EXHIBIT 10.3
EMPLOYMENT AGREEMENT BETWEEN
XXXXX XXXXXXX AND THE REGISTRANT
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is by and between One
Commerce Corporation, a Texas Corporation, ("Employer") and Xxxxx X. Xxxxxxx, an
individual residing in Comal County, Texas ("Employee"), and shall be effective
as of November 1, 1998
RECITALS:
WHEREAS, Employee desires to enter into the employment of Employer, and
Employer desires to employ Employee provided that, in so doing, it can protect
its confidential information, business, accounts, patronage and goodwill.
NOW, THEREFORE, in consideration of the foregoing recital and of the
mutual covenants set forth below, the parties hereto agree as follows:
1. EMPLOYMENT; TERMINATION.
1.1. Employer hereby hires Employee and Employee accepts
employment as President and Chief Executive Officer (CEO) for, a one (1) year
term, commencing November 1, 1998.
1.2. This Agreement shall be automatically renewed for
successive additional one (l) year terms unless either party gives the other at
least thirty (30) days written notice to any scheduled termination date of its
determination not to so renew this Agreement.
1.3. This Agreement shall be automatically terminated on the
death of Employee or on the permanent disability of Employee if he is no longer
able to perform in all material respects the usual and customary duties of his
employment hereunder. For the purposes hereof, any condition which in reasonable
likelihood is expected to impair Employee's ability to materially perform his
duties hereunder for a period of 30 days or more shall be considered to be
permanent.
1.4. Either Employer or Employee may terminate this Agreement
at any time, without cause, by giving the other thirty (30) days notice of his
or its intent to do so. Employer may elect, during such thirty (30) day period,
to relieve Employee of his regular duties.
1.5. In addition to Employer's right to terminate this
Agreement without cause pursuant to Section 1.4 hereof, Employer may terminate
this Agreement for cause if:
(a) in the opinion of the Board of Directors of
Employer, Employee has engaged in personal conduct or a breach of this
Agreement of such a serious nature as to render Employee's continued
employment detrimental to Employer;
(b) Employee is convicted of an offense constituting a
felony or involving moral turpitude; or
(c) in any material or substantial way, Employee (i)
violates any rule, regulation, practice or policy of the Employer; (ii)
violates any provision of this Agreement; (iii) is dishonest in the
performance of his duties hereunder or engages in a conflict of interest with
the Employer that is not fully disclosed to and approved by a majority of the
disinterested members of the Employer's Board of Directors; (iv) fails to
follow reasonable instructions or directions from the Board of Directors or
any person authorized by the Board of Directors to give such instructions; or
(v) fails to perform the services required of him pursuant to this Agreement.
A notice of termination pursuant to this Section 1.5
shall be in writing and shall state the alleged reason for termination.
Employee, within not less than fifteen (15) nor more than thirty (30) days after
such notice, shall be given the opportunity to appear before the Board of
Directors of the Employer, or a committee thereof, to rebut or dispute the
alleged reason for termination. If the Board of Directors or committee
determines, by a majority of the disinterested directors, after having given
Employee the opportunity to rebut or dispute the allegations, that such reason
is indeed valid, Employer may immediately terminate Employee's employment under
this Agreement for cause. Immediately upon giving the notice contemplated by
this paragraph, Employer may elect, during the pendency of such inquiry, to
relieve Employee of his regular duties. In the same written notice provided
pursuant to Section 1.5, Employer shall be authorized, in its discretion, to
provide that such notice is also given pursuant to Section 1.4 and commences the
thirty (30) day period contemplated thereby.
1.6. Upon termination, Employee shall be entitled to the
following:
(a) If this Agreement is terminated pursuant to
Section 1.3 as a result of Employee's death or disability, then Employer
shall pay Employee or his representative, as the case may be, Employee's
then-current base salary (excluding any bonuses and non-cash benefits) for a
period of sixty (60) days following the effective date of the termination,
(b) If this Agreement is terminated by Employer and
such termination is not for cause, Employee shall be entitled to the thirty
(30) day notice provided by Section 1.4, and to a two month salary
continuation (including any bonus and non-cash benefits) beyond the effective
date of the termination, for such period of months as, when added to the
ninety (90) day notice, will equal $50,000.00, whether or not Employer has
elected to relieve Employee of his regular duties pursuant to Section 1.4
above.
(c) If Employer terminates this Agreement for cause
pursuant to Section 1.5, Employee shall not be entitled to receive one half
of the compensation ($25,000.00) defined under 1.6 (b) beyond those bonus or
benefits earned or accrued as of the effective date of the termination.
1.7. Any termination of Employee's employment shall not
release either Employer or Employee from its or his respective obligations to
the date of termination nor from the provisions of Section 4 hereof.
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1.8. Upon Employee's termination of employment hereunder for
any reason, Employer agrees to use its best efforts to eliminate, or if full
elimination cannot be accomplished, to reduce to the greatest extent possible,
Employee's obligations under Employee's guaranty of any of Employer's
indebtedness.
2. DUTIES OF EMPLOYEE.
2.1. During the period of his employment, Employee shall
devote substantially his entire time and his best efforts to the business of
Employer for the profit, benefit and advantage of Employer, and shall perform
such other services as shall be designated, from time to time, by the Board
of Directors of Employer; provided, however, that this Section shall not be
construed as preventing Employee from investing his personal assets in
business ventures that do not compete with Employer, and spending reasonable
amounts of personal time in the management thereof. Employee shall use his
best efforts to promote the interests of Employer and to preserve Employer's
goodwill with respect to its employees, customers, suppliers and other
persons having business relations with Employer, accept and hold all such
offices and/or directorships to which he may, from time to time, be elected;
provided, however, that Employee shall be under no obligation to accept a
directorship with another entity at Employer's direction unless a valid and
effective Directors' and Officers' Liability Policy insuring Employee to the
full extent permitted by the Texas Business Corporation Act (the "Act") is
maintained in full force and effect at all times in accordance with Section 6
below.
2.2. Subject to the approvals by and the ultimate
supervision of the Employer's Board of Directors, Employee during the term
hereof shall serve as the President and CEO of the Employer and shall be a
member of the Board of Directors of the Employer. Subject to the control of
the Board of Directors and in compliance with its instructions and
directives, Employee, as the President of the Employer, shall have
responsibility for general supervision, direction, and control of the
business of the Employer. As CEO, he shall have the general powers and duties
of management usually vested in the office of CEO of a corporation and shall
have such other powers and duties as may be prescribed by the Board of
Directors.
3. SALARY; EXPENSE REIMBURSEMENTS.
3.1. As compensation for his service under and during the term
of this Agreement (or until terminated pursuant to the provisions hereof)
Employer shall pay Employee a salary of $130,000.00 per year, payable in
accordance with the regular payroll practices of the Employer, as in effect from
time to time. Such salary shall be subject to withholding for the prescribed
federal income tax, social security and other items as required by law and for
other items consistent with the Employer's policy with respect to health
insurance and other benefit plans for similarly situated employees in which
Employee may elect to participate.
3.2. During the term of this Agreement, Employee also shall be
entitled to receive such benefits as are made available to other personnel of
the Employer in comparable positions, with comparable service credit and with
comparable duties and responsibilities. Any benefits substantially in excess of
those granted other salaried employees of Employer shall be subject to the prior
approval of the Board of Directors.
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3.3. In the discretion of the Board of Directors of the
Employer, and without implying any obligation on Employer ever to award a bonus
to Employee, Employee may from time to time be awarded a cash bonus or bonuses
for services rendered to the Employer during the term of his employment under
this Agreement. Such bonuses shall be in accordance with a bonus plan, if any,
adopted from year to year by Employer but all such bonuses are entirely
discretionary with the Board of Directors. If and to the extent a bonus is ever
considered for Employee, it is expected that any such bonus will be based not
only on Employee's individual performance and his relative position, service
tenure and responsibilities with Employer, but also on the performance and
profitability of the entire business of Employer.
3.4. Employer shall reimburse all reasonable travel and
entertainment expenses incurred by Employee in connection with the performance
of his duties pursuant to this Agreement. Employee shall provide Employer with a
written monthly accounting of his expenses, on a form acceptable to Employer and
satisfying any applicable federal income tax reporting or record keeping
requirements within a reasonable time following the end of each month.
3.5. At 180 day intervals, the employer may review and
evaluate the employee's performance based on the company goals being reached,
and grant a 5% pay increase upon the approval and recommendation of the
compensation committee.
4. EMPLOYEE'S RESTRICTIVE COVENANTS. In consideration of the extended
employment of Employee hereunder, the increase in salary hereunder, the
agreement of Employer to seek Employee's release from certain of Employer's
indebtedness, the grant of options hereunder, and other good and valuable
consideration the receipt and sufficiency of which Employee hereby acknowledges,
Employee acknowledges and agrees that:
4.1. (a) In his position of employment, Employee will be
exposed to confidential information and trade secrets ("Proprietary
Information") pertaining to, or arising from, the business of Employer; that
such Proprietary Information is unique and valuable to Employer's business and
that Employer would suffer irreparable injury if this information were divulged
to those in competition with Employer. Therefore, Employee agrees to keep in
strict secrecy and confidence, both during, except as otherwise herein provided,
and after the period of his employment, any and all information which he
acquires, or to which he has access, during his employment by Employer, that has
not been publicly disclosed by Employer or that is not a matter of common
knowledge by Employer's competitors. The Proprietary Information covered by this
Agreement shall include, but shall not be limited to, information relating to
any inventions, processes, formulae, plans, devices, compilations of
information, technical data, mailing lists, distribution methods, names of
suppliers (of both goods and services) and customers, names of employees and
terms of employment, arrangements entered into with suppliers and customers,
including, but not limited to, proposed expansion plans of Employer, marketing
and other business and pricing strategies, trade secrets of Employer.
(b) Except with prior written approval of Employer,
either during or after Employee's employment hereunder, Employee will
neither: (i) directly or indirectly, disclose any Proprietary Information to
any person except authorized personnel of Employer; nor, (ii) use
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Proprietary Information in any way. Upon termination of employment, whether
voluntary or involuntary, within forty-eight (48) hours of termination,
Employee will return to Employer all documents, records or other
memorializations including copies of documents and any notes which he has
prepared, that contain Proprietary Information or relate to Employer's
business, and all of Employer's credit cards, keys, equipment, vehicles,
supplies and other materials that are in his possession or under his control.
4.2. (a) During the Employee's, employment hereunder and for
a period of one (1) year after he ceases to be employed by the Employer, the
Employee shall not, directly or indirectly, for his own account or otherwise (i)
solicit business from, divert business from, or attempt to convert to other
methods of using the same or similar products or services as provided by the
Employer, any client, account or location of the Employer with which the
Employee has had any contact as a result of his employment by the Employer
hereunder; or (ii) solicit for employment or employ any employee or former
employee of the Employer.
(b) For a period of one (1) years after the termination of the
Employees' employment hereunder, the Employee shall not, directly or indirectly,
as an officer, director, employee, consultant or otherwise in the geographic
market areas in which Employer's products or Services are sold, engage in the
business of developing, manufacturing, selling or leasing products actually
sold, or perform services actually provided, by Employer at the time of
termination.
4.3. Employee understands and acknowledges damages at law
alone will be an insufficient remedy for Employer and Employer will suffer
irreparable injury if Employee violates the terms of this Agreement.
Accordingly, Employer, upon application to a court of competent jurisdiction,
shall be entitled to injunctive relief to enforce the provisions of this
Agreement in the event of any breach, or threatened breach, of its terms
Employee hereby waives any requirement that Employer post bond or other security
prior to obtaining such injunctive relief. Injunctive relief may be sought in
addition to any other available rights or remedies at law. Employer shall
additionally be entitled to reasonable attorneys' fees incurred in enforcing the
provisions of this Agreement.
5. OWNERSHIP OF INVENTIONS AND COPYRIGHTS.
5.1. During the term of employment, every invention,
discovery, improvement, device, design, apparatus, practice, process, method
of production, whether patentable or not, made, developed, perfected,
devised, conceived or first reduced to practice by the Employee, either
solely or in collaboration with others, relating in any way to the business,
developments, products, or activities of the Employer ("Inventions") shall be
promptly disclosed to Employer and shall be Employer's sole and exclusive
property, except as may otherwise be required as provided in Section 5.4
below. The Employed shall hold all such Inventions in a fiduciary capacity
for the benefit of the Employer and shall promptly disclose in writing full
information concerning each Invention to the Employer. All Inventions claimed
to have been made or conceived by the Employee during the first sixty (60)
days following the termination of the Employee's employment and related to
the Employer's business shall be presumed to have been made or conceived
during the period of employment and shall be subject to the provisions of this
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Agreement unless the Employee can establish the contrary to the reasonable
satisfaction of the Employer or of a court of competent jurisdiction. All
writing or other works subject to copyright written by the Employee either
solely or in collaboration with others during the period of employment by the
Employer or at the Employer's facility and relating in any way to the
business developments, products or activities of the Employer (the
"Copyrights"), shall be the sole and exclusive property of the Employer,
except as provided in Section 5.4 below.
5.2. At the request of the Employer, during his employment and
for a one (1) year period thereafter and with reasonable compensation determined
by the Employer along with necessary expenses not covered by his salary that are
incurred by him in connection therewith, the Employee shall (a) assist the
Employer, its attorneys and nominees in preparing and prosecuting in the United
States and all foreign countries applications for patents covering all
Inventions, (b) execute, acknowledge and deliver any and all instruments
necessary to make, file, or prosecute all such patent applications, necessary in
connection with continuations, renewals or reissues of patents or patent
applications or necessary in the conduct of proceedings or litigations in regard
to patents or patent applications, (c) execute any and all instruments deemed by
the Employer, its attorneys or nominees to be necessary to transfer title in and
to applications or title in and to all patents covering Inventions to the
Employer or its nominees, (d) take the necessary steps to perfect copyright
rights in the Copyrights of registrations, and (e) assist the Employer, if
requested, to obtain reprints of the Copyrights for distribution.
5.3. The Employee shall keep complete, accurate and authentic
accounts, notes, data and records of Invention and Copyrights in the manner and
form requested by the Employer Such accounts, notes, data and records shall be
the property of the Employer and the Employee shall surrender the same to the
Employer upon request or termination of his employment.
5.4. The Employee acknowledges that (a) there are no
inventions of the Employee heretofore made or conceived by the Employee which
Employee deems to be excluded from the scope of this Agreement, except as set
forth and attached in Exhibit B, and (b) there are no writings or other works
written or produced by Employee which Employee deems to be excluded from the
scope of this Agreement except as set forth and attached in Exhibit B.
Employer hereby acknowledges and agrees that it shall have no claim for any
of the intellectual property rights, profits and other rights in the patents,
properties, business plans or other items listed in Exhibit B.
6. INDEMNITY; EMPLOYER'S MAINTENANCE OF DIRECTORS' AND OFFICERS'
LIABILITY INSURANCE. Employer shall indemnify Employee against all judgments,
penalties, fines, amounts paid in settlement and reasonable expenses actually
incurred by Employee in connection with any proceedings to which Employee
was, is or is threatened to be named a defendant, respondent or witness;
provided, however, that as a condition precedent to any such indemnification,
the disinterested members of Employer's Board of Directors shall reasonably
determine that Employee's conduct in question was acted upon in good faith
and that Employee was acting within the scope of Employee's authority of
Employer. Employer agrees that during the term hereof, it shall endeavor in
good faith and with reasonable diligence to obtain and maintain Directors'
and Officers' Liability Insurance providing for coverage of Employee to the
fullest
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extent provided under the Act in such amounts as Employer's Board of Directors
from time to time shall determine to be adequate to reasonably protect Employee
and Employer's other officers and directors in light of the nature of Employer's
business.
7. MISCELLANEOUS.
7.1. This Agreement is performable in COMAL County, Texas and
is governed by the laws of Texas; supersedes all prior understandings and
agreements between the parties and contains the entire understanding of the
parties hereto with respect to the subject matter hereof; and is binding upon
the parties hereto, their successors and permitted assigns. Employer may assign
its interest in this Agreement and all covenants, conditions and provisions
hereunder shall inure to the benefit of and be enforceable by its assignee or
successor in interest. The rights and obligations of Employee under this
Agreement are personal to him, and no such rights, benefits or obligations shall
be subject to voluntary or involuntary alienation, assignment or transfer,
except that his personal representatives, heirs and legatees may enforce the
obligation of the Company hereunder.
7.2. Any notices required or permitted hereunder shall be given in
writing either (a) through personal delivery by courier or otherwise, (b) by
telecopy or other electronic medium to be promptly followed by mailed notice
pursuant to Subsection (c) or (c) by deposit in United States mail, postage
paid, certified or registered mail, return receipt requested to the address
stated below or to such other address notice of which is given in accordance
with this Section 7.2:
If to Employer: One Commerce Corporation
000 XX 00 Xxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
If to Employee: Xxxxx X. Xxxxxxx
000 XX 00 Xxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Any such notice shall be deemed given five (5) business days following
its deposit in the United States mails.
7.3. If any provision of this Agreement is held by a
court of competent jurisdiction to be invalid, illegal or unenforceable, that
shall, in no way, affect the validity or enforceability of any other
provision of this Agreement and that provision shall be deemed modified to
the minimum extent necessary to render it valid, legal and enforceable.
7.4. No waiver by either the Employer or the Employee of a
breach of any provision of this Agreement shall operate as or be construed as a
waiver of any subsequent breach.
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