1
EXHIBIT 10.7
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made and entered into
this lst day of July, 1996, the "Effective Date," by and among Electronic
Transmission Corporation, a Texas corporation ("ETC"), and Xxxxxx X. Xxxxxx
("Xx. Xxxxxx").
ETC now desires to employ Xx. Xxxxxx as a programmer/analyst and for
systems support for ETC's Electra-Net and Xx. Xxxxxx desires to accept such
employment with ETC, all on the following terms and subject to the following
conditions.
NOW, THEREFORE, ETC and Xx. Xxxxxx hereby agree as follows.
1. Employment. ETC hereby employs Xx. Xxxxxx, and Xx. Xxxxxx hereby
accepts employment by ETC, for the term and compensation and subject to the
terms and conditions hereinafter set forth.
2. Duties of Xx. Xxxxxx. Xx. Xxxxxx shall serve as a
programmer/analyst and for systems support for Electra-Net, subject at all
times to the terms and conditions hereof and to the ultimate control and
direction of the President and the Board of Directors of ETC. Xx. Xxxxxx shall
not make any agreements, representations, or performance guarantees, or execute
or agree to any instruments or contracts, on behalf of ETC or any of its
subsidiaries or affiliates without prior consent of ETC's chief executive
officer or Board of Directors. During, the term of this Agreement, Xx. Xxxxxx
shall devote thirty (30) hours of his business week to the performance of the
duties and responsibilities contained in this Agreement. ETC recognizes that
Xx. Xxxxxx has other private clients for which he will be performing, services
and that he may use the office supplied by ETC for that purpose.
3. Compensation. As compensation for his services rendered to ETC in
the capacities set forth above, ETC shall pay to Xx. Xxxxxx a base salary of
five thousand dollars ($5,000) per month and he shall receive an incentive
attributable to his performance, the basis of which is to be determined within
thirty (30) days of the Effective Date of this agreement, which will be paid
retroactively to the Effective Date.
Xx. Xxxxxx will be given the option to purchase up to forty-five
thousand (45,000) shares of ETC stock at a price Of one dollar ($1.00) per one
thousand shares as follows. After one year of employment he may exercise his
option to purchase one-third (1/3) of the stock. After two
2
Employment Agreement Between ETC and Xxxxxx X. Xxxxxx Page 2
years of employment he may exercise his option to purchase an additional
one-third (1/3) of the shares. After three years of employment he may purchase
the final one-third (1/3) of the shares.
Should this Agreement be terminated without cause by
ETC, the liquidated damages shall be payment of ninety (90) days base salary
to Xx. Xxxxxx. If such termination occurs after six months employment of the
current year term, Xx. Xxxxxx may exercise his stock option for that year at
that time.
4. Benefits. During the term hereof, Xx. Xxxxxx shall be entitled to
participate in any benefit plans, stock option plans, and medical insurance
programs, provided by ETC on the same basis as other ETC employees including
COBRA benefits if necessary.
5. Reimbursement of Expenses. ETC shall reimburse Xx. Xxxxxx for all
expenses actually incurred by him in connection with ETC business, provided
that such expenses are reasonable and are in accordance with ETC policies. Such
reimbursement shall be made to Xx. Xxxxxx upon appropriate documentation of
such expenditures in accordance with ETC policies.
6. Term. The term of this Agreement shall be for the period commencing
on July 1, 1996, and ending on October 1, 1996, subject to earlier termination
as provided in Section 7. The term of this Agreement is automatically extended
for one-year periods thereafter unless either party gives the other ten days
notice prior to the expiration date.
7. Termination. This Agreement and Xx. Xxxxxx'x employment hereunder
shall terminate in the event of Xx. Xxxxxx'x death or if Xx. Xxxxxx becomes
permanently disabled as determined by the ETC board of Directors. This
Agreement and Xx. Xxxxxx'x employment hereunder may be terminated by ETC "for
cause" at any time the ETC Board of Directors determines, in the exercise of
its good faith judgment, that Xx. Xxxxxx has engaged in gross malfeasance or
willful misconduct in performing his duties hereunder and that his continued
employment by ETC no longer is in the best interests of ETC. Xx. Xxxxxx may
terminate this agreement at any time.
8. Noncompetition for Existing Clients After Termination. Xx. Xxxxxx
agrees, for a period of one year after the termination of this Agreement, not
to solicit, on his own behalf or on behalf of any future employer or other
entity, any business directly or indirectly related to the services and
products offered by ETC from any entity with which ETC or any of its
subsidiaries did business during the term The parties recognize that this
covenant not to compete for specified customers for a limited time period is an
integral part of this Agreement and that ETC would not enter into this
Agreement, or would do so only on the basis of decreased compensation to Xx.
Xxxxxx, without this covenant.
3
Employment Agreement Between ETC and Xxxxxx X. Xxxxxx
Page 3
9. Nondisclosure of Information and Trade Secrets. During his
employment hereunder and thereafter, Xx. Xxxxxx will not disclose to any person
or entity not directly connected with ETC, or use for his own benefit, any of
the trade secrets, financial information, systems, records, or business methods
of ETC or its subsidiaries or affiliates, or any of the business relationships
between ETC or its subsidiaries or affiliates and any of their business
partners or customers, unless such disclosure shall be in direct connection
with or a part of Xx. Xxxxxx'x performance of his duties hereunder. All
software development code written for ETC while Xx. Xxxxxx is employed by ETC
will be the intellectual property of ETC and will be protected by ETC
copyrights. The provisions of this section shall survive any termination of
this Agreement.
10. Notices. All notices hereunder shall be in writing and delivered
personally or sent by U.S. Mail or recognized courier service, addressed as
follows or to such other address for itself as any party may specify hereunder:
If to ETC Electronic Transmission Corporation
0000 Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Mr. L. Xxxx Xxxxxx,
Chief Executive Officer
If to Xx. Xxxxxx: Xx. Xxxxxx X. Xxxxxx
0000 Xxxxxxx Xx.
Xxxxx, Xxxxx 00000
11. Entire Agreement, Counterparts, Governing Law. This Agreement
expresses the complete understanding of the parties with respect to the subject
matter hereof, superseding all prior or contemporaneous understandings,
arrangements or agreements of the parties, and may be amended, supplemented,
or waived in whole or in part only by an instrument in writing executed by the
parties hereto. No party may assign this Agreement or its rights or obligations
hereunder without the written consent of all other parties hereto. Subject to
the foregoing, this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective heirs, administrators, successors, and
assigns. The headings herein are for convenience of reference only and shall
not affect the meaning or interpretation of this Agreement. This Agreement may
be executed in multiple counterparts, and by the parties in separate
counterparts, each of which shall be an original but all of which together
shall constitute one and the same instrument. This Agreement shall be governed
by and construed in accordance with the laws of the State of Texas.
4
Employment Agreement Between ETC and Xxxxxx X. Xxxxxx
Page 4
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
duly executed and delivered by its duly authorized representatives, on and
effective as of the Effective Date.
ELECTRONIC TRANSMISSION CORPORATION
By: /s/ L. XXXX XXXXXX
--------------------------------------
L. Xxxx Xxxxxx
President and Chief Executive Officer
Xx. Xxxxxx
/s/ XXXXXX X. XXXXXX
-------------------------------------------
Xxxxxx X. Xxxxxx
