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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into this
22nd day of November 2000, between XXXX X. XXXXX, a resident of the State of
Georgia ("Employee"), and BRAINWORKS VENTURES, INC., a Nevada corporation
("Company").
WITNESSETH:
WHEREAS, the Company and Employee each desire to enter into this
Agreement, pursuant to which Employee will be employed by the Company on the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the promises
and agreements hereinafter set forth, the parties hereto, intending to be
legally bound, do hereby agree as follows:
SECTION 1. EMPLOYMENT. Subject to the terms hereof, the Company hereby
employs Employee, and Employee hereby accepts such employment. Employee shall
devote his best efforts to rendering services on behalf of the Company pursuant
to this Agreement.
SECTION 2. POSITION AND RESPONSIBILITIES. Employee shall serve as
President of the Company and Employee also consents to serve, without
compensation, if elected, as a director of the Company. As President of the
Company, Employee will have the powers, duties and responsibilities from time to
time assigned to him by the Company's Board of Directors (the "Board"),
including, but not limited to, generating, facilitating, monitoring, supervising
and evaluating all the Company's venture capital activities and investments.
Employee, in his capacity as President of the Company, will report directly to
the Board. During the term of his employment under this Agreement, Employee
shall devote such of his business time as is necessary to faithfully and
industriously perform his duties under this Agreement and promote the Company's
business and its best interests.
SECTION 3. TERM. Employee's initial term of Employment hereunder shall
commence on the date hereof (the "Effective Date") and will continue in effect
for a period of three (3) years from the Effective Date. The initial term of
employment will automatically renew for an additional three-year period upon the
foregoing expiration, and thereafter upon the expiration of any renewal term
provided by this section, unless the Company or Employee provides written notice
to the other party at least thirty (30) days prior to expiration that such party
elects not to extend this Agreement.
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SECTION 4. COMPENSATION AND BENEFITS.
4.1 SALARY. For all services to be rendered by the Employee
pursuant to this Agreement, the Company hereby agrees to pay the Employee a base
salary at an annual rate per year of $60,000 payable in accordance with the
Company's payroll practices in effect from time to time.
4.2 REIMBURSEMENT OF EXPENDITURES. The Company will reimburse
the Employee for all reasonable expenditures incurred by the Employee in the
course of his employment, including expenditures for (i) transportation, lodging
and meals during overnight business trips, (ii) business meals and
entertainment, (iii) supplies and business equipment, and (iv) long-distance
telephone calls. Notwithstanding the foregoing, the Company will not have an
obligation to pay reimbursements under this Section 4.2 unless the Employee
submits timely reports of his expenditures to the Company in the manner
prescribed by the Board and the rules and regulations underlying Section 162 of
the Internal Revenue Code (the "Code").
4.3 OPTIONS. Simultaneously with the execution of this
Agreement and Pursuant to the Company's 2000 Stock Option Plan (the "Plan"), the
Company shall grant Employee options (the "Employee Options") to purchase
250,000 shares of the Company's common stock, par value $.01 (the "Common
Stock"), which Employee Options shall vest and first become exercisable at a
rate of 40% on the date of the consummation of the Merger (as defined in Section
5 below), 40% on the first anniversary of the Effective Date, and 20% on the
second anniversary of the Effective Date, such that all the Employee Options
shall have vested and become exercisable by the second anniversary of the
Effective Date. The per share exercise price for the Employee Options shall be
equal to the "fair market value" of the shares of Common Stock determined in
accordance with the Plan. The vesting schedule described in this Section 4.3 is
subject to the following modifications:
(i) If the Company terminates the Employee's employment for
any reason other than for Cause (as defined in Section 5 below) after
the date of the consummation of the Merger but prior to the first
anniversary of the Effective Date, then 40% of the Employee Options
shall vest and become exercisable upon such termination, and if such
termination occurs after the first anniversary of the Effective Date
but prior to the second anniversary of the Effective Date, then 20% of
the Employee Options shall vest and become exercisable upon such
termination; and
(ii) Upon a Change in Control of the Company, all unvested
Employee Options shall vest immediately. For purposes of this
Agreement, a "Change in Control" shall mean a merger or consolidation
of the Company with or into another corporation (other than (1) a
merger or consolidation with a subsidiary of the Company or (2) a
merger or consolidation in which (a) the holders of voting stock of the
Company immediately prior to the merger as a class continue to hold
immediately after the merger at least a majority of all outstanding
voting power of the surviving or resulting corporation or its parent
and (b) all holders of each outstanding class or series of voting stock
of the Company immediately prior to the merger or consolidation have
the right to receive substantially the same cash, securities or other
property in exchange for their
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voting stock of the Company as all other holders of such class or
series); provided that in no event shall the Merger be deemed to be a
Change in Control hereunder.
4.4 INSURANCE. The Company shall maintain director and officer
insurance under which Employee shall be covered in his capacity as an officer
and director of the Company.
SECTION 5. TERMINATION OF EMPLOYMENT. This Agreement and Employee's
Employment shall terminate upon the occurrence of any of the following events:
(i) the death or total disability of Employee (total
disability meaning the failure of Employee to perform his normal
required services hereunder for a period of three (3) consecutive
months, by reason of Employee's mental or physical disability as so
determined by a licensed physician selected by the Company satisfactory
to Employee);
(ii) the mutual written agreement of the parties hereto to
terminate Employee's employment hereunder; or
(iii) the Company's termination of Employee's employment
hereunder, upon thirty (30) days' prior written notice to Employee, for
Cause. For the purposes of this Agreement, "Cause" for termination of
Employee's employment shall exist (a) if Employee is convicted of (from
which no appeal may be taken), or pleads guilty to, any act of fraud,
misappropriation or embezzlement, or any felony, (b) if, in the sole
determination of the Board, Employee has engaged in conduct or
activities materially damaging to the business of the Company (it being
understood, however, that neither conduct nor activities pursuant to
Employee's exercise of his good faith business judgment nor
unintentional physical damage to any property of the Company by
Employee shall be a ground for such a determination by the Board) or
(c) if Employee has failed without reasonable cause to devote his best
efforts to the business of the Company and, after notice from the
Company of such failure, Employee at any time thereafter again so
fails.
(iv) upon written notice by Employee to the Company if the
Merger is not consummated by December 31, 2000, provided such notice is
given no later than January 15, 2001. For purposes of this Agreement
the "Merger" shall mean the acquisition by the Company of
eBusinessLabs, Inc., a Georgia corporation ("eBL"), by means of a
merger whereby eBL becomes a wholly-owned subsidiary of the Company.
Upon termination of this Agreement pursuant to this Section 5, any part
of the Employee Options that have not yet vested according to Section 4.3 shall
upon such termination immediately expire and may not be exercised by Employee
thereafter.
SECTION 6. RESTRICTIVE COVENANTS.
6.1 TRADE SECRETS AND CONFIDENTIAL INFORMATION. Employee
acknowledges and recognizes that during his employment with the Company he may
acquire Trade Secrets or Confidential Information.
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(a) Employee agrees to maintain in strict confidence, and not
use or disclose except pursuant to written instructions from the
Company, any Trade Secret (as hereinafter defined) of the Company, for
so long as the pertinent data or information remains a Trade Secret,
provided that the obligation to protect the confidentiality of any such
information or data shall not be excused if such information or data
ceases to qualify as a Trade Secret as a result of the acts or
omissions of Employee.
(b) Employee agrees to maintain in strict confidence and not
to use or disclose any Confidential Information (as hereinafter
defined) during his employment with the Company and for a period of one
(1) year thereafter.
(c) Employee may disclose Trade Secrets or Confidential
Information pursuant to any order or legal process requiring him (in
his legal counsel's reasonable opinion) to do so, provided that
Employee shall first have notified the Company in writing of the
request or order to so disclose the Trade Secrets or Confidential
Information in sufficient time to allow the Company to seek and
appropriate protective order.
(d) "Trade Secret" shall mean any information, including, but
not limited to, technical or non-technical data, a formula, a pattern,
a compilation, a program, a plan, a device, a method, a technique, a
drawing, a process, financial data, financial plans, product plans, or
a list of actual or potential customers, investors or entrepreneurs who
provide the Company with business plans which (i) derives economic
value, actual or potential, from not being generally known to, and not
being readily ascertainable by proper means by, other persons who can
obtain economic value from its disclosure or use, and (ii) is the
subject of efforts that are reasonable under the circumstances to
maintain its secrecy.
(e) "Confidential Information" shall mean any non-public
information of a competitively sensitive or personal nature, other than
Trade Secrets, acquired by Employee, directly or indirectly, in
connection with Employee's employment with the Company, including,
without limitation, oral and written information concerning the
Company's financial positions and results of operations (revenues,
margins, assets, net income, etc.), annual and long-range business
plans, marketing plans and methods, account invoices, oral or written
customer or investor information, and personnel information.
6.2 REMEDIES. In the event Employee violates or threatens to
violate the provisions of this Section 6, damages at law will be an insufficient
remedy and the Company will be entitled to equitable relief in addition to any
other remedies or rights available to the Company and no bond or security will
be required in connection with such equitable relief.
6.3 COUNTERCLAIMS. The existence of any claim or cause of
action Employee may have against the Company will not at any time constitute a
defense to the enforcement by the Company of the restrictions or rights provided
by this Section 6.
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SECTION 7. MISCELLANEOUS.
7.1 BINDING EFFECT. This Agreement shall inure to the benefit
of and shall be binding upon Employee, his executor, administrator, heirs,
personal representatives and assigns, and upon the Company and its successors
and assigns; provided, however, that the obligations and duties of Employee may
not be assigned or delegated.
7.2 GOVERNING LAW. This Agreement shall be deemed to be made
in, and in all respects shall be interpreted, construed and governed by and in
accordance with, the laws of the State of Georgia, without giving effect to
principles of conflicts of laws. Venue for the purposes of any litigation in
connection with this Agreement will lie solely in the state or superior courts
in and for Xxxxxx County, Georgia or the United States District Court in and for
the Northern District of Georgia.
7.3 INVALID PROVISIONS. The parties herein hereby agree that
the agreements, provisions and covenants contained in this Agreement are
severable and divisible, that none of such agreements, provisions or covenants
depends upon any other provision, agreement or covenant for its enforceability,
and that each such agreement, provision and covenant constitutes an enforceable
obligation between the Company and Employee. Consequently, the parties hereto
agree that neither the invalidity nor the unenforceability of any agreement,
provision or covenant of this Agreement shall affect the other agreements,
provisions or covenants hereof, and this Agreement shall remain in full force
and effect and be construed in all respects as if such invalid or unenforceable
agreement, provision or covenant were omitted.
7.4 HEADINGS. The section and paragraph headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
7.5 NOTICES. All communications provided for hereunder shall
be in writing and shall be deemed to be given when delivered in person or
deposited in the United States mail, first class, registered mail, return
receipt requested, with proper postage prepaid, and
(a) If to Employee, addressed to:
Xxxx X. Xxxxx
0000 Xxxxxxxx Xx.
Xxxxxxxx, XX 00000
(b) If to the Company, addressed to:
Brainworks Ventures, Inc.
0000 Xxxxxxxx Xxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxx X. Xxxxxxxx
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or at such other place or places or to such other person or persons as shall be
designated in writing by the parties hereto in the manner provided above for
notices.
7.6 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.
7.7 WAIVER AND MODIFICATION. The waiver by the Company of a
breach of any provision, agreement or covenant of this Agreement by Employee
shall not operate or be construed as a waiver of any prior or subsequent breach
of the same or any other provision, agreement or covenant by Employee. This
Agreement may be modified only by written instrument signed by each of the
parties hereto.
7.8 ENTIRE AGREEMENT. This Agreement (together with any Stock
Option Agreement entered into under the Plan with respect to the Employee
Options) is intended by the parties hereto to be the final expression of their
agreement with respect to the subject matter hereof and is the complete and
exclusive statement thereof notwithstanding any representation or statements to
the contrary heretofore made.
7.9 RIGHT TO SET OFF. The Company shall have the right to set
off against or to deduct from any payments to be made to Employee hereunder any
amounts claimed by the Company to be owed to it by Employee, or to withhold the
making of any such payment based upon any such claimed indebtedness, whether
such claim or indebtedness arises hereunder or otherwise; provided, however,
that this Section 7.9 does not constitute a waiver or limitation of any right of
garnishment or any other legal remedy (other than a right of set off or self
help) available to the Company against Employee pursuant to court order.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed and delivered by its duly authorized officer, and Employee has executed
and delivered this Agreement, all as of the date first written above.
/s/ Xxxx X. Xxxxx
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XXXX X. XXXXX
BRAINWORKS VENTURES, INC.
By: /s/ Xxxx Xxxxxxxx
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Its: Vice President & Secretary
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