MANAGEMENT EMPLOYMENT CONTRACT
This Employment Contract ("Contract") is made and effective this
8-2-2004, by and between Systems Evolution Inc.
("Company") and Xxxxxx Xxxxxx Xxxxxxx Jr. ("Executive").
NOW, THEREFORE, the parties hereto agree as follows:
1. Employment.
Company hereby agrees to employ Executive as its Vice
President - Infrastructure Support & Services and Executive hereby
accepts such employment in accordance with the terms of this Contract and the
terms of employment applicable to management Executives of Company. In the event
of any conflict or ambiguity between the terms of this Contract and terms of
employment applicable to management Executives, the terms of this Contract shall
control. Election or appointment of Executive to another office or position,
regardless of whether such office or position is inferior to Executive's office
or position, shall not be a breach of this Contract as long Executive’s
compensation remains as defined within this Contract.
2. Duties of Executive.
The duties of Executive shall include the performance of all of the
duties typical of the office held by Executive as described in any published job
description and such other duties and projects as may be assigned by a superior
officer of the Company, if any, or the board of directors of the Company.
Executive shall devote his entire productive time, ability and attention to the
business of the Company and shall perform all duties in a professional, ethical
and businesslike manner. Executive will not, during the term of this Contract,
directly or indirectly engage in any competing enterprise or activity, either as
an Executive, employer, consultant, principal, officer, director, advisor, or in
any other capacity, either with or without compensation, without the prior
written consent of Company.
3. Compensation.
Executive will be paid compensation during this Contract as follows:
| · |
A Base Salary of $100,000 (one-hundred thousand
dollars) per year, payable in installments according to the Company's
regular payroll schedule. The base salary shall be adjusted at the end of
each year of employment at the discretion of Executive Management.
|
| · |
Retention - 900,000 Stock Options of SEVI.OB ($0.25
per share - Twenty-Five Cents) vested quarterly over the term of
the Contract at a rate of 1/12th of total Retention options
granted, e.g. 75,000 Options vested per calendar
quarter. |
| · |
A Management Bonus Opportunity (MBO) in the amount of
100% of Base Salary. The MBO earned will be based upon attainment defined
Revenue and Operating Income (OI) Goals. MBO attainment will be accrued
monthly and paid quarterly. Payment will be made for each on the second
pay-cycle of the month following the period. The MBO will be calculated as
follows: |
|
Opportunity |
%
of MBO |
Measurement
Payout |
Leverage Based on % Attainment of
Goal | ||
|
< 80% |
80% to 100% |
> 100% | |||
|
Quarterly Revenue |
50%
-or -
$12,500 |
Quarterly Revenue
Quarterly |
No Bonus |
Bonus % equals attainment % (e.g., 97% attainment = 97% bonus
payout) |
Amount above 100% is doubled (e.g.,105% attainment = 110% bonus
payout) |
|
18%
Operating Income |
50%
-or -
$12,500 |
18% Operating Income
Quarterly |
No Bonus |
Bonus % equals attainment % (e.g., 80% attainment = 80% bonus
payout) |
Amount above 100% is doubled (e.g.,101% attainment = 102% bonus
payout) |
| · |
Performance - 900,000 Stock Options of SEVI.OB ($0.05
per share - Five Cents) vested semi-annually over the term of the
Contract at a rate of 1/6th of total options granted, e.g.
150,000 Options vested per 6 months. Options will be granted for
attainment of ISS Division Operating Income (O/I) Goal of 18%.
Operating Income will be calculated semi-annually and Options will be
granted according to percent of attainment as
follows: |
|
Opportunity |
Options |
Measured |
Leverage Based on % Attainment of
Goal | |
|
< 70% |
70% to 100% | |||
|
18%
Operating Income |
150,000 |
Semi-Annual |
No Performance Options
Granted |
Options Grant % equals attainment %
e.g. 87% = 130500
95% = 142,500
100% = 150,000 |
| · |
A Signing Bonus of 100,000 Stock Options of SEVI.OB
($0.05 per share - Five Cents) vested upon date of
hire. |
4. Benefits.
Paid Time Off. You will be entitled, on a yearly basis, to 184
hours (23) days of time off with pay, which includes time that is intended for
holidays, vacations, personal time, and time needed for illness.
Medical and Group Life Insurance. Company agrees to include
Executive in the group medical and hospital plan and contribute not less than
$175.00 per month towards Executive’s cost to participate in the plan. Executive
shall be responsible for payment of any federal or state income tax imposed upon
these benefits.
Pension and Profit Sharing Plans. Executive shall be entitled
to participate in any pension or profit sharing plan or other type of plan
adopted by Company for the benefit of its officers and/or regular Executives.
Automobile Expense. Company will reimburse Executive for all
automobile operating expenses incurred by Executive in the performance of an
Executive's company duties.
Expense Reimbursement. Executive shall be entitled to
reimbursement for all reasonable expenses, including travel and entertainment,
incurred by Executive in the performance of Executive's duties. Executive will
maintain records and written receipt as required by the Company policy and
reasonably requested by the board of directors to substantiate such expenses.
Company agrees to reimburse Executive $50.00 per month for business use of
personal cell and $50.00 per month for business use of home internet
services.
| A) |
The Initial Term of this Contract shall commence on July
1, 2004 and it shall continue in effect for a period of Thirty-Six
(36) months. Thereafter, the Contract shall be renewed upon the mutual
agreement of Executive and Company. This Contract and Executive's
employment may be terminated at Company's discretion during the Initial
Term, provided that Company shall pay to Executive an amount equal to
payment at Executive's base salary rate for twelve (12) months if such
termination occurs within the 1st year of the Initial Term or
six (6) months if such termination occurs after the 1st year of
the Initial Term. In the event of such termination Executive vesting
schedule will mature for the same number of months and Executive shall be
paid any bonus, commission payment or any other compensation then in
effect, prorated or otherwise. |
| B) |
This Contract and Executive's employment may be terminated
by Company for cause or in the event that Executive is in breach of any
material obligation owed Company in this Contract, habitually neglects the
duties to be performed under this Contract, engages in any conduct which
is dishonest, damages the reputation or standing of the Company, or is
convicted of any felony or engages in any act of moral turpitude, then
Company may terminate this Contract upon five (5) days notice to
Executive. In event of termination of the agreement pursuant to this
subsection, Executive shall be paid only at the then applicable base
salary rate up to and including the date of termination. Executive shall
not be paid any commissions or bonus payments or other compensation,
prorated or otherwise. |
| C) |
This Contract may be terminated by Executive at Executive's
discretion by providing at least thirty (30) days prior written notice to
Company. In the event of termination by Executive pursuant to this
subsection, Company may immediately relieve Executive of all duties and
immediately terminate this Contract. In the event of such termination
Executive vesting schedule will mature to the termination date included in
Executive's original termination notice and Executive shall be paid any
bonus, commission payment or applicable base salary for the same period.
|
| D) |
In the event Company is acquired, or is the non-surviving
party in a merger, or sells all or substantially all of its assets, this
Contract shall not be terminated and Company agrees to use its best
efforts to ensure that the transferee or surviving company is bound by the
provisions of this Contract. |
6. Notices.
Any notice required by this Contract or given in connection with it,
shall be in writing and shall be given to the appropriate party by personal
delivery or by certified mail, postage prepaid, or recognized overnight delivery
services;
If to Company: SYSTEMS EVOLUTION INC.
00000 Xxxxxxxxx XX, Xxxxx 000
Xxxxxxxx, XX 00000
If to Executive: Xxxxxx Xxxxxx Xxxxxxx Jr.
00000 Xxxxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
7. Final Contract.
This Contract terminates and supersedes all prior understandings or
agreements on the subject matter hereof. This Contract may be modified only be a
further writing that is duly executed by both parties.
8. Governing Law.
This Contract shall be construed and enforced in accordance with the
laws of the State of Texas.
9. Headings.
Headings used in this Contract are provided for convenience only and
shall not be used to construe meaning or intent.
10. No Assignment.
Neither this Contract nor any or interest in this Contract may be
assigned by Executive without the prior express written approval of Company,
which may be withheld by Company at Company's absolute discretion.
11. Severability.
If any term of this Contract is held by a court of competent
jurisdiction to be invalid or unenforceable, then this Contract, including all
of the remaining terms, will remain in full force and effect as if such invalid
or unenforceable term had never been included.
12. Disputes.
The parties agree that they will use their best efforts to amicably
resolve any dispute arising out of or relating to this Contract. Any
controversy, claim or dispute that cannot be so resolved shall be settled
through legal remedies in accordance with applicable laws, regulations, and
procedures for the State of Texas and County of Xxxxxx and may be entered in any
court having jurisdiction thereof.
IN WITNESS WHEREOF, the parties hereto have executed this Contract as
of the date first above written. Accepted to and agreed upon by:
|
Xxxxxxx Xxxxxxxx, COO
/s/ Xxxxxxx X. Xxxxxxxx
________________________________
Signed
President
________________________________
Title:
8/23/04
________________________________
Date: |
Xxxxxx Xxxxxx Xxxxxxx, Jr.
/s/ Xxxxxx X. Xxxxxxx, Xx.
________________________________
Signed
DIrector - SMB Solutions
________________________________
Title:
August 23, 2004
________________________________
Date: |
