EMPLOYMENT AGREEMENT
AGREEMENT dated as of April 30, 1997 between Intellicell Corp., a
Delaware corporation (the "Employer" or the "Company"), and Xxxx Xxxxxx, II (the
"Employee").
W I T N E S S E T H :
WHEREAS, the Employer desires, subject to approval of the Board of
Directors of the Company (the "Board"), to employ the Employee as its Vice
President and Chief Financial Officer and to be assured of his services as such
on the terms and conditions hereinafter set forth; and
WHEREAS, the Employee is willing to accept such employment on such
terms and conditions;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, and intending to be legally bound hereby, the
Employer and the Employee hereby agree as follows:
1. Term. Employer hereby agrees to employ Employee, and Employee
hereby agrees to serve Employer for a three-year period commencing effective as
of April 30, 1997 (the "Effective Date") (such period being herein referred to
as the "Term"
2. Employee Duties.
(a) During the term of this Agreement, the Employee shall have
the duties and responsibilities of Vice President and Chief Financial Officer of
the Employer, reporting directly to the President and Executive Vice President
of Employer and the Board.
(b) The Employee shall devote all of his business time,
attention, knowledge and skills faithfully, diligently and to the best of his
ability, in furtherance of the business and activities of the Company. The
principal place of performance by the Employee of his duties hereunder shall be
the Company's principal executive offices or such other place as the Board shall
determine, although the Employee may be required to travel outside of the area
where the Company's principal executive offices are located in connection with
the business of the Company.
3. Compensation.
(a) During the term of this Agreement, the Employer shall pay
the Employee a salary (the "Salary") at a rate of $70,000 per annum, payable
bi-weekly, or at such other times as may mutually be agreed upon between the
Employer and the Employee. The Employer shall also pay the Employee a bonus (the
"Bonus") of $50,000 per annum, payable quarterly. Such Salary and Bonus may be
increased at the discretion of the Board.
(b) In addition to the foregoing, the Employee shall be
entitled to such other cash bonuses and such other compensation in the form of
stock, stock options or other property or rights as may from time to time be
awarded to him by the Board during the term of his employment hereunder. The
Company agrees, subject to Board approval, to grant to Employee five-year
incentive stock options to purchase an aggregate of 50,000 shares of Common
Stock, exercisable as to one-third of the Shares covered thereby on the first,
second and third anniversaries of the date of grant, at an exercise price equal
to the fair market value of the Company's Common Stock on the date of grant.
4. Benefits.
(a) During the term of this Agreement, the Employee shall have
the right to participate in such health and disability insurance plans which the
Company may provide to its senior executive officers and for which the Employee
is eligible, the premiums of which shall be paid by the Company.
(b) During the term of this Agreement, the Employee will be
entitled to paid vacation in accordance with the Company's policy. Such vacation
may be taken in the Employee's discretion with the prior approval of the
Employer, and at such time or times as are not inconsistent with the reasonable
business needs of the Company.
5. Travel Expenses. All travel and other expenses, including
business class air fare (or coach fares when business class is not available),
incident to the rendering of services reasonably incurred on behalf of the
Company by the Employee during the term of this Agreement shall be paid by the
Employer, provided that such expenses are preapproved by the President of the
Company, upon presentation of appropriate documentation therefor.
6. Termination. Notwithstanding the provisions of Section 1 hereof,
the Employee's employment with the Employer may be earlier terminated as
follows:
(a) By action taken by the Board, the Employee may be
discharged for cause (as hereinafter defined), effective as of such time as the
Board shall determine. Upon discharge of the Employee pursuant to this Section
6(a), the Employer shall have no further obligation or duties to the Employee,
except for payment of Salary and Bonus through the effective date of
termination, and as provided in Section 5, and the Employee shall have no
further obligations or duties to the Employer, except as provided in Section 7.
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(b) In the event of (i) the death of the Employee or (ii) by
action of the Board in the event of the inability of the Employee, by reason of
physical or mental disability, to continue substantially to perform his duties
hereunder for an aggregate period of 180 days during the term of this agreement,
during which 180 day period Salary and any other benefits hereunder shall not be
suspended or diminished. Upon any termination of the Employee's employment under
this Section 6(b), the Employer shall have no further obligations or duties to
the Employee, except as provided in Section 5, and the Employee shall have no
further obligations or duties to the Employer, except as provided in Section 7.
(c) In the event that Employee's employment with the Employer
is terminated by action taken by the Board without cause within the first 90
days of the date of this Agreement, then the Employer shall have no further
obligation or duties to Employee, except for payment of Salary and Bonus through
the second full month following the effective date of termination and as
provided in Section 5, and Employee shall have no further obligations or duties
to the Employer, except as provided in Section 7.
(d) In the event that Employee's employment with the Employer
is terminated by action taken by the Board without cause at any time after the
first 90 days following the date of this Agreement, or if the Employee resigns
from his employment at any time after 90 days following the date of this
Agreement due to a disagreement with the Employer's President or Executive Vice
President concerning a material item relating to the Company's financial
reporting obligations, then the Employer shall have no further obligations or
duties to the Employee, except for payment of Salary and Bonus through the sixth
full month following the effective date of termination and as provided in
Section 5, and Employee shall have no further obligations or duties to the
Employer, except as provided in Section 7.
(e) For purposes of this Agreement, the Company shall have
"cause" to terminate the Employee's employment under this Agreement upon (i) the
failure by the Employee to substantially perform his duties under this
Agreement, (ii) the engaging by the Employee in criminal misconduct (including
embezzlement and criminal fraud) which is materially injurious to the Company,
monetarily or otherwise, (iii) the conviction of the Employee of a felony, (iv)
gross negligence on the part of the Employee or (v) other misconduct of the
Employee in the performance of his duties hereunder. The Company shall give
written notice to the Employee, which notice shall specify the grounds for the
proposed termination and the Employee shall be given thirty (30) days to cure if
the grounds arise under clauses (i) or (v) above.
7. Confidentiality; Noncompetition.
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(a) The Employer and the Employee acknowledge that the
services to be performed by the Employee under this Agreement are unique and
extraordinary and, as a result of such employment, the Employee will be in
possession of confidential information relating to the business practices of the
Company. The term "confidential information" shall mean any and all information
(verbal or written) relating to the Company or any of its affiliates, or any of
their respective activities, other than such information which can be shown by
the Employee to be in the public domain (such information not being deemed to be
in the public domain merely because it is embraced by more general information
which is in the public domain) other than as the result of breach of the
provisions of this Section 7(a), including, but not limited to, information
relating to: trade secrets, personnel lists, financial information, research
projects, services used, pricing, customers, customer lists and prospects,
product sourcing, marketing and selling and servicing. The Employee agrees that
he will not, during his employment or subsequent to the termination of
employment, directly or indirectly, use, communicate, disclose or disseminate to
any person, firm or corporation any confidential information regarding the
clients, customers or business practices of the Company acquired by the Employee
during his employment by Employer, without the prior written consent of
Employer; provided, however, that the Employee understands that Employee will be
prohibited from misappropriating any trade secret (as defined for purposes of
California law) at any time during or after the termination of employment. At no
time during the term of this Agreement, or thereafter shall the Employee
directly or indirectly, disparage the commercial, business or financial
reputation of the Company.
(b) In consideration of Employer's hiring Employee, the
payment by the Employer to the Employee as described below and for other good
and valuable consideration, the Employee hereby agrees that he shall not, during
the period of his employment and for a period of one (1) year following such
employment, directly or indirectly, take any action which constitutes an
interference with or a disruption of any of the Company's business activities
including, without limitation, the solicitations of the Company's customers,
employees or agents.
(c) For purposes of clarification, but not of limitation, the
Employee hereby acknowledges and agrees that the provisions of subparagraph 7(b)
above shall serve as a prohibition against him, during the period referred to
therein, directly or indirectly, hiring, offering to hire, enticing, soliciting
or in any other manner persuading or attempting to persuade any officer,
employee, agent, lessor, lessee, licensor, licensee or customer who has been
previously contacted by either a representative of the Company, including the
Employee, (but only those suppliers existing during the time of the Employee's
employment by the Company, or at the termination of his
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employment), to discontinue or alter his, her or its relationship with the
Company.
(d) Upon the termination of the Employee's employment for any
reason whatsoever, all documents, records, notebooks, equipment, price lists,
specifications, programs, customer and prospective customer lists and other
materials which refer or relate to any aspect of the business of the Company
which are in the possession or under the control of the Employee including all
copies thereof, shall be promptly returned to the Company.
(e) The parties hereto hereby acknowledge and agree that (i)
the Company would be irreparably injured in the event of a breach by the
Employee of any of his obligations under this Section 7, (ii) monetary damages
would not be an adequate remedy for any such breach, and (iii) the Company shall
be entitled to injunctive relief, in addition to any other remedy which it may
have, in the event of any such breach.
(f) The parties hereto hereby acknowledge that, in addition to
any other remedies the Company may have under Section 7(e) hereof, the Company
shall have the right and remedy to require the Employee to account for and pay
over to the Company all compensation, profits, monies, accruals, increments or
other benefits (collectively, "Benefits") derived or received by the Employee as
the result of any transactions constituting a breach of any of the provisions of
Section 7, and the Employee hereby agrees to account for any pay over such
Benefits to the Company.
(g) Each of the rights and remedies enumerated in Section 7(e)
and 7(f) shall be independent of the other, and shall be severally enforceable,
and all of such rights and remedies shall be in addition to, and not in lieu of,
any other rights and remedies available to the Company under law or in equity.
(h) If any provision contained in this Section 7 is hereafter
construed to be invalid or unenforceable, the same shall not affect the
remainder of the covenant or covenants, which shall be given full effect,
without regard to the invalid portions.
(i) If any provision contained in this Section 7 is found to
be unenforceable by reason of the extent, duration or scope thereof, or
otherwise, then the court making such determination shall have the right to
reduce such extent, duration, scope or other provision and in its reduced form
any such restriction shall thereafter be enforceable as contemplated hereby.
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(j) It is the intent of the parties hereto that the covenants
contained in this Section 7 shall be enforced to the fullest extent permissible
under the laws and public policies of each jurisdiction in which enforcement is
sought (the Employee hereby acknowledging that said restrictions are reasonably
necessary for the protection of the Company). Accordingly, it is hereby agreed
that if any of the provisions of this Section 7 shall be adjudicated to be
invalid or unenforceable for any reason whatsoever, said provision shall be
(only with respect to the operation thereof in the particular jurisdiction in
which such adjudication is made) construed by limiting and reducing it so as to
be enforceable to the extent permissible, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of said
provision in any other jurisdiction.
8. General. This Agreement is further governed by the following
provisions:
(a) Notices. All notices relating to this Agreement shall be
in writing and shall be either personally delivered, sent by telecopy (receipt
confirmed) or mailed by certified mail, return receipt requested, to be
delivered at such address as is indicated below, or at such other address or to
the attention of such other person as the recipient has specified by prior
written notice to the sending party. Notice shall be effective when so
personally delivered, one business day after being sent by telecopy or five days
after being mailed.
To the Employer:
Intellicell Corp.
0000 Xxxxxxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxx Xxxxx
To the Employee:
Xxxx Xxxxxx, II
00000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
With, in either case, a copy in the same manner to:
Xxxxxx Xxxxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
(b) Parties in Interest. Employee may not delegate his duties
or assign his rights hereunder. This Agreement shall inure to the benefit of,
and be binding upon, the
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parties hereto and their respective heirs, legal representatives, successors and
permitted assigns.
(c) Entire Agreement. This Agreement supersedes any and all
other agreements, either oral or in writing, between the parties hereto with
respect to the employment of the Employee by the Employer and contains all of
the covenants and agreements between the parties with respect to such employment
in any manner whatsoever. Any modification or termination of this Agreement will
be effective only if it is in writing signed by the party to be charged.
(d) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California. Employee
agrees to and hereby does submit to jurisdiction before any state or federal
court of record in Los Angeles County, California, or in the state and county in
which such violation may occur, at Employer's election.
(e) Warranty. Employee hereby warrants and represents as
follows:
(i) That the execution of this Agreement and the
discharge of Employee's obligations hereunder will not breach or conflict with
any other contract, agreement, or understanding between Employee and any other
party or parties.
(ii) Employee has ideas, information and know-how
relating to the type of business conducted by Employer, and Employee's
disclosure of such ideas, information and know-how to Employer will not conflict
with or violate the rights of any third party or parties.
(f) Severability. In the event that any term or condition in
this Agreement shall for any reason be held by a court of competent jurisdiction
to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other term or condition of
this Agreement, but this Agreement shall be construed as if such invalid or
illegal or unenforceable term or condition had never been contained herein.
(g) Execution in Counterparts. This Agreement may be executed
by the parties in one or more counterparts, each of which shall be deemed to be
an original but all of which taken together shall constitute one and the same
agreement, and shall become effective when one or more counterparts has been
signed by each of the parties hereto and delivered to each of the other parties
hereto.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.
INTELLICELL CORP.
By:/s/ Xxx Xxxxx
--------------------------------
Name: Xxx Xxxxx, President
/s/
-----------------------------------
Xxxx Xxxxxx, II
