EXHIBIT 10.19
EMPLOYMENT AGREEMENT
Hiway Technologies, Inc., a Delaware corporation, located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, its predecessors, successors and assigns,
(hereinafter referred to as "Employer") and ______________________________
(hereinafter referred to as "Employee") hereby enter into this Employment
Agreement as of the date set forth below. In consideration of the mutual
promises made herein, the parties hereto agree as follows:
ARTICLE 1. TERM OF EMPLOYMENT
Specified Period
Section 1.1. Employer hereby employs Employee and Employee hereby accepts
employment with Employer for a period of three (3) years, beginning January 1,
1998 and terminating on December 31, 2000.
Automatic Renewal
Section 1.2. This Agreement shall be renewed automatically for succeeding
terms of Two (2) years unless one party gives notice to the other at last ninety
(90) days prior to the expiration of any term of his or its intention not to
renew.
"Employment Term" Defined
Section 1.3. As used herein, the phrase "Employment Term" refers to the
entire period of employment of Employee by Employer hereunder, whether for the
periods provided above, or whether terminated earlier as hereinafter provided or
extended by mutual agreement between Employer and Employee.
ARTICLE 2. DUTIES AND OBLIGATIONS OF EMPLOYEE
General Duties and Authority
Section 2.1. Employee shall serve as the ___________________________ of
Employer. In such capacity, Employee shall do and perform all services, acts or
things necessary or advisable to discharge the normal duties of such office of
Employer, subject at all times to the policies set by Employer's Board of
Directors.
-1-
Devotion to Employer's Business
Section 2.2.
(a) Except as otherwise provided herein, Employee shall devote substantially
all of his productive time, ability and attention to the business of Employer
during the term of this Agreement.
(b) And except in connection with business arrangements in effect as of the
date of this Agreement; Employee shall not engage in any material new business
ventures, duties or pursuits, or directly or indirectly render any services of a
business, commercial or professional nature to any other person or organization
for compensation, without the prior written consent of Employer. The expenditure
of reasonable amounts of time for education, charitable or professional
activities shall not be deemed a breach of this Agreement if such activities do
not materially interfere with the services required under this Agreement.
(c) This Agreement shall not be interpreted to prohibit Employee from making
passive personal investments or conducting private business affairs if those
activities do not materially interfere with the services required under this
Agreement.
Competitive Activities
Section 2.3.
During the term of this Agreement, Employee shall not, directly or indirectly,
either as an employee, employer, consultant, agent, principal, partner,
stockholder, corporate officer, director or in any other individual or
representative capacity, engage or participate in any business that is in
competition with the business of Employer as of the date of such activity,
except that Employee's investment in publicly traded corporations shall not be
deemed to be a breach of this Section 2.3 unless Employee owns more than five
percent of the outstanding shares of such corporation.
Section 2.4.
(a) During the term of this Agreement or any extensions thereof, Employee
agrees that he will not undertake planning for or organization of any business
activity competitive with Employer's business or combine or conspire with other
employees or representatives of Employer's business for the purpose of
organizing any competitive business activity.
(b) During the term of this Agreement or any extensions thereof and except
as provided in Section 2.1, Employee agrees that he will not directly or
indirectly or by action in concert with others induce or influence (or seek to
induce or influence) any person who is engaged (as an employee, agent,
independent contractor or otherwise) by Employer to terminate his or her
employment or engagement.
-2-
(c) Employee hereby covenants and represents that he will not at any time
during the term of this Agreement or any extensions thereof, directly or
indirectly use or divulge, disclose or communicate any confidential information
of Employer to others, except in the proper performance of his authorized
duties.
(d) Employee represents and warrants that Employee is free to enter into
this Agreement and to perform each of the terms and covenants of it.
ARTICLE 3. OBLIGATIONS OF EMPLOYER
General Description
Section 3.1. Employer shall provide Employee with the compensation,
incentives, benefits and business expense reimbursement specified elsewhere in
this Agreement.
Office and Staff
Section 3.2. Employer shall provide Employee a private office, office
equipment, supplies and other facilities and services suitable to Employee's
position and adequate for the performance of his duties.
Indemnification of Losses of Employee
Section 3.3. To the fullest extent permitted by Delaware law, Employer shall
indemnify and defend Employee from all costs, expenses and losses whether direct
or indirect, including consequential damages and attorney's fees, incurred or
sustained by Employee in consequence of the proper discharge of his duties on
Employer's behalf.
ARTICLE 4. COMPENSATION OF EMPLOYEE
Annual Salary
Section 4.1.
(a) As compensation for the services to be performed hereunder, Employee
shall receive an initial base salary at the rate of One Hundred Sixty Thousand
Dollars ($160,000) per year beginning June 1, 1998.
(b) Employee shall receive such increases in salary as may be determined by
Employer's Board of Directors or its Compensation Committee in its sole
discretion from time to time, but the Board shall not decrease the salary set
forth in Section 4.1(a) above except with
-3-
Employee's consent. Such increases shall be considered a part of this Agreement
and subject to its terms.
Bonus Compensation
Section 4.2. In addition to his base salary, Employee shall be entitled to
receive annual bonuses during the term of this Agreement equal to five percent
(5%) of Company EBITDA (as calculated before consideration of this and all such
similar bonuses) up to a maximum of One Hundred Forty Thousand Dollars
($140,000) for each calendar year of the Company, to be paid by the end of the
first quarter of the succeeding year.
Tax Withholding
Section 4.3. Employer shall have the right to deduct or withhold from the
compensation due to Employee hereunder any and all sums required for federal
income and social security taxes and all state or local taxes now applicable or
that may be enacted and become applicable in the future.
Annual Vacation
Section 4.4. Employee shall be entitled to twenty (20) paid vacation days
each year. Employee may be absent from his employment for vacation only at such
times as may be approved by Employer, such approval not to be unreasonably
withheld. In the event that Employee is unable for any reason to take the total
amount of vacation time authorized herein during any year, he shall be deemed to
have carried forward any entitlement to vacation for that year.
Automobile Expenses
Section 4.5. Employee shall be entitled to the use of an Employer-provided
automobile, including gasoline, maintenance and insurance, in the furtherance of
his duties hereunder pursuant to standard Employer Policy.
Insurance and Benefits
Section 4.6. Employee shall be eligible to participate in all life, health,
medical and dental insurance and benefit plans, including a 401k plan, and any
other plan offered during the term of this Agreement by Employer should Employee
elect to participate in such plans.
-4-
ARTICLE 5. REIMBURSEMENT OF BUSINESS EXPENSES
Section 5.1.
(a) Employer shall promptly reimburse Employee for all business expenses
incurred by Employee in connection with the business of Employer.
(b) Each such expenditure shall be reimbursable only if Employee furnishes
to employer adequate records and other documentary evidence required by the
appropriate taxing authorities for the substantiation of each such expenditure.
ARTICLE 6. TERMINATION OF EMPLOYMENT
Termination for Cause
Section 6.1.
(a) Employer reserves the right to terminate this Agreement for cause. For
purpose of this Agreement, the Employer shall have "Cause" to terminate
Employee's employment hereunder upon (i) the willful and continued failure by
the Employee to substantially perform his duties hereunder (other than any such
failure resulting from Employee's incapacity due to physical or mental illness),
after demand for substantial performance is delivered by Employer that
specifically identifies the manner in which Employer believes Employee has not
substantially performed his duties, or (ii) the willful engaging by Employee in
misconduct which is materially injurious to the Employer, monetarily or
otherwise.
(b) Notwithstanding the foregoing, Employee shall not be deemed to have been
terminated for Cause without (i) reasonable notice to Employee setting forth the
reasons for employer's intention to terminate for Cause, (ii) an opportunity for
Employee, together with his Counsel, to be heard before Employer's Board of
Directors ("Board") and (iii) delivery to Employee of a notice of termination
from the Board finding that in the good faith opinion of the Board, Employee was
guilty of conduct set forth in clause (a)(i) or (a)(ii) of the preceding
paragraph, and specifying the particulars thereof in detail.
Termination Without Cause
Section 6.2.
(a) This Agreement shall be terminated upon the death of Employee.
-5-
(b) Employee may terminate this Agreement upon thirty (30) days written
notice to Employer if there occurs (i) a change in control of Employer (as
defined below), (ii) a failure by Employer to comply with any material provision
of this Agreement which has not been cured within thirty (30) days after notice
of such noncompliance has been given by Employee to Employer, (iii) any material
change by Employer in Employee's duties, responsibilities, job title or
description, or location of his office, unless such change was initiated at the
request or suggestion of the Employee or (iv) a termination of Employee's
employment under Section 6.1(a) which is not effected pursuant to the procedures
set forth in Section 6.1(b) or which is disputed and is finally determined by a
court of competent jurisdiction, not to have been for cause.
(c) For purposes of this Section, a "change in control of Employer" shall be
deemed to have occurred if (i) any person or entity becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Securities Exchange Act of 1934),
directly or indirectly, of securities of Employer representing fifty percent
(50%) or more of the combined voting power of Employer's then outstanding
securities.
(e) Except as otherwise provided herein, termination under this Section 6.2
shall not be considered "for cause" for purposes of this Agreement.
Termination by Employee
Section 6.3. Employee may at any time terminate his obligations under this
Agreement by giving Employer at least thirty (30) days written notice.
ARTICLE 7. COMPENSATION UPON TERMINATION
Compensation Upon Termination
Section 7.1. For Cause or Election by Employee. If Employer terminates
---------------------------------
Employee's employment hereunder for cause, pursuant to Section 6.1, or Employee
effectively terminates his employment pursuant to Section 6.2(a), 6.2(b)(iii)
(where the termination is a result of a "change" that was initiated at the
request or suggestion of the Employee only), or 6.3, then Employer shall pay
Employee's compensation through the date of termination, reimburse Employee for
all outstanding business expenses, and pay Employee for all other matters
required by law, such as for accrued vacation, but Employer shall have no
further obligations under this Agreement.
Section 7.2. Without Cause. If Employer terminates Employee's employment
-------------
without cause and for reasons other than as provided in Sections 7.3 or 7.4 or
other than as a result of Employee's suggestion as provided in 6.2(b)(iii), then
Employee shall be paid both salary and bonus compensation through the then
remaining term of this Agreement, during which period vacation pay shall
continue to accrue and be paid as accrued, use of Employer-provided automobile
and all insurance and benefits shall continue, and all of employee's stock
options shall vest fully and the period of exercise thereof shall continue for
not less than the remaining term of this Agreement.
-6-
Section 7.3. Change of Control. If the termination of Employee's employment
-----------------
occurs because of a change of control pursuant to Section 6.2(b)(i), then
Employer shall pay Employee as provided in Section 7.2 without regard to any
other provisions of this Agreement.
Section 7.4. Material Breach By Employer. If a court of competent
---------------------------
jurisdiction makes a final determination that Employee terminated his employment
because of a material breach by Employer as provided in Section 6.2(b)(ii),
(iii) or (iv) then Employer shall pay Employee as provided in Section 7.2 and in
addition, Employer shall pay all other damages to which Employee may be entitled
as a result of such breach, and including all legal fees and expenses incurred
by him as a result of such termination. Employee shall not be required to
mitigate the amount of any payment payable under this Article 7.
ARTICLE 8. GENERAL PROVISIONS
Notices
Section 8.1. Any notices to be given hereunder by either party to the other
shall be in writing and may be transmitted by personal delivery or by mail,
registered or certified, postage prepaid with return receipt requested. Mailed
notices shall be addressed to the parties at the address appearing in the
introductory paragraph of this Agreement, but each party may change that address
by written notice in accordance with this Section. Notices delivered personally
shall be deemed communicated as of the date of actual receipt; mailed notice
shall be deemed communicated as of one day after the date of mailing.
Attorneys' Fees and Costs
Section 8.2. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees, costs and necessary disbursements in addition to any
other relief to which that party may be entitled. This provision shall be
construed as applicable to the entire Agreement.
Entire Agreement
Section 8.3. This Agreement supersedes any and all other agreements, either
oral or in writing, between the parties hereto with respect to the subject
matter contained herein and contains all of the covenants and agreements between
the parties with respect to that subject 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 valid or binding on either
party.
-7-
Modifications
Section 8.4. Any modification of this Agreement will be effective only if it
is in writing and signed by the party to be charged.
Effect of Waiver
Section 8.5. The failure of either party to insist on strict compliance with
any of the terms, covenants or conditions of this Agreement by the other party
shall not be deemed a waiver of that term, covenant or condition, nor shall any
waiver or relinquishment of any right or power at any one time or times be
deemed a waiver or relinquishment of that right or power for all or any other
times.
Partial Invalidity
Section 8.6. If any provision in this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions shall nevertheless continue in full force without being impaired or
invalidated in any way.
Law Governing Agreement
Section 8.7. This Agreement shall be governed by and construed in accordance
with laws of the State of Delaware.
Executed on _________________, 1998 by:
EMPLOYER:
Hiway Technologies, Inc.
By:________________________________
EMPLOYEE:
__________________________________
-8-