EXHIBIT 10.3
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), dated as of June ___, 1999,
between Xxxxxxx.xxx, Inc., a Delaware corporation (the "Company"), and Xxxx
Xxxxxxx, an individual residing in Van Buren, Arkansas (the "Executive").
WHEREAS, the Executive is presently employed by the Company, and is willing
to commit himself to continue to serve the Company on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby, the
Company and the Executive hereby agree as follows:
1. Employment. The Company agrees to continue to employ the Executive,
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and the Executive agrees to remain in the employ of the Company, for the period
set forth in Paragraph 2, in the position and with the duties and
responsibilities set forth in Paragraph 3, and upon the other terms and
conditions herein provided.
2. Term. The employment of the Executive by the Company as provided in
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Paragraph 1 shall be for a period commencing on the date of this Agreement
through and ending on June 13, 2002, unless sooner terminated as herein provided
(the "Employment Term").
3. Position and Duties.
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(a) During the Employment Term, the Executive shall serve as President
and Chief Financial Officer of the Company. In such capacities, the Executive,
subject to the ultimate control and direction of the Board of Directors of the
Company, shall have and exercise (i) direct charge of and general supervision
over the business and affairs of the Company and (ii) the duties and functions
normally incident to the office of chief financial officer of a company similar
to the Company. In addition, the Executive shall have such other duties,
functions, responsibilities, and authority as are from time to time delegated to
the Executive by the Board of Directors of the Company, provided that such
duties, functions, responsibilities, and authority are reasonable and customary
for a person serving in the aforesaid functions of an enterprise comparable to
the Company. The Executive shall report and be accountable to the Board of
Directors and the Chairman of the Board and Chief Executive Officer of the
Company.
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(b) During the Employment Term, the Executive shall devote his full
time, skill, and attention and his best efforts to the business and affairs of
the Company to the extent necessary to discharge fully, faithfully and
efficiently the duties and responsibilities delegated and assigned to the
Executive herein or pursuant hereto, except for usual, ordinary, and customary
periods of vacation and absence due to illness or other disability.
(c) In connection with the Executive's employment by the Company under
this Agreement, the Executive shall be based at the principal executive offices
of the Company in Van Buren, Arkansas, except for such reasonable travel as the
performance of the Executive's duties in the business of the Company may
require.
(d) All services that the Executive may render to the Company or any of
its subsidiaries or affiliates in any capacity during the Employment Term shall
be deemed to be services required by this Agreement and consideration for the
compensation provided for herein.
4. Compensation and Related Matters.
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(a) Base Salary . During the Employment Term, the Company shall pay to
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the Executive for his services hereunder a base salary ("Base Salary") at the
rate of One Hundred Seventy-Five Thousand Dollars ($175,000.00) per year,
payable in installments in accordance with the general payroll practices of the
Company, or as otherwise mutually agreed upon. The Executive's Base Salary shall
be subject to such adjustments as may be determined from time to time by the
compensation committee of the Board of Directors of the Company in its sole
discretion, but in no event shall the Company pay the Executive a Base Salary at
a rate less than that set forth in the immediately preceding sentence.
(b) Executive Bonus and Benefits . During the Employment Term, the
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Executive may be entitled, in the sole discretion of the compensation committee
of the Board of Directors, to annual cash bonuses in amounts not to exceed 50%
of his then-current Base Salary for any calendar year; provided, however, that
Executive's bonus for the year ended December 31, 1999 shall not be less than
$37,500. Further, Executive shall be entitled to participate in all additional
employee benefit plans (including, stock option plans and long-term incentive
plans), programs and arrangements that are generally made available by the
Company to its senior executives.
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(c) Medical and Dental Coverage . During the Employment Term, the
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Company shall provide, at its cost, full medical and dental coverage to Employee
under the Company's group insurance plans as in effect from time to time.
(d) Expenses . During the Employment Term, the Executive shall be
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entitled to receive prompt reimbursement on a timely basis (according to the
then-current practices of the Company) for all reasonable expenses incurred by
the Executive in performing his duties and responsibilities hereunder upon the
presentation by the Executive of an itemized monthly accounting of such
expenditures, including receipts where required by Company policy or federal
income tax regulations.
(e) Vacations . During the Employment Term, the Executive shall be
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entitled to four (4) weeks of paid vacation each year. The Executive shall also
be entitled to all paid holidays given by the Company to its senior executives.
The Executive agrees to utilize his vacation at such time or times as are (i)
consistent with the proper performance of his duties and responsibilities
hereunder and (ii) mutually convenient for the Company and the Executive.
5. Termination of Employment.
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(a) Death . The Executive's employment hereunder shall terminate
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automatically upon his death.
(b) Disability . If the Disability (as defined below) of the Executive
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occurs during the Employment Term, the Company may notify the Executive of the
Company's intention to terminate the Executive's employment hereunder for
Disability. In such event, the Executive's employment hereunder shall terminate
effective on the 15th day following the date such notice of termination is
received by the Executive (the "Disability Effective Date"). For purposes of
this Agreement, the "Disability" of the Executive shall be deemed to have
occurred at such time as the Board of Directors of the Company determines, in
its sole and absolute discretion, (i) that despite any reasonable accommodation
required by law, the Executive is unable to perform the essential functions of
his position hereunder as a result of his physical or mental incapacity and (ii)
that such inability has existed or is likely to exist for a period of three
months or more.
(c) Termination by Company .
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(i) For Cause. The Company may terminate the Executive's employment
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hereunder for Cause (as defined below) (a "For Cause Termination"). For
purposes of this Agreement, "Cause" shall mean any of the following: (A)
any
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misrepresentation of a material fact to, or concealment of a material fact
from, a member of the Board of Directors of the Company; (B) the
Executive's failure to follow a lawful written directive of the Board of
Directors; (C) the Executive's willful violation of any material rule,
regulation or policy that may be established from time to time in the
Company's business; (D) the Executive's unlawful possession, use or sale of
narcotics or other controlled substances, or performing job duties while
such controlled substances are present in the Executive's body; (E) the
Executive operating a vehicle in the course of his employment under the
influence of alcohol (meaning a blood alcohol level which would establish a
felony or misdemeanor under the applicable state law, or a conviction of or
plea of guilty or no contest to such a felony or misdemeanor); (F) any act
or omission of the Executive in the scope of his employment (i) that
results in the assessment of a criminal penalty against the Executive or
the Company, or (ii) that in the reasonable judgment of the Board of
Directors would result in a material violation of any federal, state, local
or foreign law or regulation; or (G) the Executive's conviction of or a
plea of guilty or no contest to any crime involving an act of moral
turpitude. Whether any termination of Executive's employment hereunder
constitutes a For Cause Termination in accordance with the foregoing shall
be determined in the reasonable judgment of the Board of Directors.
(ii) Without Cause. The Company may terminate the Executive's
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employment hereunder without Cause for any or no reason. For purposes of
this Agreement, a "Without Cause Termination" shall mean a termination by
the Company of the Executive's employment hereunder other than pursuant to
(x) a For Cause Termination, or (y) Disability.
(d) Constructive Termination . The Executive may terminate his
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employment hereunder if a Constructive Termination occurs. A "Constructive
Termination" of Executive's employment with the Company shall be deemed to have
occurred if the Company:
(i) demotes Executive to a lesser position, either in title or
responsibility, than the highest position held by him with the Company at
any time during his employment with the Company; or
(ii) decreases Executive's compensation below the highest level in
effect at any time during his employment with the Company or reduces
Executive's benefits and perquisites below the highest levels in effect at
any time during his employment with the Company (other than as a
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result of any amendment or termination of any employee or group or other
executive benefit plan, which amendment or termination is applicable to all
executives of the Company).
Any termination of Executive's duties and responsibilities as Chief Financial
Officer of the Company shall not constitute a Constructive Termination under
subparagraph (i) of this paragraph 5(d).
(e) Notice of Termination . Any termination of the Executive's
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employment hereunder by the Company or by the Executive (other than a
termination pursuant to Paragraph 5(a)) shall be communicated by a Notice of
Termination (as defined below) to the other party hereto. For purposes of this
Agreement, a "Notice of Termination" shall mean a written notice which (i)
indicates the specific termination provision in this Agreement relied upon, (ii)
in the case of a termination for Disability or a For Cause Termination or a
Constructive Termination, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated, and (iii) specifies the Employment
Termination Date (as defined in Paragraph 5(f) below). The failure by the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Disability or Cause shall not waive any right of the
Company hereunder or preclude the Company from asserting such fact or
circumstance in enforcing the Company's rights hereunder.
(f) Employment Termination Date . For purposes of this Agreement,
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"Employment Termination Date" shall mean the effective date of termination of
the Executive's employment hereunder, which date shall be (i) if the Executive's
employment is terminated by his death, the date of his death, (ii) if the
Executive's employment is terminated because of his Disability, the Disability
Effective Date, (iii) if the Executive's employment is terminated by the Company
pursuant to a For Cause Termination or a Without Cause Termination, the date
specified in the Notice of Termination, which date shall in no event be earlier
than the date such notice is given, and (iv) if the Executive's employment is
terminated by the Executive pursuant to a Constructive Termination, the date on
which the Notice of Termination is given.
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(g) Resignation . In the event of termination of the Executive's
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employment hereunder (for any reason other than the death of the Executive), the
Executive agrees that if at such time he is a member of the Board of Directors
or officer of the Company or a director or officer of any of its subsidiaries,
he will promptly deliver to the Company his written resignation from all such
positions, such resignation to be effective as of the Employment Termination
Date.
6. Company Obligations Upon Termination of Employment.
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(a) Death . If the Executive's employment hereunder is terminated by
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reason of the Executive's death, the Company shall pay to the Executive's estate
a sum equal to 12 month's Base Salary at the Executive's last current rate. Any
such amounts payable under this Paragraph 6(a) shall be paid in equal monthly
installments for a period of one year, such payments to begin as of the
Employment Termination Date. In addition, if the Executive's employment
hereunder is terminated by reason of the Executive's death, the Company shall
continue to provide medical insurance at the level provided at the Employment
Termination Date for the Executive's spouse for a period of five years after the
Employment Termination Date and for each of his children for a period beginning
on the Employment Termination Date and ending on the earlier of (i) five years
after the Employment Termination Date and (ii) the date on which such child
ceases to be a "dependent" of Executive's spouse within the meaning of Section
___ of the Internal Revenue Code of 1986, as amended (the "Code"); provided,
that the Company shall be required to provide medical insurance to the
Executive's spouse and his children only for so long as, and to the extent that,
the Company provides medical insurance for its full-time employees; and,
provided, further, that this Paragraph 6(a) shall not prohibit the Company from
modifying or canceling its existing health insurance program.
(b) Disability . If the Executive's employment hereunder is terminated
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by reason of the Executive's Disability, the Company shall pay to the Executive
a sum equal to 12 month's Base Salary at the Executive's last current rate. Any
such amounts payable under this Paragraph 6(b) shall be paid in equal monthly
installments for a period of one year, such payments to begin as of the
Employment Termination Date. In addition, if the Executive's employment
hereunder is terminated by reason of the Executive's Disability that, in the
sole discretion of the Board of Directors, is a "permanent and total disability"
as defined in the Company's long-term disability insurance plan, or if the
Company does not maintain such a plan containing a definition of that term, as
defined in Section 22(e)(3) of the Code, then the Company shall continue to
provide medical insurance at the level provided at the Employment Termination
Date for the Executive and
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his spouse for a period of five years after the Employment Termination Date and
for each of his children for a period beginning on the Employment Termination
Date and ending on the earlier of (i) five years after the Employment
Termination Date and (ii) the date on which such child ceases to be a dependent
of Executive or Executive's spouse within the meaning of Section _____ of the
Code; provided, that the Company shall be required to provide medical insurance
to the Executive, his spouse and his children only for so long as, and to the
extent that, the Company provides medical insurance for its full-time employees;
and provided further, that this Paragraph 6(b) shall not prohibit the Company
from modifying or canceling its existing health insurance program.
(c) For Cause Termination . If the Executive's employment hereunder is
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terminated pursuant to a For Cause Termination, the Company shall pay to the
Executive, in a lump sum in cash within 15 days after the Employment Termination
Date, the Executive's Base Salary through the Employment Termination Date, to
the extent not theretofore paid, and, thereafter, the Company shall have no
further obligations to the Executive under this Agreement.
(d) Without Cause Termination . If the Executive's employment hereunder
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is terminated by the Company by reason of a Without Cause Termination, the
Company shall pay to the Executive a sum equal to 12 month's Base Salary at the
Executive's last current rate. Any such amounts payable under this Paragraph
6(d) shall be paid in equal monthly installments for a period of one year, such
payments to begin as of the Employment Termination Date.
(e) Constructive Termination . If the Executive's employment hereunder
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is terminated by the Executive by reason of a Constructive Termination, the
Company shall pay to the Executive a sum equal to 12 month's Base Salary at the
Executive's last current rate. Any such amounts payable under this Paragraph
6(e) shall be paid in equal monthly installments for a period of one year, such
payments to begin as of the Employment Termination Date.
(f) Sole Remedy . The right to receive the payments and insurance, as
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applicable, provided for under this Paragraph 6 shall be the Executive's sole
and exclusive remedy for the termination of his employment hereunder and shall
be in lieu of any claim that he might otherwise have against the Company arising
from such termination.
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(g) Coordination of Payments . The payments required by subparagraphs
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(d) and (e) of this Paragraph 6 are subject to the provisions of Paragraph 7(b)
dealing with the coordination of payments in the event of a Change of Control.
7. Termination in Connection with Change of Control.
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(a) Upon the occurrence of a Termination Event (as defined in Paragraph
8(a)), the Company shall:
(i) pay Executive an amount equal to Executive's Base Annual
Compensation (as defined in Paragraph 8(c)) multiplied by a factor of two,
payable as a lump sum cash payment within ten days following the date of
the termination constituting such Termination Event (the "Termination
Date");
(ii) provide Executive with life, disability and medical insurance
at the level provided at either the date of the occurrence of a Change of
Control (as defined in Paragraph 8(b)) or the Termination Date, as
Executive shall in his sole discretion elect by providing written notice to
the Company, for 12 months following the Termination Date or such shorter
period until Executive shall obtain substantially equivalent insurance
coverage from a subsequent employer, if any, in the same manner as if
Executive's employment had not been terminated until the end of such
period. Executive shall immediately notify the Company upon obtaining any
insurance from a subsequent employer and shall provide all information
required by the Company regarding such insurance to enable the Company to
make a determination of whether such insurance is substantially equivalent;
and
(iii) pay all reasonable legal fees and expenses incurred by
Executive in seeking to obtain or enforce any right or benefit provided by
this Agreement including without limitation all such costs incurred in
contesting or disputing any determination made by the Company under this
Agreement or in connection with any tax audit or proceeding to the extent
attributable to the application of Section 4999 of the Code to any payment
hereunder. Reimbursements of such costs shall be made by the Company
within 15 days after Executive's presentation to the Company of any
statements of such costs and thereafter shall bear interest at the rate of
18% per annum or, if different, the maximum rate allowed by law until paid
by the Company, and all accrued and unpaid interest shall bear interest at
the same rate, all of which interest shall be compounded daily.
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(b) Coordination With Paragraph 6. If, in connection with the
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termination of Executive's employment hereunder, Executive is entitled to
receive payments pursuant to this Paragraph 7 and Executive would also be
entitled to receive termination payments under Paragraph 6 in accordance with
the terms thereof, Paragraph 7 shall take precedence and Executive shall not be
entitled to receive any payments under Paragraph 6.
8. Definitions.
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(a) A "Termination Event" shall be deemed to have occurred if:
(i) at any time within six months after a Change of Control,
Executive or the Company terminates Executive's employment for any reason,
or for no reason; or
(ii) at any time within 12 months after a Change of Control, the
Company or any successor thereto terminates Executive's employment for any
reason other than for (A) Cause, (B) Disability or (C) death.
For purposes of this Paragraph 8(a), Executive's employment shall be deemed to
have been terminated upon the actual termination of his employment or upon the
occurrence of a Constructive Termination.
(b) A "Change of Control" shall be deemed to have occurred if:
(i) individuals who, as of the date hereof, constitute the Board of
Directors (the "Incumbent Board") of the Company cease for any reason to
constitute at least 51% of the Board, provided that any person becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's stockholders was approved by a vote of at least
a majority of the directors then comprising the Incumbent Board shall be,
for purposes of this Agreement, considered as though such person were a
member of the Incumbent Board;
(ii) the Company shall consummate a reorganization, merger or
consolidation, in each case, with respect to which persons who were the
stockholders of the Company immediately prior to such reorganization,
merger or consolidation do not, immediately thereafter, own outstanding
voting securities representing more than 50% of the combined voting power
entitled to vote generally in the election of
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directors ("Voting Securities") of the reorganized, merged or consolidated
company;
(iii) the stockholders of the Company shall approve a sale of all
or substantially all of the stock or assets of the Company; or
(iv) any "person," as that term is defined in Section 3(a)(9) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act") (other
than the Company, any of its subsidiaries, any employee benefit plan of the
Company or any of its subsidiaries, or any entity organized, appointed or
established by the Company for or pursuant to the terms of such a plan),
together with all "affiliates" and "associates" (as such terms are defined
in Rule 12b-2 under the Exchange Act) of such person (as well as any
"Person" or "group" as those terms are used in Sections 13(d) and 14(d) of
the Exchange Act), shall become the "beneficial owner" or "beneficial
owners" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act),
directly or indirectly, of securities of the Company representing in the
aggregate 40% or more of either the then outstanding shares of common
stock, par value $.001 per share, of the Company ("Common Stock") or the
Voting Securities of the Company, in either such case other than solely as
a result of acquisitions of such securities directly from the Company.
Notwithstanding the foregoing, a "Change in Control" of the Company
shall not be deemed to have occurred for purposes of subparagraph (iv) of
this Paragraph 8(b) solely as the result of an acquisition of securities by
the Company which, by reducing the number of shares of Common Stock or
other Voting Securities of the Company outstanding, increases (i) the
proportionate number of shares of Common Stock beneficially owned by any
person to 40% or more of the shares of Common Stock then outstanding or
(ii) the proportionate voting power represented by the Voting Securities of
the Company beneficially owned by any person to 40% or more of the combined
voting power of all then outstanding Voting Securities; provided, however,
that if any person referred to in clause (i) or (ii) of this sentence shall
thereafter become the beneficial owner of any additional shares of Common
Stock or other Voting Securities of the Company (other than a result of a
stock split, stock dividend or similar transaction), then a Change in
Control of the Company shall be deemed to have occurred for purposes of
subparagraph (iv) of this Paragraph 8(b).
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(c) "Base Annual Compensation" shall, as determined on the Termination
Date, be equal to the greater of (i) Executive's Base Salary on the date of the
earliest Change of Control to occur during the 18-month period prior to the
Termination Date plus any bonuses or special incentive payments received in the
12 months prior to such Change of Control or (ii) Executive's Base Salary on the
Termination Date plus any bonuses or special incentive payments received in the
12 months prior to the Termination Date.
9. Adjustments. Any provision of this Agreement to the contrary
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notwithstanding, if, in the Company's determination, the total sum of (i) the
payments and benefits to be paid or provided to (or with respect to) Executive
under this Agreement which are considered to be "parachute payments" within the
meaning of Section 280G of the Code, and (ii) any other payments and benefits
which are considered to be "parachute payments," as so defined, to be paid or
provided to (or with respect to) Executive by the Company or a member of the
Company's affiliated group (within the meaning of Section 280G(d)(5) of the
Code) (the "Total Amount") exceeds the amount Executive can receive without
having to pay excise tax with respect to all or any portion of such payments or
benefits under Section 4999 of the Code (the "Reduced Amount"), then the amount
payable to Executive pursuant to Paragraphs 7(a)(i) and (ii) of this Agreement
shall be reduced to the greater of zero or the highest amount which will not
result in Executive having to pay excise tax with respect to any payments and
benefits under Section 4999 of the Code; provided, however, that in the event
that the Reduced Amount minus any and all applicable federal, state and local
taxes (including but not limited to income and employment taxes imposed by the
Code) is less than the Total Amount minus any and all applicable federal, state
and local taxes (including but not limited to income and employment taxes
imposed by the Code and excise taxes applicable to such payments under Section
4999 of the Code), then the reduction of the amount payable to Executive under
Paragraphs 7(a)(i) and (ii) of this Agreement provided for in the preceding
provisions of this Paragraph 9 shall not be made.
10. Compliance With Other Agreements. The Executive represents and
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warrants to the Company that the execution, delivery and performance by the
Executive of this Agreement do not and will not conflict with or result in a
violation of any provision of, or constitute a default under, any contract,
agreement, instrument or obligation to which the Executive is a party or by
which he is bound.
11. Noncompetition and Related Matters. Without the prior written
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consent of the Company, Executive will not, directly or indirectly:
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(a) persuade or attempt to persuade any customer, client, business
partner, licensor, licensee, sales representative, supplier or distributor of
the Company or any of its subsidiaries to cease doing business with the Company
or any of its subsidiaries, or to reduce the amount of business it does with the
Company or any of its subsidiaries;
(b) persuade or attempt to persuade any potential customer, client,
supplier, business partner, licensor, licensee, sales representative, supplier
or distributor to which the Company or any of its subsidiaries has made a
presentation, or with which the Company or any of its subsidiaries has been
having discussions, not to do business with the Company or any of its
subsidiaries, or to undertake with any other person or business any business or
activity of a type and character similar to or competitive with that conducted
by the Company or any of its subsidiaries (a "Competitive Activity");
(c) solicit for himself or any person other than the Company or any of
its subsidiaries the business of any person which is a customer, client,
business partners, licensor, licensee, sales representative, supplier or
distributor of the Company or any of its subsidiaries, or was a customer,
client, business partner, licensor, licensee, sales representative, supplier or
distributor of the Company or any of its subsidiaries within two years prior to
the Termination Date or the Employment Termination Date, as applicable;
(d) persuade or attempt to persuade any employee of the Company any of
its subsidiaries, or any individual who was its employee during the six months
prior to the Termination Date, to leave the employ of the Company or any of its
subsidiaries, or to become employed by any person engaged in a Competitive
Activity;
(e) anywhere in the world where the Company or any of its subsidiaries
is conducting any business, directly or indirectly, own, manage, operate,
control, be employed by or participate in the ownership, management, operation
or control of, or be connected in any manner with any person or business engaged
in a Competitive Activity; provided, however, that ownership of securities of a
company whose securities are registered under the United States Securities
Exchange Act of 1934, as amended, not in excess of 1% of any class of such
securities shall by itself not be considered a violation of this Paragraph 11.
The provisions of this Paragraph 11 shall be in effect during the
Employment Term and shall continue in effect for a period of 12 months following
the Employment Termination Date.
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Notwithstanding the foregoing, if Executive's employment with the Company is
terminated by the Company for Disability or by reason of a Without Cause
Termination or is terminated by the Executive by reason of a Constructive
Termination, Executive shall be bound by the restrictions set forth in this
Paragraph 11 after the Employment Termination Date (i) if and only for so long
(but not to exceed 12 months) as the Company complies with its obligations under
Paragraphs 6(b), (d) or (e), as applicable, or (ii) if and only if the Company
has made the payments to Executive required under Paragraph 7(a)(i), if
applicable, provided that Executive shall cease being bound by such restrictions
if the Company fails to satisfy its obligations under Paragraph 7(a)(ii) or
(iii).
12. Confidentiality. The Executive recognizes and acknowledges that the
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Company's trade secrets and other confidential or proprietary information, as
they may exist from time to time, are valuable, special, and unique assets of
the Company's business, access to and knowledge of which are essential to the
performance of the Executive's duties hereunder. The Executive confirms that
all such trade secrets and other information constitute the exclusive property
of the Company. During the Employment Term and thereafter without limitation of
time, the Executive shall hold in strict confidence and shall not, directly or
indirectly, disclose or reveal to any person, or use for his own benefit or for
the benefit of anyone else, any trade secrets, confidential dealings, or other
confidential or proprietary information of any kind, nature or description
(whether or not acquired, learned, obtained or developed by the Executive alone
or in conjunction with others during the Employment Term) belonging to or
concerning the Company or any of its subsidiaries or any of their customers or
clients or others with whom they now or hereafter have a business relationship,
except (i) with the prior written consent of the Company duly authorized by its
Board of Directors, (ii) in the course of the proper performance of the
Executive's duties hereunder, (iii) for information (x) that becomes generally
available to the public other than as a result of unauthorized disclosure by the
Executive or his affiliates or (y) that becomes available to the Executive
subsequent to the termination of his employment hereunder and on a
nonconfidential basis from a source other than the Company or its subsidiaries
who is not bound by a duty of confidentiality, or other contractual, legal or
fiduciary obligation, to the Company or such customers, clients or others having
a business relationship, or (iv) as required by applicable law or legal process.
The provisions of this Paragraph 12 shall continue in effect notwithstanding
termination of the Executive's employment hereunder for any reason.
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13. Business Records. Given the competitive environment in which the
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Company does business and the fiduciary relationship that the Executive will
have with the Company hereunder, the Executive agrees to promptly deliver to the
Company, upon termination of his employment hereunder, or at any other time when
the Company so requests, all memoranda, notes, records, drawings, manuals and
other documents (and all copies thereof and therefrom) in any way relating to
the business or affairs of the Company or any of its subsidiaries or any of
their clients, whether made or compiled by the Executive or furnished to him by
the Company or any of its employees, customers, clients, consultants or agents,
which the Executive may then possess or have under his control. The Executive
confirms that all such memoranda, notes, records, drawings, manuals and other
documents (and all copies thereof and therefrom) constitute the exclusive
property of the Company. The obligation of confidentiality set forth in
Paragraph 12 shall continue notwithstanding the Executive's delivery of any such
documents to the Company. The provisions of this Paragraph 13 shall continue in
effect notwithstanding termination of the Executive's employment hereunder for
any reason.
14. Intellectual Property.
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(a) Disclosure . The Executive shall promptly disclose to the Company
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all inventions, discoveries, processes, designs, methods, substances, articles,
computer programs and improvements, whether or not patentable or copyrightable
(all of the foregoing being hereinafter collectively called "Intellectual
Property"), which the Executive conceives, invents, discovers, creates or
develops, alone or with others, during the Employment Term, if such conception,
invention, discovery, creation or development (i) occurs in the course of the
Executive's employment with the Company, or (ii) occurs with the use of the
Company's or any of its subsidiaries' time, materials or facilities, or (iii) in
the opinion of the Board of Directors of the Company, relates or pertains in any
way to the Company's or any of its subsidiaries' purposes, activities or
affairs.
(b) Assignment . The Executive hereby assigns and agrees to assign to
----------
the Company, its successors, assigns or designees, any and all of the
Executive's right, title and interest in and to all Intellectual Property that
the Executive is obligated to disclose to the Company pursuant to Paragraph
14(a).
(c) Assistance . The Executive shall assist the Company in the
----------
preparation of and shall execute and deliver all disclosures, applications for
patents or reissue of patents, rights of priority, assignments and other
documents, give all
14
testimony, and in general do all lawful things reasonably requested by the
Company to obtain, maintain and enforce United States and foreign patents and to
obtain, maintain and enforce on behalf of the Company or its designee legal
title and all rights in and to all Intellectual Property referred to in the
preceding provisions of this Paragraph 14.
(d) Records . The Executive shall prepare and maintain adequate and
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current written records of all Intellectual Property within the scope of
Paragraphs 14(a) through 14(c) in the form of notes, sketches, drawings,
memoranda or reports, all of which shall be promptly submitted by the Executive
to the Company and shall be owned exclusively by the Company.
(e) Consideration and Expenses . The Executive shall perform his
--------------------------
obligations under this Paragraph 14 at the Company's expense, but without any
additional compensation other than that which the Executive receives by reason
of his employment with the Company or pursuant to any separate agreement between
the Company and the Executive or any separate policy of the Company that may be
in effect from time to time during the Employment Term.
(f) Power of Attorney . If the Company or its designee is unable for any
-----------------
reason whatsoever to obtain the Executive's signature to any documents that the
Company is entitled to require him to sign pursuant to this Paragraph 14, the
Executive hereby irrevocably designates and appoints the Company as his agent
and attorney-in-fact to act for and on behalf of him and in his stead to
execute, deliver and file all such documents (including, without limitation, all
applications for United States and foreign patents or for the reissue of such
patents) and to do all other lawful acts that the Company is entitled to require
the Executive to do pursuant to this Paragraph 14.
(g) Survival . The provisions of this Paragraph 14 shall continue in
--------
effect notwithstanding termination of the Executive's employment hereunder for
any reason.
15. Assistance in Litigation. During the Employment Term and for a
------------------------
period of three years thereafter, the Executive shall, upon reasonable notice,
furnish such information and proper assistance to the Company as may reasonably
be required by the Company in connection with any litigation in which the
Company or any of its subsidiaries or affiliates is, or may become, a party.
The Company shall reimburse the Executive for all reasonable out-of-pocket
expenses incurred by the Executive in rendering such assistance. The provisions
of this Paragraph 16 shall continue in effect notwithstanding termination of the
Executive's employment hereunder for any reason.
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16. Withholding Taxes. The Company may withhold from any payments to be
-----------------
made to the Executive hereunder such amounts (including social security
contributions and federal income taxes) as shall be required by federal, state
and local withholding tax laws.
17. No Effect on Other Contractual Rights. The provisions of this
-------------------------------------
Agreement, and any payment provided for hereunder, shall not reduce any amounts
otherwise payable to the Executive, or in any way diminish the Executive's
rights as an employee of the Company, whether existing now or hereafter, under
any employee benefit plan, program or arrangement or other contract or agreement
of the Company providing benefits to the Executive.
18. Arbitration. The Company and the Executive agree to submit to final
-----------
and binding arbitration any and all disputes, claims (whether in tort, in
contract, statutory or otherwise) and/or disagreements concerning the
interpretation or application of this Agreement; provided, however, that
notwithstanding the foregoing, in no event shall any dispute, claim or
disagreement arising under Paragraphs 11, 12, 13 and 14 be submitted to
arbitration pursuant to this Paragraph 18 or otherwise. Any dispute, claim
and/or disagreement subject to arbitration pursuant to the terms of this
Paragraph 18 shall be resolved by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association or any successor
organization (the "Association") then in effect. Arbitration under this
provision must be initiated within 30 days of the action, inaction or occurrence
about which the party initiating the arbitration is complaining. Within ten
days of the initiation of an arbitration hereunder, each party will designate an
arbitrator pursuant to Rule 14 of the Association's Rules, and within 10 days
thereafter the appointed arbitrators will appoint a neutral arbitrator from the
panel in the manner prescribed in Rule 13 of the Association's Rules; provided,
however, that if the Company and the Executive mutually agree, the arbitration
may be conducted by a single arbitrator selected by agreement of the Company and
the Executive. The Executive and the Company agree that the decision of the
arbitrators selected hereunder will be final and binding on both parties. This
arbitration provision is expressly made pursuant to and shall be governed by the
Federal Arbitration Act, 9 U.S.C. Sections 1-14. The parties hereto agree that
pursuant to Section 9 of such Act a judgment of any state court located in
Xxxxxxxx County, Arkansas, shall be entered upon the award made pursuant to the
arbitration.
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19. Injunctive Relief. In recognition of the fact that a breach by the
-----------------
Executive of any of the provisions of Paragraphs 11, 12, 13 and 14 will cause
irreparable damage to the Company for which monetary damages alone will not
constitute an adequate remedy, the Company shall be entitled as a matter of
right (without being required to prove damages or furnish any bond or other
security) to obtain a restraining order, an injunction, an order of specific
performance or other equitable or extraordinary relief from any court of
competent jurisdiction restraining any further violation of such provisions by
the Executive or requiring him to perform his obligations hereunder. Such right
to equitable or extraordinary relief shall not be exclusive but shall be in
addition to all other rights and remedies to which the Company may be entitled
at law or in equity, including without limitation the right to recover monetary
damages for the breach by the Executive of any of the provisions of this
Agreement.
20. Survival. Neither the expiration of the term of the Executive's
--------
employment hereunder nor any other termination of this Agreement shall impair
the rights or obligations of either party hereto which shall have accrued
hereunder prior to such expiration or termination. The provisions of Paragraphs
11, 12, 13, 14, 15, 18 and 19 and the rights and obligations of the parties
thereunder, shall survive the expiration or termination of the term of the
Executive's employment hereunder.
21. Notices. All notices, requests, demands and other communications
-------
required or permitted to be given or made hereunder by either party hereto shall
be in writing and shall be deemed to have been duly given or made (i) when
delivered personally, or (ii) when deposited in the United States mail, first
class registered or certified mail, postage prepaid, return receipt requested,
to the party for which intended at the following addresses (or at such other
addresses as shall be specified by the parties by like notice, except that
notices of change of address shall be effective only upon receipt):
If to the Company, at:
Xxxxxxx.xxx, Inc.
000 Xxxxx 00xx Xxxxxx
Xxx Xxxxx, XX 00000
Attn: Chief Executive Officer
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with a copy to:
Xxxx X. Xxxx, Esq.
Xxxxxxxx & Xxxxxx, P.C.
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
If to the Executive:
Xxxx Xxxxxxx
000 Xxxxx 00xx Xxxxxx
Xxx Xxxxx, XX 00000
22. Entire Agreement. This Agreement constitutes the entire agreement
----------------
between the parties hereto concerning the subject matter hereof and supersedes
all prior agreements and understandings, both written and oral, between the
parties with respect to such subject matter.
23. Binding Effect; Assignment; No Third Party Benefit. This Agreement
--------------------------------------------------
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and assigns; provided,
however, that the Executive shall not assign or otherwise transfer this
Agreement or any of his rights or obligations hereunder without the prior
written consent of the Company (except that any rights that the Executive may
have hereunder at the time of his death may be transferred by will or pursuant
to the laws of descent and distribution). Nothing in this Agreement, express or
implied, is intended to or shall confer upon any person other than the parties
hereto, and their respective heirs, legal representatives, successors and
permitted assigns, any rights, benefits or remedies of any nature whatsoever
under or by reason of this Agreement.
The Company may: (i) as long as it remains obligated with respect to this
Agreement, cause its obligations hereunder to be performed by a subsidiary or
subsidiaries for which Executive performs services, in whole or in part; (ii)
assign this Agreement and its rights hereunder in whole, but not in part, to any
corporation with or into which it may hereafter merge or consolidate or to which
it may transfer all or substantially all of its assets, if said corporation
shall by operation of law or expressly in writing assume to the reasonable
satisfaction of Executive all liabilities of the Company hereunder as fully as
if it had been originally named the Company herein; but may not otherwise assign
this Agreement or its rights hereunder. Subject to the foregoing, this
Agreement shall inure to the benefit of and be enforceable by the Company's
successors and assigns.
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24. Nonalienation of Benefits. The Executive shall not have any right to
-------------------------
pledge, hypothecate, anticipate or in any way create a lien upon any payments or
other benefits provided under this Agreement; and no benefits payable hereunder
shall be assignable in anticipation of payment either by voluntary or
involuntary acts, or by operation of law, except by will or pursuant to the laws
of descent and distribution.
25. Amendment. This Agreement may not be modified or amended in any
---------
respect except by an instrument in writing signed by both of the parties hereto.
26. Waiver. Any term or condition of this Agreement may be waived at any
------
time by the party hereto that is entitled to have the benefit thereof, but such
waiver shall only be effective if evidenced by a writing signed by such party,
and a waiver on one occasion shall not be deemed to be a waiver of the same or
any other type of breach on a future occasion. No failure or delay by a party
hereto in exercising any right or power hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right or power.
27. Authority. No person, other than pursuant to a resolution duly
---------
adopted by the members of the Board of Directors of the Company, shall have
authority on behalf of the Company to agree to modify, amend or waive any
provision of this Agreement or take any action in reference hereto.
28. Severability. If any provision of this Agreement is held to be
------------
unenforceable, (a) this Agreement shall be considered divisible, (b) such
provision shall be deemed inoperative to the extent it is deemed unenforceable,
and (c) in all other respects this Agreement shall remain in full force and
effect; provided, however, that if any such provision may be made enforceable by
limitation thereof, then such provision shall be deemed to be so limited and
shall be enforceable to the maximum extent permitted by applicable law.
29. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
-------------
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ARKANSAS WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
30. Counterparts. This Agreement may be executed by the parties hereto
------------
in any number of counterparts, each of which shall be deemed an original, but
all of which shall constitute one and the same agreement.
19
31. Interest on Late Payments. The Company's obligation to pay Executive
-------------------------
any amounts under this Agreement, if not paid by the time specified for payment
herein, shall bear interest at the rate of 18% per annum or, if different, the
maximum rate allowed by law until paid by the Company, and all accrued and
unpaid interest shall bear interest at the same rate, all of which interest
shall be compounded daily.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on
its behalf by its duly authorized officer, and the Executive has executed this
Agreement, as of the date first set forth above.
XXXXXXX.XXX, INC.
By:
---------------------------------
Name: Xxxx X. Xxxxxx
Title: Chairman of the Board and
Chief Executive Officer
------------------------------------
Xxxx X. Xxxxxxx
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