[DESCRIPTION] EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into between Xxxx Xxx
Xxxxxxx ("Employee") and Alternate Marketing Networks, Inc. ("Company"). In
consideration of the mutual covenants contained in this Agreement, the parties
agree as follows:
1. Employment. Commencing January 1, 1999 ("Effective Date"),
Company employs Employee as President of the Company and Employee accepts such
employment. Employee shall report to the Company's Chief Executive Officer
(the "CEO") and Board of Directors and devote her full time, attention and
efforts to the performance of her duties which shall include without
limitation overall responsibility for the day-to-day management and operations
of the Company and all reasonable duties assigned to her by the CEO. Those
responsibilities include but are not limited to the following:
a. Achieve corporate revenue and profit goals as set by the CEO.
b. Oversee quality execution of the Company's operation inside the
approved budget.
c. Refine Company's marketing strategy to position the Company for
continuing growth.
2. Term. The term of the Agreement shall be from January 1, 1999
through December 31, 1999, unless earlier terminated as provided below. This
Agreement shall automatically renew for additional one-year terms unless
either party provides written notice of termination in accordance with
Paragraph 17 on or before December 1, 1999, or December 1 of any subsequent
year in which the Agreement is in effect. Employee acknowledges that certain
duties set forth in this Agreement (including without limitation the
obligations set forth in paragraphs 8, 9, and 10) survive termination of this
Agreement.
3. Base Salary. Company will pay Employee a gross salary of $140,000
per year (minus all deductions authorized by law) ("Base Salary") in
substantially equal periodic installments in accordance with its practices for
payment of salary to management employees.
(a) Long-Term Incentive-Cash Bonus.
$15,000 for meeting 1999 sample revenue budget of $14,000,000.
This can be paid as early as the third quarter 1999 if YTD sales
and the sales tracking sheet give appropriate substantiation.
An additional $30,000 for a total of $45,000 for meeting 1999
Company-approved budget for operating profit. This can be paid as
early as the fourth quarter 1999 if the financials and projections
substantiate.
An additional $15,000 for a total of $60,000 for exceeding 1999
approved budget for operating profit by 15% or more. This can be
paid as early as the first quarter 2000 if financials
substantiate.
The 1999 budget is attached that was approved by the CEO and Board
of Directors.
(b) Long-Term Incentive-Stock Options
30,000 shares granted April 16, 1998 at $1.04 per share with a
two-year graded vesting period.
30,000 shares granted April 30, 1998 at $2.50 per share with a
four-year graded vesting period.
40,000 shares granted April 30, 1998 at $4.00 per share with a
four-year graded vesting period.
If your employment is terminated prior to completion of the
vesting period, options will be pro-rated.
In case the Company is acquired by another firm, all options
granted will become immediately vested and exercisable at the time
of acquisition.
4. Fringe Benefits. Employee may participate in all benefit plans
and programs offered to the Company's management or supervisory employees.
Such benefits (including eligibility requirements) are governed by the terms
of the plan documents (where applicable) and the Company's standard policies
and practices. Nothing in this Agreement shall prevent or limit the Company's
right to terminate or modify any employee benefit plan or program in its sole
discretion. The Company also agrees to an annual $5,000 auto allowance which
will be disbursed in 12 equal monthly payments and added to the employees W-2
form as is required by law.
5. Vacation. Employee shall be entitled to three weeks paid
vacation. Vacation shall be taken as mutually agreed by Employee and Company.
6. Expenses. The Company shall reimburse Employee for reasonable
expenses incurred in the performance of her duties under this Agreement,
provided that Employee provides the Company with adequate documentation and
reports regarding such expenditures in accordance with Company policies. The
Company will provide a corporate credit card for company purposes only.
7. Additional Compensation. Bonus. A discretionary cash bonus may
be granted annually as set forth by the Board of Directors for the executive
management team.
8. Confidential Information. (a) The term "Confidential
Information" means information and data not generally known outside the
Company (unless as a result of a breach of any of the obligations imposed by
this Agreement) concerning the Company's business and technical information,
including, without limitation, information relating to: (i) the identities of
its customers and their purchasing habits, needs, credit histories, contact
personnel and other information; (ii) suppliers' and vendors' costs, products,
discounts, margin discounts, financial and marketing data and plans, personnel
and compensation, budgets forecasts and business plans; and (iii) the
Company's research, manufacturing activities, data bases, techniques, software
codes, strategies, licenses, inventions, processes, and equipment. Employee
acknowledges that Confidential Information is solely the property of the
Company.
(b) Except as otherwise herein provided, Employee agrees that during
the period of her employment, and thereafter, she will hold in strictest
confidence and will not use or disclose to any person or entity without the
written authorization of the Company's CEO, any of the Company's Confidential
Information, except as such use or disclosure may be required in connection
with her work for the Company or to the extent that such information becomes
known in the public or trade other than as a result of Employee's actions or
failure to act. In the event Employee is legally compelled to disclose any
Confidential Information, Employee agrees to immediately notify the Company
(prior to such disclosure if possible) so that the Company may seek such
protective order or other remedy as it deems necessary. Employee understands
that this Agreement applies to art work, computerized and written information
and to other information, whether or not in written form.
(c) Employee agrees that she will not take with her any Confidential
Information, whether in written, computerized, machine readable, model,
sample, or other form capable of physical delivery, upon or after the
termination for any reason of her employment with the Company, without the
prior written consent of the Company's CEO. Employee also agrees that upon
the termination for any reason of her employment with the Company or at any
other time that the Company may request, she shall deliver promptly and return
to the Company all such documents and materials, along with any other
Confidential Information and all other property of the Company and property
relating to the Company's suppliers, customers and business, in her possession
or control.
9. Restrictive Covenants. (a) Employee agrees that during the term
of this agreement and for four months following, she shall not, without the
prior written consent of the Company's CEO, directly or indirectly, engage in,
represent, consult with, be employed by, assist or have any interest in any
business or entity that is in competition; provided however, that nothing in
this Agreement shall prevent employee from owning one percent or less of the
outstanding stock of any class of a corporation which is publicly traded, so
long as Employee does not participate in the conduct of the business of such
corporations.
(b) Employee agrees, that during the term of her employment with the
Company and for a period of one year following the termination of her
employment with the Company for any reason, she will not on her own behalf or
on behalf of any other person or entity, without the express written consent
of the Company's CEO, solicit or attempt to solicit any then current employee
or representative of the Company to terminate or modify his or her employment
or business relationship with the Company.
(c) Given the sensitive nature of Employee's position with the
Company, the Confidential Information to which Employee shall have access, and
the company's permanent or near-permanent relationship with its customers, the
parties acknowledge that the limitations contained in Paragraphs 8 and 9 are
reasonable. Employee further acknowledges that any violation of Paragraphs 8
and/or 9 will result in irreparable injury to the Company for which there is
no adequate remedy at law. In the event of a breach of Paragraph 8 and/or 9,
the Company shall be entitled to injunctive relief in addition to any other
remedies which may be available to it.
10. Inventions. Employee will, during the period of her employment,
disclose to the Company promptly and fully all Inventions made or conceived by
the Employee (either solely or jointly with others) including but not limited
to Inventions which relate to the business of the Company or the Company's
actual or anticipate research or development, or result from work performed by
her for the Company. All Inventions and all records related to Inventions,
whether or not patentable, shall be and remain the sole and exclusive property
of the Company. "Inventions" means all inventions, discoveries, processes,
improvements, designs, developments, and ideas, and all know-how related
thereto. Employee hereby assigns and agrees to assign to the Company all her
rights to Inventions and any patents, trademarks, or copyrights which may be
issued with respect to Inventions. Employee further acknowledges that all
work shall be work made for hire. During and after the term of this
Agreement, Employee agrees to assist the Company, without charge to the
Company but at its request and expense, to obtain and retain rights in
Inventions, and will execute all appropriate related documents at the request
of the Company.
Employee understands that this Paragraph 10 shall not apply to any
invention for which no equipment, supplies, facilities, trade secret, or other
confidential information of the Company was used and which was developed
entirely on her own time, and does not relate to the business of the Company,
its actual or anticipated research, and does not result from any work
performed by her for the Company.
11. Termination. (a) The Company may terminate this Agreement for
"cause" effective immediately upon notice to Employee, without any liability
to or upon the Company other than to pay Salary for services rendered prior to
the date of termination. "Cause" shall be defined as: (i) Employee's
conviction of a crime which results in a material injury to the interest,
property, operations, business or reputation of the Company; (ii) gross
negligence or willful misconduct in the performance of Employee's duties;
(iii) Employee's willful neglect of her duties under this Agreement; and/or
(iv) a material breach of this Agreement.
(b) The Company may terminate this Agreement effective immediately
upon notice to Employee, without any liability to or upon the Company other
than to pay Salary for services rendered prior to the date of termination,
upon the "Disability" of Employee or effective upon death, in the event of
death of Employee. "Disability" shall be defined as Employee's inability, as
determined by the Company's CEO in her reasonable discretion, due to illness,
accident, injury, physical or mental incapacity or other disability,
effectively to carry out her duties and obligations under this Agreement for
90 consecutive days or shorter periods aggregating 90 days (whether or not
consecutive) during any one-year period.
(c) In the event that Employee voluntarily resigns her employment with
the Company, she shall not be entitled to any compensation or benefits beyond
her last day of employment, other than any accrued vacation or bonuses earned
but unpaid.
(d) Notwithstanding any provision of this Agreement to the contrary,
the Company may terminate this Agreement at any time during its term, without
Cause, upon giving notice to the Employee. In the event of termination under
this subsection (d), the Company's only obligation shall be to pay four (4)
months of salary, plus any accrued vacation and earned prorata bonuses, to the
Employee based upon her then current Base Salary.
(e) If the Company enters into an agreement to be acquired, the
Employee will have the option of receiving a one-time payment equal to twelve
months of employee's base compensation if Employee chooses not to remain with
acquiring company. Employee must make this decision within fourteen working
days from receiving written notice from the CEO of the Company. If Employee
accepts a position with acquiring company, no one-time payment is due.
12. No Conflicting Contracts. Employee represents and warrants that
she is not subject to any non-compete covenant in any contract and no
contractual or other commitment or covenant exists which would limit, affect
or prevent the Employee's full performance of her duties and responsibilities
under this Agreement.
13. Successors. This Agreement may be assigned by the Company to any
successor or to any person who acquires the Company or substantially all of
its assets.
14. Complete Agreement. This Agreement is the complete agreement
between the parties and supersedes any and all prior agreements or
understandings between them. This Agreement may only be modified in writing
signed by the parties. The waiver of a breach of any provision of this
Agreement shall not serve as a waiver of any subsequent breach by that party.
15. Severability and Modification. (a) If any provision of this
Agreement is declared void, unenforceable or against public policy, such
provision shall be deemed severable and severed from this Agreement and the
balance of this Agreement shall remain in full force and effect.
(b) If a court of competent jurisdiction rules that any restriction of
this Agreement is overboard or unreasonable, the court shall modify or revise
such restriction to include the maximum reasonable restriction allowed by law.
16. Governing Law. This Agreement shall be governed by the laws of
Michigan.
17. Notices. Any notice to be given under this Agreement shall be in
writing, personally delivered or sent by next day overnight delivery or
certified mail, and sent if to the Company to its corporate offices and, if to
Employee to her residence.
ALTERNATE MARKETING NETWORKS, INC. XXXX XXX XXXXXXX ("Employee")
By: /s/Xxxxxxx X. Xxxxxx /s/Xxxx Xxx Xxxxxxx
Title: Chairman/CEO Date: 1/27/99
Date: 1/29/99
