EXHIBIT 10.2
EXECUTIVE EMPLOYMENT AGREEMENT
This EXECUTIVE EMPLOYMENT AGREEMENT (the "AGREEMENT"), is entered into
effective as of December 23, 2002, by and between Mobile Reach Technologies,
Inc. ("MRT" or the "COMPANY") located at 0000 Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxx,
Xxxxx Xxxxxxxx 00000, and Xxxxxxx X. Xxxxxx, residing at 000 Xxxxx Xxxxx Xxxxx,
Xxxx, Xxxxx Xxxxxxxx 00000 ("EMPLOYEE").
WITNESSETH:
WHEREAS, the Company is engaged in the development, promotion and sales
of integrated information technology solutions; and
WHEREAS, the Company wishes to employ the Employee in the position of
President and Chief Executive Officer, and the Employee desires to be in the
employment with the Company.
NOW THEREFORE, in consideration of the foregoing and the provisions and
mutual promises herein contained and other good and valuable consideration, the
parties hereby agree as follows:
1. ENGAGEMENT. The Company hereby engages and employs the Employee, and
the Employee hereby accepts engagement and employment as the President and Chief
Executive Officer of the Company, based at the Company's headquarters in Cary,
North Carolina, with principal responsibilities as described in Exhibit A
attached hereto and such other responsibilities as may be assigned to him from
time to time by the Board of Directors and Chairman of the Company, which titles
and responsibilities are subject to change by the Board of Directors from time
to time in accordance with the needs of the Company.
2. TERM. The Employee's employment shall be for a term of three (3) years
from the effective date of this Agreement (the "INITIAL TERM"), subject to the
termination and severance provisions herein later provided, unless amended or
modified by mutual agreement of the parties. After the expiration of the Initial
Term, this Agreement shall automatically be renewed for additional successive
three-year terms (each, a "RENEWAL TERM" and collectively, the "RENEWAL TERMS")
unless either party gives the other party written notice of its intention not to
renew this Agreement at least thirty (30) days prior to the end of the
then-current term. For purposes of this Agreement, the "TERM" shall mean and
include the Initial Term and all Renewal Terms.
3. EXCLUSIVE SERVICE. The Employee agrees to devote his full time and
attention to the performance of his duties and responsibilities on behalf of the
Company and to comply with all policies and regulations of the Company, except
as otherwise agreed to by the Board of Directors and Chairman.
4. COMPENSATION. During the Term of this Agreement, the Employee's
compensation shall be determined and paid as follows:
(a) Base Salary. The Employee shall receive an annual base salary
of $200,000, payable in accordance with the Company's payroll practices, and
payment of such salary to begin on March 20, 2003, with Employee's first year
base salary to be pro rated for the remaining number of days in the initial year
of his employment. Annual increases of twenty-five percent (25%) of Employee's
base salary will be made each year during the Initial Term (such increases to be
effective as of January 1 of each year). Thereafter increases of twenty-five
percent (25%) of Employee's base salary will be made, if any, based upon
Employee's satisfactory completion of performance objectives set by the
Compensation Committee of the Board of Directors for the preceding year, such
increases to be effective as of January 1 of each year during the Term or at
such other date each year during the Term as may be set by the Compensation
Committee in compliance with the Company's human resource policies. During each
renewal term, the Compensation Committee and/or the Board shall evaluate the
Employee's performance on an annual basis, and the Board of Directors shall
adjust the Employee's salary at its sole discretion. Employee may elect to
receive all or any portion of his base salary due in an equivalent amount of
common stock of the Company calculated at its then-current fair market value per
share.
(b) Incentive Payments.
(i) Quarterly Payments. Within thirty (30) days after the
end of each calendar quarter during the term of Employee's employment with the
Company, the Company shall pay to the Employee a cash incentive bonus in an
amount equal to two percent (2%) of the cash received [from operations] by the
Company during the previous quarter. In lieu of a cash bonus, Employee may elect
to receive any bonus due in an equivalent amount of common stock of the Company
calculated at its then-current fair market value per share.
(ii) Sale of the Company. In the event of the sale or
transfer of all or substantially all of the Company's assets to another
corporation (other than a wholly-owned subsidiary), person or entity (a "Sale")
or a merger or consolidation of the Company with or into any other corporation
or organization as a result of which the holders of the voting capital stock of
the Company prior to such merger or consolidation would receive or hold less
than a majority of the voting capital stock of the company after the merger or
consolidation (a "Merger"), and the total value of the Sale or Merger exceeds
thirty million dollars ($30,000,000), then upon the closing of such Sale or
Merger, Employee shall receive one million dollars ($1,000,000) (the
"Transaction Bonus") out of the proceeds of the Sale or Merger, and payment to
Employee of such Transaction Bonus shall be in the same form as the
consideration paid in the Sale or Merger (either in cash, securities or a
combination of cash or securities, depending upon the consideration paid).
(c) Withholding. All applicable federal and state taxes and other
governmental assessments shall be deducted from Employee's base salary and
incentive pay, as required by law.
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(d) Stock; Options. Upon the date that Employee begins receiving
his base salary, the Employee shall be issued, as a signing bonus, 5,730,953
shares of common stock of the Company at a price of $0.01 per share. Employee
shall also be entitled to receive options to purchase shares of the Company's
Common Stock as determined in the discretion of the Company's Board of
Directors.
(e) Benefits. The Employee shall be eligible to participate in the
Company's standard employee benefit program made available to employees of the
Company from time to time and any additional benefits, if any, made available to
officers of the Company, subject to appropriate premium contributions, benefit
elections, and related conditions. In addition, the Employee shall receive [four
(4)] weeks of paid vacation per year and up to six (6) days of paid sick and
personal leave each calendar year which will accrue at the rate of four (4)
hours per month. Sick leave and unused vacation will not carry over from one
year to the next.
(f) Insurance. The Company will provide the Employee with standard
health, life and disability coverage provided to other employees, which coverage
may vary from time to time, or may be eliminated provided that the Employee is
treated the same as other employees similarly situated. In addition, subject to
eligibility for good health, the Company will procure a $1,000,000.00 term
insurance policy on the life of Employee payable to Employee's designated
beneficiaries, and the Company shall pay all premiums necessary to maintain such
life insurance policy for so long as Employee remains employed by the Company.
(g) Business Expenses. The Company shall reimburse the Employee
for all reasonable expenses incurred in the furtherance of the Company's
business and interests, including travel and entertainment. The Employee agrees
to comply with the expense reporting policies and procedures of the Company.
5. TERMINATION. This Agreement shall or may be terminated, as the case may
be, upon the terms and conditions hereinafter provided.
(a) Severance Payment.
(i) In the event of termination of Employee's employment
by the Company for reasons other than as set forth in Paragraph 5(c) or in the
event of termination of Employee's employment by Employee for "good reason", the
Employee shall receive severance pay in an amount equal to two year's base
salary. This severance payment shall be paid as a lump sum not later than five
(5) business days after the date of Employee's termination or resignation. Upon
termination of employment by the Company as specified in this Paragraph 5(a)(i),
in addition to any vested options Employee may otherwise be entitled to upon the
date of notice of his termination with the Company, Employee shall be entitled
to exercise any remaining portion of the unvested option shares subject to any
stock options granted to the Employee that would have vested in the next twelve
(12) calendar months following the date of notice of termination of employment.
For purposes of this Paragraph 5(a)(i), "good reason" shall mean a substantial
reduction in Employee's duties and responsibilities for the Company, or a
substantial reduction in
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Employee's salary, or if Employee is asked to relocate more than fifty (50)
miles from the Raleigh-Cary metropolitan area.
(ii) In the event of termination of Employee's employment
by the Company for reasons set forth in Paragraph 5(c) other than conviction of
a crime against the Company or an employee of the Company, the Employee shall
receive severance pay in an amount equal to one hundred fifty thousand dollars
($150,000). This severance payment shall be paid as a lump sum not later than
five (5) business days after the date of Employee's termination.
(iii) In the event of termination of Employee's employment
by the Company for conviction of a crime against the Company or an employee of
the Company, the Employee shall receive no severance payment.
(iv) In the event of termination of Employee's employment
by the Employee other than for "good reason," the Employee shall receive
severance pay in an amount equal to three (3) months' salary. This severance
payment shall be paid as a lump sum not later than five (5) business days after
the date of Employee's resignation.
(v) In the event of death of the Employee, any severance
pay due to the Employee shall be payable to the Employee's estate.
(b) Voluntary Termination. Subject to the provisions of Paragraph
5(a), this Agreement may be voluntarily terminated by either party with thirty
(30) days' prior written notice provided to the other party.
(c) Involuntary Termination. The Company may terminate this
Agreement immediately upon written notice to the Employee (or his
representative) in any of the following events: (i) in the event of death of the
Employee; (ii) in the event that the Employee becomes permanently disabled; or
(iii) "for cause" which shall include material breach of the terms of this
Agreement; material breach of the Special Terms of Employment Agreement
(described in Section 6 below); material failure by the Employee to comply with
the policies or directives of the Board of Directors; any illegal or dishonest
action by the Employee that is materially detrimental to the Company; or
material failure to faithfully carry out the duties of his position, provided
that, in any such case, the Company shall provide at least thirty (30) days'
written notice of such breach or failure to perform during which time the
Employee will be given an opportunity to remedy the situation; or (iv)
conviction of Employee of a crime against the Company or an employee of the
Company.
For purposes of this Agreement, the Employee shall be considered permanently
disabled when a qualified medical doctor mutually acceptable to the Company and
the Employee or his personal representative shall have certified in writing
that: (i) he is unable because of medically determinable physical or mental
disability to perform substantially all of his duties for more than one hundred
eighty (180) calendar days measured from the last full day of work; or (ii) by
reason of mental or physical disability, it is unlikely that he will be able,
within one hundred eighty
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(180) calendar days, to resume substantially all business duties and
responsibilities in which he was previously engaged and otherwise discharge his
duties under this Agreement.
Notwithstanding any termination of this Agreement, the continuing obligations
and restrictions imposed on Employee pursuant to this Agreement, including
without limitation pursuant to Paragraph 6 of this Agreement, shall survive
termination of this Agreement and shall exist in accordance with the terms of
this Agreement and that Paragraph.
6. NON-DISCLOSURE, INVENTION, AND NON-COMPETITION. The Employee shall
execute the Company's standard non-disclosure, invention, and non-competition
agreement (sometimes also referred to as Special Terms and Conditions), which
are hereby made a part of this Agreement as Exhibit B attached hereto.
7. NOTICES. Any notice required to be given shall be in writing personally
delivered by certified mail or registered mail or overnight courier or by
facsimile (receipt confirmed) to the address last shown in the Company's
records.
8. REFORMATION/SEVERABILITY. If any provision of this Agreement shall for
any reason be adjudged by any court of competent jurisdiction to be illegal,
invalid or otherwise unenforceable, such judgment shall not affect, impair or
invalidate the remainder of this Agreement but shall be confined in its
operation to the provision of this Agreement directly involved in the
controversy in which such judgment shall have been rendered. The invalid or
unenforceable provision shall be reformed so that each party shall have the
obligation to perform reasonably alternatively to give the other party the
benefit of its bargain. In the event the invalid or unenforceable provision
cannot be reformed, the other provisions or applications of this Agreement shall
be given full effect, and the invalid or unenforceable provision shall be deemed
struck.
9. GOVERNING LAW. This Agreement shall be governed by and construed
according to the laws of the State of North Carolina, without reference to the
choice of law provisions of such laws.
10. ENTIRE AGREEMENT. This Agreement contains the entire agreement of the
parties relating to the subject matter hereof, and the parties hereto have made
no agreements, representations, or warranties relating to the subject matter of
this Agreement which are not set forth herein. No modification of this Agreement
shall be valid unless made in writing and signed by the parties hereto.
11. BENEFIT. This Agreement shall be binding upon and shall inure to the
benefit of each of the parties hereto, and to their respective representatives.
This Agreement shall be binding upon the Company and upon any successor Company.
The Employee may not assign any of his rights or obligations under this
Agreement without the prior written consent of the Board of Directors.
12. INJUNCTIVE RELIEF. The Employee understands and agrees that the Company
will suffer irreparable harm in the event that the Employee breaches any of his
obligations under this
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Agreement and that monetary damages will be inadequate to compensate the Company
for such breach. Accordingly, the Employee agrees that, in the event of a breach
or threatened breach by the Employee of any of the provisions of this Agreement,
the Company, in addition to and not in limitation of any other rights, remedies,
or damages available to the Company at law or in equity, shall be entitled to a
permanent injunction in order to prevent or to restrain any such breach by the
Employee, or by the Employee's partners, agents, representatives, servants,
employers, employees and/or any and all persons directly or indirectly acting
for or with him; provided such injunction shall not affect the Employee's
ownership rights in the Company or compensation earned or due the Employee.
13. WARRANTY BY EMPLOYEE. Employee represents and warrants that his
performance of all terms under this Agreement does not result in a breach of any
duty owed by Employee to another, under contract or otherwise, or violate any
confidence of another. Employee agrees not to disclose to Company or induce
Company to use any confidential or proprietary information belonging to any of
the Employee's previous employers or others. Employee warrants that Employee has
executed no prior noncompetition, nondisclosure or confidentiality agreements
that would in any way interfere with his work for or employment by Company.
IN WITNESS WHEREOF, the parties hereto have executed this Executive
Employment Agreement and affixed their seals as of the day and year first above
written.
SIGNATURES:
MOBILE REACH TECHNOLOGIES, INC.
/S/ Xxxxxxx X. Xxxxxx By: /S/ Xxxx X. Xxxxx
--------------------- --------------------------------------
Xxxxxxx X. Xxxxxx Xxxx X. Xxxxx, Vice President, Secretary
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EXHIBIT A
Specific Duties, President and Chief Executive Officer.
The Corporation engages and employees the Employee, and the Employee agrees
that the duties of this position include, but are not limited to:
1. Primary responsibility for setting and achieving the Company's
business strategy;
2. Primary responsibility for developing and managing the Company's
operating budget;
3. Raise capital for the Company, serve as primary contact and chief
translator of the Company strategy and value for investment banking
community, analysts, private investors, and other potential sources of
revenue or financial support;
4. Manage key executives of the Company, and provide guidance and
development to their staffs;
5. Lead the effort to attract, recruit, retain, and motivate key
management staff and employees; and
6. Report to the Board of Directors and Chairman, and attend meetings of
the Board of Directors of the Company.
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