1
Exhibit 10.11
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT effective as of _________________, 1999,
is by and between iBIZ TECHNOLOGY CORP., a Florida corporation, INVNSYS
TECHNOLOGY CORPORATION, an Arizona corporation (collectively the "Company"), and
XXXXXXX XXXXXXXXX, an individual residing in Peoria, Arizona ("Employee").
RECITALS:
A. Employee has agreed to serve as the President and Chief Executive
Officer of the Company;
B. The Board of Directors of the Company considers sound and vital
management to be essential and desires to have the benefit of Employee's
knowledge, experience and service; and
C. Employee desires to be employed by the Company and the Company
desires to retain Employee as its President and Chief Executive Officer on the
terms and conditions set forth herein.
AGREEMENTS:
The parties hereto, in consideration of the covenants and agreements
set forth herein and other good and valuable consideration, agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following terms
shall have the meaning indicated thereof:
1.1 Board means the Board of Directors of the Company or any
successor.
1.2 Company means iBIZ TECHNOLOGY CORP. or any successor
entity.
1.3 Compensation means the total amount included in Employee's
gross income for federal income tax purposes in connection with his
employment hereunder for payments or benefits received under the
provisions of Sections 2.3.1 and 2.3.2 hereof.
1.4 Effective Date means ______________________, 1999.
Page 1
2
1.5 Termination For Cause means the termination of employment
of Employee by the Board because of Employee's personal dishonesty,
willful misconduct, breach of fiduciary duty involving personal profit,
intentional failure to perform stated duties, willful violation of any
material law, rule or regulation resulting in the Company's detriment or
reflecting upon the Company's integrity (other than traffic infractions or
similar minor offenses) or a material breach by the Employee of the terms
of this Agreement and failure to cure such breach within thirty (30) days
after receipt of written notice from the Company specifying the nature of
such breach or to pay compensation to the Company deemed reasonable by the
Company if the breach cannot be cured. For purposes of this Agreement,
Employee's termination of employment shall not be considered to be a
Termination for Cause unless and until there shall have been delivered to
the Employee a copy of a resolution, duly adopted by the affirmative vote
of not less than sixty-six percent (66%) of the entire membership of the
Board at a meeting called and held for that purpose after reasonable
notice to Employee and an opportunity for him, together with his counsel,
to be heard, finding that, in the good faith opinion of the Board,
Employee is guilty of misconduct of the type described in this Section
1.5, and specifying the particulars thereof in detail which determination
shall be subject to a complete and de novo review as to reasonableness and
good faith.
1.6 Termination by Employee For Good Reason means the
termination of this Agreement by Employee upon the occurrence of any of
the following events without Employee's consent: (i) assignment of
Employee to any duties substantially inconsistent with his position or
duties contemplated by this Agreement or a substantial reduction of his
duties contemplated by this Agreement; (ii) the removal of any titles of
Employee specified in Section 2.2 of this Agreement; (iii) any material
breach of the Company's obligation under this Agreement or any failure by
the Company to carry out any of its material obligations hereunder, and
the failure to cure such breach or failure within thirty (30) days after
written notice of such breach or failure has been delivered to the Company
by Employee; and (iv) the relocation of Employee or his corporate office,
facilities, or personnel outside the Phoenix metropolitan area.
1.7 Total and Permanent Disability means an injury or illness
of the Employee that prevents the performance of customary duties and
which is expected to be of long continued and indefinite duration and that
has caused Employee's absence from service for at least one hundred eighty
(180) days.
2. EMPLOYMENT. The Company hereby retains and employs Employee to
serve in the capacity of President and Chief Executive Officer. Employee accepts
such employment on the terms and conditions set forth herein.
Page 2
3
2.1 Term. The term of this Agreement shall commence on the
Effective Date and shall end, unless previously terminated in accordance
with the provisions of Section 3 hereof, at the close of business on the
day before the second anniversary of the Effective Date hereof.
2.2 Duties and Responsibilities. Employee's position shall be
President and Chief Executive Officer of the Company. The President and
Chief Executive Officer of the Company, subject to the control of the
directors, shall in general supervise and control all business and affairs
of the Company. He shall bear ultimate responsibility for the success or
failure of the business of the Company and the operating profits or
losses. Employee shall serve in such other executive capacities and have
such additional titles and authorities with respect to the Company and its
subsidiaries as the Board may from time to time reasonably prescribe.
During the term of this Agreement, Employee shall devote substantially his
entire work time, attention, and energies to the business of the Company
and its subsidiaries. Subject to the provisions of Section 4 hereof,
Employee may serve as a director or member of any other corporation or
entity so long as any such service does not cause any conflict of interest
with the Company. During the term of this Agreement, the Company shall use
its good-faith efforts to cause the Board to include Employee as a nominee
and cause his election to the Board.
2.3. Compensation.
2.3.1 Base Salary. Subject to the further provisions of
this Agreement, the Company agrees to pay to Employee an annual base
salary of $200,000, payable no less frequently than in accordance
with the regular payroll practices of the Company, with such
increases as shall be made from time to time in accordance with the
Company's regular salary administrative practices as applied to
Company officers. The base salary of Employee shall not be decreased
at any time during the term of this Agreement from the amount in
effect from time to time. Employee shall be entitled and eligible
for bonuses that may be declared from time to time in the sole
discretion of the Board.
2.3.2 Fringe Benefits. Employee shall be entitled to
participate in any fringe benefits which are now or may hereafter
become applicable to the Company's executives, and any other
benefits which are commensurate with the duties and responsibilities
to be performed by the Employee under this Agreement; including, but
not limited to, reimbursement for reasonable business expenses
accounted for in accordance with applicable governmental
regulations; life, long-term disability and accident insurance
plans; employee saving and
Page 3
4
investment plans; and medical, dental and hospitalization insurance
plans; without any material reduction in such fringe benefits as in
effect on the Effective Date hereof. Employee shall receive 5 weeks
paid vacation and 6 personal days paid vacation per year that this
Agreement is in effect. Effective upon execution of this Agreement,
Employee shall receive _____ options to purchase _____ shares of
Common Stock of the Company at an exercise price of _____ per share
subject to the vesting schedule and other terms and conditions
contained in the stock option attached hereto as Exhibit "2.3.2"
issued pursuant to the Employee Stock Option Plan (the "Option
Plan") attached hereto as Exhibit "2.3.2(a)."
2.3.3 Participation in Retirement and Benefit Plans. The
Employee shall be entitled to participate in any retirement,
pension, thrift or other retirement or employee plan that the
Company has adopted or may adopt for the benefit of its senior
executives.
3. TERMINATION. Employee's employment under this Agreement shall
terminate upon the occurrence of any one of the following events:
3.1 Total and Permanent Disability. In the event Employee
suffers Total and Permanent Disability, the Company may terminate
Employee's employment. Upon termination by reason of Total and Permanent
Disability, the Company shall pay to Employee such benefits as may be
provided to officers of the Company under any Company provided disability
insurance or similar policy or under any Company adopted disability plan
and in the absence of any such policy or plan shall continue to pay to
Employee for a period of not less than six (6) months the Compensation
then in effect as of the effective date of Employee's termination.
Employee agrees, in the event of any dispute under this Section as to the
existence of Total and Permanent Disability, to submit to a physical
examination by a licensed physician selected by the Company, the cost of
such examination to be paid by the Company, and the decision as to
Employee's disability shall be conclusive and binding upon the Company and
Employee. Nothing contained herein shall be construed to affect Employee's
rights under any disability insurance or similar policy, whether
maintained by the Company, Employee or another party.
3.2 Death. In the event of the death of Employee this
Agreement shall terminate and all obligations of the Company hereunder
shall be extinguished as of the date of Employee's death. Nothing
contained herein shall be construed to affect any rights of Employee's
estate under any life insurance or similar policy, whether owned by the
Company, the Employee or any third party.
Page 4
5
3.3 Termination For Cause. The Company may effect a
Termination For Cause of Employee. The Company shall have no further
obligation to pay Compensation hereunder after the date of Termination For
Cause.
3.4 Voluntary. Should Employee voluntarily terminate his
employment prior to the termination of this Agreement, the Company shall
have no further obligation to pay compensation.
3.5 Termination By Employee For Good Reason. Employee shall be
entitled to terminate his employment hereunder upon the occurrence of an
event constituting Good Reason, as defined in Section 1.6. If an event
constituting Good Reason occurs, Employee shall have the right,
exercisable for a period of thirty (30) days, to immediately terminate
this Agreement by delivering a written statement to that effect to the
Company. Upon such a termination, Employee shall be entitled to receive a
payment equal to the lesser of (i) an amount equal to one-half of the
Employee's annual base salary in effect at the time of termination, or
(ii) the remaining compensation due Employee under the terms of this
Agreement. If Employee fails to exercise his rights under this Section 3.5
within thirty (30) days following an event constituting Good Reason, such
rights shall expire and be of no further force or effect.
4. CONFIDENTIALITY.
4.1 Confidential Information. Employee acknowledges that he
has and will have access to trade secrets and confidential business
information of the Company and its affiliates and subsidiaries throughout
the term of this Agreement and that any such trade secret or confidential
information, regardless of whether Employee alone or with others developed
any such trade secret or confidential information, shall be and shall
remain the property of the Company or its affiliates or subsidiaries.
During the term of this Agreement and after termination of employment,
Employee shall not, either voluntarily or involuntarily, on either his own
account, as a member of a firm, or on behalf of another employer or
otherwise, directly or indirectly use or reveal to any person,
partnership, corporation or association any trade secret or confidential
information of the Company or any of its subsidiaries or affiliates. Such
trade secrets shall include, but shall not be limited to, business plans,
marketing plans or programs, any non-public financial information,
including but not limited to, financial information, forecasts and
statistics relating to markets, contracts, customer lists, compensation
arrangements and business opportunities. The term "trade secrets" shall
not include information generally available to the public or a
governmental agency. Employee will not make available to any person,
partnership, corporation or association, or retain after termination of
employment, any Employer policy manuals, printed
Page 5
6
materials or computer disc containing information related to the Company
or to any affiliate of the Company.
4.2 Injunctive Relief. Employee acknowledges that the
restrictions contained in this Section 4 are a reasonable and necessary
protection of the immediate interests of the Company and its affiliates
and subsidiaries and that any violation of these restrictions would cause
substantial injury to the Company. In the event of a breach or threatened
breach by Employee of these restrictions, the Company shall be entitled to
apply to any court of competent jurisdiction for an injunction restraining
Employee from such breach or threatened breach; provided, however, that
the right to apply for an injunction shall not be construed as prohibiting
the Company from pursuing any other available remedies for such breach or
threatened breach.
5. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon
and inure to the benefit of the Employee, the Company and their respective
heirs, executors, administrators, successors and assigns; provided, however,
that Employee may not assign his rights hereunder without the prior written
consent of the Company and may not assign his obligations hereunder. The Company
may assign either its rights or obligations hereunder to any of its subsidiaries
or affiliated corporation or to any successor to substantially all of the assets
or business of the Company.
6. MODIFICATION, WAIVER OR AMENDMENT. The provisions of this
Agreement may not be modified, amended or waived except by a written instrument
executed by the Company and Employee. The waiver of any provision of this
Agreement by either party shall not constitute a waiver of any subsequent
occurrences or transactions unless the waiver, by its terms, constitutes a
continuing waiver.
7. ARBITRATION. Any disputes related to or arising out of this
Agreement or otherwise relating to Employee's employment with the Company shall
be subject to mandatory binding arbitration before a single arbitrator in
accordance with the rules of the American Arbitration Association ("AAA"),
except that the Company may, in place of or in addition to arbitration, elect to
pursue court remedies for any breach of Section 4 of this Agreement. The
arbitrator shall be selected in accordance with the AAA's rules for selecting a
single arbitrator provided that, if AAA rules call for selecting an arbitrator
by making strikes against a list of candidates, in the event that there is an
odd number of candidates Employee shall have the first strike and in the event
that there is an even number of candidates the Company shall have the first
strike. Except to the extent contrary to this Agreement or the Company's written
policies regarding arbitration with Employee, the procedural rules that shall
govern the arbitration shall be the rules of the AAA, or in the event that a
particular procedural issue is not governed by the foregoing, the Arizona Rules
of Civil Procedure shall apply except that discovery may be conducted only upon
agreement of the parties or order of the arbitrator upon good cause shown,
Page 6
7
and in issuing discovery orders, the arbitrator shall consider that the parties
have chosen arbitration to provide for the efficient and inexpensive resolution
of disputes. The forum for the arbitration shall be Phoenix, Arizona. The
applicable substantive law shall be the law chosen to apply to disputes provided
by this Agreement. A party may initiate arbitration under this Section by making
a demand for arbitration and shall serve with that demand a detailed statement
setting forth with particularity the factual and legal basis for each claim
asserted. In the event that the party initiating arbitration fails to serve on
the opposing party the detailed statement of claims required by this Section,
the opposing party shall be entitled to move to dismiss the arbitration, and
upon such motion, such claims shall be dismissed. Upon the issuance of a
decision, the arbitrator shall issue written findings of fact and conclusions of
law. The decision of the arbitrator shall be in accordance with the express
terms and conditions of this Agreement. Each party shall pay its own attorneys'
fees and costs and shall share the arbitration fees provided that the
nonprevailing party shall reimburse the prevailing party for all reasonable
attorneys' fees and costs, including the arbitration fees, incurred in
connection with the arbitration. Arbitration proceedings and any information
related thereto shall be kept confidential. THE PARTIES ACKNOWLEDGE THAT THEIR
AGREEMENT TO ARBITRATE UNDER THIS SECTION MEANS THAT TRIAL BY JURY OR APPEAL
WILL NOT BE AVAILABLE FOR ANY DISPUTES RELATED TO OR ARISING OUT OF THIS
AGREEMENT OR OTHERWISE RELATING TO EMPLOYEE'S EMPLOYMENT WITH THE COMPANY
INCLUDING WITHOUT LIMITATION DISPUTES INVOLVING ALLEGED EMPLOYMENT
DISCRIMINATION, HARASSMENT, WRONGFUL TERMINATION, AND ANY OTHER CLAIMS ARISING
OUT OF FEDERAL OR STATE STATUTES, COMMON LAW OR PUBLIC POLICY, EXCEPT THAT THIS
SECTION DOES NOT RESTRICT THE RIGHT TO PURSUE COURT REMEDIES FOR ANY BREACH OF
SECTION 4 OF THIS AGREEMENT.
8. NO MITIGATION. Any compensation earned by Employee from another
employer or from employment not in violation of the provisions of Section 2.2 or
Section 4 hereof shall not reduce any payment to which Employee is entitled
under the terms of this Agreement.
9. MISCELLANEOUS.
9.1 Entire Agreement. This Agreement rescinds and
supersedes any other agreement and contains the entire understanding
between the parties relative to the employment of Employee, there
being no terms, conditions, warranties, or representations other
than those contained or referred to herein, and no amendment hereto
shall be valid unless made in writing and signed by both of the
parties hereto.
9.2 Governing Law. This Agreement shall be interpreted
and construed in accordance with the laws of the State of Arizona
without regard to conflicts of law principles as applied to
residents of Arizona.
Page 7
8
9.3 Severability. In the event that any provisions
herein shall be legally unenforceable, the remaining provisions
nevertheless shall be carried into effect.
9.4 Attorneys' Fees. In the event of any litigation
between the parties hereto arising out of the terms, conditions and
obligations expressed in this Agreement, the prevailing party in
such litigation shall be entitled to recover reasonable attorneys'
fees incurred in connection therewith.
9.5 Notices. All notices required or permitted to be
given hereunder shall be deemed given if in writing and delivered
personally or sent by telex, telegram, telecopy, or forwarded by
prepaid registered or certified mail (return receipt requested) to
the party or parties at the following addresses (or at such other
addresses as shall be specified by like notices), and any notice,
however given, shall be effective when received:
To Employee: Xxxxxxx Xxxxxxxxx
0000 X. Xxx Xxxxxxx
Xxxxxx, Xxxxxxx 00000
To the Company: iBIZ TECHNOLOGY CORP.
Xxxxx 000-000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx,
Xxxxxx X0X 0X0
9.6 Waiver. The waiver by any party of a breach of any
provision of this Agreement by the other shall not operate or be construed
as a waiver of any subsequent breach of the same provision or any other
provision of this Agreement.
9.7. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
9.8 Headings. The subject headings to the sections in this
Agreement are included for purposes of convenience only and shall not
affect the construction or interpretation of any of its provisions.
9.9 Survivorship. The provisions of Sections 3.1, 4.1, 4.2, 7
and 8 shall continue and shall survive the termination of the Agreement.
Page 8
9
9.10 Integration. This Agreement reflects the entire agreement
of the parties related to the subject matter hereof, and any prior
understandings, agreements or representations relating to such subject
matter are hereby superseded.
In witness whereof, the parties have executed this Agreement on
___________________, 1999, and effective as of the date first hereinabove
written.
iBIZ TECHNOLOGY CORP.,
a Florida corporation
By:___________________________________
Its:__________________________________
Employee
___________________________________
XXXXXXX XXXXXXXXX
Page 9
10
EXHIBIT "2.3.2"
EMPLOYEE STOCK OPTION
Page 10
11
EXHIBIT "2.3.2(a)"
EMPLOYEE STOCK OPTION PLAN
Page 11
12
ADDENDUM TO EMPLOYMENT AGREEMENT
THIS ADDENDUM TO EMPLOYMENT AGREEMENT ("this Addendum") is entered
into effective as of the ____ day of ______________, 1999, by and between iBIZ
TECHNOLOGY CORP., a Florida corporation ("iBIZ"), INVNSYS TECHNOLOGY
CORPORATION, ("INVNSYS") (iBIZ and INVNSYS are referred to collectively as the
"Company") and XXXXXXX XXXXXXXXX, an individual ("Employee"). iBIZ and the
Employee entered into that certain Employment Agreement dated March 5, 1999
("Employment Agreement"), which, among other things, provided for the issuance
of certain options to purchase shares of common stock of iBIZ. iBIZ and Employee
desire to amend the provisions relating to the options under such Employment
Agreement.
THEREFORE, in consideration of the covenants and agreements set
forth in the Employment Agreement and this Addendum and other good and valuable
consideration, the parties agree as follows:
1. OPTIONS. In lieu of the options that were to be issued to
Employee under the Employment Agreement, the Company and Employee hereby agree
that iBIZ shall issue to Employee 250,000 options to purchase 250,000 shares of
common stock of iBIZ at an exercise price of $0.75 per share. Such options shall
be subject to the vesting schedule and other terms and conditions contained in
the stock option attached to the Employment Agreement issued pursuant to the
Employee Stock Option Plan attached to the Employment Agreement. A total of
200,000 options shall be issued to Employee in consideration of Employee's
services as an officer of iBIZ and 50,000 options shall be issued to Employee in
consideration of Employee's services as a director of iBIZ. The effective date
of the issuance of the foregoing options shall be April 22, 1999.
2. EFFECT OF ADDENDUM. Except as amended by this Addendum, the terms
and conditions of the Employment Agreement shall remain unchanged. This Addendum
is hereby incorporated into the Employment Agreement as though originally a part
thereof.
IN WITNESS WHEREOF, the parties have executed this Addendum as of
the effective date set forth above.
iBIZ TECHNOLOGY CORP.
By: _______________________________
Xxx Xxxxxxxxx, President
Page 12
13
XXX XXXXXXXXX
___________________________________
Page 13
