EXHIBIT 10.12
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into as of this 1st day of March,
1996, by and between GARDENESCAPE, INC., a Delaware corporation
("GardenEscape"), and XXXX X. XXXXXX ("Xxxxxx").
RECITALS
GardenEscape and Xxxxxx acknowledge the following:
X. Xxxxxx has valuable expertise and experience in the software and
information development field which will enable him to provide valuable business
and management services to GardenEscape.
B. GardenEscape desires to employ Xxxxxx and Xxxxxx desires to accept such
employment on the terms and conditions set forth in this Agreement.
AGREEMENTS
In consideration of the mutual covenants and agreements set forth in this
Agreement, the parties agree as follows:
1. Employment; Term. GardenEscape employs Xxxxxx and Xxxxxx accepts
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employment with GardenEscape on the terms and conditions set forth in this
Agreement. The term of Xxxxxx'x employment shall commence as of March 1, 1996
and continue on a month to month basis unless sooner terminated in accordance
with the terms hereof (the "Employment Period").
2. Duties. Xxxxxx shall serve as the Vice President of Development of
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GardenEscape and will, under the direction of the Board of Directors of
GardenEscape (the "Board"), faithfully and to the best of his ability perform
the duties of Vice President of Development as assigned by the Board from time
to time. As Vice President of Development, Xxxxxx will be responsible for all
development efforts for GardenEscape, including general technology,
architecture, software development, data-base design and implementation,
integration with GardenEscape's entire supply chain and research and
development. Xxxxxx will develop and maintain a source code control strategy and
a backup and disaster recovery system that will safeguard against the loss,
destruction and unauthorized use or modification of the database, architecture
and related software. At reasonable intervals, Xxxxxx shall provide GardenEscape
with
backup master copies of all code, software and other products created by him or
under his supervision. As a key executive of GardenEscape, Xxxxxx'x duties and
responsibilities are subject to reasonable review and modification by the Board.
Xxxxxx agrees to devote his entire business time, effort, skill and attention to
the discharge of such duties while employed by GardenEscape.
3. Compensation.
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(a) Base Salary. Xxxxxx shall receive a base salary of $100,000 per
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year, payable in regular and equal semi-monthly installments ("Base Salary").
Xxxxxx'x Base Salary shall be subject to annual review by the Board. Except as
otherwise provided, GardenEscape's obligation to pay Base Salary shall terminate
upon termination of this Agreement.
(b) Incentive Compensation. Xxxxxx shall be eligible to participate
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in the Incentive Compensation Plan of GardenEscape which is attached hereto as
Exhibit A (the "Incentive Compensation").
(c) Stock Option Plan. GardenEscape shall grant to Xxxxxx options to
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purchase an aggregate of 100,000 shares of GardenEscape's common stock, $.01 par
value in accordance with the terms of the GardenEscape, Inc. 1996 Stock Option
Issuance Plan and the GardenEscape Stock Option Agreement which agreement is
attached as Exhibit B.
4. Fringe Benefits. During the Employment Period, GardenEscape will
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provide Xxxxxx with the following fringe benefits:
(a) Generally. Xxxxxx shall receive such fringe benefits as are
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generally made available to executive-level employees of GardenEscape in
comparable positions, which benefits shall be at least as favorable as those
provided to all salaried employees of GardenEscape and such other benefits as
the Board of Directors of GardenEscape may from time to time, in its discretion,
grant to Xxxxxx.
(b) Employee Benefit Plans. Xxxxxx shall be eligible to participate,
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to the extent he may be eligible, in any profit sharing, retirement, insurance
or other employee benefit plan maintained by GardenEscape.
(c) Group Life and Health Coverage. Xxxxxx shall be eligible to
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participate in any group life and health policy in effect for employees of
GardenEscape.
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(d) Vacation. Xxxxxx shall be entitled to receive three weeks' paid
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vacation annually. Such vacation shall be taken at such time and in such
intervals as are mutually acceptable to Xxxxxx and GardenEscape.
5. Termination of Employment. Either GardenEscape or Xxxxxx may terminate
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this Agreement at any time with or without cause upon 30 days prior written
notice to the other party. If this Agreement is terminated, whether by Xxxxxx or
by GardenEscape, GardenEscape's sole obligation shall be to pay any outstanding
accrued Base Salary to Xxxxxx.
6. Representations and Warranties of Xxxxxx. Xxxxxx represents and
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warrants to the Company that his execution, delivery and performance of this
Agreement will not (a) violate the provisions of, or constitute a default under,
any other contract or agreement to which Xxxxxx is a party or by which he is
bound, and (b) infringe upon any patent, trademark, copyright or other
proprietary right of any third party.
7. Ownership of Work Product. All right, title and interest in and to all
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of Xxxxxx'x work product relating to the subject matter hereof or otherwise
related to the services performed under this Agreement, including, but not
limited to, all ideas, techniques, inventions, processes, systems, computer
programs, software, operating instructions, design concepts, documentation,
source documents, stored data, reports and notes (the "Work Product"), shall
rest exclusively with GardenEscape. Xxxxxx acknowledges and agrees that the Work
Product includes works made for hire. Xxxxxx may not use the Work Product for
any purpose other than for the benefit of GardenEscape without GardenEscape's
prior written consent. GardenEscape may, in its sole discretion, use, transfer
and dispose of the Work Product. Xxxxxx unconditionally transfers, conveys,
relinquishes and releases to GardenEscape all right, title, interest and claim
which Xxxxxx now has, has had, or may in the future have with respect to the
Work Product, including all derivative works, copyrights, patents, trade secrets
or other intellectual property rights associated with the Work Product. Xxxxxx
agrees to execute assignments of all intellectual property rights relating to
the Work Product upon GardenEscape's request and will perform such other acts
and execute such other documents and instruments as GardenEscape may now or
hereafter deem reasonably necessary or desirable to evidence the transfer of
absolute ownership of all Work Product to GardenEscape. Notwithstanding the
foregoing, the parties agree that Xxxxxx may, in his free time, continue to
develop and own the rights to object oriented programming tools and other
processes or systems which are unrelated to GardenEscape's business and areas of
interest provided, however that
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Xxxxxx obtain the prior written consent of GardenEscape to these specific
activities, which consent will not be unreasonably withheld.
8. Noncompetition. The parties agree that GardenEscape's customer
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contacts and relations are established and maintained at great expense and by
virtue of Xxxxxx'x employment with GardenEscape, Xxxxxx will have unique and
extensive exposure to and personal contact with GardenEscape's customers, and
that he will be able to establish a unique relationship with those individuals
and entities that will enable him, both during and after employment, to unfairly
compete with GardenEscape. Further, the parties agree that the terms and
conditions of the following restrictive covenants are reasonable and necessary
for the protection of GardenEscape's business, trade secrets and confidential
information and to prevent great damage or loss to GardenEscape as a result of
action taken by Xxxxxx. Xxxxxx acknowledges that the noncompete restrictions and
nondisclosure of confidential information restrictions contained in this
Agreement are reasonable and the consideration provided for herein is sufficient
to fully and adequately compensate Xxxxxx for agreeing to such restrictions.
Xxxxxx acknowledges that he could continue to actively pursue his career and
earn sufficient compensation in the same or similar business without breaching
any of the restrictions contained in this Agreement.
(a) During Term of Employment. Xxxxxx hereby covenants and agrees
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that, during his employment with GardenEscape, he shall not, directly or
indirectly, either individually or as an employee, officer, principal, agent,
partner, member, manager, shareholder, owner, trustee, beneficiary, co-venturer,
distributor or consultant or in any other capacity, participate in, become
associated with, provide assistance to, engage in or have a financial or other
interest in any business, activity or enterprise which is competitive with
GardenEscape or any successor or assign of GardenEscape. The ownership of less
than a 2% interest in a corporation whose shares are traded in a recognized
stock exchange or traded in the over-the-counter market, even though that
corporation may be a competitor of GardenEscape, shall not be deemed financial
participation in a competitor.
(b) Upon Termination of Employment. Xxxxxx agrees that for a period
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of two years after termination of his employment with GardenEscape he will not,
directly or indirectly, either individually or as an employee, officer, agent,
partner, member, manager, shareholder, owner, trustee, beneficiary, co-venturer,
distributor, consultant or in any other capacity:
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(i) Canvass, solicit or accept from any person or entity
who is an "Active Customer" of GardenEscape any business in competition with the
business of GardenEscape or the successors or assigns of GardenEscape. "Active
Customer" shall mean any account which received within the twelve months prior
to Xxxxxx'x termination of employment (or the duration of his employment if less
than twelve months), any products or services supplied by or on behalf of
GardenEscape.
(ii) Request or advise any of the Active Customers,
suppliers or other business contracts of GardenEscape who currently have or have
had business relationships with GardenEscape within twelve months preceding the
date of Xxxxxx'x termination of employment (or the duration of his employment if
less than twelve months), to withdraw, curtail or cancel any of their business
or relations with GardenEscape.
(iii) Induce or attempt to induce any employee, officer,
director, sales representative, consultant or other personnel of GardenEscape to
terminate his or her relationship or breach his or her agreements with
GardenEscape.
(iv) Participate in, become associated with, provide
assistance to, consult with, engage in or have a financial or other interest in
any business, activity or enterprise within the "Restricted Territory" which is
competitive with the business of GardenEscape or any successor or assign of
GardenEscape; provided, however, that the ownership of less than 2% of the stock
of a corporation whose shares are traded in a recognized stock exchange or
traded in the over-the-counter market, even though that corporation may be a
competitor of GardenEscape, shall not be deemed financial participation in a
competitor. For purposes of this Agreement, the "Restricted Territory" shall
mean the United States of America and in such other geographic areas as
GardenEscape has Active Customers.
9. Confidentiality.
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(a) In performing the Services, Xxxxxx shall maintain in confidence,
and safeguard as GardenEscape's property, all written and oral information
relating to GardenEscape and its actual and proposed business which, at any
time, becomes known to Xxxxxx, including, but not limited to, the existence of
and terms of this Agreement and any and all information concerning
GardenEscape's business, strategic plans, formulas, processes, techniques, know-
how, trade secrets, technology, designs, products, customer lists, the Work
Product
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and other proprietary information of GardenEscape and information of customers
or suppliers of GardenEscape not generally known in the public domain
(collectively, "Confidential Information"). For purposes of this Agreement,
Confidential Information shall include, without limitation, any information
delivered prior to the execution of this Agreement, any oral, written or
computer-based information, any knowledge gained through observation of the
records, products or facilities of GardenEscape, any information of which Xxxxxx
participated in the development or discovery of and any information or other
material derived from any of the foregoing. Xxxxxx shall not, except as
otherwise expressly authorized in advance and in writing by GardenEscape:
(i) disclose or authorize anyone to disclose to any third party
any Confidential Information; or
(ii) use any Confidential Information for any reason other than
for performing his duties hereunder.
(b) Xxxxxx agrees to promptly return or transfer to GardenEscape,
upon GardenEscape's request, all physical embodiments of the Confidential
Information. Xxxxxx further agrees to promptly erase all embodiments of the
Confidential Information from all storage devices including, but not limited to,
random access memory ("RAM") devices, read-only memory (ROM) devices, disks and
disk drives.
(c) Xxxxxx'x obligations under this section 6 shall not apply to any
Confidential Information shall not include information which was known to
Xxxxxx, as evidenced by Xxxxxx'x contemporaneous written records, prior to the
time of disclosure by GardenEscape; which Xxxxxx can prove is or becomes
publicly known or available to the public through no fault of Xxxxxx; which
Xxxxxx can prove is disclosed in writing to Xxxxxx by a third party who had the
legal right to make such disclosure; or the disclosure of which GardenEscape
expressly consents to in advance and in writing.
10. Relationship with Suppliers. The parties agree that the profitability
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and goodwill of GardenEscape depends on continued, amicable relations with its
suppliers and Xxxxxx agrees, during his employment with GardenEscape and for two
years thereafter, he will not cause, request or advise any suppliers of
GardenEscape to curtail or cancel their business with GardenEscape.
11. Common Law of Torts and Trade Secrets. The parties agree that nothing
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in this Agreement shall be construed to limit or negate the common
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law of torts or trade secrets where it provides GardenEscape with broader
protection than that provided herein.
12. Inventions and Improvements. Xxxxxx agrees that every improvement,
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invention, process, technique, apparatus, method, manufacturing system, computer
program, design or other creation (collectively, the "Inventions") that Xxxxxx
may invent, discover, conceive or originate by himself or in conjunction with
any other person that relates in any respect to the business of GardenEscape now
or hereafter carried on by it shall be the exclusive property of GardenEscape.
Xxxxxx understands and agrees that in partial consideration of his employment
for the compensation herein stated, all such Inventions shall be the exclusive
property of GardenEscape. If Xxxxxx fails to make or refuses to make an
assignment to GardenEscape of any Invention, GardenEscape shall have the
authority, and this Agreement shall operate to give GardenEscape authority to
execute, seal and deliver, as the act of Xxxxxx, any license, any license
agreement, contract, assignment or other instrument in writing that may be
necessary or proper to convey to GardenEscape the entire right, title and
interest in and to such Invention. Xxxxxx hereby agrees to hold GardenEscape and
its assigns harmless by reason of GardenEscape's acts pursuant to this
paragraph. Xxxxxx further agrees that, during the term of this Agreement and at
any time thereafter whenever reasonably necessary for the protection of
GardenEscape, he shall cooperate with and be compensated by GardenEscape and its
counsel in the prosecution and/or defense of any litigation at the cost of
GardenEscape which may arise in connection with the Inventions, without any
liability or cost to Xxxxxx.
13. Specific Performance. Xxxxxx acknowledges and agrees that irreparable
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injury to GardenEscape may result in the event Xxxxxx breaches any covenant and
agreement in this Agreement, including those contained in sections 8, 9 and 12
hereof and that the remedy at law for the breach of any such covenant will be
inadequate. Therefore, if Xxxxxx engages in any act in violation of the
provisions of sections 8, 9 and 12, Xxxxxx agrees that GardenEscape shall be
entitled, in addition to such other remedies and damages as may be available to
it by law or under this Agreement, to injunctive relief to enforce the
provisions of sections 8, 9 and 12.
14. Sale, Consolidation or Merger. In the event of a sale of the stock of
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GardenEscape, or consolidation or merger of GardenEscape with or into another
corporation or entity, or the sale of substantially all of the operating assets
of GardenEscape to another corporation, entity or individual, the successor-in-
interest shall be deemed to have assumed all liabilities of GardenEscape under
this Agreement.
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15. Waiver. The failure of either party to insist, in any one or more
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instances, upon performance of the terms or conditions of this Agreement shall
not be construed as a waiver or a relinquishment of any right granted hereunder
or of the future performance of any such term, covenant or condition.
16. Notices. Any notice to be given hereunder shall be deemed sufficient
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if addressed in writing and delivered by registered or certified mail or
delivered personally, in the case of GardenEscape, to its principal business
office and, in the case of Xxxxxx, to his address appearing on the records of
GardenEscape, or to such other address as he may designate in writing to
GardenEscape.
17. Severability. In the event that any provision shall be held to be
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invalid or unenforceable for any reason whatsoever, it is agreed such invalidity
or unenforceability shall not affect any other provision of this Agreement and
the remaining covenants, restrictions and provisions hereof shall remain in full
force and effect and any court of competent jurisdiction may, and is hereby
directed to, so modify the objectionable provision as to make it valid,
reasonable and enforceable. Furthermore, the parties specifically acknowledge
the covenants and agreements contained in sections 9 and 10 hereof.
18. Amendment. This Agreement may only be amended by an agreement in
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writing signed by all of the parties hereto.
19. Governing Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of Texas.
20. Benefit. This Agreement shall be binding upon and inure to the
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benefit of and shall be enforceable by and against GardenEscape, its successors
and assigns, and Xxxxxx, his heirs, beneficiaries and legal representatives. It
is agreed that the rights and obligations of Xxxxxx may not be delegated or
assigned except as specifically set forth in this Agreement.
GARDENESCAPE, INC.
BY /s/ XXXXXXXX X. XXXXXXXX
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Xxxxxxxx X. Xxxxxxxx, President
/s/ XXXX X. XXXXXX
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Xxxx X. Xxxxxx
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EXHIBIT A
INCENTIVE COMPENSATION PLAN
Xxxxxx shall be eligible to receive an annual bonus in an amount of up
to $20,000, which bonus shall be based on the performance of the Corporation and
Xxxxxx'x performance of his duties hereunder. The Board shall, in its sole
discretion, determine the timing, amount and criteria for awarding such bonus.
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