Exhibit 10.2


 


EMPLOYMENT AGREEMENT


 


THIS EMPLOYMENT AGREEMENT
(this “Agreement”), effective as
of the 1st day of August, 2003 (the “Effective
Date”), by and between Precis, Inc. (the “Company”), an Oklahoma corporation, and Judith Henkels, an
individual (the “Executive”) (the
Company and the Executive are collectively referred to as the “parties” or are individually referred to as
the “party”).


 


RECITALS


 


WHEREAS, the Company
deems the services of the Executive to be of great and unique value to the
business of the Company and the Company desires to assure both itself of
continuity of management and the Executive of continued employment; and


 


WHEREAS, the
Executive is a key management employee of the Company and is presently making
and is expected to continue making substantial contributions to the Company;
and


 


WHEREAS, it is in
the best interests of the Company and its shareholders to induce the Executive
to remain in the employ of the Company; and


 


WHEREAS, the
Executive and the Company previously entered into that certain Employment
Agreement dated June 8, 2001(“Prior
Agreement”); and


 


WHEREAS, this
Agreement shall be considered as a complete amendment and restatement of the
Prior Agreement; and


 


WHEREAS, the Company
desires to induce the Executive to remain in the employ of the Company by
providing to the Executive additional amounts of compensation and severance
benefits; and


 


WHEREAS, the
Executive is willing to remain in the employ to the Company in accordance with
and subject to the terms and conditions set forth in this Agreement.


 


NOW, THEREFORE, in
consideration of the mutual covenants hereinafter set forth and for good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Executive and the Company hereby agree as follows:


 


1.             Term.  The Company shall employ the Executive for a
period of three years commencing on the date hereof (the “Initial Term”), unless such employment
shall be terminated earlier as provided in this Agreement.  The employment of the Executive shall
continue after the Initial Term for successive periods of one year duration on
the same terms and conditions contained herein, until terminated in accordance
with the terms of this Agreement (the Initial Term and the Extended Term are
referred to as the “Term”).


 


2.             Nature
of Services; Employment; Duties; Employment Evaluations.


 


2.1          Executive
Services.  The
Company hereby employs the Executive for the Term as the Chief Executive
Officer and President, and the Executive shall perform reasonable services as
may, from time to time, be prescribed and directed by the Board of Directors of
the Company.  The Executive hereby
accepts employment and agrees to perform such duties and undertake such
responsibilities as are customarily performed by others holding executive
officer positions similar to that held by and assigned to the Executive in
similar businesses, subject to the general and customary supervision of the
Company’s Board of Directors. 
Notwithstanding anything contained herein to the contrary, the  position and duties of the Executive shall
be as from time to time designated by the Company’s Board of Directors.


 


1

















 


2.2          Compliance
with Policies and Code of Conduct.  During the Term, the Executive agrees to
serve the Company fully, diligently and competently, and to the best of the
Executive’s ability, experience and talent, in conformity with the policies and
code of conduct of the Company, in effect and as may be adopted, modified,
expanded or contracted from time to time.


 


2.3          Place
of Performance; Support Facilities.  The principal places of employment of
the  Executive shall be at the Company’s
principal executive offices in Grand Prairie, Texas or within the Dallas/Ft.
Worth area and the principal executive offices of the Company.  In performing the duties and fulfilling the
responsibilities to be performed and fulfilled by the Executive under this
Agreement, the Executive shall be provided by the Company with reasonable
facilities, services, and support.


 


2.4          Devotion
of Full Time and Attention; Conflicts of Interest.  The Executive agrees, during the Term, to
devote the Executive’s best efforts on a full-time basis to the performance of
the duties and responsibilities assigned to the Executive pursuant to this
Agreement or otherwise.  Executive
acknowledges and agrees that Executive owes a fiduciary duty of loyalty,
fidelity and allegiance to act at all times in the best interests of the
Company and its stockholders, and to do no act that would injure the Company’s
business, its interests, or its reputation. 
It is agreed that any direct or indirect interest in, connection with,
or benefit from any outside activities, particularly commercial activities, which
interest might in any way adversely affect the Company or any of its
affiliates, involves a possible conflict of interest.  In keeping with the Executive’s fiduciary duties to the Company
and its stockholders, Executive agrees that Executive will not knowingly become
involved in a conflict of interest with the Company or its affiliates, or upon
discovery thereof, allow such a conflict to continue.  Moreover, Executive agrees that Executive shall disclose to or
discuss with the Company’s General Counsel any facts or circumstances that
might involve such a conflict of interest that has not been disclosed in
writing to and approved by the Company’s Board of Directors.  The Executive shall not, without the prior
written disclosure to and consent of the Company’s Board of Directors, directly
or indirectly, render services of a business, professional or commercial nature
to or for the Executive’s own account or any other person, firm or entity that
engages in any other business or activity, whether or not competitive with that
of the Company or any affiliate of the Company.


 


2.5                               Resolution
of Conflicts of Interest.  The
Executive and the Company recognize that it is difficult and possibly
impossible to provide an exhaustive list of actions or interests that
constitute a ‘conflict of interest.” Moreover, the Executive and the Company
recognize that there are many borderline situations.  In some instances, full disclosure of facts by the Executive to
the Company’s General Counsel may be all that is necessary to enable Company or
its affiliate to protect its interests. 
In others, if no improper motivation appears to exist and the interests
of the Company or its affiliate have not suffered, prompt elimination of the
outside interest causing the conflict of interest will suffice.  In still others, it may be necessary for the
Company to terminate the employment relationship.  The Company and Executive agree that the Company’s Board of
Director’s determination of whether a conflict of interest exists will be
conclusive.  The Company reserves the
right to take such action as, in its judgment, will end the conflict.  The Company’s termination of the employment
relationship solely because the Executive violates this Section 2.5 shall
be a Voluntary Termination for purposes of this Agreement.


 


At the end of each calendar year, the Executive must report to the
Company’s Board of Directors all of their and their spouse’s investment
holdings.


 


2.6          Annual
Review.  On or
about the first day of January, 2004, and on or about the last day of each year
thereafter during the Term, the Compensation Committee of Company’s Board of
Directors shall evaluate the performance of the Executive under and consistent
with this Agreement and, in that connection, meet with and discuss any such
performance evaluation and the services of the Executive under this Agreement
with the Executive.


 


2

















 


2.7          Affiliate
Office and Director Positions.  During the Term, the Executive may be
nominated for election or appointed to serve as a  director or officer of the Company’s subsidiaries as determined
in the sole discretion of the Company’s Board of Directors.


 


3.             Compensation.  The Executive shall be entitled to
compensation for any and all services performed under this Agreement except as
may be otherwise agreed to in writing, by the parties, from the Effective Date
through the 31st day of July, 2006 of $180,000 per year inclusive of
any directors fees that the Executive may be entitled for services as a
director of the Company or any of its subsidiaries or affiliates), payable in
semi-monthly installments in arrears, in cash or cash equivalents in each month
that this Agreement is in effect (the “Base
Salary”), less, in any case, any deductions or withholdings required
by law.  The Base Salary, in the event
that this Agreement shall not be terminated, shall be reviewed at least
annually and may be increased consistent with generally salary increases for
the Company’s executive employees or as appropriate in light of the performance
of the Company or the Executive.  At a
minimum, annual Base Salary increases for the Executive will not be less than
7.5% of the prior year’s Base Salary.


 


3

















 


4.             Other
Benefits, Bonus and Incentive Compensation.


 


4.1                               Annual
Incentive and Bonus.  The Executive
shall be eligible for annual incentives and bonuses.  Incentives and bonuses distributed to an officer or to an
executive of the Company shall be in the sole discretion of the Compensation
Committee of the Company’s Board of Directors and in accordance with the
benefits, bonus and incentive plan adopted by the Compensation Committee of the
Company’s Board of Directors.  Other
incentives and bonuses related to Executive’s responsibilities as Chief
Executive Officer and President of the Company shall be awarded and paid at the
sole discretion of the Compensation Committee of the Company’s Board of
Directors.


 


In the event that the Company makes acquisitions outside the ordinary
course of business of the Company, directly or indirectly, during the Term, the
Bonus shall be determined as if such acquisitions had not taken place or,
alternatively, the Company’s Compensation Committee in its sole discretion
shall adjust the Bonus.


 


4.2                               Expense
Reimbursement.  The Company shall
reimburse the Executive for all reasonable expenses incurred by the Executive
in the performance of the Executive’s duties under this Agreement; provided,
however, that the Executive must furnish to the Company an itemized account,
satisfactory to the Company, in substantiation of such expenditures.


 


4.3                               Fringe
Benefits; Plan Participation.  The
Executive shall be entitled to such fringe benefits as may be provided from
time to time by the Company to other senior officers of the Company, including,
but not limited to, medical and insurance benefits and 401(k) and medical
savings account plans.  The Executive
shall be eligible to participate, in accordance with the terms of such plans as
they may be adopted, amended and administered from time-to-time, in incentive,
bonus, benefit or similar plans, including without limitation the Company’s
1999 Stock Option Plan, any other stock option, bonus or other equity ownership
plan in which employees are eligible to participate, any incentive bonus plan
and any other bonus, pension or profit sharing plans established and maintained
by the Company.  The Executive’s
participation in such plans shall be at such levels of participation as the
Compensation Committee may determine in its reasonable discretion based upon
the Executive’s responsibilities and performance and, when applicable, the
Company’s past compensation practices. 
Compensation and other benefits granted under such plans will be subject
to the actual provisions and conditions applicable to such plans.  The Company shall not by reason of this
Agreement be obligated to institute, maintain, or refrain from changing,
amending, or discontinuing, any such incentive compensation or employee benefit
program or plan, so long as such actions are similarly applicable to employees eligible
generally to participate or receive benefits under the program or plan.


 


4.4                               Company
Automobile.  During the Terms, the
Company shall provide an automobile for the Executive’s business and personal
use, or an automobile allowance of $650 per month as determined in the sole
discretion of the Executive.  Approval
by the Company’s Board of Directors of the automobile provided to the Executive
is not required.  However, the
automobile purchase price must be considered reasonable in nature.  The
automobile, if provided, will be a new automobile and will be


 


4

















 


replaced after two years of
use.  The Executive reserves the right
to purchase the automobile from the Company at the end of the two-year period
at the then net book value as defined under generally accepted accounting
principles.  The Company will provide
without cost to the Executive insurance as required by applicable state law on
the automobile.


 


In the event of a Change of Control, the Executive is entitled to
purchase the automobile at the then net book value as defined under generally
accepted accounting principles.


 


4.5                               Vacation
and Leave; Holidays.  During the
Term, Executive shall be entitled to take (i) four weeks of vacation leave with
pay (at the Executive’s Base Salary at the time such vacation leave is taken)
during each 12-month period of the Term commensurate with Executive’s executive
office position or positions with the Company, and (ii) reasonable periods of
sick leave with pay (at the Executive’s Base Salary at the time such sick leave
is taken) commensurate with Executive’s executive officer position or positions
with the Company, in accordance with Company policy as established by the Board
of Directors.  Any annual vacation leave
not taken by the Executive during a 12-month period shall not accumulate to
following periods.   The Executive is
not entitled to elect vacation compensation for any unused vacation.


 


4.6          Employment
Termination. 
In the event of Termination (as defined below) of the Executive’s
employment with the Company, the Company shall pay or provide the following:


 


4.6.1                     Lump Sum
Payment of Base Salary.  The Company
shall pay to the Executive in a lump sum an amount equal to the Base Salary
payable in accordance with and pursuant to Section 3 for the remaining
Term or following 36 months, whichever shall be the longer, to which the
Executive would have been entitled if the Executive had remained in the employ
of the Company for the remainder of unexpired portion of the Term or the
36-month period.    The lump sum payment
pursuant to this Section 4.6.1 shall be paid to the Executive on or before
the 15th day following Termination.  For
purposes of this agreement, all lump sum payments of Base Salary are for
Involuntary Terminations only.


 


5

















 


The Executive, at the Executive’s sole  discretion, shall have the right to elect to
receive the lump sum termination payment on a bi-weekly basis over the
remaining Term or up to a period of 36 months following Termination, whichever
shall be the longer, as if the Executive remained employed during the remaining
term, although the Executive’s employment shall have terminated on the date of
Termination.  The bi-weekly termination
payment represents the Executive’s Base Salary immediately prior to the
Termination divided by the number of bi-weekly payroll periods remaining in the
Term, immediately following date of Termination, or 72 bi-weekly payroll
periods, whichever shall be the longer.


 


4.7          Health,
Medical, Dental, Disability and Life Insurance.  The Company shall provide to the Executive
(i) until the Executive attains 65 years of age, health, medical, dental, and
disability insurance benefits (including coverage of the dependents of
Executive) comparable to those provided to the executive officers of the
Company either as a group or individually as of the date of Termination, and
(ii) payment of the insurance premiums on the Policy of Insurance required to
be maintained by the Company in accordance with and as provided by
Section 4.6, during the remaining and unexpired portion of the Term.


 


In the event of a Termination of the Executive’s employment as
described in 4.6.1, the Company shall provide to the Executive and the
Executive shall be entitled to Health, Medical, Dental, Disability, and Life
Insurance Benefits during the remaining and unexpired portion of the Term or
the 36 months following the Termination, whichever shall be the longer.


 


5.                                      No
Additional Compensation or Benefits; Unsecured Benefits; Withholdings.  Except provided in Sections 3 and 4 or as
otherwise determined by the Compensation Committee of the Company’s Board of
Directors, the Executive shall not be entitled to any other or further
compensation or benefits (including any insurance benefits) from the Company as
a result of the services to be performed under and pursuant to this Agreement
or otherwise.  In the event of
termination of this Agreement, all payments and benefits under this Agreement
shall cease effective upon Voluntary Termination or Involuntary Termination of
employment under this Agreement.  None
of the benefits or arrangements described in this Agreement shall be secured or
funded in any way, and each shall instead constitute an unfunded and unsecured
promise to pay money in the future exclusively from the general assets of the
Company.  The Company may withhold from
any compensation, benefits, or amounts payable under this Agreement all
federal, state, city, or other taxes as may be required pursuant to any law or
governmental regulation or ruling.


 


6.                                      Termination
Prior to Expiration of Term and Effects of such Termination.


 


6.1.         Company’s
Right of Termination. 
Notwithstanding any other provisions of this Agreement, the Company
shall have the right to terminate the Executive’s employment under this
Agreement at any time prior to the expiration of the Term following 30 days
advance written notice for any of the following reasons:


 


6

















 


6.1.1       For
Cause Termination. 
For “cause” upon the determination by the Company’s Board of Directors
that “cause” exists for the termination of the employment relationship with the
Executive.  As used in this
Section 6.1.1, the term “Cause”
shall mean


 


(a) the Executive has been convicted of a felony (which, through lapse
of time or otherwise, is not subject to appeal); or


 


(b) the Executive has willfully refused without proper legal reason to
perform the duties and responsibilities required of the Executive under this
Agreement which remains uncorrected for 30 days following written notice to the
Executive by the Company of such breach; or


 


(c) the Executive has willfully engaged in conduct that the Executive
knows or should know is materially injurious to the Company or any of its
subsidiaries.


 


It is expressly acknowledged and agreed by the parties that the
decision of whether Cause exists for termination of the employment relationship
with the Executive by the Company is solely with the determination of the
Company’s Board of Directors.  If the
Executive disagrees with the decision reached by the Company’s Board of
Directors, the dispute will be limited to whether the Company’s Board of
Directors reached its decision in good faith.


 


6.1.2       Without
Cause Termination. 
For any other reason whatsoever, with or without “cause,” in the sole
discretion of the Company’s Board of Directors.


 


6.1.3       Death.  Upon the Executive’s death.


 


6.1.4       Disability.  Upon the Executive becoming “disabled” so as
to entitle the Executive to benefits under the Company’s long-term disability
plan.  The term “Disabled” as used in
this Agreement shall mean, in the event a disability insurance policy is
provided or paid for by the Company covering the Executive at such time and is
in full force and effect, the definition of permanent disability set forth in
such policy.  If no such disability
policy is so maintained at such time and is then in full force and effect, the
term “Disabled” shall mean the inability of the Executive, as reasonably
determined by the Company’s Board of Directors by reason of physical or mental
disability to perform the duties required of the Executive under this Agreement
for a period of 120 days in any one-year period.  Successive periods of disability, illness or incapacity will be
considered separate periods unless the later period of disability, illness or
incapacity is due to the same or related cause and commences less than three
months from the ending of the previous period of disability.  Upon such determination, the Company may
terminate the Executive’s employment under this Agreement upon 10 days’ prior
written notice.  If any determination of
the Company with respect to Permanent Disability is disputed by the Executive,
the parties hereto agree to abide by the decision of a panel of three
physicians.  The Executive and Company
shall each appoint one member, and the third member of the panel shall be
appointed by the other two members.  The
Executive agrees to be available for and submit to examinations by such
physicians as may be directed by the Company. 
Failure to submit to any such examination may be treated by the Company
as an admission by the Executive of Permanent Disability.


 


6.1.5       Change
of Control. The occurrence of a “Change of
Control.”  For purposes of this Agreement,
the phrase “Change of Control” shall mean:


 


7

















 


(i)  any “person” (as such term is used in Sections
13(d) and 14(d)(2) of the Exchange Act but excluding any employee benefit plan
of the Company) is or becomes the “beneficial owner” (as defined in Rule 3d-3
under the Exchange Act), directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company’s
outstanding securities then entitled ordinarily (and apart from rights accruing
under special circumstances) to vote for the election of directors of the
Company; or


 


(ii)  the Board of Directors
shall approve a sale of all or substantially all of the assets of the Company;
or


 


(iii) the Board of Directors shall approve any merger, consolidation or
like business combination or reorganization of the Company, the consummation of
which would result in the occurrence of any event described in clause (i) or
(ii) of this Section 6.1.5.


 


The termination of the Executive’s employment
by the Company prior to the expiration of the Term shall constitute a
“Termination for Cause” if made pursuant to Section 6.1.1; the effect of
such termination is specified in Section 6.4.  The termination of the Executive’s employment by the Company
prior to the expiration of the Term shall constitute an “Involuntary
Termination” if made pursuant to Section 6.1.2 or Section 6.1.5; the
effect of such termination is specified in Section 6.5. The effect of the
employment relationship being terminated pursuant to Section 6.1.3 as a
result of the Executive’s death is specified in Section 6.6. The effect of
the employment relationship being terminated pursuant to Section 6.1.4 as
a result of the Executive becoming Disabled is specified in Section 6.7.


 


In the event of a Change of Control, the
Executive is obligated to continue employment with the Company for a term of 3
months, immediately following the Change of Control.  The Involuntary Termination becomes effective immediately
following the 3-month continued employment term.


 


6.2          The
Executive’s Right of Termination.  Notwithstanding any other provisions of this
Agreement, the Executive shall have the right to terminate the employment
relationship under this Agreement at any time prior to the expiration of the
Term following 30 days’ advance written notice for any of the following
reasons:


 


8

















 


6.2.1       Relocation.  The Executive is required by the Company to
be permanently relocated to a city more than 50 miles from the Grand Prairie,
Texas or is demoted from the position of Chief Executive Officer and President
of The Company, within 60 days after such relocation or demotion the Executive
provides the Company with a written notice that such relocation or demotion has
occurred and that the Executive intends to terminate the employment
relationship under this Section 6.2.1, and thereafter such relocation or
demotion is not corrected by the Company within 30 days.


 


6.2.2       The Company’s Breach.  Any material breach by the Company of any
material provision of this Agreement that remains uncorrected for 30 days
following receipt of written notice of such breach by the Executive to the
Company.


 


6.2.3       The
Executive’s Election to Terminate.  For any other reason whatsoever other than
pursuant to Section 6.2.1 or 6.2.2, in the sole discretion of the
Executive.


 


6.2.4       Change of Control.  The occurrence of a Change of Control.


 


The termination of the Executive’s employment
by the Executive prior to the expiration of the Term shall constitute an
“Involuntary Termination” if made pursuant to Sections 6.2.1, or 6.2.2 or
6.2.4; the effect of such termination is specified in Section 6.5.  The termination of the Executive’s employment
by the Executive prior to the expiration of the Term shall constitute a
“Voluntary Termination” if made pursuant to Section 6.2.3; the effect of
such termination is specified in Section 6.3.


 


6.3          The
Executive’s Voluntary Termination.  Upon a “Voluntary Termination” of the
employment relationship by the Executive prior to expiration of the Term, all
future compensation that the Executive is entitled and all future benefits for
which the Executive is eligible shall cease and terminate as of the date of
termination. The Executive shall be entitled to pro rata salary through the
date of such termination, but the Executive shall not be entitled to any Bonus
or other incentive compensation not yet paid at the date of such
termination.  The effect and consequences
of the Executive’s Voluntary Termination under this Agreement shall be
independent of the Executive’s rights under any stock option agreement or plan
or employee benefit award agreement.


 


6.4          Termination
for Cause. 
Upon a “Termination for Cause” of the Executive’s employment
relationship by the Company prior to expiration of the Term, all future
compensation to which the Executive is entitled and all future benefits for
which the Executive is eligible shall cease and terminate as of the date of
termination. The Executive shall be entitled to pro rata salary through the
date of such termination, but the Executive shall not be entitled to any
individual bonuses or individual incentive compensation not yet paid at the
date of such termination. Upon termination of the employment relationship for
Cause, all of the Executive’s interests under the any stock option agreement or
plan or employee benefit award agreement shall be canceled effective as of the
date of such termination of employment and the Executive shall not be entitled
to any compensation or benefits thereunder from and after the date of such
termination of employment.


 


6.5          Involuntary
Termination. 
Upon an Involuntary Termination of the employment relationship by either
the Company or the Executive prior to expiration of the Term, the Executive
shall be entitled, in consideration of the Executive’s continuing obligations
under this Agreement after such termination (including, without limitation, the
Executive’s non-competition obligations), to receive the compensation and
benefits pursuant to and in accordance with Sections 3 and 4.  The Executive shall not be under any duty or
obligation to seek or accept other employment following Involuntary Termination
and, subject to the Executive complying with the Executive’s continuing
obligations (including non-competition


 


9

















 


obligations), the amounts due
the Executive hereunder shall not be reduced or suspended if the Executive
accepts subsequent employment.  The
Executive’s rights under this Section 6.5 are the Executive’s sole and
exclusive rights against the Company or its affiliates, and the Company’s sole
and exclusive liability to the Executive under this Agreement, in contract,
tort, or otherwise, for any Involuntary Termination of the employment
relationship.  The Executive covenants
not to sue or lodge any claim, demand, or cause of action against the Company
based on Involuntary Termination for any compensation and benefit the Executive
shall be entitled to receive pursuant to this Section 6.5.  If the Executive breaches this covenant, the
Company shall be entitled to recover from the Executive all sums expended by
the Company (including costs and attorneys fees) in connection with such suit,
claim, demand, or cause of action.  Upon
Involuntary Termination of the employment relationship by either the Company or
the Executive, the entirety of the Executive’s unvested rights under any stock
option agreement or plan or employee benefit award agreement shall vest
immediately upon such termination of the employment relationship and the
Company shall at that time.


 


6.6          Termination
Caused by Death. 
Upon termination of the employment relationship as a result of the
Executive’s death, the Executive’s heirs, administrators, or legatees shall be
entitled to the Executive’s pro rata salary through the date of such
termination, but the Executive’s heirs, administrators, or legatees shall not
be entitled to any individual bonuses or individual incentive compensation not
yet paid to the Executive at the date of such termination. Upon the Executive’s
death, the Executive’s heirs, administrators, or legatees shall be entitled
only to the compensation and benefits that the Executive under the terms and
conditions of any stock option agreement or plan or employee benefit award
agreement that the Executive has at the date of death or as a result of the
Executive’s death.


 


6.7          Termination
Caused by Disability. 
The Disability of the Executive and termination of the Executive’s
employment termination, the Executive shall be entitled to receive the Base
Salary plus any bonus compensation earned but not yet paid, less any cash
benefits received by the Executive under any disability insurance paid for by
the Company and the Executive’s all other rights under this Agreement shall
terminate.  Provided, however, during
any period from the date of the commencement of period that the Executive is
absent from work due to sickness, disability or incapacity and until
commencement of the Executive’s receipt of payments of the monthly disability
benefits under any disability policy maintained by the Company, the Executive
shall continue to be entitled to receive and the Company shall pay and provide
to compensation and benefits under and in accordance with Section 3 and 4
during the remaining and unexpired portion of the Term.


 


6.8          Offsets.  In all cases, the compensation and benefits
payable to the Executive under this Agreement upon termination of the
employment relationship shall be offset against any amounts to which the
Executive may otherwise be entitled under any and all severance plans and
policies of the Company or its affiliates.


 


10

















 


7.             Ownership
and Protection of Information; Copyrights.


 


7.1          Access
to Proprietary Information.  The Company shall disclose to the Executive, or place the
Executive in a position to have access to or develop, trade secrets or
confidential information of the Company or its affiliates; and/or shall entrust
the Executive with business opportunities of the Company or its affiliates;
and/or shall place the Executive in a position to develop business good will on
behalf of the Company or its affiliates.


 


7.2          Ownership
of Information. 
All information, ideas, concepts, improvements, discoveries, and inventions,
whether patentable or not, which are conceived, made, developed or acquired by
the Executive, individually or in conjunction with others, during the
Executive’s employment by the Company (whether during business hours or
otherwise and whether on the Company’s premises or otherwise) that relate to
the Company’s business, products or services (including, without limitation,
all such information relating to corporate opportunities, research, financial
and sales data, pricing and trading terms, evaluations, opinions,
interpretations, acquisition prospects, the identity of customers or their
requirements, the identity of key contacts within the customer’s organizations
or within the organization of acquisition prospects, or marketing and
merchandising techniques, prospective names, and marks) shall be disclosed to
the Company and are and shall be the sole and exclusive property of the
Company.  Moreover, all documents,
drawings, memoranda, notes, records, files, correspondence, manuals, models,
specifications, computer programs, e-mail, voice mail, electronic databases,
maps and all other writings or materials of any type embodying any of such
information, ideas, concepts, improvements, discoveries, and inventions are and
shall be the sole and exclusive property of the Company.


 


7.3          Intellectual
Property Development. 
If, during the Executive’s employment by the Company, the Executive
creates any original work of authorship fixed in any tangible medium of
expression which is the subject matter of copyright (such as videotapes,
written presentations on acquisitions, computer programs, drawings, maps,
architectural renditions, models, manuals, brochures, or the like) relating to
the Executive’s business, products, or services, whether such work is created
solely by the Executive or jointly with others (whether during business hours
or otherwise and whether on the Employer’s premises or otherwise), the
Executive shall disclose such work to the Company.  The Company shall be deemed the author of such work if the work
is prepared by the Executive in the scope of the Executive’s employment; or, if
the work is not prepared by the Executive within the scope of the Executive’s
employment but is specially ordered by the Company as a contribution to a
collective work, as a part of an audio-visual work, as a translation, as a
supplementary work, as a compilation, or as an instructional text, then the
work shall be considered to be work made for hire and the Company shall be the
author of


 


11

















 


the work.  If such work relating to the Company’s
business is neither prepared by the Executive within the scope of the
Executive’s employment nor a work specially ordered and is deemed to be a work
made for hire, then the Executive hereby agrees to assign, and by these
presents does assign, to the Company all of the Executive’s worldwide right,
title, and interest in and to such work and all rights of copyright
therein.  If such work has no relation
to the Company’s business, then the title and rights of copyright related
thereto will belong to the Executive.


 


7.4          Non-disclosure.  The Executive acknowledges that the business
of the Company and its affiliates is highly competitive and that their
strategies, methods, books, records, and documents, their technical information
concerning their products, equipment, services, and processes, procurement
procedures and pricing techniques, the names of and other information (such as
credit and financial data) concerning their customers and business affiliates,
all comprise confidential business information and trade secrets which are
valuable, special, and unique assets that the Company or its affiliates use in
their business to obtain a competitive advantage over their competitors.  The Executive further acknowledges that
protection of such confidential business information and trade secrets against
unauthorized disclosure and use is of critical importance to the Company and
its affiliates in maintaining their competitive position. The Executive hereby
agrees that the Executive will not, at any time during or after his or her
employment by the Company, make any unauthorized disclosure of any confidential
business information or trade secrets of the Company or its affiliates, or make
any use thereof, except in the carrying out of the Executive’s employment
responsibilities under this Agreement; provided, however, that these
restrictions shall not apply to (i) such portions of any information treated as
confidential information or trade secrets by the Company or its affiliates that
in fact become publicly available other than through the action of the
Executive, or (ii) such portions of information which, although it was treated
as confidential or a trade secret at the time of its creation, is no longer confidential
or a trade secret at the time of termination of the Executive’s employment by
the Company, and provided further that such restrictions shall not apply to the
portions of such information that is or becomes part of the Executive’s general
business knowledge or experience. The Company’s affiliates shall be third party
beneficiaries of the Executive’s obligations under this Section 8.  As a result of the Executive’s employment by
the Company, the Executive may also from time to time have access to, or
knowledge of, confidential business information or trade secrets of third
parties, such as customers, suppliers, partners, joint venturers, and the like,
of the Company and its affiliates.  The
Executive also agrees to preserve and protect the confidentiality of such third
party confidential information and trade secrets to the same extent, and on the
same basis, as the Company has agreed to protect and preserve such third party
confidential information and trade secrets. 
These obligations of confidence apply irrespective of whether the
information has been reduced to a tangible medium of expression (e.g., is only
maintained in the minds of Company’s employees) and, if it has been reduced to
a tangible medium, irrespective of the form or medium in which the information
is embodied (e.g., documents, drawings, memoranda, notes, records, files,
correspondence, manuals, models, specifications, computer programs, e-mail,
voice mail, electronic databases, maps and all other writings or materials of
any type).


 


7.5          Information
Re-delivery Upon Termination.  Upon termination of the Executive’s
employment with the Company, for any reason, the Executive promptly shall
deliver to the Company all written materials, records, videotape, computer
programs, drawings, maps, architectural renditions, models, manuals, brochures,
and other documents made by, or coming into the possession of, the Executive
during the period of the Executive’s employment by the Company that are owned
by the Company or its affiliates or which contain or disclose confidential
business information or trade secrets of the Company or its affiliates, and all
copies thereof.


 


7.6          Assistance
in Protection. 
Both during the period of the Executive’s employment by the Company and
thereafter, the Executive shall assist the Company and its nominee, at any
time, at the Company’s cost, in the protection of the Company’s worldwide
right, title, and interest in and to information, ideas, concepts,
improvements, discoveries, and inventions, and its copyrighted works, including
without limitation, the execution of all formal assignment documents requested
by the Company or its nominee and the execution of all lawful oaths and
applications for applications for patents and registration of copyright in the
United States and foreign countries.


 


7.7          Remedies.  The Executive acknowledges that money
damages would not be sufficient remedy for any breach of this Section 7 by
the Executive.  After provision of 15
days advance written notice specifying the Company’s basis for belief that the
Executive may have violated the provisions of Section 7, and if the
Executive fails to remedy such alleged breach within such 15 period of time,
the Company shall be entitled to enforce the provisions of this Section 7
by terminating any payments then owing to the Executive under this


 


12

















 


Agreement and/or to specific
performance and injunctive relief as remedies for such breach or any threatened
breach.  Such remedies shall not be
deemed the exclusive remedies for a breach of this Section 7, but shall be
in addition to all remedies available at law or in equity to the Company,
including the recovery of damages from the Executive and the Executive’s agents
involved in such breach and remedies available to the Company pursuant to other
agreements with the Executive.


 


8.             Non-competition
Obligations.


 


8.1          Access
to Proprietary Information.  The Company shall disclose to the Executive, or place the
Executive in a position to have access to or develop, trade secrets or
confidential information of the Company or its affiliates; and/or shall entrust
the Executive with business opportunities of the Company or its affiliates;
and/or shall place the Executive in a position to develop business good will on
behalf of the Company or its affiliates.


 


8.2          Non-disclosure.  As part of the consideration for the
compensation and benefits to be paid to the Executive hereunder; to protect the
trade secrets and confidential information of the Company or its affiliates that
will be disclosed or entrusted to the Executive, the business goodwill of the
Company or its affiliates that will be developed in the Executive, or the
business opportunities that will be disclosed or entrusted to the Executive by
the Company or its affiliates; and as an additional incentive for the Executive
to enter into this Agreement, the Company and the Executive agree to the
non-competition provisions of this Section 8.  The Executive agrees that during the period of the Executive’s
non-competition obligations hereunder, the Executive will not, directly or
indirectly for the Executive or for others, in any geographic area or market
where the Company or any of its affiliated companies are conducting any
business as of the date of termination of the employment relationship or have
during the previous 12 months conducted any business: (i) engage in any
business competitive with the business conducted by the Company; (ii) render
advice or services to, or otherwise assist, any other person, association, or
entity who is engaged, directly or indirectly, in any business competitive with
the business conducted by the Company; (iii) induce any employee of the Company
or any of its affiliates to terminate his or her employment with the Company or
its affiliates, or hire or assist in the hiring of any such employee by any
person, association, or entity not affiliated with the Company.  A competitive business is defined as any
business that sells or produces a healthcare membership savings card business
or distributes its product and/or services through a network marketing
strategy.  These non-competition
obligations shall extend for so long as the Executive is employed by the
Company or, if the employment relationship terminates prior to the expiration
of the Term, for a period of three years following termination of the
Executive’s employment relationship.


 


8.3          Remedies.  The Executive understands that the foregoing
restrictions may limit the Executive’s ability to engage in certain businesses
anywhere in the world during the period provided for above, but acknowledges
that the Executive will receive sufficiently high remuneration and other
benefits (e.g., the right to receive compensation under this Agreement for the
remainder of the Term upon Termination) under this Agreement to justify such
restriction.  The Executive acknowledges
that money damages would not be sufficient remedy for any breach of this
Section 8 by the Executive, and the Company shall be entitled to enforce
the provisions of this Section 8 by terminating any payments then owing to
the Executive under this Agreement and/or to specific performance and
injunctive relief as remedies for such breach or any threatened breach. Such
remedies shall not be deemed the exclusive remedies for a breach of this
Section 8, but shall be in addition to all remedies available at law or in
equity to the Company, including, without limitation, the recovery of damages
from the Executive involved in such breach and remedies available to the
Company pursuant to other agreements with the Executive.


 


8.4          Judicial
Modification. 
It is expressly understood and agreed that the Company and the Executive
consider the restrictions contained in this Section 8 to be reasonable and
necessary to protect the proprietary information of the Company. Nevertheless,
if any of the aforesaid restrictions are found by a court having jurisdiction
to be unreasonable, or overly broad as to geographic area or time, or otherwise
unenforceable, the parties intend for the restrictions therein set forth to be
modified by such courts so as to be reasonable and enforceable and, as so
modified by the court, to be fully enforced.


 


13

















 


9.             Submission
to Mediation and Arbitration.  Any “Dispute” that cannot be resolved by the
parties shall be submitted to mediation before a mediator selected by the
parties.  The parties shall bear their
own costs for mediation and the costs of the mediator shall be borne equally.  If the parties are unable to select a
mediator within 15 days or if the Dispute is not resolved as a result of the
mediation within 60 days (or such other period as may be agreed by the
parties), either party may submit the matter to arbitration for final, binding
and exclusive settlement by three arbitrators in accordance with the Commercial
Arbitration Rules of the American Arbitration Association in effect on the date
of such controversy or claim.  Any such
arbitration shall take place in Dallas, Texas and shall be conducted before
three arbitrators.  The parties hereby
submit to the jurisdiction of the courts (federal and state) in Dallas, Texas.
The arbitrators shall have all the powers of an Texas court of law and equity,
including the power to order specific performance of this agreement and the production
of relevant and unprivileged documents by one party for any inspection and
duplication by the other party prior to any hearing.  Any arbitration decision pursuant to this Section 9 shall be
final and binding upon the parties and judgment thereon may be entered in any
court of competent jurisdiction.  Costs
incurred by the parties in carrying on any arbitration proceeding hereunder
(including reasonable attorneys’ fees and arbitration fees) shall be determined
by the arbitrators by reference to fault. 
Nothing in this Agreement shall limit the right of the parties, before
and during such arbitration, to have recourse to such judicial remedies,
including preliminary injunction and attachment, as would be available in the
absence of this Section 9.  For
purposes of this Agreement, the term “Dispute”
means any dispute or difference which arises between the parties in connection
with or arising out of this Agreement (including, without limitation, any
dispute as to the termination or invalidity of this Agreement or any provision
of it).


 


10.          Miscellaneous.


 


10.1        Maintenance
of Privacy Rights. 
The Executive shall refrain, both during the employment relationship and
after the employment relationship terminates, from publishing any oral or
written statements about the Company, any of its subsidiaries or affiliates, or
any of such entities’ officers, employees, agents or representatives that are
slanderous, libelous, or defamatory; or that disclose private or confidential
information about the Company, any of its subsidiaries or affiliates, or any of
such entities’ business affairs, officers, employees, agents, or
representatives; or that constitute an intrusion into the seclusion or private
lives of the Company, any of its subsidiaries or affiliates, or any of such
entities’ officers, employees, agents, or representatives; or that give rise to
unreasonable publicity about the private lives of the Company, any of its
subsidiaries or affiliates, or any of such entities’ officers, employees,
agents, or representatives; or that place the Company, any of its subsidiaries
or affiliates, or any of such entities’ officers, employees, agents, or
representatives in a false light before the public; or that constitute a
misappropriation of the name or likeness of the Company, any of its
subsidiaries or affiliates, or any of such entities’ officers, employees,
agents, or representatives.  A violation
or threatened violation of this prohibition may be enjoined by court of
competent jurisdiction.  The rights
afforded the Company and its affiliates under this Section 10.1 are in
addition to any and all rights and remedies otherwise afforded by law.


 


10.2        Notices.  For purposes of this Agreement, notices and
all other communications provided for herein shall be in writing and shall be
deemed to have been duly given when personally delivered or when mailed by
United States registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:


 


	
   

  	
  If the Company, to:

  	
   

  	
  Precis, Inc.

  
	
   

  	
   

  	
   

  	
  2040 North Highway 360

  
	
   

  	
   

  	
   

  	
  Grand Prairie, Texas 75050

  
	
   

  	
   

  	
   

  	
  Attention: Dino Eliopoulos, Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  If the Executive, to:

  	
   

  	
  [                                  ]

  
	
   

  	
   

  	
   

  	
  [                                  ]

  
	
   

  	
   

  	
   

  	
  [                  ],
  Texas
  [                  ]

  



 


Either party may furnish a change of address to the other in writing in
accordance herewith, except that notices of changes of address shall be
effective only upon receipt.


 


14

















 


10.3        Applicable
Law.  This
Agreement shall be governed in all respects by the laws of the State of Texas,
excluding any conflict-of- law rule or principle that might refer the
construction of the Agreement to the laws of another State or country.


 


10.4        Waiver.  No failure by either party hereto at any
time to give notice of any breach by the other party of, or to require
compliance with, any condition or provision of this Agreement shall be deemed a
waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. Any term or provision of this Agreement may be waived
in writing at any time by a party, if the party is entitled to the benefits
thereof.  No such waiver shall, unless
explicitly stated, be a continuing waiver. 
No failure to exercise or delay in exercising any right hereunder shall
constitute a waiver thereof.  The
failure or delay of any party at any time to require performance by another
party of any provision of this Agreement, even if known, shall not affect the
right of such party to require performance of that provision or to exercise any
right, power or remedy under this Agreement. 
Any waiver by any party of any breach of any provision of this Agreement
shall not be construed as a waiver of any continuing or succeeding breach of
such provision, a waiver of any continuing or succeeding breach of such right,
power or remedy under this Agreement. 
No notice to or demand on any party in any case shall, of itself,
entitle such party to any other or further notice or demand in similar or other
circumstances.


 


10.5        Effect
of Invalid Provisions.  It is a desire and intent of the parties that the terms,
provisions, covenants, and remedies contained in this Agreement shall be
enforceable to the fullest extent permitted by law.  If any such term, provision, covenant, or remedy of this
Agreement or the application thereof to any person, association, or entity or
circumstances shall, to any extent, be construed to be invalid or unenforceable
in whole or in part, then such term, provision, covenant, or remedy shall be
construed in a manner so as to permit its enforceability under the applicable
law to the fullest extent permitted by law. 
In any case, the remaining provisions of this Agreement or the
application thereof to any person, association, or entity or circumstances
other than those to which they have been held invalid or unenforceable, shall
remain in full force and effect. In the event any provision of this Agreement
may be construed in two or more ways, one of which would render the provision
invalid or otherwise voidable or unenforceable and another of which would
render the provision valid and enforceable, such provision shall have the
meaning which renders it valid and enforceable.


 


10.6        Assignment.  This Agreement shall be binding upon and
inure to the benefit of the Company and any other person, association, or
entity which may hereafter acquire or succeed to all or substantially all of
the business or assets of the Company by any means whether direct or indirect,
by purchase, merger, consolidation, or otherwise. The Executive’s rights and
obligations under Agreement are personal and such rights, benefits, and
obligations of the Executive shall not be voluntarily or involuntarily
assigned, alienated, or transferred, whether by operation of law or otherwise,
without the prior written consent of the Company.


 


10.7        Entire
Agreement. 
Except as provided in (1) written company policies promulgated by the
Company dealing with issues such as securities trading, business ethics,
governmental affairs and political contributions, consulting fees, commissions
or other payments, compliance with law, investments and outside business
interests as officers and employees, reporting responsibilities, administrative
compliance, and the like, or (2) any signed written agreements
contemporaneously or hereafter executed by the Company and the Executive, this
Agreement constitutes the entire agreement of the parties with regard to such
subject matters, and contains all of the covenants, promises, representations,
warranties, and agreements between the parties with respect to the Executive’s
employment relationship with the Company and the term and termination of such
relationship, and replaces and merges previous agreements and discussions
pertaining to the employment relationship between the Company and the
Executive. Specifically, but not by way of limitation, the Employment Agreement
dated June 8, 2001 between the Company, The Capella  Group, Inc. and the Executive is hereby
canceled and the Executive hereby irrevocably waives and renounces all of the
Executive’s rights and claims under such June 8, 2001 Employment
Agreement.  Any modification of this
Agreement will be effective only if it is in writing and signed by each party
whose rights hereunder are affected thereby.


 


10.8        Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original and all of
which together shall be deemed to be a single agreement.


 


15

















 


10.9        Headings
and Captions; Interpretation.  In this Agreement, unless the context
otherwise requires, (i) references to Sections are to Sections of this
Agreement; (ii) use of any gender includes the other genders; (iii) any
reference to a “day” (including
within the phrase “Business Day)
shall mean a period of 24 hours running from midnight to midnight; (iv) a
reference to any other document referred to in this Agreement is a reference to
that other document as amended, varied, modified or supplemented at any time;
(v) where a word or phrase is given a particular meaning, other parts of speech
and grammatical forms of that word or phrase shall have corresponding meanings;
(vi) reference to an “authorization”
includes any authorization, consent, order, approval, resolution, licence,
exemption, permission, notarization, recording, filing and registration; (vii)
a reference to this “Agreement” or
any other agreement or document shall be construed as a reference to it as
amended, or modified from time to time; and a reference to “affiliate” or “affiliated”means an entity that directly or indirectly through
one or more intermediaries, controls, is controlled by, or is under common
control with the Company.  The headings
in this Agreement are inserted for convenience only and shall not be taken into
consideration in the interpretation or construction of this Agreement.


 


IN WITNESS WHEREOF,
parties have duly executed this Agreement in multiple originals to be effective
on the date first stated above.


 


	
  “Company”

  	
  PRECIS, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ DINO ELIOPOULOUS

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
  August 1, 2003

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  “Executive”

  	
   

  
	
   

  	
  /s/ JUDITH H. HENKELS

  	
   

  	
   

  	
  Judith H. Henkels

  
	
   

  	
   

  	
   

  	
  Chief Executive Officer and President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
  August 1, 2003

  	
   

  
										



 


16