EXHIBIT 10.2
AGREEMENT OF EMPLOYMENT
THIS AGREEMENT OF EMPLOYMENT ("Agreement") is made and entered into as of
March 13, 2000 by and between DPEC, INC., an Ohio corporation having its
principal office at Building 3, 000 Xxxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxx (the
"Company"), and Xxxxx X. Xxxxx ("Employee").
W I T N E S S E T H:
WHEREAS, Employee is a longstanding employee of the Company;
WHEREAS, the Company and Employee desire to revise the terms and conditions
under which the Company will employ Employee on and after the date hereof; and
WHEREAS, the Company and Employee desire to enter into this Agreement to
set forth their mutual understanding as to the terms and conditions of
Employee's employment by the Company on and after the date hereof.
It is therefore agreed between the parties as follows:
1. EMPLOYMENT. The Company agrees to employ Employee as the Company's
President and Chief Executive Officer and Employee, in consideration of such
employment, hereby accepts such employment. Employee shall have the duties,
responsibilities and authority customarily possessed by a chief executive
officer of a corporation. During the term of her employment with the Company,
Employee shall perform faithfully, diligently and competently her duties and
responsibilities. Unless otherwise approved in advance by the Company's Board
of Directors, Employee shall devote her full business time and energy
exclusively to the business and affairs of the Company and in no event shall
Employee engage in any outside activities which would be reasonably expected to
affect the Company adversely or which would divert substantial time or effort
from the business affairs of the Company.
2. TERM. Employee's term of employment with the Company pursuant to this
Agreement shall continue until terminated by the Company or Employee pursuant to
Section 4 hereof. Employee shall be an "employee-at-will" of the Company.
3. COMPENSATION AND BENEFITS. Except as otherwise provided upon a
termination of Employee's employment pursuant to Section 4 hereof, the Company
shall compensate Employee and provide the benefits as set forth in this Section
3. In addition, the Company shall reimburse Employee or pay directly for
reasonable business expenses incurred by her during her employment term in
accordance with the Company's standard policy for reimbursing employment-related
expenses.
3.1 BASE SALARY. The Company shall pay Employee an annual base
salary of not less than $210,000 (prorated for any partial calendar year) during
each calendar year of
employment hereunder. Commencing January 1, 2001, Employee will also be
eligible for an annual salary review by the Compensation Committee (the
"Committee") of the Company's Board of Directors and her annual base salary for
the following calendar year may be increased (but not decreased) by the
Committee based on such criteria as the Committee shall determine.
3.2 BONUS. Employee shall be eligible to participate in the
Company's executive bonus plan, as such plan may be amended from time-to-time by
the Committee. Bonuses will be awarded by the Company to Employee based upon
the achievement of goals that are mutually agreeable to Employee and the
Committee. Employee's targeted bonus will be not less than $100,000 per
calendar year. Any bonus awarded to Employee shall be paid by the Company by
the end of the month following such date of award.
3.3 OTHER BENEFITS. Subject to the terms and conditions of the
Company's employee benefit plans and other benefit arrangements, Employee shall
be eligible to participate in the employee benefit plans and other benefits that
the Company makes available from-time-to time to its executive officers, as such
plans and benefits may be amended from time-to-time by the Company. The plans
and benefits that the Company currently offers to its executive officers are
described in its Employee Handbook, a copy of which has previously been provided
to Employee. Notwithstanding anything to the contrary contained in this
Section 3.3, Employee shall first be eligible for an award of incentive stock
options under the Company's incentive stock option plan during the first
calendar quarter of 2001.
4. TERMINATION OF AGREEMENT.
4.1 FOR CAUSE. The Company may terminate Employee's employment at
any time for cause (as defined below) effective immediately upon written notice
to Employee. In such event, Employee shall receive her salary through the
effective date of termination and any bonus payments awarded by the Company but
not yet paid to Employee prior to such date, and the Company shall have no
further obligation to Employee under this Agreement. Such amounts shall be paid
by the Company within thirty (30) days of the effective date of such
termination. For purposes of this Agreement, "cause" shall mean (a) conviction
of any felony or crime involving dishonesty; (b) participation in any act of
fraud or dishonesty against or involving the Company; (c) willful breach of any
Company policy; (d) material breach of this Agreement; or (e) conduct by
Employee which in the good faith determination of the Company's Board of
Directors demonstrates Employee's unfitness to serve as Chief Operating Officer
of the Company.
4.2 DISABILITY. Employee's employment may be terminated, at the
option of the Company or Employee, if during the term hereof the Employee is
under a disability, meaning because of ill health, physical or mental
disability, or for any other disability ("disability"), the Employee shall have
been continuously unable or shall have otherwise failed to perform the essential
functions of her job hereunder for ninety (90) consecutive working days.
Provided, however, that if the question of disability is raised, Employee shall
submit to a medical examination by three physicians who shall determine whether
Employee is disabled, one of whom shall be appointed by the Company, one of whom
shall be appointed by Employee or her representative, and one of whom shall be
appointed by the first two appointed physicians. The
-2-
decision of any two of the three physicians shall be final and binding. In the
event of the termination of Employee's employment due to disability, the Company
will pay Employee her salary through the end of month in which such termination
upon disability occurs and all bonus payments awarded by the Company but not yet
paid to Employee prior to her termination for disability. Such amounts shall be
paid by the Company within thirty (30) days following the effective date of such
termination. This Section 4.2 will be applied consistent with the Company's
obligations under applicable federal and state law, including without limitation
the Americans with Disabilities Act.
4.3 DEATH. This Agreement shall be terminated on the death of
Employee effective as of the date of her death. Employee's spouse or estate, as
the case may be, shall be entitled to retain the Employee's salary installment
for the month in which she dies and shall be entitled to all bonus payments
awarded by the Company but not yet paid to Employee prior to her death. Such
amounts shall be paid by the Company within thirty (30) days after the date of
death.
4.4 BY EMPLOYEE OTHER THAN FOR GOOD REASON. If Employee terminates
her employment with the Company other than for good reason (as defined below),
Employee shall receive her salary through the effective date of termination and
all bonus payments awarded by the Company but not yet paid to Employee prior to
such date, and the Company shall have no further obligation to Employee under
this Agreement. Such amounts shall be paid by the Company within thirty (30)
days from the effective date of such termination.
4.5 BY THE COMPANY OTHER THAN FOR CAUSE OR BY EMPLOYEE FOR GOOD
REASON. If the Company terminates Employee's employment with the Company other
than for cause or other than by reason of Employee's death or disability or if
Employee terminates her employment with the Company for good reason, the Company
shall continue to pay Employee her salary in effect on the effective date of the
termination for a period of twelve (12) months following the effective date of
her termination. In addition, the Company shall pay to Employee all bonus
payments awarded by the Company but not yet paid to Employee prior to such date
which amounts shall be paid within thirty (30) days of the effective date of
such termination. For purposes of this Agreement, "good reason" shall mean (a)
the assignment of duties or responsibilities to Employee that are inconsistent
in any material respect with her position as Chief Operating Officer of the
Company other than any such action that is remedied by the Company within thirty
(30) business days after receipt of notice thereof from Employee; or (b) any
failure by the Company to comply in any material respect with any provision of
this Agreement other than any such failure that is remedied by the Company
within thirty (30) business days after receipt of notice thereof from Employee.
A termination of employment by Employee for good reason shall be effectuated by
Employee giving the Company written notice of the termination, setting forth in
reasonable detail the specific conduct of the Company that constitutes good
reason. A termination of employment by the Employee for good reason shall be
effective at the close of business on the thirtieth (30th) business day
following the date when the notice of proposed termination for good reason is
given; PROVIDED, that such a termination of employment shall not become
effective if the Company shall have corrected the circumstances giving rise to
the notice of proposed termination within such period.
-3-
5. COVENANT NOT TO COMPETE.
5.1 NONCOMPETITION. At all times during the term of Employee's
employment, and for a period of one (1) year thereafter, Employee agrees that
she will not, directly or indirectly, anywhere in the Restricted Territory: (a)
enter into or in any manner take part in any business or endeavor, either as an
employee, agent, independent contractor, owner or otherwise, which directly or
indirectly competes with the Company, (b) divert or attempt to divert from the
Company any business whatsoever by influencing or attempting to influence, or
soliciting or attempting to solicit any of the customers of the Company with
whom Employee may have dealt at any time or who were customers of the Company on
the date of termination of Employee's employment or had been customers of the
Company prior thereto, or (c) divert or attempt to divert from the Company any
person employed by the Company by influencing or attempting to influence such
person to leave the Company's employ. For purposes of this Agreement,
"Restricted Territory" means (x) during the term of Employee's employment,
anywhere in the World and (y) during the one (1) year period after the
termination of Employee's employment, only those countries where the Company had
a reseller of its products as of the termination date and/or where the Company
did more than $10,000 of business in the one (1) year period prior to the
termination date.
5.2 ACKNOWLEDGMENT AND AGREEMENT. The Company and Employee each
hereby acknowledge and agree as follows:
(a) The covenants, restrictions and obligations set forth in
Section 5.1 above are founded upon valuable consideration and are reasonable in
duration and geographic scope;
(b) In the event of a breach or threatened breach by Employee of
any of the covenants, restrictions, agreements and obligations set forth herein,
monetary damages or the other remedies at law that may be available to the
Company for such breach or threatened breach will be inadequate and, without
prejudice to the Company's right to pursue any other remedies at law or in
equity available to it for such breach or threatened breach, including, without
limitation, the recovery of damages from Employee, the Company will be entitled
to injunctive relief;
(c) The time period and geographical area set forth in Section
5.1 hereof are each divisible and separable, and, in the event that the
covenants not to compete contained therein are judicially held invalid or
unenforceable as to such time period and/or geographical area, they will be
valid and enforceable in such geographical area(s) and for such time period(s)
which the court determines to be reasonable and enforceable. Employee agrees
that in the event any court of competent jurisdiction determines that the above
covenants are invalid or unenforceable to join with the Company in requesting
that court to construe the applicable provision by limiting or reducing it so as
to be enforceable to the extent compatible with the then applicable law.
Furthermore, any period of restriction or covenant herein stated
-4-
shall not include any period of violation or period of time required for
litigation to enforce such restriction or covenant; and
6. CONFIDENTIAL INFORMATION AND INVENTIONS.
6.1 CONFIDENTIALITY. Employee shall not at any time disclose,
distribute, publish, communicate or in any way cause to be disclosed,
distributed, published, or communicated in any way, Confidential Information (as
defined herein), or any part thereof, to any person, firm, corporation,
association, or any other operation or entity except on behalf of the Company,
in performance of Employee's duties for the Company, and Employee further agrees
not to use or permit the reproduction of any Confidential Information except on
behalf of the Company in Employee's capacity as an employee of the Company.
Employee shall take all reasonable care to avoid the unauthorized disclosure or
use of any Confidential Information. Employee hereby assumes responsibility for
and shall indemnify and hold harmless the Company from and against any
disclosure or use of the Confidential Information in violation of this
Agreement.
6.2 CONFIDENTIAL INFORMATION. For the purpose of this Agreement,
"Confidential Information" shall mean any written or unwritten information which
relates to and/or is used in the Company's business (including, without
limitation, information related to the names, addresses, buying habits and other
special information regarding past, present and potential customers, employees
and suppliers of the Company; customer and supplier contracts and transactions
or price lists of the Company and suppliers; all agreements, files, books, logs,
charts, records, studies, reports, processes, schedules and statistical
information relating to the Company; all products, services, programs and
processes sold, and all software licensed or developed by the Company; data,
plans and specifications, present and/or future development projects of the
Company; financial and/or marketing data respecting the conduct of the present
or future phases of business of the Company; computer programs, systems and/or
software; ideas, inventions, trademarks, business information, know-how,
processes, techniques, improvements, designs, redesigns, creations, discoveries
and developments of the Company; and finances and financial information of the
Company) which the Company deems confidential and proprietary, which is
generally not known to others outside the Company, and which gives or tends to
give the Company a competitive advantage over persons who do not possess such
information or the secrecy of which is otherwise of value to the Company in the
conduct of its business regardless of when and by whom such information was
developed or acquired, and regardless of whether any of these are described in
writing, copyrightable or considered copyrightable, patentable or considered
patentable. "Confidential Information" shall not include general industry
information or information which is publicly available or otherwise known to
those persons working in the area of the business of the Company or is otherwise
in the public domain without breach of this Agreement or information which
Employee has lawfully acquired from a source other than the Company.
"Confidential Information" specifically includes information received by the
Company from others, including the Company's clients, that the Company has an
obligation to treat as confidential and also includes any confidential
information acquired or obtained by Employee while in the employment of any of
the Company's subsidiary companies or any company which has been acquired by the
Company.
-5-
6.3 INVENTION OWNERSHIP. With respect to information, inventions and
discoveries developed, made or conceived by Employee, either alone or with
others, at any time during Employee's employment by the Company whether prior to
or hereafter and whether or not within normal working hours, arising out of such
employment or pertinent to any field of business or research in which, during
such employment, the Company is engaged or (if such is known to or ascertainable
by Employee) is considering engaging, Employee agrees:
(a) that all such information, inventions and discoveries,
whether or not patented or patentable, shall be and remain the sole property of
the Company;
(b) to disclose promptly to an authorized representative of the
Company all such information, inventions and discoveries and all information in
Employee's possession as to possible applications and uses thereof;
(c) not to file any patent applications relating to any such
invention or discovery except with the prior consent of an authorized
representative of the Company; and
(d) at the request of the Company, and without expense to
Employee, to execute such documents and perform such other acts as the Company
deems necessary, to obtain patents on such inventions in a jurisdiction or
jurisdictions designated by the Company, and to assign to the Company or its
designee such inventions and all patent applications and patents relating
thereto.
6.4 CONFIDENTIALITY OF INVENTIONS. With respect to the information,
inventions and discoveries referred to in Section 6.3, and also with respect to
all other information, whatever its nature and form and whether obtained orally,
by observation, from graphic materials, or otherwise (except such as is
generally available through publication) obtained by Employee during or as a
result of her employment by the Company and relating to any product, service,
process, or apparatus or to any use of any of them, or to materials, tolerances,
specifications, costs (including manufacturing costs), prices, or to any plans
of the Company, Employee agrees:
(a) to hold all such information, inventions and discoveries in
strict confidence and not to publish or otherwise disclose any thereof except
with the prior consent of an authorized representative of the Company;
(b) to take all reasonable precautions to assure that all such
information, inventions, and discoveries are properly protected from access by
unauthorized persons;
(c) to make no use of any such information, invention, or
discovery except as required or permitted in the performance of Employee's
duties for the Company; and
(d) upon termination of Employee's employment by the Company, or
at any time upon request of the Company, to deliver to the Company all graphic
materials and all substances, models, prototypes and the like containing or
relating to any such information,
-6-
invention, or discovery, all of which graphic materials and other things shall
be and remain the sole property of the Company. The term "graphic materials"
includes letters, memoranda, reports, notes, notebooks, books of account,
drawings, prints, specifications, formulae, data printouts, microfilms, magnetic
tapes and disks and other documents and recordings, together with all copies
thereof.
6.5 DURATION OF OBLIGATIONS. The obligations under Sections 6.1, 6.3
and 6.4 hereof shall remain in effect throughout Employee's employment by the
Company and ever thereafter, unaffected by any transfer(s) between the Company
and its affiliate(s), and without regard to the reason for termination of such
employment.
7. ASSIGNMENT, SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective legal
representatives, successors and assigns. The Company may assign or otherwise
transfer its rights under this Agreement to any successor or affiliated business
or corporation (whether by sale of stock, merger, consolidation, sale of assets
or otherwise), but this Agreement may not be assigned nor may the duties
hereunder be delegated by Employee. In the event that the Company assigns or
otherwise transfers its rights under this Agreement to any successor or
affiliated business or corporation (whether by sale of stock, merger,
consolidation, sale of assets or otherwise), for all purposes of this Agreement,
the "Company" shall then be deemed to include the successor or affiliated
business or corporation to which the Company assigned or otherwise transferred
its rights hereunder.
8. COUNTERPARTS. This Agreement may be executed in two counterparts, any
one of which shall constitute an original without reference to the other.
9. SEVERABILITY. Each of the provisions of this Agreement shall stand
independently and severably, and the invalidity of any one provision or portion
thereof shall not affect the validity of any other provision. In the event any
provision shall be construed to be invalid, no other provision of this Agreement
shall be affected thereby.
10. APPLICABLE LAW. This Agreement shall be governed in all respects by
the laws of the State of Ohio.
11. ENTIRE AGREEMENT. This Agreement supercedes and replaces all other
understandings and agreements, whether oral or in writing, between the parties
concerning the subject matter of this Agreement, including without limitation
the Employment Agreement dated September 15, 1998 between the Company and
Employee. No amendment or waiver of this Agreement or any provision hereof
shall be binding upon either party unless it is contained in a writing signed by
both parties.
-7-
IN WITNESS WHEREOF, the parties have hereunto set their hands as of the
date first above written.
COMPANY
DPEC, INC.
By: /s/ Xxxx X. Xxxxxxxx
Title: CFO
EMPLOYEE
/s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
-8-
