EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, effective as of __________, 2005 (this "Agreement"),
between Xxxxxx Xxxxxxx, an individual residing at _________ (the "CFO"), and
Xxxxxxx.xxx, Inc., an Utah corporation with an office currently at 000 Xxxxxx
Xxxxxx, Xxxxxxx, XX 00000 (the "Company").
W I T N E S S E T H :
WHEREAS, the Company and the Board of Directors of the Company desire to
memorialize the employment of the CFO on a full-time basis as its Chief
Financial Officer and the CFO desires to accept such employment subject to the
terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
set forth herein, the parties hereto agree as follows:
ARTICLE I
POSITION; DUTIES; TERM
1.1 Position. The Company hereby employs the CFO as the Chief Financial
Officer of the Company, which employment the CFO hereby accepts, all in the
capacity and on the terms and conditions hereinafter set forth.
1.2 Duties.
(a) During the Term (as defined below), the CFO shall be a
full-time employee of the Company, all under and subject to the direction and
control of the Board of Directors of the Company (the "Board").
(b) In his capacity as Chief Financial Officer, the CFO shall be the
senior financial officer of the Company with principal responsibility for the
Company's financial, financial reporting, and accounting functions, and he shall
perform such duties for the Company as are consistent with the foregoing.
(c) The services to be performed by the CFO shall be commensurate
with the position of the CFO as the most senior financial officer of the
Company. In this connection, during the Term (i) the CFO shall not render
services to or for any other person, firm, corporation or business in this
capacity and (ii) shall have no interest directly or indirectly in any other
person, firm, corporation or business whose business is related to or
competitive with the business of the Company; provided, however, the CFO may
own, directly or indirectly, solely as an investment, securities of any entity
which are traded on any national securities exchange or which are admitted to
quotation on The NASDAQ Stock Market Inc. if the CFO (a) is not a controlling
person of, or a member of a group which controls, such entity and (b) does not,
directly or indirectly, own one percent or more of any class of securities of
such entity. Notwithstanding the foregoing, so long as it does not interfere
with his full time employment hereunder, the CFO may attend to outside
investments and serve as a director, trustee or officer of or otherwise
participate in charitable and civic organizations and serve as director of
corporations whose business is unrelated to the business of the Company and
continue to pursue his other business interests.
1.3 Term. The term of employment shall commence as of the date set forth above
and shall continue until this Agreement is terminated in accordance with the
terms hereof (the "Term"). Notwithstanding anything contained herein to the
contrary, the CFO can terminate his employment hereunder at any time hereafter
upon sending written notice of termination to the Company at least sixty (60)
days prior to the termination.
ARTICLE II
SALARY; BONUS; OPTIONS
2.1 Annual Base Salary. During each twelve month period of the Term, the
annual base salary (the "Base Salary") to be paid by the Company to the CFO
shall be One Hundred Twenty Thousand Dollars ($140,000), payable in equal
bi-monthly installments, or in such other manner as the parties shall mutually
agree, subject to withholding for applicable taxes. The Base Salary shall be
subject to an annual increase at the discretion of the Board.
2.2 Bonus. In addition to the Base Salary, the CFO shall be eligible for a
bonus (the "Bonus") of up to Fifty Thousand Dollars ($50,000). The Bonus shall
be based on the Company's overall performance and meeting established objectives
which shall be submitted by the CFO and approved by the Board.
2.3 Stock Options.
(a) The Company hereby grants to the CFO 1,000,000 options for the
purchase of the Company's common stock (each, a "Stock Option"). Each Stock
Option shall give the CFO the right to purchase one (1) share of the common
stock of the Company for $0.05.
(b) The Stock Options shall vest pro ratably every three (3) months over three
(3) year period commencing on the effective date of this Agreement. The vested
options shall be exercisable until the earlier of 5 years after vesting or 365
days after termination of CFO's employment with the Company. No additional
vesting of options shall occur after the CFO's death, disability, or cessation
of employment with the Company for any reason or no reason.
(c) If the company has a Change of Control (as defined below), all remaining
Options will automatically vest on the effective date of the Change.
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ARTICLE III
BENEFITS
3.1 Business Expenses The Company, upon presentation by the CFO of
appropriate documentation, shall reimburse the CFO for all reasonable and
necessary business expenses incurred by the CFO in connection with the
performance of his duties under this Agreement, including reasonable
accommodation expenses during travel required in connection with the performance
of the CFO's duties. Such reimbursement shall be paid to the CFO within five (5)
business days thereafter.
3.2 Directors' and Officers' Liability Insurance. The CFO shall be covered
by the directors' and officers' insurance policy to be obtained by the Company.
The Company agrees to defend the CFO from and against any and all lawsuits
initiated against the Company and/or the CFO.
3.3 Additional Benefits. The CFO shall be entitled to participate in any
pension or profit sharing plans, group health, accident or life insurance plans,
group medical and hospitalization plan, and other similar benefits as may be
available to the CFOs of the Company. The CFO shall assist the Company in
adopting the proper plans for the Company.
ARTICLE IV
TERMINATION
4.1 Termination without Cause. The CFO's employment hereunder may be
terminated by the Company without Cause at any time within the first three-month
period. After this three months period, the Company could terminate the
employment of the CFO without cause and without notice if the Company pays the
CFO under normal payroll practices for a 1 year period. If the CFO's employment
is terminated by the Company without Cause, the Company shall pay the Base
Salary through the date of termination.
4.2 Termination with Cause. The CFO's employment hereunder may be terminated by
the Company for Cause (hereafter defined) at any time upon notice from the
Company to the CFO. For purposes hereof, "Cause" shall mean any one of the
following: (i) willful and continuing disregard of his job responsibilities or
material breach by the CFO of this Agreement, which continues for 20 days
after delivery to the CFO of notice thereof or (ii) fraud, embezzlement,
conviction of a felony or serious crime, violation of ethics code or other
serious misconduct. If the CFO's employment is terminated by the Company for
Cause or by the CFO for any reason, including without limitation, the CFO's
death or disability, the Company shall pay the CFO or his heirs or personal
representatives the Base Salary accrued through the date of termination. 3.
4.3 "GOOD REASON" shall mean: your right to voluntarily and immediately
terminate your employment with the Company if after a Change of Control:
(i) you suffer a material reduction in your authority or areas of
responsibility,
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(ii) your base compensation is reduced by an amount greater than five
percent (5%) of your Base Compensation prior to such reduction.
"CHANGE OF CONTROL" shall mean the occurrence of any of the following
events:
(i) The acquisition, other than from the Company (which term for
purposes of this Subsection (i) includes any successor corporation),
or any subsidiary thereof by any person or group (as such terms are
used for the purposes of Sections 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended (the "1934 ACT")) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
0000 Xxx) of securities with voting power equal to fifty percent
(50%) or more of the combined voting power of the Company's then
outstanding voting securities;
(ii) Approval by the Company's stockholders of (a) a merger or
consolidation of the Company with or into another corporation if the
stockholders of the Company, immediately before such merger or
consolidation do not, immediately after 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 Company outstanding immediately before such merger or
consolidation or (b) dissolution of the Company or an agreement for
the sale or other disposition of all or substantially all of the
assets of the Company.
Notwithstanding the foregoing, a Change in Control shall not be
deemed to occur solely because fifty percent (50%) or more of the
combined voting power of the Company's then outstanding securities
is acquired by (i) a trustee or other fiduciary holding securities
under one or more employee benefit plans maintained by the Company
or any of its subsidiaries or (ii) any corporation which,
immediately prior to such acquisition, is owned directly or
indirectly by the stockholders of the Company in the same proportion
as their ownership of stock in the Company immediately prior to such
acquisition.
For purposes of the foregoing definition, the Company's stockholders
are deemed to be the indirect owners of any assets, including stock
interests, held by the Company or any subsidiary thereof.
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ARTICLE V
REPRESENTATION; NON-COMPETITION; CONFIDENTIALITY
5.1 CFO Representation. The CFO represents that the CFO's execution of
this Agreement and the performance of his duties required hereunder will neither
be a breach of any other employment or other agreement nor a breach of any
non-competition or similar agreement.
5.2 Non-Competition. (a) The CFO agrees that during the Term and for the
period of one (1) year thereafter, he will not engage, directly or directly,
either as principal, agent, consultant, proprietor, creditor, stockholder,
director, officer or employee, or participate in the ownership, management,
operation or control of any business which directly or indirectly competes with
the business of the Company. The CFO acknowledges and agrees that the current
market for the Company's business extends throughout the world and that it is
therefore reasonable to prohibit the CFO from competing with the Company
anywhere in such territory. This Section shall not apply to the CFO's ownership
of less than five percent (5%) of the capital stock of a company having a class
of capital stock which is traded on any national stock exchange or on the
over-the-counter market.
(b) During the Term and for the period of one (1) year thereafter,
the CFO agrees that he will not, directly or indirectly, (i) solicit, divert or
recruit or encourage any of the employees of the Company, or any person who was
an employee of the Company during the Term, to leave the employ of the Company
or terminate or alter their contractual relationship in a way that is adverse to
the Company's interests, (ii) solicit or divert business from the Company, or
assist any person or entity in doing so or attempting to do so or (iii) cause or
seek to cause any person or entity to refrain from dealing or doing business
with the Company or assist any person or entity in doing so or attempting to do
so.
5.3 Confidential Information. (a) The CFO agrees that he shall hold in
strict confidence and shall not at any time during or after his employment with
the Company, directly or indirectly, (i) reveal, report, publicize, disclose, or
transfer any Confidential Information (as described below) or any part thereof
to any person or entity, (ii) use any of the Confidential Information or any
part thereof for any purpose other than in the course of his duties on behalf of
the Company, or (iii) assist any person or entity other than the Company to
secure any benefit from the Confidential Information or any part thereof. All
Confidential Information (regardless of the medium retained) and all abstracts,
summaries or writings based upon or reflecting any Confidential Information in
the CFO's possession shall be delivered by the CFO to the Company upon request
therefor by the Company or automatically upon the expiration of the Term or
termination of this Agreement.
(b) For purposes of this Agreement, "Confidential Information"
shall mean any information relating to the business, operations, affairs, assets
or condition (financial or otherwise) of the Company which is not generally
known by non-company personnel, or is proprietary or in any way constitutes a
trade secret (regardless of the medium in which information is maintained) which
the CFO develops or which the CFO obtains knowledge of or access to through or
as a result of the CFO's relationship with the Company. Confidential Information
specifically includes, without limitation, business and marketing plans,
financings, cost and pricing information, supplier information, all source code,
system and user documentation, and other technical documentation pertaining to
the hardware and software programs of the Company, including any proposed design
and specifications for future products and products in development, and all
other technical and business information considered confidential by the Company.
Confidential Information shall not include any information that is generally
publicly available or otherwise in the public domain other than as a result of a
breach by the CFO of his obligations hereunder. For purposes of this Agreement,
information shall not be deemed Confidential Information if (i) such information
is available from public sources, (ii) such information is received from a third
party not under an obligation to keep such information confidential, or (iii)
the CFO can conclusively demonstrate that such information had been
independently developed by the CFO.
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5.4 Remedies. The CFO agrees and acknowledges that the foregoing
restrictions and the duration and the territorial scope thereof as set forth in
this Sections 5.2 and 5.3 are under all of the circumstances reasonable and
necessary for the protection of the Company and its business. In the event that
the CFO shall breach any of the provisions of Sections 5.2 or 5.3, in addition
to and without limiting or waiving any other remedies available to the Company,
at law or in equity, the Company shall be entitled to immediate injunctive
relief in any court, domestic or foreign, having the capacity to grant such
relief, to restrain any such breach or threatened breach and to enforce the
provision of this Agreement.
ARTICLE VI
MISCELLANEOUS
6.1 Entire Agreement. This Agreement constitutes the entire understanding
between the Company and the CFO with respect to the subject matter hereof and
supersedes any and all previous agreements or understandings between the CFO and
the Company concerning the subject matter hereof, all of which are merged
herein.
6.2 Successors. This Agreement shall be binding upon and inure to the
benefit of the CFO and his heirs and personal representatives, and the Company
and its successors and assigns.
6.3 Notices. All notices and other communications required or permitted
hereunder shall be delivered personally, sent via facsimile, certified or
registered mail, return receipt requested, or next day express mail or
overnight, nationally recognized courier, postage prepaid with proof of receipt,
to the address or telephone number (in the case of facsimile) set forth above.
Such addresses and/or telephone numbers may be changed by notice given in the
manner provided herein. Any such notice shall be deemed given (i) when delivered
if delivered personally, (ii) the day after deposit with the express or courier
service when sent by next day express mail or courier, (iii) five (5) days after
deposit with the postal service when sent by certified or registered mail, or
(iv) when sent over a facsimile system with answer back response set forth on
the sender's copy of the document.
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6.4 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey, without regard to choice of
law principles.
6.5 Amendment and Modification. This Agreement may be amended, modified or
supplemented only by written agreement executed by the Company and the CFO.
6.6 Headings. The section headings herein are inserted for the convenience
of the parties only and are not to be construed as part of the terms of this
Agreement or to be taken into account in the construction or interpretation of
this Agreement.
6.7 Counterparts. This Agreement may be executed in counterparts and by
facsimile, each of which shall be deemed to be an original but both of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have entered into this Agreement as of the
day and year first above written.
XXXXXXX.XXX, INC.
By: /s/ Xxxxxx Xxxxxx
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Name: Xxxxxx Xxxxxx
Title: Chief Executive Officer
/s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx
