EXHIBIT 10









EXHIBIT 10.42




 




EMPLOYMENT AGREEMENT




 




This Employment Agreement

(the “Agreement”) by and between COAD

SOLUTIONS, INC., a Texas Corporation (the “Company”), a wholly owned

subsidiary of DESIGN AUTOMATION SYSTEMS,

INC., and RICHARD KYLE CARTER

(“Employee”) is hereby entered into and effective as of June 1, 1999.




 




RECITALS




 




The following statements are true and

correct:




 




As of the date of this

Agreement, the Company is engaged primarily in the business of providing

application management services and consulting.




 




Employee is employed

hereunder by the Company in a confidential relationship

wherein Employee, in the course of Employee’s employment with the Company, will

be instrumental in the development of the Company’s business and has and will

continue to become familiar with and aware of information as to the Company’s

customers, specific manner of doing business, including the processes,

techniques and trade secrets utilized by the Company, and future plans with

respect thereto, all of which has been and will be established and maintained

at great expense to the Company; this information is a trade secret and

constitutes the valuable good will of the Company.




 




Therefore, in consideration

of the mutual promises, terms, covenants and conditions set forth herein and

the performance of each, it is hereby agreed as follows:




 




AGREEMENTS




 




1.            Employment and Duties




 




(a)           The Company hereby employs Employee as

Vice-President, of the Company.  As

such, Employee shall have the responsibilities, duties and authority reasonably

accorded to and expected of such position and such other executive duties as

are assigned to him and will report directly to the President of COAD

SOLUTIONS, INC. as may be agreed between the parties or from time to time.  Employee hereby accepts this employment upon

the terms and conditions herein contained and, subject to Section 1 (c), agrees

to devote such time, attention and efforts as are reasonably necessary to

promote and further the business of the Company.




 




(b)           Employee shall adhere to, execute and fulfill all

reasonable and uniformly applied policies established by the Company.




 





























 




(c)           Employee shall not, during the term of Employee’s

employment hereunder, be engaged in any other business activity pursued for

gain, profit or other pecuniary advantage if such activity interferes with

Employee’s duties and responsibilities hereunder.  The foregoing limitations shall not be construed as prohibiting

Employee from making personal investments in such form or manner as will

neither require Employee’s services in the operation or affairs of the

companies or enterprises in which such investments are made nor violate the

terms of Section 3 hereof.




 




2.            Compensation.    For all services rendered by Employee, the

Company shall compensate Employee as follows:




 




(a)           Base Salary.  Employee’s billable rate minus $15.00 for each hour of billed

time payable on a twice monthly basis on the 5th and 20th of each month.




 




(b)           Executive Perquisites, Benefits and Other Compensation.  Employee shall be entitled to receive additional

benefits and compensation from the Company in such form and to such extent as

specified below:




 




(i)                                     Immediate

admittance for participation (without waiting period, pre-existing

condition limitation or other exception) of Employee under health, hospitalization,

disability, dental, life and other insurance plans that the Company may have in effect from

time to time, with the benefits provided to Employee under this clause (i) to

be at least equal to such benefits provided to key executives.




 




(ii)                                  Reimbursement

for all business travel and other out-of-pocket expenses reasonably incurred by

Employee in the performance of Employee’s services pursuant to this

Agreement.  All reimbursable expenses

shall be appropriately documented in reasonable detail by Employee upon

submission of any request for reimbursement, and in a format and manner

consistent with expense reporting policy of the Company.




 




(iii)                               The Company may

provide Employee with other executive perquisites including annualized stock

options in DESIGN, the parent company of COAD SOLUTIONS, INC., as may be

available to or deemed appropriate for Employee by the Board of Directors of

COAD and DESIGN and participation in all other Company-wide employee benefits

as available from time to time.




 




(iv)                              All bonuses and

annualized stock options to be reviewed semi-annually.




 




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3.            Non-Competition Agreement




 




(a)           Employee will not, during the period of Employee’s

employment by or with the Company, and for a period of one (1) year immediately

following the termination of Employee’s employment under this Agreement for any

reason other than the expiration of its term or termination by the Company

without cause, directly or indirectly, for Employee or on behalf of or in

conjunction with any other person, persons, company, partnership, corporation

or business of whatever nature:




 




(i)                                     call upon any

person who is, at that time, an employee of the Company in any capacity for the

purpose or with the intent of enticing such employee away from or out of the

employ of the Company; or




 




(ii)                                  call upon any

person or entity which is, at that time, or which has been, within one (1) year

prior to that time, a customer of the Company for the purpose of soliciting or

selling products or services in direct competition with the Company.




 




The foregoing covenant shall

not be deemed to prohibit Employee from acquiring as an investment not more

than three percent (3%) of the capital stock of a competing business, whose

stock is traded on a national securities exchange or over-the-counter.  The foregoing covenant shall not be deemed

to prohibit Employee from any business practice authorized by the Board of

Directors.




 




(b)           Because of the difficulty of measuring economic losses to

the Company as a result of a breach of the foregoing covenant, and because of

the immediate and irreparable damage that could be caused to the Company for

which it would have no other adequate remedy, Employee agrees that the

foregoing covenant may be enforced by the Company in the event of breach by

Employee, by injunctions and restraining orders.




 




(c)           It is agreed by the parties that the foregoing covenants

in this Section 3 impose a reasonable restraint on Employee in light of the

activities and business of the Company on the date of the execution of this

Agreement; but it is also the intent of the Company and Employee that such

covenants be construed and enforced in accordance with the changing activities,

business and locations of the Company throughout the term of this covenant,

whether before or after the date of termination of the employment of

Employee.  For example, if, during the

term of this Agreement, the Company engage in new and different activities,

enter a new business or establish new locations for their current activities or

business in addition to or other than the activities or business enumerated

under the Recitals above or the locations currently established




 




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therefor, then Employee will be precluded

from soliciting the customers or employees of such new activities or business,

except as specifically provided for herein.




 




(d)           The covenants in this Section 3 are severable and

separate, and the unenforceability of any specific covenant shall not affect the

provisions of any other covenant. 

Moreover, in the event any court of competent jurisdiction shall

determine that the scope, time or territorial restrictions set forth are

unreasonable, then it is the intention of the parties that such restrictions be

enforced to the fullest extent which the court deems reasonable, and the

Agreement shall thereby be reformed.




 




4.            Place of Performance




 




(a)           Employee’s duties shall be carried out in Austin, Texas,

except for traveling which may be involved in the ordinary course of Employee’s

duties.




 




(b)           The Employee may be asked to relocate at the expense of

the Company.




 




5.            Term;

Termination Rights on Termination.  The term of this Agreement shall begin June 1, 1999 and shall

continue thereafter on a year-to-year basis on the same terms and conditions

contained herein in effect as of the time of renewal.  This Agreement and Employee’s employment may be terminated in any

one of the following ways:




 




(a)           Death.  The

death of Employee shall immediately terminate this Agreement with no severance

compensation due to Employee’s estate. 

In the event of Employee’s death, Employee’s estate shall be entitled to

all Base Salary, bonus, stock options or other incentives earned through the

date of death.




 




(b)           Disability. 

If, as a result of incapacity due to physical or mental illness or

injury, Employee shall have been absent from full-time duties hereunder for two

(2) consecutive months, then thirty (30) days after receiving written notice

(which notice may occur before or after the end of such two (2) month period,

but which shall not be effective earlier than the last day of such two (2)

month period), the Company may terminate Employee’s employment hereunder

provided Employee is unable to resume full-time duties at the conclusion of

such notice period.  Also, Employee may

terminate Employee’s employment hereunder if Employee’s health should become

impaired to an extent that makes the continued performance of Employee’s duties

hereunder hazardous to Employee’s physical or mental health or life, provided

that Employee shall have furnished the Company with a written statement from a

qualified doctor to such effect and provided, further, that, at the Company’s

request made within thirty (30) days of the date




 




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of such written statement, Employee shall

submit to an examination by a doctor selected by the Company who is reasonable

acceptable to Employee or Employee’s doctor and such doctor shall have

concurred in the conclusion of Employee’s doctor.  In the event this Agreement is terminated as a result of

Employee’s disability, Employee shall receive from the Company sixty percent

(60%) of the Base Salary at the rate then in effect for whatever time period is

remaining under the Term of this Agreement or for one (1) year, whichever

amount is less, payable at regular pay intervals.  The Company may satisfy this obligation through provision of a

disability policy covering Employee that meets the terms of this Section, with

the premiums for such policy being paid by Company.




 




(c)           Good Cause. 

The Company may terminate the Agreement ten (10) days after written

notice to Employee for good cause, which shall mean: (1) Employee’s gross

negligence in the performance or intentional nonperformance (either of which

continuing for ten (10) days after receipt of written notice of need to cure)

of any of Employee’s material duties and responsibilities hereunder; (2)

Employee’s willful, material and irreparable breach of this Agreement; (3)

Employee’s willful dishonesty, fraud or misconduct with respect to the business

or affairs of the Company which materially and adversely affects the operations

or reputation of the Company; (4) Employee’s conviction of a felony crime; or

(5) chronic alcohol abuse or illegal drug abuse by Employee.  In the event of a termination for good

cause, as enumerated above, Employee shall have no right to any severance

compensation.




 




(d)           Without Cause. 

At any time after the commencement of employment, the Company or

Employee may, without cause, terminate this Agreement and Employee’s

employment, effective thirty (30) days after written notice is provided to the

Company or to the Employee as the case may be. 

Should Employee be terminated by the Company without cause during the

Term, Employee shall receive from the Company, at his option, either six (6)

months Base Salary (at the rate then in effect) payable in a lump-sum payment

due on the effective date of termination or twelve (12) months Base Salary

payable from time to time at regular intervals.  Further, any termination without cause by the Company shall

operate to invalidate the terms of Section 3. 

If Employee resigns or otherwise terminates Employee’s employment

without cause pursuant to this Section 5(d), Employee shall receive no

severance compensation and the terms of Section 3 shall be fully enforceable.




 




If termination of Employee’s

employment arises out of the Company’s failure to pay Employee on a timely

basis the amounts to which Employee is entitled under this Agreement or as a

result of any other breach of this Agreement by the Company, the Company shall

pay all amounts and damages to which Employee may be entitled as a result of

such breach, including interest thereon and all reasonable legal fees and

expenses and other costs incurred by




 




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Employee to enforce Employee’s rights

hereunder.  Further, none of the

provisions of Section 3 shall apply in the event this Agreement is terminated

as a result of a breach by the Company.




 




6.            Return

of Company Property.  All records,

designs, patents, business plans, financial statements, manuals, memoranda,

lists and other property delivered to or compiled by Employee by or on behalf

of the Company or their representatives, vendors or customers which pertain to

the business of the Company shall be and remain the property of the Company, as

the case may be, and be subject at all times to their discretion and

control.  Likewise, all correspondence,

reports, records, charts, advertising materials and other similar data

pertaining to the business, activities or future plans of the Company which is

collected by Employee shall be delivered promptly to the Company without

request by it upon termination of Employee’s employment.




 




7.            Inventions.  Employee shall disclose

promptly to the Company any and all significant conceptions and ideas for

inventions, improvements and valuable discoveries, whether patentable or not,

which are conceived or made by Employee, solely or jointly with another, during

the period of employment, and which are directly related to the business or

activities of the Company and which Employee conceives as a result of

Employee’s employment by the Company. 

Employee hereby assigns and agrees to assign all Employee’s interests

therein to the Company or its nominee. 

Whenever requested to do so by the Company, Employee shall execute any

and all applications, assignments or other instruments that the Company shall

deem necessary to apply for and obtain Letters Patent of the United States or

any foreign country or to otherwise protect the Company’s interest therein.




 




8.            Trade

Secrets.  Employee agrees

that Employee will not, during or after the Term of this Agreement with the

Company, disclose the specific terms of the Company’s relationships or

agreements with significant vendors or customers or any other significant and

material trade secret of the Company, to any person, firm, partnership,

corporation or business for any reason or purpose whatsoever.




 




9.            Indemnification.  In the event Employee is

made a party to any threatened, pending or completed action, suit or

proceeding, whether civil or administrative (other than an action by the

Company against Employee), by reason of the fact that Employee is or was

performing services under this Agreement, then the Company shall indemnify

Employee against all expenses (including attorneys’ fees), judgments and

amounts paid in settlement, as actually and reasonably incurred by Employee in

connection therewith.  In the event that

both Employee and the Company are made a party to the same third-party action,

complaint, suit or proceeding, the Company agrees to engage competent legal

representation, and Employee




 




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agrees to use the same representation,

provided that if counsel selected by Company shall have a conflict of interest

that prevents such counsel from representing Employee, Employee may engage

separate counsel and the Company shall pay all reasonable attorneys’ fees, of

such separate counsel.  Employee will

not be held liable to the Company for errors or omissions where Employee has

not exhibited gross, willful and wanton negligence and misconduct or performed

criminal and fraudulent acts which materially damage the business of the Company.  The indemnity provisions contained herein

shall be deemed to extend to protect Employee to the maximum extent permitted

by law.




 




10.         No Prior

Agreements.  Employee hereby

represents and warrants to the Company that the execution of this Agreement by

Employee and Employee’s employment by the Company and the performance of

Employee’s duties hereunder will not violate or be a breach of any written

agreement with a former employer, client or any other person or entity.  Employee agrees to indemnify the Company for

any claim, including, but not limited to, attorneys’ fees and expenses of

investigation, by any such third party that such third party may now have or

may hereafter come to have against the Company based upon or arising out of any

written non-competition agreement, invention or secrecy agreement between

Employee and such third party which was in existence as of or prior to the date

of this Agreement.  Company agrees to

indemnify Employee for any claim, including, but not limited to, attorneys’ fees

and expenses of investigation, by any third party that such third party may now

have or may hereafter come to have against Employee where there was not a

written non-competition agreement, invention or secrecy agreement between

Employee and such third party which was in existence as of or prior to the date

of this Agreement and where Employee committed no illegal or fraudulent act.




 




11.         Assignments;

Binding Effect.  Employee

understands that Employee has been selected for employment by the Company on

the basis of Employee’s personal qualifications, experience and skills.  Employee agrees, therefore, that Employee

cannot assign all or any portion of Employee’s performance under this

Agreement.  Subject to the preceding two

(2) sentences, this Agreement shall be binding upon, inure to the benefit of

and be enforceable by the parties hereto and their respective heirs, legal

representatives, successors and assigns.




 




12.         Complete

Agreement.  This Agreement

is not a promise of future employment. 

Employee has no oral representations, understandings or agreements with

the Company or any of its officers, directors or representatives covering the

same subject matter as this Agreement. 

This written Agreement is the final, complete and exclusive statement

and expression of the agreement between the Company and Employee and of all the

terms of this Agreement, and it cannot be varied, contradicted or supplemented

by evidence of any prior or




 




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contemporaneous oral or written

agreements.  This written Agreement may

not be later modified except by a further writing signed by a duly authorized

officer of the Company and Employee, and no term of this Agreement may be

waived except by writing signed by the party waiving the benefit of such term.




 




13.          Notice.  Whenever any notice is

required hereunder, it shall be given in writing addressed as follows:




 




To the Company:                                    COAD Solutions,

Inc.


3200 Wilcrest, Suite 370


Houston, Texas 77042




 




With a copy to:                                             Ronald B.

Pruitt


2950 North Loop West, Suite 270


Houston, Texas 77092






To Employee:                                                       Richard Kyle

Carter


6915 GENTLE OAK DRIVE


AUSTIN, TX 78749




 




Notice shall be deemed given

and effective three (3) days after the deposit in the U.S. mail of a writing

addressed as above and sent first class mail, certified, return receipt

requested, or when actually received. 

Either party may change the address for notice by notifying the other

party of such change in accordance with this Section 13.




 




14.          Severability; Headings.  If any portion of this

Agreement is held invalid or inoperative, the other portions of this Agreement

shall be deemed valid and operative and, so far as is reasonable and possible,

effect shall be given to the intent manifested by the portion held invalid or

inoperative.  The Section headings

herein are for reference purposes only and are not intended in any way to

describe, interpret, define or limit the extent or intent of the Agreement or

of any part hereof.




 




15.          Arbitration.  Any unresolved dispute or

controversy arising under or in connection with this Agreement shall be settled

exclusively by first mediation and then, if necessary, by arbitration,

conducted before a panel of three (3) arbitrators in Houston, Texas, in

accordance with the rules of the American Arbitration Association then in

effect.  The arbitrators shall not have

the authority to add to, detract from, or modify any provision hereof nor to

award punitive damages to any injured party. 

The arbitrators shall have the authority to order back-pay, severance

compensation, vesting of options (or cash compensation in lieu of vesting of

options), reimbursement of costs, including those incurred to enforce this

Agreement, and interest thereon in the event the arbitrators determine that

Employee was terminated without disability or good cause, as defined in

Sections 5(b) and




 




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5(c), respectively, or that the Company has

otherwise materially breached this Agreement. 

A decision by a majority of the arbitration panel shall be final and

binding.  Judgment may be entered on the

arbitrators’ award in any court having jurisdiction.  The direct expense of any arbitration proceeding shall be borne

by the company.




 




16.          Governing Law.  This Agreement shall in all

respects be construed according to the laws of the State of Texas with giving

effect to Texas conflicts laws provisions.




 




17.          Counterparts.  This Agreement may be

executed simultaneously in two (2) or more counterparts, each of which shall be

deemed an original and all of which together shall constitute but one and the

same instrument.




 




IN WITNESS

WHEREOF, the parties hereto have executed this Agreement as of the day and

year first above written.




 




	

   


  	

   


  	

  COMPANY:


  	

   


  	

   


  
	

   


  	

   


  	

  COAD

  SOLUTIONS, INC.


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

  By:


  	

   


  	

  /s/ Thomas E. Scheifler


  	

   


  	

   


  
	

  Name:


  	

   


  	

  Thomas E. Scheifler, Vice

  President


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

  EMPLOYEE:


  	

   


  	

   


  
	

   


  	

   


  	

   


  	

   


  	

   


  
	

   


  	

   


  	

  /s/ Richard Kyle Carter


  	

   


  	

   


  
	

   


  	

   


  	

  RICHARD KYLE CARTER


  	

   


  	

   


  





 




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