EXHIBIT 10.25
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement"), dated as of July 31, 2004,
by and between XXXX, Inc., a Delaware corporation ("the Company") located at
0000 Xxxxx Xxxxx Xxxx., Xxx Xxxxx, Xxxxxx 00000, and Xxxxxxx X. Xxxxxx, whose
address is 0000 Xxxxxxxx Xxxxx Xxxxx, Xxx Xxxxx, Xxxxxx 00000, ("the
Executive"), and is based upon the following:
RECITALS
WHEREAS, the Executive is currently acting as the Company's President and
Chief Operating Officer and member of the Company's Board of Directors ("Board
of Directors");
WHEREAS, the Company wishes to retain the services of the Executive, and
the Executive wishes to render services to the Company, as President and Chief
Operating Officer;
WHEREAS, the Company and the Executive wish to set forth in this
Agreement the duties and responsibilities that the Executive has agreed to
undertake on behalf of the Company in his role as its Chief Operating Officer
only;
WHEREAS, the Company and the Executive intend that this Agreement will
supersede and replace any and all other employment agreements or arrangements
for employment entered into by and between the Company and the Executive, and
that any such employment agreements or arrangements shall have no further
force or effect.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises contained in this Agreement, the Company and the Executive (who are
sometimes individually referred to as a "party" and collectively referred to
as the "parties") agree as follows:
AGREEMENT
1. SPECIFIED PERIOD AND OFFICE LOCATION/HEADQUARTERS.
The Company hereby employs the Executive, and the Executive hereby
accepts employment with the Company, pursuant to the terms of this Agreement
beginning on July 31, 2004 the "Effective Date" and expiring on July 31, 2007
(the "Term"). The Company will provide the Executive with his own office and
staff and pay for the office, staff and all facilities and equipment required
by the Executive and his staff.
2. GENERAL DUTIES.
The Executive shall devote sufficient productive time, ability, and
attention to the Company's business during the term of this Agreement. In his
capacity as Chief Operating Officer, the Executive shall have the overall
responsibility for the day-to-day supervision, control and management of the
business and the employees of the Company. The Executive shall conduct and
perform all services, acts, or things necessary or advisable to discharge his
duties under this Agreement, and such other duties as are commonly performed
by a Chief Operating Officer of a publicly traded corporation of the size of
the Company or which may, from time to time, be prescribed by the Company
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through the Board of Directors consistent with his duties as a Chief Operating
Officer. Furthermore, the Executive agrees to cooperate, and work to the best
of his ability, with the Company's management team, which includes the Board
of Directors, officers and other employees, to continually improve the
Company's reputation. Independent from XXXX, Executive shall be entitled to
produce and/or host television and/or radio shows, write newspaper articles
and/or books and participate in other business ventures including consulting,
advising, and serving on the Board of Directors provided the same do not
compete with the Company's business or materially interfere with Executive's
duties set forth in this Agreement.
3. AUTHORITY, HUMAN, AND CAPITAL RESOURCES.
The Executive shall have authority to hire, fire, train and manage the
staff of the Company as well as to negotiate and execute contracts and other
documents. Should any single contract encompass commercial commitments in the
amount of $100,000 or more, such authority shall be subject to approval by the
Board of Directors prior to execution of any such contract. The Company shall
provide the Executive with the human and capital resources (including, but not
limited to, development funding, equity investment, debt-financing) and
dedicated management support staff (including, but not limited to, technical,
financial, legal, tax, accounting) required to promote the mission of the
Company and execute the business plan and the requisite tools and resources
needed to perform the Company's business (including, but not limited to, cell
phones, computer, Internet, office supplies).
4. COMPENSATION.
(a) Base Salary. During the first year of the Term, the Company shall
pay to the Executive a base salary of $195,000 per year, in equal consecutive
monthly installments of $16,250.00 per month (the "Base Salary") on the first
of each month for the prior month of work or a more frequent pay schedule in
accordance with Company payroll policies. In the second and third years of the
Term, the Base Salary shall be increased by $25,000/year provided that during
the immediately preceding Fiscal Year the Company generates an operating
profit ("Operating Profit") pursuant to the Company's audited financial
statements determined and calculated per Generally Accepted Accounting
Principles ("GAAP")... Once the increased Base Salary level is reached, it
shall not be reduced for any reason. The Base Salary shall be subject to any
applicable federal or state tax withholdings and/or employee deductions.
(b) Common Stock Grant. As an incentive for continued employment with
the Company, the Executive shall be entitled to a stock grant of restricted
common shares of Company in the amount of 2,000,000 shares (the "Shares"),
which shall vest as follows: 1,000,000 Shares at signing of this Agreement,
500,000 Shares on the 1st anniversary of this Agreement, and 500,000 Shares on
the 2nd anniversary of this Agreement. Once the initial Shares vest at
signing, additional shares are earned "only" by continued employment with the
Company through the anniversary date or change of ownership or control. The
Shares will then be vested in the name of the Executive and issued as fully
paid by the Company.
(c) Change of ownership compensation. In the event of a change in
ownership or control of the Company, either friendly or hostile, Executive
shall immediately receive a minimum base salary of $250,000 per year and all
remaining unvested Shares shall immediately vest and be issued effective as of
the date in change of ownership control.
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(d) Executive benefit plans. During the Term of this Agreement, the
Executive shall participate equally with other senior executive employees in
any retirement, pension, profit sharing, insurance, or other plans which may
now be in effect or which may be adopted by the Company pursuant to the terms
of each plan. The benefit plans shall be with such underwriters and shall
contain such provisions as the Company and the Executive may determine from
time to time. Insurance provisions shall cover the Executive and his immediate
family, including, but not limited to, term life, long-term disability,
medical, dental, vision, and other related benefits.
5. REIMBURSEMENT OF BUSINESS EXPENSES.
The Company shall provide the Executive an auto allowance of $750.00 per
month and shall reimburse the Executive for all reasonable business expenses
incurred by the Executive in connection with the business of the Company
within 10 (ten) days following the submission of an expense report documenting
expenses. Each such expenditure shall be reimbursable only if the Executive
furnishes to the Company such documentary evidence as may be required by
federal and state statutes and regulations issued by the appropriate taxing
authorities for the substantiation of each such expenditure as an income tax
deduction.
6. ANNUAL VACATION/HOLIDAY/SICK LEAVE.
During the Term, the Executive shall be entitled to 6 weeks paid vacation
per year, which vacation time shall not be taken until the expiration of at
least 90 days from the Effective Date. The Executive shall be entitled to all
holiday and sick leave in accordance with the Company's general policy for its
employees. The Executive shall be entitled to take the Christmas week off with
pay.
7. INDEMNIFICATION OF LOSSES.
So long as the Executive's actions were taken in good faith and in
furtherance of the Company's business and within the scope of the Executive's
duties and authority, the Company shall indemnify and hold the Executive
harmless from any and all claims, losses and expenses sustained by the
Executive as a result of any action taken by him in connection with his duties
under this Agreement, and the Company shall defend the Executive, at the
Company's expense, in connection with any and all claims by stockholders or
third parties which are based upon actions taken by the pursuant to this
agreement to the full extent of Delaware law.
8. PERSONAL CONDUCT.
Except as set forth in paragraph 2 of this Agreement, the Executive
agrees promptly and faithfully to comply with all present and future written
policies, requirements, directions, requests, rules and regulations of the
Company in connection with the Company's business provided to him. The
Executive further agrees to conform to all laws and shall not at any time
commit any act or become involved in any situation or occurrence which brings
the Company into public scandal, ridicule or which will reflect unfavorably on
the reputation of the Company.
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9. TERMINATION FOR CAUSE.
The Company reserves the right to declare the Executive in default of
this Agreement if the Executive fails to adequately perform or willfully
breaches or habitually neglects the material duties which he is required to
perform under the terms of this Agreement, or if the Executive commits such
material acts of dishonesty, fraud, misrepresentation, gross negligence or
willful misconduct as would prevent the effective performance of his duties or
which results in material harm to the Company or business. The Company may
terminate this Agreement for cause by giving written notice of termination to
the Executive. If the Executive's failure, breach or violation is of a nature
that is curable, the Executive shall have fifteen business days after written
notice of such failure, breach or violation is given to him to affect the cure
thereof. Upon such termination the obligations of the Executive and the
Company under this Agreement shall immediately cease. Such termination shall
be without prejudice to any other remedy to which the Company may be entitled
either at law, in equity, or under this Agreement. If the Executive's
employment is terminated pursuant to this paragraph, the Company shall pay to
the Executive, immediately upon such termination, any accrued but unpaid
amounts earned pursuant to Sections 4, 5 and 6.
10. TERMINATION WITHOUT CAUSE.
(a) Death. The Executive's employment shall terminate upon the death of
the Executive. Upon such termination, the obligations of the Executive and the
Company under this Agreement shall immediately cease except as hereinafter set
forth. In the event of a termination pursuant to this section, the Executive
shall be entitled to receive any amounts accrued but unpaid pursuant to
Sections 4, 5 & 6 of this Agreement. The Executive's successors, heirs,
representatives and/or executor(s) shall be entitled to exercise the stock
grants provided for in paragraph 4 following the death of the Executive. All
other rights the Executive has under any benefit or stock option plans and
programs shall be determined in accordance with the terms and conditions of
such plans and programs.
(b) Disability. The Company reserves the right to terminate the
Executive's employment upon 10 (ten) days written notice if, for a consecutive
period of 90 (ninety) days, the Executive is prevented from discharging his
duties under this Agreement due to any physical or mental disability. During
any such period of disability the Executive shall continue to receive all
compensation and benefits as if he was not disabled. Upon such termination the
obligations of the Executive and the Company under this Agreement shall
immediately cease. In the event of a termination pursuant to this section the
Executive shall be entitled to receive any accrued and unpaid amounts earned
pursuant to section 4,5 & 6. All other rights the Executive has under any
benefit or stock option plans and programs shall be determined in accordance
with the terms and conditions of such plans and programs.
(c) Election By The Executive. The Executive may elect to terminate his
employment at any time upon not less than 60 (sixty) days following written
notice by the Executive to the Board. In the event of a termination pursuant
to this section, the Executive shall be entitled to receive any accrued and
unpaid amounts earned pursuant to Section 4, 5 & 6. All other rights the
Executive has under any benefit or stock option plans and programs shall be
determined in accordance with the terms and conditions of such plans and
programs.
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(d) Election By The Company and Termination Fee. The Company may
terminate the Executive's employment upon not less that 60 (sixty) days
written notice by the Company to the Executive. In the event of a termination
pursuant to this section, the Executive shall be entitled to receive any
accrued and unpaid amounts earned and stock options granted pursuant to
Section 4, 5 & 6. All other rights the Executive has under any benefit or
stock option plans and programs shall be determined in accordance with the
terms and conditions of such plans and programs, except that the Company will
continue to provide Executive medical insurance at no cost to Executive for a
12 (twelve) month period. In addition, within 10 (ten) days following the
effective date of termination, the Company shall pay the Executive a
termination fee in an amount equal to 12 (twelve) months of the Executive's
Base Salary (as that term is defined in section 4(a)), which the Executive
receives as of the date of termination.
(e) Termination By The Executive For Good Reason. The Executive may
terminate this agreement immediately based on his reasonable determination
that one of the following events has occurred:
(i) The Company intentionally and continually breaches or wrongfully
fails to fulfill or perform (A) its obligations, promises or covenants under
this Agreement; or (B) any warranties, obligations, promises or covenants in
any agreement (other than this agreement) entered into between the Company and
the Executive, without cure;
(ii) The Company terminates this Agreement and the Executive's
employment hereunder, and such termination does not constitute termination for
cause,
(iii) Without the consent of the Executive, the Company: (A)
substantially alters or materially diminishes the position, nature, status,
prestige or responsibilities of the Executive or location of the Executive's
office then in effect by mutual agreement of the parties; (B) assigns
additional duties or responsibilities to the Executive which are inconsistent
with the position, nature, status, prestige or responsibilities of the
Executive then in effect; (C) removes or fails to reappoint or re-elect the
Executive to the Executive's offices under this Agreement (as they may be
changed or augmented from time-to-time with the consent of the Executive), or
as a director of the Company, except in connection with the Executive's
disability; and (D) changed the nature of its business operations;
(iv) The Executive is removed from the Board without his consent; or
the Company fails to nominate or reappoint the Executive to the Board (unless
the Executive is deceased or disabled, or such removal or failure is
attributable to an event which would constitute termination for cause), or if
the Executive is so nominated, the stockholders of the Company fail to
re-elect the Executive to the Board;
(v) The Company intentionally requests or causes the Executive to
commit or participate in any felony or other serious crime; and/or
(vi) The Company engages in other conduct constituting legal cause
for termination.
(vii) The Company files for protection under the Bankruptcy laws of
the United States.
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If the Executive terminates this Agreement pursuant to this Section, the
obligations of the Executive and the Company under this Agreement shall
immediately cease. In the event of a termination pursuant to this section, the
Company shall pay the Executive a termination fee in an amount equal to 12
(twelve) months of the Executive's Base Salary (as the term is defined in
paragraph 4(a)) at the time of termination. All other rights the Executive has
under benefit or stock option plans and programs shall be determined in
accordance with the terms and conditions of such plans and programs, except
that the Company will continue to provide Executive medical insurance at no
cost to Executive for a 12 (twelve) month period.
11. COVENANTS NOT TO COMPETE OR SOLICIT.
Based upon the Executive's unique and essential value to the Company and
the receipt of the compensation as set forth in this Agreement, the Executive
agrees to the following covenants and/or restrictions following the
termination of his employment with the Company where such termination results
from (a) the Executive's voluntary election to terminate his employment with
the Company as defined in Section 10(c) or (b) the Executive's termination by
the Company for cause as defined in Section 9 above. In only those events, the
Executive hereby covenants and agrees that for a period of 18 (eighteen)
months from the date of the termination of the Executive's employment with the
Company as defined above, the Executive shall not, without the prior written
consent of the Company (which consent may be withheld in the sole and absolute
discretion of the Company), directly or indirectly, either alone or in
association or in connection with or on behalf of any person, firm,
partnership, corporation, venture or other entity now existing or hereafter
created: (i) be or become interested or engaged in, directly or indirectly,
with any Competitive Business including, without limitation, as on organizer,
partner, joint-venture, stockholder, officer, director, employee, manger,
independent sales representative, associate, consultant, or agent of, or a
supplier, lender, vendor, vendee, lesser, or lessee to, any Competitive
Business; (ii) in any manner associate with, aid or give information or
financial assistance to any Competitive Business.. The term "Competitive
Business" is defined as any business that is competitive with the Company's
Business as of the date of termination, whether such business is conducted by
a proprietorship, partnership, corporation or other form of entity or venture;
provided, however, that the exclusions set forth in paragraph 2 of this
Agreement shall not be considered as an aspect of the "Competitive Business"
or "Company's Business." The Executive further covenants and agrees that for a
period of 18 (eighteen) months from the date of the termination of the
Executive's employment with the Company as defined above, the Executive shall
not, either for the Executive's own account or directly or indirectly in
conjunction with or on behalf of any person, partnership, corporation or other
entity or venture, solicit any customer, account, officer, partner, manager,
agent or employee of the Company or any of the Company's business; (ii) the
covenants or restrictions embodied herein relate to matters which are of a
special, unique and extraordinary value; and (iii) a material breach of any of
the covenants or restrictions embodies herein may result in irreparable harm
and damages which cannot be adequately compensated by a monetary award.
12. ELECTION TO BOARD OF DIRECTORS.
As of the Effective Date, the Executive shall be duly elected as member
of the Company's Board of Directors.
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13. NO CONFLICTING DUTIES.
The Executive shall devote sufficient productive time, ability, and
attention to the business of the Company during the term of this Agreement in
a manner that will serve the best interests of the Company. The Executive
hereby confirms he is under no contractual commitments inconsistent with his
obligations set forth in this Agreement. During the term of this Agreement,
and except as otherwise set forth in paragraph 2 of this Agreement, the
Executive will not render or perform services, or enter into any contract to
do so, for any other corporation, firm, entity or person that are inconsistent
with the provisions of this Agreement. This Agreement shall not be interpreted
to prohibit the Executive from making passive personal investments, engaging
in personal or charitable activities, or serving as a director, consultant, or
advisor to any business or entity that does not conflict with his duties or
compete directly with the business of the Company.
14. MISCELLANEOUS.
(a) Preparation of Agreement. It is acknowledged by each party that such
party either had separate and independent advice of counsel or the opportunity
to avail itself or himself of it. In light of these facts it is acknowledged
that no party shall be construed to be solely responsible for the drafting
hereof, and therefore any ambiguity shall not be construed against any party
as the alleged draftsman of this Agreement.
(b) Cooperation. Each party agrees, without further consideration, to
cooperate and diligently perform any further reasonable acts, deeds and things
and to execute and deliver any documents that may from time to time be
reasonably necessary or otherwise reasonably required to consummate, evidence,
confirm and/or carry out the intent and provisions of this Agreement, all
without undue delay or expense.
(c) Interpretation.
(i) Entire Agreement/No Collateral Representations. Each party
expressly acknowledges and agrees that this Agreement: (1) is the final,
complete and exclusive statement of the agreement of the parties with respect
to the subject matter hereof; (2) supersedes any prior or contemporaneous
agreements, promises, assurances, guarantees, representations, understandings,
conduct, proposals, conditions, commitments, acts, course of dealing,
warranties, interpretations or terms of any kind, oral or written
(collectively and severally, the "Prior Agreements"), except Option
Agreements, and that any such Prior Agreements are of no force or effect
except as expressly set forth herein; and (3) may not be varied, supplemented
or contradicted by evidence of Prior Agreements, or by evidence of subsequent
oral agreements. Any agreement hereafter made shall be ineffective to modify,
supplement or discharge the terms of this Agreement, in whole or in part,
unless such agreement is in writing and signed by the party against whom
enforcement of the modification or supplement is sought.
(ii) Waiver. No breach of any agreement or provision herein
contained, or of any obligation under this agreement, may be waived, nor shall
any extension of time for performance of any obligations or acts be deemed an
extension of time for performance of any other obligations or acts contained
herein, except by written instrument signed by the party to be charged or as
otherwise expressly authorized herein. No waiver of any breach of any
agreement or provision herein contained shall be deemed a waiver of any
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preceding or succeeding breach thereof, or a waiver or relinquishment of any
other agreement or provision or right or power herein contained.
(iii) Remedies Cumulative. The remedies of each party under this
Agreement are cumulative and shall not exclude any other remedies to which
such party may be lawfully entitled.
(iv) Severability. If any term or provision of this Agreement or the
application thereof to any person or circumstance shall, to any extent, be
determined to be invalid, illegal or unenforceable under present or future
laws effective during the term of this agreement, then and, in that event: (A)
the performance of the offending term or provision (but only to the extent
it's application is invalid, illegal or unenforceable) shall be excused as if
it had never been incorporated into this Agreement, and, in lieu of such
excused provision, there shall be added a provision as similar in terms and
amount to such excused provision as may be possible and be legal, valid and
enforceable, and (B) the remaining part of this Agreement (including the
application of the offending term or provision to persons or circumstances
other than those as to which it is held invalid, illegal or unenforceable)
shall not be affected thereby and shall continue in full force and effect to
the fullest extent provided by law.
(v) No Third Party Beneficiary. Notwithstanding anything else herein
to the contrary, the parties specifically disavow any desire or intention to
create any third party beneficiary obligations, and specifically declare that
no person or entity, other than as set forth in this agreement, shall have any
rights hereunder or any right of enforcement hereof.
(vi) Headings; References; Incorporation; Gender. The headings used
in this Agreement are for convenience and reference purposes only, and shall
not be used in construing or interpreting the scope or intent of this
agreement or any provision hereof. References to this Agreement shall include
all amendments or renewals thereof. Any exhibit referenced in this agreement
shall be construed to be incorporated in this Agreement. As used in this
Agreement, each gender shall be deemed to include the other gender, including
neutral genders or genders appropriate for entities, if applicable, and the
singular shall be deemed to include the plural, and vice versa, as the context
requires.
(vii) Binding Upon Successors. This Agreement shall be binding upon
the parties' successors, assigns, purchasers, representatives and heirs.
(d) Enforcement.
(i) Applicable Law. This Agreement and the rights and remedies of
each party arising out of or relating to this Agreement (including, without
limitation, equitable remedies) shall be solely governed by, interpreted
under, and construed and enforced in accordance with the laws (without regard
to the conflicts of law principles thereof) of the State of Nevada, as if this
agreement were made, and if it's obligations are to be performed, wholly
within the State of Nevada.
(ii) Consent to Jurisdiction; Service of Process. Any action or
proceeding arising out of or relating to this Agreement shall be filed in and
litigated solely before the state courts of Nevada located within Xxxxx
County.
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(iii) Consent to Specific Performance and Injunctive Relief and
Waiver of Bond or Security. Each party acknowledges that the Company, as
result of the Executive's material breach of the covenants and obligations
included herein, may sustain immediate and long-term substantial and
irreparable injury and damage that cannot be reasonably or adequately
compensated by damages at law. Each party agrees that, in the event of the
Executive's breach or threatened breach of the covenants and obligations, the
Company shall be entitled to seek equitable relief from a court of competent
jurisdiction or arbitration without proof of any actual damages that have been
or may be caused to the Company by such breach or threatened breach and the
posting of bond or other security in connection therewith shall be made in
accordance with Nevada law.
(e) No Assignment of Rights or Delegation of Duties by the Executive. The
Executive's rights and benefits under this Agreement are personal to him and
therefore (i) no such right or benefit shall be subject to voluntary or
involuntary alienation, assignment or transfer, except as provided herein; and
(ii) Executive may not delegate his duties or obligations hereunder.
(f) Notices. Unless otherwise specifically provided in this Agreement,
all notices, demands, requests, consents, approval or other communications
(collectively and severally called "Notices") required or permitted to be
given hereunder, or which are given with respect to this agreement, shall be
in writing, and shall be given by: (A) personal delivery (which form of Notice
shall be deemed to have been given upon delivery), (B) by private
airborne/overnight delivery service (which forms of Notice shall be deemed to
have been given upon confirmed delivery by the delivery agency), (C) by
electronic or facsimile or telephonic transmission, provided the receiving
party has a compatible device or confirms receipt thereof (which forms of
Notice shall be deemed delivered upon confirmed transmission or confirmation
of receipt), or (D) by mailing in the Unites States mail by registered or
certified mail, return receipt requested, postage prepaid (which forms of
Notice shall be deemed to have been given upon the 5th business day following
the date mailed). Each party, and their respective counsel, hereby agrees that
if Notice is to be given hereunder by such party's counsel may communicate
directly with all principals, as required to comply with the foregoing notice
provisions. Notices shall be addressed to the address hereinabove set forth in
the introductory paragraph of this agreement, or to such other address as the
receiving party shall have specified most recently by like Notice, with a copy
to the other parties hereto. Any Notice give to the estate of a party shall be
sufficient if addressed to the party as provided in this subparagraph.
(g) Counterparts. This Agreement may be executed in counterparts, each of
which shall be an original, and all of which together shall constitute one and
the same instrument, binding on all parties hereto. Any signature page of this
agreement may be detached from any counterpart of this Agreement and
reattached to any other counterpart of this Agreement identical in form hereto
by having attached to it one or more additional signature pages.
(h) Execution by All Parties required to be Binding, Electronically
Transmitted Documents. This Agreement shall not be construed to be an offer
and shall have no force and effect until this agreement is fully executed by
all parties hereto. If a copy or counterpart of this Agreement is originally
executed and such copy or counterpart is thereafter transmitted electronically
by facsimile or similar device, such facsimile document shall for all purposes
be treated as if manually signed by the party whose facsimile signature
appears.
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Agreed and Accepted this 31st day of July 2004.
/s/ Xxxxxxx X. Xxxxxx /s/ Xxxx Xxxxxxx
Xxxxxxx X. Xxxxxx XXXX, Inc.
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