EXHIBIT 10.2
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into as of
the 1st day of December, 2000, by and between NetCommerce, Inc., a Nevada
corporation (the "Company"), and, Xxxxxx Xxxxxxxxx, (the "Employee").
RECITALS
A. Prior to the date of this Agreement, Employee has held the positions
of President and Chief Executive Officer of a wholly owned subsidiary of the
Company and as Director of the Company.
B. The Company desires to employ the Employee from the date set forth
above (the "Effective Date") until expiration of the term of this Agreement, and
Employee is willing to be employed by Company during that period, on the terms
and subject to the conditions set forth in this Agreement.
In consideration of the mutual covenants and promises of the parties, the
Company and Employee covenant and agree as follows:
1. Duties. During the term of this Agreement, Employee will be employed
by the Company to serve as President and Chief Executive Officer of a wholly
owned subsidiary of the Company. The Employee will devote such amount of
business time to the conduct of the business of the Company as may be reasonably
required to effectively discharge Employee's duties under this Agreement and,
subject to the supervision and direction of the Company's Board of Directors
(the "Board"), will perform those duties and have such authority and powers as
are customarily associated with the offices of a President and Chief Executive
Officer of a company engaged in a business that is similar to the business of
the Company, including (without limitation) (a) the authority to direct and
manage the day-to-day operations and affairs of the Company, (b) the authority
to hire and discharge employees of the Company, and (c) all other authority and
powers exercised by the Employee prior to the Effective Date as President and
Chief Executive Officer of the Company; provided, however, that Employee will
not be required to perform services for any affiliate of the Company and will
not be required to accept any other offices with the Company without Employee's
consent. Unless the parties agree otherwise in writing, during the term of this
Agreement, Employee will not be required to perform services under this
Agreement other than at Company's principal place of business in Dallas, Texas;
provided,
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however, that Company may, from time to time, require Employee to travel
temporarily to other locations on the Company's business. Notwithstanding the
foregoing, nothing in this Agreement is to be construed as prohibiting Employee
from continuing to (i) serve on corporate, civic or charitable boards or
committees, (ii) deliver lectures, fulfill speaking engagements or teach at
educational institutions, (iii) manage personal investments and (iv) provide
consulting services, so long as such activities do not significantly interfere
with the performance of the Employee's responsibilities as an employee of the
Company in accordance with this Agreement.
2. Term of Employment
2.1. Definitions. For purposes of this Agreement the following
terms have the following meanings:
(a) "Termination for Cause" means termination by Company of
Employee's employment (i) by reason of Employee's willful dishonesty towards,
fraud upon, or deliberate injury or attempted injury to, the Company, (ii) by
reason of Employee's material breach of this Agreement or (iii) by reason of
Employee's gross negligence or intentional misconduct with respect to the
performance of Employee's duties under this Agreement; provided, however, that
no such termination will be deemed to be a Termination for Cause unless the
Company has provided Employee with written notice of what it reasonably believes
are the grounds for any Termination for Cause and Employee fails to take
appropriate remedial actions during the thirty (30) day period following receipt
of such written notice.
(b) "Termination Other than For Cause" means termination by the
Company of Employee's employment by the Company for reasons other than those
which constitute Termination for Cause.
(c) "Voluntary Termination" means termination by the Employee of
the Employee's employment with the Company, excluding termination by reason of
Employee's death or disability as described in Sections 2.5 and 2.6.
2.2 Basic Term. The term of employment of Employee by the Company
will commence on the Effective Date and four (4) months of such date, (the
"Termination Date"). Company and Employee may
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extend the term of this Agreement by mutual written agreement.
2.3 Termination for Cause.Termination for Cause may be effected by
Company at any time during the term of this Agreement and may be effected by
written notification to Employee; provided, however, that no Termination for
Cause will be effective unless Employee has been provided with the prior written
notice and opportunity for remedial action described in Section 2.1. Upon
Termination for Cause, Employee is to be immediately paid all accrued salary,
incentive compensation to the extent earned, vested deferred compensation (other
than pension plan or profit sharing plan benefits, which will be paid in
accordance with the applicable plan), and accrued vacation pay, all to the date
of termination, all debts owed by Company to Employee for personal loans to the
Company, but Employee will not be paid any severance compensation.
2.4 Termination Other Than for Cause. Notwithstanding anything else
in this Agreement, Company may effect a Termination Other Than for Cause at any
time upon giving ninety (90) day written notice to Employee of such Termination
Other Than for Cause. Upon any Termination Other Than for Cause, Employee will
immediately be paid all accrued salary, all incentive compensation to the extent
earned, severance compensation as provided in Section 4, vested deferred
compensation (other than pension plan or profit sharing plan benefits, which
will be paid in accordance with the applicable plan), all debts owed by Company
to Employee for personal loans to the Company, and accrued vacation pay, all to
the date of termination.
2.5 Termination Due to Disability. In the event that, during the
term of this Agreement, Employee should, in the reasonable judgment of the
Board, fail to perform Employee's duties under this Agreement because of illness
or physical or mental incapacity ("Disability"), and such Disability continues
for a period of more than three (3) consecutive months, Company will have the
right to terminate Employee's employment under this Agreement by written
notification to Employee and payment to Employee of all accrued salary,
incentive compensation to the extent earned, severance compensation as provided
in Section 4, vested deferred compensation (other than pension plan or profit
sharing plan benefits, which will be paid in accordance with the applicable
plan), and all accrued vacation pay, all debts owed by Company to Employee
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for personal loans to the Company , and all to the date of termination. Any
determination by the Board with respect to Employee's Disability must be based
on a determination of competent medical authority or authorities, a copy of
which determination must be delivered to the Employee at the time it is
delivered to the Board. In the event the Employee disagrees with the
determination described in the previous sentence, Employee will have the right
to submit to the Board a determination by a competent medical authority or
authorities of Employee's own choosing to the effect that the aforesaid
determination is incorrect and that Employee is capable of performing Employee's
duties under this Agreement. If, upon receipt of such determination, the Board
wishes to continue to seek to terminate this Agreement under the provisions of
this section, the parties will submit the issue of Employee's Disability to
arbitration in accordance with the provisions of this Agreement.
2.6 Death. In the event of Employee's death during the term of this
Agreement, Employee's employment is to be deemed to have terminated as of the
last day of the month during which Employee's death occurred, and Company will
pay to Employee's estate accrued salary, incentive compensation to the extent
earned, vested deferred compensation (other than pension plan or profit sharing
plan benefits, which will be paid in accordance with the applicable plan), and
accrued vacation pay, all debts owed by Company to Employee for personal loans
to the Company , and all to the date of termination.
2.7 Voluntary Termination. In the event of a Voluntary
Termination, Company will immediately pay to Employee all accrued salary, all
incentive compensation to the extent earned, vested deferred compensation (other
than pension plan or profit sharing plan benefits, which will be paid in
accordance with the applicable plan), all debts owed to Companyand accrued
vacation pay, all debts owed by Company to Employee for personal loans to the
Company, and all to the date of termination, but Employee will not be paid any
severance compensation.
2.8 Effect of Termination on Option Agreement. Notwithstanding
anything to the contrary contained in this Agreement, any termination of
Employee's employment by the Company will have no effect on Employee's rights
under that certain Nonqualified Stock Option Agreement granted to Employee
pursuant to the Company's 2000 Nonstatutory Stock Option Plan (the "Option
Agreement").
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3. Salary, Benefits and Other Compensation.
3.1 Base Salary. As payment for the services to be rendered by
Employee as provided in Section 1 and subject to the terms and conditions of
Section 2, Company agrees to issue 1,500,000 shares of Company common stock to
be registered through an S-8 registration statement. Furthermore, the Company
and Employee acknowledge that, subject to the actual financial performance of
the Company during the term of this Agreement, during the term of this Agreement
it is the mutual intent of the parties that the Base Salary increase to a level
that is commensurate with the level of compensation received by Employee for
services rendered in an executive capacity for other entities prior to the
commencement of Employee's employment with the Company.
3.2 Incentive Bonus Plans. During the term of his employment under
this Agreement, the Employee will be eligible to participate in all cash and
stock bonus and incentive plans established by the Board including, without
limitation, the Company's 2000 Nonstatutory Stock Option Plan.
3.3 Benefit Plans. During the term of Employee's employment under
this Agreement, the Employee is to be eligible to participate in all employee
benefit plans to the extent maintained by the Company, including (without
limitation) any life, disability, health, accident and other insurance programs,
paid vacations, and similar plans or programs, subject in each case to the
generally applicable terms and conditions of the plan or program in question and
to the determinations of any committee administering such plan or program. On
termination of the Employee for any reason, the Employee will retain all of
Employee's rights to benefits that have vested under such plan, but the
Employee's rights to participate in those plans will cease on the Employee's
termination unless the termination is a Termination Other Than for Cause, in
which case Employee's rights of participation will continue for a period of one
(1) year following Employee's termination.
3.4 Expenses. During the term of this Agreement, Company will
reimburse Employee for Employee's reasonable and customary out-of-pocket
expenses incurred in connection with Company's business, including travel
expenses, food, and lodging while away from home, subject to such policies as
Company may from time to time reasonably establish for its employees.
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3.5 Life Insurance. During the term of Employee's employment, the
Company will pay for a $100,000 life insurance policy, in the form designated by
Employee and approved by the Company's Board of Directors, covering the life of
Employee and with proceeds payable to such beneficiaries as Employee designates.
The foregoing is to be in addition to, and not in place of, any rights to which
Employee's estate may be entitled under this Agreement on Employee's death.
Upon any termination of Employee's employment, the aforementioned insurance
policy will be assigned to the Employee and Employee will assume responsibility
for all premium payments with respect the insurance policy; provided, however,
that in the event that Employee's termination is as a result of a Termination
Other Than for Cause, then the Company will continue to pay for premiums for the
insurance policy for a period of one (1) years from the date of Employee's
termination.
3.6 Automobile.
(a) The Company will provide Employee with a $500 monthly
stipend for the allowance of a company vehicle with such optional
equipment as Employee may select .
4. Severance Compensation
4.1 Termination Other Than for Cause; Payment in Lieu of Notice. In
the event Employee's employment is terminated in a Termination Other Than for
Cause, Employee will be paid as severance pay Employee's Base Salary for the
period commencing on the date that Employee's employment is terminated and
ending on the date which is one (1) year thereafter, on the dates specified in
Section 3.1 for payment of Employee's Base Salary.
4.2 Termination for Disability. In the event Employee's employment
is terminated because of Employee's disability pursuant to Section 2.5, Employee
will be paid as severance pay Employee's Base Salary for the period commencing
on the date that Employee's employment is terminated and ending on the date
which is six (6) months thereafter, on the dates specified in Section 3.1 for
payment of Employee's Base Salary.
4.3 Other Termination. In the event of a Voluntary Termination,
Termination for Cause
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or Death, Employee or Employee's estate will not be entitled to any severance
pay.
5. Confidentiality and Noncompetition
5.1 Confidentiality. Because of Employee's employment by Company,
Employee will have access to trade secrets and confidential information about
Company, its products, its customers, and its methods of doing business (the
"Confidential Information"). During and after the termination of Employee's
employment by the Company, Employee may not directly or indirectly disclose or
use any such Confidential Information; provided, that Employee will not incur
any liability for disclosure of information which (a) is required in the course
of Employee's employment by the Company, (b) was permitted in writing by the
Board or (c) is within the public domain or comes within the public domain
without any breach of this Agreement.
5.2 Noncompetition. In consideration of Employee's access to the
Confidential Information, Employee agrees that:
(a) For a period of six (6) months after termination of
Employee's employment, Employee will not, directly or indirectly, use such
Confidential Information to compete with the business of the Company, as the
business of the Company may then be constituted, within any state, region or
locality in which the Company is then doing business or marketing its products.
Employee understands and agrees that direct competition means development,
production, promotion, or sale of products or services competitive with those of
Company. Indirect competition means employment by any competitor or third party
providing products competing with Company's products, for whom Employee will
perform the same or similar function as he performs for Company; and
(b) For a period of one (1) year after termination of
Employee's employment, Employee will not induce or attempt to induce any
employee of the Company to discontinue his or her employment with the Company
for the purpose of becoming employed by any competitor of Company, nor will
Employee initiate discussions, negotiations or contacts with persons known by
Employee to be a customer or supplier of the Company at the time of Employee's
termination of employment for the purpose of competing with the Company.
Notwithstanding anything to the contrary contained in the
Agreement, the provisions
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of this Section 5.2(a) will not be applicable in the event of any Termination
Othe r Than for Cause with respect to Employee.
6. Assignment of Inventions
All processes, inventions, patents, copyrights, trademarks, and other
intangible rights (collectively the "Inventions") that may be conceived or
developed by Employee, either alone or with others, during the term of
Employee's employment, whether or not conceived or developed during Employee's
working hours, and with respect to which the equipment, supplies, facilities, or
trade secret information of Company was used, or that relate at the time of
conception or reduction to practice of the Invention to the business of the
Company or to Company's actual or demonstrably anticipated research and
development, or that result from any work performed by Employee for Company,
will be the sole property of Company, and Employee hereby assigns to the
Company all of Employee's right, title and interest in and to such Inventions.
Employee must disclose to Company all inventions conceived during the term of
employment, whether or not the invention constitutes property of Company under
the terms of the preceding sentence, but such disclosure will be received by
Company in confidence. Employee must execute all documents, including patent
applications and assignments, required by Company to establish Company's rights
under this Section.
7. Miscellaneous
7.1 Waiver. The waiver of any breach of any provision of this
Agreement will not operate or be construed as a waiver of any subsequent breach
of the same or other provision of this Agreement.
7.2 Entire Agreement; Modification. Except as otherwise provided
in the Agreement, this Agreement represents the entire understanding among the
parties with respect to the subject matter of this Agreement, and this Agreement
supersedes any and all prior understandings, agreements, plans, and
negotiations, whether written or oral, with respect to the subject matter
hereof, including without limitation, any understandings, agreements, or
obligations respecting any past or future compensation, bonuses, reimbursements,
or other payments to Employee from Company. All modifications to the Agreement
must be in writing and signed by the party against whom enforcement of such
modification is sought.
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7.3 Notice. All notices and other communications under this
Agreement must be in writing and must be given by personal delivery, telecopier
or telegram, or first class mail, certified or registered with return receipt
requested, and will be deemed to have been duly given upon receipt if personally
delivered, five (5) days after mailing, if mailed, or twenty-four (24) hours
after transmission, if delivered by telecopies or telegram, to the respective
persons named below:
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If to Company: NetCommerce, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxx Xxxxxxxxx, Director
If to Employee: Xxxx Xxxxxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Any party may change such party's address for notices by notice duly given
pursuant to this Section.
7.4 Headings. The Section headings of this Agreement are intended
for reference and may not by themselves determine the construction or
interpretation of this Agreement.
7.5 Governing Law. This Agreement is to be governed by and
construed in accordance with the laws of the State of Texas. Any controversy or
claim arising out of or relating to this Agreement, or breach of this Agreement
(except any controversy or claim with respect to Section 5 or 6), is to be
settled by arbitration in Dallas, Texas, in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, and judgment on the
award rendered by the arbitrators may be entered in any court having
jurisdiction. There must be three (3) arbitrators, one to be chosen directly by
each party at will, and the third arbitrator to be selected by the two (2)
arbitrators so chosen. Each party will pay the fees of the arbitrator he
selects and his own attorney, and the expenses of his witnesses and all other
expenses connected with presenting his case. Other costs of the arbitration,
including the cost of any record or transcripts of the arbitration,
administrative fees, the fee of the third arbitrator, and all other fees and
costs, will be borne equally by the parties. Notwithstanding anything in this
Agreement to the contrary, if any controversy or claim arises between the
parties under Section 5 or 6 of this Agreement, the Company will not be required
to arbitrate that controversy or claim but the Company will have the right to
institute judicial proceedings in any court of competent jurisdiction with
respect to such controversy or claim. If such judicial proceedings are
instituted, the parties agree that such proceedings will not be stayed or
delayed pending the outcome of any arbitration proceeding under this Agreement.
7.6 Survival of Company's Obligations. This Agreement will be
binding on, and inure to the benefit of, the executors, administrators, heirs,
successors, and assigns of the parties; provided, however,
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that except as expressly provided in this Agreement, this Agreement may not be
assigned either by Company or by Employee.
7.7 Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together will constitute one and the same
Agreement.
7.8 Withholdings. All sums payable to Employee under this
Agreement will be reduced by all federal, state, local, and other withholdings
and similar taxes and payments required by applicable law.
7.9 Enforcement. If any portion of this Agreement is determined
to be invalid or unenforceable, that portion of this Agreement will be adjusted,
rather than voided, to achieve the intent of the parties under this Agreement.
7.10 Indemnification. The Company agrees that it will indemnify
and hold the Employee harmless to the fullest extent permitted by applicable law
from and against any loss, cost, expense or liability resulting from or by
reasonof the fact of the Employee's employment hereunder, whether as an officer,
employee, agent, fiduciary, director or other official of the Company, except to
the extent of any expenses, costs, judgments, fines or settlement amounts which
result from conduct which is determined by a court of competent jurisdiction to
be knowingly fraudulent or deliberately dishonest or to constitute some other
type of willful misconduct.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
COMPANY:
NetCommerce, Inc.
By:
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Xxxx Xxxxxxxx, Director
By:
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Xxx Xxxxxxx, Director
EMPLOYEE:
By:
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Xxxxxx Xxxxxxxxx, Director
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