EXHIBIT 10.3
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), entered into as of this 15th day
of May, 1996, by and between CONNECTSOFT, INC., a Washington corporation having
its principal offices at 00000 X.X. 00xx Xxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxxxx
00000 (the "Company"), and XXXXXX XXXXXX, an individual residing at 0000 Xxxx
Xxxxxxxx Xxx Xxxx, Xxxxxxx, Xxxxxxxxxx 00000 (the "Employee");
W I T N E S S E T H :
WHEREAS, the Employee has extensive experience relating the marketing and
promotion of computer software and related technologies; and
WHEREAS, to promote the ongoing business of the Company, the Company
desires to assure itself of the right to the Employee's services, on the terms
and conditions of this Agreement; and
WHEREAS, the Employee is willing and able to render his services to the
Company on the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereby agree as follows:
1. NATURE OF EMPLOYMENT.
(a) Subject to the terms and conditions of this Agreement, the
Company shall, throughout the term of this Agreement, retain the Employee, and
the Employee shall render services to the Company, in the capacity and with the
title of President and Chief Executive Officer, and/or such other titles as may
be assigned to the Employee from time to time by the Board of Directors of the
Company (the "Board"). In such capacity, the Employee shall have and exercise
responsibility for overseeing and actively participating in all aspects of the
Company's business (with particular emphasis on marketing and sales efforts)
throughout the world, together with such other similar or related duties as may
be assigned to the Employee from time to time by the Board.
(b) Throughout the period of his employment hereunder, the Employee
shall: (i) devote his full business time, attention, knowledge and skills,
faithfully, diligently and to the best of his ability, to the active performance
of his duties and responsibilities hereunder on
behalf of the Company; (ii) observe and carry out such reasonable rules,
regulations, policies, directions and restrictions as may be established from
time to time by the Board, including but not limited to the standard policies
and procedures of the Company as in effect from time to time; and (iii) do such
traveling as may reasonably be required in connection with the performance of
such duties and responsibilities; PROVIDED, HOWEVER, that the Employee shall not
be assigned to regular duties that would reasonably require him to relocate his
permanent residence from that first set forth above.
2. TERM OF EMPLOYMENT.
(a) Subject to prior termination in accordance with paragraph 2(b)
below, the term of this Agreement and the Employee's employment hereunder shall
commence on July 15, 1996 and shall continue through July 31, 1999, and shall
thereafter automatically renew for additional terms of one (1) year each unless
either party gives written notice of termination to the other party not less
than ninety (90) days prior to the end of any term (in which event this
Agreement shall terminate effective as of the close of such term).
(b) This Agreement may be terminated:
(i) upon mutual written agreement of the Company and the
Employee;
(ii) at the option of the Employee, upon fourteen (14) days'
prior written notice to the Company, in the event that the Company shall (A)
fail to make any payment to the Employee required to be made under the terms of
this Agreement within thirty (30) days after payment is due, or (B) fail to
perform any other material covenant or agreement to be performed by it hereunder
or take any action prohibited by this Agreement, and fail to cure or remedy same
within thirty (30) days after written notice thereof to the Company;
(iii) at the option of the Company, upon written notice to
the Employee, "for cause" (as hereinafter defined);
(iv) at the option of the Company in the event of the
"permanent disability" (as hereinafter defined) of the Employee; or
(v) upon the death of the Employee.
(c) As used herein, the term "for cause" shall mean and be limited
to: (i) any willful and material breach of this Agreement (including, without
limitation, the covenants contained in paragraph 5 below) by the Employee which
in any case is not fully corrected within thirty (30) days after written notice
of same from the Company to the Employee; (ii) gross neglect by the Employee of
his duties and responsibilities hereunder; (iii) any fraud, criminal
misconduct, breach of fiduciary duty, dishonesty, or gross and willful
misconduct by the Employee in connection with the performance of his duties and
responsibilities hereunder; (iv) the Employee being under the influence of
alcohol or drugs during business hours or while on call, or being habitually
drunk or addicted to drugs; (v) the commission by the Employee of any crime of
moral turpitude, or any other action by the Employee which may materially impair
or damage the reputation of the Company; or (vi) habitual breach by the Employee
of any of the material provisions of this Agreement (regardless of any prior
cure thereof).
(d) As used herein, the term "permanent disability" shall mean, and
be limited to, any physical or mental illness, disability or impairment that
prevents the Employee from continuing the performance of his normal duties and
responsibilities hereunder for a period in excess of three (3) consecutive
months. For purposes of determining whether a "permanent disability" has
occurred under this Agreement, the written determination thereof by two (2)
qualified practicing physicians selected and paid for by the Company (and
reasonably acceptable to the Employee) shall be conclusive.
(e) Upon any termination of this Agreement as hereinabove provided,
the Employee (or his estate or legal representatives, as the case may be) shall
be entitled to receive any and all unpaid Base Salary prorated as of the
effective date of termination, and any other amounts then due and payable to the
Employee hereunder. All such payments shall be made on the next applicable
payment date therefor (as provided in paragraph 3 below) following the effective
date of termination. Except when termination is pursuant to paragraph 2(b)(ii)
above or by the Company other than on grounds specified in paragraph 2(b) above
(in either instance, an "Unjustified Termination"), the foregoing constitutes
all amounts to which the Employee shall be entitled upon termination of this
Agreement.
3. COMPENSATION AND BENEFITS.
(a) BASE SALARY. As compensation for his services to be rendered
hereunder, the Company shall pay to the Employee a base salary at the rate of
One Hundred Twenty-Five Thousand ($125,000) Dollars per annum (the "Base
Salary"), payable in periodic installments in accordance with the standard
payroll practices of the Company in effect from time to time.
(b) FRINGE BENEFITS. The Company shall also make available to the
Employee, throughout the period of his employment hereunder, such benefits and
perquisites as are generally provided by the Company to its employees, including
but not limited to eligibility for participation in any group life, health,
dental, disability or accident insurance, pension plan, profit-sharing plan, or
other such benefit plan or policy which may presently be in effect or which may
hereafter be adopted by the Company for the benefit of its employees generally;
PROVIDED, HOWEVER, that nothing herein contained may be deemed to require the
Company to adopt or maintain any particular plan or policy. Participation in
such benefit plans may be subject to standard waiting periods following the
commencement of full-time employment.
(c) EXPENSES. Throughout the period of the Employee's employment
hereunder, the Company shall also reimburse the Employee, upon presentment by
the Employee to the Company of appropriate receipts and vouchers therefor, for
any reasonable out-of-pocket business expenses incurred by the Employee in
connection with the performance of his duties and responsibilities hereunder;
PROVIDED, HOWEVER, that no reimbursement shall be required to be made for any
expense which is not properly deductible (in whole or in part) by the Company
for income tax purposes, or for any expense item which has not previously been
approved in accordance with the Company's standard policies and procedures in
effect from time to time.
4. VACATION.
The Employee shall be entitled to take, from time to time, normal and
reasonable vacations with pay, consistent with the Company's standard policies
and procedures in effect from time to time, at such times as shall be mutually
convenient to the Employee and the Company, and so as not to interfere unduly
with the conduct of the business of the Company.
5. RESTRICTIVE COVENANTS.
(a) The Employee hereby acknowledges and agrees that (i) the business
contacts, customers, suppliers, technology, product designs and specifications,
know-how, trade secrets, marketing techniques, promotional methods and other
aspects of the business of the Company have been and are of value to the
Company, and have provided and will hereafter provide the Company with
substantial competitive advantage in the operation of its business, and (ii) he
has and will continue to have detailed knowledge and possesses and will possess
confidential information concerning the business and operations of the Company.
The Employee hereby further acknowledges that his business skills are not
uniquely suited to businesses of the type conducted by the Company, and that, if
required, he could readily adapt and utilize such skills in one or more other
types of businesses.
(b) The Employee shall not, directly or indirectly, for himself or
through or on behalf of any other person or entity:
(i) at any time, divulge, transmit or otherwise disclose or
cause to be divulged, transmitted or otherwise disclosed, any business contacts,
client or customer lists, technology, know-how, trade secrets, marketing
techniques, contracts or other confidential or proprietary information of the
Company of whatever nature, whether now existing or hereafter created or
developed (provided, however, that for purposes hereof, information shall not be
considered to be confidential or proprietary if (A) it is a matter of common
knowledge or public record, (B) it is generally known in the industry, or (C)
the Employee can demonstrate that such information was already known to the
recipient thereof other than by reason of any breach of any
obligation under this Agreement or any other confidentiality or non-disclosure
agreement); and/or
(ii) at any time during the period from the date hereof
through and including the date of the termination of the Employee's employment
with the Company, and for an additional period of one (1) year thereafter unless
the Employee's employment was terminated by reason of an Unjustified Termination
(collectively, the "Restrictive Period"), invest, carry on, engage or become
involved, either as an employee, agent, advisor, officer, director, stockholder
(excluding ownership of not more than 3% of the outstanding shares of a publicly
held corporation if such ownership does not involve managerial or operational
responsibility), manager, partner, joint venturer, participant or consultant, in
any business enterprise (other than American United Global, Inc. (so long as it
is an affiliate of the Company), the Company or any of their respective
subsidiaries, affiliates, successors or assigns) which derives any material
revenues from the offer or sale in the United States, at wholesale or retail, of
any computer software products or other goods or services offered or sold by the
Company or its subsidiaries, affiliates, successors or assigns from time to time
during the Restrictive Period, or which engages in any other business similar to
or competitive with the business of the Company or its subsidiaries, affiliates,
successors or assigns (as such business is constituted at the time that the
Employee proposes to become involved in such other business enterprise).
(c) The Employee and the Company hereby acknowledge and agree that,
in the event of any breach by the Employee, directly or indirectly, of the
foregoing restrictive covenants, it will be difficult to ascertain the precise
amount of damages that may be suffered by the Company by reason of such breach;
and accordingly, the parties hereby agree that, as liquidated damages (and not
as a penalty) in respect of any such breach, the breaching party or parties
shall be required to pay to the Company, on demand from time to time, cash
amounts equal to any and all gross revenues derived by the breaching party or
parties, directly or indirectly, from any and all violative acts or activities.
The parties hereby agree that the foregoing constitutes a fair and reasonable
estimate of the actual damages that might be suffered by reason of any breach of
this paragraph 5 by the Employee, and the parties hereby agree to such
liquidated damages in lieu of any and all other measures of damages that might
be asserted in respect of any subject breach.
(d) The Employee and the Company hereby further acknowledge and agree
that any breach by the Employee, directly or indirectly, of the foregoing
restrictive covenants will cause the Company irreparable injury for which there
is no adequate remedy at law. Accordingly, the Employee expressly agrees that,
in the event of any such breach or any threatened breach hereunder by the
Employee, directly or indirectly, the Company shall be entitled, in addition to
any and all other remedies available (including but not limited to the
liquidated damages provided for in paragraph 5(c) above), to seek and obtain
injunctive and/or other equitable relief to require specific performance of or
prevent, restrain and/or enjoin a breach under the provisions of this paragraph
5.
(e) In the event of any dispute under or arising out of this
paragraph 5, the prevailing party in such dispute shall be entitled to recover
from the non-prevailing party or parties, in addition to any damages and/or
other relief that may be awarded, its reasonable costs and expenses (including
reasonable attorneys' fees) incurred in connection with prosecuting or defending
the subject dispute.
6. INVENTIONS; INTELLECTUAL PROPERTY.
The Employee acknowledges and confirms that any and all inventions,
product designs and specifications, and other intellectual property developed or
utilized by the Employee during the period of his employment hereunder
constitutes, as between the Company and the Employee, the sole and exclusive
property of the Company for which the Employee is being adequately compensated
hereunder; and the Employee shall execute and deliver any and all applications,
assignments and other documents as may be requested by the Company to establish,
protect and enforce the Company's rights in and to such intellectual property.
7. NON-ASSIGNABILITY.
In light of the unique personal services to be performed by the
Employee hereunder, it is acknowledged and agreed that any purported or
attempted assignment or transfer by the Employee of this Agreement or any of his
duties, responsibilities or obligations hereunder shall be void.
8. NOTICES.
Any notices, requests, demands or other communications required or
permitted under this Agreement shall be in writing and shall be deemed to have
been given when delivered personally, one (1) day after being sent by recognized
overnight courier service will all charges prepaid or charged to the sender's
account, or three (3) days after being mailed by certified mail, return receipt
requested, addressed to the party being notified at the address of such party
first set forth above, or at such other address as such party may hereafter have
designated by notice; PROVIDED, HOWEVER, that any notice of change of address
shall not be effective until its receipt by the party to be charged therewith.
Copies of any notices or other communications to the Company shall
simultaneously be sent by first class mail to American United Global, Inc., 00
Xxxxxxxx Xxxxxxxxx, Xxx Xxxxx, Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxx.
9. GENERAL.
(a) Neither this Agreement nor any of the terms or conditions hereof
may be waived, amended or modified except by means of a written instrument duly
executed by the party to be charged therewith. Any waiver or amendment shall
only be applicable in the specific instance, and shall not constitute or be
construed as a waiver or amendment in any other or subsequent instance. No
failure or delay on the part of either party in respect of any enforcement of
obligations hereunder shall in any manner affect such party's right to seek or
effect enforcement at any other time or in respect of any other required
performance.
(b) Neither this Agreement nor any rights or obligations hereunder
may be assigned by either party without the express prior written consent of the
other party.
(c) The captions and paragraph headings used in this Agreement are
for convenience of reference only, and shall not affect the construction or
interpretation of this Agreement or any of the provisions hereof.
(d) This Agreement, and all matters or disputes relating to the
validity, construction, performance or enforcement hereof, shall be governed,
construed and controlled by and under the laws of the State of Washington.
(e) This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, personal representatives, successors and permitted assigns.
(f) This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original hereof, but all of which
together shall constitute one and the same instrument.
(g) Except for any legal or judicial proceeding which may be brought
for injunctive and/or any other equitable relief as contemplated by paragraph
5(d) above, any dispute involving the interpretation or application of this
Agreement shall be resolved by final and binding arbitration before one or more
arbitrators designated by the American Arbitration Association in Seattle,
Washington. The award of such arbitrator(s) may be enforced in any court of
competent jurisdiction. The prevailing party in any action or proceeding
hereunder shall be entitled to an award for its costs and reasonable attorneys'
fees in connection with such action or proceeding, and the arbitrator(s) in any
arbitration hereunder shall be empowered and directed to make such an award in
his, her or their discretion.
(h) This Agreement constitutes the sole and entire agreement and
understanding between the parties hereto as to the subject matter hereof, and
supersedes all prior
discussions, agreements and understandings of every kind and nature between them
as to such subject matter.
(i) This Agreement is intended for the sole and exclusive benefit of
the parties hereto and their respective heirs, executors, administrators,
personal representatives, successors and permitted assigns, and no other person
or entity shall have any right to rely on this Agreement or to claim or derive
any benefit herefrom absent the express written consent of the party to be
charged with such reliance or benefit.
(j) If any provision of this Agreement is held invalid or
unenforceable, either in its entirety or by virtue of its scope or application
to given circumstances, such provision shall thereupon be deemed modified only
to the extent necessary to render same valid, or not applicable to given
circumstances, or excised from this Agreement, as the situation may require; and
this Agreement shall be construed and enforced as if such provision had been
included herein as so modified in scope or application, or had not been included
herein, as the case may be.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and
as of the date first set forth above.
CONNECTSOFT, INC.
By:_____________________________
________________________________
XXXXXX XXXXXX
CONNECTSOFT, INC.
00000 X.X. 00xx Xxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
July 31, 1997
Mr. Xxxxxx Xxxxxx
0000 X. Xxxxxxxx Xxx X.
Xxxxxxx, Xxxxxxxxxx 00000
Dear Xx. Xxxxxx:
This will confirm that the Employment Agreement, dated as of May 15, 1996
(the "Agreement"), by and between ConnectSoft, Inc., a Washington corporation
("Old ConnectSoft") and you, and all respective rights and obligations therein
and thereunder, will be assigned by Old ConnectSoft to its affiliate,
Connectsoft Communications Corporation ("New Connectsoft"), subject to and
effective upon the consummation by New Connectsoft of a registered initial
public offering of its common stock on or prior to December 31, 1997. In
connection therewith, you hereby consent to such assignment and the assumption
by New Connectsoft (evidenced by its signature below) of all obligations of Old
ConnectSoft under the Agreement, and you agree to look solely to New Connectsoft
with respect to all performance under the Agreement from and after the effective
date provided herein.
Please indicate your agreement with the foregoing by signing a counterpart copy
of this letter, whereupon this shall constitute a binding agreement between you
and New Connectsoft.
Very truly yours,
CONNECTSOFT, INC.
By:_________________________
Name:
Title:
Acknowledged, Confirmed and Agreed To:
/s/ Xxxxxx Xxxxxx
______________________________
Xxxxxx Xxxxxx
The undersigned, Connectsoft Communications Corporation, hereby confirms its
assumption of all rights and obligations of Old ConnectSoft under the Agreement,
effective from and after the effective date provided above.
CONNECTSOFT COMMUNICATIONS CORPORATION
By:___________________________
Name:
Title:
