EXHIBIT 10.2
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is made as of February
1st, 2006, by and between Trinity Learning Corporation, a Utah corporation
(the "Company"), and Xxxxxxx Xxxxx, an individual (the "Executive").
Certain definitions are set forth in Section 4 of this Agreement.
In consideration of the mutual covenants contained herein and
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties to this Agreement hereby agree as
follows:
1. Employment.
(a) Position and Duties. The Company agrees to employ Executive
and Executive accepts such employment for the period beginning as of the
date hereof and ending upon termination pursuant to Section 1(c) hereof
(the "Employment Period"). Executive shall serve as a Vice President
Finance and Chief Financial Officer of the Company and shall have all of
the duties, powers and responsibilities customarily delegated and assigned
therewith, subject to the management and control of the Company's Board of
Directors (the "Board").
(b) Compensation.
(i) Salary. During the Employment Period, the Company will
pay Executive a base salary (the "Annual Base Salary") of $187,000 per
annum (payable semi-monthly) or such other higher rate as the Board
may designate from time to time. The Board will review Executive's
Annual Base Salary at least once during each calendar year, beginning
with calendar year 2007. Executive's Annual Base Salary for any
partial year will be prorated based upon the number of days elapsed in
such year.
(ii) Bonus. Within the first forty-five (45) days of the
date hereof, the Board will determine a bonus plan for Executive,
which shall be effective for calendar year 2006 and all subsequent
calendar years of the Company (and portions thereof) during the
Employment Period. The bonus plan shall take into account the
proposed budget for the applicable year and other reasonable
objectives determined by the Board. Upon completion of calendar year
2006 and each subsequent calendar year of the Company, the Board will
award a bonus to Executive an amount to be determined in accordance
with the bonus plan criteria, giving effect to the Company's
achievement of the budgetary and other reasonable objectives
identified in the bonus plan for the applicable calendar year (the
"Annual Bonus").
(iii) Benefits. During the Employment Period, Executive
will be entitled to such disability insurance, health insurance, and
other benefits as are commensurate for similarly situated employees as
determined from time to time by the Board. Executive shall also be
entitled to a car allowance of $1000 per month and four (4) weeks paid
vacation per calendar year.
(iv) Moving Expenses. If Executive is required to relocate
to a new geographic region in connection with his employment
hereunder, the Company will reimburse Executive for all reasonable
moving and relocation expenses.
(v) Option to Purchase Shares. During calendar year 2006,
the Company shall issue to Executive an option to purchase up to
250,000 shares of the Company's common stock. Such option shall vest
over a three-year period and the terms and conditions of such option
shall be governed by a stock option agreement to be executed by the
parties and in accordance with the Company's 2002 Stock Plan, as
amended. Executive shall receive additional options to acquire a like
number of shares of common stock during each subsequent calendar year
of employment.
(c) Term and Termination. The Employment Period will commence
on the execution date hereof and continue until December 31, 2007 (the
"Term") unless earlier terminated pursuant to the first to occur of (i)
Executive's resignation, death or Disability (as defined in Section 4,
below), or (ii) termination by the Company with or without Cause (as
defined in Section 4, below). The Term may be extended upon the written
agreement of the Company and Executive.
(d) Severance.
(i) Termination Without Cause, or for Death or Disability.
If Executive's employment is terminated by the Company without Cause,
or for death or Disability prior to the end of the Term, then the
Company shall pay Executive each month a payment, equal to his monthly
salary (based on his Annual Base Salary), for a six (6) month period
with the first payment beginning one month after the date of
termination of employment (the "Severance Payments"). The Company
shall also allow Executive to continue participating in all of the
Company's medical, disability and life insurance plans on the same
basis as he was participating prior to termination (e.g., if his
participation was at the Company's sole expense prior to termination,
it will be at the Company's sole expense during the severance period),
but only to the extent permitted by the Company's insurance carriers
at a cost not materially in excess of the Company's cost for such
insurance immediately prior to the date of termination. In addition,
the Company shall pay Executive the portion of the Annual Bonus
attributable to any calendar year of the Company (or portion thereof)
accrued through the date of termination. Executive shall be entitled
to exercise his outstanding stock options that he has in accordance
with the Company's Stock Option Plan. Any Advisory Agreement between
the Company and Executive shall remain in effect in accordance with
its terms.
(ii) Resignation. If Executive's employment is
terminated due to Executive's resignation, then Executive shall be
entitled to receive his Annual Base Salary plus any accrued leave
through the date of termination. All of Executive's rights to Annual
Base Salary and benefits hereunder which accrue or become payable
after the date of such termination of the Employment Period shall
cease upon such termination. All of Executive's rights to the Annual
Bonus which accrue or become payable before or after the date of such
resignation shall terminate and cease upon such resignation.
Executive shall be entitled to retain all stock options he has in
accordance with the Company's Stock Option Plan. Any Advisory
Agreement between the Company and Executive shall remain in effect in
accordance with its terms.
(iii) Termination With Cause. If Executive's employment
is terminated by the Company with Cause, then Executive shall be
entitled to receive his Annual Base Salary through the date of
termination. All of Executive's rights to receive any other
compensation or benefits from the Company shall cease on the date of
termination.
2
2. Confidential Information. Executive acknowledges that the
confidential or proprietary information, observations and data of the
Company obtained by him during the course of his performance under this
Agreement concerning the business and affairs of the Company and its
Affiliates are the property of the Company, including information
concerning acquisition opportunities in or reasonably related to the
Company's business or industry of which Executive becomes aware during the
Employment Period. Therefore, Executive agrees that he will not disclose
to any unauthorized person outside the ordinary course of business or use
for his own account any of such information, observations or data without
the Board's written consent, unless and to the extent that the
aforementioned matters become generally known to and available for use by
the public other than as a result of Executive's acts or omissions to act.
Executive agrees to deliver to the Company at the termination of the
Employment Period, or at any other time the Company may reasonably request
in writing, all memoranda, notes, plans, records, reports and other
documents (and copies thereof) relating to the business of the Company and
its Affiliates (including, without limitation, all acquisition prospects,
lists and contact information) which he may then possess or have under his
control.
3. Noncompetition and Nonsolicitation.
(a) Noncompetition. Executive acknowledges that in the course
of his employment with the Company he will become familiar with the
Company's trade secrets and with other confidential information concerning
the Company and that his services will be of special and unique value to
the Company. Therefore, Executive agrees that, during the Employment
Period and for six months after the payment by the Company of any Severance
Payments (the "Noncompete Period"), he shall not directly or indirectly
own, manage, control, participate in, consult with, render services for, or
in any manner engage in any business that provides products or services
similar or identical to those provided by the Company or any of its
Affiliates at the time of such termination.
(b) Nonsolicitation. During the term of the Employment Period
and the Noncompete Period, Executive shall not directly or indirectly
through another entity (i) induce or attempt to induce any employee of the
Company or any of its Affiliates to leave the employ of the Company or any
of its Affiliates, or in any way interfere with the relationship between
the Company or any of its Affiliates and any such employee thereof, (ii)
hire or engage, or offer to hire or engage, any employee of the Company or
any of its Affiliates, or (iii) induce or attempt to induce any customer,
supplier, licensee or other business relation of the Company or any of its
Affiliates to cease doing business with the Company or such Affiliate, or
in any way interfere with the relationship between any such customer,
supplier, licensee or business relation and the Company or any of its
Affiliates.
3
(c) Enforcement. If, at the time of enforcement of Section 2 or
3 of this Agreement, a court holds that the restrictions stated herein are
unreasonable under circumstances then existing, the parties hereto agree
that the maximum duration, scope or geographical area reasonable under such
circumstances shall be substituted for the stated period, scope or area and
that the court shall be allowed to revise the restrictions contained herein
to cover the maximum duration, scope and area permitted by law. Because
Executive's services are unique and because Executive has access to
confidential information, the parties hereto agree that money damages would
be an inadequate remedy for any breach of this Agreement. Therefore, in
the event a breach or threatened breach of this Agreement, the Company or
its successors or assigns may, in addition to other rights and remedies
existing in their favor, apply to any court of competent jurisdiction for
specific performance and/or injunctive or other relief in order to enforce,
or prevent any violations of, the provisions hereof (without posting a bond
or other security).
4. Definitions.
"Affiliate" of any particular person or entity means any other
person or entity controlling, controlled by or under common control with
such particular person or entity. For purposes of this Agreement,
Affiliates of the Company include, without limitation, all subsidiaries of
the Company and any companies that it shall hereafter acquire.
"Cause" means (i) the conviction of a felony or a crime involving
moral turpitude or the commission of any act constituting intentional
dishonesty or fraud with respect to the Company or any of its Affiliates or
any of their customers or suppliers, (ii) intentional conduct tending to
bring the Company or any of its Affiliates into substantial public disgrace
or disrepute, (iii) substantial and repeated material failure to perform
duties of the office held by Executive as reasonably directed by the Board,
and such failure is not cured within 30 days after Executive receives
written notice thereof from the Board, (iv) recklessness or willful
misconduct with respect to the Company or any of its Affiliates, or (v) any
material breach of Section 2 or 3 of this Agreement.
"Disability" means the inability, due to illness, accident,
injury, physical or mental incapacity or other disability, of Executive to
carry out effectively his duties and obligations to the Company or to
participate effectively and actively in the management of the Company for a
period of at least 90 days (whether or not consecutive) during any 180-day
period, as determined in the reasonable judgment of the Board after receipt
of competent medical advice.
"Person" means an individual, a partnership, a limited liability
company, a corporation, an association, a joint stock company, a trust, a
joint venture, an unincorporated organization and a governmental entity or
any department, agency or political subdivision thereof.
5. Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly
given or made as of the date delivered if delivered personally or by
telecopy or seven (7) days after being mailed by registered or certified
mail (postage prepaid, return receipt requested) to the parties at the
following addresses (or at such other address for a party as shall be
specified by like notice, except that notices of changes of address shall
be effective upon receipt):
4
If to the Company:
Trinity Learning Corporation
0000 Xxxxxxxxxxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Attention: Chief Executive Officer
Telephone: ______________
Facsimile: _______________
If to Executive:
Xxxxxxx Xxxxx
_______________
_______________
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
6. General Provisions.
(a) Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or unenforceability
will not affect any other provision or any other jurisdiction, but this
Agreement will be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision had never been contained
herein.
(b) Complete Agreement. This Agreement, the exhibits
attached hereto, those documents expressly referred to herein and other
documents executed by the Company and Executive of even date herewith embody
the complete agreement and understanding among the parties and supersede and
preempt any prior understandings, agreements or representations by or among
the parties, written or oral, which may have related to the subject matter
hereof in any way.
(c) Counterparts. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which
taken together constitute one and the same agreement.
(d) Successors and Assigns. Except as otherwise provided
herein, this Agreement shall bind and inure to the benefit of and be
enforceable by Executive, the Company, and their respective successors and
assigns; provided that the rights and obligations of Executive under this
Agreement shall not be assignable.
(e) Choice of Law. All questions concerning the
construction, validity and interpretation of this Agreement and any exhibits
hereto will be governed by and construed in accordance with the internal laws
of the State of Utah, without giving effect to any choice of law or conflict
of law provision or rule (whether of the State of Utah or any other
jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Utah. Any suit or action brought by the
Company or by Executive shall be brought in the State of Utah.
5
(f) Remedies. Each of the parties to this Agreement will be
entitled to enforce its rights under this Agreement specifically, to recover
damages and costs (including attorney's fees) caused by any breach of any
provision of this Agreement and to exercise all other rights existing in its
favor. The parties hereto agree and acknowledge that money damages may not
be an adequate remedy for any breach of the provisions of this Agreement and
that any party may in its sole discretion apply to any court of law or equity
of competent jurisdiction (without posting any bond or deposit) for specific
performance and/or other injunctive relief in order to enforce or prevent any
violations of the provisions of this Agreement.
(g) Amendment and Waiver. The provisions of this Agreement
may be amended and waived only with the prior written consent of the Company
and Executive.
[Remainder of this page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have executed this
Employment Agreement on the date first written above.
TRINITY LEARNING CORPORATION
By:
Its:
XXXXXXX XXXXX
