INNOTRAC CORP
EMPLOYMENT AGREEMENT
<DOCUMENT>
<TYPE>EX-10.24
<SEQUENCE>6
<FILENAME>g74787ex10-24.txt
<DESCRIPTION>EMPLOYMENT AGREEMENT
<TEXT>
<PAGE>
                                                                  EXHIBIT 10.24


                             EMPLOYMENT AGREEMENT

         THIS AGREEMENT ("Agreement") is made and entered into as of this 31st
day of December, 2001, by and between ROBERT TONER, an individual resident of
the State of Georgia ("Employee"), and INNOTRAC CORPORATION, a Georgia
corporation (the "Employer").

                                  WITNESSETH:

         WHEREAS, the parties hereto desire to enter into an agreement for the
Company's continued employment of Employee on the terms and conditions
contained herein;

         NOW, THEREFORE, in consideration of the premises and the mutual
promises and agreements contained herein, the parties hereto, intending to be
legally bound, hereby agree as follows:

Section 1.        Employment.

         Subject to the terms hereof, the Employer hereby employs Employee, and
Employee hereby accepts such employment. Employee will serve as Vice President
Logistics of the Employer or in such other executive capacity as the Board of
Directors of Employer (the "Board of Directors") may hereafter from time to
time determine. Employee agrees to devote his full business time and best
efforts to the performance of the duties that Employer may assign Employee from
time to time; provided that the Employee may also serve as an officer of any
subsidiary of the Employer, and may perform services for any subsidiary of the
Employer, as directed from time to time by the Board of Directors or the Chief
Executive Officer, President or Chief Operating Officer.

Section 2.        Term of Employment.

         The term of Employee's employment (the "Term") shall commence on
January 1, 2002 and shall continue from such date until the earlier of (a)
January 1, 2005 or (b) the occurrence of any of the following events:

                  (i)      The death or total disability of Employee (total
         disability meaning the failure to fully perform his normal required
         services hereunder for a period of three (3) months during any
         consecutive twelve (12) month period during the term hereof, as
         determined by the Board of Directors, by reason of mental or physical
         disability);

                  (ii)     The termination by Employer of Employee's employment
         hereunder, upon prior written notice to Employee, for "good cause", as
         determined by the Board of Directors. For purposes of this Agreement,
         "good cause" for termination of Employee's employment shall exist (A)
         if Employee is convicted of, pleads guilty to, or confesses to any
         felony or any act of fraud, misappropriation or embezzlement, (B) if
         Employee fails to comply with the terms of this Agreement, and, within
         thirty (30) days after written notice from Employer of such failure,
         Employee has not corrected such failure or, having once received such
         notice of failure and having so corrected such failure, Employee at


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         any time thereafter again so fails, (C) if Employee violates any of
         the provisions contained in Section 4 of this Agreement, or (D) if
         Employee tests positive for illegal drugs; or

                  (iii)    The termination of this Agreement by either party
         upon at least ninety (90) days prior written notice.

Section 3.        Compensation.

         3.1      Term of Employment. Employer will provide Employee with the
following salary, expense reimbursement and additional employee benefits during
the term of employment hereunder:

                  (a)      Salary. Employee will be paid a salary (the "Salary")
         of no less than One Hundred Eighty-Five Thousand Dollars ($185,000) per
         annum, less deductions and withholdings required by applicable law. The
         Salary shall be paid to Employee in equal monthly installments (or on
         such more frequent basis as other executives of Employer are
         compensated). The Salary shall be reviewed by the Board of Directors,
         Chief Executive Officer, President or Chief Operating Officer of
         Employer on at least an annual basis.

                  (b)      Bonus. Employee will be entitled to a maximum annual
         bonus (the "Bonus") of 50% of Salary. The Bonus shall be determined
         and paid as provided in the Plan Rules adopted from time to time
         pursuant to the Employer's Senior Executive Incentive Compensation
         Plan, or any successor plan thereto.

                  (c)      Vacation. Employee shall receive four (4) weeks
         vacation time per calendar year during the term of this Agreement. Any
         unused vacation days in any calendar year may not be carried over to
         subsequent years.

                  (d)      Expenses. Employer shall reimburse Employee for all
         reasonable and necessary expenses incurred by Employee at the request
         of and on behalf of Employer.

                  (e)      Benefit Plans. Employee may participate in such
         medical, dental, disability, hospitalization, life insurance and other
         benefit plans (such as pension and profit sharing plans) as Employer
         maintains from time to time for the benefit of other senior executives
         of Employer, on the terms and subject to the conditions set forth in
         such plans.

         3.2      Effect of Termination.

                  (a)      Except as hereinafter provided, upon the termination
         of the employment of Employee hereunder for any reason, Employee shall
         be entitled to all compensation and benefits earned or accrued under
         Section 3.1 as of the effective date of termination (the "Termination
         Date"), but from and after the Termination Date no additional
         compensation or benefits shall be earned by Employee hereunder.
         Employee shall be deemed to have earned any Bonus payable with respect
         to the calendar year in which the Termination Date occurs on a
         prorated basis (based on the number of days in such


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         calendar year through and including the Termination Date divided by
         365) based upon the year to date financials and performance of the
         Employer and assuming performance at the target level for any
         individual performance criteria. Any such Bonus shall be payable upon
         termination.

                  (b)      If Employee's employment hereunder is terminated by
         Employer pursuant to Section 2(b)(iii) hereof, then, in addition to
         any other amount payable hereunder, Employer shall continue to pay
         Employee his normal Salary pursuant to Section 3.1 (a) for a six-month
         period (on the same basis as if Employee continued to serve as an
         employee hereunder for such applicable period). Except as provided in
         Section 3.3, in the case of a termination by Employer pursuant to
         Section 2(b)(iii) hereof, the options will expire on the first
         anniversary after the effective date of the termination of Employee's
         employment hereunder. Upon the death of Employee, any options that
         Employee would otherwise be entitled to exercise hereunder may be
         exercised by his personal representatives or heirs, as applicable.
         Except as provided in Section 3.3, if Employee's employment is
         terminated by Employer pursuant to Section 2(b)(ii) or by Employee
         pursuant to Section 2(b)(iii), those options which are exercisable as
         of the date of such termination shall be exercisable for a period of
         90 days after such termination (and all other options not then
         exercisable shall be forfeited as of such date), and after such 90-day
         period, all unexercised options will expire. To the extent necessary,
         this provision shall be deemed an amendment of any option agreement
         between the Employee and the Employer or an affiliate of the Employer.

         3.3      Effect of Change in Control. Notwithstanding Section 3.2(b)
above, if there is a Change in Control (as defined below) of the Employer and
the Employee's employment is terminated within six (6) months following the
date of the Change in Control, the following provisions shall apply.

                  (a)      If Employee's employment hereunder is terminated by
         Employer pursuant to Section 2(b)(iii) hereof or by Employee for "Good
         Reason" as defined below, then, in addition to any other amount
         payable pursuant to Section 3.2(a), the Employee shall be entitled to
         received the compensation and benefits set forth in subsections (i)
         through (iii) below:

                           (i)      Base Salary. Employee will continue to
                  receive his Salary as then in effect (subject to withholding
                  of all applicable taxes) for a period of six (6) months from
                  his date of termination in the same manner as it was being
                  paid as of the date of termination.

                           (ii)     Health, Dental and Life Insurance Coverage.
                  The health, dental and group term life insurance benefits
                  coverage provided to Employee at his date of termination
                  shall be continued at the same level and in the same manner
                  as if his employment under this Agreement had not terminated
                  (subject to the customary changes in such coverages if
                  Employee retires, reaches age 65 or similar events),
                  beginning on the date of such termination and ending on the
                  date six (6) months from the date of such termination. Any
                  additional coverages Employee had at termination, including
                  dependent coverage, will also be


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                  continued for such period on the same terms, to the extent
                  permitted by the applicable policies or contracts. Any costs
                  Employee was paying for such coverages at the time of
                  termination shall be paid by Employee by separate check
                  payable to the Company each month in advance or by reduction
                  of amounts owed to Employee by the Employer. If the terms of
                  any benefit plan referred to in this Section, or the laws
                  applicable to such plan, do not permit continued
                  participation by Employee, then the Company will arrange for
                  other coverage at its expense providing substantially similar
                  benefits. The coverages provided for in this paragraph shall
                  be applied against and reduce the period for which COBRA will
                  be provided.

                           (iii)    Stock Options. Notwithstanding any
                  provision in any option agreement, all outstanding stock
                  options granted to Employee by Employer or an affiliate of
                  Employer shall become fully vested on the date of Employee's
                  termination of employment and shall remain exercisable as
                  provided in the applicable option agreement or, if longer,
                  for a period of three (3) years following the date of
                  termination of employment. To the extent necessary, this
                  provision shall be deemed an amendment of any option
                  agreement between the Employee and the Employer or an
                  affiliate of the Employer.

                  (b)      If Employee's employment hereunder is terminated by
         Employee pursuant to Section 2(b)(iii) hereof other than for "Good
         Reason" as defined below, then, in addition to any other amount
         payable pursuant to Section 3.2(a), the Employee shall be entitled to
         receive the compensation and benefits set forth in subsections (i)
         through (iii) of Subsection 3.3(a) above.

         3.4      Definitions. For purposes of this Agreement, the following
terms shall have the meanings set forth below:

                  (a)      "Change in Control" means any of the following
         events:

                           (i)      The acquisition (other than from the
                  Employer) by any person of beneficial ownership of fifty
                  percent (50%) or more of the combined voting power of the
                  Employer's then outstanding voting securities; provided,
                  however, that for purposes of this Section, person shall not
                  include any person who on the date hereof owns 25% or more of
                  the Employer's outstanding securities, and a Change in
                  Control shall not be deemed to occur solely because fifty
                  percent (50%) or more of the combined voting power of the
                  Employer's then outstanding securities is acquired by (1) a
                  trustee or other fiduciary holding securities under one or
                  more employee benefit plans maintained by the Employer or any
                  of its subsidiaries, or (2) any corporation, which,
                  immediately prior to such acquisition, is owned directly or
                  indirectly by the shareholders of the Employer in the same
                  proportion as their ownership of stock in the Employer
                  immediately prior to such acquisition.

                           (ii)     Approval by shareholders of the Employer of
                  (1) a merger or consolidation involving the Employer if the
                  shareholders of the Employer,


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                  immediately before such merger or consolidation do not, as a
                  result of such merger or consolidation, own, directly or
                  indirectly, more than fifty percent (50%) of the combined
                  voting power of the then outstanding voting securities of the
                  corporation resulting from such merger or consolidation in
                  substantially the same proportion as their ownership of the
                  combined voting power of the voting securities of the
                  Employer outstanding immediately before such merger or
                  consolidation, or (2) a complete liquidation or dissolution
                  of the Employer, or (3) an agreement for the sale or other
                  disposition of all or substantially all of the assets of the
                  Employer.

                           (iii)    A change in the composition of the Board
                  such that the individuals who, as of the date of this
                  Agreement, constitute the Board (such Board shall be
                  hereinafter referred to as the "Incumbent Board") cease for
                  any reason to constitute at least a majority of the Board;
                  provided, however, for purposes of this Section that any
                  individual who becomes a member of the Board subsequent to
                  the Effective Date whose election, or nomination for election
                  by the Employer's shareholders, was approved by a vote of at
                  least a majority of those individuals who are members of the
                  Board and who were also members of the Incumbent Board (or
                  deemed to be such pursuant to this proviso) shall be
                  considered as though such individual were a member of the
                  Incumbent Board; but, provided, further, that any such
                  individual whose initial assumption of office occurs as a
                  result of either an actual or threatened election contest (as
                  such terms are used in Rule 14a-11 of Regulation 14A
                  promulgated under the Exchange Act, including any successor
                  to such Rule), or other actual or threatened solicitation of
                  proxies or consents by or on behalf of a Person other than
                  the Board, shall not be so considered as a member of the
                  Incumbent Board.

                           (iv)     The occurrence of any other event or
                  circumstance which is not covered by (i) through (iii) above
                  which the Board determines affects control of the Company and
                  adopts a resolution that such event or circumstance
                  constitutes a Change in Control for the purposes of this
                  Agreement.

                  (b)      A "Good Reason" for termination by Employee of
         Employee's employment shall mean the occurrence (without the
         Employee's express written consent), within the twelve (12) month
         period following the date of a Change in Control, of any one of the
         following acts by the Employer, or failures by the Employer to act,
         unless, in the case of any act or failure to act described in
         paragraph (i) or (iv) below, such act or failure to act is corrected
         within 30 days after notice by the Employee to the Employer of the act
         or failure to act:

                           (i)      the assignment to Employee of any duties
                  inconsistent with Employee's title and status set forth
                  herein, or a substantial adverse alteration in the nature or
                  status of Employee's responsibilities at the Employer from
                  those in effect immediately prior to the Change in Control;

                           (ii)     a substantial reduction by the Employer in
                  Employee's Base Salary;


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                           (iii)    the relocation of Employee's principal
                  office to a place more than 50 miles from Atlanta, Georgia;

                           (iv)     the failure by the Employer to continue in
                  effect any compensation or benefit plan or program in which
                  Employee participates immediately prior to the Change in
                  Control, which is material to Employee's total compensation,
                  unless an equitable arrangement (embodied in an ongoing
                  substitute or alternative plan) has been made with respect to
                  such plan, or the failure by the Employer to continue the
                  Employee's participation in such plan (or in such substitute
                  or alternative plan) on a basis not materially less
                  favorable, both in terms of the amount of benefits provided
                  and the level of Employee's participation relative to other
                  participants, as existed at the time of the Change in
                  Control.

         The Employee's right to terminate the Employee's employment for Good
Reason shall not be affected by the Employee's incapacity due to physical or
mental illness, except for a total disability as defined in Section 2 above.
The Employee's continued employment shall not constitute consent to, or a
waiver of rights with respect to, any act or failure to act constituting Good
Reason hereunder.

Section 4.        Partial Restraint on Post-termination Competition.

        4.1       Definitions. For the purposes of this Section 4, the
following definitions shall apply:

                  (a)      "Company Activities" means the business of selling
         caller ID technology and hardware, fulfillment services, e-commerce
         fulfillment and e-commerce return services as well as other similar
         services that Innotrac or its subsidiaries is involved in at the date
         of this agreement.

                  (b)      "Competitor" means any business, individual,
         partnership, joint venture, association, firm, corporation or other
         entity, other than the Employer or its affiliates or subsidiaries,
         engaged, wholly or partly, in Company Activities.

                  (c)      "Competitive Position" means (i) the direct or
         indirect ownership or control of all or any portion of a Competitor;
         or (ii) any employment or independent contractor arrangement with any
         Competitor whereby Employee will serve such Competitor in any
         managerial capacity.

                  (d)      "Confidential Information" means any confidential,
         proprietary business information or data belonging to or pertaining to
         Employer that does not constitute a "Trade Secret" (as hereinafter
         defined) and that is not generally known by or available through legal
         means to the public, including, but not limited to, information
         regarding Employer's customers or actively sought prospective
         customers, suppliers, manufacturers and distributors gained by
         Employee as a result of his employment with Employer.


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                  (e)      "Customer" means actual customers or actively sought
         prospective customers of Employer during the Term.

                  (f)      "Noncompete Period" or "Nonsolicitation Period"
         means the period beginning the date hereof and ending on the first
         anniversary of the termination of Employee's employment with Employer.

                  (g)      "Territory" means the area within a thirty-five (35)
         mile radius of any corporate office of Employer or any of its
         subsidiaries, affiliates or divisions.

                  (h)      "Trade Secrets" means information or data of or
         about Employer, including but not limited to technical or
         non-technical data, formulas, patterns, compilations, programs,
         devices, methods, techniques, drawings, processes, financial data,
         financial plans, products plans, or lists of actual or potential
         customers, clients, distributees or licensees, information concerning
         Employer's finances, services, staff, contemplated acquisitions,
         marketing investigations and surveys, that (i) derive economic value,
         actual or potential, from not being generally known to, and not being
         readily ascertainable by proper means by, other persons who can obtain
         economic value from their disclosure or use; and (ii) are the subject
         of efforts that are reasonable under the circumstances to maintain
         their secrecy.

                  (i)      "Work Product" means any and all work product,
         property, data documentation or information of any kind, prepared,
         conceived, discovered, developed or created by Employee for Employer
         or its affiliates, or any of Employer's or its affiliates' clients or
         customers.

         4.2      Trade Name and Confidential Information.

                  (a)      Employee hereby agrees that (i) with regard to each
         item constituting all or any portion of the Trade Secrets, at all
         times during the Term and all times during which such item continues
         to constitute a Trade Secret under applicable law; and (ii) with
         regard to any Confidential Information, during the Term and the
         Noncompete Period:

                           (i)      Employee shall not, directly or by
                  assisting others, own, manage, operate, join, control or
                  participate in the ownership, management, operation or
                  control of, or be connected in any manner with, any business
                  conducted under any corporate or trade name of Employer or
                  name similar thereto, without the prior written consent of
                  Employer;

                           (ii)     Employee shall hold in confidence all Trade
                  Secrets and all Confidential Information and will not, either
                  directly or indirectly, use, sell, lend, lease, distribute,
                  license, give, transfer, assign, show, disclose, disseminate,
                  reproduce, copy, appropriate or otherwise communicate any
                  Trade Secrets or Confidential Information, without the prior
                  written consent of Employer; and

                           (iii)    Employee shall immediately notify Employer
                  of any unauthorized disclosure or use of any Trade Secrets or
                  Confidential Information of which


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                  Employee becomes aware. Employee shall assist Employer, to
                  the extent necessary, in the procurement or any protection of
                  Employer's rights to or in any of the Trade Secrets or
                  Confidential Information.

         4.3      Noncompetition.

                  (a)      The parties hereto acknowledge that Employee is
         conducting Company Activities throughout the Territory. Employee
         acknowledges that to protect adequately the interest of Employer in
         the business of Employer it is essential that any noncompete covenant
         with respect thereto cover all Company Activities and the entire
         Territory.

                  (b)      Employee hereby agrees that, during the Term and the
         Noncompete Period, Employee will not, in the Territory, either
         directly or indirectly, alone or in conjunction with any other party,
         accept, enter into or take any action in conjunction with or in
         furtherance of a Competitive Position. Employee shall notify Employer
         promptly in writing if Employee receives an offer of a Competitive
         Position during the Noncompete Term, and such notice shall describe
         all material terms of such offer.

         Nothing contained in this Section 4 shall prohibit Employee from
acquiring not more than five percent (5%) of any company whose common stock is
publicly traded on a national securities exchange or in the over-the-counter
market.

         4.4      Nonsolicitation During Employment Term. Employee hereby
agrees that Employee will not, during the Term, either directly or indirectly,
alone or in conjunction with any other party solicit, divert or appropriate or
attempt to solicit, divert or appropriate, any Customer for the purpose of
providing the Customer with services or products competitive with those offered
by Employer during the Term.

         4.5      Nonsolicitation During Nonsolicitation Period. Employee
hereby agrees that Employee will not, during the Nonsolicitation Period, either
directly or indirectly, alone or in conjunction with any other party solicit,
divert or appropriate or attempt to solicit, divert or appropriate, any
Customer for the purpose of providing the Customer with services or products
competitive with those offered by Employer during the Term; provided, however,
that the covenant in this clause shall limit Employee's conduct only with
respect to those Customers with whom Employee had substantial contact (through
direct or supervisory interaction with the Customer or the Customer's account)
during a period of time up to but no greater than two (2) years prior to the
last day of the Term.

Section 5.        Miscellaneous.

        5.1       Severability. The covenants in this Agreement shall be
construed as covenants independent of one another and as obligations distinct
from any other contract between Employee and Employer. Any claim that Employee
may have against Employer shall not constitute a defense to enforcement by
Employer of this Agreement.


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         5.2      Survival of Obligations. The covenants in Section 4 of this
Agreement shall survive termination of Employee's employment, regardless of who
causes the termination and under what circumstances.

         5.3      Notices. Any notice or other document to be given hereunder
by any party hereto to any other party hereto shall be in writing and delivered
in person or by courier, by telecopy transmission or sent by any express mail
service, postage or fees prepaid at the following addresses:

                  EMPLOYER

                  Innotrac Corporation
                  6655 Sugarloaf Parkway
                  Duluth, GA 30097
                  Attention:  Mr. Scott Dorfman
                              Chief Executive Officer
                  Telephone No.: (678) 584-4000


                  EMPLOYEE

                  Mr. Robert Toner


                  --------------------------


                  --------------------------

or at such other address or number for a party as shall be specified by like
notice. Any notice which is delivered in the manner provided herein shall be
deemed to have been duly given to the party to whom it is directed upon actual
receipt by such party or its agent.

         5.4      Binding Effect. This Agreement inures to the benefit of, and
is binding upon, Employer and their respective successors and assigns, and
Employee, together with Employee's executor, administrator, personal
representative, heirs, and legatees.

         5.5      Entire Agreement. This Agreement is intended by the parties
hereto to be the final expression of their agreement with respect to the
subject matter hereof and is the complete and exclusive statement of the terms
thereof, notwithstanding any representations, statements or agreements to the
contrary heretofore made. This Agreement may be modified only by a written
instrument signed by all of the parties hereto.

         5.6      Governing Law. This Agreement shall be deemed to be made in,
and in all respects shall be interpreted, construed, and governed by and in
accordance with, the laws of the State of Georgia. No provision of this
Agreement shall be construed against or interpreted to the disadvantage of any
party hereto by any court or other governmental or judicial authority or by any
board of arbitrators by reason of such party or its counsel having or being
deemed to have structured or drafted such provision.


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         5.7      Headings. The section and paragraph headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.

         5.8      Specific Performance. Each party hereto hereby agrees that
any remedy at law for any breach of the provisions contained in this Agreement
shall be inadequate and that the other parties hereto shall be entitled to
specific performance and any other appropriate injunctive relief in addition to
any other remedy such party might have under this Agreement or at law or in
equity.

         5.9      Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.

          IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.


                                    INNOTRAC CORPORATION

                                    By:  /s/ Scott D. Dorfman
                                       ----------------------------------------
                                       Scott D. Dorfman
                                       Chief Executive Officer


                                    EMPLOYEE

                                    /s/ Robert Toner
                                    -------------------------------------------
                                    Robert Toner


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