EXHIBIT 10.16
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of September 22, 2000, by and between Digi Link
Technologies Incorporated, a subsidiary of Xxxxxxxxx Technologies Corporation, a
Delaware corporation, with offices at 00 Xxxxxxx Xxxxxxx, Xxxxx 00, Xxxxxx, Xxx
Xxxxxx 00000 (the "Company") and Xxxxx X. Xxxxx, who resides at 0000 Xxxxxxxx
Xxx Xxxx, Xxxxxxxxxxx, Xxx Xxxxxx 00000 ("Jegou").
WHEREAS, the Company presently employs Jegou as President and Chief
Executive Officer of the Company; and
WHEREAS, the Company desires to continue to employ Jegou in such capacities
on the terms and conditions hereinafter stated; and
WHEREAS, Jegou is willing to continue employment in such capacities on such
terms and conditions;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises, covenants and conditions hereinafter set forth, the parties hereto
agree as follows:
1. Employment. The Company hereby employs Jegou, and Jegou hereby accepts
employment, upon the terms and conditions hereinafter set forth.
2. Term. Subject to Section 7 hereof, this Agreement shall commence as of
the date first stated above, and shall continue thereafter through October 1,
2003.
3. Duties. Jegou is engaged as President and Chief Executive Officer of the
Company with all the duties and responsibilities commensurate with such
positions, and as such duties and responsibilities may be modified, enlarged or
limited, from time to time, at the discretion of the Board of Directors and/or
its Executive Committee.
4. Compensation.
(a) In consideration of the services to be rendered by Jegou under this
Agreement, the Company shall pay Jegou an annual base salary as set forth in
Exhibit A hereto, or such greater amount as may be approved from time to time by
the Board of Directors (the "Base Salary"), payable in equal monthly
installments net of appropriate payroll deductions.
(b) Jegou shall also be entitled to such additional compensation as may be
approved from time to time by the Board of Directors in its discretion.
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(c) Jegou shall be entitled to receive all benefits and perquisites
generally available to senior executive officers of the Company including, but
not limited to, hospital, surgical, medical and other group health and accident
insurance benefits, life insurance coverage, pension, retirement and
profit-sharing plans, and any stock option or stock award plan or arrangement,
whether qualified or non-qualified, now or hereafter generally available to
senior executive officers of the Company. Nothing contained herein shall be
construed as denying or impairing any right Jegou may have under any other
agreement or arrangement with, or plan of, the Company, to vest in the right to
exercise stock options to purchase common stock of the Company previously
awarded, if any, or to exercise stock options to purchase common stock of the
Company in which Jegou is vested, if any.
(d) With respect to any stock options that may be granted by the Company to
Jegou during the term of this Agreement, the terms of such grant shall provide,
among other things, that Jegou may pay the exercise price of such options in any
combination of: (i) cash, check or other property (not including a promissory
note) with a fair market value on the date of exercise equal to at least the
aggregate par value of the shares of capital stock issuable upon the exercise of
such options, which property may include shares of common stock of the /company,
provided that such shares not be issuable upon the exercise of any such options;
and (ii) by delivering to the Company a promissory note in the amount of the
remaining portion, if any, of the exercise price for the stock options being
exercised. Any promissory note delivered by Jegou as payment for the exercise of
any portion of such stock options may be repaid by Jegou in any combination of
cash, check or other property, including shares of capital stock of the Company,
provided that any shares delivered in payment of Jegou's promissory note shall
not be shares issuable upon the exercise of any such stock options.
(e) The Company shall reimburse the Employee for all reasonable business
expenses incurred by the Employee in the course of performing his duties
hereunder, with reasonable written substantiation of such expenses to be
furnished by the Employee at the Company's request.
5. Confidential Information. Jegou shall not, during the term of this
Agreement or during the two-year period thereafter, use (other than in
connection with the performance of his duties hereunder) or disclose to any
third party any technical, financial, marketing or sales information of the
Company that is proprietary and confidential (the "Confidential Information").
No information shall be deemed Confidential Information if it (i) is or
hereafter becomes known to the public through no fault of Jegou, (ii) was
already known by Jegou, or (iii) is hereafter disclosed to Jegou by a third
party not in breach of any confidentiality obligation with respect thereto.
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6. Non-Competition.
(a) Jegou shall not, during the term of this Agreement or during the
two-year period thereafter, whether for his own benefit or in conjunction with
any other person, firm, corporation or other entity, engage in (the "Territory")
in any business competitive with the business of the Company. If any limitation
on Jegou imposed by the preceding sentence is adjudged invalid by any court of
competent jurisdiction, the parties agree that this Agreement shall be deemed
amended to conform thereto and shall remain enforceable to the extent not
adjudged invalid.
(b) Subject to paragraph (a) of this Section, nothing in this Agreement
shall be construed as prohibiting Jegou in any way from performing consulting
services for any person, firm, corporation or other entity during the term of
this Agreement, provided that the performance of such services does not
interfere with his performance of services hereunder.
7. Termination.
(a) The Company shall have the right to terminate Jegou's employment under
this Agreement for Cause (as hereinafter defined).
(b) For purposes of this Agreement, "Cause" shall mean if Jegou:
(i) is convicted of a felony, or pleads guilty or nolo contendre to
such felony;
(ii) commits an act of moral turpitude which the Company's Board of
Directors determines is likely to have a material adverse impact on
the Company's reputation or business prospects;
(iii) engages in a continuing neglect of, or malfeasance in, the
performance of his duties which he fails to cure within thirty (30)
calendar days after receiving written notice thereof from the
Company or, if such neglect or malfeasance, as the case may be, is
not susceptible of cure within such thirty-day period, he has not
commenced promptly and continued diligently thereafter to
completion to effect such cure;
(iv) dies or suffers a Disability (as hereinafter defined) for a period
of six (6) consecutive months (the "Disability Period"); in either
event the Company shall pay to Jegou or his estate, as the case may
be, within three (3) months following such death or Disability
Period, as the case may be, the Base Salary which would otherwise
have been payable to him during the one-year period from and after
such death or Disability Period. For purposes of this Agreement, a
"Disability" shall mean if Jegou is unable to perform substantially
the material duties of his positions, does not work at any other
occupation, is unable to perform substantially the material duties
of any position of employment for which he is qualified by
education, training, or experience, and is under the regular
treatment of a physician.
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8. Change in Control.
(a) If, in a single transaction or as a result of a series of transactions
occurring in concert with each other, the control of the Company shall change,
and subsequent to such Change in Control (as hereinafter defined), this
Agreement, extensions or modifications thereof, or if Jegou terminates this
Agreement or any succeeding employment agreement within one year following a
Change of Control for Good Reason (as hereinafter defined), Jegou shall be
entitled to compensation (in addition to all amounts otherwise payable to Jegou
under this Agreement) in an amount equal to two hundred and ninety-nine (299%)
percent of the annual Base Salary payable to Jegou at the time when his
employment is terminated. For purposes of this paragraph (a): (i) a "Change in
Control" shall be deemed to occur if in excess of fifty (50%) percent of the
Company's stock is transferred in a single transaction or a series of
transactions in concert with each other; and (ii) "Good Reason" shall mean if
Jegou's responsibilities and/or compensation are substantially reduced. In
determining whether in excess of fifty (50%) percent of the Company's stock has
been transferred, transfers by a person or persons who were officers of the
Company, or were related to an officer, immediately prior to a Change in Control
shall be disregarded. The amount payable under this paragraph (a) shall be paid
in one single payment to Jegou within sixty (60) days following the termination
of Jegou's employment.
(b) Notwithstanding any other provisions of this Agreement to the contrary,
the total amounts deemed to be payable to Jegou under this Agreement as a result
of a Change in Control shall not exceed three times the base amount as
determined under Section 2806 of the Internal Revenue Code of 1986, as amended.
In the event the amounts payable to Jegou as a result of a Change of Control are
reduced pursuant to the preceding sentence, the amounts payable under this
paragraph (b) shall be reduced prior to the reduction of any other payments
which may be payable to Jegou hereunder.
(c) In the event of Jegou's termination of employment following a Change in
Control pursuant to paragraph (a) of this Section, Jegou shall also be entitled
to the following : (i) all outstanding amounts owed by Jegou to the Company
under one or promissory notes in connection with the exercise by Jegou of stock
options to purchase capital stock of the Company shall be thereupon forgiven,
and such note(s) canceled and of no further force or effect; (ii) Jegou shall
become immediately vested in all stock option grants then issued and outstanding
to him in which he is not vested at such time, Jegou shall have a period of one
year from and after the Change in Control to exercise any or all such options in
accordance with their respective terms, and the Company shall take all necessary
measures to authorize and permit such vesting and exercise notwithstanding the
terms and conditions under which such options were granted; and (iii) in the
event the Company proposes to effect registration of its common stock under the
Securities Act of 1933, it shall offer Jegou by timely written notice, the
opportunity, at the Company's expense, to have his shares of common stock of the
Company included in such registration on a "piggyback" basis.
(d) This Paragraph shall survive the termination of this Agreement.
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9. Miscellaneous.
(a) Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing, and if sent by registered or
certified mail to his residence in the case of Jegou, or to its principal office
in the case of the Company.
(b) Waiver. The waiver by the Company of a breach of any provision of this
Agreement by Jegou shall not operate or be construed as a waiver of any
subsequent breach by Jegou of the same or any provision of this Agreement.
(c) Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Texas, without regard to its conflicts
of laws provisions.
(d) Entire Agreement; Amendment. This Agreement, including Exhibit A
hereto, contains the entire agreement of the parties, and supersedes all prior
written agreements or other arrangements between the parties with respect to
Jegou's employment by the Company or the performance of any services by Jegou
for or on behalf of the Company in any other capacity, which are hereby canceled
and of no further force or effect. This Agreement may not be amended or modified
except by an agreement in writing signed by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first written above.
ATTEST: DIGI LINK TECHNOLOGIES, INC.
__________________________ By:/s/: Xxxxx X. Xxxxx
----------------------
WITNESS:
__________________________ Xxxxx X. Xxxxx
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EXHIBIT "A"
As set forth in Paragraph 4 of the Employment Agreement, Jegou's yearly
base salary beginning on the date first set forth above will be $200,000,
payable in monthly installments of $16,666.66 each on the first of each month
until such time as Digi Link Technologies, Inc. becomes a publicly traded
company. Once Digi Link has become a publicly traded company, Jegou shall
receive a yearly base salary of $300,000 payable in monthly installments of
$25,000 each on the first of each month.
Two million ($2,000,000) shares of restricted common stock of Digi Link
Technologies, Inc. shall be issued to Xxxxx Xxxxx immediately upon the
commencement of public trading of the company's stock. This is in addition to
the three million (3,000,000) shares having already been issued to Xxxxx Xxxxx.
Jegou will continue to serve as special consultant to the Board of
Director's of Xxxxxxxxx Technologies Corporation and will continue to assist the
company in it's efforts to file it's Form 10SB, prepare a Registration Statement
and prepare for a secondary offering for Xxxxxxxxx Technologies Corporation.
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