Employment Agreement
Exhibit
10.10
This
EMPLOYMENT AGREEMENT (“Agreement”)
is
made
and entered into as of September 19, 2006 (“Effective
Date”) by
and
between YP Corp., A Nevada corporation (the “Company”)
and
Xxxx
X. Xxxxxxxxxxxx (the “Executive”).
Background
The
Company has engaged the Executive, on an interim basis since November 28, 2005,
first
as
Special Assistant to the Chairman of the Board and then as Chief Financial
Officer, pursuant
to that certain Employment Agreement by and between the Company and Executive,
dated
March 31, 2006 (“Original
Agreement”).
The
Company and the Executive now desire to enter into a new Employment Agreement
to
extend
the term of Executive’s employment with the Company and further clarify the
rights and
obligations of the parties.
In
consideration of the mutual promises, covenants and agreement herein contained,
intending
to be legally bound, the parties agree as follows:
1. Employment. The
Company hereby agrees to employ Executive, and Executive hereby
agrees to serve, subject to the provisions of the Agreement, as an employee
of
the Company
in the position of Chief Financial Officer. Executive will perform all services
and acts reasonably necessary to fulfill the duties and responsibilities of
his
position and will render such services
on the terms set forth herein and will report to the Company’s Chief Executive
Officer.
2. Term. The
term
of this Agreement is for the three-year period (the “Term”)
commencing
on the Effective Date hereof and terminating on the third anniversary thereof,
or upon
the
date of termination pursuant to Section
8
of this
Agreement.
3. Compensation. Executive’s
salary during the first year of this Agreement will be
at the
annual rate of $200,000 (the “Annual
Salary”),
payable in accordance with the Company’s
regular payroll
practices. For the Company’s fiscal year ending September 30, 2008 and
fiscal year ending September 30, 2009, Executive’s Annual Salary shall be
increased by 10% of
the
preceding year’s Annual Salary. During the Term of the Executive’s employment,
he will remain
a
partner in Xxxxx, LLC (“Xxxxx”). As a partner of Xxxxx,
Executive will share with Xxxxx
a
portion of his salary (16.67%) as specified in that certain Full-Time Engagement
Resources
Agreement between the Company and Xxxxx (the “Resources
Agreement”).
4. Xxxxx
Resources. The
Company acknowledges and agrees that the Employee is and will remain a partner
of, and has and will retain an interest in, Xxxxx, which will benefit
the
Company in that the Employee will have access to certain Xxxxx resources
pursuant to a certain Full-Time Engagement Resources Agreement between the
Company and Xxxxx (the “Resources
Agreement”).
5. Business
Expenses. During
the Term, the Company will reimburse Executive for
all
reasonable business expenses incurred by him in connection with his employment
and the performance
of his duties, upon submission by the Executive of receipts and other
documentation in
conformance with the Company’s normal procedures for executives of Executive’s
position and
status.
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6. Vacations,
Holidays and Sick Leave.
During
the Term, Executive will be entitled
to paid vacation, paid holidays, and paid sick leave in accordance with the
Company’s standard
policies for its officers, as may be amended from time to time.
7. Benefits.
During
the Term, Executive will be eligible to participate fully in all health,
disability, vision and dental benefits, insurance programs, pensions and
retirement plans, 401K
plan, and other employee benefit and compensation arrangements (collectively,
the “Employee
Benefits”) available to senior officers of the Company generally, as
the same may be amended
from time to time by the Board. The Executive will be exempt from any delay
periods required
for eligibility. In lieu of the Executive participating in the Company-sponsored
employee
medical insurance benefit, the Executive will remain on his current Xxxxx
medical plan.
The
Company will reimburse the Executive for amounts paid by the Executive for
such
medical
insurance for himself of up to $500 per month upon presentation of reasonable
documentation
of premiums paid by the Executive to Xxxxx. In accordance with the U.S. federal
tax
law,
such amount will not be considered reportable W-2 income, but instead
non-taxable benefits
expense.
The
Executive must receive written evidence that the Company maintains adequate
directors’
and officers’ insurance to cover the Executive in an amount of at least
$7,500,000 at no additional
cost to the Executive, and the Company will maintain such insurance during
the
Term of
this
Agreement.
Furthermore,
the Company will maintain such insurance coverage with respect to occurrences
arising during the Term of the Agreement for at least three years following
the
termination or expiration of the Agreement or will purchase directors’ and
officers’ extended reporting
period or “tail”
policy to cover
Executive.
The
Company agrees to indemnify the Executive to the full extent permitted by law
for any
losses, costs, damages, and expenses, including reasonable attorneys’ fees, as
they are incurred,
in connection with any cause of action, suit, or other proceedings arising
in
connection with
Executive’s employment with the Company.
8. Termination
of Employment.
(a) Notwithstanding
any provision of this Agreement to the contrary, the employment
of Executive hereunder will terminate on the first to occur of the following
dates:
(i)
the
date
of Executive’s death;
(ii) the
date
on which Executive has experienced a Disability (as defined
below), and the Company gives Executive notice of termination on account of
Disability;
(iii)
the
date
on which Executive has engaged in conduct that constitutes
Cause (as defined below), and the Company gives notice of termination for
Cause;
(iv) expiration
of the Term; or
(v) the
date
on which the Company gives Executive notice of termination
for any reason other than the reasons set forth in (i) through (iv)
above.
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(b) For
purposes of this Agreement, “Disability” will mean an illness, injury
or
other
incapacitating condition as a result of which Executive is unable to perform,
with reasonable
accommodation, the services required to be performed under this Agreement for
180 consecutive days during the Term. Executive agrees to submit to such medical
examinations as may be necessary to determine whether a Disability exists,
pursuant to such reasonable requests made by the Company from time to time.
Any
determination as to the existence of a Disability will
be
made by a physician mutually selected by the Company and Executive.
(c) For
purposes of this Agreement, “Cause” will mean the occurrence of any
of
the following events, as reasonably determined by the Board:
(i)
Executive’s
willful and continued refusal to substantially perform his duties
hereunder;
(ii) Executive’s
conviction of a felony, or his guilty plea to or entry of a nolo contendere
plea
to a felony charge; or
(iii) Executive’s
breach of any material term of this Agreement or the Company’s
written policies and procedures, as in effect from time to time; provided,
however, that
with
respect to (i) or (iii)
above,
such termination for Cause will only be effective if the conduct
constituting Cause is not cured by Executive within 30 days of receipt by
Executive of written
notice specifying in reasonable detail the nature of the alleged breach. For
purposes of this
subparagraph (c), no act or omission by Executive shall be considered “willful”
unless done, or
not
done, by Executive in bad faith or without reasonable belief that such act
or
omission was in
the
best interests of Company, and any act or omission by Executive based upon
or
consistent with
authority given to Executive under this Agreement or by the Board or upon advice
of the Company’s
counsel, shall be conclusively presumed to be done in good faith and in the
best
interests
of Company. There shall be a presumption that Executive has not violated
Sections
8(c)(i)
or (iii)
above
until there is a finding by the fact finder (i.e., judge, jury, or arbitrator)
of wrongdoing
sufficient to justify termination for Cause under these sections. Until such
a
finding is made, Executive shall receive all the payments and benefits that
he
would otherwise receive if his
employment was terminated pursuant to Sections
8(a)(v)
above.
9. Compensation
in Event of Termination.
Upon
termination of this Agreement and
Executive’s employment, the Company will have no further obligation to Executive
except to pay
the
amounts set forth in this Section
9.
(a) In
the
event Executive’s employment is terminated pursuant to Sections
8(a)(i)(ii),
(iii)
or
(iv)
on or
before the expiration of the Term, Executive or Executive’s estate, conservator
or designated beneficiary, as the case may be, will be entitled to payment
of
any earned
but unpaid Annual Salary for the year in which the Executive’s employment is
terminated through
the date of termination, as well as any accrued but unused vacation,
reimbursement of expenses
and vested benefits to which Executive is entitled in accordance with the terms
of each applicable
Employee Benefits plan.
(b) In
the
event Executive’s employment is terminated pursuant to Section
8(a)(v)
on or
before the expiration of the Term, and provided that Executive executes a valid
release of any and all claims that Executive may have relating to his employment
against the Company
and its agents, including but not limited to its officers, directors and
employees, in a form provided by the Company, Executive will be entitled to
receive, as his sole and exclusive remedy,
on the date of termination, in addition to his accrued salary and benefits
through the date of
termination, a lump sum amount equal to three months of payments that Executive
would receive
under the Agreement if his employment with the Company had not been
terminated.
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10.
Confidentiality. Executive
covenants and agrees that he will not at any time during
or
after end of Term, without written consent of Company or as may be required
by
law or valid
legal process, directly or indirectly, use for his own account, or disclose
to
any person, firm or corporation, other than authorized officers, directors,
attorneys, accountants, and employees of the
Company or its subsidiaries, Confidential Information (as hereinafter defined)
of the Company.
As used herein, “Confidential
Information” of
the
Company means information about
the
Company of any kind, nature or description, including but not limited to, any
proprietary
information, trade secrets, data, formulae, supplier, client and customer lists,
or requirements,
price lists or pricing structures, marketing and sales information, business
plans or dealings
and financial information and plans as well as papers, resumes, and records
(including computer
records) that are disclosed to or otherwise known to Executive as a direct
or
indirect consequence
of Executive’s employment with the Company, which information is not generally
known
to
the public or in the business in which the Company is engaged. Confidential
Information
also includes any information furnished to the Company by a third party with
restrictions
on its use or further disclosure.
11.
Binding
Agreement.
(a) This
Agreement is a personal contract and the rights and interests of Executive
hereunder may not be sold, transferred, assigned, pledged, encumbered or
hypothecated by him, provided that all rights of the Executive hereunder shall
inure to the benefit of,
and
be enforceable by Executive’s personal or legal representatives, executors,
heirs, administrators,
successors, distributors, devisees and legatees.
(b) In
addition to any obligations imposed by law, any successor to Company
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
to
all or substantially all of the assets of the Company, is bound by this
Agreement in the same manner and
to
the same extent that the Company would be required to perform if no such
succession had taken
place.
12. Disclosure
Obligations. During
the Term, Executive agrees to make prompt and full
disclosure to the Company of any change of facts or circumstances that may
affect Executive’s
or Company’s obligations undertaken and acknowledged herein, and Executive
agrees
that the Company has the right to notify any third party of the existence and
content of Executive’s
obligations hereunder.
13.
Return
of Company Property. Executive
agrees that following the termination of
his
employment for any reason, he will promptly return all property of the Company,
its subsidiaries,
affiliates and any divisions thereof he may have managed that is then in or
thereafter comes into his possession, including, but not limited to, documents,
contracts, agreements, plans, photographs,
books, notes, electronically stored data and all copies of the foregoing, as
well as any
materials or equipment supplied by the Company to Executive.
14.
Entire
Agreement. This
Agreement contains all the understandings between the parties
hereto pertaining to the matters referred to herein, and supersedes all
undertakings and agreements,
whether oral or written, previously entered into by them with respect thereto,
including,
without limitation, the Original Agreement, which is hereby terminated.
Executive represents
that, in executing this Agreement, he does not rely, and has not relied, on
any
representation
or statement not set forth herein made by the Company with regard to the subject
matter,
bases or effect of this Agreement otherwise.
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15.
Amendment
or Modification, Waiver.
No
provision of this Agreement may be amended
or waived unless such amendment or waiver is agreed to in writing, signed by
Executive and
by a
duly authorized officer of the Company. The failure of either party to this
Agreement to enforce any of its terms, provisions or covenants will not be
construed as a waiver of the same or of
the
right of such party to enforce the same. Waiver by either party hereto of any
breach or default
by the other party of any term or provision of this Agreement will not operate
as a waiver of any other breach or default.
16.
Notices. Any
notice to be given hereunder will be in writing and will be deemed given
when delivered personally, sent by courier or fax or registered or certified
mail, postage prepaid,
return receipt requested, addressed to the party concerned at the address
indicated below or to such other address as such party may subsequently give
notice of hereunder in writing:
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To
Executive at:
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Xxxx
Xxxxxxxxxxxx
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To
the Company at:
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Suite
105
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0000
X Xxxxxxx Xxxxxx
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Xxxx,
XX 00000-0000
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Phone:(000)
000-0000
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Fax:
(000) 000-0000
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Attention:
Chief Executive Officer
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Any
notice delivered personally or by courier under this Section will be deemed
given on the
date
delivered. Any notice sent by fax or registered or certified mail, postage
prepaid, return receipt requested, will be deemed given on the date faxed or
mailed. Each party may change the address
to which notices are to be sent by giving notice of such change in conformity
with the provisions
of this Section.
17.
Severability.
In the
event that any one or more of the provisions of this Agreement
will be held to be invalid, illegal or unenforceable, the validity, legality
and
enforceability
of the remainder of the Agreement will not in any way be affected or impaired
thereby.
Moreover, if any one or more of the provisions contained in this Agreement
will
be held to
be
excessively broad as to duration, activity or subject, such provisions will
be
constructed by limiting
and reducing them so as to be enforceable to the maximum extent allowed by
applicable law.
18.
Survivorship.
The
respective rights and obligations of the parties hereunder will survive
any termination of this Agreement to the extent necessary for the intended
preservation of such rights and obligations.
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19.
Each
Party the Drafter. This
Agreement and the provisions contained in it will not
be
construed or interpreted for or against any party to this Agreement because
that
party drafted
or caused that party’s legal representative to draft any of its
provisions.
20. Governing
Law. This
Agreement will be governed by and construed in accordance
with the laws of the State of Arizona, without regard to its conflicts of laws
principles.
21.
Headings. All
descriptive headings of sections and paragraphs in this Agreement
are intended solely for convenience, and no provision of this Agreement is
to be
construed
by reference to the heading of any section or paragraph.
22.
Counterparts. This
Agreement may be executed in counterparts, each of which will
be
deemed an original, but all of which together will constitute one and the same
instrument.
[Signature
Page Follows]
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IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first
written above.
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YP
CORP., a Nevada corporation
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Executive
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/s/
Xxxxxx X. Xxxxx, Xx
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/s/
Xxxx Xxxxxxxxxxx
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Xxxxxx
X. Xxxxx, Xx
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Xxxx
Xxxxxxxxxxx
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Chief
Executive Officer
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[XXXX XXXXXXXXXXXX EMPLOYMENT AGREEMENT]
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