EMPLOYMENT
AGREEMENT
This
EMPLOYMENT AGREEMENT (the “Agreement”) is made and
entered into as of January 1, 2007 (the “Effective
Date”), by and between NetSol Technologies, Inc., a
Nevada corporation (the “Company”) and Najeeb
Ghauri, an individual (“Executive”).
BACKGROUND
A.
The
Company desires assurance of the association and services of
Executive in order to retain Executive’s experience,
skills, abilities, background and knowledge, and is willing to
engage Executive’s services on the terms and conditions
set forth in this Agreement.
B.
Executive
desires to be in the employ of the Company, and is willing to
accept such employment on the terms and conditions set forth
in this Agreement.
AGREEMENT
In
consideration of the foregoing recitals and the mutual
promises and covenants herein contained, and for other good
and valuable consideration, the parties, intending to be
legally bound, agree as follows:
1.
EMPLOYMENT.
1.1
The
Company hereby enters into this Agreement with Executive, and
Executive hereby accepts employment under the terms and
conditions set forth in this Agreement for a period of three
years thereafter (the “Employment Period”);
provided, however, that the Employment Period may be
terminated earlier pursuant as provided herein. The Employment
Period shall be automatically extended for additional one-year
periods unless either party notifies the other in writing six
months before the end of the anniversary year to elect not to
so extend the Employment Period.
1.2
Executive
shall serve as Chief Executive Officer (“CEO”) of
the Company. It is hereby contemplated that the Executive will
have a seat on and act as Chairman of the Board of
Directors.
1.3
Executive
shall perform all services, acts or things necessary or
advisable to manage and conduct the business of the Company
and which are normally associated with the position of CEO and
consistent with the bylaws of the Company.
1.4
The
employment relationship between the parties shall be governed
by the policies and practices established by the Company,
except that when the terms of this Agreement differ from or
are in conflict with the Company’s policies or
practices, this Agreement shall control.
1.5
Unless
the parties otherwise agree in writing, during the term of
this Agreement, Executive shall perform the services he is
required to perform pursuant to this Agreement at the
Company’s offices, located at its present or future
locations in the United States; provided, further, that the
Company may from time to time require Executive to travel
temporarily to other locations in connection with the
Company’s business and in accordance with the
Company’s standard policies regarding travel for
executive and senior management employees.
2.
LOYAL
AND CONSCIENTIOUS PERFORMANCE; NONCOMPETITION.
2.1
During
the Employment Period, Executive shall devote substantially
all his business energies, interest, abilities and productive
time to the proper and efficient performance of his duties
under this Agreement. The foregoing shall not preclude
Executive from engaging in civic, charitable or religious
activities, or from serving on boards of directors of
companies or organizations which will not present any direct
conflict with the interest of the Company or affect the
performance of Executive’s duties
hereunder.
2.2
Except
with the prior written consent of the Company’s Board of
Directors (“Board”), Executive will comply with
all the restrictions set forth below at all times during his
employment and for a period of eighteen months after the
termination of his employment:
2.2.1
Executive will not, either individually or in conjunction with
any person, as principal, agent, director, officer, employee
or in any other manner whatsoever, directly or indirectly
engage in or become financially interested in any competitive
business within North America, except as a passive investor
holding not more than one percent of the publicly traded stock
of a corporation in which Executive is not involved in
management;
2.2.2
Executive will not, either directly or indirectly, on his own
behalf of on behalf of others, solicit, divert or appropriate
or attempt to solicit, divert or appropriate to any
competitive business, any business or actively sought
prospective business of the Company or any customers with whom
the Company or any affiliate of the Company has current
agreements relating to the business of the Company, or with
whom Executive has dealt, or with whom Executive has
supervised negotiations or business relations, or about whom
Executive has acquired confidential information in the course
of Executive’s employment;
2.2.3
Executive will not, either directly or indirectly, on
Executive’s behalf or on behalf of others, solicit,
divert or hire away, or attempt to solicit, divert, or hire
away, any independent contractor or any person employed by the
Company or any affiliate of the Company or persuade or attempt
to persuade any such individual to terminate his or her
employment with the Company; and,
2.2.4
Executive will not directly or indirectly impair or seek to
impair the reputation of the Company or any affiliate of the
Company, nor any relationship that the Company or any
affiliate of the Company has with its employees, customers,
suppliers, agents or other parties with which the Company or
any other affiliate of the Company does business or has
contractual relation; and,
2.2.5
Executive will not receive or accept for his own benefit,
either directly or indirectly, any commission, rebate,
discount, gratuity or profit from any person having or
proposing to have one or more business transactions with the
Company or any affiliate of the Company, without the prior
approval of the Board, which may be withheld;
and,
2.2.6
Executive will, during the term of this employment with the
Company, communicate and channel to the Company all knowledge,
business and customer contacts and any other information that
could concern or be in any way beneficial to the business of
the Company. Any such information communicated to the Company
as aforesaid will be and remain the property of the Company
notwithstanding any subsequent termination of
Executive’s employment.
3.
COMPENSATION
OF EXECUTIVE.
3.1
The
Company shall pay Executive a base salary of Two Hundred
Seventy Five Thousand Dollars ($275,000) per year (the
“Base Salary”), payable in accordance with the
Company policy. Such salary shall be pro rated for any partial
year of employment on the basis of a 365-day fiscal year.
Executive shall receive a car allowance of Three Thousand
Dollars ($3,000) per month. Executive will be eligible for
bonuses from time to time as determined by the
Board.
3.2
Executive’s
Base Salary and other compensation may be changed from time to
time by mutual agreement of Executive and the
Board.
3.3
All
of Executive’s compensation shall be subject to
customary withholding taxes and any other employment taxes
applicable to Executive’s jurisdiction of employment as
are commonly required to be collected or withheld by the
Company.
3.4
During
the Employment Period, the Company agrees to reimburse
Executive for all reasonable and necessary business expenses
subject to the Company’s standard requirements with
respect to reporting and documentation of such
expenses.
3.5
Executive
shall, in accordance with the Company policy and the terms of
the applicable plan documents, be eligible to participate in
benefits under any Executive benefit plan or arrangement which
may be in effect from time to time and made available to its
executive or key management employees, including, as
applicable, health and disability insurance, dental insurance,
and participation in Employer’s 401(k) plan. The Company
may modify or cancel its benefit plan(s) as it deems
necessary.
3.6
Executive
shall cooperate with the Company and its insurers as
reasonably required for the Company to acquire and keep in
force key-man life insurance on Executive.
3.7.
The
Company and Executive shall enter into an Indemnity Agreement
to provide indemnification of and the advancing of expenses to
Executive to the fullest extent (whether partial or complete)
permitted by law, and, to the extent the Company maintains
insurance, for the coverage of Executive under the
Company’s directors’ and officers’ liability
insurance policies.
4.
TERMINATION.
4.1
Termination
by the Company. Executive’s employment with the Company
may be terminated under the following conditions:
4.1.1
Death
or Disability. Executive’s employment with the Company
shall terminate effective upon the date of Executive’s
death or “Complete Disability” (as defined in
Section 4.5.1).
4.1.2
For
Cause. The Company may terminate Executive’s employment
under this Agreement for “Cause” (as defined in
Section 4.5.3) by delivery of written notice to Executive
specifying the cause or causes relied upon for such
termination. Any notice of termination given pursuant to this
Section 4.1.2 shall effect termination as of the date
specified in such notice or, in the event no such date is
specified, on the last day of the month in which such notice
is delivered or deemed delivered as provided in Section 8
below.
4.1.3
Without
Cause. The Company may terminate Executive’s employment
under this Agreement at any time and for any reason by
delivery of written notice of such termination to Executive.
Any notice of termination given pursuant to this Section 4.1.3
shall effect termination as of the date specified in such
notice (which shall be no earlier than 30 days after such
notice is given) or, in the event no such date is specified,
on the last day of the month following the month in which such
notice is delivered or deemed delivered as provided in Section
8 below
4.2
Termination
By Executive. Executive may terminate his employment with the
Company for “Good Reason” (as defined below in
Section 4.5.2) by (i) delivery of written notice to the
Company specifying the “Good Reason” relied upon
by Executive for such termination, provided that such notice
is delivered within six (6) months following the occurrence of
any event or events constituting Good Reason, or (ii) at any
time during the Employment Period without Good
Reason.
4.3
Termination
by Mutual Agreement of the Parties. Executive’s
employment pursuant to this Agreement may be terminated at any
time upon a mutual agreement in writing of the parties. Any
such termination of employment shall have the consequences
specified in such agreement.
4.4
Compensation
Upon Termination.
4.4.1
Death
or Complete Disability. If Executive’s employment shall
be terminated by death or Complete Disability as provided in
Section 4.4.1, the Company shall (i) pay Executive his accrued
Base Salary and accrued and unused vacation benefits earned
through the date of termination at the rate in effect at the
time of termination, and (ii) continue Executive’s
annual Base Salary, in effect at the time of termination, for
a period of two (2) months after the termination date, in both
cases subject to standard deductions and withholding, and the
Company shall thereafter have no further obligations to
Executive under this Agreement.
4.4.2
Cause
or Without Good Reason. If Executive’s employment shall
be terminated by the Company for Cause, or if Executive
terminates employment hereunder without Good Reason, the
Company shall pay Executive his accrued Base Salary and
accrued and unused vacation benefits earned through the date
of termination at the rate in effect at the time of the notice
of termination, and the Company shall thereafter have no
further obligations to Executive under this
Agreement.
4.4.3
Without
Cause or Good Reason. If Executive shall terminate
Executive’s employment with the Company for Good Reason
or the Company shall terminate Executive’s employment
without Cause, or in the event Executive is terminated for any
reason following a Change in Control, Executive shall be
entitled to the following:
(i)
Executive’s
Base Salary, and accrued and unused vacation earned through
the date of termination;
(ii)
Continuation
of Executive’s annual Base Salary, in effect at the time
of termination, for a period of thirty-six (36) months after
the termination date subject to standard deductions and
withholding;
(iii)
Continuation
of Executive’s medical, disability and other benefits
for a period of thirty six (36) months after the termination
date, as if Executive had continued in employment during said
period, or in lieu thereof, cash (including a tax-equivalency
payment for Federal, state and local income and payroll taxes
assuming Executive is in the maxim
