EMPLOYMENT AGREEMENT
The effective date of this Agreement by and between TOP TEAM, INC., a
Delaware corporation (the "Company"), and JOHN DAVIS (the "Officer") shall be
effective JANUARY 7,2000
WITNESSETH:
WHEREAS, the Company desires to employ Officer, and Officer desires to
accept such employment with the Company upon the terms and conditions set forth
herein,
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the Company and the Officer agree as follows:
AGREEMENT
1. EMPLOYMENT AND DUTIES.
The Company hereby employs Officer as CHIEF OPERATING OFFICER and
Officer hereby accepts employment by the Company upon the terms and conditions
set forth herein, with the authority and responsibilities customarily afforded
the Chief Operating Officer of a company. Officer shall faithfully and
diligently develop and direct all aspects of the Company's business plan and
reporting requirements that the Company's Board of Directors may adopt, in
accordance with the Company's bylaws, and do and perform all acts in the
ordinary cause of the Company's business (with such limits as the Board of
Directors of the Company may prescribe) necessary and conducive to the Company's
best interests. Officer shall have authority to hire and fire employees. Officer
shall devote full time, energy, and skill to the business of the Company and to
the promotion of the Company's best interests, except for vacations, and
absences made necessary because of illness.. Officer shall report directly to
the Chief Executive Officer. The primary place of employment shall be at the
Company's principal offices in San Jose, California.
2. TERM.
The term of this Agreement shall commence as of the effective JANUARY
7, 2000, and shall expire five (5) years hence, unless sooner terminated as
hereinafter set forth (the "Term"). Company will advise Officer of its
intent to renew six (6) months before term lapses.
3. COMPENSATION.
Subject to the provisions of Paragraphs 4 and 5 of this Agreement, the
Company shall pay Officer for all services to be performed by Officer during the
Term of this Agreement the following compensation:
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A. BASE SALARY. The Company shall pay Officer a fixed salary at the rate
of $150,000 per annum, payable in periodic payments in accordance with
the Company's practices for other executive, managerial, and
supervisory employees, as such practices may be determined from time to
time. The Company's Board of Directors will review such fixed salary
annually and, in its discretion, may grant increases thereof based upon
Officer's performance;
B. ANNUAL CASH BONUS. The Officer shall be entitled to receive an annual
cash performance bonus up to 100% OF THE GROSS ANNUAL SALARY for the
applicable year upon the achievement of reasonable corporate
performance targets established by the Board of Directors on an annual
basis . See Attachment A: Top Team Bonus Plan.
C. LONG TERM COMPENSATION: 1) STOCK OPTIONS: Officer shall be granted an
option to purchase a total of 200,000 shares of common stock at a
strike price of $7.50/share with annual vesting, in 5 equal amounts of
40,000 each year, over 5 years; 2) PERFORMANCE UNITS: Officers shall be
granted 100,000 performance units, vesting over the life of this
contract upon achievement of goals established by the board.
D. LOAN TO OFFICER: Top Team shall advance a $50,000 LOAN to officer,
which will be forgiven in four (4) equal annual installments commencing
on the date of this contract, or repaid in the event and at the time of
voluntary termination.
E. WITHHOLDING. All such payments will be subject to such deductions as
may be required to be made pursuant to law, government regulations, or
order, or by agreement with, or consent of, the Officer;
F. BENEFITS. Officer shall be entitled to participate in such life
insurance, medical, dental, long-term disability, pension, and
retirement plans, and other programs as may be approved from time to
time by the Company for the benefit of its employees and to all normal
perquisites provided to senior executives of the Company. Officer also
shall be entitled to no less than 3 weeks of vacation with pay during
each consecutive 12-months period during the term of Officer's
employment hereunder, to be taken at such times and in such periods as
Officer and the Company shall mutually determine and provided that no
vacation time shall interfere with the duties required to be rendered
by Officer hereunder;
G. BUSINESS EXPENSES. The Company agrees that during the term of this
Agreement Officer shall be entitled to reimbursement by the Company for
all reasonable expenses actually and necessarily incurred by Officer on
the Company's behalf in the course of Officer's employment hereunder,
for which Officer shall submit vouchers in a form satisfactory to the
Company and which are approved by the Company in its sole discretion;
and
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4. TERMINATION.
A. Officer's employment with the Company may be terminated as follows:
1. Termination for Cause, which means
(a) Officer willfully and unreasonably refuses to perform services
hereunder,
(b) Officer materially breaches Paragraph 6 of this Agreement,or
(c) Officer engages in acts of dishonesty or fraud in connection
with the services performed hereunder, including reporting
misleading or untrue information to the board,or
(d) Officer engages in gross misconduct of such a nature that the
continued employment of Officer may, in the reasonable
discretion of the Company, be expected to adversely affect the
business or properties of the Company, including acts which
violate securities laws, misrepresentation of material facts
to the Board or the shareholders, or criminal acts or
(e) Officer engages in a related business which represents a
conflict of interest with the company ,or
(f) Officer breaches his confidentiality agreement.
2. Involuntary Termination, which is defined as termination by the
Company of Officer's employment, other than in a Termination for
Cause or a Voluntary Termination and including a termination by
Officer for Good Reason; or
3. Voluntary Termination, which means termination by Officer of
Officer's employment by the Company.
4. Change of Control Termination, which means if within 12 months
after a change of control the company terminates executive
employment other than pursuant Section 4, clause A1 and A3 or if
executive terminates for Good Reason.
B. TERMINATION PAYMENTS. In the event of Officer's termination, severance
payments ("Severance Amount Payments") shall be made as follows:
1. Termination for Cause Payment. If Officer's employment with the
Company is Terminated for Cause, or due to death, disability, or
retirement on or after age 65, any portion of the fixed salary
pursuant to subparagraph 4 which is earned but unpaid as of the
date of death or retirement shall be paid to Officer, or a
designated beneficiary in the event of Officer's death, or if none
to Officer's then living spouse, or if none, to the duly appointed
personal representative of Officer's estate. If the Company
determines that a reason constituting cause for termination under
clauses 4A1(a)-(f) has occurred, Company shall give Officer written
notice thereof at least 30 days prior to the proposed date of
termination of employment. If Officer shall take the necessary
steps to remedy the condition constituting cause within 10 days
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after the receipt of such notice, then a reason for termination for
cause shall be deemed not to have occurred. If Officer shall not
remedy the condition constituting cause within such time period,
then Termination for Cause shall occur on the date set forth in the
notice from the Company.
2. Involuntary Termination Payment. In the event of an Involuntary
Termination during the term of Officer's employment hereunder, the
Company shall pay the Officer the Compensation set forth in
Paragraph 3(a) for the duration of the Term, prorata share of the
annual cash bonus earned and severance compensation equal to the
current base salary in effect multiplied by one (1). Executive's
unvested stock options and performance units set forth in Paragraph
3(c) will accelerate and become immediately exercisable and vested.
3. Voluntary Termination Payment. In the event of Voluntary
Termination during the term of Officer's employment hereunder,
Officer shall immediately be paid all accrued salary and accrued
vacation pay, up to the date of termination, but no other
compensation or reimbursement of any kind, including without
limitation, severance compensation.
4. Change of Control Termination Payment. In the event of termination
upon a change of control the company shall pay to the executive as
severance pay in lieu of any further salary an amount equal to the
product of the annual base salary in effect as of the date of
termination multiplied by one (1).
C. DEFINITIONS. All the terms defined in this paragraph 4 shall have the
meanings given below throughout this Agreement:
1. an "AFFILIATE" shall mean any entity which owns or controls, is
owned by or is under common ownership or control with, the Company;
2. a "CHANGE OF CONTROL" shall be deemed to have occurred if:
a) a tender offer or exchange offer is made and consummated for
the ownership of securities of the Company representing 662/3
percent or more of the combined voting power of the Company's
then outstanding voting securities; or
b) the Company transfers substantially all of its assets to
another corporation which is not a wholly-owned subsidiary of
the Company.
c) Acquisition or disposition of capital stock of Top Team by
E-Marketplace shall be excluded from this definition of change
of control.
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3. a "GOOD REASON" shall mean:
a) without written consent the assignment of Officer to any
duties inconsistent with, or any adverse change in, Officer's
titles or positions, duties, responsibilities or status with
the Company, or the removal of Officer from, or failure to
reelect Officer to, any of such positions except in connection
with Termination for Cause, disability, retirement, or death;
or
b) the failure of the Company to provide support, information,
assistance and staffing reasonably appropriate for Officer to
carry out Officer's duties or to achieve the performance goals
set by the company; or
c) any other material breach by the Company of this Agreement
which is not cured within thirty (30) days of notice thereof
by the Officer to the Company; or
D. GOLDEN PARACHUTE PAYMENT REDUCTION. It is the intention of the parties
that the Severance Amount Payments under this Agreement shall not
constitute "excess parachute payments" within the meaning of Section
280G of the Internal Revenue Code of 1986, as amended, and any
regulation thereunder. If the independent accountants acting as
auditors of the Company on the date of a Change of Control (or another
accounting firm designated by them) determine that the Severance Amount
Payments under this Agreement may constitute "excess parachute
payments", the payments may be reduced to the maximum amount which may
be paid without the payments being "excess parachute payments". The
determination shall take into account (i) whether the payments are
"parachute payments" under Section 280G and, if so, (ii) the amount of
payments under this agreement that constitutes reasonable compensation
under Section 280G. Nothing contained in this Agreement shall prevent
the Company after a Change of Control from agreeing to pay the Officer
compensation or benefits in excess of those provided in this Agreement.
5. DISABILITY.
In the event that Officer is permanently disabled so as to be unable to
fully perform the services required hereunder, Officer's obligation to perform
such services will terminate and the Company may terminate this Agreement upon
five day's written notice to Officer. In the event of such termination,
Officer's fixed salary as defined in Paragraph 3A hereof shall continue during
the then remaining Term of the Agreement, reduced by any payments received by
Officer during such term under a long-term disability plan or policy maintained
by the Company. The Company shall have sole discretion, based on competent
medical advice, to determine whether Officer is and continues to be permanently
disabled for purposes of this Paragraph.
6. NONDISCLOSURE OF CONFIDENTIAL INFORMATION.
Officer acknowledges that the Company may disclose certain confidential
information to Officer during the term of this Agreement to enable Officer to
perform the duties required hereunder. Officer hereby covenants and agrees that
he will not, without the prior written consent of the Company, during the term
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of this Agreement or at any time thereafter, disclose or permit to be disclosed
to any third party by any method whatsoever any of the confidential information
of the Company. For purposes of this Agreement, "confidential information" shall
include, but not be limited to, any and all records, notes, memoranda, data,
ideas, processes, methods, techniques, systems, formulas, patents, models,
devices, programs, computer software, writings, research, personnel information,
customer information, the Company's financial information, plans, or any other
information of whatever nature in the possession or control of the Company which
has not been published or disclosed to the general public, or which gives to the
Company an opportunity to obtain an advantage over competitors who do not know
of or use it. Officer further agrees that if Officer's employment hereunder is
terminated for any reason, he will leave with the Company and will not take
originals or copies of any and all records, papers, programs, computer software,
and documents and all matter of whatever nature that bears secret or
confidential information of the Company.
The foregoing paragraph shall not be applicable if and to extent
Officer is required to testify in a judicial or regulatory proceeding pursuant
to an order of a judge or administrative law judge. Officer agrees promptly to
reduce to writing and to disclose and assign, and hereby does assign, to the
Company, its parent, subsidiary, successors, assigns, and nominees, all
inventions, discoveries, improvements, copyrightable material, trademarks,
programs, computer software, and ideas concerning the same, capable of use in
connection with the business of the Company, which Officer may make or conceive,
either solely or jointly with others, during the period of Employment by the
Company, its parent, subsidiaries, or successors.
Officer agrees, without charge to the Company and at the Company's
expense, to execute, acknowledge, and deliver to the Company all such papers,
including applications for patents, applications for copyright and trademark
registrations, and assignments thereof, as may be necessary, and at all times to
assist the Company, its parent, subsidiaries, successors, assigns, and nominees
in every proper way to patent or register said programs, computer software,
ideas, inventions, discoveries, improvements, copyrightable material, or
trademarks in any and all countries and to vest title thereto in the Company,
its parent, subsidiaries, successors, assigns, or nominees. Officer will
promptly report to the company all discoveries, inventions, or improvements of
whatever nature conceived or made by Officer at any time he was employed by the
Company, its parent, subsidiaries, or successors. All such discoveries,
inventions, and improvements which are applicable in any way to the Company's
business shall be the sole and exclusive property of the Company. The covenants
set forth in this paragraph which are made by Officer are in consideration of
the employment or continuing employment of, and the compensation paid to,
Officer during employment by the Company. The foregoing covenants will not
prohibit Officer from disclosing confidential or other information to other
employees of the Company or to third parties to the extent that such disclosure
is necessary to the performance of the duties required under this Agreement. Any
breach of this covenant of nondisclosure will result in the forfeiture by
Officer and all other persons of any and all rights to severance pay and
supplemental pension benefits unpaid at the time of breach and in such event the
Company shall have no further obligation to pay any amount related thereto.
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7. ADDITIONAL REMEDIES.
Officer recognizes that irreparable injury will result to the Company
and to its business and properties in the event of any breach by Officer of any
of the provisions of Paragraphs 9 and 10 of this Agreement, and that Officer's
continued employment is predicated on the commitments undertaken by Officer
pursuant to said paragraphs. In the event of any breach of any of Officer's
commitments pursuant to Paragraphs 8 and 9, the Company shall be entitled, in
addition to any other remedies and damages available, to injunctive relief to
restrain the violation of such commitments by Officer or by any person or
persons acting for or with Officer in any capacity whatsoever.
8. NONASSIGNMENT.
This Agreement is personal to Officer and shall not be assigned by him.
Officer shall not hypothecate, delegate, encumber, alienate, transfer or
otherwise dispose of his rights and duties hereunder. The Company may assign
this Agreement without Officer's consent to any other entity who, in connection
with such assignment, acquires all or substantially all of the Company's assets
or into or with which the Company is merged and consolidated.
9. WAIVER.
The waiver by the Company of a breach by Officer of any provision of
this Agreement shall not be construed as a waiver of any subsequent breach by
Officer.
10. SEVERABILITY.
If any clause, phrase, provision, or portion of this Agreement or the
application thereof to any person or circumstance shall be invalid or
unenforceable under any applicable law, such event shall not affect or render
invalid or unenforceable the remained of this Agreement and shall not affect the
application of any clause, provision, or portion hereof to other persons or
circumstances.
11. BENEFIT.
The provisions of this Agreement shall inure to the benefit of the
Company, its successors, and assigns, and shall be binding upon the Company and
Officer, its and his heirs, personal representatives, and successors, including
without limitation Officer's estate and the executors, administrators, or
trustees of such estate.
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12. RELEVANT LAW.
This Agreement shall be construed and enforced in accordance with the
laws of the State of California.
13. NOTICES.
All notices, requests, demands and other communications in connection
with this Agreement shall be made in writing and shall be deemed to have been
given when delivered by hand or 48 hours after mailing at any general or branch
United States Post Office, by registered or certified mail, postage prepaid,
addressed as follows, or to such other address as shall have been designated in
writing by the addressee:
(a) if to the Company: (b) if to the Officer:
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14. ENTIRE AGREEMENT.
This Agreement sets forth the entire understanding of the parties and
supersedes all prior agreements, arrangements, and communications, whether oral
or written, pertaining to the subject matter hereof; and this Agreement shall
not be modified or amended except by written agreement of the Company and
Employee.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first set forth above.
Employer: TOP TEAM, INC. Employee: JOHN DAVIS
By: _________________ By: /s/ JOHN DAVIS
Officer: _________________
Date: _________________ Date: _________________
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