EXHIBIT 10.28
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") by and between XXXX
SOLUTIONS, INC., a Texas Company (the "Company") and XXXX XXXXXX ("Employee") is
hereby entered into and effective as of April 1, 1999.
RECITALS
The following statements are true and correct:
As of the date of this Agreement, the Company is engaged primarily in
the business of application consulting services.
Employee is employed hereunder by the Company in a confidential
relationship wherein Employee, in the course of Employee's employment with the
Company, will be instrumental in the development of the Company's business and
has and will continue to become familiar with and aware of information as to the
Company's customers, specific manner of doing business, including the processes,
techniques and trade secrets utilized by the Company, and future plans with
respect thereto, all of which has been and will be established and maintained at
great expense to the Company; this information is a trade secret and constitutes
the valuable good will of the Company.
Therefore, in consideration of the mutual promises, terms, covenants
and conditions set forth herein and the performance of each, it is hereby agreed
as follows:
AGREEMENTS
1. Employment and Duties
(a) The Company hereby employees Employee as President. As such,
Employee shall have the responsibilities, duties and authority reasonably
accorded to and expected of such position and such other executive duties as are
assigned to him and will report directly to the President of LOCH Exploration,
Inc.. Employee hereby accepts this employment upon the terms and conditions
herein contained and, subject to Section 1 (c), agrees to devote such time,
attention and efforts as are reasonably necessary to promote and further the
business of the Company.
(b) Employee shall adhere to, execute and fulfill all reasonable
and uniformly applied policies established by the Company.
(c) Employee shall not, during the term of Employee's employment
hereunder, be engaged in any other business activity pursued for gain, profit or
other pecuniary advantage if such activity interferes with Employee's duties and
responsibilities hereunder. The foregoing limitations shall not be construed as
prohibiting Employee from making personal investments in such form or manner as
will neither require Employee's services in the operation or affairs of the
companies or enterprises in which such investments are made nor violate the
terms of Section 3 hereof.
2. Compensation. For all services rendered by Employee, the Company shall
compensate Employee as follows:
(a) Base Salary. The base salary payable to Employee shall be
$160,000.00 per year, payable on a twice monthly basis on the 5th and 20th of
each month.
(b) Incentive Bonus. The Board of Directors will review Employee's
performance and make increases to base salary and bonuses up to $80,000.00 per
year based upon performance.
(c) Executive Perquisites, Benefits and Other Compensation.
Employee shall be entitled to receive additional benefits and compensation from
the Company in such form and to such extent as specified below:
(i) Admittance for participation for Employee under health,
hospitalization, disability, dental, life and other insurance plans
that the Company may have in effect from time to time, with the
benefits provided to Employee under this clause (i) to be at least
equal to such benefits provided to key executives.
(ii) Reimbursement for all business travel and other out-of-pocket
expenses reasonably incurred by Employee in the performance of
Employee's services pursuant to this Agreement. All reimbursable
expenses shall be appropriately documented in reasonable detail by
Employee upon submission of any request for reimbursement, and in a
format and manner consistent with expense reporting policy of the
Company.
(iii) The Company shall provide Employee with other executive
perquisites as may be available to or deemed appropriate for Employee
by the Board of Directors and participation in all other Company-wide
employee benefits as available from time to time.
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3. Non-Competition Agreement
(a) Employee will not, during the period of Employee's employment by or
with the Company, and for a period of one (1) year immediately following the
termination of Employee's employment under this Agreement for any reason other
than the expiration of its term or termination by the Company without cause,
directly or indirectly, for Employee or on behalf of or in conjunction with any
other person, persons, company, partnership, corporation or business of whatever
nature:
(i) call upon any person who is, at that time, an employee of
the Company in any capacity for the purpose or with the intent
of enticing such employee away from or out of the employ of
the Company; or
(ii) call upon any person or entity which is, at that time, or
which has been, within one (1) year prior to that time, a
customer of the Company for the purpose of soliciting or
selling products or services in direct competition with the
Company.
The foregoing covenant shall not be deemed to prohibit Employee from
acquiring as an investment not more than three percent (3%) of the capital stock
of a competing business, whose stock is traded on a national securities exchange
or over-the-counter. The foregoing covenant shall not be deemed to prohibit
Employee from any business practice authorized by the Board of Directors.
(b) Because of the difficulty of measuring economic losses to the
Company as a result of a breach of the foregoing covenant, and because of the
immediate and irreparable damage that could be caused to the Company for which
they would have no other adequate remedy, Employee agrees that the foregoing
covenant may be enforced by the Company in the event of breach by Employee, by
injunctions and restraining orders.
(c) It is agreed by the parties that the foregoing covenants in this
Section 3 impose a reasonable restraint on Employee in light of the activities
and business of the Company on the date of the execution of this Agreement; but
it is also the intent of the Company and Employee that such covenants be
construed and enforced in accordance with the changing activities, business and
locations of the Company throughout the term of this covenant, whether before or
after the date of termination of the employment of Employee. For example, if,
during the term of this Agreement, the Company engage in new and different
activities, enter a new business or establish new locations for their current
activities or business in addition to or other than the activities or business
enumerated under the Recitals above or the locations currently established
therefor, then Employee will be precluded from soliciting the customers or
employees of such new activities or business, except as specifically provided
for herein.
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(d) The covenants in this Section 3 are severable and separate, and the
unenforceability of any specific covenant shall not affect the provisions of any
other covenant. Moreover, in the event any court of competent jurisdiction shall
determine that the scope, time or territorial restrictions set forth are
unreasonable, then it is the intention of the parties that such restrictions be
enforced to the fullest extent which the court deems reasonable, and the
Agreement shall thereby be reformed.
4. Place of Performance
(a) Employee's duties shall be carried out in Austin, Texas, except for
occasional traveling which may be involved in the ordinary course of Employee's
duties.
(b) Notwithstanding the above, if Employee is requested by the Board to
relocate and Employee refuses, such refusal shall not constitute "cause" for
termination of this Agreement under the terms of Section 5(c).
5. Term; Termination Rights on Termination. The term of this Agreement
shall begin April 1, 1999 and continue until December 31, 2004 (the "Term"),
and, unless terminated sooner as herein provided or at the end of the Term by
either party, shall continue thereafter on a year-to-year basis on the same
terms and conditions contained herein in effect as of the time of renewal. This
Agreement and Employee's employment may be terminated in any one of the
following ways:
(a) Death. The death of Employee shall immediately terminate this
Agreement with no severance compensation due to Employee's estate. In the event
of Employee's death, Employee's estate shall be entitled to all Base Salary
earned through the date of death.
(b) Disability. If, as a result of incapacity due to physical or mental
illness or injury, Employee shall have been absent from full-time duties
hereunder for two (2) consecutive months, then thirty (30) days after receiving
written notice (which notice may occur before or after the end of such two (2)
month period, but which shall not be effective earlier than the last day of such
two (2) month period), the Company may terminate Employee's employment hereunder
provided Employee is unable to resume full-time duties at the conclusion of such
notice period. Also, Employee may terminate Employee's employment hereunder if
Employee's health should become impaired to an extent that makes the continued
performance of Employee's duties hereunder hazardous to Employee's physical or
mental health or life, provided that Employee shall have furnished the Company
with a written statement from a qualified doctor to such effect and provided,
further, that, at the Company's request made within thirty (30) days of the date
of such written statement, Employee shall submit to an examination by a doctor
selected by the Company who is reasonable acceptable to Employee or Employee's
doctor and such doctor shall have concurred in the conclusion of Employee's
doctor. In the event this Agreement is terminated as a result of Employee's
disability, Employee shall receive from the Company sixty percent (60%) of the
Base Salary at the rate then in effect for whatever time period is remaining
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under the Term of this Agreement or for one (1) year, whichever amount is less,
payable at regular pay intervals. The Company may satisfy this obligation
through provision of a disability policy covering Employee that meets the terms
of this Section, with the premiums for such policy being paid by Company.
(c) Good Cause. The Company may terminate the Agreement ten (10) days
after written notice to Employee for good cause, which shall mean: (1)
Employee's gross negligence in the performance or intentional nonperformance
(either of which continuing for ten (10) days after receipt of written notice of
need to cure) of any of Employee's material duties and responsibilities
hereunder; (2) Employee's willful, material and irreparable breach of this
Agreement; (3) Employee's willful dishonesty, fraud or misconduct with respect
to the business or affairs of the Company which materially and adversely affects
the operations or reputation of the Company; (4) Employee's conviction of a
felony crime; or (5) chronic alcohol abuse or illegal drug abuse by Employee. In
the event of a termination for good cause, as enumerated above, Employee shall
have no right to any severance compensation.
(d) Without Cause. At any time after the commencement of employment,
the Company or Employee may, without cause, terminate this Agreement and
Employee's employment, effective thirty (30) days after written notice is
provided to the Company. Should Employee be terminated by the Company without
cause during the Term, Employee shall receive from the Company, at his option,
either six (6) months Base Salary (at the rate then in effect) payable in a
lump-sum payment due on the effective date of termination or one year's Base
Salary payable from time to time at regular intervals. Further, any termination
without cause by the Company shall operate to invalidate the terms of Section 3.
If Employee resigns or otherwise terminates Employee's employment without cause
pursuant to this Section 5(d), Employee shall receive no severance compensation
and the terms of Section 3 shall be fully enforceable.
If termination of Employee's employment arises out of the Company's
failure to pay Employee on a timely basis the amounts to which Employee is
entitled under this Agreement or as a result of any other breach of this
Agreement by the Company, the Company shall pay all amounts and damages to which
Employee may be entitled as a result of such breach, including interest thereon
and all reasonable legal fees and expenses and other costs incurred by Employee
to enforce Employee's rights hereunder. Further, none of the provisions of
Section 3 shall apply in the event this Agreement is terminated as a result of a
breach by the Company.
6. Return of Company Property. All records, designs, patents, business plans,
financial statements, manuals, memoranda, lists and other property delivered to
or compiled by Employee by or on behalf of the Company or their representatives,
vendors or customers which pertain to the business of the Company shall be and
remain the property of the Company, as the case may be, and be subject at all
times to their discretion and control. Likewise, all correspondence, reports,
records, charts, advertising materials and other similar data pertaining to the
business, activities or future plans of the Company which is collected by
Employee shall be delivered promptly to the Company without request by it upon
termination of Employee's employment.
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7. Inventions. Employee shall disclose promptly to the Company any and all
significant conceptions and ideas for inventions, improvements and valuable
discoveries, whether patentable or not, which are conceived or made by Employee,
solely or jointly with another, during the period of employment, and which are
directly related to the business or activities of the Company and which Employee
conceives as a result of Employee's employment by the Company. Employee hereby
assigns and agrees to assign all Employee's interests therein to the Company or
its nominee. When-ever requested to do so by the Company, Employee shall execute
any and all applications, assignments or other instruments that the Company
shall deem necessary to apply for and obtain Letters Patent of the Untied States
or any foreign country or to otherwise protect the Company's interest therein.
8. Trade Secrets. Employee agrees that Employee will not, during or after the
Term of this Agreement with the Company, disclose the specific terms of the
Company's relationships or agreements with significant vendors or customers or
any other significant and material trade secret of the Company, to any person,
firm, partnership, corporation or business for any reason or purpose whatsoever.
9. Indemnification. In the event Employee is made a party to any threatened,
pending or completed action, suit or proceeding, whether civil or administrative
(other than an action by the Company against Employee), by reason of the fact
that Employee is or was performing services under this Agreement, then the
Company shall indemnify Employee against all expenses (including attorneys'
fees), judgments and amounts paid in settlement, as actually and reasonably
incurred by Employee in connection therewith. In the event that both Employee
and the Company are made a party to the same third-party action, complaint, suit
or proceeding, the Company agrees to engage competent legal representation, and
Employee agrees to use the same representation, provided that if counsel
selected by Company shall have a conflict of interest that prevents such counsel
from representing Employee, Employee may engage separate counsel and the Company
shall pay all reasonable attorneys' fees of such separate counsel. Employee will
not be held liable to the Company for errors or omissions where Employee has not
exhibited gross, willful and wanton negligence and misconduct or performed
criminal and fraudulent acts which materially damage the business of the
Company. The indemnity provisions contained herein shall be deemed to extend to
protect Employee to the maximum extent permitted by law.
10. No Prior Agreements. Employee hereby represents and warrants to the Company
that the execution of this Agreement by Employee and Employee's employment by
the Company and the performance of Employee's duties hereunder will not violate
or be a breach of any written agreement with a former employer, client or any
other person or entity. Employee agrees to indemnify the Company for any claim,
including, but not limited to, attorneys' fees and expenses of investigation, by
any such third party that such third party may now have or may hereafter come to
have against the Company based upon or arising out of any written
non-competition agreement, invention or secrecy agreement between Employee and
such third party which was in existence as of or prior to the date of this
Agreement. Company agrees to indemnify Employee for any claim, including, but
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not limited to, attorneys' fees and expenses of investigation, by any third
party that such third party may now have or may hereafter come to have against
Employee where there was not a written non-competition agreement, invention or
secrecy agreement between Employee and such third party which was in existence
as of or prior to the date of this Agreement and where Employee committed no
illegal or fraudulent act.
11. Assignments; Binding Effect. Employee understands that Employee has been
selected for employment by the Company on the basis of Employee's personal
qualifications, experience and skills. Employee agrees, therefore, that Employee
cannot assign all or any portion of Employee's performance under this Agreement.
Subject to the preceding two (2) sentences, this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the parties hereto and their
respective heirs, legal representatives, successors and assigns.
12. Complete Agreement. This Agreement is not a promise of future employment.
Employee has no oral representations, understandings or agreements with the
Company or any of its officers, directors or representatives covering the same
subject matter as this Agreement. This written Agreement is the final, complete
and exclusive statement and expression of the agreement between the Company and
Employee and of all the terms of this Agreement, and it cannot be varied,
contradicted or supplemented by evidence of any prior or contemporaneous oral or
written agreements. This written Agreement may not be later modified except by a
further writing signed by a duly authorized officer of the Company and Employee,
and no term of this Agreement may be waived except by writing signed by the
party waiving the benefit of such term.
13. Notice. Whenever any notice is required hereunder, it shall be given in
writing addressed as follows:
To the Company: XXXX Solutions, Inc.
0000 Xxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
With a copy to: Xxxxxx X. Xxxxxx
0000 Xxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
To Employee: Xxxx Xxxxxx
00 Xxxxxx Xxxx Xxxxx
Xxxxxx, Xxxxx 00000
Notice shall be deemed given and effective three (3) days after the
deposit in the U.S. mail of a writing addressed as above and sent first class
mail, certified, return receipt requested, or when actually received. Either
party may change the address for notice by notifying the other party of such
change in accordance with this Section 13.
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14. Severability; Headings. If any portion of this Agreement is held invalid or
inoperative, the other portions of this Agreement shall be deemed valid and
operative and, so far as is reasonable and possible, effect shall be given to
the intent manifested by the portion held invalid or inoperative. The Section
headings herein are for reference purposes only and are not intended in any way
to describe, interpret, define or limit the extent or intent of the Agreement or
of any part hereof.
15. Arbitration. Any unresolved dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by first mediation
and then, if necessary, by arbitration, conducted before a panel of three (3)
arbitrators in Houston, Texas, in accordance with the rules of the American
Arbitration Association then in effect. The arbitrators shall not have the
authority to add to, detract from, or modify any provision hereof nor to award
punitive damages to any injured party. The arbitrators shall have the authority
to order back-pay, severance compensation, vesting of options (or cash
compensation in lieu of vesting of options), reimbursement of costs, including
those incurred to enforce this Agreement, and interest thereon in the event the
arbitrators determine that Employee was terminated without disability or good
cause, as defined in Sections 5(b) and 5(c), respectively, or that the Company
has otherwise materially breached this Agreement. A decision by a majority of
the arbitration panel shall be final and binding. Judgment may be entered on the
arbitrators' award in any court having jurisdiction. The direct expense of any
arbitration proceeding shall be borne by the Company.
16. Governing Law. This Agreement shall in all respects be construed
according to the laws of the State of Texas with giving effect to Texas
conflicts laws provisions.
17. Counterparts. This Agreement may be executed simultaneously in two (2)
or more counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
COMPANY:
XXXX SOLUTIONS, INC.
By: /s/ Xxxxxxx Xxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxx
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EMPLOYEE:
/s/ Xxxxxxx Xxxxxx
-------------------------------------
Xxxx Xxxxxx
EMPLOYMENT AGREEMENT
ADDENDUM
THIS ADDENDUM to Employment Agreement is made this 15th day of October,
1999, by and between DESIGN AUTOMATION SYSTEMS, INC. and XXXX XXXXXX,
hereinafter referred to as "Employee".
WHEREAS XXXX XXXXXX is employed by DESIGN AUTOMATION SYSTEMS, INC.,
under an Employment contract dated April 1, 1999; and
WHEREAS DESIGN AUTOMATION SYSTEMS, INC. desires to retain key
executives; promote executive dedication; secure previous benefits granted
Employee and promote management objectivity; and
WHEREAS Employee is the holder of 450,000 STOCK options in DESIGN
AUTOMATION SYSTEMS, INC.
NOW THEREFORE THIS AGREEMENT
1. Should at any future date during Employee's employment and prior
to the vesting of the above referenced STOCK options, both Xxxx X. Xxxx and
Xxxxxxx Xxxxxx leave the positions of Chairman of the Board of Directors and
Chief Executive Officer of DESIGN AUTOMATION SYSTEMS, INC., for whatever
reasons, all STOCK options previously granted Employee shall immediately vest.
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EXECUTED the date first recited above.
DESIGN AUTOMATION SYSTEMS, INC.
/s/ Xxxxxxx Xxxxxx By: /s/ Xxxxxxx Xxxxxx
---------------------------------- ------------------------------
XXXX XXXXXX XXXXXXX XXXXXX
Employee
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