EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of February 16, 2000 by and between Xxxxx
Xxxxxxxx (the "EMPLOYEE") and GENISYS INFORMATION SYSTEMS, INC. (the
"COMPANY") and iGenisys, Inc. (the "Parent Company"). This agreement reduces
to writing the oral employment agreements previously agreed to by the Company
and Employee. In consideration of the mutual covenants and agreements set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows,
effective as of the date hereof:
1. DUTIES AND SCOPE OF EMPLOYMENT.
(a) Position. For the term of his employment under this Agreement
("EMPLOYMENT"), the Company agrees to employ Employee in the position of Vice
President or in such other comparable position consistent with the Employee's
experience, stature, and Base Compensation (as defined below), as the Company
may subsequently assign to Employee.
(b) Term of Employment. Employment shall continue until terminated by
Employee, by Company or by insolvency of Company.
(i.) Termination by Employee may be accomplished by provision of
written resignation delivered to the Chief Executive Officer (CEO), or by
delivery of written resignation to the Board of Directors.
(ii.) Termination by Company may be accomplished by delivery of
written notification or termination and is effective immediately.
(iii.) Company may terminate Employee for good cause or without good
cause.
(iv.) Employee may terminate employment upon the insolvency of
Company.
(c) Obligations. During the term of his Employment, Employee shall
devote his best effort to the business of the Company and shall not render
business services to any competing person or entity whether on a compensated
or non-compensated basis ("OTHER EMPLOYMENT") without the express prior
approval of the CEO or the Board of Directors. The Employee shall serve as
Vice President of the Company and shall have the usual and customary duties,
responsibilities and authority of a Vice President subject to the power of the
board of directors of the Company (the "BOARD"), the CEO , or any duly
designated officer of the Company or Parent Company. The Board of Directors
has the authority to (i) expand or limit such duties, responsibilities and
authority and (ii) to override the actions of the Employee. The Employee
shall report to the CEO, and shall perform his duties and responsibilities to
the best of his abilities in a diligent and professional manner. Employee
represents and warrants to the Company that he is under no contractual
commitments inconsistent with his obligations under this Agreement.
(d) Employment Commencement. Employee has been, and is a full-time
employment with the Company at the time that this agreement is executed.
Xxxxxxxx'x original employment date will be recorded as from October 1, 1995
the date of his first service with Xxxx controlled companies.
2. CASH AND INCENTIVE COMPENSATION.
(a) Salary. The Company shall pay Employee as compensation for his
services a starting base salary at a rate of $11,250 per month (subject to
annual increases as shall be determined by the Board of Director's) ("BASE
COMPENSATION"). Such salary shall be paid in accordance with the Company's
standard payroll procedures, but at least twice a month.
(b) Options. The Employee will be granted options at the sole
discretion of the Board under the Genisys 1999 Equity Incentive Plan. In
subsequent years, the Employee is eligible for award of future options at the
discretion of the Board. Prior to this written agreement the Employee was
granted 470,000 options under the Genisys 1999 Equity Incentive Plan having an
exercise price of $0.40 per share. In the event of a change in control in the
Company or Parent Company unvested shares in the option grant will be
immediately accelerated and become one hundred percent available to the
employee as fully assessed and registered shares. A change in control would
be a material shift in stock holdings enabling a different person or entity to
exercise majority control in electing The Board of Directors.
(c) Benefits. Employee shall be eligible to participate in such benefit
programs offered by the Company, such as health, dental, life insurance,
vision, long term disability, employee stock purchase plan, vacations and
401(k). The Company stipulates that it does not intend to purchase
Director's and Officer's Liability Insurance, but agrees to defend the actions
of the Employee unless the action is that of the Employee as defined in 3c
below (for Cause).
(d) Business Expenses. During the term of his Employment, Employee shall
be authorized to incur necessary and reasonable travel, entertainment and
other business expenses in connection with his duties hereunder. The Company
may advance such expenses, and shall reimburse Employee for such expenses upon
presentation of an itemized account and appropriate supporting documentation,
all in accordance with the Company's (and/or Genisys's) generally applicable
policies.
(e) Bonuses and Other Incentives. The Employee shall be entitled to
participate in any bonuses or other incentive programs made available by the
Company as the Board of Directors may determine to award in its sole
discretion.
3. AT WILL EMPLOYMENT.
(a) Basic Rule. The Company agrees to employ the Employee and Employee
agrees to commence employment with the Company, from the time set forth in
Section 1(d). Employee's Employment with the Company shall be "at will." This
means that either Employee or the Company may terminate the Employee's
Employment at any time for any reason, with or without Cause (as defined
below). Any contrary representations which may have been made to the Employee
shall be superseded by this Agreement. This Agreement shall constitute the
full and complete agreement between the Employee and the Company on the "at
will" nature of the Employee's Employment, which may only be changed in an
express written agreement signed by the Employee and the CEO.
(b) Rights Upon Termination.
(i) Upon Employee's voluntary termination of employment or the
Company's termination of Employee's Employment for Cause, Employee shall only
be entitled to the compensation, benefits and reimbursements described in
Sections 1 and 2 for the period preceding the effective date of the
termination and for such payments as may be required in Section 3, (b), (ii)
of this document.
(ii) In the event the Company terminates Employee's Employment
without Cause, the Company shall be obligated to pay Employee (A) his then
current Base Compensation until Employee becomes re-employed as an employee or
consultant or for a six month term (the "Termination Payment Period"), which
ever is shorter, but in no case less than three months, plus (B) all accrued
but unpaid amounts payable to Employee pursuant to Section 2(d) of this
Agreement (other than Base Compensation). If the Company terminates the
Employee's employment based on a change in control (2.b.) or a diminishment of
responsibilities, the Company shall be obligated to pay Employee his then
current base compensation for a twelve month term. Base Compensation payable
under this subsection shall be payable, at the Company's option, either (i) in
accordance with the payroll practices of the Company or (ii) in a single lump
sum payment equal to the aggregate amount of the payments. Upon such
termination The Company shall also continue to provide Employee with all
health insurance, and other employee insurance, subject to the terms,
conditions and restrictions of the specific plans, through the end of the
Termination Payment Period. If Employee meets eligibility terms, conditions
and restrictions of COBRA, the Company will pay the COBRA premiums for
Employee and, if covered prior to the termination, Employee's dependents.
Insured benefits otherwise receivable by Employee pursuant to this Section
3(b)(ii) will be reduced to the extent comparable benefits are actually
received by Employee during such period from another source. Thereafter, the
Company shall have no obligation to make any further payments to or to provide
any further benefits hereunder to Employee.
(c) Cause. "CAUSE" as used herein shall mean Employee's, (i) commission
of fraud or embezzlement, an act of moral turpitude, or of any tortious or
unlawful act or a felony causing harm to the Company's business, standing or
reputation, (ii) act of material dishonesty or fraud with respect to the
Company, (iii) breach of his/her reasonable duty of loyalty or care to the
Company, (iv) other misconduct that is materially detrimental to the Company
as reasonably determined by a majority of the Board of Directors, (v) ongoing
refusal or failure to perform Employee's duties other than as a result of
Disability after receiving written notice describing his non-performance and
being given a reasonable opportunity to cure such non-performance; (vi)
deliberate and consistent refusal to conform to or follow any reasonable
policy adopted by the Company's Board or lawful instructions of the CEO after
receiving written notice describing his/her non-compliance and being given a
five (5) business days opportunity to cure (to the extent curable) such non-
compliance; or (vii) material breach of this Agreement, the Proprietary
Information and Inventions Agreement between Employee and the Company.
4. NON-COMPETITION.
(a) General Terms. The parties acknowledge that it would be detrimental
to the Company if Employee were to compete with the Company in any part of the
Business (as defined below). As a result of the foregoing, the parties
expressly acknowledge that the intention of the non-competition provisions
contained in this Agreement are so that such provisions shall be enforceable
pursuant to the provisions of Texas law.
(b) Non-Competition During Employment. Employee agrees that during his
Employment with the Company, Employee will not engage in Other Employment in
competition with the Company. This non-competition includes, but is not
limited to, development of project management software programs and consulting
services.
(c) Employee further covenants with Company that all trade secrets,
processes, designs, concepts, formulas, data, standards, specifications,
discoveries, improvements, inventions, computer software, computer programming
code, techniques and know-how of the Company, or those with whom the Company
transacts business, customer and client identity and contracts and information
contained in or derived from the Company's client and customer lists and
third-party agreements whether active, inactive or prospective, supplier and
manufacturer identity and contracts, marketing and sales plans, product
agreements, strategic contractual relationships, financial information,
pricing information, product research and development, and all other concepts
or ideas involving or reasonably related to the business of the Company,
information received by the Company as to which there is a bona fide
obligation, contractual or otherwise, on the part of the Company not to
disclose same and not generally available to the public, and any information
of the type similar to the information described above which the Company
treats or regards as confidential or designates as proprietary or
confidential, is confidential information and will be treated by an Employee
as such, and that he will not hereafter, directly or indirectly, make use of
such information or divulge any such information nor reveal any customer lists
or other confidential information to any other person not related to the
Company. The foregoing restrictions on disclosure of information shall not
include (i) information that has properly come into the public domain, (ii)
information learned by an Employee from a third party without an obligation of
confidentiality, (iii) information gained or learned by an Employee
independent of activities undertaken on behalf of Company, or (iv) information
otherwise protected by applicable law, such as the information pertaining to
patents or copyrights.
(d) Any and all research, reports, memoranda, developments, inventions
or discoveries, computer software, source code, modules, algorithms and the
like, made, devised or developed by Employee during such time as he holds an
Executive officer Position with the Company, either alone or jointly with
others, pertaining to any of the business, properties or operations of the
Company are deemed works for hire and are hereby assigned by Employee to the
Company and shall remain the Company's sole, exclusive and separate property.
Employee agrees to execute any assignments to the Company of his entire
rights, title and interest in and to any trade secrets, copyrightable
material, inventions, discoveries, reports or research, whether or not
copyrightable, that may be requested by the Company. Any and all
copyrightable and/or patentable material generated or developed by Employee
for the Company, including, without limitation, source codes and computer
programs and documentation pertaining thereto, shall be works for hire and
considered the property and copyrights of the Company, and the Company shall
have the right to register and hold same in its own name, free of any claim of
Employee. All documentation containing or relating to any Confidential
Information of the Company which Employee shall use or prepare or come into
contact with, shall remain the sole and separate property of the Company, and
upon the request of the Company, or upon termination of Employee's position as
an officer, director or stockholder of the Company, all such materials shall
be promptly returned to the Company, together with all copies thereof.
(e) Non-Competition Following Termination of Employment. Subject to and
except as set forth in Section 4(d), for purposes of this Section 4, the
restricted period shall be, the period of Employment plus the period
commencing with the date of termination of Employment and ending on (i) in the
case of a termination of Employee's Employment by the Company for Cause or a
termination of the Employee's Employment for any reason by Employee (other
than Disability), a period of six months following such termination, and (ii)
in the event of a termination of the Employee's Employment by the Company for
any reason other than for Cause, a period of six months following such
termination (the "RESTRICTED PERIOD"). During the Restricted Period, Employee
shall not, as an employee, agent, consultant, advisor, independent contractor,
general partner, officer, director, stockholder, investor, lender or guarantor
of any corporation, partnership or other entity (or as a sole proprietorship
or by way of another business), or in any other capacity, directly or
indirectly:
(i) Participate or engage in any business in which the Company is
engaged, (or any business in which the Company or Genisys engages in during
the term of Employment or, as at the termination of the term of Employment, is
then actively preparing to engage (collectively, the "BUSINESS").
(ii) Permit the name of Employee to be used in connection with a
competitive Business.
(f) Exceptions. Notwithstanding Subsection (c) above:
(i) Employee may engage in a business that relates to the Business
if Employee receives the prior written approval of the CEO to do so. Such
written approval will not be unreasonably withheld if such outside employment
business or activity would not be detrimental to the Company.
(ii) Employee may own, directly or indirectly, solely as an
investment, up to five percent (5%) of any class of "publicly traded
securities" of any person or entity which owns a business that relates to the
Business. For the purposes of this paragraph, the term "publicly traded
securities" shall mean securities that are traded on a national securities
exchange or listed on the Nasdaq Stock Market or SmallCap Markets.
(iii) Employee shall not be prohibited from competing with the
Business, if the Company or Genisys or their respective successors, and any
entity deriving title to their goodwill or shares, cease to carry on a like
Business therein or becomes insolvent or became insolvent prior to
termination. Insolvent, for purposes of this agreement means the inability to
satisfy Genisys' current financial obligations for at least 90 days.
(iv) Nothing in this section is intended to prevent Employee from
engaging in any activity which does not compete with the Company, and is not
detrimental to the Company.
(v) The Restricted Period shall end at such time that the Company
ceases to compensate Employee.
5. NON-SOLICITATION AND NON-DISCLOSURE.
(a) Non-Solicitation. During the period commencing on the date of this
Agreement and continuing through the "restricted period" in 4(c), Employee
shall not directly or indirectly, personally or through others, solicit or
attempt to solicit (on Employee's own behalf or on the behalf of any other
person or entity) (i) any employee of the Company or any of the Company's
affiliates to cease performing work or services for the Company or to perform
work or services for any other party, (ii) any customer, supplier, licensee,
or other business relations of the Company or Genisys (and/or its affiliates)
for purpose of encouraging them to terminate their relationship with the
Company or Genisys (and/or its affiliates) or in any way interfere with the
relationship between such customer, supplier, licensee, or business
relationship, on the one hand, and the Company or Genisys (and/or its
affiliates), on the other hand, or (iii) any person who was an employee of the
Company or Genisys (on any of its affiliates) within six (6) months after
Employee's Employment was terminated, unless Genisys (and/or its affiliates)
becomes or is insolvent.
(b) Non-Disclosure. Employee shall enter into a Non-Disclosure/Trade
Secrets Agreement with the Company, which is attached hereto as Exhibit B
6. MISCELLANEOUS PROVISIONS.
(a) Notice. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or three days after deposit in the U.S. registered mail,
return receipt requested and postage prepaid. In the case of Employee, mailed
notices shall be addressed to him at the home address which he most recently
communicated to the Company in writing. In the case of the Company, mailed
notices shall be addressed to its corporate headquarters, and all notices
shall be directed to the attention of its Secretary; with copy to Genisys, 000
Xxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxx 00000 or such other address
properly changed.
(b) Waiver. No provision of this Agreement shall be modified, waived or
discharged unless the modification, waiver or discharge is agreed to in
writing and signed by Employee and by an authorized officer of the Company
(other than Employee). No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement by the other
party shall be considered a waiver of any other condition or provision or of
the same condition or provision at another time.
(c) Whole Agreement; Modifications. Except for the Proprietary
Information and Inventions Agreement, and the Non-Disclosure/Trade Secrets
Agreement, and no other agreements, representations or understandings (whether
oral or written and whether express or implied) which are not expressly set
forth in this Agreement have been made or entered into by either party with
respect to the subject matter hereof. A modification of this Agreement shall
be valid only if it is made in writing and executed by both parties hereto.
(d) Withholding Taxes. All payments made under this Agreement shall be
subject to reduction to reflect taxes or other charges required to be withheld
by law.
(e) CHOICE OF LAW. THE VALIDITY, INTERPRETATION, CONSTRUCTION AND
PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF
TEXAS.
(f) Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions hereof shall not be in any way impaired, unless the
provisions held invalid, illegal or unenforceable shall substantially impair
the benefits of the remaining provisions hereof. The parties hereto further
agree to replace such invalid, illegal or unenforceable provision of this
Agreement with a valid, legal and enforceable provision that will achieve, to
the extent possible, the economic, business and other reasonable purposes of
such invalid, illegal or unenforceable provision.
(g) No Assignment of this agreement may be made by either party.
(i) Company's Successors. This Agreement shall be binding upon any
successor (whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company's business and/or assets. For all purposes under this Agreement, the
term "COMPANY" shall include any successor to the Company's business and/or
assets which becomes bound by this Agreement.
(ii) Employee's Successors. This Agreement and all rights of
Employee may not be transferred or assigned by Employee at any time without
the prior written consent of the Company authorized by a duly adopted Board
resolution; and shall inure to the benefit of, and be enforceable by,
Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
(iii) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(i) Joint Participation in Preparation of Agreement. The parties hereto
participated jointly in the negotiation and preparation of this Agreement and
each party has had the opportunity to obtain the advice of legal counsel and
to review, comment upon, and redraft this Agreement. Accordingly, it is
agreed that no rule of construction shall apply against any party in favor of
any party. This Agreement shall be construed as if the parties jointly
prepared it, and any uncertainty or ambiguity shall not be interpreted against
any one party and in favor of the other.
(j) Remedies. In the event of a breach or threatened breach by the
Company or Employee of any of the provisions of this agreement, the Employee
or Company shall be entitled to an injunction, as may be permitted under Texas
law, restraining the Employee or the Company from such breach and/or in the
case of an injunction in favor of the Company or Employee, from rendering any
services to any person, firm, corporation, association, or other entity
receiving (or to receive) the benefit of such breach, since the remedy at law
would be inadequate and insufficient.
(k) DAMAGES. In addition, the Employee or Company shall be entitled to
such damages as he or it can show he or it has sustained by reason of such
breach. As among themselves, the parties agree that the prevailing party
shall bear the costs and expenses of enforcing the provisions of the
Agreement. Nothing herein contained shall be construed as prohibiting the
Employee or Company from pursuing any other remedies available for such breach
or threatened breach or any other breach of this Agreement at law or in equity
or otherwise.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the
case of the Company by its duly authorized officer, as of the day and year
first above written.
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[EMPLOYEE]
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GENISYS INFORMATION SYSTEMS, INC.
BY:
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NAME:
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TITLE:
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