EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into effective as of the 19th day of
January 2000, notwithstanding the later execution hereof, by and between
WebQuest International, Inc. a Nevada corporation ("Employer") and Xxxxx
Xxxxxx("Employee").
WITNESSETH:
In consideration of the mutual promises herein contained, the parties agree as
follows:
1. Employment Agreement. The Employer hereby agrees to employ Employee, and
Employee hereby agrees to serve as such Employee upon the terms and conditions
hereinafter set forth.
2. Term of Employment. Subject to the provisions for termination as
hereinafter provided, the term of the employment shall commence as of the date
of this Agreement and shall end five (5) years from that date on January 18,
2005. At the end of the term hereof, this Agreement may be renewed by mutual
agreement of the parties.
3. Employee's Position and Duties. Employee agrees as follows:
a. Employee shall assume responsibility, as directed by the Board of
Directors,as President and Chief Operating Officer of Employer. The Board of
Directors shall be responsible for the management and supervision of Employer
and shall perform any other duties relating to Employer's operations that may
from time to time be assigned by the Board of Directors and governed by the
Bylaws of Employer, for the successful operation of Employer's business.
b. It is contemplated that Employee shall also be a Board of Director of
Employer during the term of this Agreement, pursuant to the Articles of
Incorporation and Bylaws of Employer.
c. During the term of this Employment Agreement, Employee shall, in good
faith,devote his best efforts to his employment and perform diligently and in
good faith such duties as are or may be from time to time required by the
Employer, which duties shall be consistent with his position as set forth
above; it being understood and acknowledged that, the terms "best efforts"
mean such effort and time commitment as is necessary to achieve the success of
the business.
d. Employee shall not, without the prior written consent of Employer,
directly or indirectly, during the term of this Agreement, whether for
compensation or otherwise, render services of a business, professional or
commercial nature to any person or firm that is engaged in a business similar
to that of the Employer. Employer understands that employee has interests in
and is an officer and director of Sales Technology, Inc, Reliability Direct,
Inc. and Advanced Vibration Systems, Inc.
e. The parties agree that during the performance of this Agreement
Employees office shall be League City, Texas and Minden, Nevada and Employer
shall not require Employee to change his principal place of residence.
4. Compensation and Benefits. During the term of employment hereunder,
Employer shall compensate Employee as follows:
a. Salary. For all services he may render to Employer during the term of
this Agreement, employee shall receive from Employer a base annual salary
while he is employed hereunder of One Hundred Thirty Thousand Dollars
($130,000). Salary is to be paid in accordance with the policy of Employer
regarding payment of salary to its other officers and directors.
b. Stock Options. Employee shall also be granted a stock option to purchase
one million one hundred thousand shares of WebQuest International. Inc. common
stock at $2.81 per share. These options vest as follows: 100,000 shares today
and 50,000 shares vesting quarterly over the next five (5) years. All stock
options will have a life of three years from vesting date. Upon involuntary
termination or change of control, as defined in this agreement, remaining
options will vest immediately.
c. Director's Compensation. During the time which Employee is a member of
the Board of Directors of Employer, and properly fulfills his duties therefore,
Employer shall provide or reimburse to Employee expenses comparable to other
Directors of Employer.
d. Benefits. Employee shall receive a monthly automobile allowance in the
amount of $200.00 a month
5. Termination of Employment.
a. For Cause. The employment of Employee under this Employment Agreement,
and the term hereof, may be terminated by the Employer only upon a showing of
"Cause", upon thirty (30) days' written notice to Employee. The "effective
date of termination" shall be the date thirty (30) days after written notice
of termination is delivered to the Employee. "Cause" is defined as follows:
i. A material act or omission in the course of Employee's duties
that is dishonest or fraudulent;
ii. A material breach of this Agreement by Employee.
iii. Employee is not performing his duties adequately as Chief
Operating Officer and President, as determined by a majority of the Board of
Directors, with employee abstaining from the vote as Chairman.
b. Disability or Death. The employment of Employee under this Employment
Agreement and the term hereof, shall be terminated by the death or partial or
total disability of Employee. For purposes hereof, the term "disability" is
hereby defined to mean any mental or physical disability which renders Employee
unable to perform his duties or assignment as determined by the Board of
Directors of Employer, in the sole judgment and discretion of said Board as
determined by a majority vote of the members thereof.
c. Resignation. The employment of Employee under this Employment Agreement,
and the term hereof, will be terminated by the voluntary resignation of
Employee.
6. Salary and Benefits Upon Termination. Except as specifically provided
herein, all salary and other benefits shall terminate as of the effective date
of termination if Employee resigns. If involuntarily terminated (except
following a Change in Control, as provided for below) and in consideration for
the obligations of Employee pursuant to paragraphs 15 and 16 of the Employment
Agreement, Employee shall be entitled to a termination or severance salary
equal to the remainder of the contract at the time of termination. Employee
shall have the option to accelerate payments of the severance salary and
receive the full amount upon termination, in Employee's sole discretion.
Unless precluded by law, any medical and dental insurance coverage and
benefits shall continue for thirty (30) days after termination or until
Employee is re-employed, whichever shall first occur.
7. Termination Following Change in Control. Employer will provide or cause
to be provided to Employee the rights and benefits described in Paragraph 9
below in the event that Employee's employment is terminated at any time during
the term of this Agreement, or any renewal term, following a Change in Control
(as such term is defined in Paragraph 8) under circumstances stated in (a) or
(b) below.
a. The involuntary termination of Employee by Employer for reasons other
than for "Cause" (as such term is defined in Paragraph 5 of this Agreement)
or other than as a consequence of Employee's death, permanent disability or
attainment of the normal retirement date; or
b. The voluntary termination by Employee, which shall not result in a breach
of this Agreement, following the occurrence of any of the following events:
i. the assignment to Employee of any duties or responsibilities that are
inconsistent with Employee's position, duties, responsibilities or status
immediately preceding such Change in Control, or a reduction of Employee's
responsibilities subsequent to the Change in Control;
ii. the reduction of Employee's annual salary (including any deferred
portions) or level of benefits or supplemental compensation;
iii. the material increase in the amount of travel normally required of
Employee in connection with Employee's employment; or
iv. the good faith determination by Employee that due to the Change in
Control (including any changes in circumstances at Employer that
directly or indirectly effect Employee's position, duties,
responsibilities or status immediately preceding such Change in
Control) he is no longer able effectively to discharge Employee's
duties and responsibilities.
8. Definition of Change of Control. For purposes of this Agreement, a
"Change of Control" shall be deemed to have taken place if:
a. a third person, including a "group" as defined in Section 13(d)(3) of
the Securities Exchange Act of 1934, becomes the beneficial owner
of shares of the Employer having more than fifty percent (50%) of the
total number of votes that may be cast by holders of capital stock upon
any corporate action proposed to shareholders for approval or adoption;
or
b. as a result of, or in connection with, any cash tender or securities
exchange offer, merger, or other business combination, sale of assets or
contested election, or any combination of the foregoing transactions (a
"Transaction"), the persons who were directors of the Employer before
the Transaction shall cease to constitute a majority of the Board of the
Employer or any successor corporation.
9. Benefits Entitlements. On or before Employee's last day of employment
with the Employer or any of its subsidiaries, the Employer will pay to the
Employee as compensation for services rendered a lump sum cash amount (subject
to any applicable payroll or other taxes required to be withheld) equal to the
sum of,
a. Employees' highest annual salary fixed during the period he was an
employee of the Employer, plus. the largest aggregate amount awarded to
Employee in a year as cash bonus (whether or not deferred) under the
Corporation's short and long term cash incentive plans or arrangements
providing for performance bonus payments during the preceding years.
10. Taxes. In the event a tax is imposed pursuant to Section 4999 of the
Internal Revenue Code ("Excise Tax") on any portion of a benefit payment made
to an Employee in accordance with Paragraph 9, Employer shall relieve the
Employee of the Excise Tax burden by paying;
a. the initial Excise Tax and
b. any additional Excise Tax and federal and state income tax which arise
as a result of Employer's payment of the initial Excise Tax on
behalf of the Employee.
11. Payment Obligations Absolute. The Employer's obligation to pay the
Employee the benefits described herein shall be absolute and unconditional and
shall not be affected by any circumstances, including, without limitation, any
set-off, counter-claim, recoupment, defense or other right which the Employer
may have against the Employee or anyone else. All amounts payable by the
Employer shall be paid without notice or demand. Each and every payment made
by the Employer shall be final and the Employer will not seek to recover all
or any part of such payment(s) from the Employee or from whosoever may be
entitled to such payment(s) for any reason whatsoever. The Employee shall not
be obligated to seek other employment in mitigation of the amounts payable or
arrangements made under any provisions herein, and the obtaining of any such
other employment shall in no event effect any reduction of the Employer's or
subsidiary's obligations to make the payments and arrangements required to be
made hereunder. The Employer may at the discretion of the Board of Directors
of the Employer enter into an irrevocable, third party guarantee or similar
agreement with a bank or other institution with respect to the benefits
payable to an Employee, which would provide for the unconditional payment of
such benefits by such third-party upon presentment by an Employee of a
Certificate (and on such other conditions deemed necessary or desirable by the
Employer) at some specified time after termination of employment. Such third-
party guarantor shall have no liability for improper payment if it follows the
instructions of the Employer as provided in such Certificate and other
documents required to be presented under the agreement, unless the Employer,
in a written notice, has previously advised such third-party guarantor of the
determination by its Board of Directors of ineligibility of the Employee
12. Successors. This Agreement shall be binding upon and inure to the
benefit of the Employee and his estate, the Employer and any applicable
subsidiary and any successor of the Employer or applicable subsidiary, but
neither this Amendment nor any rights arising under it may be assigned,
pledged or disposed of in any manner by the Employee or his beneficiary.
13. Other Agreements. Nothing in this paragraph is intended to result in set-
off of pension benefits, supplemental executive retirement benefits,
disability benefits, retiree benefits or any other plan benefits not directly
provided as termination or separation benefits.
14. Reimbursable Expenses. The Employer shall pay directly or reimburse the
Employee for the following expenses:
a. License fees and membership dues in associations or organizations
relative to the business of the Employer,
b. Subscriptions to journals or monthly service publications relative to
the business of the Employer.
c. The Employee's necessary travel, hotel, and entertainment expenses
incurred in connection with the business of the Employer or other
events that contribute to the benefit of the Employer in amounts to be
determined by the Board of Directors.
15. Noncompetition/Nonsolicitation. Employee, as additional material
consideration hereunder, agrees that during the term hereof and for a period of
two (2) years from termination of this Agreement, he will not directly or
indirectly solicit business from, engage in business with, or divert business
from any of Employer's current or future customers, and that they will not
participate as a shareholder, partner, employee, consultant, or otherwise in
any enterprise engaging in activities that would violate this provision if
engaged in by them directly. This covenant shall be applicable to the World on
the basis that Employer sells its products nationally or internationally.
Employee acknowledges and agrees that the scope of this covenant is reasonable
given the special relationship of the parties as to the various agreements
executed by them. Employee acknowledges and confirms that this covenant is made
to induce Employer to enter into this Agreement, is considered material to
Employer, and is required by Employer for the purpose of preserving the
business and goodwill of Employer.
16. Confidentiality Provision. Employee agrees that, during the term of this
Agreement or any extensions and for a period of ten (10) years thereafter, he
will keep confidential any information which he obtains from Employer or any of
said entities' subsidiaries, sister corporations or concerns, now or hereafter
existing or created, concerning their properties, assets, proprietary assets,
source codes, copyrights, business methods, and trade secrets. Upon termination
hereof, Employee will return to Employer all written matter with respect to
such businesses obtained by him in connection with the negotiation,
consummation, or performance of this Agreement. Employee further agrees that
any work performed or created by Employee during the term hereof shall be
owned solely by Employer and shall be subject to the terms of this provision.
17. Modification. No change or modification of this Agreement shall be valid
unless the same is in writing and signed by all the parties hereto.
18. Binding Effect. The contract shall be binding upon the heirs, executors,
administrators, and assigns of the Employee and any successors in interest of
the Employer.
19. Notice. Except as expressly provided to the contrary herein, notices or
other communications required, permitted, or made necessary by the terms of
this Agreement may be given orally to the respective representatives of the
Employer and the Employee designed herein. Written notices shall be personally
delivered to the Employer's representative or the Employee's representative,
as appropriate or sent by the United States registered or certified mail,
postage prepaid, return receipt requested, addressed to the party as
designated below. Notices sent by mail shall be deemed made, delivered and
received on the date of the United States postmark thereon. Either party may
change its address or notice by giving notice of such change to the other
party in the manner specified in this section.
For purposes of notice the addresses of the parties shall be:
If to Employer:
WebQuest International, Inc.
0000 xxx 000 xxxxx 000
Xxxxxx, XX 00000
If to Employee:
Xxxxx Xxxxxx
0000 Xxxxxx Xxx Xxxxx Xxxxx #000
Xxxxx Xxxx Xxxxxx, Xxxxx 00000
20. No Waiver. No waiver of any breach or default in any of the terms and
provisions of this Agreement shall be deemed to constitute or be construed as
a waiver of the subsequent breach or default of the same, similar or
dissimilar nature.
21. Choice of Law and Invalidity. The validity construction, performance and
effect of this Agreement shall be governed by the laws of the State of Nevada
and jurisdiction shall vest exclusively in the Ninth Judicial District Court in
and for the State of Nevada, located in Xxxxxxx County. The parties
acknowledge and agree that this Agreement is executed and performance hereof
is due in Xxxxxxx County, State of Nevada. In case any one or more of the
provisions contained herein shall for any reason be held to be invalid,
illegal,or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provisions of this Agreement, but
this Agreement shall be construed as if such invalid, illegal, or
unenforceable provisions contained herein shall, for
any reason, be held to be excessively broad as to time, duration, geographical
scope, activity or subject, said provision shall be construed by limiting and
reducing it so as to be enforceable to the extent compatible with the then
applicable law, it being the intent of the parties hereto to give the maximum
permitted effect to the restrictions set forth herein.
22. Assignment. This Agreement is one for personal services and the Employee
shall not have a right to assign any part or all of his respective rights,
duties or obligations hereunder.
23. Interpretation. If necessary to give effect to the terms and provisions
hereof, the masculine, feminine, and neuter gender in the singular and plural
number shall each be deemed to include the other whenever the context so
indicates.
24. Headings. Headings in this Agreement are inserted for convenience and
identification only and are in no way intended to describe, interpret, define
or limit the scope, extent or intent of this Agreement or any provision hereof
25. Counterparts. This Agreement may be executed in any number of counterparts,
any of which may be constituted in the agreement between the parties hereto.
26. Authority. The Employer warrants and represents that it is a corporation
organized and existing under the laws of the State of Nevada, that the
undersigned is authorized to execute this Agreement on behalf of the Employer;
that the employment of the Employee under the terms of this Agreement has been
duly authorized by the Employer.
27. Inurement. Each covenant and condition in this Agreement shall be binding
on, and shall insure solely to the benefit of the parties to it, their
respective heirs, legal representatives successors and assigns.
28. Entire Agreement. Except as otherwise provided herein, this Agreement
supersedes any and all other agreements, either oral or in writing, between the
parties hereto and contains all of the covenants and agreements between the
parties with respect to this matter. Each party to this Agreement acknowledges
that no representations, inducements, promises, or agreements, orally or
otherwise, have been made by any party, or anyone acting on behalf of any
party, which are not embodied herein, and that no other agreement, statement
or promise not contained in this Agreement shall be binding.
IN WITNESS WHEREOF, the parties have executed this Employment Agreement
effective as of the day and year first above written.
EMPLOYEE: EMPLOYER:
Xxxxx Xxxxxx WebQuest International, Inc.
a Nevada Corporation,
/s/ Xxxxx Xxxxxx By: /s/ Xxxx Xxxxxxx
Xxxx Xxxxxxx, Chairman
