EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made on this date to
be effective on the date stated at the end of this Agreement (the "Effective
Date"), between American Net Claims, Inc., ("the Company") and Xxxxxxx X.
Xxxxxxx, ("the Employee").
I. TERM:
1. Company hereby employs the Employee to render full time
services to the Company at the direction of its officers for
an "Initial Term" of thirty-six (36) months, commencing on the
Effective Date and ending thirty-six (36) months from the
Effective Date.
2. Unless otherwise terminated in accordance with the other
provisions of this Agreement, this Agreement shall
automatically renew annually after the Initial Term of this
Agreement, unless a thirty (30) day advance written notice to
the contrary is served by either party. Such notice shall be
delivered at least thirty days in advance of the anniversary
date of this Agreement.
II. DUTIES:
1. The Employee hereby accepts employment by the Company as a
Vice President of Technology for the term and upon the
conditions set forth in this Agreement, and shall during the
term of this Agreement:
a. Perform his duties to the best of his ability, and in an
efficient, faithful and businesslike manner, and carry
out the policies and directives of the Company.
b. Devote his full time and attention to the performance of
such duties, and to the exclusion of any other active
business involvement unless approved, in advance, by the
President of the Company or any other authorized officer
of the Company.
c. Not become involved in any matters which may adversely
affect or reflect upon the Company.
d. Not become engaged, either directly or indirectly, in
any manner whatsoever or in any capacity, whether as
principal, agent, partner, officer, director, employee,
advisor, consultant, or otherwise, in
EMPLOYMENT AGREEMENT PAGE-1
any business or activity in competition with the
business of the Company, or which may adversely effect
the Company.
e. Refrain from disclosing to anyone outside the Company,
except as required in the normal course of business,
Company Proprietary Information which includes, but is
not limited to, the following: customer lists, trade
secrets, vendor lists, Company financial statements and
information, market plans, product drawings, products
designs, product specifications, processes, techniques,
inventions, research projects, Company strategies and
other information concerning the Company obtained while
in the employ of the Company not generally known to the
public or to persons involved in the same business as
the Company.
III. BASE COMPENSATION:
1. The Employee shall receive annual compensation agreed upon by
both parties during the term of this Agreement. This pay may
be adjusted upward from time to time based on performance of
the Employee, at the Company's sole discretion. The Employee
shall initially receive annual compensation of ONE HUNDRED
THOUSAND AND NO/l00 DOLLARS ($100,000.00) payable in at least
semi-monthly installments during the term of this Agreement.
2. Notwithstanding the foregoing, in the event that the Employee
is terminated without cause or under numbered paragraph
VIII(1)(g) hereof, the Employee shall receive the following
severance compensation in consideration of the termination of
the Employee:
a. THIRTY THOUSAND AND NO/100 DOLLARS ($30,000.00) in the
event that such termination occurs during the first one
year after the Effective Date of this Agreement;
b. TWENTY-FIVE THOUSAND AND NO/l00 DOLLARS ($25,000.00) in
the event that such termination occurs during the second
year after the Effective Date of this Agreement;
c. TWENTY THOUSAND AND NO/l00 DOLLARS ($20,000.00) in the
event that such termination occurs during the third year
after the Effective Date of this Agreement; and
d. After the end of the third year from the Effective Date
of this Agreement, the Employee shall be entitled to no
severance
EMPLOYMENT AGREEMENT PAGE-2
compensation in the event that the Employee is
terminated without cause or under numbered paragraph
VIII(1)(g) hereof.
3. Except for accrued salary for which the Employee has not been
paid, all compensation to the Employee shall cease upon the
Employee's no longer being employed by the Company, unless
otherwise agreed to, in writing. This specifically is meant to
include the agreement that the Employee's right to all
"Bonuses" (defined as any type of additional compensation for
the services of the Employee, whether in the form of stock,
cash or any other benefit or compensation to or for the
benefit of the Employee), if any, shall terminate upon the
employee's no longer being employed by the Company, unless
specifically provided otherwise by an employee benefit plan
adopted generally by the Company for its employees (and then,
only to the extent the Employee is included by qualification
or general reference in such plan), or as otherwise agreed by
a subsequent writing signed by the duly authorized
representative of the Company. Unless the Employee shall have
been employed by the Company on the last day of the period for
which Bonuses, if any, under this Agreement relate, no Bonuses
shall be due or owing to the Employee, unless otherwise
specifically agreed by a subsequent writing signed by the duly
authorized representative of the Company. The Employee shall
be entitled to Bonuses based on the schedule defined in
Schedule I and Exhibit A attached hereto and made a part
hereof.
IV. COMPETITION:
1. In the event the Employee resigns from the Company or his
employment is terminated for any reason set forth in
Subparagraph a. through e. of numbered Paragraph VIII(1)
hereof the Employee agrees that for a period of one (1) year
after the Employee's date of departure from the Company he
will not, in any manner whatsoever or in any capacity, whether
as principal, agent, partner, officer, director, employee,
advisor, consultant or otherwise, for profit or not, sell
products or services that meet the same specifications or are
substantially similar to the products sold by the Company to
the same customers, then existing, of the Company, regardless
of where those customers are located. To be deemed to be a
"same customer, then existing, of the Company", the customer
in question must have done business with the Company sometime
within the one (1) year prior to the Employee's date of
departure from the Company. In the event that the Employee is
terminated from employment for either reason set forth in
Subparagraph f. or g. of numbered Paragraph VIII(1) hereof,
the Employee agrees that the same restrictions against
competition and same Market Area as stated above in this
paragraph shall apply, but the time period prohibiting
competition shall be shortened to six (6) months.
EMPLOYMENT AGREEMENT PAGE-3
2. In the event the Employee becomes subject to any restriction
against competition by reason of the immediately preceding
paragraph, the Employee agrees that during the period of
restricted competition, the Employee will not, directly or
indirectly, for profit or not, do as follows:
a. Employ, or in any manner interfere with the employment
of any of the then existing employees, agents or
representatives of the Company.
b. Either directly or indirectly, induce, solicit, or
influence, or attempt to induce, solicit, or influence,
any client or customer of the Company to terminate or
materially change its relationship with the Company.
c. Either directly or indirectly, request or advise any
present or future merchandise resource, supply resource,
or service resource of the Company to withdraw, curtail,
or cancel the furnishing or sales of merchandise,
supplies, or services to the Company.
d. Either directly or indirectly, induce, solicit, or
influence, or attempt to induce, solicit, or influence,
any employee, representative or agent of the Company
(including sales persons or sales representatives
whether or not they are independent contractors) to
terminate their employment or to terminate their
relationship with the Company.
3. In the event a court holds that any of the above restrictions
are invalid or unenforceable, the parties hereby request that
the intent of such provisions be carried out by judicial
modification to make such restrictions reasonable and within
the law. The parties hereby request the trier(s) of fact in
any proceeding in which they are involved, to amend or delete
provisions of this Agreement in accordance with the spirit and
underlying intent of this Agreement as is deemed necessary by
such trier(s) of fact in order to make this Agreement comply
with law. Any such deletion or amendment shall apply only
where the Court rendering the same has jurisdiction. The
Employee hereby specifically acknowledges and agrees that the
time period restricting competition as provided for in this
Agreement shall be tolled during the time period of any breach
of this Agreement by the Employee.
4. The Employee acknowledges that a breach of the restrictions
against engaging in a competitive activity contained in this
Section will cause
EMPLOYMENT AGREEMENT PAGE-4
irreparable damage to the Company, the exact amount of which
will be difficult to ascertain, and that the remedies at law
for any such breach will be inadequate. Accordingly, the
Employee and the Company agree that if the Employee breaches
the restrictions against engaging in a competitive activity
contained in this Section, then the Company shall be entitled
to injunctive relief, without posting bond or other security.
5. CONSIDERATION FOR COVENANT NOT TO COMPETE AGREEMENT: The
Employee hereby acknowledges and agrees that but for the
Employee's agreements concerning not competing with the
Company as contained in numbered paragraph IV of this
Agreement, the Company never would have hired the Employee, or
in the event that the Employee had already been employed by
the Company, that the Company never would have continued the
employment of the Employee. Therefore, the Employee hereby
acknowledges and agrees that there is separate and distinct,
good and valuable consideration given with respect to such
agreement not to compete with the Company. Further, as
additional consideration for the agreements of the Employee
concerning not competing with the Company, the Employee
acknowledges and agrees that five per cent (5%) of the
Employee's salary (or hourly wage as the case may be) is paid
to the Employee as further consideration for the agreements of
the Employee concerning not competing with the Company [in the
event that this Agreement is executed by an existing Employee
of the Company, such Employee acknowledges and agrees that
concurrently with the execution of this agreement, such
Employee has received an increase in pay equal to five per
cent (5%) of the Employee's salary (or hourly wage as the case
may be) and that such increase is and shall be paid to such
Employee as further consideration for the agreements of the
Employee concerning not competing with the Company].
V. COMPANY PROPRIETARY INFORMATION:
1. Company Proprietary Information includes, but is not limited
to, the following: information relating to any formula,
pattern, device or compilation of information, source codes,
techniques, pricing, forms, procedures, processes, mailing
lists, customer lists and/or data bases, sales methods,
models, drawings, memoranda and other material or records of
proprietary nature, technical data, records and policy matters
relating to research, finance, accounting, sales, promotion,
schematics, personnel, management and operations, price lists,
customer service requirements, costs to providing services,
names of suppliers and customers, arrangements entered into
with suppliers and customers, including, but not limited to,
marketing strategies, and trade secrets of the Company and in
EMPLOYMENT AGREEMENT PAGE-5
general, any process or device for continuous use in the
operation of the business of the Company obtained while in the
employ of the Company not generally known to the public or to
persons involved in the same business as the Company, meaning
specifically to include any of the foregoing items,
information, data, compilations or lists developed in whole or
in part by the Employee.
2. The Employee agrees that any Company Proprietary Information
is and shall be and remain the sole and exclusive property of
the Company, regardless of whether or not the Employee had any
hand in the development or origination of the Company
Proprietary Information. This Agreement shall constitute the
Employee's assignment to the Company of any and all right,
title and interest in and to Company Proprietary Information
the Employee had any hand in the development or origination of
on behalf of the Company or on Company time. The Employee
agrees that in the performance of his duties he has received
and will continue to receive both written and oral Company
Proprietary Information.
3. The Employee agrees that the use of Company Proprietary
Information is strictly limited to that which is necessary in
the Company's business and within the scope of his employment.
Except as required in the conduct of the Company's business
and within the scope of his employment, the Employee agrees to
maintain secret all Company Proprietary Information and agrees
not to disclose such Company Proprietary Information to any
other person, firm or corporation either during or after his
employment with the Company. The Employee further agrees not
to use any Company Proprietary Information for his own benefit
or the benefit of any other person, firm or corporation, in
any manner whatsoever or in any capacity, whether as
principal, agent, partner, officers, director, employee,
advisor, consultant or otherwise, either during or after his
employment with the Company, for profit or not.
4. The Employee agrees that all Company Proprietary Information
in his possession from time to time (original and all copies
thereof) shall be and remain the Company's sole property, that
the Employee will not claim any ownership interest in any part
of the Company Proprietary Information and agrees to use all
reasonable precautions to insure that such Company Proprietary
Information shall be properly protected and kept from
unauthorized persons.
5. The Employee agrees that in the event of termination of his
employment for any reason, or at any time upon request, he
shall deliver promptly to the Company all Company Proprietary
Information.
EMPLOYMENT AGREEMENT PAGE-6
VI. EMPLOYEE BENEFITS:
1. The Employee shall be entitled to a maximum allowance for
actual expenses incurred in the relocation of the Employee to
the Dallas, Texas area in the amount of TWO THOUSAND FIVE
HUNDRED AND NO/100 DOLLARS ($2,500.00).
2. The Employee shall be entitled to participate in any health
insurance, life insurance, or any other benefit or bonus
programs which are or may be established by the Company at its
sole discretion for its employees, subject to any plan
qualification requirements, including but not limited to the
Stock Option Plan (the "Plan") described in Schedule 1
attached hereto and incorporated herein by reference.
Notwithstanding any Company Employee Manual terms or
conditions to the contrary, the Employee shall be deemed to be
entitled to two (2) weeks vested vacation time immediately
upon the signing of this Agreement (normal policy is that only
one week will vest after six months of employment). Additional
vacation time will accrue monthly, totaling two (2) weeks per
year of employment. The Company shall pay for the parking of
the Employee at the offices of the Company in Dallas, Texas.
3. Bonuses, if any, may be given from time to time, at the sole
discretion of the Company, calculated by "in house"
accountants of the Company. All bonus payments are in addition
to compensation agreed to and are not subject to question or
dispute.
4. Unless otherwise specifically provided for in this Agreement,
the Employee shall be deemed to have no vested rights or
accrued rights in any employee benefit or bonus provided for
hereunder, whether in the form of cash, equity compensation
(if there is any such agreement), or other things of value,
unless specifically stated herein to the contrary, or unless
otherwise specifically agreed by a subsequent writing signed
by the duly authorized representative of the Company.
VII. ASSIGNMENT:
1. This Agreement is personal in nature, and the Employee shall
not assign or transfer any of his obligations under this
Agreement. The Company shall not assign the or transfer any of
the obligations of the Company under this Agreement.
EMPLOYMENT AGREEMENT PAGE-7
2. Any attempt to assign the obligations under the terms and
conditions of this Agreement shall be null and void and shall
constitute a material breach of this Agreement.
VIII. GROUNDS FOR TERMINATION OF EMPLOYMENT:
1. The following shall be deemed grounds for termination of the
Employee, immediately, with or without any written notice:
a. Because of theft, misappropriation or embezzlement of
Company property, property of any officer, shareholder,
director or employee, or property of any customer of the
Company or supplier of the Company.
b. Because of dishonesty in the performance of his duties
for the Company or fraud against the Company, which
fraud shall consist of making false representations
known to be false (or concealing material facts) with
the intent to deceive the Company, or its officers,
directors or shareholders, for the purpose of obtaining
for himself something of value to which he is not
entitled under this Agreement, and which has the effect
of damaging the Company, either financially, legally or
in its relations with its suppliers or customers.
c. Conviction of a crime punishable as a felony, or
imprisonment for any crime whether felony or
misdemeanor, for a period of time in excess of five (5)
days.
d. Failure to comply with any of the terms and conditions
of this Agreement.
e. In the conduct of the business of the Company, violation
of any state or federal law regarding discrimination
against individuals by reason of their age, race, sex or
religion, the sexual harassment of any individual, or
the disability of any individual.
f. If the Employee cannot physically or mentally render
satisfactory service to the Company, understanding that
the Company will make all reasonable attempts to
accommodate the Employee under the law.
g. Any other reason which in the sole reasonable judgement
of the Company is in the best interests of the Company.
EMPLOYMENT AGREEMENT PAGE-8
IX. MISCELLANEOUS:
SEVERABILITY AND SURVIVAL: Should any provision hereof be
deemed illegal or unenforceable, the other provisions hereof
shall be given effect separately therefrom and shall not be
affected thereby. The restrictions against competition and
with respect to Company Proprietary Information contained in
this Agreement shall survive the termination of this
Agreement.
2. NOTICE: Unless otherwise provided for to the contrary under
this Agreement, any notice required or permitted to be given
under this Agreement shall be in writing, shall be effective
five (5) days after mailing and shall be sent by Certified
Mail, return receipt requested, to the last known address of
the party to whom such notice is addressed.
3. COMPANY POLICIES. The Employee agrees to comply with any and
all the Company's policies, regulations and procedures
including but not limited to those which now or hereafter in
effect or which may relate to the matters set forth in this
Agreement. Periodically, at the request of the Company, the
Employee also agrees to execute and/or respond fully,
truthfully, accurately and completely to all customary
employment documents or questionnaires as may be submitted to
the Employee in connection therewith.
4. CHOICE OF LAW: It is the intention of the parties that the
laws of the State of Texas shall govern this Agreement,
without regard to the rules relating to conflict of laws or
choice of law.
5. PARAGRAPH HEADINGS: Paragraph and other headings contained in
this Agreement are for reference purposes only, and shall not
affect, in any way, the meaning or interpretation of this
Agreement.
6. PARTIES IN INTEREST: This Agreement shall inure to the benefit
of and be binding upon the respective heirs, successors and
assigns (where permitted) of the parties hereto.
7 CONFLICT: To the extent that this Agreement conflicts with any
of the terms and conditions of any Company Employee Manual or
similar document, the terms of this Agreement shall control.
8. ENTIRE AGREEMENT: This Agreement constitutes the entire
agreement between the parties hereto, and there are no
agreements or
EMPLOYMENT AGREEMENT PAGE-9
understandings relating to the subject matter hereof between
the parties other than those set forth herein or herein
provided for. This Agreement cannot be changed, modified, or
amended except in writing signed by the parties thereto.
9. SETTLEMENT OF DISPUTES: The following agreements are made with
respect to the settlement of disputes arising under the terms
and conditions of this Agreement:
a. If a dispute arises out of or relates to this Agreement,
including to mean any of its Exhibits, or the breach or
default of this Agreement, the parties shall first, in
good faith, attempt to negotiate a settlement of that
dispute, breach or default.
b. If the dispute, breach or default cannot be settled
through negotiation, the parties agree and shall proceed
to binding arbitration through the American Arbitration
Association in accordance with its Commercial
Arbitration Rules, and judgment upon the award rendered
by the arbitrator(s) may be entered in any court having
jurisdiction thereof.
c. Any provisional remedy (including injunctive relief)
which a party to this Agreement may want to elect, shall
be available notwithstanding the provisions relating to
arbitration of disputes. Any party may seek such
provisional remedy from the appropriate court of law
pending arbitration, and such proceeding in which the
provisional remedy was sought will then be stayed
pending the final award of the arbitration.
d. The expenses of arbitration conducted pursuant to this
paragraph shall be borne by the parties in such
proportions as the arbitrator(s) shall decide.
Executed to be effective on June 2, 1997.
THE COMPANY:
AMERICAN NET CLAIMS INC.
BY: [ILLEGIBLE]
Title: [ILLEGIBLE]
EMPLOYMENT AGREEMENT PAGE-10
THE EMPLOYEE:
/s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxx
EMPLOYMENT AGREEMENT PAGE-11
SCHEDULE 1
On April 5, 1997, the Board of Directors of the Company and stockholders
of the Company adopted the Plan. The Plan provides for the grant of options to
purchase up to 750,000 shares of Common Stock to employees, officers, directors,
and consultants of the Company. Options may be either "incentive stock options"
within the meaning of Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Internal Revenue Code of
1986, as amended (the "Code"), or non-qualified options. Incentive stock options
may be granted only to employees of the Company, while non-qualified options may
be issued to non-employee directors, consultants, and others, as well as to
employees of the Company.
The Plan will be administered by "disinterested members" of the Board of
Directors (as defined by Rule 16b-3 under the Exchange Act), who determine,
among other things, the individuals who shall receive options, the time period
during which the options may be partially or fully exercised, the number of
shares of Common Stock issuable upon the exercise of each option, and the option
exercise price.
The exercise price per share of Common Stock subject to an incentive
option may not be less than the fair market value per share of Common Stock on
the date the option is granted. The per share exercise price of the Common Stock
subject to a non-qualified option may be established by the Board of Directors.
The aggregate fair market value (determined as of the date the option is
granted) of Common Stock for which any person may be granted incentive stock
options which first become exercisable in any calendar year may not exceed
$100,000. No person who owns, directly or indirectly, at the time of the
granting of an incentive stock option to such person, 10% or more of the total
combined voting power of all classes of stock of the Company (a "10%
Stockholder") shall be eligible to receive any incentive stock options under the
Plan unless the exercise price is at least 110% of the fair market value of the
shares of Common Stock subject to the option, determined on the date of grant.
Non-qualified options are not subject to such limitation.
No stock option may be transferred by an optionee other than by will or
the laws of descent and distribution, and, during the lifetime of an optionee,
the option will be exercisable only by the optionee. In the event of termination
of employment other than by death or disability, the optionee will have no more
than three months after such termination during which the optionee shall be
entitled to exercise the option, unless otherwise determined by the Board of
Directors. Upon termination of employment of an optionee by reason of death or
permanent and total disability, such optionee's options remain exercisable for
one year thereafter to the extent such options were exercisable on the date of
such termination. No similar limitation applies to non-qualified options.
Options under the Plan must be issued within ten years from the effective
date of the Plan. The effective date of the Plan is April 5, 1997. Incentive
stock options granted under the Plan cannot be exercised more than ten years
from the date of grant. Incentive stock options
EMPLOYMENT AGREEMENT PAGE-12
issued to a 10% Stockholder are limited to five year terms. Options granted
under the Plan generally provide for the payment of the exercise price in cash
and may provide for the payment of the exercise price by delivery to the Company
of shares of Common Stock already owned by the optionee having a fair market
value equal to the exercise price of the options being exercised, or by a
combination of such methods. Therefore, if so provided in an optionee's options,
such optionee may be able to tender shares of Common Stock to purchase
additional shares of Common Stock and may theoretically exercise all of his
stock options with no additional investment other than the purchase of his
original shares.
Any unexercised options that expire or that terminate upon an employee's
ceasing to be employed by the Company become available again for issuance under
the Plan.
To date, no options have been granted under the Plan.
EMPLOYMENT AGREEMENT PAGE-13
EXHIBIT A
Bonus Plan for Xxxxxxx Xxxxxxx
$10,000 Paid upon completion, testing and successful production of a claim
format generator for use with CyberClaim.
$5,000 Paid upon completion of a browser interface implementation of
CyberClaim for production mode utilizing Top Speed browser solution
and eliminating the requirement for Citrix terminal emulation.
Bonus will be paid in the first two week pay period upon successful completion
of the above objectives.
EMPLOYMENT AGREEMENT PAGE-14
