EXHIBIT 10.32
EMPLOYMENT AGREEMENT
This Agreement, entered in to this 6th day of August 1999, is by and
between NetVoice Technologies, Corporation, a Nevada corporation
(hereinafter referred to as the "Company") and Xxxxx Xxxx (hereinafter
referred to as "Employee") under the following terms and conditions:
RECITALS:
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WHEREAS, the Company and Employee desire to set forth the terms and
conditions on which (i) the Company shall employ Employee, (ii) Employee
shall render services to the Company or a subsidiary or parent of the
Company, and (iii) the Company shall compensate Employee for such services
to the Company; and
WHEREAS, in connection with the employment of Employee by the Company,
the Company desires to restrict Employee's rights to compete with the
business of the Company;
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements hereinafter set forth, the parties hereto agree as follows:
1. EMPLOYMENT
The Company hereby employs Employee and Employee hereby accepts
employment with the Company upon the terms and conditions hereinafter set
forth.
2. TERM
2.1 The term of this Agreement (the "Term") shall be for a
period of one year commencing on the Effective Date (as defined in
subsection 2.3 below) of this Agreement, subject, however, to prior
termination as provided herein below, in Section 6.
2.2 For purposes of extending the term of the relationship
between the Company and Employee, the parties agree to enter into good
faith negotiations within sixty (60) days prior to the termination of this
Agreement. In the event that the parties are unable to reach an agreement
at such time as this Agreement terminates, this Agreement shall be
automatically terminated at the end of the term set forth in subsection 2.1
above.
2.3 The effective date of this Agreement shall be August 1,
1999.
3. DUTIES AND RESPONSIBILITIES
3.1 Employee shall, during the Term of this Agreement, devote
his/her full attention and expend his/her best efforts, energies and
skills, on a full-time basis, to the business of the Company, any
corporation controlled by the Company (each a "Subsidiary"), and NetVoice
Technologies Corporation, the parent of the Company (hereinafter the
"Parent").
3.2 During the Term of this Agreement, Employee shall serve as
the CFO and Treasurer of the Company or in such other capacity as
determined by the Board of Directors of the Company (hereinafter the
"Board"). In the performance of all of his/her responsibilities hereunder,
Employee shall be subject to all of the Company's policies, rules, and
regulations applicable to its employees of comparable status and shall
report directly to, and shall be subject to, the direction and control of
the executive officers and/or directors of the Company and shall perform
such duties as shall be assigned to him. In performing such duties,
Employee will be subject to and abide by, and will use his/her best efforts
to cause other employees of the Company to be subject to and abide by, all
policies and procedures developed by the Board or senior management of the
Company.
4. COMPENSATION
4.1 For all services rendered by Employee under this Agreement,
the Company shall pay Employee during the term hereof a base salary at the
rate of $78,000 per year, payable in accordance with the Company's existing
payroll schedule.
4.2 As a bonus for Employee entering into this Agreement, the
Company shall issue to Employee 50,000 shares of common stock on August 6,
1999.
4.3 As additional compensation hereunder, Employee shall be
entitled to receive up to 250,000 shares of common stock as set forth
herein in accordance with Exhibit A (hereinafter the "Quarterly Bonus
Payments"). Quarterly Bonus Payments shall vest on a pro-rata basis
throughout the quarter.
(a) EFFECT OF TERMINATION OF EMPLOYMENT WITH CAUSE,
RESIGNATION OR DEATH OR DISABILITY. In the event that this
Agreement is terminated with cause or the employee resigns
prior to the last day of any quarterly anniversary of the
Effective Date of this Agreement, the obligation of the Company
to grant any Quarterly Bonus Payment for such quarter will be the
pro-rata share for such quarter. Any obligation for Quarterly
Bonus Payments for future quarters, shall be null and void and
Employee shall have no further rights to such stock bonuses. In
the event of the disability or death of Employee as set forth
herein, Employee or the estate of the Employee shall continue to
have the right to receive the Quarterly Bonus Payments hereunder
until the expiration of the term of this Agreement
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(b). Effect of Termination without Cause .
If there is any termination by the Company of the Employee's employment
(other than for Cause or disability), then Company shall issue all
Quarterly Bonus Payments in consideration of Employee's agreement to
release his/her rights as an Employee. Additionally, the Company will pay
the employee a severence in the amount of forty-five (45) days payable as
part of normal payroll of the Company or in a lump sum.
(c.) Change in Control. Upon any Change in Control, all
Quarterly Bonus Payments shall vest and immediately be issuable.
"Change in Control" means:
i. An acquisition by any "person" or "group" (as those terms
are defined or used in Section 13(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as enacted and in force on the date
hereof) of "beneficial ownership" (within the meaning of Rule 13d-3 under
the Exchange Act, as enacted and in force on the date hereof) of securities
of the Company or Parent representing 50% or more of the combined voting
power of Company's or Parent's securities then outstanding;
ii. A contested proxy solicitation of Company's or Parent's
shareholders that results in the contesting party obtaining the ability to
cast 50% or more of the votes entitled to be cast in an election of
directors of Company or Parent;
iii. A merger, consolidation or other reorganization of Company
or Parent, except where shareholders of Company or Parent immediately prior
to consummation of any such transaction continue to hold at least a
majority of the voting power of the outstanding voting securities of the
legal entity resulting from or existing after any transaction and a
majority of the members of the Board of Directors of the legal entity
resulting from or existing after a transaction are former members of
Company's or Parent's Board of Directors;
iv. A sale, exchange, transfer or other disposition of
substantially all of the assets of Company or Parent to another entity,
except to an entity controlled, directly or indirectly, by Company or Parent;
v. A change in the composition of a 40% or more of the
Company's or Parent's Board of Directors, during any one year period.
(b) RESERVATION OF STOCK. The Company shall cause the
Parent to reserve for issuance of the stock bonuses set forth
above the number of shares of common stock subject to such
unissued stock bonuses. The Parent may reserve either authorized
but unissued shares or issued shares that have been reacquired by
the Parent.
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(c) DILUTION OR OTHER ADJUSTMENT. In the event that the
number of shares of common stock of the Parent from time to time
issued and outstanding is increased pursuant to a stock split or
a stock dividend, the number of shares of common stock thereafter
to be issued pursuant to this provision shall be increased
proportionately. In the event that the number of shares of
common stock of the Parent from time to time issued and
outstanding is reduced by a combination or consolidation of
shares, the number of shares of common stock to be issued
pursuant hereto shall be reduced proportionately. No fractional
shares shall be issued, and any fractional shares resulting from
the computations pursuant to this subparagraph shall be
eliminated from the future Quarterly Bonus Payments. No
adjustment shall be made for cash dividends, for the issuance of
additional shares of common stock for consideration approved by
the Board of Directors of the Parent, or for the issuance to
stockholders of rights to subscribe for additional common stock
or other securities.
(d) Amendment. This subsection 4.3 shall not be amended
without the prior written consent of the Parent. The Parent
shall be deemed a third party beneficiary of this Agreement.
4.4 SECURITIES LAW PROVISIONS. The Company shall cause the
Parent to take all reasonable steps as it deems appropriate to permit
issuance of the shares of common stock as specified in this Section
pursuant to a valid exemption from registration or qualification under
applicable federal and state securities laws; PROVIDED, that in no event
shall the Parent be required to consent to the general service of process
or to qualify as a foreign corporation in any jurisdiction where the
Employee resides if such jurisdiction is different than the Employee's
present residence. In order to comply with exemptions from the
registration requirements of the Securities Act of 1933, and certain state
securities statutes, the Parent may require the Employee to make certain
representations and execute and deliver to the Parent certain documents as
a condition to issuance of the shares of common stock hereunder, all in
form and substance satisfactory to the Parent as determined in its sole
discretion. In the event the Parent reasonably determines that the shares
of common stock cannot be issued in compliance with applicable federal and
state securities laws in the absence of registration or qualification under
such statutes, neither the Parent nor the Company shall be under any
obligation to issue the shares of common stock pursuant hereto. Neither
the Company nor the Parent is under any obligation to provide registration
rights in connection with any of the shares of common stock issued pursuant
to this Agreement.
4.5 All compensation shall be subject to customary withholding
tax and other employment taxes as are required with respect to compensation
paid by a corporation to an employee.
5. ADDITIONAL EMPLOYEE COVENANTS
5.1 CONFIDENTIAL INFORMATION. Employee recognizes and
acknowledges that certain information, including, but not limited to,
information pertaining to the financial condition
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of the Company, the Subsidiaries, and the Parent, their systems, methods of
doing business, agreements with customers or suppliers, or other aspects of
the business of such entities or which are sufficiently secret to derive
economic value from not being disclosed (hereinafter "Confidential
Information") may be made available or otherwise come into the possession
of Employee by reason of his/her employment with the Company. Accordingly,
Employee agrees that he will not (either during or after the term of
his/her employment with the Company) disclose any Confidential Information
to any person, firm, corporation, association, or other entity for any
reason or purpose whatsoever or make use to his/her personal advantage or
to the advantage of any third party, of any Confidential Information,
without the prior written consent of the Board. Employee shall, upon
termination of employment, return to the Company all documents which
reflect Confidential Information (including copies thereof).
Notwithstanding anything heretofore stated in this subsection 5.1,
Employee's obligations under this subsection 5.1 shall not, after
termination of Employee's employment with the Company, apply to information
which has become generally available to the public without any action or
omission of Employee (except that any Confidential Information which is
disclosed to any third party by an employee or representative of the
Company who is authorized to make such disclosure shall be deemed to remain
confidential and protectable under this subsection 5.1).
5.2 RECORDS. All files, records, memoranda, and other documents
regarding former, existing, or prospective customers of the Company or
relating in any manner whatsoever to Confidential Information or the
business of the Company (collectively ""Records"), whether prepared by
Employee or otherwise coming into his/her possession, shall be the
exclusive property of the Company. All Records shall be immediately placed
in the physical possession of the Company upon the termination of
Employee's employment with the Company, or at any other time specified by
the Board. The retention and use by the Employee of duplicates in any form
of Records after termination of Employee's employment with the Company is
prohibited.
5.3 REMEDIES. Employee hereby recognizes and acknowledges that
irreparable injury or damage shall result to the Company in the event of a
breach or threatened breach by Employee of any of the terms or provisions
of this Section 5, and Employee therefor agrees that the Company shall be
entitled to an injunction restraining Employee from engaging in any
activity constituting such breach or threatened breach. Nothing contained
herein shall be construed as prohibiting the Company from pursuing any
other remedies available to the Company at law or in equity for such breach
or threatened breach, including, but not limited to, the recovery of
damages from Employee and, if Employee is an employee of the Company, the
termination of his/her employment with the Company in accordance with the
terms of this Agreement.
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6. TERMINATION
6.1 The Company may terminate the Employee's employment under
this Agreement at any time for cause. "Cause" shall exist for such
termination if Employee (i) is adjudicated guilty of illegal activities of
consequence by a court of competent jurisdiction; (ii) commits any act of
fraud or intentional misrepresentation; (iii) has, in the reasonable
judgment of the Board, engaged in serious misconduct, which conduct has, or
would if generally known, materially adversely affect the good will or
reputation of the Company and which conduct the Employee has not cured or
altered to the satisfaction of the Board within ten (10) days following
notice by the Board to the Employee regarding such conduct; (iv) breaches
any of the provisions of this Agreement and which breach the Employee has
not cured or altered to the satisfaction of the Board within ten (10) days
following notice by the Board to the Employee regarding such breach; or (v)
has made any material misrepresentation to the Company.
6.2 If the Company terminates the Employee's employment under
this Agreement pursuant to the provisions of subsection 6.1 hereof, the
Employee shall not be entitled to receive any compensation set forth in
Section 4 above following the date of such termination.
6.3 If Employee's employment with the Company is terminated
within the first year of employment due to the death or permanent
disability of Employee or for any reason other than pursuant to the
provisions of subsection 6.1 above, the Employee shall continue to receive
compensation for one (1) month from the date of such termination (such
payments by the Company to be diminished, however, by the extent to which
the Employee receives compensation during such one (1) month period from a
third party employer) in an amount equal to the monthly compensation paid
Employee for the month prior to such termination. If Employee's employment
with the Company is terminated within the second or third years of
employment due to the death or permanent disability of Employee or for any
reason other than pursuant to the provisions of subsection 6.1 above, the
Employee shall continue to receive compensation for three (3) months from
the date of such termination (such payments by the Company to be
diminished, however, by the extent to which the Employee receives
compensation during such three (3) month period from a third party
employer) in an amount equal to the monthly compensation paid Employee for
the month prior to such termination. Thereafter, the Employee shall not be
entitled to receive any compensation following the date of termination.
6.4 EMPLOYEE'S DUTIES ON TERMINATION. In the event of
termination of employment with the Company, Employee agrees to deliver
promptly to the Company all equipment, notebooks, documents, memoranda,
reports, files, samples, books, correspondence, lists, or other written or
graphic records, and the like, relating to the Company's business, which
are or have been in his/her possession or under his/her control.
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7. EXPENSES
7.1 Employee shall be entitled to reimbursement of all
reasonable expenses actually incurred in the course of his/her employment.
Employee shall submit such expenses on the Company's standardized expense
report form, provided by the Company, and shall attach thereto receipts for
all expenditures. Automobile expenses shall be reimbursed at the maximum
mileage rate allowed by the Internal Revenue Service.
7.2 The Company shall reimburse Employee within fifteen (15)
days after submission by Employee of his/her expense report.
8. THE COMPANY'S AUTHORITY
Employee agrees to observe and comply with the reasonable rules
and regulations of the Company as adopted by the Board either orally or in
writing respecting performance of his/her duties and to carry out and
perform orders, directions, and policies stated by the Board, to him from
time to time, either orally or in writing.
9. PAID VACATION; SICK LEAVE; INSURANCE
9.1 Following three (3) months from the Effective Date of this
Agreement, Employee shall be entitled to a paid vacation of two weeks
during the initial one-year term of this Agreement. The Company and the
Employee shall negotiate in good faith the amount of paid vacation during
any extension of this Agreement.
9.2 The Employee shall be entitled to reasonable periods of paid
sick leave during the term of this Agreement in accordance with the
Company's policy regarding such sick leave.
9.3 Following thirty (30) days from the Effective Date of this
Agreement, the Company shall provide Employee, at the Company's expense,
participation in the group medical insurance plan of the Company as may be
provided by the Company from time to time to Company employees of
comparable status, subject to, and to the extent that, the Employee is
eligible under such benefit plans in accordance with their respective
terms. The provision of such insurance coverage by the Company shall be
made for the Employee only, and shall not be provided for Employee's spouse
or dependents.
10. NONCOMPETITION
10.1 During his/her employment, Employee shall not, directly or
indirectly, whether as an employee, director, owner, 5% or greater
stockholder, consultant, or partner (limited or general):
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(a) engage in or have any interest in, any business that
competes with the business of the Company during such period, including the
business of the Company or its Subsidiaries. The Company may, in its sole
discretion, give Employee written approval(s) to personally engage in any
activity or render any services referred to in this Section 10 if the
Company secures written assurances (satisfactory to the Company and its
counsel) from Employee, or any prospective employer(s) of Employee, that
the integrity of the Company's Confidential Information will not in any way
be jeopardized by such activities, provided that the burden of so
establishing the foregoing to the satisfaction of the Company and its
counsel shall be upon Employee;
(b) offer any of the products or services similar or in
competition with those offered by the Company; or
(c) otherwise compete or interfere with the activities of
the Company during the term of this Agreement or any extension thereof.
10.2 REMEDIES. Employee hereby recognizes and acknowledges that
irreparable injury or damage shall result to the Company in the event of a
breach or threatened breach by Employee of any of the terms or provisions
of this Section 10, and Employee therefor agrees that the Company shall be
entitled to an injunction restraining Employee from engaging in any
activity constituting such breach or threatened breach. Nothing contained
herein shall be construed as prohibiting the Company from pursuing any
other remedies available to the Company at law or in equity for such breach
or threatened breach, including, but not limited to, the recovery of
damages from Employee and, if Employee is an employee of the Company, the
termination of his/her employment with the Company in accordance with the
terms of this Agreement.
11. MISCELLANEOUS
11.1 The Company may, from time to time, apply for and take out,
in its own name and at its own expense, life, health, accident, disability
or other insurance upon the Employee in any sum or sums that it may deem
necessary to protect its interests, and the Employee agrees to aid and
cooperate in all reasonable respects with the Company in procuring any and
all such insurance, including without limitation, submitting to the usual
and customary medical examinations, and by filling out, executing and
delivering such applications and other instruments in writing as may be
reasonably required by an insurance company or companies to which an
application or applications for such insurance may be made by or for the
Company. In order to induce the Company to enter into this Agreement, the
Employee represents and warrants to the Company that to the best of his/her
knowledge the Employee is insurable at standard (non-rated) premiums.
11.2 This Agreement is a personal contract, and the rights and
interests of the Employee hereunder may not be sold, transferred, assigned,
pledged or hypothecated except as otherwise expressly permitted by the
provisions of this Agreement. The Employee shall not under any
circumstances have any option or right to require payment hereunder
otherwise than in
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accordance with the terms hereof. Except as otherwise expressly provided
herein, the Employee shall not have any power of anticipation, alienation,
or assignment of payments contemplated hereunder, and all rights and
benefits of the Employee shall be for the sole personal benefit of the
Employee, and no other person shall acquire any right, title or interest
hereunder by reason of any sale, assignment, transfer, claim or judgment or
bankruptcy proceedings against the Employee; provided, however, that in the
event of the Employee's death, the Employee's estate, legal representative
or beneficiaries (as the case may be) shall have the right to receive all
of the benefit that accrued to the Employee pursuant to, and in accordance
with, the terms of this Agreement.
11.3 The Company shall have the right to assign this Agreement to
any successor of substantially all of its business or assets, and any such
successor shall be bound by all of the provisions hereof.
12. CORPORATE APPROVALS
The Company represents and warrants that the execution of this
Agreement by its corporate officer named below has been duly authorized by
the Board, is not in conflict with any Bylaw or other agreement and will be
a binding obligation of the Company, enforceable in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date above written.
THE COMPANY: NetVoice Technologies, Corporation
By
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Its
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EMPLOYEE:
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Exhibit A
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Stock Grant
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Shares earned Date
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50,000 8/06/99
175,000 1/1/00
25,000 3/1/00
25,000 6/1/00
25,000 1/1/01
