EXHIBIT 10.11
EMPLOYMENT AGREEMENT
Employment Agreement (the "Agreement"), dated as hereinafter indicated
to be effective on February 15, 2001 (the "Effective Date"), by and between
x-xxxxxxx.xxx, Inc., a Delaware corporation (the "Company"), and Xxxxx Xxxx, Jr.
("Employee").
WHEREAS, the parties hereto had entered into that certain Employment
Agreement, dated July 12, 1997 as amended on April 22, 1998, among the Company
and Employee (the "Prior Agreement"); and,
WHEREAS, the Company and Employee wish to continue the employment of
Employee on the terms and conditions described herein with this Agreement
superceding and wholly replacing the Prior Agreement including subsequent
Amendments in its entirety;
NOW THEREFORE, in consideration of the mutual premises and conditions
contained herein, the parties hereto agree as follows:
Section 1. EMPLOYMENT. The Company hereby agrees to employ Employee,
and Employee hereby accepts employment by the Company, upon the terms and
subject to the conditions hereinafter set forth.
Section 2. DUTIES. Employee shall serve as the Senior Vice President,
General Counsel and Chief Development Officer of the Company (the "Position")
reporting to the Company's President. Employee's duties and powers shall be
those consistent with the office of the Position, with such additional duties or
titles as mutually determined necessary or appropriate from time to time by the
Company's President. Employee agrees to devote his full time and best efforts to
the Company in the performance of his duties. All of the Employee's powers and
authorities shall be subject to the reasonable direction and control of the
President. Employee acknowledges that the executive offices of the Company will
be located in Phoenix, Arizona and he shall perform his duties under this
Agreement from those executive offices.
Section 3. TERM. Except as otherwise provided in Section 6 hereof, the
term of this Agreement shall be for two (2) years ("Term"), beginning on the
Effective Date (also referred to as the "Commencement Date"). Unless and until
terminated as provided for in Section 6, this Agreement shall automatically
extend and renew on each annual anniversary of the Effective Date by adding one
(1) year to the Term from year to year until terminated.
Section 4. COMPENSATION AND BENEFITS. In consideration for the services
of the Employee hereunder, the Company will compensate Employee as follows:
(a) BASE SALARY. During the Term of this Agreement and until
terminated, Employee shall receive a monthly MINIMUM base salary (the
"Base Salary") equal to the greater of: (i) twelve thousand five hundred
and 00/100 dollars ($12,500.00) per month; or (ii) such amount as
determined by the President in writing. Employee's Base Salary shall be
paid in accordance with Company's standard policy regarding payment of
compensation to employees but no less frequently than monthly.
(b) BONUS. Commencing with the fiscal year beginning April 1,
2000 and continuing from year to year until this Agreement is
terminated, Employee shall be eligible to receive a cash bonus each
year during the term of this Agreement determined in accordance with
the Management Incentive Compensation Plan as amended from time to
time, a copy of which is attached as Exhibit "A". Such bonus shall be
payable by the Company to Employee as provided for in the Management
Incentive Compensation Plan.
(c) BENEFITS. The Company shall grant Employee options to
purchase shares of the Company's Common Stock in such amounts, with
such vesting and at such prices as determined by the President all in
accordance with the terms of a Stock Option Agreement, and in the
general form of option agreement attached as Exhibit "B". In addition,
during the term of this Agreement, Employee shall be allowed to
participate in, and be entitled to benefits, plans and programs,
including improvements or modifications of the same, which are now, or
may hereafter be, those available to officers or employees of a like
position ("Executives"). Employee shall be entitled to medical, dental
and retirement benefits which are generally made available to
Executives, provided further that Employer will pay the total premium
costs associated with the medical and dental insurance, not including
deductibles and/or co-payments, covering the health of Employee,
Employee's spouse and Employee's dependants. Medical, dental and
disability insurance already effective shall remain in force, or if not
shall become effective on the first day of the month following the
Commencement Date. During each year of his employment Employee shall be
entitled to three (3) weeks of vacation, and such other days of
compensated absences, (i.e. sick leave or personal days) in accordance
with the Company's policies and procedures as determined from time to
time by the President.
Section 5. EXPENSES. It is acknowledged by the parties that Employee,
in connection with the services to be performed by him pursuant to the terms of
this Agreement, will be required to make payments for travel, entertainment of
business associates, mobile telephone and similar expenses (the "Out of Pocket
Expenses"). The Company will reimburse Employee for all reasonable and necessary
Out of Pocket Expenses incurred by Employee in the performance of his duties.
Employee will comply with such budget limitations, approval and reporting
requirements with respect to such Out of Pocket Expenses as the Company may
establish from time to time. The Company Prior to execution of this Agreement
will obtain and maintain, for so long as Employee is employed by the Company and
provides legal services to the Company, legal malpractice insurance which will
indemnify and protect Employee and Employer from claims by persons that Employee
committed errors, omissions, or malpractice during the delivery of legal
services to the Company or any other person. The premiums associated with such
malpractice insurance shall be paid by the Company. The Company may select the
insurance carrier provided that the policy limits meet or exceed existing policy
terms and limits and the insurance covers claims which occur while Employee is
associated with the Company. Upon termination of this Agreement, Employee shall
be permitted to obtain tail coverage if available from the insurance carrier.
The Company agrees to provide notice to Employee if that malpractice insurance
is going to be canceled or lapse. In the event that the Company relocates its
corporate offices or Employee is asked to move to other corporate offices
outside of the Phoenix, Arizona area, then Employee shall be entitled to
reimbursement of the costs of relocation described on Exhibit "C".
Section 6. TERMINATION. Employee's employment hereunder will commence
on the Commencement Date and continue until the end of the Term including any
renewals thereof, except that the employment of Employee hereunder will
terminate upon the occurrence of the following events:
(a) Death or Disability. Employee's employment will terminate
immediately upon the death of Employee during the term of his
employment hereunder or, at the option of the Company, in the event of
Employee's disability, upon 30 days notice to Employee. Employee will
be deemed "disabled" if, as a result of Employee's incapacity due to
physical or mental illness, Employee shall have been continuously
absent from his duties with the company on a full-time basis for 120
consecutive business days, and Employee shall not reasonably be
expected to be able to resume his duties within 60 days of the end of
such 120 day period. In the event of the termination of this Agreement
pursuant to this subsection 6(a), Employee will not be entitled to any
Severance Amount (as hereinafter defined) or other compensation except
for any portion of his base salary accrued but unpaid from the last
monthly payment date to the date of termination and expense
reimbursements under Section 5 hereof or for expenses incurred in the
performance of his duties hereunder prior to termination.
(b) For Cause. The Company may terminate the Employee's
employment for "Cause" immediately upon written notice by the Company
to Employee. For purposes of this Agreement, a termination will be for
Cause if: (i) Employee willfully and continuously fails to perform his
duties with the Company (other than any such failure resulting from
incapacity due to physical or mental illness); (ii) Employee willfully
engages in gross misconduct materially and demonstrably injurious to
the Company; or (iii) Employee has been convicted of a felony which the
President reasonably believes will result in injury to the Company or
which would disqualify employee for coverage by the Company's surety
bond. IN the event of the termination of this Agreement pursuant to
this sub-section 6(b), Employee will not be entitled to any Severance
Amount (as hereinafter defined) or further consideration, except for
any portion of the base salary accrued but unpaid from the last monthly
payment date to the date of Termination and expense reimbursements
under Section 5 hereof for expenses incurred in the performance of his
duties hereunder prior to termination.
(c) By Company Without Cause. The Company may terminate this
Agreement during the Term at any time for any reason without cause. It
shall be deemed a termination without cause if Company changes the
Position of Employee without Employee's prior written consent. In the
event of the termination of this Agreement pursuant to this subsection,
the Company will pay Employee, as Employee's sole remedy in connection
with such termination, severance in the amount determined by
multiplying Employee's monthly base salary at the rate in effect
immediately preceding the termination of Employee's employment by
twelve (12) months (the "Severance Amount"). The Company will also pay
Employee the portion of his base salary accrued but unpaid from the
last monthly payment date to the date of termination and expense
reimbursements under Section 5 hereof for expenses incurred in the
performance of his duties hereunder prior to termination. The Company
will pay the Severance Amount in a lump sum and within thirty (30) days
of the Employee's last day of employment. The Company will not be
entitled to offset or mitigate the amount due under this subsection by
any other amounts payable to Employee, including amounts payable or
paid to Employee by third parties for Employee's services after the
date of termination, except as provided for otherwise in Section 10(b)
hereinafter.
(d) CHANGE OF CONTROL. Notwithstanding anything to the
contrary contained in this Section 6, in the event Employee's
employment with the Company terminates for any reason (other than death
or disability) within the twelve (12) month period following a Change
of Control (as defined hereafter), then the Company will pay Employee a
lump sum payment (the "Termination Payment") in cash equal to the
amount of the Severance Amount; plus, the amount of Employee's base
salary accrued but unpaid and any expense reimbursement for expenses
incurred in the performance of the duties described herein prior to the
termination date. A "Change of Control" shall be deemed to have
occurred: (i) when in a single transaction or a series
of transactions a change of stock ownership of the Company of a nature
that would be required to be reported in response to Item 6(e) of
Schedule 14A promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and any successor item of a similar
nature has occurred; or (ii) upon the acquisition of beneficial
ownership, directly or indirectly, by any person (as such term is used
in Section 13(d) and 14(d)(2) of the Exchange Act of securities of the
Company) in a single transaction or a series of transactions
representing 33% or more of the combined voting power of the Company's
then outstanding securities; or (iii) sale of substantially all of the
assets of the Company in a single transaction or a series of
transactions; or (iv) removal by the Company from the Position
identified herein without Employee's prior written consent ; provided
that a Change in Control will not be deemed to have occurred for
purposes of clauses (i) and (ii) hereof with respect to any person
meeting the requirements of Rule 13d-1(b)(1) promulgated under the
Securities Exchange Act of 1934, as amended. The Company shall pay the
Termination Payment to Employee upon written notice by Employee. The
Termination Payment due under this Section will not be affected by the
manner in which Employee's employment is terminated and accordingly
will be whether the Change of Control occur after termination of this
Agreement and whether Employee's termination of employment is
voluntary, involuntary, for cause, or without cause.
Section 7. EFFECT OF TERMINATION ON OPTIONS. If Employee is terminated
"for cause" under Section 6(b) above, then the effect of the termination of the
Employee's employment on such options shall be determined by the terms of the
option plan under which the options are issued and the option agreement related
to such options, except that Employee shall retain those options which are
already vested and shall have ninety (90) days to exercise those vested options.
Notwithstanding anything to the contrary herein or in any option agreement, in
the event of: (a) a Change of Control, or (b) termination of this Agreement for
any reason (except if "for cause"), then the Options issued and outstanding to
Employee shall immediately vest (100%), and the Employee may exercise his
options at any time during the original term of the option agreement (as defined
therein), and such termination of this Agreement shall not cause termination or
expiration of the options.
Section 8. CONFIDENTIAL INFORMATION. Employee recognizes and
acknowledges that certain assets of the Company and its affiliates, including
without limitation information regarding customers, pricing policies, methods of
operation, proprietary computer programs, sales, products, profits, costs,
markets, key personnel, formulae, product applications, technical processes, and
trade secrets (herein called "Confidential Information") are valuable, special
and unique assets of the Company and its affiliates. Employee will not, during
or after the term of his employment, disclose any of the Confidential
Information to any person, firm, corporation, association, or any other entity
for any reason or purpose whatsoever, directly or indirectly, except as may be
required pursuant to his employment hereunder, unless and until such
Confidential Information becomes publicly available other than as a consequence
of the breach by Employee of his confidentiality obligations hereunder. In the
Event of the termination of his employment, whether voluntary or involuntary,
and whether by the Company or Employee, Employee will deliver to the Company all
documents and data pertaining to the Confidential Information and will not take
with him any documents or data of any kind or any reproductions (in whole or in
part) of any items relating to the Confidential Information.
Section 9. NONCOMPETITION. Until one year after termination of
Employee's employment with the Company for any reason, whether voluntary or
involuntary, Employee will not: (i) engage directly or indirectly, alone or as a
shareholder, partner, officer, director, employee or consultant of any other
business organization, in any business activities which are directly competitive
with the Company and which were either conducted by the Company at the time of
Employee's termination or "Proposed to be Conducted" (as defined herein) by the
Company at the time of such termination (the "Designated Industry"); (ii) divert
to any competitor of the Company in the Designated Industry any customer of
Employee or, (iii) solicit or encourage any officer, employee, or consultant of
the Company to leave its employ for employment by or with any competitor of the
Company in the Designated Industry. The parties hereto acknowledge that
Employee's non-competition obligations hereunder will not preclude Employee from
(i) owning less than 5% of the common stock of any publicly traded corporation
conducting business activities in the Designated Industry or (ii) serving as an
officer, director, stockholder or employee of an entity engaged in the
healthcare industry whose business operations are not competitive with those of
the Company. "Proposed to be Conducted," as used herein, shall mean those
business activities which are the subject of a formal, written business plan
approved by the Board of Directors prior to termination of Employee's employment
and which the Company takes material action to implement within 12 months of the
termination of Employee's employment. Employee will continue to be bound by the
provisions of this Section 9 until their expiration and will not be entitled to
any compensation from the Company with respect thereto. If at any time the
provisions of this Section 9 are determined to be invalid or unenforceable, by
reason of being vague or unreasonable as to area, duration or scope of activity,
this Section 9 will be considered divisible and will become and be immediately
amended to only such area, duration, scope of activity as will be determined to
be reasonable and enforceable by the court or other body having jurisdiction
over the matter; and Employee agrees that this Section 9 as so amended will be
valid and binding as though any invalid or unenforceable provision had not been
included herein.
Section 10. GENERAL.
(a) NOTICES. All notices and other communications hereunder
will be in writing or by written telecommunication, and will be deemed
to have been duly given if delivered personally or if mailed by
certified mail, return receipt requested or by written
telecommunication, to the relevant address set forth below, or to such
other address as the recipient of such notice or communication will
have specified to the other party hereto in accordance with this
Section 10(a):
If to the Company, to: With a copy to:
x-xxxxxxx.xxx, Inc. Xxxxxxx Xxxxxx, L.L.P.
0000 X. 00xx Xxxxxx, Xxxxx 000 000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000 Xxxxxx, Xxxxx 00000Xxxx:
Attn: CHIEF EXECUTIVE OFFICER Xxxxx X. Xxxx, III
Fax No.: (000) 000-0000 Fax No. (000) 000-0000
If to Employee, to:
Xxxxx Xxxx Jr.
0000 Xxxx Xxxxx
Xxxxxxxxxx, XX 00000
(b) WITHHOLDING AND OFFSET. All payments required to be made
by the Company under this Agreement to Employee will be subject to the
withholding of such amounts, if any, relating to federal, state and
local taxes as may be required by law. No payment under this Agreement
will be subject to offset or reduction attributable to any amount
Employee may owe to the Company or any other person.
(c) EQUITABLE REMEDIES. Each of the parties hereto
acknowledges and agrees that upon any breach by Employee of his
obligations under any of the Sections 8 and 9 hereof, the Company will
have no adequate remedy at law, and accordingly will be entitled to
specific performance and other appropriate injunctive and equitable
relief.
(d) SEVERABILITY. If any provision of this Agreement is held
to be illegal, invalid or unenforceable, such provision will be fully
severable and this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision never comprised a part
hereof; and the remaining provisions hereof will remain in full force
and effect and will not be affected by the illegal, invalid or
unenforceable provision or by its severance herefrom. Furthermore, in
lieu of such illegal, invalid or unenforceable provision, there will be
added automatically as part of this Agreement a provision as similar in
its terms to such illegal, invalid or unenforceable provision as may be
possible and be legal, valid and enforceable. Any and all covenants and
obligations of either party hereto which by their terms or by
reasonable implication are to be performed, in whole or in part, after
the termination of this Agreement, shall survive such termination,
including specifically the obligations arising under Sections: 6, 7, 8
and 9.
(e) WAIVERS. No delay or omission by either party hereto in
exercising any right, power or privilege hereunder will impair such
right, power or privilege, nor will any single or partial exercise of
any such right, power or privilege preclude any further exercise
thereof or the exercise of any other right, power or privilege.
(f) COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which will be deemed an original, and all of
which together will constitute one and the same instrument.
(g) CAPTIONS. The captions in this Agreement are for
convenience of reference only and will not limit or otherwise affect
any of the terms or provisions hereof.
(h) REFERENCE TO AGREEMENT. Use of the words "herein,"
"hereof;" "hereto " and the like in this Agreement refer to this
Agreement only as a whole and not to any particular subsection or
provision of this Agreement, unless otherwise noted.
(i) BINDING AGREEMENT. This Agreement will be binding upon and
inure to the benefit of the parties and will be enforceable by the
personal representatives and heirs of Employee and the successors of
the Company. If Employee dies while any amounts would still be payable
to him hereunder, such amounts will be paid to Employee's estate. This
Agreement is not otherwise assignable by Employee.
(j) ENTIRE AGREEMENT. Except as provided in the benefit plans
and programs referenced herein, this Agreement contains the entire
understanding of the parties, supersedes all prior agreements and
understandings relating to the subject matter hereof and may not be
amended except by a written instrument hereafter signed by each of the
parties hereto.
(k) GOVERNING LAW. This Agreement and the performance hereof
will be construed and governed in accordance with the laws of the State
of Arizona, without regard to its choice of law principles. Any
modification of this Agreement shall be effective only if it is in
writing and signed by the parties hereto.
(1) ATTORNEY'S FEES. If legal action is commenced by either
party to enforce or defend its rights under this Agreement, the
prevailing party in such action shall be entitled to recover its costs
and reasonable attorneys' fees in addition to any other relief granted.
If either party commences legal action or arbitration to enforce or
defend its rights under this Agreement, the prevailing party in such
action shall be entitled to recover its costs, including travel,
lodging and meals for itself, counsel and witnesses, actual witness
fees paid and legal fees actually paid, including costs of associating
local counsel with regular counsel, if actually paid.
Section 11. BINDING ARBITRATION. Any controversy or claim arising out
of or relating to this Agreement, or breach thereof, shall be settled
exclusively by arbitration in Phoenix, Arizona, in accordance with the
Commercial Arbitration Rules of the American Arbitration Association then in
effect. A sole arbitrator shall conduct Arbitration and he or she shall render
his or her award within forty five (45) days of appointment. Judgment upon the
award rendered by the arbitrator may be entered in, and enforced by, any court
having jurisdiction thereof. The award of the arbitrator may grant any relief
available to the parties in law or in equity; and the award may contain a
provision for payment of costs and attorney's fees to the prevailing party, if
any.
EXECUTED as of the date and year first written above.
x-xxxxxxx.xxx, inc.
By: /s/Xxxxx X. Xxxxxx, Xx.
--------------------------
Its: President
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EMPLOYEE:
/s/Xxxxx Xxxx Jr.
-----------------------------
Xxxxx Xxxx Jr.
Date: February 16, 2001
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Amendment No. 3 to Employment Agreement
Of
Xxxxx X. Xxxx, Xx.
This amendment (the "Third Amendment") to that employment agreement
dated February 15, 2001 (the "Employment Agreement"), by and between iLinc
Communications, Inc. (formerly EDT Learning, Inc.), a Delaware corporation (the
"Company"), and Xxxxx Xxxx, Jr. ("Employee") with this amendment being effective
on December 15, 2005 (the "Effective Date").
Whereas, Employee wishes to modify the Employment Agreement to provide
for his continued employment with the Company, but provided for his ability to
live in Texas outside the corporate headquarters in Phoenix, Arizona; and,
Whereas, the Company wishes to retain the services of Employee and
continue to receive the benefit of his services, whether or not residing in
Arizona;
Now Therefore, in exchange for the mutual promises contained in the
Employment Agreement and this Amendment, the Company and Employee agree as
follows:
1. The prior amendment to Employee's Agreement dated July 16,
2003 (the "First Amendment") and the prior amendment to
Employee's Agreement dated to be effective June 1, 2004 (the
"Second Amendment") shall upon execution of this Third
Amendment be terminated and have no further effect.
2. The terms of his Employment Agreement shall be modified as
follows:
a. The following shall be added to the end of Section 2
(Duties):
"Notwithstanding the foregoing Employee may work from a remote
office in Texas away from the Company's corporate
headquarters."
b. The following sentence shall be added as Subsection (b) of
Section 10 (Withholding and Offset):
"While this Agreement remains in effect and when Employee is a
resident of Texas, Employee shall not work for any third party
(i.e., moonlighting is prohibited), and furthermore should
Employee work for a third party other than Company, then the
Company shall be entitled to offset any compensation due
hereunder by the amount of any compensation paid to Employee
from that third party employer."
c. The following shall be added to the end of Subsection (c)
of Section 6 (Termination):
"Provided further that should a Change of Control occur and
Employee obtain employment with the successor organization in
a comparable position, then the Company shall not be
responsible for payment of the Severance Amount."
All other provisions of the Employment Agreement of Employee shall
remain unchanged and in full force and effect.
iLinc Communications, Inc. Employee:
By: /s/ Xxxxx X. Xxxxxx, Xx. /s/ Xxxxx X. Xxxx, Xx.
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Xxxxx X. Xxxxxx, Xx. Xxxxx X. Xxxx, Xx.
President
Date: 1/11/06 Date: 1/11/06
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