CONTRACT FOR EMPLOYMENT
Network Acquisitions, Inc., located at 0000 Xxxxx Xxxxxx, Xxxxxx,
Xxxxxxxx 00000, which is intending to acquire certain assets and
liabilities of and subsequently change its name to Cavion Technologies,
Inc., ("Cavion") (referred to herein as the "Company" and specifically
referring to Cavion, both before and after the acquisition), and Xxxxx X.
Xxxxxx, 0000 Xxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000 ("Employee"), in
consideration of the mutual promises made herein, enter into this contract
for employment (the "Contract"), pursuant to the following terms,
conditions, covenants, and provisions:
ARTICLE 1. EMPLOYMENT
1.1 ACCEPTANCE OF EMPLOYMENT. The Company hereby employs Employee and
Employee hereby accepts employment with the Company. The term of
this Contract will commence on the date shown on the signature page
and, subject to the further provisions of this Contract, and unless
otherwise terminated earlier, will end on December 31, 2001.
ARTICLE 2. DUTIES OF EMPLOYEE
2.1 POSITION DESCRIPTION AND DUTIES. Employee will serve as the
Company's Chairman and Chief Executive Officer. Employee's duties
will include, but not be limited to, the following: chair the
Company's Board of Directors (the "Board") and lead the Company's
senior executive team in planning the Company's business and setting
the strategic direction of the Company; represent the Company in key
business relationships; work with the Board and the senior executive
team to develop the Company's objectives, plans and policies, taking
into account the Company's strategic objectives; oversee
implementation of the Company's plans and policies, including
assuming primary responsibility for supervising the Company's
strategic direction, technical focus and financing strategy; and
perform such other duties as reasonably are assigned by the Board.
2.2 TIME AND ATTENTION. Employee agrees to devote substantially all of
his working time, attention and energy to the performance of his
duties pursuant to this Contract, and to perform such duties to the
best of his ability. Employee will not engage in the business of any
other person or entity while employed by the Company.
2.3 ADHERENCE TO RULES. Employee will adhere strictly to all the
Company's rules and policies now or hereafter in effect governing the
conduct of Company employees.
2.4 OBLIGATIONS TO THIRD PARTIES. Employee warrants and represents that
he has the ability to enter into this Contract, and that he has no
contract with or obligation to any third party that would conflict,
or reasonably may conflict, with his performance under this Contract.
ARTICLE 3. COMPENSATION
3.1 BASE COMPENSATION. Employee will be paid an initial base annual
salary of $125,000.00, subject to periodic raises on the same basis
as the Company's other senior executives. Employee's base salary
will be payable in accordance with the Company's standard payroll
practice for executive employees, and will be subject to the
customary withholding tax and other employment taxes and
contributions.
3.2 COMMISSIONS. The Company will create a commission or cash bonus pool
(the "Pool") based upon the Company's business goals, as defined by
the Board, and the profitability of the Company. The Pool will be
divided among the Company's senior management, including Employee, in
proportion to their salaries on a quarterly basis. All decisions
regarding the Pool, including, without limitation, the monies
contributed to the Pool and the distribution of any monies in the
Pool, rest with the Board in its sole and absolute discretion. As a
member of the Board, Employee will abstain from any votes relating,
in any manner or form to Employee's compensation, including bonuses,
incentives or benefits.
3.3 VACATION. Employee will receive four (4) weeks paid vacation per
year, governed by the Company's rules and policies concerning
vacations, providing, however, that any unused vacation time at the
end of each calendar year shall be forfeited by the Employee and
there will be no carry-over of any vacation time from one calendar
year to the next.
3.4 GROUP HEALTH INSURANCE. As further compensation, Employee is
entitled to participate, under the terms afforded to other employees
of the Company, in any group health insurance provided by the Company
to such other employees. At any time when the Company's group health
insurance policy requires employees to pay monthly premiums for
coverage of the employee's spouse and dependents, the Company will
pay, as further compensation to employee, such monthly premiums for
family coverage on behalf of the Employee. This compensation will
take the form of additional pay added to the base compensation set
forth in section 3.1 hereinabove.
3.5 OTHER BENEFITS. Employee will be entitled to such other benefits as
the Board lawfully may adopt and approve.
ARTICLE 4. COMPANY INTELLECTUAL PROPERTY
4.1 NONSOLICITATION. Employee acknowledges that an important part of
Employee's duties will be to develop good will for the Company
through his personal contacts with others having business
relationships with the Company, and that there is a danger that this
good will, a proprietary asset of the Company, may follow Employee if
his employment relationship with the Company is terminated.
Accordingly, Employee agrees he will not, either directly or
indirectly:
(a) render, or offer to render, to any Company customer services of
the kind offered by the Company;
(b) solicit for employment or employ any employee of the Company; or
(c) persuade, or attempt to persuade, any Company customer or any
person or entity who has referred customers to the Company not
to do business with the Company.
As used in this section, "Company customer" includes any client or
customer of the Company, and any person or entity identified, by
Employee or otherwise, as a prospect to become a client or customer
of the Company, during the year prior to termination of Employee's
employment.
4.2 CONFIDENTIALITY. As used in this Contract, the phrase "Company
confidential information" means all information, except as excluded
in the following sentence, that: (1) Employee obtains from the
Company or learns, conceives, or creates during the term of
Employee's employment with the Company, that directly relates to the
Company's business, or (2) the Company obtains in confidence from
third parties. As used herein, "Company confidential information"
does not include (1) information made generally available to the
public, other than through Employee's actions, or (2) general skills
or experience gained by Employee during Employee's employment with
the Company.
Recognizing the foregoing definition, Employee covenants that:
(a) Employee will not, either directly or indirectly, copy, disclose
to others, use for the benefit of any person or entity other
than the Company, or otherwise appropriate any Company
confidential information, except as reasonably may be required
in the performance of Employee's duties under this Contract;
(b) Employee will protect Company confidential information from
unauthorized use or disclosure, in accordance with Company
policy; and
(c) Employee immediately will notify the Company upon discovery of
any loss, unauthorized disclosure, or unauthorized use of
Company confidential information.
4.3 WORK PRODUCT. As used in this Contract, the phrase "Company work
product" means all work products developed by Employee that (1)
result from work performed by Employee for the Company, (2) relate to
the business of the Company, (3) relate to the Company's actual or
demonstrably anticipated research or development, or (4) involve the
use of Company confidential information or Company facilities.
Recognizing the foregoing definition, Employee covenants and
acknowledges as follows:
(a) All copyrightable work products developed by Employee within the
scope of Employee's employment under this Contract are "works
made for hire." Employee further acknowledges that the Company
owns all copyrights thereto. Employee hereby assigns to the
Company any and all other rights, including, without limitation,
all patent, copyright, and trade secret rights, and all rights
to recover for infringement, Employee has or may have in all
Company work product developed by Employee, regardless of
whether or not such Company work product is patentable.
Employee has described in Exhibit "A" to this Contract, which is
incorporated herein by this reference, (1) all work products
possibly related to the Company's business in which Employee
has, or may have, rights from previous employment, and (2) any
and all of Employee's prior obligations related to intellectual
property.
(b) Employee promptly will document and disclose to the Company all
Company work product developed by Employee. Employee will
provide all reasonable assistance to the Company, at the
Company's expense, in perfecting or protecting the Company's
rights in any Company work product developed by Employee. If
Employee is not available to provide such assistance, Employee
irrevocably appoints the Company as Employee's attorney-in-fact
to perform all acts reasonably related to perfecting or
protecting the Company's rights in any Company work product
developed by Employee.
(c) Employee will not disclose to the Company, or use in any of
Employee's work, any confidential or proprietary information
belonging to others, unless both the owner and the Company have
consented, in writing, to such disclosure or use. Work
performed by Employee during the term of Employee's employment
with the Company will not knowingly infringe upon or violate any
patent, copyright, trade secret, or other property right of any
third party, including, without limitation, any former employer.
4.4 EFFECT OF TERMINATION. All Company confidential information and
Company work product is the sole property of the Company. Upon
termination of Employee's employment with the Company, for any
reason, or at any time upon request of the Company, Employee will
deliver to the Company all materials of any nature in the Employee's
possession or control which (1) contain Company confidential
information or Company work product, or (2) are otherwise the
property of the Company, or any Company supplier, client, or
strategic partner. Employee will not retain any copies of such
materials.
4.5 TERM OF OBLIGATIONS. Unless otherwise expressly set forth in this
Article, Employee's obligation to protect Company confidential
information under section 4.2 hereinabove will survive termination of
Employee's employment, for any reason, for a period of three (3)
years, or in the case of any trade secret, as long as such
information remains a trade secret. Employee's obligation to protect
Company's work product under section 4.3 hereinabove will survive
termination of Employee's employment for a period of three (3) years
(with respect to work product developed by Employee during employment
with the Company). Employee's nonsolicitation obligations under
section 4.1 hereinabove will survive termination of Employee's
employment for a period of one (1) year.
4.6 REMEDIES. Employee acknowledges that violation of this Article 4
would cause irreparable harm to the Company, for which the Company
could not be compensated adequately in damages. The Company
therefore will be entitled, in addition to any remedies otherwise
available to it, to injunctive and other equitable relief, without
the requirement that a bond be posted, to enforce, and prevent any
breach of, this Article 4.
ARTICLE 5. TERMINATION
5.1 RESIGNATION. Employee will provide the Company with a minimum of 30
days written notice of resignation.
5.2 IMMEDIATE TERMINATION. During the term of this Contract, the Company
may terminate Employee's employment at any time upon notice to
Employee, upon occurrence of any of the following events:
(a) voluntary or involuntary dissolution, liquidation, bankruptcy or
receivership of the Company;
(b) death of Employee;
(c) disability that prevents Employee from reasonably performing the
duties of the position for a period of six (6) calendar months
or an aggregate of 130 or more business days in any 12 month
period; or
(d) for cause.
As used in this section, the term "cause" includes: (1) dishonesty,
fraud, embezzlement or intentional injury or attempted injury, in
each case with respect to the Company or its business; (2) a serious
crime which reflects on Employee's suitability as an agent of the
Company or on Employee's ability to perform under this Contract; (3)
willful breach of duty, habitual neglect of duty, or failure to
perform the material duties of the position, resulting in
unsatisfactory job performance; (4) competition with the Company; or
(5) Employee's material breach of this Contract. If the Company
deems Employee to be in violation of items (3) or (5) of the
preceding sentence, Employee will receive written notice and have the
opportunity to correct the violation within 30 days. If Employee
fails to correct such violation within 30 days, Employee may be
terminated immediately.
5.3 TERMINATION AFTER NOTICE. The Company may terminate Employee's
employment at any time upon 30 days notice to Employee, provided the
Company pays severance compensation, as described in section 5.4(b)
hereinbelow.
5.4 EFFECT OF TERMINATION ON COMPENSATION.
(a) If Employee resigns, or is terminated for any of the reasons
described in section 5.2 hereinabove, Employee, or his estate,
will be entitled to compensation (as described in Article 3 of
this Contract) earned prior to the date of termination, but not
yet paid.
(b) If Employee is terminated for reasons other than those described
in section 5.2 hereinabove, Employee will be entitled to
severance compensation equal to: (1) compensation earned prior
to the date of termination, but not yet paid, plus (2) severance
pay equal to twelve months of base salary (in effect at the time
of termination).
(c) In the event of a termination following a change of control, as
defined below, Employee will be entitled to severance
compensation, as described in section 5.4(b) hereinabove. As
used herein, the phrase "termination following a change of
control" means that (1) Employee is terminated by the Company
within three (3) months after a change of control, or (2)
Employee resigns for good reason, as defined below, within three
(3) months after a change of control. As used herein, the
phrase "Change of Control" means: (1) a sale or liquidation of
substantially all of the assets or outstanding stock of the
Company, or a merger or reorganization in which the Company is
not the surviving corporation, or Contract by the Company to
enter into any such transaction; or (2) any change in the
ownership of Company shares that results in a person, entity or
group (as defined in section 13(d)(3) of the Securities Exchange
Act of 1934) holding more than 40% of the outstanding voting
shares of the Company.
Issuance of shares to executives or affiliates of the Company under a
compensatory stock grant, stock purchase or option approved by the
Board will not be considered a change of control for this purpose.
As used in this Contract, the phrase "resigns for good reason" means
a resignation following: (1) a substantial change in Employee's
authority or responsibilities; (2) a substantial reduction in
Employee's salary or benefits; (3) failure of a successor entity to
agree to the terms of this Contract; or (4) a requirement for the
Employee to relocate.
(d) If Employee is terminated because of Employee's death or
disability, the Board, in its sole discretion, may elect to pay
to Employee or Employee's estate all or a portion of the
severance compensation described in section 5.4(b) hereinabove.
5.5 DUTIES FOLLOWING TERMINATION. Following any termination of his
employment, Employee will cooperate with the Company in the orderly
transfer of Employee's responsibilities to whomever is designated by
the Company. Employee will provide reasonable cooperation at the
Company's expense in any third party litigation or other dispute in
which the Company is a party and which relates to the period of
Employee's employment. Employee immediately will transfer all
Company property in his possession to the Company's designee.
ARTICLE 6. GENERAL PROVISIONS
6.1 NOTICES. Any notices to be given by either party to the other may be
effected in writing either by personal delivery or by registered or
certified mail, postage prepaid with return receipt requested,
addressed to the address appearing in this Contract (or any new
address of which the parties are notified in writing). Refusal to
accept delivery will be deemed receipt under this section.
6.2 DISPUTES.
(a) In the event of any dispute under this Contract, the party
claiming a dispute will give notice to the other party
describing the dispute. Both parties will make good faith
efforts to resolve the dispute informally within the Company.
If the dispute has not been resolved within 30 days after the
notice, either party may, upon notice to the other, submit the
dispute to mediation in Denver, Colorado, before a mutually
acceptable mediator. If the parties are unable to agree upon a
mediator, either party may request the appointment of a mediator
by the Center for Public Resources or any other established
dispute resolution organization.
(b) If mediation is not successful within 90 days or if either party
will not submit to mediation, either party may, upon notice to
the other, submit the dispute to binding arbitration in Denver,
Colorado, in accordance with the rules of the Center for Public
Resources, or any other established dispute resolution
organization, by a single arbitrator. The arbitration will be
governed by the United States Arbitration Act, 9 U.S.C. 1-16,
and judgment upon the award may be entered by any court of
competent jurisdiction. The arbitrator will not be empowered to
award damages in excess of actual damages, but will be
empowered, but not required, to require any party to pay the
reasonable attorney fees, expert witness fees, and other
arbitration costs of any other party.
(c) Except as stated in section 4.6 hereinabove, the procedures
specified in this section will be the exclusive procedures for
the resolution of disputes relating to this Contract. However,
either party may seek preliminary judicial relief in Denver,
Colorado, to avoid irreparable damage, while continuing to
participate in good faith in mediation or arbitration. Both
parties to this Contract submit to the jurisdiction of the
binding arbitration and of any state or federal court located in
Denver, Colorado.
6.3 GENERAL MATTERS.
(a) This Contract is governed by the laws of the State of Colorado.
(b) This Contract is binding upon the personal representatives,
successors and assigns of the parties hereto.
(c) This Contract is not assignable by Employee but shall inure to
the benefit of any successor or acquirer of the Company.
(d) This Contract constitutes the entire agreement between the
parties and may not be waived or modified, except in a writing
signed by all parties to this Contract.
(e) The headings used in this Contract are for convenience only and
do not, and will not, limit the interpretation hereof.
(f) In the event any provision in this Contract is held to be
invalid, void, or unenforceable, the provision will be modified
to the minimum extent necessary, and the remainder of this
Contract will continue in full force and effect, so as to
effectuate, as closely as possible, the intent of this Contract.
IN WITNESS WHEREOF, the parties have signed and delivered this
Contract for Employment.
NETWORK ACQUISITIONS, INC. XXXXX X. XXXXXX
/s/ Xxxxxx X. Xxxxxx /s/ Xxxxx X. Xxxxxx
---------------------------- ---------------------------------
By: Xxxxxx X. Xxxxxx
Title: President
Dated: February 1, 1999
-----------------
EXHIBIT "A"
TO
NETWORK ACQUISITION, INC.
CONTRACT FOR EMPLOYMENT
Employee has described below all work products possibly related to the
Company's business and created prior to Employee's employment by the
Company in which Employee has any right, title or interest that Employee
does not assign to the Company:
[IF NONE, PLEASE SO INDICATE. DESCRIBE WORK PRODUCT WITHOUT DISCLOSING
CONFIDENTIAL INFORMATION.]
Employee has described below all prior obligations, written or oral, that
may restrict employee's actions as an employee of the company (such as
confidentiality or noncompete agreements):
Date Parties Nature of Restrictions
---- ------- ----------------------
[IF NONE, PLEASE SO INDICATE.]
NETWORK ACQUISITIONS, INC. XXXXX X. XXXXXX
/s/ Xxxxxx X. Xxxxxx /s/ Xxxxx X. Xxxxxx
---------------------------- ---------------------------------
By: Xxxxxx X. Xxxxxx
Title: President
