Cto Employment Agreement

EXHIBIT 10.2


AGREEMENT OF EMPLOYMENT


THIS AGREEMENT OF EMPLOYMENT ("Agreement") is made and entered into as of September 15, 1998 by and between DPEC, INC., an Ohio corporation having its principal office at Building 3, 851 West Third Street, Columbus, Ohio (the "Company"), and Carol A. Clark (the "Employee").


WITNESSETH:


WHEREAS, the Employee is currently employed as the President of the Company and is a member of the Board of Directors of the Company; and


WHEREAS, the Company and the Employee mutually desire that Employee continue as the Company's President and as a member of the Board of Directors; and


WHEREAS, the Company and Employee wish to enter into this Agreement to set forth their mutual understanding as to the terms and conditions of Employee's continued employment by the Company.


It is therefore agreed between the parties as follows:


1. EMPLOYMENT. The Company agrees to employ the Employee as the Company's Chairperson of the Board, President and Chief Executive Officer and the Employee, in consideration of such employment, hereby accepts such employment. During the term of her employment, the Employee shall use her best efforts to do all things necessary and incident to her position and the dispatch of her responsibilities as set forth from time to time by the Board of Directors. Unless otherwise approved in advance by the Company's Board of Directors, Employee shall devote her full business time and energy exclusively to the business and affairs of the Company and in no event shall Employee engage in any outside activities which would be reasonably expected to affect the Company adversely or which would divert substantial time or effort from the business affairs of the Company.


2. BOARD OF DIRECTORS. The Company further agrees that it will cause Employee to be nominated for re-election to the Board of Directors during each year of her employment hereunder, such election being subject only to the approval of the Company's stockholders.


3. TERM. Employee's term of employment with the Company pursuant to this Agreement shall begin as of August 1, 1998 (the "Commencement Date") and shall continue until terminated by the Company or Employee pursuant to Section 5 hereof


4. COMPENSATION AND BENEFITS. Except as otherwise provided upon a termination of Employee's employment pursuant to Section 5 hereof, the Company shall compensate Employee and provide the benefits as set forth in this Section 4. In addition, the Company shall reimburse Employee or pay directly for reasonable business expenses incurred by her during her employment term.


4.1. BASE SALARY: PERFORMANCE REVIEW. Commencing August 1, 1998, the Company shall pay Employee an annual base salary of $135,000 during each year of employment hereunder. Commencing August 1, 1999, Employee will also be eligible for an annual salary review by the Compensation Committee (the "Committee") of the Company's Board of Directors and her annual base salary for the following fiscal year may be increased (but not decreased) by the Committee based on the achievement of performance goals approved by the Committee. In addition, Employee may be eligible for additional incentive compensation based on the achievement of such performance goals.


4.2. STOCK OPTIONS. Employee shall be eligible to receive awards under the DPEC, Inc. 1998 Stock Option Plan.


5. TERMINATION OF AGREEMENT.


5.1 FOR CAUSE. The Company may terminate Employee's employment at any time for cause (as defined below) effective immediately upon written notice to Employee. In such event, Employee shall receive her salary through the effective date of termination and any incentive payments earned by but not yet paid to Employee prior to such date, and the Company shall have no further obligation to Employee under this Agreement. Such amounts shall be paid by the Company within thirty (30) days of the effective date of such termination. For purposes of this Agreement, "cause" shall mean conviction of a felony or willful misconduct or gross neglect of duties materially damaging to the Company's business.


5.2. DISABILITY. This Agreement may be terminated, at the option of the Company or the Employee, if during the term hereof the Employee is under a disability, meaning because of ill health, physical or mental disability, or for any other disability ("disability"), the Employee shall have been continuously unable or shall have otherwise failed to perform the essential functions of her job hereunder for one hundred eighty (180) consecutive working days. Provided, however, that if the question of disability is raised, Clark shall submit to a medical examination by three physicians who shall determine whether Clark is disabled, one of whom shall be appointed by the holders of a majority of the shares of the Company's senior convertible preferred stock, no par value per share, one of whom shall be appointed by the Employee or her representative, and one of whom shall be appointed by the first two appointed physicians. The decision of any two of the three physicians shall be final and binding. In the event of the termination of Employee's employment due to disability, the Company will pay Employee her monthly salary through the end of month in which such termination upon disability occurs and all incentive payments earned by but not yet paid to Employee prior to her termination upon disability. Such amounts shall be paid by the Company within thirty (30) days from the effective date of such termination. This Section 5.2 will be applied consistent with the Company's


2


obligations under applicable federal and state law, including without limitation the Americans with Disabilities Act.


5.3. DEATH. This Agreement shall be terminated on the death of the Employee effective as of the date of her death. Employee's spouse or estate, as the case may be, shall be entitled to retain the Employee's salary installment for the month in which she dies and shall be entitled to all incentive payments earned by but not yet paid to Employee prior to her death. Such amounts shall be paid by the Company within thirty (30) days from the effective date of such termination.


5.4. BY EMPLOYEE OTHER THAN FOR GOOD REASON. If Employee terminates her employment with the Company for other than for good reason, Employee shall receive her salary through the effective date of termination and all incentive payments earned by but not yet paid to Employee prior to such date, and the Company shall have no further obligation to Employee under this Agreement. Such amounts shall be paid by the Company within thirty (30) days from the effective date of such termination.


5.5 BY THE COMPANY OTHER THAN FOR CAUSE OR BY EMPLOYEE FOR GOOD REASON. If the Company terminates Employee's employment with the Company other than for cause or other than by reason of Employee's death or disability or if Employee terminates her employment with the Company for good reason, the Company shall continue to pay Employee her salary in effect on the effective date of the termination for a period of eighteen (18) months following the effective date of her termination. In addition, the Company shall pay to Employee all incentive paymen ...