EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement"), entered into as of the 20th
day of August, 1996, by and between HOUSTON INTERWEB DESIGN, INC., a Texas
corporation (the "Company"), and XXX X. XXXXXXX ("Executive").
W I T N E S S E T H:
WHEREAS, Company desires to employ Executive as provided herein; and
WHEREAS, Executive desires to accept such employment.
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. EMPLOYMENT. Company hereby employs Executive and Executive hereby
accepts employment with Company upon the terms and conditions hereinafter set
forth.
2. DUTIES. Subject to the power of the Board of Directors of the Company
to elect and remove officers, Executive will serve the Company as its Chief
Financial Officer and Legal Counsel and will faithfully and diligently perform
the services and functions relating to such offices or otherwise reasonably
incident to such offices, provided that all such services and functions will be
reasonable and within Executive's area of expertise. Executive will, during the
term of this Agreement (or any extension thereof), devote his full business
time, attention and skills and best efforts to the promotion of the business of
Company. The foregoing will not be construed as preventing Executive from
making investments in other businesses or enterprises provided that (a)
Executive agrees not to become engaged in any other business activity that
interferes with his ability to discharge his duties and responsibilities to
Company without the prior written consent of a majority of the Board of
Directors, and (b) Executive does not violate any other provision of this
Agreement. Notwithstanding the previous sentence, Executive may engage in the
practice of law and may represent clients from time to time as he wishes.
3. TERM. Subject to the terms and conditions hereof, the term of
employment of Executive will commence as of the date hereof (the "Commencement
Date") and will end on that date in the year, 2001, unless earlier terminated by
either party pursuant to the terms hereof. The term of this Agreement is
referred to herein as the "Term."
4. COMPENSATION AND BENEFITS DURING THE EMPLOYMENT TERM.
(a) SALARY. Commencing upon the date of this Agreement, Executive
will be paid a base salary of $30,000 the first year, $70,000 the second year
and $120,000 for years three through five. At any time and from time-to-time
the base salary may be increased for the remaining portion
of the term if so determined by the Board of Directors of the Company after a
review of Executive's performance of his duties hereunder. Executive will
not be entitled to receive sales commissions.
(b) BONUS. Executive shall be entitled, in addition to his base
salary as provided above, an annual bonus in the amount of 1% of the Company's
earnings before income taxes and depreciation as determined by an independent
certified public accountant, in excess of five million ($5,000,000.00) dollars,
before any deduction of bonuses in accordance with generally accepted accounting
procedures, payable at the end of each complete year covered under this
agreement.
(c) EXPENSES. Upon submission of a detailed statement and reasonable
documentation, Company will reimburse Executive in the same manner as other
executive officers for all reasonable and necessary or appropriate out-of-pocket
travel and other expenses incurred by Executive in rendering services required
under this Agreement.
(d) BENEFITS; INSURANCE.
(i) MEDICAL, DENTAL AND VISION BENEFITS. During this
Agreement, Executive and his dependents will be entitled to receive such
group medical, dental and vision benefits as Company may provide to its
other Executives, provided such coverage is reasonably available, or be
reimbursed if Executive is carrying his own similar insurance.
(ii) AUTOMOBILE ALLOWANCE. In addition to Executive's
salary, beginning August 1, 1998, Executive shall receive a $600 per month
car allowance. The Company shall also pay all expenses and insurance
relevant to the use of the automobile. The Company shall provide Executive
with the use of a cellular telephone after August 1, 1998.
(iii) MISCELLANEOUS ALLOWANCE. In addition to Executive's
salary, beginning August 1, 1998, Executive shall receive $200 per month
for miscellaneous expenses.
(iv) BENEFIT PLANS. The Executive will be entitled to
participate in any benefit plan or program of the Company which may
currently be in place or implemented in the future.
(v) OTHER BENEFITS. During the Term, Executive will be
entitled to receive, in addition to and not in lieu of base salary, bonus
or other compensation, such other benefits and normal perquisites as
Company currently provides or such additional benefits as Company may
provide for its executive officers in the future.
(e) VACATION. Executive will be entitled to five weeks of paid
vacation per year.
5. CONFIDENTIALITY. In the course of the performance of Executive's
duties hereunder, Executive recognizes and acknowledges that Executive may have
access to certain confidential and proprietary information of Company or any of
its affiliates. Without the prior written consent of
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Company, Executive shall not disclose any such confidential or proprietary
information to any person or firm, corporation, association, or other entity
for any reason or purpose whatsoever, and shall not use such information,
directly or indirectly, for Executive's own behalf or on behalf of any other
party. Executive agrees and affirms that all such information is the sole
property of Company and that at the termination and/or expiration of this
Agreement, at Company's written request, Executive shall promptly return to
Company any and all such information so requested by Company.
The provisions of this Section 5 shall not, however, prohibit
Executive from disclosing to others or using in any manner information that:
(a) has been published or has become part of the public domain other
than by acts, omissions or fault of Executive;
(b) has been furnished or made known to Executive by third parties
(other than those acting directly or indirectly for or on behalf of Executive)
as a matter of legal right without restriction on its use or disclosure;
(c) was in the possession of Executive prior to obtaining such
information from Company in connection with the performance of this Agreement;
or
(d) is required to be disclosed by law.
6. INDEMNIFICATION. The Corporation shall to the full extent permitted by
law indemnify, defend and hold harmless Executive from and against any and all
claims, demands, liabilities, damages, losses and expenses (including
reasonable attorney's fees, court costs and disbursements) arising out of the
performance by him of his duties hereunder except in the case of his willful
misconduct.
7. TERMINATION. A termination of this Agreement is either (i) for the
death or disability under Section 7 (a) or 7 (b); (ii) with cause under Section
7 (c); or (iii) for good reason under Section 7 (d); (iv) upon the voluntary
termination of employment by Executive under Section 7(e); or (v) without cause
under Section 7(f).
(a) DISABILITY. The Company shall have the right to terminate the
employment of the Executive under this Agreement for disability in the event
Executive suffers an injury, illness, or incapacity of such character as to
substantially disable him from performing his duties without reasonable
accommodation by the Company hereunder for a period of more than one hundred
eighty (180) consecutive days upon the Company giving at least thirty (30) days
written notice of termination; provided, however, that if the Executive is
eligible to receive disability payments pursuant to a disability policy paid for
by the Company, the Executive shall assign such benefits to the Company for all
periods as to which he is receiving full payment under this Agreement.
(b) DEATH. This Agreement will terminate on the Death of the Executive.
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(c) WITH CAUSE. The Company may terminate this Agreement at any time
because of (i) Executive's material breach of any term of the Agreement, or (ii)
Executive's gross negligence in the performance of his duties hereunder;
provided, in each case, however, that the Company shall not terminate this
Agreement pursuant to this Section 7(c) unless the Company shall first have
delivered to the Executive, a notice which specifically identifies such breach
or misconduct and the executive shall not have cured the same within fifteen
(15) days after receipt of such notice. In the event Executive is terminated
with cause, Executive agrees that for a period commencing on the date of
termination with cause and ending six months following the date of termination
with cause, Executive shall not directly or indirectly, as employee, agent,
consultant, stockholder, director, or in any other individual or representative
capacity, own, operate, manage, control, engage in, invest in or participate in
any manner in, or otherwise assist another person or entity that engages or
proposes to engage in the business of designing and developing web sites,
anywhere in Texas (the "Territory"). With respect to the Territory, Executive
acknowledges that the Company has engaged in the design and development of web
sites throughout those areas comprising the Territory and the Company intends to
continue to expand the design and development of web sites throughout the
Territory.
(d) GOOD REASON. The Executive may terminate his employment for "Good
Reason" if:
(i) he is assigned, without his express written consent, any duties
inconsistent with his positions, duties, responsibilities, or status with the
Company as of the date hereof, or a change in his reporting responsibilities or
titles as in effect as of the date hereof;
(ii) his compensation is reduced;
(iii) the Company shall file a petition in bankruptcy or
re-organization under the federal bankruptcy statutes or an involuntary
petition is filed against the Company and not removed or withdrawn within
thirty (30) days, or the Company does not pay any material amount of
compensation due hereunder and then fails either to pay such amount within
the ten (10) day notice period required for termination hereunder or to
contest in good faith such notice. Further, if such contest is not resolved
within thirty (30) days, the Company shall submit such dispute to arbitration
under Section 14.
(e) VOLUNTARY TERMINATION. The Executive may terminate his employment
voluntarily.
(f) WITHOUT CAUSE. The Company may terminate this Agreement without
cause.
8. OBLIGATIONS OF COMPANY UPON TERMINATION.
(a) In the event of the termination of Executive's employment pursuant to
Section 7 (a), (b), (c) or (e), Executive will be entitled only to the
compensation earned by him hereunder as of the date of such termination (plus
life insurance or disability benefits).
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(b) In the event of the termination of Executive's employment pursuant to
Section 7(d) or (f), Executive will be entitled to receive $250,000 cash at such
time as this Agreement is terminated, in addition to all payments of salary
earned through the date of termination.
9. WAIVER OF BREACH. The waiver by any party hereto of a breach of any
provision of this Agreement will not operate or be construed as a waiver of any
subsequent breach by any party.
10. COSTS. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party will be entitled to
reasonable attorney's fees, costs and necessary disbursements in addition to any
other relief to which he or it may be entitled.
11. NOTICES. Any notices, consents, demands, requests, approvals and
other communications to be given under this Agreement by either party to the
other will be deemed to have been duly given if given in writing and personally
delivered or within two days if sent by mail, registered or certified, postage
prepaid with return receipt requested, as follows:
If to Company: Houston InterWeb Design, Inc.
0000 Xx. Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Board of Directors
If to Executive: Xxx X. Xxxxxxx
0000 Xx. Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Notices delivered personally will be deemed communicated as of actual receipt.
12. ENTIRE AGREEMENT. This Agreement and the agreements contemplated
hereby constitute the entire agreement of the parties regarding the subject
matter hereof, and supersede all prior agreements and understanding, both
written and oral, among the parties, or any of them, with respect to the subject
matter hereof.
13. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
this Agreement, such provision will be fully severable and this Agreement will
be construed and enforced as if such illegal, invalid or unenforceable provision
never comprised a part hereof; and the remaining provisions hereof will remain
in full force and effect and will not be affected by the illegal, invalid or
unenforceable provision or by its severance herefrom. Furthermore, in lieu of
such illegal, invalid or unenforceable provision there will be added
automatically as part of this Agreement a provision as similar in its terms to
such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable.
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14. ARBITRATION. If a dispute should arise regarding this Agreement, all
claims, disputes controversies, differences or other matters in question arising
out of this relationship shall be settled finally, completely and conclusively
by arbitration in Houston, Texas in accordance with the Commercial Arbitration
Rules of the American Arbitration Association (the "Rules"). The governing law
of this Agreement shall be the substantive law of the State of Texas, without
giving effect to conflict of laws. A decision of the arbitrator shall be final,
conclusive and binding on the Company and Executive. Any arbitration held in
accordance with this paragraph shall be private and confidential and no person
shall be entitled to attend the hearings except the arbitrator, Executive,
Executive's attorneys, a representative of the Company, the Company's attorneys,
and advisors to or witnesses for any party. The matters submitted to
arbitration, the hearings and proceedings and the arbitration award shall be
kept and maintained in the strictest confidence by Executive and the Company and
shall not be discussed, disclosed or communicated to any persons except as may
be required for the preparation of expert testimony. On request of any party,
the record of the proceeding shall be sealed and may not be disclosed except
insofar, and only insofar, as may be necessary to enforce the award of the
arbitrator and any judgement enforcing an award. The prevailing party shall be
entitled to recover reasonable and necessary attorneys' fees and costs from the
non-prevailing party and the determination of such fees and costs and the award
thereof shall be included in the claims to be resolved by the arbitrator
hereunder.
15. CAPTIONS. The captions in this Agreement are for convenience of
reference only and will not limit or otherwise affect any of the terms or
provisions hereof.
16. GENDER AND NUMBER. When the context requires, the gender of all words
used herein will include the masculine, feminine and neuter and the number of
all words will include the singular and plural.
17. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of which will
constitute one and the same instrument, but only one of which need be produced.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
COMPANY:
HOUSTON INTERWEB DESIGN, INC.
By /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
President
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EXECUTIVE:
/s/ Xxx X. Xxxxxxx
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XXX X. XXXXXXX
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