate on December 31, 2000, unless
earlier terminated pursuant to the provisions hereof.
B. Termination Upon Death of Employee. This Agreement shall
immediately terminate, and all rights, benefits and
obligations hereunder shall cease, in the event of the
Employee's death, except such rights of Employee which have
accrued as of the date of death.
C. Termination Upon Disability of Employee. In the event that a
mutually acceptable physician determines that the Employee is
unable to substantially perform his usual and customary duties
under this Agreement for more than two (2) months in any
calendar year, this Agreement shall immediately terminate and
all rights, benefits and obligations hereunder shall cease,
except such rights of Employee which have accrued as of the
date of disability.
5
D. Termination by the Company for Reasons Other Than Cause. In
the event of the termination of this Agreement by the Company
for any reason other than "Cause" (as hereinafter defined),
the Employee shall be entitled (without any obligation on the
part of the Employee to mitigate damages) to continuation of
the salary and the benefits provided hereunder, and for each
remaining quarter of the term of this Agreement, Employee
shall also receive the greater of (i) the Employee Bonuses due
pursuant to Section 4.B. of this Agreement or (ii) fifteen
percent (15%) of the salary paid to Employee for such quarter.
Continuation of the salary and the benefits hereunder shall
not constitute continuation of employment for the purposes of
Paragraph 5.
E. Termination by the Company for Cause. The Company shall have
the right to terminate this Agreement in any of the following
events, each of which shall constitute "Cause". Termination
under this subsection (E) shall be without damages or
liability to the Employee for compensation and other benefits
which would have accrued hereunder after termination; provided
however, and notwithstanding anything to the contrary herein,
any rights and benefits of Employee which have accrued prior
to such termination shall not be affected by such termination.
Cause is defined as:
(i) the Employee's willful and material breach in
respect of his duties under this Agreement if such
breach continues unremedied for fifteen (15) days
after written notice thereof to the Employee
specifying the acts constituting the breach and
requesting that they be remedied; (ii) fraud
committed in connection with Employee's employment,
or theft, misappropriation or embezzlement of
Netplex's funds;
(iii) a conviction, plea of nolo contendere, plea to a
lesser charge in lieu of a felony, of a felony, a
crime involving fraud or misrepresentation, or any
other crime, the effect of which is likely to
materially adversely affect Netplex;
(iv) intentional violation of any Law which results in
material liability to Netplex;
(v) abuse of alcohol or other drugs, or the illegal use
of drugs, which materially interferes with the
performance by Employee of his duties hereunder; or
(vi) failure of the Business to achieve the Minimum Net
Profit, as specified on the Quota Schedule attached
hereto, for any two quarters after the last quarter
of 1998; provided however, if the Net Profit of the
last Quarter of 1998 is less than one hundred
thousand dollars ($100,000), then the last Quarter
of 1998 would be counted as one of the Quarters
under this paragraph.
7. Successors and Assigns. The rights and obligations of Netplex hereunder
shall run in favor of and shall be binding upon Netplex, its
successors, assigns, nominees or other legal representatives.
Termination of Employee's employment shall not operate to relieve him
of any remaining obligations hereunder. Subject to the limitations set
forth in paragraph 2(A) of
6
this Agreement, Employee acknowledges that Netplex may assign its
obligations under this agreement to a Netplex subsidiary without the
consent of Employee, provided however that the assignee agrees to be
bound by the terms and conditions of this agreement; and provided
further that Netplex in the event of any such assignment shall not be
relieved of its obligations under this Agreement. Employee may not
assign his rights and obligations hereunder.
8. Notices. All notices, requests, demands and other communications
hereunder must be in writing and shall be deemed to have been duly
given upon receipt if delivered by hand, sent by telecopier or courier,
or three (3) days after such communication is mailed within the
continental United States by first class certified mail, return receipt
requested, postage prepaid, to the other party, in each case addressed
as follows:
A. if to Netplex, to President, The Netplex Group, Inc., 0000
Xxxxxxxxxx Xxxxx, Xxxxx Xxxxx, XxXxxx, Xxxxxxxx 00000; and
B. if to the Employee, to Xxxxxx Xxxxxx, 00000 Xxxxxxxxxx Xxxxx,
Xxxxxxxx Xxxx, Xxxxxxxx, 00000.
Addresses may be changed by written notice sent to the other party at
the last recorded address of that party.
9. Severability. If any provision of this Agreement shall be adjudged by
any court of competent jurisdiction to be invalid or unenforceable for
any reason, such judgment shall not affect, impair or invalidate the
remainder of this Agreement.
10. Prior Understanding. This Agreement embodies the entire understanding
of the parties hereto, and supersedes all other oral or written
agreements or understandings between them regarding the subject matter
hereof, except for the Asset Acquisition Agreement. No change,
alteration or modification hereof may be made except in a writing,
signed by both parties hereto. The headings in this Agreement are for
convenience and reference only and shall not be construed as part of
this Agreement or to limit or otherwise affect the meaning hereof.
11. Execution in Counterparts. This Agreement may be executed by the
parties hereto in counterparts, each of which shall be deemed to be
original, but all such counterparts shall constitute one and the same
instrument, and all signatures need not appear on any one counterpart.
12. Choice of Laws. Jurisdiction over disputes with regard to this
Agreement shall be exclusively in the courts of the State of Oklahoma,
and this Agreement shall be construed in accordance with and governed
by the laws of the state of Oklahoma without giving effect to
principles of conflicts of law thereunder.
13. Attorney Fees. In the event of any litigation between the parties
hereto, the prevailing party shall be entitled to all of its costs
incurred in such litigation, including reasonable attorneys' fees.
7
14. Nonwaiver. The waiver of any violation or breach of this Agreement by
either party hereto shall not be deemed to be a waiver of any
continuing violation or breach or a waiver of any other violation or
breach of this Agreement.
SIGNATURE PAGE FOLLOWS
8
Signature Page
EMPLOYMENT AGREEMENT
Xxxxxx Xxxxxx
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the day and year first above written.
THE NETPLEX GROUP, INC. EMPLOYEE
By: __________________________ ___________________________
Its: ___________________________
9
QUOTA SCHEDULE
Quarter Minimum Net Profit (cumulative) Quota
Sept. 98 $50,000 $200,000
4Q 1998 $2500,000 $400,000
1Q 1999 $4837,500 $475,000
2Q 1999 $7612,500 $550,000
3Q 1999 $1,0725,000 $625,000
4Q 1999 $1,42375,000 $700,000
1Q 2000 $1,81762,500 $775,000
2Q 2000 $2,23187,500 $850,000
3Q 2000 $2,70650,000 $925,000
4Q 2000 $3,20150,000 $1,000,000
