EXHIBIT 10.1
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated this 11th day of August, 1999, between
ebaseOne Corporation, a Delaware corporation, currently having its principal
place of business at 0000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxx 00000 (the "Company"),
and Xxxx Xxxxxxx Overstoltz (the "Executive") an individual currently residing
at 0000 Xxxxxxxxxxx, Xxxxxxx, Xxxxx 00000.
WHEREAS, the Company desires to employ Executive and Executive desires
to be employed by the Company, as Executive Vice President of the Company.
WHEREAS, the Executive is willing to enter into an agreement with the
Company upon the terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the premises and covenants herein
contained, the parties hereto agree as follows:
1. Term of Agreement. Subject to the terms and conditions hereof, the term of
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employment of the Executive under this Employment Agreement shall be for the
period commencing on the date hereof (the "Commencement Date) and terminating on
December 31, 2002, unless sooner terminated as provided in accordance with the
provisions of Section 5 hereof. (Such term of employment is herein sometimes
called the "Employment Term.")
2. Employment. As of the Commencement Date, the Company hereby agrees to
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employ the Executive as Executive Vice President of the Company, and the
Executive hereby accepts such employment and agrees to perform his duties and
responsibilities hereunder in accordance with the terms and conditions
hereinafter set forth.
3. Duties and Responsibilities; Board Membership.
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(a) Duties. Executive shall perform such duties as are usually performed by a
Executive Vice President of a business similar in size and scope as the
Company and such other reasonable additional duties as may be prescribed
from time-to-time by the Company's board of directors which are reasonable
and consistent with the Company's operations, taking into account
Executive's expertise and job responsibilities. This agreement shall
survive any job title or responsibility change agreed to by Executive.
Executive shall report directly to the board of directors of the Company
regarding implementation of all business matters. All actions of Executive
shall be subject and subordinate to the review and approval of the board of
directors. No other person or group shall be given authority to supervise
or direct Executive in the performance of his duties. The board of
directors shall be the final and exclusive arbiter of all policy decisions
relative to the Company's business.
(c) Devotion of Time. During the term of this agreement, Executive agrees to
devote sufficient time and attention during normal business hours to the
business and affairs of the company to the extent necessary to discharge
the responsibilities assigned to Executive and to use reasonable best
efforts to perform faithfully and efficiently such responsibilities. During
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term of this agreement it shall not be a violation of this agreement for
Executive to (i) serve on the boards of corporations or charitable
institutions (with the permission from the Company's board of directors);
(ii) deliver lectures, fulfill speaking engagements to teach at educational
institutions; (iii) manage personal investments or companies in which
personal investments are made so long as such activities do not
significantly interfere with the performance of Executive's
responsibilities with the Company and which companies are not in direct
competition with the Company. Any income received by Executive outside the
scope of his employment and permitted pursuant to the provisions hereof,
shall inure to the benefit of Executive, and the Company shall not claim
any entitlement thereto
4. Compensation and Benefits During the Employment Term:
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(a) Base Compensation. The Executive's base compensation from the Commencement
Date through December 31, 1999, shall be at the rate of $11,500 per month,
payable in regular semi-monthly installments in accordance with the
Company's practice for its executives, less applicable withholding for
income and employment taxes as required by law and other deductions as to
which the Executive shall agree. Executive acknowledges that initially such
base compensation may have to be accrued, based upon the Company's current
working capital. Thereafter, the Executive's base compensation shall be
$12,500 per month through December 31, 2000 and $18,750 per month through
the end of the term of this agreement.
(b) Bonus Compensation. In addition to the Executive's base compensation,
Executive will be entitled to a performance bonus as follows:
(i) Before December 31, 1999, the Executive has agreed to work toward
meeting the following objectives ("MBOs"): (i) raise working capital
necessary to begin implementation of the business plan; (ii) build an
enterprise center in Houston; (ii) secure agreements to host packaged
software applications under a subscription agreement or like
agreement with one or more vendors for sales force automation,
financial management, customer relationship management, human
resource management and electronic business; (iii) hire the necessary
personnel to execute the business plan; and (iv) secure initial
customers per the business plan. After December 31, 1999, the
Company's board of directors shall determine what material progress
the Executive has made toward meeting the above captioned MBOs and
shall pay the Executive a bonus of up to $28,000 based upon the
percentage of MBOs met. Said bonus shall be paid on or before the end
of January 2000.
(ii) If, no later than December 31, 2000, the Company successfully
implements and meets certain agreed upon milestones, as determined by
the Company's board of directors in January 2000, Executive will be
entitled to receive 50% of his then base salary rate. If the board of
directors is unable to agree on the milestones, the Executive will
receive the bonus in the event the Company attains $12 million in net
revenues for December 31, 2000, as determined by the Company's
independent auditors. In any event, the bonus shall be paid upon the
earlier of (x) 12 month financial statements filed with the
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Securities and Exchange Commission, or (y) March 31, 2001.
(iii) Subsequent bonuses will be determined by the board of directors.
(c) Warrants. The Executive will be entitled to receive five year warrants to
purchase an aggregate 3,000,000 shares of Company common stock having the
terms set forth in the warrant agreement attached hereto as Exhibit "A."
(d) Automobile Allowance. For the Employment Term, Executive shall be entitled
to receive an automobile allowance of $750 per month plus the operating
cost and insurance of such vehicle. The automobile allowance shall increase
yearly by $100 beginning each the 1/st/ of January. This vehicle may be
provided either as a company car or direct payment of the allowance at the
Executive's option.
(e) Expense Reimbursement. The Executive shall be entitled to reimbursement of
all reasonable, ordinary and necessary business related expenses incurred
by him in the course of his duties and upon compliance with the Company's
procedures.
(f) Participation in Employee Benefit Plans. Executive shall be entitled to
participate, subject to eligibility and other terms generally established
by the Company's board or directors, in any employee benefit plan
[including but not limited to life insurance plans, stock option plans,
group hospitalization, hearth, dental care (which health insurance shall
also cover Executive's dependents) profit sharing, pension and other
benefit plans], as may be adopted or amended by the Company from time-to-
time.
5. Termination. Subject to the notice and other provisions of this Section 5,
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the Company shall have the right to terminate the Executive's employment with
the Company, and the Executive shall have the right to resign from such
employment, at any time and for no stated reason.
(a) Disability. The Company shall have the right to terminate the employment
of the Executive under this Agreement for disability in the event Executive
suffers an injury, illness or incapacity as defined in the Company's Long
Term Disability Insurance Policy in effect as of the date hereof for a
period of more than six (6) months provided that during such six month
period the Company shall have given at least ten (10) days written notice
of termination; provided further, however, that if the Executive is
eligible to receive disability payments pursuant to a disability policy
paid for by the Company, the Executive shall assign such benefits to the
Company for all periods as to which he is receiving full payment under this
agreement.
(b) Death. This agreement shall terminate upon the death of Executive.
(c) With Cause. The Company may terminate this agreement at any time because
of:
(i) Executive's material breach of any term of this agreement, which is not
cured after ten (10) days written notice from the board of directors, or
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(ii) commission by the Executive of a felony or an act of fraud against the
Company.
In the event Executive's employment with the Company is terminated pursuant
to items 5(a), (b) or (c), Executive or his beneficiary shall be entitled to
receive all base compensation earned by Executive up to the date of termination,
all unreimbursed expenses, and any bonus earned in respect of a prior year and
not yet paid. For a termination by the Company without good cause, Executive
shall be entitled to receive the greater of (i) the remaining base salary at the
then base salary rate for the remainder of the Employment Term or (ii) the base
salary rate for the period of six months, and all unreimbursed expenses, any
bonus earned in respect of a prior year and not yet paid, and the pro-rata
portion of any bonus for the current year.
In the event Executive's employment with the company is terminated for
whatever reason, the Company shall indemnify and hold Executive harmless for any
personal guaranty made by Executive on behalf of the Company.
6. Revealing of Trade Secrets, etc. Executive acknowledges the interest of
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the Company in maintaining the confidentiality of information related to its
business and shall not at any time during the Employment Term or thereafter,
directly or indirectly, reveal or cause to be revealed to any person or entity
the supplier lists, customer lists or other confidential business information of
the Company; provided, however, that the parties acknowledge that it is not the
intention of this paragraph to include within its subject matter (a) information
not proprietary to the Company, (b) information which is then in the public
domain, or (c) information required to be disclosed by law.
7. Arbitration. If a dispute should arise regarding this agreement, all
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claims, disputes, controversies, differences or other matters in question
arising out of this relationship shall be settled finally, completely and
conclusively by arbitration of a single arbitrator in Houston, Texas, in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association (the "Rules"). Arbitration shall be initiated by written demand.
This agreement to arbitrate shall be specifically enforceable only in the
District Court of Xxxxxx County, Texas. A decision of the arbitrator shall be
final, conclusive and binding on the Company and the Executive, and judgement
may be entered in the District Court of Xxxxxx County, Texas, for enforcement
and other benefits. On appointment, the arbitrator shall then proceed to decide
the arbitration subjects in accordance with the Rules. Any arbitration held in
accordance with this paragraph shall be private and confidential and no person
shall be entitled to attend the hearings except the arbitrator, Executive,
Executive's attorneys, and an designated representatives of the Company and
their respective attorneys. The matters submitted for arbitration, the hearings
and proceedings and the arbitration award shall be kept and maintained in
strictest confidence by Executive and the Company and shall not be discussed,
disclosed or communicated to any persons. On request of any party, the record of
the proceeding shall be sealed and may not be disclosed except insofar, and only
insofar, as may be necessary to enforce the award of the arbitrator and any
judgement enforcing an award. The prevailing party shall be entitled to recover
reasonable and necessary attorneys' fees and costs from the non-prevailing
party.
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8. Covenants Not to Compete.
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(a) Executive's Acknowledgment. Executive agrees and acknowledges that in
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order to assure the Company that it will retain its value as a going concern, it
is necessary that Executive undertake not to utilize his special knowledge of
the business and his relationships with customers and suppliers to compete with
the Company. Executive further acknowledges that:
(i) the Company is and will be engaged in the business;
(ii) Executive will occupy a position of trust and confidence with the
Company prior to the date of this agreement and, during such period
and Executive's employment under this agreement, Executive has, and
will become familiar with the Company's trade secrets and with other
proprietary and confidential information concerning the Company;
(iii) the agreements and covenants contained in this Section 8 are
essential to protect the Company and the goodwill of the business;
and
(iv) Executive's employment with the Company has special, unique and
extraordinary value to the Company and the Company would be
irreparably damaged if Executive were to provide services to any
person or entity in violation of the provisions of this agreement.
(b) Competitive Activities. Executive hereby agrees that for a period
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commencing on the date hereof and ending one year following the later of (i)
termination of Executive's employment with the Company for whatever reason, and
(ii) the conclusion of the period, if any, during which the Company is making
payments to Executive, he will not, directly or indirectly, as employee, agent,
consultant, stockholder, director, co-partner or in any other individual or
representative capacity, own, operate, manage, control, engage in, invest in or
participate in any manner in, act as a consultant or advisor to, render services
for (alone or in association with any person, firm, corporation or entity), or
otherwise assist any person or entity (other than the Company) that engages in
or owns, invests in, operates, manages or controls any venture or enterprise
that directly or indirectly engages or proposes in engage in the business of the
manufacturing, distribution or sale of (i) products manufactured, distributed,
sold or licensed by the Company or services provided by the Company at the time
of termination or (ii) products or services proposed at the time of such
termination to be manufactured, distributed, sold, licensed or provided by the
Company within the united States (the "Territory"); provided, however, that
nothing contained herein shall be construed to prevent Executive from (i)
investing in the stock of any competing corporation listed on a national
securities exchange or traded in the over-the-counter market, but only if
Executive is not involved in the business of said corporation and if Executive
and his associates (as such term is defined in Regulation 14(A) promulgated
under the Securities Exchange Act of 1934, as in effect on the date hereof),
collectively, do not own more than an aggregate of two percent of the stock of
such corporation. With respect to the Territory, Executive specifically
acknowledges that the Company has conducted the business throughout those areas
comprising the Territory and the Company intends to continue to expand the
business throughout the Territory.
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(c) Blue Pencil. If an arbitrator shall at any time deem the terms of this
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agreement or any restrictive covenant too lengthy or the Territory too
extensive, the other provisions of this section 8 shall nevertheless stand, the
restrictive period shall be deemed to be the longest period permissible by law
under the circumstances and the Territory shall be deemed to comprise the
largest territory permissible by law under the circumstances. The arbitrator in
each case shall reduce the restricted period and/or the Territory to permissible
duration or size.
9. Opportunities. During his employment with the Company, and for one year
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thereafter, Executive shall not take any action which might divert from the
Company any opportunity learned about by him during his employment with the
Company (including without limitation during the Employment Term) which would be
within the scope of any of the businesses then engaged in or planned to be
engaged in by the Company.
10. Survival. In the even that this Agreement shall be terminated, then
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notwithstanding such termination, the obligations of Executive pursuant to
Sections 6,7,8 and 9 of this agreement shall survive such termination.
11. Contents of Agreement, Parties in Interest, Assignment, etc. This
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Agreement sets forth the entire understanding of the parties hereto with respect
to the subject matter hereof. All of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
respective heirs, representatives, successors and assigns of the parties hereto,
except that the duties and responsibilities of Executive hereunder which are of
a personal nature shall neither be assigned nor transferred in whole or in part
by Executive. This Agreement shall not be amended except by a written instrument
duly executed by the parties.
12. Severability. If any term or provision of this Agreement shall be held to
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be invalid or unenforceable for any reason, such term or provision shall be
ineffective to the extent of such invalidity or unenforceability without
invalidating the remaining terms and provisions hereof, and this Agreement shall
be construed as if such invalid or unenforceable term or provision had not been
contained herein.
13. Notices. Any notice, request, instruction or other document to be given
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hereunder by any party to the other party shall be in writing and shall be
deemed to have been duly given when delivered personally or five (5) days after
dispatch by registered or certified mail, postage prepaid, return receipt
requested, to the party to whom the same is so given or made:
If to the Company addressed to:
ebaseOne Corporation
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
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with a copy to:
Xxxxxx & Xxxxxxxxx, P.C.
0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
If to Executive addressed to:
Xxxx Xxxxxxx Overstolz
0000 Xxxxxxxxxxx
Xxxxxxx, XX 00000
or to such other address as the one party shall specify to the other party in
writing.
14. Counterparts and Headings. This agreement may be executed in one or more
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counterparts, each of which shall be deemed an original and all which together
shall constitute one and the same instrument. All headings are inserted for
convenience of reference only and shall not affect the meaning or interpretation
of this agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
EBASEONE CORPORATION
By: /s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
Director
By: /s/ Xxxx Xxxxxxx Overstolz
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Xxxx Xxxxxxx Overstoltz
Director and Executive Officer
EXECUTIVE
By: /s/ Xxxx Xxxxxxx Overstolz
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Xxxx Xxxxxxx Overstoltz
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ADDENDUM #1
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, which consideration includes but is not limited to, not
being required to issue management of ebaseOne Corporation additional warrants,
the parties hereby agree that this Addendum, entered into this 27/th/ day of
October, 1999, shall amend, to the extent set forth in this Addendum, the
employment agreement entered into on August 11, 1999 between EBASEONE
CORPORATION, a Delaware corporation ("Company") and Xxxx Xxxxxxx Overstolz, an
individual ("Overstolz") (the "Agreement").
Notwithstanding anything in the Agreement, the Company and Overstolz agree
to amend and restate in its entirety Section 4(c) of the Agreement as follows:
(4)(c) Warrants. The Executive will be entitled to receive a five year
warrant to purchase 1,000,000 shares of Company common stock at $2.50 per share,
vesting over a period of 24-months, and expiring October 27, 2004.
Overstolz hereby agrees to waive any and all rights to the warrant to purchase
3,000,000 shares of Company common stock ("Warrant"), which was provided in the
Agreement, and has concurrently delivered to the Company, the Warrant marked
canceled. The Company agrees to issue Overstolz a new warrant to purchase
1,000,000 shares of Company common stock, which is attached hereto as Exhibit
"A".
IN WITNESS WHEREOF, the parties hereto have caused this Addendum to the
Agreement to be executed on the day and year set forth above.
EBASEONE CORPORATION
By: /s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx, President
XXXX XXXXXXX OVERSTOLZ, an individual
By: /s/ Xxxx Xxxxxxx Overstolz
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Xxxx Xxxxxxx Overstolz
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