Exhibit 2.2
EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT is made as of the 17th day of October, 2005, between SMART ONLINE, INC. (“SOL”), iMART INCORPORATED, a wholly owned subsidiary of SOL (the “Company”) and GARY MAHIEU (the “Employee”). W I T N E S S E T H: WHEREAS, SOL is engaged in the business of providing web-hosted applications and technology infrastructure syndication; WHEREAS, SOL has acquired all of the stock of the Company in a transaction of even date herewith; WHEREAS, the Company and the Employee wish to contract for the employment by the Company of the Employee, and the Employee wishes to serve the Company, in the capacities and on the terms and conditions set forth in this Agreement; and WHEREAS, the Company and SOL comprise an enterprise whose success is attributable largely to the creation and maintenance of certain Confidential Data (as defined below) and during the period of employment Employee will be situated to have access to and be knowledgeable with respect to the Confidential Data as well as the customers of the Company and SOL; and WHEREAS, Company and SOL have a legitimate protectible business interest in the creation and maintenance of their Confidential Data and the protection of the identity of, and related information concerning, their customers and the Company’s and SOL’s customer lists; and WHEREAS, the Company and SOL wish to protect their Confidential Data from disclosure by Employee by means of the restrictive covenants contained in this Agreement and Employee agrees to such covenants in exchange for the Company’s commitment to continue to employ Employee and for other additional consideration agreed to between the parties; THEREFORE, it is hereby agreed as follows: 1. EMPLOYMENT PERIOD. The Company shall employ the Employee, and the Employee shall serve the Company, on the terms and conditions set forth in this Agreement. Such employment pursuant to the terms of this Agreement shall commence on the date hereof and shall terminate two (2) years thereafter. The term during which this Agreement is in effect is referred to herein as the “Employment Period.” At the option of SOL, Employee may become and employee of SOL, whereupon references to the Company in this Agreement shall mean SOL, as appropriate.
2.
POSITION AND DUTIES.
(a) During the Employment Period, the Employee shall serve as the vice president and chief executive officer of the Company on a full-time basis, and shall report directly to the President of the Company or the Chief Executive Officer of SOL or the person designated by the Chief Executive officer.
(b) During the Employment Period, the Employee shall devote his loyalty, attention, and time exclusively to the business and affairs of the Company and, to the extent necessary to discharge the responsibilities assigned to the Employee under this Agreement, use the Employee’s best efforts to carry out such responsibilities faithfully and efficiently. Employee shall not work or provide services to any other entity, and shall comply with all employment policies of the Company and SOL. (c) The Employee’s services shall be performed primarily at the Company’s headquarters in Grand Rapids, Michigan, or from time to time at such other locations as the Company or SOL shall require. 3. COMPENSATION.
(a) Salary. The Employee shall receive an annual salary of one hundred and fifty thousand ($150,000) dollars, payable in accordance with the Company’s normal payroll schedule as established by the Company from time to time. (b) Non-Compete. In consideration of the covenants made by Employee under Paragraph 7 hereof, Company shall pay Employee five hundred ten thousand ($510,000) dollars, which shall be payable in eight equal calendar quarter installments of sixty-three thousand seven hundred fifty ($63,750) dollars each, on January 2, 2006, April 3, 2006, July 3, 2006, October 2, 2006, January 2, 2007, April 2, 2007, July 2, 2007, and October 1, 2007. (c) Fringe Benefits. Employee shall be entitled to all of the non-wage benefits the Company provides from time to time to all other full-time employees. The Employee shall also receive such errors, omissions, employment practices, and other liability insurance coverage as SOL may provide, from time to time, for directors, officers, and senior management employees of SOL and its affiliates. (d) Withholding. All compensation paid pursuant to this Paragraph 3 shall be subject to withholding of taxes and other amounts as shall be required by law. 4. EXPENSES.
Company agrees to reimburse Employee for reasonable and necessary expenses incurred by Employee in the furtherance of the Com