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EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into this 1st day of July 1994, by and
between XXXX X. XXXXX, XX., (hereinafter referred to as the "Employee") and
DIGITAL COMMUNICATIONS TECHNOLOGY CORPORATION, 0000 XX 00xx Xxxxxx, Xx.
Xxxxxxxxxx, Xxxxxxx 00000, (hereinafter referred to as the "Corporation").
WHEREAS, the Corporation is engaged in the broadcast quality video tape
duplicating industry (the "video reproduction industry"); and
WHEREAS, the Employee desires to be employed by the Corporation and the
Corporation desires to employ the Employee;
NOW THEREFORE, in consideration of the mutual covenants and promises
contained herein, it is mutually agreed that the terms and conditions of the
employment relationship are as follows:
ARTICLE I
CERTAIN DEFINITIONS
For purposes of this Agreement, the following terms shall have the meanings
indicated:
Section 1.01 Associated Person. "Associated Person" means any person, entity
or organization engaged in or about to be engaged in and which, in fact, does
later become engaged in, the marketing of a "Conflicting Product."
Section 1.02 Confidential Information. "Confidential Information" means
information disclosed to the Employee or known by the Employee as a consequence
of or through his employment by the Corporation, not generally known in the
broadcast quality video tape duplicating industry about the Corporation's
customers, manufacturing, processes, financial condition, results of
operations, business, properties, assets, liabilities, or future prospects of
the Corporation or of any customer or supplier of the Corporation.
Section 1.03 Conflicting Product. "Conflicting Product" means any product,
process or service, of any person or organization other than the Corporation,
which resembles or competes with a product, process or service of the
Corporation.
Section 1.04 Corporation. "Corporation" means Digital Communications
Technology Corporation, its successors and assigns, any of its present or
future subsidiaries, organization controlled
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by it or organizations resulting from its merger or other change in form of
conducting business.
ARTICLE II
DUTIES
Section 2.01 General. The Corporation hereby employs the Employee to
faithfully, and to the best of his ability, perform those duties as listed on
Schedule A, attached hereto and made a part of this Agreement by reference, as
the Corporation may direct.
Section 2.02 Additional Duties. The Employee shall perform such additional
work as may be required by the Corporation from time to time under the terms
and conditions and according to the directions, instructions and control of the
Corporation. However, the Employee is not required to perform any duties
outside of the times and places of employment set forth in this Agreement.
Section 2.03 Change of Duties. The duties of the Employee may be changed from
time to time, by mutual agreement, without having any effect upon any other
terms of this Agreement.
Section 2.04 Corporation's Rules and Regulations. The Employee shall strictly
adhere to all of the rules and regulations of the Corporation which are
presently in force or which may be established hereafter with respect to the
conduct of his employment. The Employee shall also strictly follow the
directions of the Corporation with respect to the methods to be used in
performing his duties. The Corporation's practice or policy manuals, price
lists, product designs, customer lists, general letters and other written
publications are all made a part of this Agreement. The Corporation shall have
the right to amend, revise or discontinue the policies or procedures as the
Corporation deems necessary from time to time. Any such change in policies or
procedures will be effective upon issuance of same by the Corporation.
Section 2.05 Other Business or Civic Activities. The Employee may participate
in other business or civic activities, public or private, wholly apart from the
Employee's duties hereunder, provided such participation does not unreasonably
interfere with the performance of such duties. Duties required by public or
private corporations or associations for profit, by reason of the Employee's
membership, directorship or the Employee acting as an officer thereof, shall
not be construed as interference with the performance required by this Article
II. Fees or salaries earned for such duties, including sums received for the
reimbursement of expenses in connection with such duties, shall be retained by
the Employee.
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Section 2.06 Vacations. The Employee shall be entitled to vacations as may be
provided for by the Employer on Schedule B, attached hereto and made a part of
this Agreement by reference.
ARTICLE III
COMPENSATION AND TERM
Section 3.01 Compensation. The Corporation agrees to compensate the Employee
as provided on Schedule B attached hereto and made part of this Agreement by
reference, and, in the discretion of the Corporation, to pay such additional
compensation as the Corporation may from time to time determine, either under
any general plan or plans for payment of bonuses and additional compensation,
or otherwise, taking into account the Employee's productivity, experience and
responsibilities. In addition, the Employee shall be eligible, as an Employee
of the Corporation, to receive all of the fringe benefits provided by the
Corporation from time to time during the term of this Agreement, including, but
not limited to, any life insurance, medical insurance and disability insurance
programs, pension and profit sharing plans, stock option plans or medical
reimbursement plans which the Corporation has adopted or may adopt during the
term of this Agreement.
Section 3.02 Bonus Account. If the Employee is entitled to receive any bonus
or commission, an account will be established to record all transactions
between the Corporation and the Employee. Unless otherwise specified, any debit
balance of the account shall not be considered an account receivable of the
Corporation but shall nevertheless be carried forward on all subsequent net
earnings determinations, until the account shall be settled at the terms and
under the conditions as provided from time to time by the Corporation.
Section 3.03 Expenses. During the period of the Employee's employment, each
party will be responsible for all items of expense as listed on Schedule B.
Section 3.04 Term. The initial term of this Agreement shall be three years,
commencing on the effective date of this Agreement, shall be reviewed at the
end of each fiscal year and may be amended by mutual agreement of the Employee
and the Corporation.
Section 3.05 Termination. Notwithstanding anything herein contained, if on or
after the date hereof and prior to the end of the employment period:
(a) Either (i) Employee shall be physically or mentally
incapacitated or disabled or otherwise unable fully to discharge his duties
hereunder for a period of three months, (ii)
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Employee shall be convicted of a felony, (iii) Employee shall commit any act,
or omit to take any action, in bad faith and to the detriment of the
Corporation, or (iv) Employee shall breach any term of this Agreement and fail
to correct such breach within 20 days after being notified in writing of same,
then, in each case, the Corporation shall have the right to give notice of
termination of the Employee's services hereunder as of the date (not earlier
than 10 days from such notice) to be specified in such notice and this
Agreement shall terminate on the date so specified; or
(b) Employee shall die, then this Agreement shall terminate on
the date of Employee's death; or
(c) The Corporation shall seek protection under the Bankruptcy
laws of the United States then the Agreement shall terminate on such date;
whereupon Employee or his estate, as the case may be, shall be entitled to
receive only his salary at the rate provided in Section 3.01 to the date on
which termination shall take effect. Nothing contained in this Section 3.05
shall be deemed to limit any other right of the Corporation to terminate
Employee's employment hereunder upon any ground permitted by law.
ARTICLE IV
CONFIDENTIAL INFORMATION
Section 4.01 General. The Corporation has maintained and continues to maintain
and use commercially valuable Confidential Information which is vital to the
success of the Corporation's business. The Employee is employed by the
Corporation in a capacity in which he will become acquainted with all or part
of this Confidential Information. In order to guard the legitimate interest of
the Corporation in this Confidential Information, it is necessary for the
Corporation to protect this information by holding it confidential.
Section 4.02 Confidentiality. The Employee agrees that any information
received by the Employee during his employment which concerns the personal,
financial or other affairs of the Corporation will be treated by the Employee
in full confidence and will not be revealed to any other person, firm or
organization, either during or after the termination of his employment. The
Employee further agrees, recognizes and acknowledges:
(a) That the names and addresses of customers are and shall
remain the exclusive property of the Corporation, are confidential and are of
great value to the Corporation. The Employee further agrees that all other
information used by the
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Employee in soliciting customers, including, but not by way of limitation, the
names of customers' personnel are trade secrets, are confidential and are the
valuable property of the Corporation, and that any such information developed
by the Employee during the course of any such employment is and shall remain
the property of the Corporation;
(b) That certain services which the Corporation performs will be
confidential, that the good will of the Corporation depends, among other
things, on keeping such services confidential, and that unauthorized disclosure
of the same would irreparably damage the Corporation;
(c) That the business matters and affairs of the Corporation, and
the methods of business operations of the Corporation, are valuable and
confidential and that unauthorized disclosure of the same would irreparably
damage the Corporation; and
(d) That the Employee will treat as confidential all information
obtained by the Employee concerning customers of the Corporation or its
business, products, techniques, methods, systems, price books, plans or
policies; and will not during the period of employment or at any time
thereafter disclose such information in whole or in part to any person, firm or
corporation for any reason or purpose whatsoever, or use such information in
any way or in any capacity other than as an Employee of the Corporation in
furtherance of its interests. Upon the termination or cessation of employment
or sooner if it is required by the Corporation, the Employee will forthwith
deliver to the Corporation, any and all literature, documents, data,
information, order forms, price lists, memoranda, correspondence, computer and
financial records, customer and prospective customer lists, customer's orders,
records and cards acquired or coming to the knowledge and custody of the
Employee in connection with the Employee's activities as an Employee of the
Corporation.
Section 4.03 Remedies for Breach. The Employee acknowledges that the
Corporation's remedy in the form of monetary damages for any breach by the
Employee of any of the provisions of this article may be inadequate and that,
in addition to any remedy for such breach, the Corporation shall be entitled to
institute and maintain any appropriate proceeding or proceedings including an
action for specific performance and/or injunctive relief.
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ARTICLE V
COVENANT TO PROTECT CORPORATION'S CONFIDENTIAL INFORMATION
The Employee, in consideration of his responsibility to protect the
Corporation's Confidential Information, agrees as follows:
(a) That the Corporation is engaged in the broadcast quality
video tape duplicating industry;
(b) That the Confidential Information learned of by the Employee
during the term of this Agreement is the sole property of the Corporation;
(c) That this covenant to protect the Corporation's Confidential
Information is necessary as the Employee shall be employed as part of the
professional staff of the Corporation, reporting directly to executives and
management personnel, and that in the course of employment he shall have access
to Confidential Information of the Corporation as part of this position of
trust and confidence;
(d) That this covenant to protect the Corporation's Confidential
Information is without geographic limit as the Corporation engages in business
world-wide and is not an unreasonable restraint on any future employment by the
Employee;
(e) That a breach of any of the obligations of the Employee in
this Agreement may not be one which is capable of being reasonably measured by
monetary damages, but that this provision is an essential part of the
Employment Agreement with the Corporation;
(f) That the Employee specifically agrees that this covenant may
be enforced by injunctive relief as well as claims for compensatory damages;
and
(g) That in the event a court of competent jurisdiction finds any
of the provisions of this section to be so over broad as to be unenforceable,
it is the intent of the parties that such provision be reduced in scope by the
court, but only to the extent deemed necessary by the court to render the
provision reasonable and enforceable, the court being advised it is the intent
of the parties that this contract be construed as broadly as possible in order
to protect the Confidential Information of the Corporation except that the
provisions of this Article V will not be deemed breached merely because
Employee owns not more than it of the outstanding common stock of a
corporation, if, at any time of its acquisition by Employee, such stock is
listed on a national securities exchange, is reported on NASDAQ, or is
regularly traded
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in the over-the-counter market by a member of a national securities exchange.
ARTICLE VI
COVENANT NOT TO COMPETE
Section 6.01 Competition During the Term of this Agreement. Employee
agrees that during the term of this Agreement, neither he, nor any company
controlled by Employee (an "Affiliate"), will directly or indirectly compete
with the Corporation in any way, and that he will not act as an officer,
director, employee, consultant, shareholder, lender, or agent of any entity
which is engaged in any business of the same nature as, or in competition with,
the business in which the Corporation is now engaged or other related business
in which the Corporation becomes engaged during the term of this Agreement.
Furthermore, Employee agrees that during the term of this Agreement, he will
undertake no planning for the organization of any business activity competitive
with the work he performs as an employee of the Corporation and Employee will
not combine or conspire with any employees of the Corporation for the purpose
of organization of any such competitive business activity.
Section 6.02 Competition Following Termination of this Agreement. Employee
agrees that for a period of one year after the termination of this Agreement
for any reason whatsoever, neither Employee, nor any Affiliate, shall
knowingly, directly or indirectly, for itself or himself or on behalf of any
other corporation, person, firm, partnership, association, or any other entity
(whether as an individual, agent, servant, employee, employer, officer,
director, shareholder, investor, principal, consultant or in any other
capacity):
(a) engage or participate in any business which engages in
competition with related businesses being conducted by the Corporation or any
of its affiliates, or any other services rendered by the Corporation during the
term of this Agreement anywhere in the United States;
(b) induce or attempt to influence any employee of the
Corporation to terminate his/her employment, or to hire any such employee,
whether or not so induced or influenced except that any such employee may be
hired with the Corporation's prior written consent or after six (6) months
subsequent to the end of employee's employment with the Corporation; or
(c) assist for compensation or finance any person or entity which
competes with the Corporation.
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF EMPLOYEE
Section 7.01 Performance of Duties. Employee represents and warrants to the
Corporation that (a) Employee is under no contractual or other restriction or
obligation which is inconsistent with the execution of this Agreement, the
performance of his duties hereunder, or the other rights of the Corporation
hereunder and (b) Employee is under no physical or mental disability that would
hinder his performance of duties under this Agreement.
Section 7.02 Life Insurance. If requested by the Corporation, Employee shall
submit to such physical examinations and otherwise take such actions and
execute and deliver such documents as may be reasonably necessary to enable the
Corporation at its expense and for its own benefit, to obtain life insurance on
the life of the Employee. Employee has no reason to believe that his life is
not insurable with a reputable insurance company at rates now prevailing for
healthy men of his age.
ARTICLE VIII
MERGER
In the event of a future disposition of (or including) the properties and
business of the Corporation, substantially as an entirety, by merger,
consolidation, sale of assets or otherwise, then the Corporation may elect:
(a) To assign this Agreement and all of its rights and obligation
hereunder to the acquiring or surviving corporation; provided that such
corporation shall assume in writing all of the obligations of the Corporation
hereunder; and provided, further, that the Corporation (if and so long as it
remains in business as an independent going enterprise) shall remain liable for
the performance of its obligations hereunder in the event of an unjustified
failure of the acquiring corporation to perform its obligations under this
Agreement; or
(b) In addition to its other rights of termination, to terminate
this Agreement upon at least 30 days written notice by paying Employee the
compensation at the rate provided in Section 3.01 to the date on which such
termination shall take effect.
ARTICLE IX
SEVERABILITY
In case any provision of this Agreement shall be held invalid, illegal, or
unenforceable, in whole or in part, neither the
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validity of the remaining part of such provision nor the validity of any other
provision of this Agreement shall in any way be affected thereby.
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01 Survival. The covenants, agreements, representations and
warranties contained in or made pursuant to this Agreement shall survive
Employee's termination of employment, irrespective of any investigation made by
or on behalf of any party.
Section 10.02 Modification. This Agreement sets forth the entire understanding
of the parties with respect to the subject matter hereof, supersedes all
existing agreements between them concerning such subject matter, and may be
modified only by a written instrument duly executed by each party.
Section 10.03 Notices. Any notice or other communication required or permitted
to be given hereunder shall be in writing and shall be mailed by certified mail,
return receipt requested (or by the most nearly comparable method of mailing
from or to a location outside the United States), or delivered against receipt
to the party to whom it is to be given at the address of such party set forth in
the preamble to this Agreement (or to such other address as the party shall have
furnished in writing in accordance with the provisions of this Section 10.03).
Any notice given to the Corporation shall be addressed to the attention of the
Corporate Secretary. Notice to the estate of Employee shall be sufficient if
addressed to Employee as provided in this Section 10.03. Any notice or other
communication given by certified mail (or such comparable method) shall be
deemed given at the time of certification thereof (or comparable act), except
for a notice changing a party's address which shall be deemed given at the time
of receipt thereof.
Section 10.04 Waiver. Any waiver by either party of a breach of any provision
of this Agreement shall not operate as or be construed to be a waiver of any
other breach of that provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing.
Section 10.05 Transferability and Binding Effect. Employee's rights and
obligations under this Agreement shall not be
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transferable by assignment or otherwise, nor shall such rights be subject to
commutation, encumbrance, or the claims of Employee's creditors, and any
attempt to do any of the foregoing shall be void. The provisions of this
Agreement shall be binding upon and inure to the benefit of Employee and his
heirs and personal representatives, and shall be binding upon and inure to the
benefit of the Corporation and its successors and those who are its assigns
under Article VIII.
Section 10.06 No Third Party Beneficiaries. This Agreement does not create, and
shall not be construed as creating, any rights enforceable by any person not a
party to this Agreement (except as provided in Article VIII).
Section 10.07 Headings. The headings in this Agreement are solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
Section 10.08 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.
Section 10.09 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas, for contracts entered into
and wholly performed in such state.
WITNESS WHEREOF, the parties have duly executed this Agreement as of the
first date written above.
EMPLOYEE: DIGITAL COMMUNICATIONS
TECHNOLOGY CORPORATION:
/s/ XXXX X. XXXXX, XX. /s/ XXXXX X. XXXXXX
Xxxx X. Xxxxx, Xx. Xxxxx X. Xxxxxx, CEO
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SCHEDULE A
DUTIES OF EMPLOYEE:
As directed by the Chief Executive Officer of the Corporation.
[ THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY ]
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SCHEDULE B
1. Compensation of Employee:
A. Salary: As compensation for services, the Corporation shall pay
the Employee a salary of $85,000 annually beginning on the date
of this Agreement and a bonus arrangement set forth below which
the Corporation and the Employee may change from time to time in
writing. The Corporation shall also provide the Employee with
such other benefits as the Corporation generally provides to its
employees.
In the event the Corporation terminates this Agreement or the
Employee dies or becomes disabled, the Employee or his estate
shall receive six month's salary payable in six equal installment
payments at the rate in effect at the time; unless such early
termination or non-renewal is due to an event(s) set forth in
Section 3.05 (a)(ii)(iii) or (iv).
B. Bonus: Expressly conditioned on the Employee being employed on
the last day of the fiscal year of the Corporation, the Employee
shall receive a bonus not to exceed 3.5% of the net operating
profits of the Corporation before taxes and any income/loss
arising from investments or extraordinary items. Such bonus is
to be calculated in addition to any salary paid the Employee for
the fiscal year. The Bonus may be paid in cash or the Employee
may request payment of the Bonus in shares of common stock of the
Corporation. Notwithstanding the foregoing, the Corporation may
require or limit the amount of Bonus to be paid in shares of
common stock of the Corporation to 50% of such Bonus. In either
case, the shares of common stock, for purposes of computing the
Bonus shall be the average of the closing bid and ask price for
the last calendar month of the fiscal year of the Corporation.
The shares of common stock will be registered on Form S-8 with
the Securities and Exchange Commission. The Bonus will be payable
within 75 days following the end of the fiscal year.
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