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EXHIBIT 10.11
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), is entered into as of the 20th
day of January, 1999, by and among xxxxxxx.xxx, inc., a Nevada corporation (the
"Company") and Xxxx Xxxxx Xxxxxx ("Xxxxxx").
WHEREAS, the Company desires to employ Xxxxxx as provided herein; and,
WHEREAS, Xxxxxx desires to accept such employment,
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. EMPLOYMENT. The Company hereby employs Xxxxxx and Xxxxxx hereby
accepts employment with the Company as Vice President of Content and Design upon
the terms and conditions hereinafter set forth.
2. DUTIES. Xxxxxx will serve the Company as Vice President of Content
and Design and will faithfully and diligently perform the services and functions
relating to such positions or otherwise reasonably incident to such position,
provided that all such services and functions will be reasonable and within
Xxxxxx'x area of expertise. Xxxxxx'x specific duties shall include those related
to coordinating the design and content of the Company's products to increase
their appeal to the Spanish speaking community and such other duties as the
Company may reasonably direct. Xxxxxx will, during the term of this Agreement
(or any extension thereof), devote his time, attention and skills and best
efforts as a full time employee to the promotion of the business of the Company.
3. TERM. This Agreement and Xxxxxx'x employment shall commence on the
15th day of February, 1999, (the "Effective Date") and shall continue for a term
of two years ("Initial Term") unless terminated earlier in accordance with this
Agreement. The term of this Agreement may be extended by agreement of the
Company and Xxxxxx.
4. COMPENSATION. As compensation for the services rendered to the
Company under this Agreement commencing on the Effective Date hereof, Xxxxxx
will be paid a base salary of Seventy Five Thousand dollars ($75,000) per year,
payable in accordance with the then current payroll policies of the Company or
as otherwise agreed to by the parties (the "Salary"). At any time and from time
to time, the Salary may be increased if so determined by the Company's board of
directors after a review of Xxxxxx'x performance of his duties hereunder. After
six months of continuous employment by the Company, the Company will review
Xxxxxx'x performance and Xxxxxx, based upon such review, shall have the
opportunity to negotiate an increase of his salary and/or a bonus in the form of
cash and/or stock.
5. TERMINATION. This Agreement will terminate upon the occurrence of
any of the following events:
a. The death of Xxxxxx;
b. The "Total Disability" (as hereinafter defined) of Xxxxxx;
c. Written notice to Xxxxxx from the Company of termination for
"Cause" (as hereinafter
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defined);
d. The voluntary termination of this Agreement by either party
upon sixty (60) days prior written notice;
e. The later of two (2) years from the Effective Date of this
Agreement or the date to which this Agreement is extended in
accordance with Section 3 above; or
f. Written notice to Xxxxxx from the Company for any reason
without "Cause".
For purposes of Section 5b, the term "Total Disability" means physical
or mental disability, or both, determined to be (or reasonably expected to be,
based upon then available medical information) of not less than twelve (12)
months duration or more. The determination shall rest upon the opinion of the
physician regularly attending Xxxxxx. If the Company disagrees with said
physician's opinion, the Company may engage at their own expense a physician to
examine the Xxxxxx, and Xxxxxx hereby consents to such examination and to waive,
if applicable any privilege between the physician and Xxxxxx that may arise as a
result of said examination. If after conferring, the two physicians cannot
concur on a final opinion, they shall choose a third consulting physician whose
opinion shall control. The expense of the third consulting physician shall be
borne equally by the Xxxxxx and the Company.
For purposes of Section 5c, "Cause" means (i) Xxxxxx has failed to
substantially perform his duties as reasonably determined by any Officer of the
Company or the Board of Directors of the Company, (ii) Xxxxxx engages in poor
performance that is not cured within thirty (30) days after counseling by the
Company, (iii) Xxxxxx has failed to comply with the reasonable directives and
policies of the Board of Directors of the Company or of any Officer of the
Company, (iv) the U.S. Government or an agency thereof determines that Xxxxxx is
not eligible to work within the United States, or (v) Xxxxxx breaches his
fiduciary duty to the Company or commits any dishonest, unethical, fraudulent,
or felonious act in respect to Xxxxxx'x duties to the Company.
6. BENEFITS. Xxxxxx shall be entitled to participate in any Company
benefits as they become available, if at all, and which are normal and customary
Company benefits for a like position, including life insurance, incentive
compensation, deferred compensation, stock option plans or other Company
programs or plans. In addition, Xxxxxx shall be entitled to the following
benefits:
(a) full coverage health insurance to be paid by the Company with
a maximum premium not to exceed $350 per month;
(b) at reasonable times and upon prior Company approval, Xxxxxx
shall be entitled to two weeks paid vacation per calendar year
for each year employed during the term of this Agreement;
(c) the Company will contribute and reimburse Xxxxxx up to $5,000
for moving expenses from his current residence to Phoenix,
Arizona.
7. LOAN. The Company will loan to Xxxxxx Five Thousand dollars ($5,000)
to be loaned and disbursed on the Effective Date. All amounts loaned will be
evidenced by a promissory note with interest at 10% per annum and with all
principal and accrued but unpaid interest due one (1) year from the Effective
Date if not sooner paid. The Company agrees that if Xxxxxx has been employed by
the Company for six continuous months from the Effective Date, 50% of the
principal balance and accrued but unpaid interest shall be forgiven and, if
Xxxxxx has been employed by the Company for a total of twelve continuous months
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of employment by the Company, then the remaining principal balance and accrued,
but unpaid interest shall be forgiven by the Company and the Note evidencing
such loan shall be canceled.
8. STOCK OPTIONS. Specifically subject to Section 8a and 8b below and
Section 10c and contingent upon Xxxxxx being employed by the Company, Xxxxxx
shall be granted options to purchase 15,000 shares of the Company's Common Stock
exercisable at $1.00 per share to vest and be exercisable in accordance with the
Company's 1998 Stock Option Plan and in accordance with the following and
Section 10c below:
(a) If Xxxxxx'x employment is terminated for any reason other than "for
Cause" as defined herein, then the unexercised options shall be exercisable for
a period of either (i) forty-five (45) days from the termination of Xxxxxx'x
employment or (ii) the end of the initial term of this Agreement or any
extension thereof; whichever period of later.
(b) If Xxxxxx'x employment by the Company is terminated "for Cause" as
defined in this Agreement, then all unexercised options granted to Xxxxxx shall
immediately terminate and not be exercisable upon notice of Xxxxxx'x termination
of employment "for Cause."
9. BUSINESS EXPENSES. Upon submission of proper documentation, the
Company shall pay or reimburse Xxxxxx for all reasonable and necessary office,
telephone, travel and other expenses which are incurred by Xxxxxx in the pursuit
of Xxxxxx'x duties on behalf of the Company.
10. NON-COMPETITION AND CONFIDENTIALITY.
a. Non-Competition. The Company and Xxxxxx acknowledge and agree that
Xxxxxx'x services are of a special and unusual character which have a unique
value to the Company, the loss of which cannot be adequately compensated by
damages in an action at law and if used in competition with the Company, could
cause serious harm to the Company. Accordingly, Xxxxxx agrees that during the
term of this Agreement and for a period of two (2) years after the termination
of this employment by the Company, irrespective of the reason for such
termination, Xxxxxx will not (1) enter into any agreement with or directly or
indirectly solicit or attempt to solicit any employee or other representatives
of the Company (the "Company") for the purpose of causing them to leave the
Company to take employment with any other business entity, or (2) compete,
directly or indirectly, with the Company in any way and that Xxxxxx will not act
as an officer, director, employee, consultant, shareholder, lender or agent of
any entity engaged in any business of the same nature as, or in competition
with, the business in which the Company is now engaged, was engaged during
Xxxxxx'x employment or is engaged at the time of Xxxxxx'x termination of
employment, except for the ownership of less than five percent (5%) of the
outstanding capital stock of a publicly traded company.
b. Confidentiality.
(1) Xxxxxx acknowledges that in Xxxxxx'x employment hereunder,
Xxxxxx will be making use of, acquiring and adding to the Company's trade
secrets and its confidential and proprietary information of a special and unique
nature and value relating to such matters as, but not limited to, the Company's
business operations, internal structure, financial affairs, programs, software
systems, procedures, manuals, confidential reports, lists of clients and
prospective clients and sales and marketing methods, as well as the amount,
nature and type of services, equipment and methods used and preferred by the
Company's clients and the fees paid by such clients, all of which shall be
deemed to be confidential information. Xxxxxx acknowledges that such
confidential information has been and will continue to be of central importance
to the business of the Company and that disclosure of it to or its use by others
could cause substantial loss to
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the Company. In consideration of employment by the Company, Xxxxxx agrees that
during the Initial Term and any renewal term of this Agreement and upon and
after leaving the employ of the Company for any reason whatsoever, Xxxxxx shall
not, for any purpose whatsoever, directly or indirectly, divulge or disclose to
any person or entity any of such confidential information which was obtained by
Xxxxxx as a result of the Xxxxxx'x employment with the Company or any trade
secrets of the Company, but shall hold all of the same confidential and
inviolate.
(2) All contracts, agreements, financial books, records,
instruments and documents; client lists; memoranda; data; reports; programs;
software, tapes; Rolodexes; telephone and address books; letters; research; card
decks; listings; programming; and any other instruments, records or documents
relating or pertaining to clients serviced by the Company or Xxxxxx, the
services rendered by Xxxxxx, or the business of the Company (collectively, the
"Records") shall at all times be and remain the property of the Company. Upon
termination of this Agreement and Xxxxxx'x employment under this Agreement for
any reason whatsoever, Xxxxxx shall return to the Company all Records (whether
furnished by the Company or prepared by Xxxxxx), and Xxxxxx shall neither make
nor retain any copies of any of such Records after such termination.
(3) All inventions and other creations, whether or not
patentable or copyrightable, and all ideas, reports and other creative works,
including, without limitation, computer programs, manuals and related materials,
made or conceived in whole or in part by Xxxxxx while employed by the Company
and within one year thereafter, which relate in any manner whatsoever to the
business, existing or proposed, of the Company or any other business or research
or development effort in which the Company or any of its subsidiaries or
affiliates engages during Xxxxxx'x employment by the Company will be disclosed
promptly by Xxxxxx to the Company and shall be the sole and exclusive property
of the Company. All copyrightable works created by Xxxxxx and covered by this
Section 10b(3) shall be deemed to be works for hire. Xxxxxx shall cooperate with
the Company in patenting or copyrighting all such inventions, ideas, reports and
other creative works, shall execute, acknowledge, seal and deliver all documents
tendered by the Company to evidence its ownership thereof through the world, and
shall cooperate with the Company obtaining, defending and enforcing its rights
therein.
c. Certain Claims Upon Termination. Xxxxxx understands that if within
one year prior to the termination of Xxxxxx'x employment with the Company,
Xxxxxx has either (i) committed an act of theft, dishonesty, gross dereliction
of duty, fraud, embezzlement, misappropriation, or breach of fiduciary duty
against the Company or any other act of comparable misconduct against the
Company; or (ii) breached any of his obligations under this Agreement, then the
Company shall have the right to purchase any or all shares of Common Stock of
the Company owned by Xxxxxx at the time of such termination for a purchase price
equal to the amount that Xxxxxx paid for such shares, together with interest
thereon at a rate of ten percent (10%) per annum. If the Company desires to
exercise such right, it shall notify Xxxxxx within 60 days after the date of
such termination and Xxxxxx shall tender the shares being purchased by the
Company at the time and place designated in such notice from the Company upon
receipt of the purchase price for such shares. If Xxxxxx fails to tender such
shares, the shares shall be deemed to be canceled as of the date the Company
tenders payment of the purchase price thereof.
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d. Enforceability. In the event of the breach of the covenants
contained in this Section 10, it is understood that damages will be difficult to
ascertain and the Company may petition a court of law or equity for injunctive
relief in addition to any other relief which the Company may have under the law,
this Agreement or any other agreement executed in connection herewith. In
connection with the bringing of any legal or equitable action for the
enforcement of this Agreement, the Company shall be entitled to recover, whether
the Company seeks equitable relief, and regardless of what relief is afforded,
such reasonable attorneys' fees and expenses as the Company may incur in
prosecution of the Company's claim for breach hereof.
It is hereby agreed that the provisions of this Section 10 are separate
and independent from the other provisions of this Agreement, that these
provisions are specifically enforceable by the Company notwithstanding any claim
by Xxxxxx that the Company has violated or breached this Agreement or any claim
that Xxxxxx is entitled to any offset or compensation.
To induce the Company to enter into this Agreement, Xxxxxx represents
and warrants to the Company that Section 10 of this Agreement is enforceable by
the Company in accordance with its terms.
The parties hereto agree that to the extent that any provision or
portion of Section 10 of this Agreement shall be held, found or deemed to be
unreasonable, unlawful or unenforceable by a court of competent jurisdiction,
then any such provision or portion thereof shall be deemed to be modified to the
extent necessary in order that any such provision or portion thereof shall be
legally enforceable to the fullest extent permitted by applicable law; and the
parties hereto do further agree that any court of competent jurisdiction shall,
and the parties hereto do hereby expressly authorize, request and empower any
court of competent jurisdiction to, enforce any such provision or portion
thereof or to modify any such provision or portion thereof in order that any
such provision or portion thereof shall be enforced by such court to the fullest
extent permitted by applicable law.
11. WAIVER OF BREACH. The waiver by any party hereto of a breach of any
provision of this Agreement will not operate or be construed as a waiver of any
subsequent breach by any party.
12. NOTICES. Any notices, consents, demands, request, approvals and
other communications to be given under this Agreement by either party to the
other will be deemed to have been duly given if given in writing and personally
delivered, faxed or if sent by mail, registered or certified, postage prepaid
with return receipt requested, as follows:
If to the Company: xxxxxxx.xxx, inc.
One Arizona Center
000 Xxxx Xxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
If to Xxxxxx: Xxxx Xxxxx Xxxxxx
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Notices delivered personally will be deemed communicated as of actual receipt,
notices by fax shall be deemed delivered when such notices are faxed to
recipient's fax number and notices by mail shall be deemed delivered when
mailed.
13. ENTIRE AGREEMENT. This Agreement and the agreements contemplated
hereby constitute the entire agreement of the parties regarding the subject
matter hereof, and supersede all prior agreements and understanding, both
written and oral, among the parties, or any of them, with respect to the subject
matter hereof.
14. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future laws effective during
this Agreement, 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.
15. GOVERNING LAW. To the extent permitted by applicable law, this
Agreement and the rights and obligations of the parties will be governed by and
construed and enforced exclusively in accordance with the substantive laws (but
not the rules governing conflicts of laws) of the State of Arizona and the State
of Arizona shall have exclusive jurisdiction regarding any legal actions
relating to this Agreement.
16. 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.
17. GENDER AND NUMBER. When the context requires, the gender of all
words used herein will include the masculine, feminine and neuter, and the
number of all words will include the singular and plural.
18. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of which will
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
THE COMPANY:
xxxxxxx.xxx, inc., a Nevada corporation
By: /s/ Xxxxxxx Xxxxxxxx
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Xxxxxxx Xxxxxxxx, Chief Executive Officer
XXXXXX:
/s/ Xxxx Xxxxx Xxxxxx
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Xxxx Xxxxx Xxxxxx
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