EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into this 17th day of January 2000, is by and
between Xxxxx X. Xxxxxx (hereinafter referred to as "Employee") and Wasatch
Interactive Learning, a Utah Corporation (hereinafter referred to a "Company").
WITNESSETH
WHEREAS, the Company desires to employ the Employee; and
WHEREAS, the Employee desires to accept such employment with the Company; and
WHEREAS, the Employee and the Company desire to set forth their employment
relationship in a written agreement.
NOW THEREFORE, in consideration of the mutual promises and covenants herein set
forth, and for other valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1.00 - EMPLOYMENT
1.01 EMPLOYMENT. The Company hereby offers to employ the Employee upon
the terms and conditions hereinafter set forth and the Employee accepts such
offer and agrees to abide by the terms and conditions hereof, and the terms and
conditions of the Company's and its affiliated corporations' Articles of
Incorporation, Bylaws and Employee Policy Manuals.
1.02 DUTIES. Employee shall serve as Vice President of Development, a
Director and Officer of the Company. Employee shall develop, fund, and implement
an aggressive growth plan for the Company, including an Internet strategy, as
appropriate funding is available. The Company is in the process of implementing
a strategy to become an OTC publicly traded company by a reverse merger with a
publicly traded company (the "Merger"). The strategy includes a funding plan to
capitalize the Company with a net of Seven Million Five Hundred Thousand Dollars
($7,500,000.00). This is based on there being Nine Million shares (9,000,000)
issued and outstanding. Employee will have Seven Hundred Fifty Thousand shares
(750,000) and Xxxxxxx Xxxxxx will have Two Million Two Hundred Fifty Thousand
shares (2,250,000) initially in the Company following the Merger (3,000,000
shares equals the conversion of the original owners, Xxxxxxx Xxxxxx and Xxxxx
Xxxxxx (the "Founders") so that they have 33% of the issued and outstanding
shares of capital stock of the Company (the "Anti-Dilution Percentage") but
excludes shares exchanged for debt). In the event shares are issued to acquire a
business or its assets, the Company shall be free to issue stock in such
acquisition without regard to Founders' percentage ownership interest in the
Company; provided, however, that the percentage interest of capital stock held
by the Founders' immediately following such acquisition shall thereafter be the
new Anti-Dilution Percentage and future issuance of stock shall thereafter
continue to be subject to this paragraph 1.02 at the new Anti-Dilution
Percentage.
ARTICLE 2.00 - TERM AND TERMINATION
2.01 TERM. The Company agrees to employ the Employee commencing on January
1, 2000. Such employment shall continue until terminated per this Agreement.
2.02 TERMINATION. The Company may, by giving zero (0) days notice to the
Employee, terminate this Agreement with cause. Notwithstanding the above, this
Agreement shall terminate immediately upon the death of the Employee, and shall
terminate upon ten (10) days notice by the Company if, because of illness or
injury, Employee becomes unable to perform services required pursuant to this
Agreement with or without reasonable accommodation as required under the
Americans with Disabilities Act of 1990. Any decision to terminate this
Agreement by the Company shall not be voted upon by the Employee in any capacity
whatsoever. In no event shall termination of this Agreement relieve the parties
hereto of any rights or obligations that survive the termination of this
Agreement as set forth herein. The Company may, by giving ten (10) days notice
to the employee, terminate this agreement without cause. The Employee may, by
giving ten (10) days notice to the Company, terminate this agreement.
ARTICLE 3.00 - COMPENSATION
3.01 SALARY. The Company covenants and agrees to pay Employee, as
consideration for her services, a salary of One Hundred Twenty Five Thousand
Dollars ($125,000.00) per year, payable in equal bimonthly installments, less
payroll deductions for income tax, FICA, withholding and any other deductions as
authorized by the Employee. For the purpose of causing Employee's compensation
to equal the reasonable value of his services to the Company, the Company may
increase the Employee's salary in any amount determined by the Company in its
sole discretion.
3.02 OPTIONS. Employee is granted options to purchase Two Hundred Fifty
Thousand (250,000) shares of common stock of the Company, post reverse merger.
Said options shall be vested and exercised on the following schedule and terms:
A. 50,000 options vest upon closing of the reverse merger into an OTC
publicly trading company. The Exercise Price for these options is
$4.00 per share.
B. 50,000 options vest on the one-year anniversary of the vesting of
options in (A) above. The Exercise Price for these options is $5.00
per share.
C. 50,000 options vest on the two-year anniversary of the vesting of
options in (A) above. The Exercise Price for these options is $6.00
per share.
D. 50,000 options vest on the three-year anniversary of the vesting of
options in (A) above. The Exercise Price for these options is $8.00
per share.
E. 50,000 options vest on the four-year anniversary of the vesting of
options in (A) above. The Exercise Price for these options if $10.00
per share.
All options shall vest upon achievement of revenue in a fiscal year of
$18,000,000, as verified and confirmed by financial reporting. The exercise
price of all options vested early due to the achievement of $18,000,000 in
revenue shall have an adjusted exercise price equal to the exercise price
for the anniversary year in which the milestone was reached. For example,
if the options scheduled to vest in (D) were to vest early in the same year
as C then all C and D options would have the $6.00 exercise price.
3.03 BONUSES. For the purpose of causing the Employee's compensation to
equal the reasonable value of her services to the Company and to reflect any
outstanding contribution to the Company's revenue by Employee, the Company may
pay Employee, in addition to the salary for services described in Section 3.01
above, a bonus in any amount determined by the Company in its sole discretion.
The Bonus, if any, less payroll deductions for income taxes, FICA, withholding
and any other deductions authorized by the Employee, shall be paid by the
Company to the Employee at such time or times as the Company in its sole
discretion determines.
3.04 VACATION. During the term of this Agreement, the Employee shall be
entitled to an annual four week vacation during which time Employee's salary
shall be paid in full.
3.05 CHANGE OF CONTROL. In the event that the Founders cease to "control
the Company" and Employee's employment is terminated as a result of said loss of
control,
A. All unvested options shall vest immediately at the exercise price for
the year the Employee's employment is terminated
B. Employee shall receive a salary of One Hundred Twenty Five Thousand
Dollars ($125,000.00) per year for two years and continue on the
Company's insurance plan (as defined in the Company Employee Policy
Manuals) for two years, paid in full by the Company.
Founders ceasing to "control the Company" is defined as a subsequent material
change in Employees duties, which are materially adverse to the Founders or the
Company is acquired, merged, consolidated or otherwise adversely changed against
the Founders wishes. Resignation by the Employee following a change of control
shall constitute a termination due to loss of control for purposes of this
section. Employee shall be willing to provide up to six (6) months of
cooperative transition support, in the event of termination due to a loss of
control. The Employee will be paid at her salary rate for the cooperative
transition support and the salary paid for this cooperative transition support
time will be in addition to the salary stated in 3.05 B.
ARTICLE 4.00 - SPECIFIC OBLIGATIONS OF THE PARTIES
4.01 COMPANY'S OBLIGATIONS. The Company shall provide the employee with and
pay Employee's expenses for the following:
A. Such equipment, materials and supplies as the Employee requires for
the performance of her services.
B. Costs, including tuition, meals, lodging, and transportation incurred
by the Employee as stated in the Company's Travel and Expense Policy;
and
C. Suitable offices for the performance of Employee's services.
4.02 EMPLOYEE'S OBLIGATIONS. The Employee agrees that during the term of
this Agreement, she shall:
A. Faithfully and to the best of her ability and skill serve the Company
and perform her duties pursuant to this Agreement;
B. Maintain records in the manner established by the Company; and
C. Keep current all records, reports, insurance records and clerical work
required by Company.
ARTICLE 5.00 - COVENANTS
5.01 COVENANT NOT TO COMPETE. Employee does hereby covenant and represent
that for the period of time Employee is employed with the Company and its
affiliated corporations and for a period of two (2) years commencing upon the
termination of Employee's employment with Company and its affiliated
corporations and within the borders of the United States of America, she will
not, directly or indirectly, on her own account or in any capacity for or on
behalf of any other firm, partnership, corporation or other entity, conduct,
engage in, be connected with, have an interest in or aid or assist in conducting
or operating a business which is competitive to the business conducted by
Company or its affiliated corporations during Employee's employment with Company
and its affiliated corporations. The parties hereto stipulate and agree that the
area and time period set forth above are necessary and reasonable, and that this
covenant shall not terminate upon termination of this Agreement, but shall
continue in full force and effect during the period of time Employee is employed
with the Company and its affiliated corporations and for a period of two (2)
years after such employment is terminated. Employee recognizes that her services
are special, unique and extraordinary, and that in the event of a violation the
Company could not be adequately compensated with legal remedies. Accordingly,
Employee agrees that this covenant may be enforced by specific performance or
any available legal or equitable remedy, including, but not limited to temporary
restraining order or preliminary and permanent injunctions, and the Company and
its affiliated corporations shall be entitled to recover from Employee all court
costs and reasonable attorney's fees incurred in enforcing this covenant and
vice versa. The remedies hereunder shall not be exclusive of each other, but
shall be cumulative.
5.02 COVENANT FOR PROTECTION OF PROPRIETARY INFORMAITON. The parties hereto
recognize that the Company and its affiliated corporations and Employee are
desirous of exchanging information during the term of this Agreement and during
the period time the Employee is employed with the Company and its affiliated
corporations relating to the research, development, and marketing of technology
for application in the general field of education and that during the above
periods of time, the Company and its affiliated corporations may disclose to the
Employee certain information pursuant to this Agreement which the Company and
its affiliated corporations deem proprietary.
In order to protect said information, the parties hereto agree that during
the period of Employee's employment with the Company and its affiliated
corporations, and for a period of two (2) years from the termination date of any
employment with the Company and its affiliated corporations employee shall not
disclose information she receives or has received from the Company or its
affiliated corporations, including, but not limited to information marked
PROPRIETARY or CONFIDENTIAL or STRICTLY PRIVATE or INTERNAL DATA, to any other
person, firm or corporation, or use no less stringent degree of care to avoid
disclosure or use of such information than Employee employs with respect to her
own proprietary information which she does not wish to be disseminated,
published or disclosed.
The parties hereto agree that information shall not be deemed proprietary
and Employee shall have no obligation with respect to any such information
which:
A. Is already known to Employee through lawful channels of communication;
B. Is or becomes publicly known through no wrongful act of Employee;
C. Is rightfully received from a third party without similar restriction
and without breach of this Agreement;
D. Is independently developed by Employee without breach of this
agreement or of Employee's duties of loyalty to the Company;
E. Is furnished to a third party by Company and its affiliated
corporations without a similar restriction on the third party's
rights; or
F. Is approved for release by written authorization of Company or its
affiliated corporations. Either party may, without breach of this
Agreement, disclose proprietary information to the government by
reason of a governmental requirement or to a court by reason of
operation of law.
Employee shall not liable for (1) inadvertent disclosure or use of
proprietary information provided that (a) she used no less than the same
degree of care in safeguarding such information as she uses for her own
information of like importance, and (b) upon discovery of such inadvertent
disclosure or use of such information she endeavored to prevent any further
inadvertent disclosure or use, or (2) unauthorized disclosure or use of
information by persons who are or who have been in her employ, unless she
fails to safeguard such information with not less than the same degree of
care as she uses for her own proprietary information of like importance.
In the event proprietary information should be lost, stolen or otherwise
compromised, the party formerly in possession of that information shall promptly
notify the Company by phone, and follow up with a detailed report in writing
within ten (10) days. A coordinated effort shall then be made to recover such
information.
All copies of written data delivered by the Company to the Employee
pursuant to this Section shall be and remain the property of the Company, and
all such written data, and any copies thereof, shall be promptly returned to the
Company upon written request, or destroyed at the Company's option.
Nothing contained in this Section shall be construed as granting or
conferring to Employee any rights by license or otherwise, expressly, implied
by, or otherwise for any invention, discovery or improvement made, conceived, or
acquired at any time.
Employee and Company agree that the period set further herein is reasonable
and further that the period set forth herein does not terminate at the
termination of this Agreement, but shall continue throughout any additional
period of employment, and or a two (2) year period thereafter. This covenant may
be enforced by specific performance or any available legal or equitable remedy,
including, but not limited to, temporary restraining orders or preliminary and
permanent injunctions, and the Company and its affiliated corporations shall be
entitled to recover from Employee all court costs and reasonable attorney's fees
incurred in enforcing this covenant. The remedies hereunder shall not be
exclusive of each other, but shall be cumulative.
5.03 DEFINITION OF AFFILIATION. Affiliation, as used in this Article, shall
mean any proprietary, employment or fiduciary relationship of the Employee with
the Company and its affiliated corporations, including, but not limited to, the
position of Employee as director, officer, employee or consultant of the Company
or its affiliated corporations.
ARTICLE 6.00 - GENERAL MATTER
6.01 UTAH LAW. This Agreement shall be governed by the laws of the State of
Utah and shall be construed in accordance therewith.
6.02 NO WAIVER. No provision of this Agreement may be waived except by an
agreement in writing signed by the waiving party.
6.03 BINDING EFFECT. This Agreement shall be binding upon the parties,
their heirs, executors, administrators, successors or assignees. The parties
agree to do any and all things necessary to effectuate the purpose of this
Agreement.
6.04 CONSTRUCTION. Throughout this Agreement, the singular shall include
the plural; the plural shall include the singular; and the masculine and neuter
shall include the feminine, wherever the context so requires.
6.05 TEXT TO CONTROL. The headings of articles and sections are included
solely for convenience of reference. If any conflict between any heading and the
text of this agreement exists, the text shall control.
6.06 SEVERABILITY. If any provision of this agreement is declared by any
court of competent jurisdiction to be invalid for any reason, such invalidity
shall not affect the remaining provisions. On the contrary, such remaining
provisions shall be fully severable, and this Agreement shall be construed and
enforced as if such invalid provisions never had been inserted in this
Agreement.
6.07 AMENDMENT. This Agreement may be amended, altered or revoked at any
time, in whole or in part, by filing with this Agreement a written instrument
setting forth such charges, signed by the Company and the Employee.
6.08 NOTICES. All notices required to be given by this Agreement shall be
made in writing either by:
A. Personal delivery to the party requiring notice and securing a written
receipt, or
B. Mailing notice in the U.S. mails to the last known address of the
party requiring notice, which shall be the address shown on the
records of the Corporation for the Employee, by certified mail, return
receipt requested.
The effective date of the notice shall be the date of the written receipt
received upon delivery in Paragraph A above or four (4) days after the date
the notice was delivered to the U. S. mail as posted on the receipt in
paragraph B above.
The parties hereby execute this Employment Agreement on the day and year
first written above.
WASATCH INTERACTIVE LEARNING CORPORATION
/s/ Xxxxxxx Xxxxxx
----------------------------------------
Xxxxxxx Xxxxxx, President
EMPLOYEE:
/s/ Xxxxx X. Xxxxxx
------------------------------------------
Xxxxx X. Xxxxxx
AMENDMENT
This Agreement (the "Amendment") is made and entered into on April 14,
2000, by and among Xxxxx X. Xxxxxx and Wasatch Interactive Learning Corporation,
a Washington corporation (the "Company").
WITNESSETH
WHEREAS, Xxxxx X. Xxxxxx and Wasatch Interactive Learning Corporation, a
Utah Corporation ("WILC-Utah") entered into an Employment Agreement (the
"Agreement") dated January 17, 2000, pursuant to which Xxxxx X. Xxxxxx was
employed as Vice-President of Development, a Director and Officer of WILC-Utah.
WHEREAS, as a result of the statutory merger with WILC-Utah, on February 4,
2000, the Company assumed the Agreement by operation of law.
WHEREAS, the parties to this Amendment desire to amend the Agreement
conditioned upon the terms set forth herein.
NOW, THEREFORE, in consideration of the premises and the material covenants
and agreements hereinafter set forth, the parties agree as follows:
1. Section 1.02 of the Agreement is amended to incorporate the following
sentence: "In the event the Company shall issue in excess of nine (9) million
shares at the time of the completion of the net $7,500,000 of funding the
Founders shall be issued such number of additional shares, at no cost, to
maintain their Anti-Dilution Percentage and such additional cash to pay taxes on
the extra shares issued."
2. Other than as provided herein, the Agreement remains in full force and
effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
WASATCH INTERACTIVE
LEARNING CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx, President
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Xxxxx X. Xxxxxx
