EMPLOYMENT AGREEMENT
Employment Agreement dated June 10, 1996, between Avert, Inc. a Colorado
corporation (hereinafter referred to as the "Company") and Xxxxx X. Xxxxxxx of
Arvada, Colorado (hereinafter referred to as the "Employee").
WITNESSETH
WHEREAS, Company desires to employ Employee as Director of Information
Technology:
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
Employee and Company hereby agree as follows:
1. EMPLOYMENT. The Company agrees to employ the Employee as Director of
Information Technology. Employee shall devote his full time and attention to
rendering his services to the Company, shall report to the President and shall
perform duties as may be specified by the President. Employee hereby accepts
such employment and agrees that he will, during the continuance hereof, devote
his full time and attention and best talents and abilities to the duties of
employment hereby accepted by him.
2. TERM. Subject to the terms and conditions hereinafter contained, the terms
of this agreement shall be for five years, commencing as of the date first
above written (hereinafter referred to as the "Effective Date") and ending
June 10, 2001 (such term shall be referred herein as the "Employment
Term"). Company and Employee may mutually agree to an extension of the
Employment Term.
3. PLACE OF EMPLOYMENT. The Company agrees that the Employee shall have his
principal office at and shall perform his principal duties at the Company's
offices, located in the City of Fort Xxxxxxx, Colorado, or other such
locations within 100 miles of the City of Fort Xxxxxxx as specified by the
Company. Notwithstanding the foregoing, Employee acknowledges that it will
be necessary from time to time for him, in the performance of his duties,
to travel on behalf of the Company and to perform such duties while
temporarily away (for unpredictable periods of time) from his principal
office.
(1)
4. COMPENSATION AND BENEFITS. For all services to be rendered by the Employee
in any capacity pursuant to the terms of this Agreement, Employee shall
receive the following compensation and benefits:
4.1 Base Salary. During each year of the Employment Term, Employee
shall be paid a yearly base salary of not less than $84,000,
(hereinafter referred to as the "Base Salary"), payable in 24
equal payments per year of $3,500. Commencing in June 1997, and
annually thereafter, the President in accordance with the
Company's salary review procedures for non- officer employees,
shall review the Base Salary paid to the employee and shall if
appropriate increase the Employee's Base Salary.
4.2 Further Benefits. Employee shall be entitled to participate, as
long as he is employed by the Company, in any and all of the
Company's present or future employee benefit plans, including
Paid Time Off (hereinafter referred to as "PTO"), insurance
plans, 401K plans or other such plans or benefits that are
generally applicable to the Company's employees. Notwithstanding
the foregoing, Employee shall not be entitled to participate in
any annual management or employee bonus plans without the
written consent of the President.
5. WITHHOLDING OF APPROPRIATE TAXES. It is understood and agreed by the
parties hereto that the Company shall withhold appropriate taxes from
compensation and with respect to any other economic benefit herein provided
when such withholding is, in the reasonable judgment of the Company,
required by law or regulation.
6. EXPENSES. Company shall pay or reimburse Employee for reasonable or
necessary expenses incurred by the company in conjunction with the
performance of his duties hereunder. Such expenses shall include, but not
be limited to, travel and entertainment expenses and professional fees
incurred by the Employee for services rendered on Employee's behalf to
assist him in performing his duties pursuant to this Agreement.
(2)
7. TERMINATION BY THE COMPANY. Employee's employment under this Agreement may
be terminated by the Company prior to the expiration of the Employment Term
for Cause or without Cause as described below. As an incident to the
termination of employment, the Company may relieve Employee of the
performance of any duties and terminate his authority to act on behalf of
the Company any time upon written notice to Employee.
7.1 TERMINATION WITHOUT CAUSE. The Company may terminate
this Agreement at any time, at its sole discretion upon written
notice to the Employee, such termination to be effective on the date
specified in the notice. If the Company terminates this Agreement
without Cause, the Company shall perform, in accordance with the
provisions of this Agreement, all of its obligations under this
Agreement (including providing any retirement or fringe benefits to
which the Employee may be entitled) through the lesser of (I) the
remainder of the Employment Term or (II) six months following the date
of termination, as if the Employee had performed all of his
obligations under the Agreement through that period.
7.2 TERMINATION FOR CAUSE. The Company may terminate this
Agreement for Cause upon at least thirty days' written notice to
Employee with such termination to be effective on the date specified
in such notice; provided, however, that such Cause may only be
determined in good faith by the Company's President following at
least thirty days' prior written notice to Employee outlining the
facts constituting Cause. Employee will be given the opportunity to
refute the charges prior to final action by the Company's President.
As used herein, "Cause" shall mean: actions or inactions by Employee
including malfeasance, negligence or failure to act by Employee
involving material nonfeasance, which, at the time of such
malfeasance, negligence or material nonfeasance, or thereafter, would
tend to have a materially adverse effect on the Company; any breach of
this Agreement: dishonesty; or conviction of any felony crime.
(3)
In the event Employee is terminated by the President for Cause, then
the Company shall have no further obligation to Employee other than to
pay the Base Salary and accrued PTO, as the case may be, up to the
date of termination.
7.3 TERMINATION UPON CHANGE OF CONTROL.
Right to Payment. In the event that during the Employment Term:
(a) there is a "Change of Control" of the Company (as defined
below); and (b) Employee has "Good Reason" (as defined below)
for doing so, the Employee may within six months from the
effective date of such Change of Control, but not thereafter,
discontinue his employment under this Agreement. Good Reason
shall mean (I) the assignment to the Employee of any duties
inconsistent with those of a Director of Information Technology;
(II) relocation of the Employee without his consent, to any
place other than within a radius of 100 miles of the City of
Fort Xxxxxxx, Colorado: or (III) any other material breach of
this Agreement by the surviving or successor entity, if in each
case such action or breach of the Agreement by the surviving or
successor entity, if in each case such action or breach
continues uncorrected for thirty (30) days following written
notice thereof by Employee elected not to continue his
employment, the Company or surviving or successor entity shall
pay to Employee, subject to the provisions of Subparagraph (2)
below, an amount equal to 50% of his Base Salary in effect for
the year in which the change of Control occurred, together with
any retirement benefits to which Employee may be entitled.
For purposes of this Agreement, a Change of Control shall be
deemed to have occurred if: (I) tender offer shall be made and
consummated for the ownership of 50% of the outstanding voting
securities of the Company; (II) the Company shall be merged or
consolidated with another corporation and, as a result of such
merger and consolidation, less than 50% of the outstanding
voting securities of the surviving or resulting corporation
shall be owned in the aggregate by the former shareholders of
the Company as the same shall have existed
(4)
immediately prior to such merger or consolidation; or (III) the
Company shall sell substantially all of its assets to another
corporation which is not a wholly owned subsidiary; or (IV) a
person, within the meaning of Section 3 (a) (9) or of Section 13 (d)
(3) (as in effect on the date hereof) of the Securities Exchange Act
of 1934 (the "Exchange Act"), shall acquire, other than by reason of
inheritance,
50% or more of the outstanding voting securities of the Company
(whether directly, indirectly, beneficially or of record). In
making such a determination, transfers made by a person to an
affiliate of such person (as determined by the Board of Directors of
the Company), whether by gift devise or otherwise, shall not be
taken into account. For purposes of this Agreement, ownership of
voting securities shall take into account and shall include
ownership as determined by applying the provisions of Rule 13d -3
(d)(1)(I) as in effect on the date hereof pursuant to the Exchange
Act.
Notwithstanding the provisions of Subparagraph (IV) of this
Subparagraph 7.3 (1), "person" as used in that subparagraph shall
not include any holder who was the beneficial owner of more than 10%
of the voting securities of the Company on the date this Agreement
was adopted by the Board of Directors.
2. Payments Upon a Change of Control. It is the intent of the parties
to this Agreement that the payments which are conditioned on a
Change Control would be such that there will be no excess parachute
payments as defined in Section 280G of the Internal Revenue Code of
1986, as amended (the "Code"). Notwithstanding anything in the
Agreement to the contrary, Employee shall have the right to elect to
receive any payment to (or for the benefit of) him, which are
payable to her as a result of a termination of this Agreement
because of a Change of Control of the Company, in lump sum or over a
period of time, so long as none of the payments shall be deemed to
be an "excess parachute payment" under the Code.
(5)
8. TERMINATION BY THE EMPLOYEE. Employee may terminate his employment without
being in breach of this Agreement only if the conditions set forth in this
Paragraph 8 are satisfied. In the event of such termination, the Company
shall have no obligation to the Employee.
1. If the Employee wishes to terminate this Agreement for reasons beyond
Employee's control, then the President of the Company may, in his sole
discretion, determine that the Employee's request for termination of
his employment is for reasons beyond his control then Employee shall
have 30 days following such determination to terminate his employment
by written notice thereof.
2. Upon termination of Employee's employment, pursuant to the provisions
of this Paragraph 8, Employee shall be paid the following amounts: (I)
any unpaid Base Salary up to the date of termination and (II) any
accrued PTO.
9. LOYALTY, NON-COMPETITION AND CONFIDENTIALITY.
(PLEASE SEE ATTACHED SEPARATE AGREEMENT)
10. NOTICES. All notices which a party is required or may desire to give to the
other party under or in connection with this Agreement shall be sufficient
if given by addressing same to such other party as follows:
(1) TO EMPLOYEE, TO:
Xxxxx X. Xxxxxxx
0000 Xxxx 00/xx/ Xxxxxx
Xxxxxx, Xxxxxxxx 00000
(2) TO THE COMPANY, TO:
Avert, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxx Xxxxxxx, Xxxxxxxx 00000
or at such other place as may be designated in writing like notice. When
notices addressed as required herein shall be deposited, postage prepaid, in the
United States mail, and/or when the Company or Employee shall have delivered
the same addressed
(6)
as aforesaid to a telegraph office, toll prepaid, the Company or Employee shall
be deemed to have delivered such notice.
11. SEVERABILITY. In the event that, notwithstanding the foregoing, any of the
provisions of Paragraph 9 or any other provisions of this Agreement shall
be held to be invalid or unenforceable, the remaining provisions thereof
shall nevertheless continue to be valid and enforceable as though the
invalid or unenforceable parts had not been included therein. In the event
that any provision of Paragraph 9 shall be declared by a court of
competent jurisdiction to exceed the maximum time period and/or
restrictions deemed reasonable and enforceable for the court shall become
and thereafter be the maximum time period and/or restrictions, and
relevant provisions of Paragraph 9 shall be severed as so reformed.
12. SUPERSEDING EFFECT - ENTIRE AGREEMENT. This Agreement supersedes any prior
agreements or understandings, oral or written, with respect to employment
of Employee and constitutes the entire agreement with respect thereto. It
cannot be changed or terminated orally and may be modified only be
subsequent written agreement executed by both of the parties hereto.
13. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado.
14. MISCELLANEOUS PROVISIONS. This is a personal service agreement which may
not be assigned by Employee. Any assignment in violation of this covenant
shall be null and void.
15. SUCESSORS AND ASSIGNS. Except as otherwise specifically provided herein,
this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their successors and assigns; provided, however, this
Agreement and the rights and obligations of the Employee hereunder may not
be transferred or assigned by Employer (including by will or by operation
of law) without the prior written consent of Employer.
(7)
Executed this ____date of June, 1996.
_______________________
Xxxxx X. Xxxxxxx
_______________________
AVERT, INC. BY: Xxxx X. Xxxxxx
(8)
