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Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of March 23, 1998, by
and between Xxxxxxx X. Xxxxxx, who resides at Box 000 Xx. 000 Xxxxxxxxx, XX
00000 ("Employee") and DIDAX INC., a Delaware business corporation with its
principal place of business at 0000 Xxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000
("DIDAX"), each a "party" and collectively the "parties." In consideration of
the employment of Employee by DIDAX, DIDAX and Employee hereby agree as follows:
1. Employment, Complete Agreement, and Modification. DIDAX agrees to employ
Employee and Employee agrees to be employed by DIDAX on the terms and conditions
set forth herein. This Agreement supersedes all previous representations, either
written or oral, between the parties. No provision of this Agreement may be
modified except by a writing signed by both parties.
2. Position. Subject to the Bylaws of DIDAX and to the direction of the Board of
Directors of DIDAX (the "Board"), Employee shall serve as Chief Executive
Officer ("CEO") of DIDAX, performing such duties and carrying out such
responsibilities as are normally related to the position of CEO in accordance
with industry standards, and in such additional management position(s) as the
Board may designate. As a bona fide occupational qualification for this
position, Employee will subscribe to the Statement of Faith as stated in Article
XIII, Section 2 of the Bylaws of DIDAX. The Board shall either vote, or
recommend to the shareholders of DIDAX, as appropriate, that during the Term of
this Agreement, (2.1) Employee be nominated for election as a director at each
meeting of shareholders held for the election of directors; and (2.2) DIDAX
shall not confer on any other officer or employee authority, responsibility,
powers, or prerogatives superior or equal to the authority, responsibility,
prerogatives, and powers vested in Employee under this Agreement.
3. Compensation. During the Term of this Agreement, DIDAX shall pay to Employee
for all his services a base salary in periodic installments in accordance with
DIDAX's usual practice for its similarly situated employees, at an annual rate
of $115,000, to be increased to $120,000 if DIDAX's net quarterly revenues
exceed $200,000, and to $130,000 if DIDAX's net quarterly revenues exceed
$400,000.
4. Incentive Compensation. In addition to the compensation provided in Section
3, Employee shall be entitled to receive payments under DIDAX's incentive
compensation and/or bonus program(s) (as in effect from time to time), if any,
in such amounts as are determined by the Board to be appropriate. Any incentive
compensation which is not deductible, in the opinion of DIDAX's counsel, under
ss.162(m) of the Internal Revenue Code shall be deferred and paid, without
interest, in the first year or years when and to the extent such payment may be
deducted.
5. Stock Options. In accordance with the provisions of DIDAX's 1997 Incentive
Stock Option Plan (the "Plan") and the specific authorization of the Board,
DIDAX hereby grants to Employee, subject to all of the terms and conditions of
the Plan and this Agreement, options to acquire shares of DIDAX's outstanding
common stock ("Option Stock") in the amount and per the vesting schedule as
indicated in Attachment A. The exercise price for all such options shall be the
market price of DIDAX's common stock on the NASDAQ stock exchange at the close
of trading on the date of execution of this Agreement. In the event of
termination of this Agreement, Employee has the right to retain only those
options that have vested prior to the effective date of such termination, until
their natural expiration. All unvested options, warrants, and similar rights
shall remain the property of DIDAX.
6. Benefits. During the Term of this Agreement:
6.1 Employee shall be entitled to four (4) weeks of paid vacation time per
year, to be taken at times mutually acceptable to Employee and DIDAX.
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6.2 DIDAX shall provide paid accident and health insurance for Employee
and his family comparable to that DIDAX provides for other DIDAX employees
and their families.
6.3 DIDAX shall obtain at its expense (subject to Employee's insurability)
an insurance policy on the life of Employee, adjusted at policy
anniversary date, subject to the last sentence of this Section 6.3, in the
minimum face amount of Employee's current annual base salary. Employee
shall have the exclusive right to designate the beneficiaries of such
policy and change such beneficiaries from time to time. Such policy and
the proceeds and cash value thereof shall be the sole property of Employee
and DIDAX shall not retain any benefit therein.
6.4 Employee shall be entitled to sick leave benefits in accordance with
the customary policies of DIDAX for its executive officers, but in no
event less than one (1) week per year. In the event of Employee's
Disability, DIDAX shall provide disability insurance that shall provide
for the payment of Employee's annualized salary at the time of the
Disability, for a period of not less than one (1) year from the date of
Disability. For purposes of this Agreement, "Disability" shall mean a
written determination by a physician mutually agreeable to DIDAX and
Employee (or, in the event of Employee's total physical or mental
disability, Employee's legal representative) that Employee is physically
or mentally unable to perform his duties of CEO under this Agreement and
that such disability has continued for ninety (90) days and can reasonably
be expected to continue for a period of six (6) consecutive months or for
shorter periods aggregating one hundred and eighty (180) days in any
twelve-(12)-month period.
6.5 In addition to the vacation provided pursuant to Section 6.1 hereof,
Employee shall be entitled to not less than ten (10) paid holidays (other
than weekends) per year, generally on such days consistent with DIDAX's
employment policies.
6.6 Employee shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by him (in accordance with the policies and
procedures established by DIDAX or the Board for similarly situated
employees of DIDAX) in performing services hereunder.
6.7 Employee shall be eligible to participate in benefits not inconsistent
or duplicative of those set forth in this Section 6 as DIDAX shall
establish or maintain for its employees or executives generally. Employee
shall be solely responsible for any applicable income taxes relating to
benefits provided under this Section 6.
7. Term and Termination. The Term of this Agreement shall begin on the date of
execution stated above and shall continue until this Agreement is terminated by
either party as provided herein. Either party may terminate this Agreement and
Employee's employment hereunder at any time, with or without cause, upon thirty
(30) days prior written notice of termination to the other party.
8. Severance. Upon termination of his employment by DIDAX, and execution of a
termination agreement, Employee shall continue to receive as severance his
current base salary and such benefits as are provided under Sections 6.2 and 6.3
for an additional six (6) months.
9. Protective Covenant. During the period of his employment by DIDAX, Employee
shall: (9.1) to the best of his ability, devote his full professional and
business time and best efforts to the performance of his duties for DIDAX and
its subsidiaries and affiliates; and (9.2) not acquire, assume, or participate
in, directly or indirectly, any position, investment, action or interest adverse
or antagonistic to DIDAX, its business or prospects, financial or otherwise.
10. Conciliation. The parties agree that any claim or dispute arising from or
related to this Agreement shall be settled by biblically based mediation and, if
necessary, legally binding arbitration in accordance with the Rules of Procedure
for Christian Conciliation of the Institute for Christian Conciliation, 0000
Xxxxxx X, Xxxxx
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000, Xxxxxxxx, XX 00000. Judgment upon an arbitration decision may be entered in
any court otherwise having jurisdiction. These methods shall be the sole remedy
for any controversy or claim arising out of this Agreement and the parties
expressly waive their respective right to file a lawsuit in any civil court
against one another for such disputes, except to enforce an arbitration
decision. The parties agree that any claim or dispute hereunder shall expire if
not brought within one (1) year of arising. Any claim or dispute arising from or
related to the Noncompetition and Proprietary Information Agreement between
DIDAX and Employee, or any subsequent noncompetition, nonsolicitation,
confidentiality, and/or proprietary information agreement or covenant between
DIDAX and Employee, shall not be subject to this Section 10.
11. Governing Law. This Agreement shall be governed and interpreted in
accordance with the laws of the State of Virginia without regard to principles
of conflict of laws.
12. Severability. Should any provision or clause of this Agreement be held to be
void, invalid, or unenforceable, the remaining provisions of this Agreement
shall not be affected and shall continue in effect and the invalid provision
shall be deemed modified to the least degree necessary to remedy such
invalidity.
13. Assignment. This Agreement and the rights and obligations of the parties
shall bind and inure to the benefit of each of the parties hereto and shall also
bind and inure to the benefit of any successor or successors of DIDAX, but,
except as to any such successor of DIDAX, neither this Agreement nor any rights
or benefits hereunder may be assigned by either party without the prior written
consent of the other party.
14. Notice. Any notice required or permitted to be given hereunder shall be
effective when received and shall be sufficient if in writing and if personally
delivered or send by prepaid express delivery service, to the party to receive
such notice at its address set forth at the beginning of this Agreement or at
such other address as a party may be notice specify to the other.
15. No Conflicting Obligations. Each party represents and warrants that it is
under no obligation or restriction, nor will it assume any such obligation or
restriction, that does or would in any way violate, interfere, or conflict with
the performance to be rendered under this Agreement.
16. Agreement Read, Understood, and Fair. Employee has carefully read and
considered all provisions of this Agreement and agrees that all of the
restrictions set forth are fair and reasonable and are reasonably required for
the protection of the Interests of DIDAX.
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE DULY EXECUTED THIS AGREEMENT AS OF
THE DATE FIRST WRITTEN ABOVE.
XXXXXXX XXXXXX DIDAX INC.
/s/ Xxxxxxx X. Xxxxxx /s/ Xxxxx X. Buick
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Xxxxxxx X. Xxxxxx Xxxxx X. Buick
("Employee") Chairman of the Board
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ATTACHMENT A
TO EMPLOYMENT AGREEMENT
BETWEEN
DIDAX INC.
AND XXXXXXX X. XXXXXX
VESTING OF STOCK OPTIONS
Stock Options Vesting Based on Milestones: Options Vesting
------------------------------------------ ---------------
- Upon Execution of Employment Agreement ..................................... 100,000
- When DIDAX's annual net revenues exceed one million dollars ($1,000,000)
OR DIDAX's stock price reaches a value of no less than one hundred fifty
percent (150%) of its price at its Initial Public Offering and maintains
that price for no less than two (2) consecutive months ..................... 75,000
- When DIDAX's annual net revenues exceed four million dollars ($4,000,000)
and DIDAX has been profitable for at least two (2) consecutive quarters OR
DIDAX's stock price reaches a value of no less than two hundred percent
(200%) of its price at its Initial Public Offering ......................... 25,000
- When DIDAX's annual net revenues exceed ten million dollars ($10,000,000)
and DIDAX's earnings per share exceed $0.25 OR DIDAX's stock price reaches
a value of no less than three hundred percent (300%) of its price at its
Initial Public Offering .................................................... 25,000
Stock Options Vesting Based on Earnings: Options Vesting
---------------------------------------- ---------------
When DIDAX's Quarterly Earnings reach $0.05 per share ... 10,000
When DIDAX's Quarterly Earnings reach $0.10 per share ... 15,000
When DIDAX's Quarterly Earnings reach $0.15 per share ... 20,000
Total Options ................................................. 270,000
The exercise price for all options offered herein shall be the market price of
DIDAX's common stock on the NASDAQ stock exchange at the close of trading on the
date of execution of this Agreement. All options offered herein shall expire 10
years after they are issued.
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NONCOMPETITION AND PROPRIETARY INFORMATION AGREEMENT
THIS NONCOMPETITION AND PROPRIETARY INFORMATION AGREEMENT ("Noncompetition
Agreement") is entered into as of March 23, 1998, by and between Xxxxxxx X.
Xxxxxx, who resides at Box 000 Xx. 000 Xxxxxxxxx, XX 20131("Employee") and DIDAX
INC., a Delaware business corporation with its principal place of business at
0000 Xxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000 ("DIDAX"), each a "party" and
collectively the "parties." This Noncompetition Agreement is entered into in
connection with the Employment Agreement executed by these same parties
concurrently herewith. In consideration for and as an essential condition of the
employment and continuing employment of Employee by DIDAX, Employee and DIDAX
hereby agree as follows:
1. Noncompetition Covenant. Except with the prior written consent of the Board
of Directors of DIDAX (the "Board"), for a period of twelve (12) months after he
ceases to be employed by DIDAX (the "Termination Date"), Employee shall not,
alone, or as a member, employee or agent of any partnership, or as an officer,
agent, employee, director, stockholder, or investor of any other corporation,
directly or indirectly: (1.1) own, manage, operate, join, control or participate
in the ownership, management, operation, or control of, (1.2) become employed
by, consult or advise, or (1.3) be connected in any manner with any business or
activity which is competitive with the business of, or attempts to solicit
business or customers from, DIDAX as conducted on the Termination Date.
2. Information Disclosed Remains Property of DIDAX. All ideas, concepts,
information, and written material disclosed by DIDAX to Employee, or acquired
from a customer or prospective customer of DIDAX, are and shall remain, during
employment with DIDAX and subsequent to the Termination Date, the sole and
exclusive property and proprietary information of DIDAX or such customers, and
are disclosed in confidence by DIDAX or permitted to be acquired from such
customers in reliance on Employee's agreement to maintain them in confidence and
not to use or disclose them to any other person except in furtherance of DIDAX's
business.
3. Confidential Information. Employee agrees to hold as DIDAX's property all
trade secrets, processes, proprietary information, know-how, memoranda, books,
papers, letters, customer lists, processes, computer software, records,
financial information, policy and procedure manuals, training and recruiting
procedures, and other data, and all copies thereof and therefrom, in any way
relating to DIDAX's business and affairs, whether made by him or otherwise
coming into his possession ("Confidential Information") and on termination of
his employment, or demand of DIDAX at any time, to deliver to DIDAX all tangible
copies of Confidential Information. Employee recognizes and acknowledges that
DIDAX's Confidential Information are valuable, special, and unique assets of
DIDAX's business, access to and knowledge of which are essential to the
performance of the Employee's duties under the Employment Agreement with DIDAX.
Employee will not, during or after the term of his employment by DIDAX, in whole
or in part, disclose such Confidential Information to any person or entity for
any reason or purpose whatsoever, nor shall Employee make use of any such
Confidential Information for his own purposes or for the benefit of any person
or entity (except DIDAX) under any circumstances during or after the term of his
employment, provided that after the term of his employment these restrictions
shall not apply to such Confidential Information that are then in the public
domain (provided that Employee was not directly responsible for such
Confidential Information entering the public domain without DIDAX's consent).
Employee shall have no obligation hereunder to keep confidential any
Confidential Information if and to the extent disclosure thereof is specifically
required by law; provided, however, that in the event disclosure is required by
applicable law, Employee shall provide DIDAX with prompt notice of such
requirement, prior to making any disclosure, so that DIDAX may seek an
appropriate protective order. Employee shall use his best efforts to cause all
persons or entities to whom any Confidential Information shall be disclosed by
him hereunder to observe the terms and conditions set forth herein as through
each such person or entity were bound hereby. Employee further agrees that
during the term of his employment with DIDAX, he will not use or disclose to
other employees of DIDAX confidential information belonging to his former
employers.
4. Ownership of Intellectual Property. Any and all inventions, discoveries,
improvements, processes, apparatus, methods, designs, records, files, drawings,
documents, equipment, or other scientific, literary or artistic creations
(collectively "Creations") that Employee has invented, discovered, conceived,
originated, or made, or may invent,
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discover, conceive, originate, or make, by himself or in conjunction with any
other person or entity, during the period of his employment by DIDAX in any way,
directly or indirectly, connected with DIDAX's business shall be the sole and
exclusive property of DIDAX. Employee agrees that all copyrightable works
created by Employee or under DIDAX's direction in connection with DIDAX's
business are "works made for hire" and shall be the sole and complete property
of DIDAX, and that any and all copyrights to such works belong to DIDAX. To the
extent such works are not deemed to be "works made for hire," Employee hereby
assigns all proprietary rights, including copyright, in these works to DIDAX
without further compensation. Employee agrees to disclose to DIDAX every patent
application, notice of copyright, or other action taken by Employee or any
assignee or affiliate to protect intellectual property during the twelve (12)
months following termination of Employee's employment with DIDAX, for whatever
reason, so that DIDAX may determine whether to assert a claim under this section
or any other provisions of this Noncompetition Agreement or the related
Employment Agreement.
5. Severability; No Waiver. Should any provision or clause of this
Noncompetition Agreement be held to be void, invalid, or unenforceable, the
remaining provisions of this Noncompetition Agreement shall not be affected and
shall continue in effect and the invalid provision shall be deemed modified to
the least degree necessary to remedy such invalidity. If any tribunal of
competent jurisdiction construes any provision or clause of this Noncompetition
Agreement, or any portion thereof, to be illegal, void, or unenforceable because
of the duration of such provision or the area or matter covered thereby, such
tribunal shall reduce the duration, area, or matter of such provision, and, in
its reduced form, such provision shall then be enforceable and shall be
enforced. The failure of either party to partially or fully exercise any right
or the waiver by either party of any breach, shall not prevent a subsequent
exercise of such right or be deemed a waiver of any subsequent breach of the
same or any other term of this Noncompetition Agreement.
6. Assignment. This Noncompetition Agreement and the rights and obligations of
the parties shall bind and inure to the benefit of each of the parties hereto
and shall also bind and inure to the benefit of any successor or successors of
DIDAX, but, except as to any such successor of DIDAX, neither this
Noncompetition Agreement nor any rights or benefits hereunder may be assigned by
either party without the prior written consent of the other party.
7. Notice. Any notice required or permitted to be given hereunder shall be
effective when received and shall be sufficient if in writing and if personally
delivered or sent by prepaid express delivery service, to the party to receive
such notice at its address set forth at the beginning of this Noncompetition
Agreement or at such other address as a party may be notice specify to the
other.
8. No Conflicting Obligations. Each party represents and warrants that it is
under no obligation or restriction, nor will it assume any such obligation or
restriction, that does or would in any way violate, interfere, or conflict with
the performance to be rendered under this Noncompetition Agreement.
9. Agreement Read, Understood, and Fair. Employee has carefully read and
considered all provisions of this Noncompetition Agreement and agrees that all
of the restrictions set forth are fair and reasonable and are reasonably
required for the protection of the Interests of DIDAX.
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE DULY EXECUTED THIS NONCOMPETITION
AGREEMENT AS OF THE DATE FIRST WRITTEN ABOVE.
DIDAX INC.
/s/ Xxxxxxx X. Xxxxxx /s/ Xxxxx X. Buick
------------------------ -----------------------
Xx. Xxxxx X. Buick
("Employee") Chairman of the Board
