EMPLOYMENT AGREEMENT
This Employment Agreement (this "AGREEMENT") is made as of August 3, 2000 by
CYNET, INC., a Texas corporation (the "EMPLOYER"), and XXXX X. XXXXXXXXX, an
individual resident of the State of Texas (the "EXECUTIVE").
INTRODUCTION
Employer, directly or through one or more subsidiaries, is engaged in
the business of providing convergent messaging, web development and design,
wireless and other related services. The Employer desires to employ the
Executive, and the Executive wishes to accept such employment, upon the terms
and conditions set forth in this Agreement.
The parties, intending to be legally bound, agree as follows:
Section 1. DEFINITIONS. For the purposes of this Agreement, the
following terms have the meanings specified or referred to in this Section 1.
1.1 "AFFILIATE" OR "AFFILIATES" -- any Person that, directly or
indirectly, controls, or is controlled by or under common control with, the
Employer, including the Employer. For the purposes of this definition, "CONTROL"
(including the terms "CONTROLLED BY," AND " UNDER COMMON CONTROL WITH") means
the power to direct or cause the direction of the management and policies of any
Person, directly or indirectly, through ownership of voting securities, by
contract, or otherwise.
1.2 "AGREEMENT" - this Employment Agreement, as amended from time to
time.
1.3 "BASIC COMPENSATION" -- Salary and Benefits.
1.4 "BENEFITS" -- as defined in Section 3. 1 (c).
1.5 "BOARD OF DIRECTORS" -- the board of directors of the Employer.
1.6 "CONFIDENTIAL INFORMATION " -- any and all:
(a) trade secrets concerning the business and affairs
of Employer or any Affiliate, product specifications, data,
know-how, formulae, compositions, processes, designs,
sketches, photographs, graphs, drawings, samples, inventions
and ideas, past, current, and planned research and
development, current and planned manufacturing or distribution
methods and processes, customer lists, current and anticipated
customer requirements, price lists, market studies, business
plans, data bases, computer software and programs (including
object code and source code), computer software and database
technologies, systems, structures, and architectures (and
related formulae, compositions, processes,
improvements, devices, know-how, inventions, discoveries,
concepts, ideas, designs, methods and information), and any
other information, however documented, that is a trade secret
within the meaning of the common law of the State of Texas,
and
(b) information concerning the business and affairs
of Employer or any Affiliate (which includes historical
financial statements, financial projections and budgets,
historical and projected sales, marketing and customer data,
capital spending budgets, acquisition prospects and plans, the
names and backgrounds of key personnel, personnel training and
techniques and materials), however documented; and
(c) notes, analysis, compilations, studies,
summaries, and other material prepared by or for any Affiliate
containing or based, in whole or in part, on any information
included in the foregoing.
1.7 "DISABILITY" -- as defined in Section 5.2.
1.8 "EFFECTIVE DATE" -- the date stated in the first paragraph of the
Agreement.
1.9 "EMPLOYEE INVENTION" -- any idea, invention, technique,
modification, process, or improvement (whether patentable or not), any
industrial design (whether registerable or not), any mask work, however fixed or
encoded, that is suitable to be fixed, embedded or programmed in a semiconductor
product (whether recordable or not), and any work of authorship (whether or not
copyright protection may be obtained for it) created, conceived, or developed by
the Executive, either solely or in conjunction with others, during the
Employment Period, or a period that includes a portion of the Employment Period,
that relates in any way to, or is useful in any manner in, the business then
being conducted or proposed to be conducted by the Employer or the Affiliates,
and any such item created by the Executive, either solely or in conjunction with
others, following termination of the Executive's employment with the Employer,
that is based upon or uses Confidential Information.
1.10 "EMPLOYMENT PERIOD" -- the term of the Executive's employment
under this Agreement.
1.11 "FISCAL YEAR" -- the Employer's fiscal year, as it exists on the
Effective Date or as changed from time to time.
1.12 "FOR CAUSE" -- as defined in Section 5.3.
1.13 "INCENTIVE COMPENSATION" -- as defined in Section 3.2.
1.14 "OPTION PLAN" -- the CYNET, Inc. Stock Incentive Option Plan.
1.15 "NONINCENTIVE COMPENSATION" -- as defined in Section 3.3.
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1.16 "PERSON" -- any individual, general or limited partnership, joint
venture, corporation (including any non-profit corporation), limited liability
company, bank, estate, trust, association, entity, unincorporated organization,
or government body.
1.17 "POST-EMPLOYMENT PERIOD" -- as defined in Section 7.2.
1.18 "PROPRIETARY ITEMS" -- as defined in Section 6.2(a)(iv).
1.19 "SALARY" -- as defined in Section 3.1(a).
1.20 "GUARANTEED FIRST YEAR BONUS" -- as defined in Section 3.1(b).
Section 2. EMPLOYMENT TERM AND DUTIES.
2.1 EMPLOYMENT. The Employer hereby employs the Executive, and the
Executive hereby accepts employment by the Employer, upon the terms and
conditions set forth in this Agreement.
2.2 TERM. Subject to the provisions of Section 5, the term of the
Executive's employment under this Agreement will be one (1) year, beginning on
the Effective Date and ending on the third anniversary of the Effective Date.
Thereafter, the term may continue at will upon the mutual agreement of the
Executive and the Employer.
2.3 DUTIES. The Executive will have such duties as are assigned or
delegated to the Executive by the Chairman, President or Executive Vice
President of the Company (which duties shall be of a senior management or
executive level) and will initially serve as Vice President, Chief Technical
Officer. The Executive will devote substantially all of his entire business
time, attention, skill, and energy exclusively to the business of the Employer,
will use his best efforts to promote the success of the Employer's business, and
will cooperate fully with the Senior Management and Board of Directors in the
advancement of the best interests of the Employer. For the Executive's service
as a director of the Employer or officer of any of its Affiliates, the Executive
will fulfill his duties as such director or officer without additional
compensation.
Section 3. COMPENSATION.
3.1 BASIC COMPENSATION.
(a) SALARY. The Executive will be paid an annual
salary of $175,000.00, subject to adjustment as provided below
(the "SALARY"), which will be payable in equal periodic
installments according to the Employer's customary payroll
practices, but no less frequently than monthly. The Salary
will be reviewed by the Board of Directors not less frequently
than annually, and may be adjusted upward or downward in the
sole discretion of the Board of Directors, but in no event
will the Salary be less than $175,000.00 per year.
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(b) GUARANTEED FIRST YEAR BONUS. In order to induce
the Executive to accept employment with the Employer, the
Employer agrees to pay the Executive a bonus of $100,000.00
("GUARANTEED FIRST YEAR BONUS"). Subject to the Executive's
employment by the Employer, such bonus shall be paid to the
Executive $50,000.00 upon signing of this Agreement;
$25,000.00 on or about February 5, 2001 and $25,000.00 on the
first anniversary of the execution of this Agreement, unless
Executive, at his sole discretion, grants Employer an
extension of time to pay the Guaranteed First Year Bonus. Any
additional bonus to be paid to the Executive by the Employer
after completion of the one-year term of this Agreement is to
be determined by the Compensation Committee of the Board,
based on corporate performance, such bonus not to be less than
$50,000.00.
(c) BENEFITS. The Executive will, during the
Employment Period, be permitted to participate in such
pension, profit sharing, bonus, life insurance,
hospitalization, major medical, and other employee benefit
plans of the Employer that may be in effect from time to time,
to the extent the Executive is eligible under the terms of
those plans (collectively, the "BENEFITS").
3.2 INCENTIVE COMPENSATION. As additional compensation (the "INCENTIVE
COMPENSATION"), for the services to be rendered by the Executive pursuant to
this Agreement, the Executive will be entitled to receive such Incentive
Compensation as may be determined by the Board of Directors.
3.3 NONINCENTIVE COMPENSATION. As additional compensation (the
"NONINCENTIVE COMPENSATION") for the services to be rendered by the Executive
pursuant to this Agreement, the Executive shall be granted an incentive stock
option to purchase 650,000 shares of Class A Common Stock, at an exercise price
per share based on the Market Price of such stock on the date of execution of
this Agreement, under the Option Plan. Employer shall cause to be issued a Stock
Option Agreement reflecting the date of grant as August 3, 2000. The options
associated with this grant shall vest ratably over a three (3) year period as
follows: 25% vesting upon signing of the contract; 25% vesting at the end of
year 1; 25% vesting at the end of year 2; and 25% vesting at the end of year 3.
3.4 OTHER COMPENSATION. As additional compensation for the services to
be rendered by the Executive pursuant to this Agreement, the Executive shall be
entitled to a car allowance of $600.00 per month.
3.5 VACATIONS AND HOLIDAYS. The Executive will be entitled to paid
vacation each Fiscal Year in accordance with the vacation policies of the
Employer in effect for its executive officers from time to time which vacation
shall not be less than three (3) weeks. Vacation must be taken by the Executive
at such time or times as approved by the Chairman of the Board of Directors,
President or Executive Vice President. The Executive will also be entitled to
the paid holidays and other paid leave set forth in the Employer's policies.
Vacation days and holidays during any Fiscal Year that are not used by the
Executive during such Fiscal Year may not be
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used in any subsequent Fiscal Year without prior written approval of the Chief
Executive Officer, but Executive shall be paid at the end of each Fiscal Year
for any vacation days which Executive was unable to use as a result of a request
for approval of a vacation having been denied by the Chairman of the Board of
Directors, President or Executive Vice President.
Section 4. FACILITIES AND EXPENSES.
Section 4.1 FACILITIES AND EXPENSES. The Employer will furnish the
Executive office space, equipment, supplies, and such other facilities and
personnel as the Employer deems necessary or appropriate for the performance of
the Executive's duties under this Agreement and as are commensurate, with
Executive's duties under Section 2.3. The Employer will pay the Executive's dues
in such professional societies and organizations as the Chairman of the Board of
Directors of the Employer deems appropriate, and will pay on behalf of the
Executive (or reimburse the Executive for) reasonable expenses incurred by the
Executive at the request of, or on behalf of, the Employer in the performance of
the Executive's duties pursuant to this Agreement, and in accordance with the
Employees employment policies, including reasonable expenses incurred by the
Executive in attending conventions, seminars, and other business meetings, in
appropriate business entertainment activities, and for promotional expenses. The
Executive must file expense reports with respect to such expenses in accordance
with the Employer's policies.
Section 5. TERMINATION.
5.1 EVENTS OF TERMINATION. The Employment Period, the Executive's Basic
Compensation, Incentive Compensation, Nonincentive Compensation, and any and all
other rights of the Executive under this Agreement or otherwise as an employee
of the Employer will terminate (except as otherwise provided in this Section 5).
(a) upon the death of the Executive;
(b) upon the Disability of the Executive (as defined
in Section 5.2) immediately upon notice from either party to
the other;
(c) for cause (as defined in Section 5.3),
immediately upon notice from the Employer to the Executive, or
at such later time as such notice may specify, or
(d) upon Executive's voluntary termination of
employment, which termination shall be effective thirty (30)
days after Employer's receipt of Executive's written
resignation.
5.2 DISABILITY For purposes of this Section 5, the Executive will be
deemed to have a "DISABILITY", if, for physical or mental reasons, the Executive
is unable to perform the Executive's duties under this Agreement for 120
consecutive days, or 180 days during any twelve month period, as determined in
accordance with this Section 5.2. The Disability of the
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Executive will be determined by a medical doctor selected by written agreement
of the Employer and the Executive upon the request of either party no notice to
the other. If the Employer and Executive cannot agree on the selection of a
medical doctor then the two medical doctors will select a third medical doctor
who will determine whether the Executive has a Disability. The determination of
the medical doctor selected under this Section 5.2 will be binding on both
parties. The Executive must submit to a reasonable number of examinations by the
medical doctor making the determination of Disability under this Section 5.2,
and the Executive hereby authorizes the disclosure and release to the Employer
of such determination and all supporting medical records. If the Executive is
not legally competent, the Executive's legal guardian or duly authorized
attorney-in-fact will act on behalf of the Executive, under this Section 5.2,
for the purposes of submitting the Executive to the examinations, and providing
the authorization of disclosure, required under this Section 5.2.
5.3 FOR CAUSE. For purposes of Section 5.1, the phrase "FOR CAUSE"
means (a) the Executive's breach of a material provision of this Agreement,
which breach is not substantially cured within thirty (30) days after receipt of
written notice thereof from Employer; (b) the Executive's repeated failure to
adhere to any written Employer policy and Executive's failure to cure such
noncompliance within thirty (30) days after receipt of written notice hereof
from Employer; (c) the appropriation (or attempted appropriation) of a material
business opportunity of the Employer, including attempting to secure or securing
any personal profit in connection with any transaction entered into on behalf of
the Employer; (d) the misappropriation (or attempted misappropriation) of any of
the Employer's funds or property; or (e) the conviction of, the indictment for
(or its procedural equivalent), or the entering of a guilty plea or plea or no
contest with respect to, a felony or the equivalent thereof.
5.4 TERMINATION PAY. Effective upon the termination of this Agreement,
the Employer will be obligated to pay the Executive (or, in the event of his
death, his designated beneficiary as defined below) only such compensation as is
provided in this Section 5.4, and in lieu of all other amounts and in settlement
and complete release of all claims the Executive may have against the Employer
under this Agreement. For purposes of this Section 5.4, the Executive's
designated beneficiary will be such individual beneficiary or trust, located at
such address, as the Executive may designate by notice to the Employer from time
to time or, if the Executive fails to give notice to the Employer of such a
beneficiary, the Executive's estate. Notwithstanding the preceding sentence, the
Employer will have no duty, in any circumstances, to attempt to open an estate
on behalf of the Executive, to determine whether any beneficiary designated by
the Executive is alive or to ascertain the address of any such beneficiary, to
determine the existence of any trust, to determine whether any person or entity
purporting to act as the Executive's personal representative (or the trustee of
a trust established by the Executive) is duty authorized to act in that
capacity, or to locate or attempt to locate any beneficiary, personal
representative, or trustee.
(a) TERMINATION BY THE EMPLOYER FOR CAUSE. If the
Employer terminates this Agreement for Cause, the Executive
will be entitled to receive his Salary or Benefits through the
date such termination is effective and the vested portion of
any Incentive Compensation and any Nonincentive Compensation.
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(b) TERMINATION AND DISABILITY. If this Agreement is
terminated by either party as a result of the Executive's
Disability, as determined under Section 5.2, the Employer will
pay the Executive his Salary and Benefits through the
remainder of the calendar month during which such termination
is effective and for the lesser of (i) six consecutive months
thereafter, or (ii) the period until Disability insurance
benefits commence under the Disability insurance coverage, if
any, furnished by the Employer to the Executive. The Executive
shall be entitled to the vested portions of his Incentive
Compensation and Nonincentive Compensation and to a pro rata
portion of his Incentive Compensation and Nonincentive
Compensation for the year during which such Disability occurs,
but shall not be entitled to any other Incentive Compensation
or Nonincentive Compensation. Executive shall be entitled to
continue to participate in Employer's group health insurance
(if such participation is permitted by the insurance company
providing such insurance coverage) after Disability occurs,
provided Executive reimburses Employer for the costs of such
coverage, Executive shall also be entitled to acquire from
Employer any life insurance policy in effect on Executive's
life at the date of Disability, provided Executive reimburses
Employer the cash surrender value, if any, accumulated in such
life insurance policy and assumes the obligation to make
payments to maintain such insurance policy in effect.
(c) TERMINATION UPON DEATH. If this Agreement is
terminated because of the Executive's death, the Executive
will be entitled to receive his Salary and Benefits through
the end of the calendar month in which his death occurs. The
Executive shall be entitled to receive the vested portions of
his Incentive Compensation and Nonincentive Compensation and
to a pro rata portion of his Incentive Compensation and
Nonincentive Compensation for the year during which the
Executive's death occurs, but shall not be entitled to any
other Incentive Compensation or Nonincentive Compensation for
any subsequent year. Executive's family shall be entitled to
continue to participate in Employer's group health insurance
(if such participation is permitted by the insurance company
providing such insurance coverage) after Executive's occurs,
provided Executive's family reimburses Employer for the costs
of such coverage.
(d) TERMINATION UPON RESIGNATION. If this Agreement
is terminated because of the voluntary resignation of the
Executive hereunder, the Executive shall be entitled to
receive his Salary and Benefits through the effective date of
his termination and any vested portions of his Incentive
Compensation or Nonincentive Compensation. The Executive shall
not be entitled to any other Incentive Compensation or to any
other Nonincentive Compensation.
(e) TERMINATION BY THE EMPLOYER NOT FOR CAUSE. If the
Employer terminates this Agreement not for cause, the
Executive, at the option of the Executive, will be entitled to
either: (i) receive all of the compensation and
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Benefits provided by Section 3. 1, and the Incentive
Compensation provided by Section 3.2 and the Nonincentive
Compensation provided by Section 3.3 for the remainder of the
Employment Term, and the Executive shall be subject to the
provisions of Section 7.2 hereof, or (ii) the Executive shall
be entitled to receive all of the compensation and Benefits
provided by Section 3.1 and the vested portions of any
Incentive Compensation provided by Section 3.2 and
Nonincentive Compensation provided by Section 3.3 through the
end of the calendar month in which such termination occurs,
and the Executive shall not be subject to the provisions of
Section 7.2.
(f) BENEFITS. The Executive's accrual of, or
participation in plans providing for, the Benefits will cease
at the effective date of the termination of this Agreement,
and the Executive will be entitled to accrued Benefits
pursuant to such plans only as provided in such plans. The
Executive will not receive, as part of his termination pay
pursuant to this Section 5, any payment or other compensation
for any holiday, sick leave, or other leave unused on the date
the notice of termination is given under this Agreement.
5.5 TERMINATION BY EXECUTIVE. This Agreement may be terminated by
Executive, by written notice to Employer, in the event of the Employer's breach
of a material provision of this Agreement, which breach is not substantially
cured within thirty (30) days after Employer's receipt of written notice thereof
from Executive, If this Agreement is terminated by Executive as a result of
Employer's breach, Executive shall not be subject to the provisions of Section
7.2 hereof.
5.6 [Intentionally omitted.]
Section 6. NON-DISCLOSURE COVENANT; EMPLOYEE INVENTIONS.
6.1 ACKNOWLEDGMENTS BY THE EXECUTIVE. The Executive acknowledges that
during the Employment Period and as a part of his employment, the Executive will
be afforded access to Confidential Information; public disclosure of such
Confidential Information could have an adverse effect on the Employer and its
business; because the Executive possesses substantial technical expertise and
skill with respect to the Employer's business, the Employer desires to obtain
exclusive ownership of each Employee Invention, and the Employer will be at a
substantial competitive disadvantage if it fails to acquire exclusive ownership
of each Employee Invention; and the provisions of this Section 6 are reasonable
and necessary to prevent the improper use or disclosure of Confidential
Information and to provide the Employer with exclusive ownership of all Employee
Inventions.
6.2 AGREEMENTS OF THE EXECUTIVE. In consideration of the compensation
and benefits to be paid or provided to the Executive by the Employer under this
Agreement, the Executive covenants as follows:
(a) CONFIDENTIALITY.
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(i) During and for a period of two (2) years
following the Employment Period, the Executive will
hold in confidence the Confidential Information and
will not disclose it to any person except with the
specific prior written consent of the Employer or
except as otherwise expressly permitted by the terms
of this Agreement.
(ii) Any trade secrets of any Affiliate will
be entitled to all of the protections and benefits
under the common law of the State of Texas and any
other applicable law. If any information that the
Employer deems to be a trade secret is found by a
court of competent jurisdiction not to be a trade
secret for purposes of this Agreement, such
information will, nevertheless, be considered
Confidential Information for purposes of this
Agreement. The Executive hereby waives any
requirement that the Employer submit proof of the
economic value of any trade secret or post a bond or
other security.
(iii) None of the foregoing obligations and
restrictions applies to any part of the Confidential
Information that the Executive demonstrates either
(x) was known by Executive prior to the date of his
employment by the Employer, (y) was or became
generally available to the public other than as a
result of a disclosure by the Executive, or (z) was
made known to Executive on a nonconfidential basis
from a source other than Employer or its
representatives or agents, provided that such source
is not bound by a confidentiality agreement with, or
other obligation of secrecy to, Employer or another
party.
(iv) The Executive will not remove from the
premises of the Employer or any Affiliate (except to
the extent such removal is for purposes of the
performance of the Executive's duties at home or
while traveling, or except as otherwise specifically
authorized by the Employer or such Affiliate) any
document, record, notebook, plan, model, component,
device, or computer software or code, whether
embodied in a disk or in any other form
(collectively, the "PROPRIETARY ITEMS"). The
Executive recognizes that, as between the Employer or
any Affiliate and the Executive, all of the
Proprietary Items, whether or not developed by the
Executive, are the exclusive property of the Employer
or the Affiliates. Upon termination of this Agreement
by either party, or upon the request of the Employer
or any Affiliate during the Employment Period, the
Executive will return to the Employer or the
Affiliates all of the Proprietary Items in the
Executive's possession or subject to the Executive's
control, and the Executive shall not retain any
copies, abstracts, sketches, or other physical
embodiment of any of the Proprietary Items.
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(b) EMPLOYEE INVENTIONS. Each Executive Invention
will belong exclusively to the Employer. The Executive
acknowledges that all of the Executive's writing, works of
authorship, specially commissioned works, and other Employee
Inventions are works made for hire and the property of the
Employer, including any copyrights, patents, or other
intellectual property rights pertaining thereto. If it is
determined that any such works are not works made for hire,
the Executive hereby assigns to the Employer all of the
Executive's right, title, and interest, including all rights
of copyright, patent, and other intellectual property tights,
to or in such Employee Inventions. The Executive covenants
that he will promptly:
(i) disclose to the Employer in writing any
Employee Invention,
(ii) assign to the Employer or to a party
designated by the Employer, at the Employer's request
and without additional compensation, all of the
Executive's right to the Employee Invention for the
United States and all foreign jurisdictions,
(iii) execute and deliver to the Employer
such applications, assignments, and other documents
as the Employer may request in order to apply for and
obtain patents or other registrations with respect to
any Employee Invention in the United States and any
foreign jurisdictions;
(iv) sign all other papers necessary to
carry out the above obligations, and
(v) give testimony and render any other
assistance in support of the Employer's rights to any
Employee Invention.
6.3 DISPUTES OR CONTROVERSIES. The Executive recognizes that should a
dispute or controversy arising from or relating to this Agreement be submitted
for adjudication to any court, arbitration panel, or other third party, the
preservation of the secrecy of Confidential Information may be jeopardized. All
pleadings, documents, testimony, and records relating to any such adjudication
will be maintained in secrecy and will be available for inspection by the
Employer, the Executive, and their respective attorneys and experts, who will
agree, in advance and in writing, to receive and maintain all such information
in secrecy, except as may be limited by them in writing,
Section 7. Non-competition and Non-Interference.
7.1 ACKNOWLEDGEMENTS BY THE EXECUTIVE. The Executive acknowledges and
agrees that the limitations set forth in this Section 7 are a necessary part of
and ancillary to the Executive's agreement not to disclose Confidential
Information, reasonable and do not impose a
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greater restraint on the activities of the Executive than is necessary to
protect the business interest of the Employer, In the event that any such
territorial, scope, or time limitation are deemed to be unreasonable by a court
of competent jurisdiction, the Executive agrees to the reduction of the
territorial, scope or time limitation to the area, scope or time which such
court shall have deemed reasonable.
7.2 COVENANTS OF THE EXECUTIVE. In consideration of the acknowledgments
by the Executive, and in consideration of the compensation and benefits to be
paid or provided to the Executive by the Employer in the event this Agreement is
terminated pursuant to Section 5.4(a), 5.4(d) or 5.4(e)(i), the Executive
covenants that he will not, directly or indirectly:
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(d) at any time during or after the Employment
Period, disparage the Employer or any of its shareholders,
directors, officers, employees, or agents.
For purposes of this Section 7.2, the term 'POST-EMPLOYMENT PERIOD"
means the two-year period beginning on the date of termination of the
Executive's employment with the Employer.
If any covenant in this Section 7.2 is held to be unreasonable,
arbitrary, or against public policy, such covenant will be considered to be
divisible with respect to scope, time, and geographic area, and such lesser
scope, time, or geographic area, or all of them, as a court of competent
jurisdiction may determine to be reasonable, not arbitrary, and not against
public policy, will be effective, binding, and enforceable against the
Executive.
The Executive will, while the covenant under this Section 7.2 is in
effect, give notice to the Employer, within ten days after accepting any other
employment, of the identity of the Executive's new employer. The Employer may
notify such new employer that the Executive is bound by this Agreement.
Notwithstanding the foregoing to the contrary, the Executive will not
be subject to any covenant under this Section 7.2 in the event:
(i) the term of the Executive's employment
under this Agreement is not renewed pursuant to
Section 2.2; or
(ii) Employer voluntarily files a bankruptcy
or insolvency proceeding (or an involuntary
bankruptcy or insolvency proceeding is filed against
Employer, which proceeding has not been dismissed
within ninety (90) days from the filing thereof).
Section 8. General Provisions.
8.1 REMEDIES FOR BREACH. The Executive acknowledges that the injury
that would be suffered by the Employer as a result of a breach of the provisions
of this Agreement (including any provision of Sections 6 and 7) would be
irreparable and that an award of monetary damages to the Employer for such a
breach would be an inadequate remedy. Consequently, the Employer will have the
right, in addition to any other rights it may have, to obtain injunctive relief
to restrain any breach or threatened breach or otherwise to specifically enforce
any provision of this Agreement, and the Employer will not be obligated to post
bond or other security in seeking such relief Any such remedy shall be in
addition to any damages which the Employer may be legally entitled to recover as
a result of any breach by the Employee of any provision of this Agreement. The
Employer may pursue any of the remedies described in this Section 8 concurrently
or consecutively and in any order as to such breach or violation, and the
pursuit of any one of such remedies at any time will not be deemed an election
of remedies or a waiver of the right to pursue any other available remedy.
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8.2 ESSENTIAL AND INDEPENDENT COVENANTS. The covenants by the Executive
in Sections 6 and 7 are essential elements of this Agreement supported by the
payment of $1 0. 00 and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by Executive, and without the
Executive's agreement to comply with such covenants, the Employer would not have
entered into this Agreement or employed or continued the employment of the
Executive. The Employer and the Executive have independently consulted their
respective counsel and have been advised in all respects concerning the
reasonableness and propriety of such covenants, with specific regard to the
nature of the business conducted by the Employer.
8.3 REPRESENTATIONS AND WARRANTIES BY THE EXECUTIVE. The Executive
represents and warrants to the Employer that the execution and delivery by the
Executive of this Agreement do not, and the performance by the Executive of the
Executive's obligations hereunder will not, with or without the giving of notice
or the passage of time, or both: violate any judgment, writ, injunction, or
order of any court, arbitrator, or governmental agency applicable to the
Executive; or conflict with, result in the breach of any provisions of or the
termination of, or constitute a default under, any agreement to which the
Executive is a party or by which the Executive is or may be bound. The Executive
further represents and warrants to the Employer that no agreements or
understandings, whether written or oral, are currently in force and effect
between the Executive and the Employer, or any other Person concerning the
subject matter of this Agreement.
8.4 OBLIGATIONS CONTINGENT ON PERFORMANCE. The obligations of the
Employer hereunder, including its obligation to pay the compensation provided
for herein, are contingent upon the Executive's performance of the Executive's
obligations hereunder.
8.5 WAIVER. The rights and remedies of the parties to this Agreement
are cumulative and not alternative. Neither the failure nor any delay by either
party in exercising any right, power, or privilege under this Agreement will
operate as a waiver of such right, power, or privilege, and no single or partial
exercise of any such right, power, or privilege will preclude any other or
further exercise of such tight, power, or privilege or the exercise of any other
right, power, or privilege. To the maximum extent permitted by applicable law,
no claim or right arising out of this Agreement can be discharged by one party,
in whole or in part, by a waiver or renunciation of the claim or right unless in
writing signed by the other party; no waiver that may be given by a party will
be applicable except in the specific instance for which it is given; and no
notice to or demand on one party will be deemed to be a waiver of any obligation
of such party or of the right of the party giving such notice or demand to take
further action without notice or demand as provided in this Agreement.
8.6 NOTICES. All notices pertaining to this Agreement must be in
writing, must be sent to the addressee at the address set forth in this Section,
or at such other address as the addressee has designated by a notice given in
the manner set forth in this Section, and must be sent by telegram, telex,
facsimile, electronic mail, courier, or prepaid, certified U.S. Mail. Notices
will be deemed given when received, if sent by telegram, telex, electronic mail
or facsimile and if received between the hours of 8:00 a.m. and 5:00 p.m., local
time of the destination address, on a
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business day (with confirmation of completed transmission sufficing as prima
facie evidence of receipt of a notice sent by telex, telecopy, electronic mail,
or facsimile), and when delivered and receipted for (or when attempted delivery
is refused at the address where sent) if sent by courier or by certified U.S.
Mail. Notices sent by telegram, telex, electronic mail, or facsimile and
received between 12:01 a.m. and 7:59 a.m., local time of the destination
address, on a business day will be deemed given at 8:00 a.m., on that same day.
Notices sent by telegram, telex, electronic mail, or facsimile and received at a
time other than between the hours of 12:01 a.m. and 5:00 p.m., local time of the
destination address, on a business day will be deemed given at 8:00 a.m. on the
next following business day after the day of receipt. The addresses for notice
are as follows:
If to Employer: CYNET, Inc.
00000 Xxxxx Xxxx, Xxxxx 000 Xxxxxxx, Xxxxx 00000
Attention- General Counsel
Facsimile No.: (000) 000-0000
With a copy to: Chamberlain, Hrdlicka, White, Xxxxxxxx & Xxxxxx
0000 Xxxxx Xxxxxx, Xxxxx 0000 Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxxxx X. Spring, III
Facsimile No.: (000) 000-0000
and
If to the Executive: Xxxx X. Xxxxxxxxx
Pearland, Texas
8.7 BINDING EFFECT; DELEGATION OF DUTIES PROHIBITED. This Agreement
shall inure to the benefit of, and shall be binding upon, the parties hereto and
their respective successors, assigns, heirs, and legal representatives,
including any entity with which the Employer may merge or consolidate or to
which all or substantially all of its assets may be transferred. The duties and
covenants of the Executive under this Agreement, being personal, may not be
delegated.
8.8 INTERPRETATION. Whenever possible, each provision of this Agreement
shall be determination that any interpreted in such manner as to be effective
and valid under applicable law. A provision of this Agreement is unenforceable
or invalid shall not affect the enforceability or validity of any other
provision.
8.9 HEADINGS. The section headings appearing in this Agreement have
been inserted for convenience only and shall be given no substantive meaning or
significance whatever in construing the terms and provisions of this Agreement.
8.10 ENTIRE AGREEMENT. This Agreement constitutes the final and entire
agreement and understanding between the parties to this Agreement concerning the
subject matter of this Agreement, and this Agreement supersedes and replaces all
prior agreements and understandings,
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whether written or oral, between such parties concerning the subject matter of
this Agreement. No alleged representation, warranty, promise, inducement, or
statement of intention not expressly set forth in this Agreement is binding on
any party to this Agreement.
8.11 ACKNOWLEDGMENT AND RELEASE BY THE EXECUTIVE. By his execution of
this Agreement, the Executive acknowledges that this Agreement supersedes and
replaces all other agreements and understandings, whether written or oral,
between the Executive and any other Person concerning the subject matter of this
Agreement. In consideration for the rights and obligations arising under this
Agreement, the Executive hereby voluntarily, knowingly, fully, finally,
completely, and forever releases, relinquishes, and forever discharges the
Employer and its Affiliates, their officers, directors, employees, and agents,
from any and all claims, actions, demands, and causes of action of whatever kind
or character, whether known or unknown, joint or several, which the Executive
might have or might claim to have against the Employer for any and all injuries,
harm, damages, penalties, costs, losses, expenses, attorneys' fees, liabilities,
or other detriments, if any, whatsoever and whenever incurred, suffered, or
claimed by the Executive arising from any prior agreement or understanding,
whether written or oral, between the Executive and the Employer, or any other
Person concerning the subject matter of this Agreement,
8.12 GOVERNING LAW. This Agreement will be governed by the laws of the
State of Texas without regard to conflicts of laws principles.
8.13 JURISDICTION. Any action or proceeding seeking to enforce any
provision of, or based on any right arising out of, this Agreement may be
brought against either of the parties in the courts of the State of Texas,
County of Xxxxxx, or, if it has or can acquire jurisdiction, in the United
States District Court for the District of Texas, and each of the parties
consents to the jurisdiction of such courts (and of the appropriate appellate
courts) in any such action or proceeding and waives any objection to venue laid
therein. Process in any action or proceeding referred to in the preceding
sentence may be served on either party anywhere in the world.
9.0 SALE. In the event of a sale of the Company prior to the completion
of the vesting schedule all options vest one hundred percent (100%).
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
EMPLOYER:
CYNET, INC.
BY: /s/ XXXXXXX X. XXXXX, XX.
-------------------------------------
XXXXXXX X. XXXXX, XX., CHAIRMAN & CEO
EXECUTIVE:
BY: /s/ XXXX X. XXXXXXXXX
-------------------------------------
XXXX X. XXXXXXXXX
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