Exhibit 10.3
 
 
EMPLOYMENT AGREEMENT
 
THIS AGREEMENT ("Agreement') is by and between Internetworking Sciences
Corporation, a Delaware corporation with principal offices at 6401 Southwest
Freeway, Houston, Texas 77074 ("Company") and Mark T. Hilz, an individual
residing at 210 Canyon Oaks Drive, Argyle, Texas 76226 (Employee") and is
effective July 5, 2000.
 
In consideration of Employee's employment or continued employment in a new
position by Company and any additional compensation or benefits that Company may
now or from time to time bestow upon Employee, Employee and Company agree as
follows:
 
1.                Employment. Company hereby employs or continues to employ
Employee subject to the terms hereof, and Employee hereby accepts such
employment upon such terms. As used in this Agreement, the word "Employee" shall
be deemed to include, but not be limited to, Company's Sales Agents and Sales
Managers.
 
2.               Compensation. Employee shall be compensated by Company as set
forth in Attachment "A" attached hereto and made a part hereof. Any and all
compensation, bonus programs, commission programs and stock incentive programs
which are paid or which arise incident to the employment relationship created by
this Agreement, other than the one-time cash payment described hereinafter, are
discretionary and may be changed from time to time at the sole discretion of
Company.
 
3.               Duties, Responsibilities. Employee shall function in whatever
capacity(ies) Company shall assign, whether for Company or its subsidiary(ies)
and shall report to such executive officer, or other designated superior of
Employee, of Company or such subsidiary(ies) as may be designated from time to
time. Employee shall perform the usual functions of such position(s) and
functions as directed by such executive officer or superior from time to time.
Employee shall truthfully, completely and accurately make, maintain and preserve
all records and reports that Company may from time to time request or require.
Employee shall also perform other duties for Company and its subsidiary(ies) as
Company may otherwise reasonably order and direct through such executive officer
and/or superior. Employee's employment shall be subject to the policies of
Company now or hereafter adopted.
 
4.   Outside Business Interests. Employee agrees to faithfully devote all of
his/her time, energy, and skill to his/her employment with Company on a
full-time basis for at least forty (40) hours per week, Mondays through Fridays
of each successive calendar month, but exclusive of holidays set by Company and
vacation periods in accordance with Company's policies. Employee shall not,
while employed hereunder, be engaged in any other business activity, unless
consented to in writing by Company. Notwithstanding the foregoing, Employee may
engage in passive personal investments that do not interfere with the business
and affairs of Company or interfere with the performance of Employee's duties to
Company. Employee represents and warrants to Company that this Agreement, the
performance of his/her obligations under this Agreement or the employment
relationship between Company and Employee under this Agreement do not and will
not violate or conflict with any non- competition (as pertaining to being
employed by a competitor), non-solicitation (as pertaining to customers),
non-interference (as pertaining to employees, agents or servants) or
confidentiality agreement (as pertaining to trade secrets and other confidential
information), or any other obligation to which Employee is subject. Employee
also represents and warrants to Company that he/she will not use the trade
secrets or other confidential information of former employers or others in
connection with his/her employment by Company.
 
5.               Fiduciary Duties. Employee acknowledges and agrees that
Employee owes a fiduciary duty of loyalty, fidelity and allegiance to act at all
times in the best interests of Company. Employee agrees to not act or fail to
act in any manner that would injure the business, interests, or reputation of
Company or any of its Affiliates (as defined below in paragraph 6).
Additionally, Employee agrees to immediately disclose to an executive officer or
Employee's immediate superior all information and business opportunities
pertaining to the business of Company and any of its Affiliates learned of by
Employee while employed by Company and not to appropriate for Employee's benefit
or that of any third party such opportunities or information.
 
 
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6.               Dishonesty. If at any time Employee becomes aware, or believes,
that any other employee, agent or servant of Company, or any third party, is or
appears to be (a) removing, concealing, transferring or using any property or
funds of Company for the benefit of anyone other than Company or is otherwise
not authorized by Company to do so, or (b) divulging, providing or otherwise
disseminating in any manner not authorized by Company any of Company's
Confidential Information (as defined in the Confidentiality, Development and
Non-Interference Agreement ("Confidentiality Agreement") to be executed by
Employee concurrently herewith) to any third person not authorized by Company to
possess such Confidential Information, Employee shall immediately communicate
his/her knowledge or belief as to such matters to an executive officer of
Company or to his/her immediate superior.
 
7.               Restrictive Covenants. Employee agrees that the following
covenants are reasonable and necessary to protect Company's interests, including
but not limited to its trade secrets and other confidential information, and
therefore agrees to the following covenants which are agreed to be ancillary to
the Confidentiality Agreement to be executed by Employee concurrently herewith.
Employee agrees as follows:
 
(a)   That certain Confidentiality Agreement entered into by and between Company
and Employee (as of dates below) is incorporated herein and hereat by reference
for all pertinent purposes and such Confidentiality Agreement and all of its
terms and provisions shall be deemed a part hereof and shall be enforceable
hereunder separate and distinct from its enforceability as a separate agreement,
e.g., it shall be enforceable as a separate and distinct agreement as well as
being enforceable as a part hereof; and
 
Employee further agrees that he/she will not, while at any time employed by
Company and for a period of eighteen (18) months following the termination of
such employment, whether as an individual, or in any capacity, directly or
indirectly:
 
(b)   In competition with Company solicit or sell or participate in any way
concerning a sale of products or services similar to Company's products or
services to any customer or client which Employee at any time solicited or sold
for Company; and
 
(c)               Induce or attempt to induce any distributor, vendor,
representative, agent or contractor of Company to terminate or modify its
business relationship with Company;
 
(d)   Induce or attempt to induce any of (i) Company's customers or clients or
(ii) individuals or entities who/which have been customers or clients of Company
within the 12 months preceding Employee's termination of employment with
Company, to terminate or in any way modify its business relationship with
Company; and
 
(e)   Solicit, divert or take away, or attempt to solicit, divert or take away,
from Company, any individuals or entities who (i) are Company's customers or
clients or (ii) who/which have been customers or clients of Company within the
12 months preceding Employee's termination of employment with Company; and
 
Employee further agrees that:
 
(f)               In the event any court of competent jurisdiction at any time
determines that all or any part of the above and foregoing restrictive
covenant(s) to be unenforceable, in whole or in part, then in that event
Employee hereby waives (and covenants not to sue Company) whatever cause(s) of
action he or she might otherwise have (whether under any antitrust law(s) or
otherwise) against Company because of its attempt to enforce same; and
 
 
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(g)              Enforcement of the above paragraphs 7 (b) through (e),
inclusive, is the only practical means of enforcing paragraph 7(a), above, and
of enforcing the Confidentiality Agreement. Employee agrees that enforcement of
paragraphs 7 (b) through (e), inclusive, is necessary to protect Company's
goodwill and other business interests. Paragraphs 7 (a) through (e), inclusive,
shall be deemed ancillary to the Confidentiality Agreement. Employee agrees that
all of the provisions of this Agreement and the Confidentiality Agreement are
valid and enforceable as written and according to their terms. For purposes of
this Agreement, the following definitions shall apply: (a) "Company" shall be
deemed to mean and refer to the entity named in the first paragraph hereof; (b)
"Parent" shall be deemed to mean and refer to any corporation which, directly or
indirectly, controls Company or the referred to subsidiaries through ownership
or control of at least 80% of the authorized, issued and outstanding shares of
the common voting stock of Company or each of such subsidiaries; (c) the word
"Affiliates" includes Company's Parent (if any) and subsidiaries of Company or
Company's Parent (if any). The obligations of Employee as to this paragraph 7
hereof shall apply to Company and its Affiliates, in which case such Affiliates
shall be deemed to be third party beneficiaries of such paragraph. The
obligations of Company hereunder shall not apply to such Parent and/or
subsidiaries.
 
8.               Assignment. This Agreement applies to Company and its
subsidiaries, Affiliates, successors, assigns or its associated companies.
Company may assign this Agreement at any time without notice (but Employee
cannot). This Agreement is personal to Employee and no individual or entity
shall have any interest in same except Employee, personally, on the one hand,
and Company and its subsidiaries, Affiliates, successors, assigns or its
associated companies, on the other hand.
 
9.                Savings Clause - Non-Waiver. The failure of Company to at any
time enforce any provision hereof shall never be construed to be a waiver of
such provision or of the right of Company to enforce each and every provision
hereof at any time. In the event any paragraph, provision or clause, or any
combination of same hereof shall be found or held to be unenforceable at law or
in equity, or under any ordinance, statute or regulation, such finding or
holding shall not in any way affect the other paragraphs, provisions and clauses
which shall remain in full force and effect.
 
10.   Attorney's Fees - Venue. Employee agrees to pay Company its actual
attorney's fees and out-of-pocket costs (including all travel expense of counsel
and witnesses) which Company incurs by virtue of Employee's employment by
Company, including any litigation by which Company seeks to enforce any
provision hereof. This Agreement shall be governed by the internal laws, and not
the law of conflicts, of the State of Texas, or, at Company's option, governed
by the internal laws of the state or states where this Agreement, and/or any of
its provisions, may be at issue in any litigation involving Company, in all
respects. Venue respecting any litigation arising from this Agreement and/or
Employee's employment with Company shall, at Company's option, be properly laid
only in a court of competent jurisdiction in Harris County, Texas. Each party
hereto acknowledges and agrees that it has had the opportunity to consult with
its own legal counsel in connection with the negotiation of this Agreement and
that it has bargaining power equal to that of the other party hereto in
connection with the negotiation, execution and delivery of the Agreement.
Accordingly, the parties hereto agree that the rule of contract construction
that an agreement shall be construed against the drafter shall have no
application in the construction or interpretation of this Agreement.
 
11.             Termination. Employee's employment by Company may be terminated
at any time by either party, with or without cause. No severance pay or benefits
will be paid upon termination of employment under this Agreement. The covenants
and agreements of Employee set forth in paragraph 7 are of a continuing nature
and shall survive the expiration, termination or cancellation of this Agreement
and Employee's employment with Company regardless of the reason(s) for such
termination or cancellation.
 
12.             Consideration For This Agreement. In addition to the employment,
or continued employment, of the Employee by Company, and in addition to the
mutual covenants and promises of the parties contained herein, Company shall,
contemporaneous with the execution of this Agreement by Employee, or within
thirty days thereafter, pay to Employee additional and special consideration of
a one-time cash payment of $1,000.00 as additional and special consideration to
support the covenants and agreements of Employee contained herein. Such
$1,000.00 is paid for both this Agreement and the Confidentiality Agreement.
 
 
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13.             Miscellaneous. Employee has no authority, express or implied, to
assume or create any obligation on behalf of or in the name of Company. Employee
shall have no authority to make representations, warranties or guarantees not
herein stated (and Company makes no warranty with respect to any product or
service sold by it except as otherwise specifically agreed in writing) unless
otherwise authorized, in writing, by Company. Employee may not make any
allowances or adjustments respecting customers without the written authorization
of Company, nor may Employee bind Company to any contract of employment, or
otherwise, without Company's consent; nor may Employee endorse or cash Company's
checks or commercial paper; nor may Employee maintain any bank account in the
name of Company. Employee hereby indemnifies and holds harmless Company from any
and all liability, cost or damage which Company may suffer by Employee's breach
of this paragraph 13 and/or which Company may suffer because of any act or
omission of Employee.
 
14.             Defamation and Privacy. Employee shall refrain, both during and
after termination of the employment relationship between Company and Employee,
from publishing, uttering or otherwise disseminating any oral or written
statements about Company or its officers, directors, employees, agents or
representatives that are slanderous, libelous, or otherwise defamatory; or that
disclose private or confidential information about Company or its business
affairs, officers, directors, employees, agents or representatives that Employee
knows or should know is materially injurious to Company; or that constitute an
intrusion into the seclusion or private lives or business affairs of Company or
its officers, directors, employees, agents or representatives that Employee
knows or should know is materially injurious to Company; or that give rise to
unreasonable publicity about the private business affairs of Company or its
officers, directors, employees, agents or representatives; or that place Company
or any of its officers, directors, employees, agents or representatives in a
false light before the public; or that constitute a misappropriation of the name
or likeness of Company or its officers directors, employees, agents or
representatives. A violation or threatened violation of this prohibition may be
enjoined by any court of competent jurisdiction. The rights afforded Company
under the provision of this paragraph 14 are in addition to any and all rights
and remedies otherwise afforded by law or by this Agreement.
 
15.             Entire Agreement. This Agreement (including all written
amendments and/or modifications hereto and all documents ancillary hereto)
constitutes the entire agreement and understanding between the parties and it is
expressly agreed that no representations, promises, warranties or
understandings, express or implied, other than set forth herein or referred to
herein, shall be binding on either party. The Confidentiality Agreement is
ancillary to this Agreement. None of the provisions hereof shall be waived,
altered or amended unless in writing signed by the parties.
 
16.             Employee's Certification. Employee HEREBY CERTIFIES THAT:
 
(A)            
EMPLOYEE RECEIVED A COPY OF THIS AGREEMENT AND THE CONFIDENTIALITY AGREEMENT FOR
REVIEW AND STUDY BEFORE HE/SHE WAS ASKED TO EXECUTE THEM;

 
(B)             
EMPLOYEE HAS READ SUCH AGREEMENTS CAREFULLY;

 
(C)             
EMPLOYEE HAS HAD SUFFICIENT OPPORTUNITY BEFORE HE/SHE EXECUTED SUCH AGREEMENTS
TO ASK QUESTIONS ABOUT NOT ONLY COMPANY, BUT ALSO THE PROVISIONS OF SUCH
AGREEMENTS AND THAT IF HE/SHE ASKED SUCH QUESTIONS HE/SHE RECEIVED COMPLETE AND
SATISFACTORY ANSWERS TO SAME;

 
(D)             
EMPLOYEE HAS BEEN AFFORDED THE OPPORTUNITY TO DISCUSS AND REVIEW THIS AGREEMENT
AND THE CONFIDENTIALITY AGREEMENT  WITH AN ATTORNEY OF HIS/HER CHOICE;

 
(E)             
EMPLOYEE UNDERSTANDS WHAT HIS/HER RIGHTS ARE UNDER THE AGREEMENTS AS WELL AS
HIS/HER OBLIGATIONS, ESPECIALLY THE ANCILLARY COVENANTS; AND

 
 
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(F)             
EMPLOYEE HAS READ AND UNDERSTANDS EACH AND EVERY PROVISION OF THE AGREEMENTS AND
DOES HEREBY ACCEPT AND AGREE TO THE SAME.

 
 
IN WITNESS WHEREOF, Employee has, on the date set forth below, affixed his/her
hand and Company has caused this Agreement to be executed by a duly authorized
officer, on the date set forth below.
 

      Employee:            
Date: 07/24/00
   
/s/ Mark Hilz
 
 
   
Signature
           
 
   
Mark Hilz
 

      Printed Name                             Company:            
Date 07/06/00
   
/s/ James H. Long
 
 
   
James H. Long,
Chairman Of The Board Of Directors
 

 
 
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Attachment "A'
 
To Employment Agreement
 
Salary shall be $9,583.33 per month, payable in accordance with Company's
standard pay policies and procedures, which currently provide for a bi-monthly
payroll period. Pay shall be prorated for any partial pay period, if any.
 
Within 90 days following the effective date of this Agreement, Company will
issue three separate stock option contracts to Employee, each granting seven
hundred thousand (700,000) shares of stock of Company. The first of these three
stock option contracts will vest over five (5) years, with 1/5 (20%) of the
total shares vesting each year for a period of five (5) years, based on
continued employment. The other two stock option contracts will vest over five
(5) years, but only upon attainment of certain performance goals as set forth in
a written plan which will be generated by Company at Company's sole discretion.
The percentage of ownership of Company is subject to dilution as Company issues
additional shares to Parent in return for additional capital contribution and
other types of share issuances.
 
Within 90 days following the effective date of this Agreement, Company's Parent,
Allstar Systems, Inc., will issue three separate stock option contracts to
Employee granting five thousand (5,000) shares of stock of Allstar Systems, Inc.
The first of these three stock option contracts will vest over five (5) years,
with 1/5 (20%) of the total shares vesting each year for a period of five (5)
years, based upon continued employment. The other two stock option contracts
will vest over five (5) years, but only upon attainment of certain performance
goals as set forth in a written plan which will be generated by Company at
Company's sole discretion.
 
Company will pay a quarterly cash bonus to Employee based upon performance as
compared to goals set forth by the Company, at the Company's sole discretion.
The initial goals and related bonus program is set forth in summary form on the
six (6) page document titled "Internetworking Sciences Corporation" attached
hereto as Attachment "B".
 
The compensation plan may be modified at any time, at the sole discretion of the
Board of Directors of the Company.
 
 
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