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EXHIBIT 10.56
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of the 23rd day
of April, 1999 (the "Effective Date"), between GANYMEDE CORPORATION (the
"GANYMEDE"), an Illinois corporation and Xxxxxxx X. Xxx, a resident of Evanston,
Xxxx County, Illinois (the "Employee").
W I T N E S S E T H:
WHEREAS, pursuant to the terms of that certain Stock Purchase Agreement
and related documents and agreements of event date herewith (the "Purchase
Agreement") by and between the Employee, among others, and GANYMEDE, HomeCom has
acquired all of the issued and outstanding shares of the capital stock of
Ganymede; and
WHEREAS, the Employee has been a senior executive officer of GANYMEDE;
and
WHEREAS, after giving effect to the Purchase Agreement, GANYMEDE shall
become a wholly-owned subsidiary of HomeCom; and
WHEREAS, GANYMEDE desires to retain the services of and employ the
Employee to continue in his role as a senior executive officer of GANYMEDE, and
the Employee desires to provide such services upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the parties hereto, each intending to be legally bound hereby,
agree as follows:
1. Employment. GANYMEDE hereby employs the Employee as their employee
in the capacity of Senior Executive Officer, and the Employee hereby accepts
such employment. During the term of employment under this Agreement (the
"Employment Term"), Employee shall at all times serve as a member of the Board
of Directors of GANYMEDE. During such time, a Member of the Board of Directors
of the GANYMEDE shall pay for Director's liability insurance and indemnify
Employee from all liability that he may incur as a member of the Board of
Directors. During the Employment Term, the Employee shall perform such duties as
shall reasonably be required of an employee of GANYMEDE which are outlined on
Exhibit "A" attached hereto and incorporated herein by reference for all
purposes. Employee agrees not to take any action which would impair or undermine
the terms and conditions of the Purchase Agreement.
2. Performance. The Employee agrees to devote his entire business
efforts to the performance of his duties hereunder; provided, however, that the
Employee may engage in passive securities investment activities for his own
account so long as they do not interfere with the performance of his duties
hereunder. Employee agrees to devote his or her full time and energy to
Ganymede's business and shall not during the term of employment work or perform
services in any advisory or other capacity for any other individual or entity
without disclosing to
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HomeCom the relationship. If HomeCom objects to disclosed relationship, Employee
will refrain from continuing that relationship.
3. Term of Employment. Unless otherwise terminated in accordance with
the terms hereof, the initial term of this Agreement (the "Employment Term")
shall be three (3) years commencing on the Effective Date. Notwithstanding
anything contained herein to the contrary, Employer may terminate this Agreement
at any time by written notice as further described in Section 13.
4. Basic Compensation. The basic minimum annual salary (the "Salary")
of the Employee for his employment services hereunder shall be one hundred
thousand dollars ($100,000) per year, commencing on the Effective Date
throughout the Employment Term. The Salary shall be payable in equal
semi-monthly installments. Employee's salary shall be prorated on a daily basis
for the years or months, as the case may be, in which he commences or terminates
his employment relationship hereunder. In each year of the Employment Term,
Ganymede shall annually review the Employee to determine his eligibility to
receive an annual Salary raise together with performance bonuses based upon the
performance of Ganymede, unless Ganymede is integrated into HomeCom; then the
bonus will be based upon the performance of HomeCom. These reviews shall be
conducted during the previous annual period, subject to the sole determination
of the Compensation Committee of HomeCom's Board of Directors, in its sole
discretion. In addition to salary, Ganymede shall pay Employee commissions equal
to 5% of the gross revenues, excluding revenue received from the sale of
hardware, actually received from Rotary International payable on a monthly
basis, subject to applicable chargebacks.
5. Benefits. As an employee of Ganymede, Employee shall be entitled to
participate in all profit sharing plans, supplemental compensation arrangements,
stock option incentive plans, medical, dental and life insurance programs or any
other fringe benefits offered by Ganymede to its senior management employees
(the "Benefits"). The Salary received by the Employee hereunder shall be in
addition to the foregoing Benefits.
6. Expense Account and Vacations. Ganymede agrees to reimburse the
Employee for all expenses reasonably incurred by him on behalf of Ganymede in
accordance with the prevailing practice and policy of Ganymede, which prevailing
practice and policy shall be disseminated to the Employee by Ganymede
contemporaneous with the execution of this Agreement. In addition, the Employee
shall be entitled to that number of days of paid vacation and paid sick leave as
is consistent with the prevailing practice and policy of Ganymede for other
senior management employees in the same or similar position as that held by the
Employee hereunder.
7. Customer Non-Solicitation. Employee agrees that for a period of one
(1) year immediately following termination of Employee's employment with
Ganymede, HomeCom, or its subsidiaries or affiliates for any reason, including,
without limitation, voluntary resignation from employment by Employee
("Non-Solicitation Period"), Employee shall not, on Employee's own behalf or on
behalf of any person, firm, partnership, association, corporation or business
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organization, entity or enterprise, solicit, contact, call upon, communicate
with or attempt to communicate with any customer or immediate prospect of
Ganymede, HomeCom, or its subsidiaries or affiliates, or any representative of
any customer or immediate prospect of Ganymede, HomeCom, or its subsidiaries or
affiliates with whom the Employee had Material Contact ("Material Contact") with
a view to sale or providing any product or service competitive or potentially
competitive with any product or service sold or provided or under development by
Ganymede, HomeCom, or its subsidiaries or affiliates during the time of one (1)
year immediately preceding cessation of Employee's employment with Ganymede,
provided that the restrictions set forth in this paragraph shall apply only to
customers or prospects of Ganymede, or representatives of customers or prospects
of Ganymede, HomeCom, or its subsidiaries or affiliates, with which Employee had
substantial contact during such one (1) year period. The actions prohibited by
this paragraph shall not be engaged in by Employee directly or indirectly,
whether as director, officer, manager, salesperson, agent, technical support,
sales or service representative, developer, or otherwise. As used herein,
"Material Contact" means contact between Employee and each customer or immediate
prospect (A) with whom Employee dealt; (B) whose dealings with Ganymede,
HomeCom, or its subsidiaries or affiliates were coordinated or supervised by
Employee; (C) about whom Employee obtained Confidential Information in the
ordinary course of business as a result of Employee's association with Ganymede,
HomeCom, or its subsidiaries or affiliates; or (D) who receives services
provided by Ganymede, HomeCom, or its subsidiaries or affiliates, the sale or
provision of which results or resulted in compensation, commissions or earnings
for Employee, in each of cases (A) through (D) within two years prior to the
date of Employee's termination of employment. This section does not preclude the
Employee to engage in social contact or interaction with any of these entities
or parties, as long as the Employee is interacting with the intention not to
solicit competing business.
8. Non-Competition. Employee agrees that during the term of Employee's
employment and during the Non-Solicitation Period, Employee shall not, on
Employee's own behalf or on behalf of any person, firm, partnership,
association, corporation or business organization, entity or enterprise, engage
in any business involving, web development consulting to the financial services
industry. Employee also agrees that during the term of the Non-Solicitation
Period, Employee shall not, in any place in which Ganymede, HomeCom, or its
subsidiaries or affiliates does business, on Employee's own behalf of on behalf
of any person, firm, partnership, association, corporation or business
organization, entity or enterprise, engage in any business involving web
development consulting to the financial services industry.
The actions prohibited by this paragraph shall not be engaged in by
Employee directly or indirectly, whether as officer, director, manager,
salesperson, agent, technical support, sales or service representative,
developer, or otherwise. Employee acknowledges that Ganymede provides products
and services to customers throughout the United States given the global scope of
the internet and that a more limited territorial restriction on the
non-competition provisions of this paragraph would not adequately protect the
legitimate interests of Ganymede. Notwithstanding anything contained herein to
the contrary, nothing shall prevent the Employee from having a financial
interest in a publicly-traded competitor of Ganymede if that interest is in the
form of ownership of less than five (5%) percent of the outstanding stock of
such company.
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9. Employee Non-Solicitation. During the Non-Solicitation Period,
Employee agrees that Employee shall not call upon, solicit, recruit, or assist
others in calling upon, recruiting or soliciting any person who is an employee
of Ganymede, HomeCom, or its subsidiaries or affiliates, who is or was an
employee of Ganymede, HomeCom, or its subsidiaries or affiliates within 12
months of such solicitation or recruitment for the purpose of having such person
terminate his employment with Ganymede, HomeCom, or its subsidiaries or
affiliates or work in any other corporation, association, entity, or business.
10. Equitable Relief. The parties to this Agreement acknowledge that a
breach by Employee of any of the terms or conditions of this Agreement will
result in irrevocable harm to Ganymede and that the remedies at law for such
breach may not adequately compensate Ganymede for damages suffered. Accordingly,
Employee agrees that in the event of such breach, Ganymede, HomeCom, or its
subsidiaries or affiliates shall be entitled to injunctive relief or such other
equitable remedy as a court of competent jurisdiction may provide. Nothing
contained herein will be construed to limit Ganymede's right to any remedies at
law or equity, including the recovery of damages for breach of this Agreement.
11. Confidential Information.
(a) Ganymede, HomeCom, or its subsidiaries or affiliates may disclose
to Employee certain Trade Secrets and Confidential Information (defined below).
Employee acknowledges and agrees that the Trade Secrets and Confidential
Information are the sole and exclusive property of Ganymede, HomeCom, or its
subsidiaries or affiliates (or a third party providing such information to
Ganymede, HomeCom, or its subsidiaries or affiliates) and that Ganymede,
HomeCom, or its subsidiaries or affiliates or such third party owns all
worldwide rights therein under patent, copyright, trade secret, confidential
information, or other property right. Employee acknowledges and agrees that the
disclosure of the Trade Secrets and Confidential Information to Employee does
not confer upon Employee any license, interest or rights of any kind in or to
the Trade Secrets or Confidential Information. Employee may use the Trade
Secrets and Confidential Information solely for the benefit of Ganymede,
HomeCom, or its subsidiaries or affiliates while Employee is employed or
retained by Ganymede. Except in the performance of services for Ganymede,
Employee will hold in confidence and not reproduce, distribute, transmit,
reverse engineer, decompile, disassemble, or transfer, directly or indirectly,
in any form, by any means, or for any purpose, the Trade Secrets or Confidential
Information or any portion thereof. Employee agrees to return to Ganymede, upon
request by Ganymede, the Trade Secrets and Confidential Information and all
materials relating thereto.
(b) Employee's obligations under this Agreement with regard to the
Trade Secrets shall remain in effect for as long as such information shall
remain a trade secret under applicable law. Employee acknowledges that its
obligations with regard to the Confidential Information shall remain in effect
while Employee is employed or retained by Ganymede and for two (2) years
thereafter. As used herein, "Trade Secrets" means the trade secrets of Ganymede
and its subsidiaries and affiliates as defined in the Georgia Trade Secrets Act.
As used herein, "Confidential Information" means information of Ganymede, other
than Trade Secrets, HomeCom and its subsidiaries and affiliates, its licensors,
vendors, suppliers, customers or prospective licensors, vendors, suppliers or
customers, that is of value to its owner and is treated
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as confidential, including, but not limited to, technical or non-technical data,
formulas, patterns, compilations, programs, devices, methods, techniques,
drawings, processes, financial data, financial plans, product plans, or a list
of actual or potential customers or suppliers, future business plans, licensing
strategies, advertising campaigns, information regarding executives and
employees, and the terms and conditions of this Agreement.
(c) Employee acknowledges that existing or prospective customers of
HomeCom may be companies which are publicly traded and subject to various rules
and regulations of the Securities and Exchange Commission. Employee acknowledges
that HomeCom has a policy that no one associated with HomeCom may trade in
securities of any customer of HomeCom or HomeCom itself based on material,
nonpublic information concerning the customer. Additionally, HomeCom expressly
forbids the unauthorized disclosure of any nonpublic information acquired by
anyone associated with HomeCom relating to a customer of HomeCom. Employee shall
notify HomeCom prior to trading the securities of any customer or Securities of
HomeCom.
(d) Nothing contained herein shall be deemed to waive any of Ganymede's
rights or remedies under any applicable trade secrets acts, including, but not
limited to, the Georgia Trade Secrets Act.
(e) Upon termination of employment for any reason, Employee shall
return immediately to Ganymede all documents, property, and other records of
Ganymede, and all copies thereof, within Employee's possession, custody or
control, including but not limited to any materials containing any Trade Secrets
or Confidential Information (as defined below) or any portion thereof.
12. Ownership. For purposes of this Agreement, "Work Product" shall
mean the data, materials, documentation, computer programs, inventions (whether
or not patentable), and all works of authorship, including all worldwide rights
therein under patent, copyright, trade secret, confidential information, or
other property right, created or developed in whole or in part by Employee,
whether prior to the date of this Agreement or in the future while employed by
Ganymede (i) relate to the present or documented planned business, research,
developments, tests, products, work or activities of HomeCom or its subsidiaries
or affiliates or (ii) result from or are suggested by any work Employee may do
for HomeCom or its subsidiaries or affiliates. All Work Product shall be
considered work made for hire by the Employee and owned by Ganymede. If any of
the Work Product may not, by operation of the law, be considered work made for
hire by Employee for Ganymede, or if ownership of all right, title, and interest
of the intellectual property rights therein shall not otherwise vest exclusively
in Ganymede, Employee hereby assigns to Ganymede, and upon the future creation
thereof automatically assigns to Ganymede, without further consideration, the
ownership of all Work Product. Ganymede shall have the right to obtain and hold
in its own name copyrights, registrations, and any other protection available in
the Work Product. Employee agrees to perform, during or Employee's employment,
such further acts as may be necessary or desirable to transfer, perfect, and
defend Ganymede's ownership of the Work Product that are reasonably requested by
Ganymede. All data, materials, documentation, computer programs, inventions
(whether or not patentable), and all works of authorship, including all
worldwide rights therein under patent, copyright, or other
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property right, created or developed in whole or in part by Employee outside his
scope of employment by Ganymede, belongs exclusively to Employee.
13. Termination of Employment.
(a) The Employment Term will terminate upon the Employee's
termination or upon the effective date specified in a letter of resignation from
Employee to the Board of Directors of Ganymede. This agreement shall only be
renewed upon the mutual agreement of the Parties.
(b) The Employment Term may also be terminated by Ganymede
immediately upon prior written notice to the Employee upon the occurrence of any
of the following:
(i) the commission by the Employee of any act involving
moral turpitude detrimental to the interests of
Ganymede or Ganymede; or
(ii) violation of Title VII of the Civil Rights Act of
1964 or any other Federal or State Civil Rights
statutes or regulations; or
(iii) the conviction of the Employee of a felony.
(c) The Employment Term may also be terminated by Ganymede upon
thirty (30) days prior written notice to the Employee upon the occurrence of any
of the following:
(i) the willful damage directly caused by the Employee to
Ganymede; or
(ii) Employee's gross negligence in connection with the
performance of his duties, including but not limited
to insubordination, inability to perform mutually
agreed to delegated tasks, inability to meet mutually
agreed to established deadlines.
(d) Upon termination of the Employee's employment under
subsections 13(a), (b), or (c) above, the parties hereto will be relieved of any
further obligations hereunder from and after the effective date of such
termination, except for any obligations set forth in Sections 7, 8, 9, and 10,
14. Upon termination of the Employee's employment for any reason, the Employee
agrees to resign, at the time of termination, from all positions with Ganymede,
HomeCom or its subsidiaries or affiliates, including but not limited to, any
Officer and Director positions with HomeCom or Ganymede.
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14. Effect of Termination. An Employee may terminate their
employment with Buyer within the three year period listed herein without penalty
if the cause of the termination is a health related problem, mental or physical,
that results in Employee's inability to perform, either physically or mentally,
the duties associated with Employee's title and position with Ganymede, as
delineated by Ganymede. Employee must provide Ganymede written, signed evidence
from Employee's doctor describing the health related problem and describing how
the problem will result in Employee's inability to fulfill his/her duties of
employment with Ganymede. An Employee may terminate his employment with HomeCom
within the three year period listed herein without penalty if the cause of the
termination is due to 1) change in control of HomeCom, 2) Employee is required
to relocate to a city outside of Chicago 3) There is a material change in job
duties. Notwithstanding the above, if Employee terminates his employment with
Ganymede for any other reason or if termination is based on cause as defined
above in Section 13, within the three year period listed herein, the terminating
Employee shall be required to return a total of twenty percent (20%) of Ganymede
stock acquired by terminating Employee diminished on a pro rata basis based on
the time served by the employee within the three (3) year period pursuant to
this transaction, distributed as follows:
|_| Ten percent (10%) of the stock or the equivalent market value
of ten percent (10%) of the shares (valued at the date of
Closing) in cash shall be returned to Ganymede; and
|_| Ten percent (10%) of the stock or the equivalent market value
of ten percent (10%) of the shares (valued at the date of
Closing) in cash shall be distributed evenly to the remaining
Partners who remain employed by Ganymede. For the purposes of
this agreement, the term "Partners" refers to Xxxxxxx X. Xxx,
Xxxx X. Xxxxxx, and Xxx Xxxxxxx, collectively. If, at the time
of termination, none of the Partners remain employed with
Ganymede, this ten percent (10%) shall revert back to HomeCom.
|_| When the termination date is fixed, the twenty percent (20%)
will be calculated, and the amount will be reduced based on
subcontracting a pro rata percentage of time served by the
Employee. Employee will only be penalized for the remaining
time not fulfilled for the three (3) year period.
15. Death of the Employee. If the Employee dies during the
Employment Term, (a) this Agreement shall terminate, and (b) Ganymede will pay
to the Employee's estate the Employee's Salary for thirty (30) days after the
death occurs. Ganymede and HomeCom benefit plans in which Employee was a
participant prior to his death shall vest in full upon his death and be
exercisable by Employee's estate, subject to the terms of such benefit plans.
16. Compliance with Securities Laws. Employee agrees to comply
with all applicable state and federal securities laws, rules, and regulations,
as may be in effect from time to time.
17. Governing Law. The terms of this Agreement shall be governed
by the laws of the State of Illinois. Venue shall lie in the Circuit Court of
Xxxx County, Illinois, or the United States District Court for the Northern
District of Illinois, in Chicago, Illinois. The parties hereto acknowledge that
such Court has the jurisdiction to interpret and enforce the provisions of this
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Agreement and the parties waive any and all objections which they may have as to
personal jurisdiction or venue in any of the above Courts.
18. Assignability. The Employee may not assign his interest in or
delegate his duties under this Agreement without prior approval.
19. Binding Effect. This Agreement shall be binding upon and inure
to the benefit of Ganymede, its successors and assigns.
20. Notices. All notices, demands and requests which may be given
or which are required to be given by either party to the other, and any exercise
of a right of termination provided by this Agreement, shall be in writing and
shall be deemed effective when either: (a) personally delivered to the intended
recipient; (2) sent by certified or registered mail, return receipt requested,
addressed to the intended recipient at the address specified below; (3)
delivered in person to the address set forth below for the party to which the
notice was given; (4) deposited into the custody of a nationally recognized
overnight delivery service such as Federal Express Corporation, Xxxxx or
Purolator, addressed to such party at the address specified below; or (5) sent
by facsimile, telegram or telex, provided that receipt for such facsimile,
telegram or telex is verified by the sender and followed by a notice sent in
accordance with one of the other provisions set forth above. Notices shall be
effective on the date of delivery or receipt, of, if delivery is not accepted,
on the earlier of the date that delivery is refused or three (3) days after the
date the notice is mailed. For purposes of this Paragraph, the addresses of the
parties for all notices are as follows (unless changes by similar notice in
writing are given by the particular person whose address is to be changed):
If to the Employee, to 0000 Xxxxxxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxx 00000;
With a copy to: Xxxxxxxx & Xxx
Xxx Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
If to Ganymede, to Fourteen Xxxxxxxx Xxxxxx, Xxxxx 000, 0000
Xxxxxxxx Xxxx, Xxxxxxx, XX 00000.
21. Entire Agreement; Modification. This Agreement constitutes the
entire agreement of the parties hereto with respect to the subject matter hereof
and may not be modified or amended in any way except in writing by the parties
hereto.
22. Waiver. No waiver by Ganymede of any breach by the Employee of
this Agreement shall be construed to be a waiver as to succeeding breaches.
23. Severability. In any provision or part of any provision of
this Agreement is held invalid or unenforceable by a court of competent
jurisdiction, such holding shall not affect the enforceability of any other
provisions or parts thereof, and all other provisions and parts thereof shall
continue in full force and effect.
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24. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
or as of the date and year first above written.
COMPANY:
GANYMEDE CORPORATION
By: /s/ Xxxxxx Xxx
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Name: Xxxxxx Xxx
Title:
EMPLOYEE:
/s/ Xxxxxxx X. Xxx
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Xxxxxxx X. Xxx
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Exhibit A
Employment Agreement
of Xxxxxxx X. Xxx
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Employee shall:
1. supervise the integration of Ganymede into HomeCom and implement
necessary transition of administration, management and operation
functions;
2. promote and sell the products and services of Ganymede and HomeCom in
international business development, and in that connection will:
(a) facilitate meetings with key prospects for Ganymede and HomeCom
products and services
(b) promote the brand name and goodwill of Ganymede and HomeCom
(c) negotiate and establish distribution, strategic alliance and other
business relationships for Ganymede and HomeCom
(d) accompany sales representatives of Ganymede and/or HomeCom when
necessary or desirable to assist sales to significant accounts
(e) advise Ganymede and HomeCom in establishing pricing policies and in
developing annual and quarterly sales forecasts and budgets;
3. retain primary responsibility for servicing and maintaining the Rotary
International account;
4. accompany sales representatives of Ganymede or HomeCom when necessary
or desirable to assist sales to significant accounts;
5. other services as requested by Ganymede or HomeCom.
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