** Exhibit 10.12**

 

SUPPLEMENTAL INFORMATION TO BE FURNISHEDWITH REPORTS FILED PURSUANT TO

SECTION 15(d) OF THE EXCHANGE ACT BYNON-REPORTING ISSUERS

 

EMPLOYMENT AGREEMENT

 

EMPLOYMENT AGREEMENT (the“Agreement”) effective as of the 1st day of June,2000 betweenAMERICAN COMMERCE SOLUTIONS, INC., a Delaware corporation (together with itssuccessors and assigns referred to herein as the “Corporation”), with principalexecutive offices located at 1400 Chamber Drive, Bartow, FL 33830; and DanielL.  Hefner residing at 1502 N.  Taylor Rd., Brandon, Florida (the “Executive”).

 

W I T N E S S E T H:

 

WHEREAS, the Corporation desires toemploy Executive as the Executive VicePresident of American CommerceSolutions, Inc.  to engage in suchactivities and to render such services under the terms and conditions hereofand has authorized and approved the execution of this Agreement; and

 

WHEREAS, Executive desires to beemployed by the Corporation under theterms and conditions hereinafterprovided;

 

NOW,THEREFORE, in consideration of the mutual covenants and undertakings hereincontained, the parties agree as follows:

 

1. EMPLOYMENT, DUTIES AND ACCEPTANCE.

 

1.1SERVICES.  The Corporation herebyemploys Executive, for the Term(as hereinafter defined in Section 2hereof), to render services to the business and affairs of the Corporation in theoffice referenced in the recitals hereof and, in connection therewith, shallperform such duties as directed by the Board of Directors of the Corporation fromtime to time, in its reasonable discretion, and shall perform such other dutiesas shall be consistent with the responsibilities of such office(collectively the “Services”). Executive shall perform activities related to such office as he shall reasonablybe directed or requested to so perform by the Corporation’s Board of Directors,to whom he shall report.  Executiveshall use his best efforts, skill and abilities to promote theinterests of the Corporation and its subsidiaries.

 

1.2ACCEPTANCE.  Executive hereby acceptssuch employment and agrees to render the Services.

 

1.3REPRESENTATIONS OF THE EXECUTIVE.  TheExecutive represents andwarrants to the Corporation that hisexecution and delivery of this Agreement, his performance of the Serviceshereunder and the observance of his other obligations contemplated hereby willnot (i) violate any provisions of or require the consent or approval ofany party to any agreement, letter of intent or other document to which he is aparty or (ii) violate or conflict with any arbitration award, judgment or decreeor other restriction of any kind to or by which he is subject or bound.

 

1.4EXECUTIVE’S ABILITY TO CONTRACT.  TheExecutive has no ability toindependently contract unless authorized,in writing, by the Executive Committee of the Board of Directors or the fullBoard of Directors for a specific contract.

 

2. TERM OF EMPLOYMENT.

 

The term of Executive’s employmentunder this Agreement (the “Term”) shallcommence on June 1, 2000 and shallterminate on May 31, 2003, unless sooner terminated pursuant to Sections 9 or5.1 of this Agreement; provided, however, if the Corporation shall fail to giveExecutive notice of non-renewal not less than 60 days prior to the scheduledexpiration of the term hereof, the Term shall automatically be extended foran additional two (2) year period. Notwithstanding anything to the contrary contained herein, theprovisions of

 

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this Agreement governing Protection ofConfidential Information shall continuein effect as specified in Section 10hereof.

 

3. BASE SALARY, EXPENSE REIMBURSEMENT AND STOCK OPTIONS.

 

3.1BASE SALARY.  During the Term, as fullcompensation for theServices, the Corporation agrees to payExecutive a minimum base salary (“Base Salary”) at the annual rate of$60,000 for the period from June 1, 2000 to May 31, 2000.  Such Base Salary shall be (i) increased four percent (4%)annually effective June 1st of each year during the term of thisAgreement, (ii) reviewed periodically for possible increasespromptly after each future acquisition by the Corporation of any othercorporation or business or other material increase in theCorporation’s revenues or scope of the Corporation’s business and (iii) renegotiatedin good faith effective as of December 15, 2002 for possible increasebased upon the Corporation’s historical performance and projections for futureperformance.  Such Base Salary shall besubject to withholding and other applicable taxes, payable during the termof this Agreement in accordance with the Corporation’s customary paymentpractices, but not less frequently than monthly.

 

3.2BUSINESS EXPENSE REIMBURSEMENT.  Uponsubmission to, and approvalby an officer of the Corporation designatedby the Board of Directors of the Corporation, of a statement of expenses,reports, vouchers or other supporting information, which approval shall begranted or withheld based on the Corporation’s policies in effect at suchtime, the Corporation shall promptly reimburse Executive for allreasonable business expenses actually incurred or paid by himduring the Term or renewals thereof in the performance of the Services,including, but not limited to, expenses for entertainment, travel and similaritems.

 

3.3STOCK OPTION AGREEMENT.  In addition tothe salary hereinaboveprovided, the Executive shall be grantedoptions to purchase 100,000 shares of the Corporation’s Common Stock as ofJune 1 of each year during the Term of this Agreement at an exercise price equalto the average of the closing bid and asked price of the Corporation’s CommonStock during month of May immediately preceding said June 1, pursuant tothe terms of the Stock Option Agreement between the Corporation and theExecutive executed concurrently herewith.

 

4. PROFIT SHARING.

 

4.1PROFIT SHARING AMOUNT.  In order toprovide performance-basedincentive compensation to the Executive,the Corporation hereby agrees to pay the Executive, in addition to theBase Salary set forth in Section 3 hereof, a minimum cash bonus for each fiscalyear during the Executive’s employment hereunder (the “Bonus”) equal toFifteen Thousand Dollars ($15,000.00) per annum, payable in quarterlyinstallments, when sufficient cash is available for thepayment.  Additional profit sharing orBonus methods are available to the Executive in terms to be issued annually atthe discretion of the Board of Directors.

 

4.2DETERMINATION AND PAYMENT.  The finaldetermination with respect toany fiscal year shall be madepromptly, and in any event within 15 days, after the Corporation has filed its AnnualReport on Form 10-K for each year with the Securities and ExchangeCommission.  Within 45 days after theend of the Corporation’s fiscal year, based on the preliminary results ofthe Corporation for such fiscal year, the Corporation shall pay the Executive anamount equal to 60% of the estimated minimum cash Bonus based on suchpreliminary results.  The balance ofthe definitive Bonus so determined, if any, shall be payable to the Executivein a single lump sum no later than thirty days after the final determinationhas been made.  In any event, allmatters pertaining to the Bonus and to the payment of any Bonus to theExecutive hereunder, shall be administered and determined by the Board ofDirectors (or a subcommittee thereof appointed for such purpose) in itsreasonable discretion consistent with the terms hereof, the determination ofwhich shall be final, conclusive and binding for all purposes, absent manifesterror.

 

4.3PARTIAL YEARS.  Notwithstanding anythingcontained herein to thecontrary, no Bonus under this Section 4shall be deemed earned or payable with respect to any fiscal year duringwhich this Agreement or the Executive’s

 

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employment is terminated by the Corporationfor Cause (as such term ishereinafter defined).

 

4.4 Nothing inthis Section 4 shall be construed as conferring upon the Executive any right(i) normally associated with the ownership of capital stock; (ii) to continuein the employ of the Corporation or any affiliate of the Corporation; or (iii)to interfere in any way with the right of the Corporation to terminate thisAgreement in accordance with the provisions hereof.  Nothing in this Agreement shall be construed to imply that anyspecific assets of the Corporation have been set aside to provide for paymentsunder this Agreement.  Any paymentsunder this Agreement shall be made solely from general assets of theCorporation existing at the time such payments are due.

 

5. SEVERANCE UPON TERMINATION.

 

5.1TERMINATION.  In the event thatExecutive’s employment hereundershall be terminated by theCorporation without Cause (as defined in Section 9.3 hereof) orby the Executive for Good Reason (as defined in Section 9.4 hereof) or upon aChange in Control (as defined in Section 9.5 hereof) or upon the Death orDisability (as defined in Section 9.1 and 15.1, respectively) of Executive atanytime prior to the end of the Term, the Executive or his estate shall be entitled toreceive from the Corporation, in addition to any Base Salary earned to the dateof termination, a severance payment in an amount equal to the greater of(i) the balance of the Executive’s Base Salary due through the balance ofthe Term of this Agreement or (ii) one years salary in the event less than oneyear remains in the current contract period.

 

6. ADDITIONAL BENEFITS.

 

6.1IN GENERAL.  In addition to thecompensation, bonuses, expenses andother benefits to be paid underSections 3, 4 and 5 hereof, Executive will be entitled to all rights and benefitsfor which he shall be eligible under any insurance, health and medical,incentive, bonus, profit-sharing, pension or other extra compensation or “fringe”benefit plan of the Corporation or any of its subsidiaries now existing orhereafter adopted for the benefit of the executives or employees generally ofthe Corporation.  The provisions of thisAgreement,which incorporate employee benefit packages, shall change as and when suchemployee benefit packages change.  Inthe event that the Corporation does not provide family health and medicalinsurance for the benefit of the executives and employees generally of theCorporation, the Corporation shall provide Executive and pay all the costsassociated with family health and medical insurance for the benefit ofExecutive as selected by Executive in his sole discretion.

 

6.2AUTOMOBILE.  The Corporation shall leasefor the Executive anautomobile of his choice to be used by theExecutive in connection with the Corporation’s business, at a monthly rentalnot to exceed $750 and for a lease term not to exceed three (3) years.  The Corporation shall be responsible for allreasonablecosts of operating, repairing, maintaining and insuring such automobile.

 

6.3LIFE AND DISABILITY INSURANCE.  TheCorporation shall provide theExecutive with (i) a policy of termlife insurance in an amount equal to not less than three (3) times his annualBase Salary hereunder, payable to such beneficiary or beneficiaries as shallbe designated by him in writing and (b) a policy of disability insurance thatwill provide Executive with an annual amount equal to not less than seventy-fivepercent (75%) of his then current Base Salary, payable until Executive shallreach 70 years of age, with a waiting period not to exceed 120 days.

 

6.4DIRECTOR’S AND OFFICERS INSURANCE.  TheCorporation shall providethe Executive with a policy of director’sand officers liability insurance in such amounts and providing suchcoverage as the Executive and the Corporation shall reasonably agree, consistentwith policies obtained by other publicly held companies of similar size and engagedin similar businesses.

 

7. VACATION.

 

The Executive shall be entitled,during the Term of this Agreement, to a

 

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vacation period annually, as follows:

 

June 1, 2000 through May 31, 2003 —four (4) weeks in each year of the contract; during which all salary,compensation, benefits and other rights to which the Executive is entitled tohereunder shall be provided in full. Such vacation may be taken in the Executive’s discretion, at such timeor times as are not inconsistent with the reasonable business needs of theCorporation.  In addition, Executiveshall be entitled to up to eight (8) sick days and two (2) personal days foreach year commencing June 1, during which all salary, compensation, benefitsand other rights to which the Executive is entitled to hereunder shall beprovided in full.

 

8. INSURABILITY; RIGHT TO INSURE. Executive agrees that the Corporationshall havethe right during the Term to insure the life of Executive by a policy or policiesof insurance in such amount or amounts as it may deem necessary or desirable,and the Corporation shall be the beneficiary of any such policy or policiesand shall pay the premiums or other costs thereof.  The Corporation shall have the right, from time to time, tomodify any such policy or policies of insurance or to take out new insuranceon the life of Executive.  Executiveagrees,upon request, at any time or times prior to the commencement of or during theTerm to sign and deliver any and all documents and to submit to any physical orother reasonable examinations which may be required in connection with anysuch policy or policies of insurance or modifications thereof.

 

9. TERMINATION.

 

9.1DEATH.  If Executive dies during theTerm of this Agreement,Executive’s employment hereunder shallterminate upon his death and all obligations of the Corporation hereundershall terminate on such date, except that Executive’s estate or hisdesignated beneficiary shall be entitled to payment of any unpaid accrued BaseSalary through the date of his death. In addition, any accrued and unpaid Bonus shall be paid inaccordance with Section 4 hereof. In addition, Executive’s estate or his designated beneficiary shall beentitledto payment of the severance payments set forth in Section 5.1 hereof.

 

9.2TERMINATION FOR CAUSE.  The Corporationmay at any time during theTerm, without any prior notice, terminatethis Agreement and discharge Executive for Cause, whereupon theCorporation’s obligation to pay compensation or other amountspayable hereunder to or for the benefit of Executive shall terminate on the date ofsuch discharge.  As used herein the termCause shall mean: (i) a willful and material breach by Executive ofthe terms of this Agreement which breach shall not have been cured withinthirty (30) days of written notice of such breach; (ii) willful violationof specific and lawful written direction from the Board of Directors of theCorporation, which violation shall not have been cured within thirty (30) days ofwritten notice of such violation, provided such direction is not inconsistentwith the Executive’s duties and responsibilities as the President of RhodeIsland operations of the Corporation; or (iii) conviction of the Executiveof a felony by a federal or state court of competent jurisdiction, which felonyis directly and materially related to or arises out of Executive’s employmentwith the Corporation.  The obligationsof theExecutive under Section 10 shall continue notwithstanding termination of theExecutive’semployment pursuant to this Section 9.2.

 

9.3TERMINATION WITHOUT CAUSE.  TheCorporation shall have the option to terminate this Agreement Without Causeupon sixty (60) days written notice to the Executive.  In the event the Corporation terminates this Agreement withoutCause as defined above, the Corporation shall pay the Executive upontermination, the amount required pursuant to Section 5.1.  The obligations of the Executive underSection 10 hereof shall continue notwithstanding termination of the Executive’semployment pursuant to this Section 9.3.

 

9.4TERMINATION BY EXECUTIVE FOR GOOD REASON. The Executive shall havethe right to terminate this Agreementfor Good Reason, as hereinafter defined, upon written notice to theCorporation.  Good Reason shall mean anyof the following:(i) the assignment to the Executive of duties inconsistent with the Executive’sposition, duties, responsibilities, titles or offices as described herein;(ii) any material reduction by the Corporation of the Executive’s dutiesandresponsibilities; (iii) any reduction by the Corporation of the Executive’scompensationor benefits payable hereunder (it being understood that a reduction

 

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of benefits applicable to all executives ofthe Corporation, including theExecutive, shall not be deemed areduction of the Executive’s compensation package for purposes of thisdefinition); (iv) requiring the Executive to be based without his consent at alocation not within reasonable commuting distance ofLakeland, Florida.

 

9.5.TERMINATION BY EXECUTIVE UPON CHANGE IN CONTROL.  Executive, athis option, shall be able to terminate thisAgreement upon written notice given to the Secretary of the Corporationwithin ninety (90) days of an occurrence of a “Change in Control”.  A “Change in Control” of the Corporationshall mean a change in control of the Corporation or any entity controlling theCorporation (referred to collectively in this Section 9.5 as theCorporation) of a nature that would be required to be reported inresponse to Item 1 of a Current Report on Form 8-K, pursuant to Section 13or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”); providedthat, without limitation, such a Change in Control shall be deemed to haveoccurred at such time as (a) any “person” (as such term is used in Sections 13(d)and 14(d) of the Exchange Act), other than a person who or which was a shareholderof the Corporation immediately prior to the Corporation’s secondary offering(the “SO”), is or becomes the “beneficial owner” (as defined in Rule 13d-3under the Exchange Act), directly or indirectly, of securities of theCorporation representing twenty-five percent (25%) or more of the combined votingpower of the Corporation’s outstanding securities ordinarily having theright to vote at elections of directors; or (b) individuals who constitute the Boardconcurrent with the execution of this Agreement (the incumbent Board) ceasefor any reason to constitute at least a majority thereof, provided that anyperson becoming a director subsequent to the date hereof whose election ornomination for election by the Corporation’s shareholders was approved by a voteof at least three quarters of the directors comprising the Incumbent Board, shallbe, for purposes of this clause (b), considered as though he were a memberof the Incumbent Board; or (c) a sale by the Corporation of all orsubstantially all of its assets occurs. Notwithstanding anything in the foregoing to the contrary, no Change inControl shallbe deemed to have occurred for purposes of this Agreement by virtue of anytransactionswhich result in the acquisition by the Executive, or by a group of personswhich includes the Executive, directly or indirectly, of a majority of either theoutstanding shares of common stock of the Corporation or the voting securitiesof any corporation which acquires all or substantially all of the assets ofthe Corporation, whether by way of merger, consolidation, sale of such assets orotherwise.

 

10. PROTECTION OF CONFIDENTIAL INFORMATION.

 

In view of the fact that Executive’swork for the Corporation will bringhim into close contact withconfidential information and plans for future developments, Executive agrees to thefollowing:

 

10.1SECRECY.  To keep secret and retain inthe strictest confidenceall confidential matters of theCorporation, including, without limitation, trade “know how” and trade secrets,customer lists, pricing policies, marketing plans, technical processes, formulae,inventions, research projects, patents or copyrights and all other proprietaryrights owned by or in which the corporation or its subsidiaries has an interest,and other business affairs of the Corporation, learned by him heretofore orhereafter, and not to disclose them to anyone inside or outside of theCorporation, except in the course of performing the Services hereunder or with theexpress written consent of the Chief Executive Officer or Board ofDirectors of the Corporation and except to the extent such information is alreadyknown to the general public

 

10.2RETURN MEMORANDA, ETC.  To deliverpromptly to the Corporation ontermination of his employment, or atany other time as the Chief Executive Officer or the Board of Directors ofthe Corporation may so request, all memoranda, notes, records, reports,manuals, drawings, blueprints, facsimile or e-mail copies and other documents(and all copies thereof) relating to the Corporation’s business and allproperty associated therewith, which he may then possess or have under his control.

 

10.3 COVENANTS.

 

10.3.1NON-COMPETITION.  Executive agrees thatat all times while

 

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he is employed by the Corporation andregardless of the reason for terminationof his employment or this Agreement,for a period of one (1) year thereafter, he will not, as a principal, agent,employee, employer, consultant, stockholder, investor, director or co-partner ofany person, firm, corporation or business entity other than the Corporation, orin any individual or representative capacity whatsoever, directly orindirectly, without the express prior written consent of the Corporation:

 

(i)engage or participate in any business with customers of the Corporationor itssubsidiaries directly or indirectly or make use of the customer listsdirectly or indirectly as may from time to time be owned by the Corporation.

 

(ii)aid or counsel any other person, firm, corporation or business entityto do anyof the above;

 

(iii)become employed by a firm, corporation, partnership or joint venturewhichcompetes with the business of the Corporation or from its customer lists onthe date of termination or resignation within the United States or PuertoRico; or

 

(iv)approach, solicit business from, or otherwise do business or deal withanycustomer of the Corporation in connection with any product or service competitiveto any provided by the Corporation.

 

10.3.2ANTI-RAIDING.  Executive agrees thatduring the term of hisemployment hereunder, and, thereafter for aperiod of two (2) year, he will not, as a principal, agent, employee,employer, consultant, director or partner of any person, firm, corporation orbusiness entity other than the Corporation, or in any individual or representativecapacity whatsoever directly or indirectly, without the prior express writtenconsent of the Corporation approach, counsel or attempt to induce any person whois then in the employ of the Corporation to leave the employ of the Corporationor employ or attempt to employ any such person or persons who at any timeduring the preceding six months was in the employ of the Corporation.

 

10.3.3EXECUTIVE’S ACKNOWLEDGEMENTS.  Executiveacknowledges (i)that his position with the Corporationrequires the performance of services which are special, unique, andextraordinary in character and places him in a position of confidence and trust withthe Customers and employees of the Corporation, through which, among otherthings, he shall obtain knowledge of the Corporation’s “technical information”and “know-how” and become acquainted with its customers, in which matters theCorporation has substantial proprietary interests; (ii) that the restrictivecovenants set forth above are necessary in order to protect and maintain suchproprietary interests and the other legitimate business interests of theCorporation; and (iii) that the Corporation would not have entered into thisAgreement unless such covenants were included herein.

 

Executive also acknowledges that thebusiness of the Corporationpresently will extend throughout the UnitedStates, and that he will personally supervise and engage in suchbusiness on behalf of Corporation and, accordingly, it is reasonable that therestrictive covenants set forth above are not more limited as to geographicarea than is set forth therein. Executive also represents to the Corporation that the enforcement ofsuch covenantswill not prevent Executive from earning a livelihood or impose an unduehardship on the Executive.

 

10.4SEVERABILITY.  If any of the provisionsof this Section 10, or anypart thereof, is hereinafter construed tobe invalid or unenforceable, the same shall not affect the remainder ofsuch provision or provisions, which shall be given full effect, without regard tothe invalid portions.  If any of theprovisionsof this Section 10, or any part thereof, is held to be unenforceable because ofthe duration of such provision, the area covered thereby or the type of conductrestricted therein, the parties agree that the court making such determinationshall have the power to modify the duration, geographic area and/orother terms of such provision and, as so modified, said provision(s) shall thenbe enforceable.  In the event that thecourts of any one or more jurisdictions shall hold such provisionswholly or partially unenforceable by

 

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reason of the scope thereof or otherwise,it is the intention of the partieshereto that such determination notbar or in any way affect the Corporation’s right to the relief provided forherein in the courts of any other jurisdictions as to breaches or threatened breachesof such provisions in such other jurisdictions, the above provisions as theyrelate to each jurisdiction being, for this purpose, sever able into diverseand independent covenants.

 

10.5INJUNCTIVE RELIEF.  Executiveacknowledges and agrees that,because of the unique andextraordinary nature of his services, any breach or threatenedbreach of the provisions of Sections 10.1, 10.2, or 10.3 hereof will causeirreparable injury and incalculable harm to the Corporation, and the Corporationshall, accordingly, be entitled to injunctive and other equitable relief forsuch breach or threatened breach and that resort by the Corporation to suchinjunctive or other equitable relief shall not be deemed to waive or to limit inany respect any right or remedy which the Corporation may have with respect tosuch breach or threatened breach.  TheCorporation and Executive agree that any such action for injunctive orequitable relief shall be heard in a state or federal court situated inFlorida and each of the parties hereto, hereby agrees to accept service ofprocess by registered mail and to otherwise consent to the jurisdiction of suchcourts.

 

10.6EXPENSES OF ENFORCEMENT OF COVENANTS. In the event that anyaction, suit or proceeding at law orin equity is brought to enforce the covenants contained in Sections 10.1,10.2, or 10.3 hereof or to obtain money damages for the breach thereof, theparty prevailing in any such action, suit or other proceeding shall be entitledupon demand, to reimbursement from the other party for all expenses (including,without limitation, reasonable attorneys’ fees and disbursements) incurred inconnection therewith.

 

10.7SEPARATE AGREEMENT.  The provisions ofthis Section 10 shall beconstrued as an agreement on the part ofthe Executive independent of any other part of this Agreement or any otheragreement, and the existence of any claim or cause of action of the Executiveagainst the Corporation, whether predicated on this Agreement or otherwise, shallnot constitute a defense to the enforcement by the Corporation of the provisionsof this Section 10.

 

11. INDEMNIFICATION.

 

The Corporation shall provide theExecutive (including his heirs, executorsand administrators) with coverageunder a standard directors and officers liability insurance policy at theCorporation’s expense to the same extent as provided for any other director,officer or trustee of the Corporation. In addition, the Corporation shall indemnify the Executive (and hisheirs, executorsand administrators) to the fullest extent permitted under the law of its stateof incorporation against all expenses and liabilities reasonably incurred byhim in connection with or arising out of any action, suit or proceedingin which the Executive may be involved by reason of his having been a director orofficer of the Corporation or any subsidiary thereof.  Such expenses and liabilities shall include, but not belimited to, judgments, court costs and attorneys’ fees and the cost ofreasonable settlements, such settlements to be approved by the Board if such actionis brought against the Executive in his capacity as a director or officer ofthe Corporation or any subsidiary thereof. The Corporation shall, upon the request of the Executive, advance to theExecutivesuch amounts as necessary to cover expenses, including without limitationlegal fees and expenses, incurred by the Executive in connection with any suit orproceeding in which the Executive may be involved by reason of his being orhaving been a director or officer of the Corporation or of any subsidiarythereof.  Such indemnity and advance ofexpenses, however, shall not extend to matters as to which the Executiveis finally adjudged to be liable for willful misconduct in the performanceof his duties.

 

12. ARBITRATION.

 

Except with respect to any proceedingbrought under Section 10 hereof, anycontroversy, claim, or disputebetween the parties, directly or indirectly, concerning this Employment Agreementor the breach hereof, or the subject matter hereof, including questionsconcerning the scope and applicability of this arbitration clause, shall be finallysettled by arbitration in Polk County, Florida pursuant to the rules thenapplying of the American Arbitration

 

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Association.  The arbitrators shall consist of one representative selected bytheCorporation, one representative selected by the Executive andone representative selected by the first two arbitrators.  The parties agree to expedite the arbitration proceeding in every way,so that the arbitration proceeding shall be commenced within thirty (30) daysafter request therefore is made, and shall continue thereafter, withoutinterruption, and that the decision of the arbitrators shall be handed downwithin thirty (30) days after the hearings in the arbitration proceedings areclosed.  The arbitrators shall have theright and authority to assess the cost of the arbitration proceedings andto determine how their decision or determination as to each issue or matter indispute may be implemented or enforced. The decision in writing of any two of the arbitrators shall bebinding and conclusive on all of the parties to this Agreement.  Should either the Corporation or theExecutive fail to appoint an arbitrator as required by this Section 12 withinthirty (30) days after receiving written notice from the other party to do so,the arbitrator appointed by the other party shall act for all of theparties and his decision in writing shall be binding and conclusive on all of theparties to this Employment Agreement. Any decision or award of the arbitrators shall be final andconclusive on the parties to this Agreement; judgment upon such decision or awardmay be entered in any competent Federal or state court located in the UnitedStates of America; and application may be made to such court for confirmation ofsuch decision or award or for enforcement and for any other legal remedies thatmay be necessary to effectuate such decision or award.

 

13. NOTICES.

 

All notices, requests, consents andother communications required orpermitted to be given hereunder,shall be in writing and shall be deemed to have been duly given if deliveredpersonally or sent by prepaid telegram, telecopy or mailedfirst-class, postage prepaid, by registered or certified mail (notices sent bytelegram or mailed shall be deemed to have been given on the date sent),tothe parties at their respective addresses hereinabove set forth or to suchotheraddress as either party shall designate by notice in writing to the otherinaccordance herewith.  Copies of all noticesshall be sent to the attorney selected by the Executive and noticed inwriting to the Corporation from time to time.

 

14. GENERAL.

 

14.1GOVERNING LAW.  This Agreement shall begoverned by and construedand enforced in accordance with the locallaws of the State in which the primary corporate offices of the parentcorporation are located at the time either party seeks remedies or to enforce thiscontract.  The venue shall be in thecounty in which the primary corporate offices of the parent corporationare then located at the time either party seeks remedies or to enforce thiscontract.

 

14.2CAPTIONS.  The section headingscontained herein are for referencepurposes only and shall not in anyway affect the meaning or interpretation of this Agreement.

 

14.3ENTIRE AGREEMENT.  This Agreement setsforth the entire agreementand understanding of the parties relatingto the subject matter hereof, and supersedes all prior agreements,arrangements and understandings, written or oral, relating to the subject matterhereof.  No representation, promise orinducementhas been made by either party that is not embodied in this Agreement, and neitherparty shall be bound by or liable for any alleged representation, promise orinducement not so set forth.

 

14.4SEVERABILITY.  If any of the provisionsof this Agreement shall beunlawful, void, or for any reason,unenforceable, such provision shall be deemed sever able from, and shall in no wayaffect the validity or enforceability of, the remaining portions of this Agreement.

 

14.5WAIVER.  The waiver by any party heretoof a breach of anyprovision of this Agreement by any otherparty shall not operate or be construed as a waiver of any subsequent breachof the same provision or any other provision hereof.

 

14.6COUNTERPARTS.  This Agreement may beexecuted in one or more

 

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counterparts, each of which shall be deemedan original, but all of which takentogether shall constitute one and thesame Agreement.

 

14.7ASSIGNABILITY.  This Agreement, andExecutive’s rights andobligations hereunder, may not be assignedby Executive.  The Corporation mayassignits rights, together with its obligations, hereunder in connection with any sale,transfer or other disposition of all or substantially all of its business orassets; in any event the rights and obligations of the Corporation hereundershall be binding on its successors or assigns, whether by merger, consolidationor acquisition of all or substantially all of its business or assets;provided, however, that any such assignment shall not release the Corporationfrom its obligations hereunder.  ThisAgreement shall inure to the benefit of, and be binding upon, theExecutive and his executors, administrators, heirs and legal representatives.

 

14.8AMENDMENT.  This Agreement may beamended, modified, superseded,cancelled, renewed or extended andthe terms or covenants hereof may be waived, only by a written instrument executedby both of the parties hereto, or in the case of a waiver, by the partywaiving compliance.  No supersedinginstrument, amendment, modification, cancellation, renewal or extensionhereof shall require the consent or approval of any person other than the partieshereto.  The failure of eitherparty at any time or times to require performance of any provision hereofshall in no matter affect the right at a later time to enforce the same.  No waiver by either party of the breach ofany term or covenant contained in this Agreement, whether by conduct orotherwise, in any one or more instances, shall be deemed to be, or construedas, a further or continuing waiver of any such breach, or a waiver of thebreach of any other term or covenant contained  

 

15. ADDITIONAL PROVISIONS

 

15.1DISABILITY.  If Executive shall beunable to perform a significantpart of his duties andresponsibilities in connection with the conduct of the businessand affairs of the Corporation and such inability lasts for (i) a period ofat least one hundred twenty (120) consecutive days, or (ii) periods aggregatingat least one hundred eighty (180) days during any three hundred sixty-five(365) consecutive days, by reason of Executive’s physical or mental disability,whether by reason of injury, illness or similar cause, Executive shall bedeemed disabled, and the Corporation may, at any time thereafter terminateExecutive’s employment hereunder by reason of the Corporation being required toreplace the position.  Upon delivery toExecutive of such notice, all obligations of the Corporation hereundershall terminate, except that Executive shall be entitled to payment of anyunpaid accrued Base Salary through the date of termination.  In addition, any accrued and unpaid Bonusshall be paid in accordance with Section 4 hereof.  In addition, the Executive shall be entitled to thoseseverance payments set forth in Section 5.1 hereof.  The obligations of Executive under Section 10 hereof shallcontinue notwithstanding termination of Executive’s employment pursuant tothis Section 15.1.

 

IN WITNESS WHEREOF, the parties haveexecuted this Agreement as of the date first above written.

 
| ATTEST:  AMERICAN COMMERCE SOLUTIONS, INC. |
|--------------------------------------------|
|                                       |   |
|                                       |   |
| By:                                        | /s/  Norman J.  Birmingham |   | By: | /s/  David N.  DeBaene |   |
|                                       | Name:  Norman J.  Birmingham |   | Name:  David N.  DeBaene |
|                                       | Title:  Chief Financial Officer |   | Title:  President |
|                                       |   |
| WITNESS:                                   |   |
|                                       |   |
| /s/  Robert Maxwell Jr.                    |   | /s/  Daniel L.  Hefner |   |
|                                       | DANIEL  L.  HEFNER, individually |
|                                            |  |  |  |  |  |  |

 

9

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