EMPLOYMENT AGREEMENT
Agreement made this 6th day of December, 1996, by and between
The Network Connection, Inc., with offices located at 0000 Xxxxx Xxxx
Xxxx, Xxxxxxxxxx, XX, 00000 (the Company), and Xxxxx X. Xxxxxxx
residing at 00000 Xxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxx 00000 (the
Employee).
W I T N E S S E T H:
WHEREAS, Company is desirous of employing Employee as
General Counsel and Corporate Secretary of Company, and Employee
is desirous of committing himself to serve Company in such capacities,
all upon the terms and subject to the conditions hereinafter provided.
NOW, THEREFORE, in consideration of the mutual covenants
and agreements herein contained, the parties hereto, intending to be
legally bound, agree as follows:
1. Employment..
Company agrees to employ Employee, and employee agrees to be
employed by Company, upon the terms and subject to the conditions of
this Agreement.
2. Term.
The employment of Employee by Company as provided in Section
1 will be for a period commencing on December 6, 1996 and ending
on December 6, 1999, unless sooner terminated as hereinafter set forth
(the Term).
3. Duties: Best Efforts: Indemnification.
Employee shall serve as General Counsel and Secretary of the
Company, subject only to the directions from the Chairman, Chief
Executive Officer, Vice Chairman, President, Chief Financial Officer
and Board of Directors of Company. Subject only to the directions of
those identified in the preceding sentence, Employee shall have
supervision and control over, and sole responsibility for the legal, risk
management and human resource affairs of the Company as well as
Secretarial responsibilities as defined in the Companys Bylaws, and
shall have such powers and duties as may be from time to time
prescribed by the Board of Directors of Company, provided that the
nature of Employees powers and duties so prescribed shall not be
inconsistent with Employees position and duties set forth herein.
Employee shall devote all of his business time, attention and
energies to the business and affairs of Company, shall use his best
efforts to advance the best interests of Company and shall not during
the Term be actively engaged in any other business activity, whether or
not such business activity is pursued for gain, profit or other pecuniary
advantage. The Employee shall expend his best efforts on behalf of the
Company and abide by all reasonable Company policies now or
hereafter existing.
Subject to the provisions of Companys Certificate of Incorporation
and Bylaws, each as amended from time to time, Company shall
indemnify Employee to the fullest extent permitted by the General
Corporation Law of the State of Georgia, as amended from time to
time, for all amounts ( including without limitation, judgments, fines,
settlement payments, expenses and attorneys fees) incurred or paid by
Employee in connection with any action, suit, investigation or
proceeding arising out of or relating to the performance by Employee
of services for, or the acting by Employee as a director, officer or
employee of, Company, or any other person or enterprise at
Companys request. Company shall obtain and maintain in full force
and effect during the Term, directors and officers liability insurance
policies providing full and adequate protection to Employee acting
within his capacities for the Company.
4. Place of Performance.
In connection with his employment by Company, Employee shall be
based at the principal manufacturing facility of Company located at
0000 Xxxxx Xxxx Xxxx, Xxxxxxxxxx, Xxxxxxx 00000 (the Offices), and
Employee shall have discretion regarding his absence therefrom on
travel status or otherwise during any calendar year. Employee shall not
be required to move his present residence in order to perform the
services contemplated hereby. Subject to the foregoing, in connection
with any relocation of the Offices or transfer consented to by
Employee, Company will promptly pay (or reimburse Employee for)
all reasonable moving and moving related expenses incurred by
Employee as a consequence of a change of his principal residence in
connection with any such transfer or relocation of the Offices.
5. Compensation.
(a) Base Salary. Company shall pay to Employee a base salary (the
Base Salary) at a rate of not less than Seventy thousand dollars
($70,000) per annum, payable in equal semi-monthly installments
during the Term. The Board of Directors of the Company, at least
annually, will review the Base Salary and other compensation during
the Term with a view toward the increase thereof based upon
Employees performance, the performance of Company, inflation, then
prevailing industry salary scales and other relevant factors. The Base
Salary provided hereunder, as may be increased by the Board of
Directors of Company from time to time, shall not be reduced without
Employees consent.
(b) Out-of-Pocket Expenses. Company shall promptly pay to
Employee the reasonable expenses incurred by him in the performance
of his duties hereunder, including, without limitation, those incurred in
connection with business related travel or entertainment, or, if such
expenses are paid directly by Employee, Company shall promptly
reimburse Employee for such payment, provided that Employee
properly accounts therefor in accordance with Companys written
policy.
(c) Participation in Benefit Plans. Employee shall be entitled to
participate in or receive benefits under any pension plan, profit sharing
plan, stock option plan, stock purchase plan or arrangement, health and
accident plan or any other employee benefit plan or arrangement made
available by Company to its executives and key management
employees.
(d) Vacation. Employee shall be entitled to paid vacation days in
each calendar year as determined by Company from time to time, but
not less than three (3) weeks in any calendar year, prorated in any
calendar year during which Employee is employed hereunder for less
than entire year in accordance with the number of days in such year
during which Employee is so employed. Employee shall also be
entitled to all paid holidays given by Company to its executives and
key management employees.
(e) Other Benefits. In addition to the other benefits specified
pursuant to this Section 5, Company shall provide Employee with an
automobile allowance of $400.00 per month to be used to meet the
costs of operating an automobile for business use.
(f) Incentive Compensation. The Company may also pay to
Employee other incentive compensation as may be set by the Board of
Directors from time to time to reflect Employees contribution to the
financial goals of the Company.
6. Termination.
Employees employment hereunder shall be terminated upon
Employees death and may be terminated as follows:
(a) Effective upon the giving of written notice by the Board of
Directors of Company to Employee in the event that Employee
hereafter (i) shall willfully fail to comply with any of the material terms
of this Agreement, (ii) shall fail to perform his duties hereunder, (iii)
shall be diagnosed with chronic alcoholism or any other form of
addiction which substantially impairs the Employees ability to
perform his duties hereunder, or (iv) shall willfully engage, in his
capacity as an executive or officer of Company, in gross misconduct
injurious to the Company, and a vote to such effect shall have been
adopted by not less than a majority of the directors (including
Employee) then in office of Company, after reasonable notice to
Employee and an opportunity for him to be heard before such Board.
For purposes of this Section 6(a), no act, or failure to act, on
Employees part shall be considered willful unless done, or omitted
to be done, by Employee not in good faith and without reasonable
belief that his action(s) or omission(s) were in the best interests of
Company.
(b) Upon not less than sixty (60) days written notice by the Board
of Directors of Company to Employee in the event that (i) the Board
shall have received a written statement from a reputable independent
physician to the effect the Employee shall have become so
incapacitated as to be unable to resume, within the ensuing twelve (12)
months his employment hereunder by reason of physical or mental
illness or injury, or (ii) Employee shall not have substantially
performed his duties hereunder for six (6) consecutive months
(exclusive of any vacation permitted under Section 5 (d) hereof) by
reason of any such physical or mental illness.
(c) If, within thirty (30) days after any notice of termination
pursuant to Sections 6(a) or 6(b) hereof is given, Employee informs
Company in writing that a dispute exists concerning such termination,
such termination shall be deemed to have occurred only upon the date
on which such dispute is finally resolved. During the pendency of any
such dispute and until such dispute is finally resolved, Company shall
continue to pay Employee the Base Salary in effect at the date of such
notice of termination pursuant to Section 6(a) or 6(b). If such dispute
results in a final determination to the effect that Company did not have
a proper basis for such termination, Company shall promptly pay to
Employee any other payments to which Employee would have been
entitled to receive had Employees employment hereunder not been
improperly terminated, and if such dispute results in a final
determination to the effect that Company did have a proper basis for
such termination, the Base Salary pursuant to the preceding sentence
shall cease and terminate upon the date of such final determination.
(d) In the event of the termination of Employees employment
pursuant to Section 6(b) hereof, for the longer of one year following
any such termination or the balance of the Term (as if such termination
had not occurred), Company shall (i) continue to pay Employee the
Base Salary in effect at the time of such
termination less the amount, if any, then payable to Employee under
any disability benefits of Company,
(ii) pay to Employee at the end of the fiscal year in which his
termination occurred, the amount which would have been payable to
Employee pursuant to Companys bonus pool, if any, for the entire
year in which such termination occurred pro-rated to the effective date
of termination and (iii) maintain at its expense, all major medical and
other health, accident, life or other disability plans and programs in
which Employee participated immediately prior to such termination.
(e) In the event of the termination of Employees employment as a
result of Employees death, Company shall (i) for the longer of (X) one
year following Employees death or (Y) the balance of the Term (as if
such termination had not occurred), continue to pay to Employees
estate Employees Base Salary in effect at the time of such termination,
(ii) pay to Employees estate at the end of the fiscal year in which
Employees death occurred, the amount which would have been
payable to Employee pursuant to Companys bonus pool, if any, for the
entire fiscal year in which his death occurred pro-rated to the date of
his death, and (iii) for the longer of one year following Employees
death or the balance of the Term (as if such termination had not
occurred), maintain, at Companys expense, for the continued benefit
of Employees family, all major medical and other health, accident, life
or other disability plans and programs in which Employee participated
immediately prior to his death. Company shall also pay to Employees
heirs a lump-sum death benefit equal to 50% of any key employee life
insurance obtained by Company on the life of Employee.
7. Severance.
Upon (i) the acquisition by any person (as such term is defined in
sections 13 (d) and 14 (d) (2) of the Securities Exchange Act of 1934,
as amended), directly or indirectly of securities of Company
representing 51% or more combined voting power of Companys then
outstanding securities, (ii) the future disposition by Company (whether
direct or indirect, by sale of assets or stock, merger, consolidation or
otherwise) of all or substantially all of its business and/or assets in a
transaction to which Employee does not consent, (iii) the breach by
Company of its material obligations under this Agreement, or (iv) the
termination of this Agreement by Company for any reason other than
(X) that specified in Section 6 (a) hereof or (Y) by mutual agreement of
Company and Employee (such events being hereinafter collectively
referred to as a Severance Event), Employee shall have the right to
terminate this Agreement within ten (10) days after the occurrence of
such Severance Event. Upon the effective date of such termination,
Employee shall be entitled to receive a lump sum severance amount
equal to the sum of (I) the greater of (x) the present value of his Base
Salary in effect at the time of Severance Event for one year or (y) the
present value of his Base Salary in effect at the time of the Severance
Event for the remainder of the Term (as if such termination had not
occurred) plus (II) the estimated amount which would have been
payable to Employee pursuant to Companys bonus pool, if any, for
the fiscal year during which such termination occurred, as determined
in good faith by the Board of Directors of Company based upon
Companys results of operations for the fiscal year through the
effective date of the termination and its historical results of operations
and pro-rated to the effective date of termination. In addition, for the
longer of one year following any such termination or the balance of the
Term (as if such termination had not occurred), Company shall
maintain, at Companys expense, major medical and other health,
accident, life or other disability plans or programs in which Employee
participated immediately prior to such termination. For purposes of
this Agreement, the present value of Employees Base Salary shall be
based upon an interest rate of ten percent (10%) per annum. Employee
shall not be required to mitigate the amount of the termination payment
provided pursuant to this Section 7, nor will such payment be reduced
by reason of Employees securing other employment.
8. Covenant Regarding Inventions and Copyrights; Protection of
Confidential Information.
The Employee Invention, Non-Disclosure and Non-Solicitation
Agreement dated September 24, 1996 between Company and
Employee (the NDA Agreement) is incorporated herein by reference.
9. Disputes.
If Company or Employee shall dispute any termination of
Employees employment hereunder or if a dispute concerning any
payment hereunder shall exist:
(a) either party shall have the right (but not the obligation), in
addition to all other rights and remedies provided by law, to compel
arbitration of the dispute in Xxxxxx County, Georgia, under the rules of
the American Arbitration Association by giving written notice of
arbitration to the other party within thirty (30) days after notice of such
dispute has been received by the party to whom notice has been given;
and
(b) if such dispute (whether or not submitted to arbitration pursuant
to Section 9 (a) hereof) results in a determination that (i) Company did
not have the right to terminate Employees Employment under the
provisions of this Agreement or (ii) the position taken by Employee
concerning payments to Employee is correct, Company shall promptly
pay, or if theretofore paid by Employee, shall promptly reimburse
Employee for, all costs and expenses (including attorneys fees)
reasonably incurred by Employee in connection with such dispute.
10. Successors; Binding Agreement.
(a) In the event of a future disposition by Company (whether direct
or indirect, by sale of assets or stock merger, consolidation or
otherwise) of all or substantially all of its business and/or assets in a
transaction to which Employee consents, Company will require any
successor, by agreement in form and substance satisfactory to
Employee, to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that Company would be
required to perform if no such disposition had taken place.
(b) This Agreement and all rights of Employee hereunder shall
inure to the benefit of, and be enforceable by, Employees personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If Employee should die while any
amount would still be payable to him hereunder if he had continued to
live, all such amounts, unless otherwise provided herein, shall be paid
in accordance with the terms of this Agreement to Employees estate.
11. Notices.
All notices, consents or other communications required or permitted
to be given by any party hereunder shall be in writing (including
telecopy or other similar writing) and shall be given by personal
delivery, certified or registered mail, postage prepaid, or telecopy (or
other similar writing) as follows:
To Company: To
Employee:
The Network Connection Xxxxx
X. Xxxxxxx
0000 Xxxxx Xxxx Xxxx 00000
Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Xxxxxxxxxx, Xxxxxxx 00000
Attn: CEO
or at such other address or telecopy number (or other similar number)
as either party may from time to time specify to the other. Any notice,
consent or other communication required or permitted to be given
hereunder shall have been deemed to be given on the date of mailing,
personal delivery or telecopy or other similar means (provided the
appropriate answer back is received) thereof and shall be conclusively
presumed to have been received on the second business day following
the date of mailing or, in the case of personal delivery or telecopy or
other similar means, the day of delivery thereof, except that a change
of address shall not be effective unit actually received.
12. Modifications and Waivers.
No term, provision or condition of this Agreement may be modified
or discharged unless such modification or discharge is authorized by
the Board of Directors of Company and is agreed to in writing and
signed by Employee and Company. No waiver by either party hereto
of any breach by the other party hereto of any term, provision or
condition of this Agreement to be performed by such other party shall
be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time.
13. Entire Agreement.
This Agreement constitutes the entire understanding between the
parties hereto relating to the subject matter hereof, superseding all
negotiations, prior discussions, preliminary agreements and agreements
relating to the subject matter hereof made prior to the date hereof.
14. Governing Law.
Except as otherwise explicitly noted, this Agreement shall be
governed by and construed in accordance with the laws of the State of
Georgia (without giving effect to conflicts of law).
15. Invalidity.
Except as otherwise specified herein, the invalidity or
unenforceability of any term or terms of this Agreement shall not
invalidate, make unenforceable or otherwise affect any other term of
this Agreement which shall remain in full force and effect.
16. Headings.
The headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT
THEY HAVE READ AND UNDERSTAND THIS AGREEMENT
AND AGREE TO BE BOUND BY ITS TERMS.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year set forth above.
Company:
Employee:
By:_____________________________
By:_________________________________
Title: Chairman and CEO
Xxxxx X. Xxxxxxx
