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Exhibit 6.31
EMPLOYMENT AGREEMENT
THIS AGREEMENT (this "Agreement") is made this 1st day of January 2000,
between FutureOne, Inc., a Nevada corporation ("Employer"), and Xxxx Xxxx
("Employee"). The Employer and the Employee are collectively referred to herein
as the "Parties."
The Parties wish to provide for employment and future services of Employee
upon the terms and conditions set forth in this Agreement. The Parties,
intending to be legally bound hereby, agree upon the following terms of
employment of Employee by Employer.
1. TERM. Subject to the provisions of Section 5 hereof, the term of
Employee's employment (the "Initial Employment Term") hereunder shall commence
January 1, 2000 (the "Effective Date"), and shall continue for a period of six
months from such Effective Date; provided, however, that upon the mutual consent
of the Parties, the Employee's employment hereunder may be extended for an
additional six months (the "Subsequent Employment Term" and, together with the
Initial Employment Term, the "Employment Term").
2. EMPLOYMENT AND DUTIES. Subject to the provisions of Section 5 hereof,
Employer agrees to employ Employee as its Executive Chairman of the Board or
such other position as Employer and Employee may agree during the Employment
Term, and Employee agrees to remain in the employ of Employer during the
Employment Term. Employee agrees to perform all duties for Employer as may be
requested by the Board, including, without limitation, general corporate
advisory functions and management duties, such as conducting regular staff and
division head meetings, assisting with Employer's capital formation efforts, and
assisting with Employer's search for additional key management personnel.
Employee will have such authority, power and responsibilities and duties as are
inherent to Employee's position and necessary to carry out Employee's
responsibilities and the duties required of Employee's office hereunder.
3. PERFORMANCE BY EMPLOYEE. Except as otherwise may be directed or
approved by Employer from time to time, during the period of employment under
this Agreement, Employee shall perform Employee's duties competently and
efficiently and shall dedicate the amount of time and efforts necessary to
perform in such manner. The Agreement does not restrict Employee from continuing
his consulting practice as an advisor and a member of the board of directors of
other companies, his work with ASU or civic activities during the term of this
Agreement.
4. COMPENSATION AND BENEFITS.
A. Compensation. For all services to be performed by Employee during
the Employment Term, Employee shall receive a salary of Ten Thousand and
No/Dollars ($10,000.00) per month (the "Base Salary"), payable in two equal
installments on the first and fifteenth day of each month, during the Employment
Term.
B. Bonus. Upon signing the Agreement the Employee shall receive a
signing bonus of $20,000. The Board may award Employee such additional bonuses,
from time to time, subject to limitations imposed by agreement with lenders or
others, as the Board may see fit, commensurate with Employee's performance and
overall performance of Employer.
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C. Warrants. For all services to be performed by Employee during the
Employment Term, Employee shall receive warrants ("Warrants") to purchase 70,000
shares of common stock of the Employer at an exercise price of $1.00 per share,
each of which if not sooner exercised shall expire seven (7) years from the date
of issuance, for each month during the Initial Employment Term in which the
Employee is employed by Employer. Each Warrant issued pursuant to this Section
4(C) shall be in substantially the form of Exhibit A attached hereto and shall
be issued to Employer within five days following the end of each month during
the Initial Employment Term in which Employee is employed.
D. Transaction Bonus. In the event the Employer closes a public
offering, private placement, sale of Employer or merger ("Transaction") in an
aggregate amount valued at least $10,000,000 during the term of this Agreement,
Xx. Xxxx shall receive payment from the Employer in the cash amount of 1% of the
Transaction ("Cash Amount") and an amount of warrants, equal to the Cash Amount
divided by the strike price of the warrant. Such warrants shall have a strike
price of $1.00 per share, shall expire seven (7) years from the date of issuance
and shall be in substantially the form of Exhibit A attached hereto.
E. Participation in Employee Benefit Plans. In addition to any cash
compensation payable hereunder, Employee shall be entitled to participate in the
various employee benefits generally made available to other employees of
Employer. Nothing in this Section 4(E) shall require the Board or any committee
thereof to exercise its discretion in favor of Employee in awarding any
discretionary benefit.
F. Vacation. Employee shall be entitled up to ten (10) days of paid
vacation during the Initial Employment Term, subject to any increases approved
by the Board. Employer shall first approve the time or times during which
vacation is taken.
G. Expenses. It is understood that Employee will from time to time
incur reasonable expenses in conjunction with Employee's employment. Employer
will reimburse Employee for any such expenses of which Employee shall present an
itemized written account within thirty (30) days after they have been incurred.
Employee will not be reimbursed for expenses in substantial amounts unless they
have been approved in advance by Employer.
H. Personal Expenses. Notwithstanding anything to the contrary in
this Agreement, Employee understands and agrees that Employee shall not receive
any personal perquisites (other than as set forth in this Section 4) nor receive
reimbursement for any personal expenses.
5. TERMINATION. This Agreement shall be terminated upon the happening of
any of the following events:
A. Death. Employee's death;
B. Disability. In the event Employee becomes physically or mentally
disabled so as to become unable, for a period of more than thirty (30)
consecutive calendar days or for more than sixty (60) calendar days in the
aggregate during any six-month period, to perform Employee's duties hereunder,
Employer may at its option terminate Employee's employment hereunder upon
written notice;
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C. Cause by Employer. Employer may terminate Employee's employment
hereunder for Cause. "Cause" shall include but not be limited to:
(i) dishonesty in connection with the duties to be performed
by Employee;
(ii) an adjudication in a criminal or civil proceeding that
Employee has committed a fraud or any felony; or
(iii) violation of any of the provisions of this Agreement,
including without limitation, Sections 6 and 7 hereunder; or
D. Cause by Employee. Employee may terminate this agreement
hereunder for cause. "Cause" shall include but not be limited to:
(i) Employers failure to perform their obligations under
Agreement
(ii) Majority change in ownership or merger of Employer where
the Employer is not the surviving corporation
(iii) Board of Director actions which cause the Employer to
violate standard accounting practices; or federal, state or local regulations or
law; or failure to maintain prudent and reasonable levels of Employer director's
and officer's insurance; or
E. Stockholder or Director Action. Employer may immediately and
without notice terminate Employee's employment hereunder in the event the
Company's stockholders or directors take action to remove Employee from the
Employee's Board of Directors during the Employment Term or do not elect
Employee as a director pursuant to Delaware General Corporation Law, the
Employer's Amended and Restated Articles of Incorporation or the Employer's
Bylaws.
6. COMPENSATION UPON TERMINATION OF EMPLOYMENT. If Employee's employment
is terminated pursuant to Section 5, the Employer shall:
(1) pay Employee (or his estate or beneficiaries) any Base Salary
that has accrued but has not been paid as of the termination date;
(2) reimburse Employee (or his estate or beneficiaries) for expenses
incurred by him prior to the date of termination that are subject to
reimbursement pursuant to Section 4(G) hereof;
(3) provide to Employee (or his estate or beneficiaries) any accrued
benefits required to be provided by the terms of any Employer-sponsored benefit
plans or programs, together with any benefits required to be paid or provided in
the event of Employee's death or disability under applicable laws;
(4) pay Employee (or his estate or beneficiaries) any discretionary
bonus that has been authorized by the Board of Directors and has accrued and
been earned but has not been paid; and
(5) Upon termination as a result of section 5 A., B., D. or E., or
termination of Employee without cause, Employee or in the case of A., his
estate, will be granted warrants equal to the amount he would have received if
he was employed for the full six month Initial Term as specified
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in section 4 C. In addition, upon termination as a result of section 5 D., or
termination of Employee without cause, Employee shall receive a lump sum payment
at termination equal to the amount that would have been paid under section 4 had
the Employee completed the entire Employment Term; and if the Employer closes a
Transaction before January 1, 2001 then Employee shall also be entitled to the
Transaction Bonus in section 4D.
7. Confidential Information; Proprietary Information.
A. Definitions.
(i) "Confidential Information" means: (i) this Agreement; (ii)
any trade secrets relating to Employer's product plans, designs, costs, prices
and names, finances marketing plans, business opportunities, personnel,
research, development or know-how and any other non-public technical or business
information; (iii) any information or materials marked or identified as
confidential; and (iv) any information or materials identified by Employer in
writing as confidential. Confidential Information shall not include information
that: (i) is now or subsequently becomes generally available to the public
through no fault or breach on the part of Employee; (ii) Employee can
demonstrate to have had lawfully in his possession without an obligation of
confidentiality prior to disclosure hereunder; or (iii) Employee lawfully
obtains from a third party who has the right to transfer or disclose it and who
provides it without any obligation to maintain the confidentially of such
information.
(ii) "Proprietary Information" means all materials of
Employer, including, but not limited, to any computer software (in object code
and source code form), script, programming code, data, information, custom
developed solutions of Employer, and any trade secrets, know-how, methodologies
and processes related to Employer's products or services, including, without
limitation, all copyrights, trademarks, patents, trade secrets, and any other
proprietary rights inherent therein and appurtenant thereto.
B. Nondisclosure and Restrictions. Employee shall treat confidential
Information and Proprietary Information as confidential, and Employee shall not
use Confidential Information or Proprietary Information for purposes other than
those necessary to directly further the purposes of this Agreement. Employee
shall protect Confidential Information and Proprietary Information from
unauthorized dissemination and use with the same degree of care that Employee
uses to protect Employee's own like information, but in no event less than a
reasonable degree of care. Employee shall not disclose to any third party any
Confidential Information or Proprietary Information without the prior written
consent of Employer. Except as expressly provided in this Agreement, Employee
shall not have any ownership or license rights in any Confidential Information
or Proprietary Information. Employee will not, during or at any time after
termination of this Agreement (for whatever reason), without authorization of
Employer, disclose to, or make use of for Employee or for any person or
corporation or other entity, any Confidential Information or Proprietary
Information.
C. Return. Upon the termination of this Agreement, or upon written
request therefor, Employee shall return to Employer all Confidential Information
and Proprietary Information and all files, lists, books, records, literature,
products and any other material owned by Employer or used by Employer in
connection with the conduct of its business, whether tangible or in electronic
form. Each party acknowledges that all of the Confidential Information and
Proprietary Information is the exclusive property of Employer and that the
unauthorized disclosure or use of such Confidential
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Information or Proprietary Information would cause irreparable harm and
significant injury, the monetary effect of which would be difficult to
ascertain.
D. Court-Ordered Disclosure. To the extent that any court or agency
seeks to have Employee disclose Confidential Information or Proprietary
Information, Employee will promptly inform Employer, and will take such
reasonable steps at Employer's expense to prevent disclosure of Confidential
Information and Proprietary Information until Employer has been informed of such
requested disclosure, and Employer has an opportunity to respond to such court
or agency. To the extent that Employee obtains information on behalf of Employer
that may be subject to attorney-client privilege as to Employer's attorneys,
Employee will take reasonable steps to maintain the confidentiality of such
information and to preserve such privilege.
8. COVENANT NOT TO COMPETE AND NONSOLICITATION.
A. Restrictive Covenant. During the Employment Term and for a period
of one (1) year after termination of this Agreement, Employee shall not, within
the Restricted Area as hereinafter defined, directly or indirectly own, operate,
control, be employed by, participate in, or be connected in any way with the
ownership, management, operation or control of any Restricted Business. For the
purposes of this Agreement, Restricted Business is specifically limited to those
businesses engaged primarily in the installation of fiber optic cable and
delivery of voice, video and data services through that cable to new residential
developments. For purposes of this Section 7(A), the "Restricted Area" means the
states of Arizona and Colorado. However, this section shall not apply to
Employee if Employee is terminated in accordance with sections 5 D, E or
termination of Employee without cause.
B. Solicitation of Customers or Employees. In furtherance of the
foregoing, and not in limitation thereof, during the Employment Term and for a
period ending one (1) year after termination of this Agreement, for whatever
reason, Employee shall not, directly or indirectly solicit or service in any
way, for the purpose of competing directly with Employer in Restricted
Businesses and within Restricted Areas, on behalf of Employee or on behalf of or
in conjunction with others, any client or customer, or prospective client or
customer, which has been solicited or serviced by Employer or any affiliate of
Employer during the Employment Term. So long as Employee remains employed by
Employer and for a period ending one (1) year after termination of such
employment, Employee shall not solicit any employee of Employer or any of its
affiliates to become employed by or otherwise associated with Employee in any
other business. Employee shall be deemed to be competing with Employer or
soliciting a customer, prospective customer or employee of Employer if Employee
is engaged in any such activity directly, whether for Employee's own account or
as a principal, agent, proprietor, officer, director, employee, Employee or in
any other capacity for any other person, corporation or other entity. The
foregoing provision, however, shall not prohibit Employee from investing in
securities of any corporation whose securities are listed on a national
securities exchange or traded in the over the counter market if Employee shall
be the owner, beneficially or of record, of less than five percent (5%) of any
class of the stock of such corporation.
C. Extension of Period. If Employee violates this Section 8 and
Employer brings legal action for injunctive or other relief, Employer shall not,
as a result of the time involved in obtaining such relief, be deprived of the
benefit of the full period of the restrictive covenants. Accordingly, the
restrictive covenants shall be deemed to have the duration specified in this
Section 8 hereof, computed from the date such relief is granted but reduced by
the time expired between the date the period of restriction began to run and the
date of the first violation of the covenant by Employee.
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D. Reformation or Judicial Modification. Employee acknowledges and
agrees that the duration and other limitations set forth in this Section 8 have
been specifically discussed and negotiated and are reasonable in view of all the
facts and circumstances known to Employee. Nevertheless, if any court shall
determine that such duration or other limitations are unenforceable, the
restrictions set forth herein shall be deemed modified to apply for the maximum
duration and other limitations which are reasonable in view of all the facts and
circumstances, and the Agreement shall be reformed to that extent.
E. Representations, Warranties and Covenants. Employee represents,
warrants and covenants that (a) Employee has all necessary right, power and
authority to enter into this Agreement and perform Employee's obligations under
this Agreement, (b) the execution of this Agreement and the performance of
Employee's obligations hereunder do not and will not conflict with or cause any
default under or breach of any other agreement or contract to which Employee is
a party or will become a party; (c) Employee's performance of this Agreement
shall be conducted in full compliance with any and all applicable agreements,
laws, rules, ordinances, and regulations adopted or required by any governmental
agency or regulatory body, or other party, whether foreign, federal, state,
municipal, city, town, or local, and (d) Employee is currently a resident of the
United States of America and has no plans to become a resident of a country
other than the United States of America or otherwise take any action which would
exclude Employee from taxation by the United States of America during the
Employment Term.
9. REMEDIES OF EMPLOYER. As an Employee of Employer, Employee may have
access to Confidential Information and Proprietary Information of Employer.
Moreover, Employee's continued employment relationship with Employer will be
instrumental to the continuity and development of Employer's business. Employee
therefore acknowledges that the restrictions contained in Sections 7 and 8 of
this Agreement are a reasonable and necessary protection of the legitimate
interests of Employer, that any violation of them could cause substantial injury
to Employer, and that Employer would not have entered into this Agreement with
Employee without receiving the additional consideration of Employee being bound
to said restrictions. In the event of any violation of the said restrictions,
Employer shall be entitled, in addition to any other remedy, to preliminary and
permanent injunctive relief, including attorneys' fees and costs incurred in
enforcing this Agreement. The rights and remedies provided hereunder are
cumulative and the use of any one right or remedy shall not preclude or waive
the right to use any or all other remedies. Said rights and remedies are given
in addition to any other rights available by law, statute, and ordinance or
otherwise.
10. WORK PRODUCT; FURTHER ASSURANCES.
A. "Work Product" shall mean documentation, software, creative
works, know-how, information, or any other item created, designed, or produced
in whole or in part, by Employee, during the term of this Agreement and pursuant
to this Agreement whether or not copyrightable or otherwise protectable.
Employee hereby assigns to Employer without addition consideration to Employee,
the entire right title and interest in and to the Work Product and all
proprietary rights therein or based thereon.
B. Further Assurances. Employee will keep Employer informed of, and
will execute such assignments as may be necessary to transfer to Employer or its
affiliates the benefits of, any inventions, discoveries, improvements, trade
secrets, developments, processes, and procedures
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made by Employee, in whole or in part, or conceived by Employee either alone or
with others, which results from any work which Employee has done or may do for
or at the request of Employer, and will assist Employer, or other entity
nominated by it, to obtain patents, trademarks and service marks and to execute
all documents and to take all other actions which are necessary or appropriate
to secure to Employer and its affiliates the benefits thereof. Employee will
deliver to Employer all sketches, drawings, models, figures, plans, outlines,
descriptions or other information with respect thereto.
11. NOTICES. All notices, requests, demands and other communications
required under this Agreement shall be in writing and shall be deemed duly given
and received (i) if personally delivered, on the date of delivery, (ii) if
mailed, three (3) days after deposit in the United States mail, registered or
certified, return receipt requested, postage prepaid and addressed as provided
below, or (iii) if by a courier delivery service providing overnight or
"next-day" delivery, on the next business day after deposit with such service,
addressed as follows:
If to Employer: FutureOne, Inc.
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx X-000
Xxxxxxx, Xxxxxxx 00000
Attention: President
If to Employee: Xxxx Xxxx
0000 X Xxxxx xxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Any party may change its above-designated address by giving the other party
written notice of such change in the manner set forth herein.
12. MISCELLANEOUS. Employer and Employee hereby acknowledge and agree that
(a) this Agreement shall be binding upon, inure to the benefit of, and be
enforceable by and against the respective heirs, executors, administrators,
personal representatives, successors and permitted assigns of any of the parties
to this Agreement, (b) no waiver of any of the provisions of this Agreement
shall be deemed, or shall constitute, a waiver of any other provision hereof
(whether or not similar) nor shall such waiver constitute a continuing waiver,
and no waiver shall be binding unless executed in writing by the party making
the waiver, (c) except as expressly provided herein, this Agreement shall be
construed in accordance with, and governed by, the laws of the State of Arizona,
without regard to the application of conflicts of law principles, (d) in the
event an action or suit is brought by any party hereto to enforce the terms of
this Agreement, the prevailing party shall be entitled to the payment of
reasonable attorneys' fees and costs, as determined by the judge of the court,
(e) this Agreement constitutes the entire agreement among the parties and
supersedes all prior and contemporaneous agreements and understandings of the
parties with respect to the subject matter hereof, (f) no supplement,
modification or amendment of this Agreement or any exhibit hereto shall be
binding and enforceable unless executed in writing by both parties hereto, (g)
headings contained in this Agreement are inserted only as a matter of
convenience and in no way define, limit extend or describe the scope of this
Agreement or of any provision hereof, (h) this Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument, (i) Employer will
not be liable to Employee for, or be considered to be in breach of or default
under this Agreement on account of, any delay or failure to perform as required
by this Agreement as a result of any cause or condition beyond Employer's
reasonable control (including, without limitation power surges, civil unrest,
strikes, acts of government, or acts of God), (j) in no
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event shall Employer be liable to Employee, whether in contract, warranty, tort
(including negligence) or otherwise, for any special, incidental, indirect or
consequential damages (including, without limitation, damages for any loss of
profit, revenue or business) arising out of or in connection with this
Agreement, (k) Employee may not assign or otherwise transfer this Agreement or
any of Employee's rights and obligations hereunder or any portion thereof
without the prior written consent of Employer, (1) Sections 7, 8, 9, 10, and 11
of this Agreement shall survive any expiration or earlier termination of this
Agreement except if Agreement is terminated in accordance with section 5 D, E or
termination of Employee without cause,, and (m) if any provision of this
Agreement shall be held to be invalid, illegal or unenforceable, the validity,
illegality and enforceability of the remaining provisions shall in no way be
affected or impaired thereby.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year first above written.
/s/ Xxxx Xxxx
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Xxxx Xxxx, Employee
FUTUREONE, INC.
By: /s/ Xxxx X. Xxxx
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Name: Xxxx X. Xxxx
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Title: President
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