EXHIBIT 10.14
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made and
entered into as of the 6th day of August, 2002 between Viewcast Corporation (the
"Employer and Xxxx XxXxxx (the "Executive"), residing at 00 Xxxxxxx Xxxxx,
Xxxxxxx, Xxx Xxxx 00000.
WHEREAS, the Employer wishes to employ the Executive in an
executive capacity, as President of DCi, Inc., the wholly owned subsidiary
ViewCast Corporation, and as Corporate Vice President of ViewCast Corporation,
wishes to accept such employment, on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises,
benefits and covenants herein contained, the Employer and Executive hereby agree
as follows:
1. Effective Date; Term.
1.1 This Agreement shall be effective as of the date of the
acquisition of DCi, Inc. by ViewCast (the Corporation) (the "Effective Date").
1.2 The Employer employs the Executive, and the Executive
accepts such employment, for an eighteen (18) month period commencing on the
Effective Date (the purchase of DCi, Inc.).
1.3 The Term of the Executive's employment under this
Agreement shall be automatically renewed for additional one-year terms (each a
"Renewal Term") upon the expiration of the Initial Term or any Renewal Term
unless the Employer or the Executive delivers to the other, at least sixty (60)
days prior to the expiration of the Initial Term or the then current Renewal
Term, as the case may be, a written notice specifying that the Term of the
Executive's employment will not be renewed at the end of the Initial Term or
such Renewal Term, as the case may be.
1.4 This Agreement may be terminated prior to the expiration
of the Initial Term or any Renewal Term as provided in Section 4 of this
Agreement.
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2. Position and Duties.
2.1 During the Initial or any Renewal Term of this Agreement,
the Employer shall employ the Executive to serve as its President. The Executive
shall perform such executive, administrative and operational duties customary
for executives in such capacity or as may be assigned to the Executive from time
to time by the Executive Management of ViewCast Corporation. In his capacity as
President of DCi, Inc., the wholly-owned subsidiary of ViewCast Corporation, and
as Corporate Vice President of ViewCast Corporation. Executive's performance
shall be reviewed within thirty (30) days after the close of Employer's second
quarter and within thirty (30) days after the close of the Employer's fiscal
year.
2.2 Executive agrees to serve the Employer faithfully and to
the best of the Executive's ability and to devote substantially all of the
Executive's business time, attention and efforts to the interests and business
of the Employer and its Subsidiaries.
2.3 The Executive agrees at all times to perform all his
duties in accordance with applicable laws, rules and regulations and the
policies and procedures of the Employer applicable to senior executives in
effect from time to time.
3. Compensation, Benefits and Expenses.
3.1 Salary. During the period from the Effective Date through
the Term of this Agreement and except as otherwise provided in this Agreement,
the Employer shall pay to Executive an annual base salary of $14,167.00 per
month (the "Base Salary Amount"), in equal installments pursuant to the
Employer's standard payroll policies and subject to such withholding or
deductions as may be mutually agreed between the Employer and the Executive or
required by law.
3.2 Incentive Compensation. In addition to the salary set
forth in Section 3.1, Executive, at Employer's discretion, may earn incentive
compensation in an amount determined by the Employer based principally upon
growth in net revenues and earnings and the results of continuing operation and
the growth in new business and such other criteria as determined by the
President and CEO of ViewCast Corporation with the approval and concurrence of
the Compensation
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Committee of the Board of Directors of ViewCast Corporation. Initial cash
incentives through fiscal year 2003 mirror the plan presently in place for Xx.
XxXxxx, specifically, 5% of net income of DCi, the subsidiary of ViewCast
Corporation, in accordance with the Employer's standard or established payroll
policies and shall be subject to such withholding or deductions as may be
mutually agreed between the Employer and the Executive or required by law.
3.3 Fringe Benefits. During the period of his employment,
Executive shall be entitled to participate in Employer's plans for the welfare
and benefit of its employees available to senior executive officers generally to
the extent Executive satisfies the requirements provided in such plans with
respect to the position, tenure, salary, health and other qualifications for
participation. Executive will be entitled to four (3) weeks annual vacation; no
more then two (2) consecutive weeks may be taken at any given time in each
fiscal year. Vacation will not accumulate from one year to the next.
3.4 Expenses. During the term of this Agreement, the Employer
authorizes Executive to incur reasonable and necessary out-of-pocket business
expenses in the course of performing his duties and rendering services hereunder
in accordance with Employer's policies with respect thereto, and the Employer
shall reimburse Executive for all such expenses, provided (i) such expenses and
the purpose for which they were incurred are in accordance with Employer's
policies, and (ii) the Executive timely submits to the Employer expense reports
and substantiation of the expenses in accordance with Employer's policies.
3.5 Options. Employer shall grant to the Executive an option
to purchase the total amount of one hundred thousand (100,000) shares of
Employer's common stock (the "Shares") set forth in the Notice of Grant, (at the
exercise price determined by the average bid/ask price as of the official date
of the Acquisition and upon approval of the ViewCast Board of Directors'
Compensation Committee (the "Exercise Price") subject to the terms, definitions
and provisions of the 1995 Stock Plan (the "Plan") adopted by the Employer, as
follows:
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(i) 33,000 shares will vest 12 months post date of
grant; additional 33,000 shares will vest 24 months post date of grant;
remainder of 34,000 shares will vest equally 1/12 each month during year 3
(2,833 shares each month). It is expressly understood that all options shall
accelerate and immediately vest upon a Change in Control as defined herein.
4. Termination.
4.1 Termination. The Executive's employment by Employer shall
terminate on the earliest Date of Termination upon the occurrence of one of the
following events:
4.1.1 the Executive's death;
4.1.2 the Executive is determined to be "permanently disabled"
as defined under the disability insurance policy covering the
Executive;
4.1.3 termination of Executive by Employer for "Cause";
4.1.4 termination of employment by Executive upon written
notice to Employer.
4.1.5 termination of Executive by Employer without cause upon
written notice to Executive;
4.1.6 the expiration of this Agreement; or
4.1.7 a Change of Control of the Employer, if the Executive's
employment -hereunder is terminated by the Employer or its
successor (other than pursuant to Section 4.1.3 above) after
such Change of Control.
4.2 Time of Termination. Executive's employment with Employer
(including all positions held with Employer or its Subsidiaries or affiliates)
shall terminate immediately upon the Date of Termination without further action
by Employer.
4.3 Effect of Termination of Employment.
(a) Termination Due to Death. In the event the Executive's
employment is terminated due to his death, his estate or designated
beneficiaries shall be entitled to the following:
(i) any amounts payable on death pursuant to any
plans or policies of Employer; and
(ii) any other amounts due but not yet paid from
Employer to Executive.
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(b) Termination Due to Disability. In the event the
Executive's employment is terminated due to his permanent or total disability,
Executive or his legal representative shall be entitled to the following:
(i) any amounts payable on disability pursuant to any
plans or policies of Employer; and
(ii) any other amounts due but not yet paid from
Employer to Executive.
(c) Termination for Cause. In the event Executive's employment
is terminated by Employer for Cause, Executive shall receive:
(i) The equivalent of two (2) weeks Base Salary
Amount in effect on the Date of Termination, payable
in accordance with Employer's standard payroll
policies;
(ii) any other amounts due but not yet paid from
Employer to Executive.
(iii) reimbursement for three (3) months of COBRA
premiums paid by Executive
(d) Termination Without Cause or for Good Reason. In the event
the Executive's employment is terminated by Employer without cause (other than
by death or disability), or by Executive for Good Reason, Executive shall be
entitled to the following:
(i) an amount equal to the Base Salary Amount in
effect on the Date of Termination for the balance of
the Initial Term or Renewal Term or a period of six
(6) months, whichever is longer, payable in
accordance with Employer's standard payroll periods
and policies;
(ii) any other amounts due but not yet paid from
Employer to Executive
(iii) reimbursement for three (3) months of COBRA
premiums paid by Executive.
(e) Termination upon Change of Control. If Executive's
employment hereunder is terminated by the Employer or its successor (other than
pursuant to Section 4.1.3 above) after such Change of Control, Employee shall be
entitled to an amount equal to the Base Salary Amount in
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effect on the Date of Termination for a period of six (6) months, payable in
accordance with Employer's standard payroll periods and policies.
5. Confidentiality.
5.1 Confidential Information in General. The Executive has and
will have access to and participate in the development of or be acquainted with
confidential or proprietary information and trade secrets related to the
business of Employer, its Subsidiaries and affiliates (the "Companies"),
including but not limited to (i) business plans, operating plans, marketing
plans, bid strategies, bid proposals, financial reports, operating data,
budgets, wage and salary rates, pricing strategies and information, terms of
agreements with suppliers or customers and others, customer lists, formulas,
patents, devices, software programs, reports, correspondence, tapes, discs,
tangible property and specifications owned by or used in Employer's business,
operating strengths and weaknesses of the Companies' officers, directors,
employees, agents, suppliers and customers, (ii) information pertaining to
future developments such as, but not limited to, research and development,
future marketing, distribution, delivery or merchandising plans or ideas, and
potential new distribution or business locations, and (iii) other tangible and
intangible property, which are used in the business and operations of the
Companies but not made publicly available (the "Confidential Information").
5.2 Assignment. The Executive hereby assigns to Employer, in
consideration of his employment, all Confidential Information in the possession
of Executive at any time during the term of this Agreement, whether or not made
or conceived during working hours, alone or with others, which relates, directly
or indirectly, to businesses or proposed businesses of the Companies, and
Executive agrees that all such Confidential Information shall be the exclusive
property of the Companies. The Executive shall establish and maintain written
records of all such Confidential Information with respect to inventions or
similar intellectual property for the benefit of the Companies and shall execute
and deliver to the Companies any specific assignments or other documents
appropriate to vest title in such Confidential Information in the Companies or
to obtain for the Companies legal protection for such Confidential Information.
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5.3 Non-Disclosure. The Executive shall not disclose, use or
make known for his or another's benefit any Confidential Information of the
Companies or use such Confidential Information in any way except in the best
interests of the Companies in the performance of Executive's duties under this
Agreement.
5.4 Continuing Obligations. The obligations of Executive under
this Section 5 shall survive the termination of Executive's employment and the
expiration or termination of this Agreement for a period of twelve (12) months.
6. Return of Employer's Property
Immediately upon termination of the Executive's employment
with the Employer, the Executive shall deliver to the Employer all Confidential
Information, documents, correspondence, notebooks, reports, computer programs,
names of full-time and part-time employees and consultants, and all other
materials and copies thereof (including computer discs and other electronic
media) relating in any way to the business of the Employer in any way obtained
by the Executive during the period of his employment with the Employer.
Immediately upon termination of the Executive's employment with the Employer,
the Executive shall deliver to the Employer all tangible property of Employer in
the possession of Executive, including, without limitation, telephones,
facsimile machines, computers, leased automobiles and credit cards. The
obligations of Executive under this Section 6 shall survive the termination of
Executive's employment and the expiration or termination of this Agreement.
7. Non-Competition and Non-Solicitation.
7.1 Non-Compete. For a period of six (6) months following the
termination of Executive's employment by Employer (the "Non-competition
Period"), the Executive will not, directly or indirectly, without the written
consent of the Chief Executive Officer and Chief Financial Officer of ViewCast
Corporation, own, manage, operate, control, be employed by, consult with or
participate in or be connected with any entity owning or having financial
interest in, whether direct or indirect, a business entity which is in the same
line or lines of business as the Employer or its Subsidiaries, from
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time to time, within the continental United States. For purposes of this Section
7.1, each of the following activities, without limitation, shall be deemed to
constitute proscribed activities during the Non-competition Period: to engage
in, work with, have an interest in (other than interests of less than 1% in
companies with securities traded on a nationally recognized stock exchange or
interdealer quotation system), advise, consult, manage, operate, lend money to
(other than interests of less than 1% in companies with securities traded on a
nationally recognized stock exchange or interdealer quotation system), guarantee
the debts or obligations of, or permit one's name or any part thereof to be used
in connection with an enterprise or endeavor, either individually, in
partnership or in conjunction with any person or persons, firm, association,
company or corporation, whether as principal, director, agent, shareholder,
partner, employee, consultant or in any other manner whatsoever. For purposes of
this Agreement, an "indirect" interest is presumed to exist if an interest is
held by a spouse, parent or child, in addition to any other forms of indirect or
beneficial interest.
7.2 Non-Solicitation. During the Non-competition Period, the
Executive will not, directly or indirectly, solicit for employment, or advise or
recommend any person to employ or solicit for employment, any person Executive
knows to be an employee of the Employer or any of its Subsidiaries.
7.3 Continuing Obligations. The obligations of Executive under
this Section 7 shall survive the termination of Executive's employment and the
expiration or termination of this Agreement throughout the Non-competition
Period.
8. Remedies.
8.1 In the event of any breach or threatened breach, the
parties to this Agreement may seek to compel specific performance of the terms
of this Agreement through arbitration in accordance with the provisions of
paragraph 9.2 of this Agreement.
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9. Miscellaneous.
9.1 Certain Definitions. "Cause" shall mean: (i) the Executive
is charged with fraud, embezzlement, theft or other criminal
conduct, (ii) dishonesty, disloyalty, insubordination or gross
negligence in the performance of duties, (iii) failure of the
Executive to obey the reasonable and lawful orders of a
majority of the CEO and Board of Directors of the Employer,
which orders were consistent with the duties of the Executive
under this Agreement, after the Executive had been given
written notice of such failure and not less than thirty (30)
days to cure it; (iv) failure to provide requested
information, or (v) any act of fraud or serious moral
turpitude.
"Change of Control" shall mean the occurrence of any one of
the following events:
(i) the Board of Directors of Employer approves a
plan to sell or dispose of by merger, consolidation
or other transaction all or substantially all of
Employer's operating assets (on a consolidated basis)
or approves a plan of liquidation; or
(ii) the Employer combines with another company and
is the surviving corporation but immediately after
the combination, the persons who were the
shareholders of the Employer immediately prior to the
combination own 50% or less of all outstanding
securities including vested options granted under the
Plan of the combined entity.
"Good Reason" shall mean a significant change in the nature
and scope of the authority, powers, functions, benefits or
duties attached to the position of President of DCi, Inc. of
the Employer as held by Executive as of the Effective Date.
"Date of Termination" shall mean:
(i) if employment terminates because of Executive's
death, the date of death;
(ii) if employment terminates for "Cause", the latest
date specified in Section 4.1.3 of this Agreement;
(iii) if employment terminates because of permanent
or total disability, the date of determination that
Executive is so disabled as described in Section
4.1.2 of this Agreement;
(iv) if employment terminates due to expiration of
term, the date of expiration.
"Subsidiary" shall mean any entity in which Employer, directly
or indirectly, owns 50% or more of the voting securities or
otherwise controls the ability to elect a majority of the
governing board.
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9.2 Dispute Resolution. Any disputes arising under or in
connection with this Agreement shall be subject to arbitration in accordance
with rules and procedures of the American Arbitration Association ("AAA") with
such changes as the parties may agree. If within ten (10) days of a request for
arbitration, the parties have not agreed on the selection of an arbitrator
willing to serve, either party may request the AAA to appoint an arbitrator who
shall arbitrate the dispute and such appointment and determination shall be
binding on the parties. Neither party may commence any legal action or
proceeding under this Agreement, other than to enforce this provision, except
that Employer may seek judicial intervention for the purpose of obtaining
injunctive relief to enforce Executive's obligations under paragraphs 5, 6 and
7, which shall specifically survive the termination of this Agreement. Costs of
arbitration, including, without limitation, costs of investigations, fees and
expenses of the arbitrator and attorneys, shall be borne by the party incurring
same.
9.3 Notices. Any notices under this Agreement shall be in
writing and shall be given by personal delivery, by local courier service, by
certified or registered letter, return receipt requested, or by a nationally
recognized overnight delivery service; and shall be deemed given when delivered
in person or by local courier or upon actual receipt of the facsimile or
certified or registered letter, or on the business day next following delivery
to a nationally recognized overnight delivery service at the addresses set forth
below of this Agreement or to such other address or addresses as either party
shall have specified in writing to the other party hereto.
If to the Employer:
ViewCast Corporation
00000 Xxxxx Xxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
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If to Executive:
Xxxx XxXxxx
00 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
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9.4 GOVERNING LAW. ALL QUESTIONS PERTAINING TO THE VALIDITY,
CONSTRUCTION, EXECUTION AND PERFORMANCE OF THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH, AND BE GOVERNED BY, THE LAWS OF THE STATE OF TEXAS.
9.5 Entire Agreement; Amendment or Modification. This
Agreement constitutes the entire agreement of the parties hereto with respect to
the matters contained herein. No modification or amendment of any of the
provisions of such agreements shall be effective unless in writing and signed by
the Executive and Employer. No failure to exercise any right or remedy hereunder
shall operate as a waiver thereof. No term or condition of this Agreement shall
be deemed to have been waived, nor shall a party be estopped from enforcing any
provision of this Agreement, except by a statement in writing signed by the
Executive or Employer, whichever party against whom such waiver or estoppel is
sought. If any provision of this Agreement is found to be unreasonably broad, it
shall nevertheless be enforceable to the extent reasonably necessary to protect
the Employer and to the greatest extent permitted by law. If any provision of
this Agreement is found to be unreasonably broad, it shall nevertheless be
enforceable to the extent reasonably necessary to protect the Employer and to
the greatest extent permitted by law. If any provision of this Agreement is
determined to be invalid or unenforceable, such provision shall be reformed to
the extent necessary to make it valid or enforceable and to carry out the intent
of the parties, or if such reformation is not possible, the remaining provisions
of this Agreement shall continue in full force and effect.
9.6 Binding Nature. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors, heirs (in
the case of the Executive) and permitted assigns.
9.7 Survival. The Executive's obligations under Sections 5, 6,
7 and 8 will survive the termination of Executive's employment and the
termination or expiration of this Agreement. The Employer's obligations under
this Agreement will survive the termination of Executive's employment and the
termination or expiration of this Agreement until paid in full.
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9.8 Headings. The paragraph and subparagraph headings
contained in this Agreement are for reference purposes only and shall not affect
the construction or interpretation of this Agreement.
9.9 Counterparts. This Agreement may be executed in several
counterparts, and all counterparts so executed shall constitute one agreement,
binding on the parties hereto, notwithstanding that both parties are not
signatory to the original or the same counterpart.
10. Successors and Assigns. The rights and obligations of the
parties hereto shall inure to the benefit of and shall be binding upon
successors and assigns of Employer.
11. Further Assurances. Executive shall cooperate and take
such action as may be reasonably requested by Employer in order to carry out the
provisions and purposes of this Agreement. Specifically, Executive certifies
that he is in compliance with the Immigration Reform and Control Act of 1986
(the "Act") and that he is legally entitled to work in the United States.
Executive also agrees to execute the Employment Verification Form I-9 as
required by the Act and also agrees to execute the Employee Proprietary
Information Agreement in the form attached hereto as Exhibit "A".
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first above written, but to be effective for all purposes
as of the Effective Date.
VIEWCAST CORPORATION.
By: /s/ XXXXXX X. XXXXX
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EXECUTIVE
/s/ XXXX XXXXXX
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Xxxx XxXxxx
XxXxxx 8-6-02
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