AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Exhibit 10.1
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into effective as of August 16, 2017, by and between Western Capital Resources, Inc., a Delaware corporation (“Company”), and Xxxxx Xxxxxxx, a resident of the District of Columbia (“Employee”), and amends and restates an earlier Employment Agreement between the parties dated as of February 9, 2015 (the “Original Agreement”).
BACKGROUND
A. The Company desires to employ Employee to assist the Company by rendering services on the terms and conditions provided in this Agreement, and Employee desires to render services for the Company as provided herein.
B. The success of the Company depends, to a significant extent, upon the Company maintaining the secrecy of its proprietary information.
C. While employed by the Company, Employee will be entrusted with certain of its most sensitive information. Employee recognizes that it is important that the Company protect its rights with respect to its confidential information. For the Company’s legitimate protection, Employee is willing to reiterate, as set forth in the Original Agreement, several promises to the Company that reasonably restrict Employee’s activities after Employee is no longer employed by the Company, and Employee acknowledges and agrees that Employee earlier received in connection with entering into the Original Agreement, and is now receiving by virtue of his appointment to the office of Chief Financial Officer pursuant to this Agreement, adequate and valuable consideration for making those promises and entering into this Agreement.
D. Prior to entering into this Agreement, Employee has had sufficient time to consider the Company’s offer and its terms, including the restrictive covenants contained in this Agreement. Employee enters into this Agreement voluntarily, without coercion or duress. Employee has had the opportunity to consult with legal counsel of Employee’s choice prior to entering into this Agreement.
NOW, THEREFORE, in consideration of the above premises and the terms and conditions below, the Company and Employee understand and agree as follows:
AGREEMENT
1. Employment.
a. Term. The Company hereby employs Employee, and Employee hereby accepts such employment, for a term commencing as of August 15, 2017 and continuing thereafter through the close of business on April 30, 2019, unless sooner terminated in accordance with the provisions of Section 5 (the “Term”).
b. Position and Duties. Employee shall serve as the Chief Investment Officer and Chief Financial Officer of the Company, and Employee’s primary duties and responsibilities in such capacity shall include (i) sourcing deals, leading due-diligence investigations, performing financial evaluations and models, integrating acquired businesses, assisting with any required financing, strategic planning and modeling, assisting in the sale of Company subsidiaries or parts thereof, provide strategic direction and analysis for the Company and its subsidiaries as needed and (ii) review the 10K, 10Q filings and various public disclosures of the Company and ensure they are accurate and filed in a timely manner, oversee the Company’s finance department, ensure that consolidated monthly financial statements are accurate and published in a timely manner, oversee the Company’s outside SOX consultants and the internal audit work and SOX testing performed by the Company’s controller, perform various investor relations functions for the Company, manage the Company’s banking relationship and the required reporting associated with it, and (iii) such other duties as may be assigned to Employee by the Chief Executive Officer of the Company or the Board of Directors of the Company (the “Board”). The Company specifically agrees that Employees duties will not include preparation of tax-related documentation and filings, and that such documentation and filings shall be prepared and reviewed by tax experts. Employee will duly, loyally and diligently perform all the duties, responsibilities and requirements to the Company in a timely and proficient manner during Employee’s employment. The Company agrees that all subsidiary CFOs will report to employee when it comes to public company/SOX related items, or other items required for Employee to perform his duties. Employee shall be able to work remotely from anywhere, and shall not be required to relocate for the term of his employment.
c. Permitted Activities. Notwithstanding Employee’s duties and obligations described herein, the parties wish to make it clear that Employee may: (i) serve on industry, trade, civic or charitable boards or committees; as well as continue to serve on the boards of directors of Swift Spinning, Inc. and AlphaGraphics, Inc.; (ii) engage in charitable activities and community affairs; and (iii) manage his own personal investments, including but not limited to real estate, as long as none of the above such activities materially interfere with the performance of Employee’s duties and responsibilities.
2. Employee’s Compensation and Benefits.
a. Base Salary. Employee will receive a gross annualized base salary of $300,000, less applicable legally required withholdings and such other deductions as Employee voluntarily authorizes in writing. The base salary shall be payable in a manner that is consistent with the Company’s ordinary payroll practices.
b. Bonus. Employee will be eligible to receive an annual bonus with an initial target of $135,000 tied to Employee accomplishing annual goals as set by the Company’s CEO and/or Board.
c. Health Insurance. Employee and his immediate family members will be entitled to participate in the Company’s health insurance plan that the Company offers to employees on the terms and conditions governing such plan.
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d. Vacation. Employee is eligible to take up to four weeks of paid vacation days in each calendar year. Any vacation time not taken by Employee during the calendar year may not be carried forward into any succeeding calendar year.
e. Expense Reimbursement. Employer shall promptly reimburse Employee for reasonable out-of-pocket expenses incurred on behalf of Employer by Employee in connection with the performance of Employee’s duties hereunder, including but not limited to monthly cellular phone bills, Internet service provider bills, printer and office supplies and business travel-related expenses. Employee shall endeavor to book flights in advance and stay in reasonably priced hotels.
f. Options Vesting Acceleration. In consideration for entering into this Agreement, the Company shall allow the accelerated vesting of any unvested options issued to Employee pursuant to the Stock Option Agreement dated February 9, 2015 by and between Employee and the Company (the “Option Agreement”). Upon the execution of this Agreement, all 65,000 shares subject to the Option Agreement shall be deemed fully vested and the initial three-year term of employment under the Original Agreement shall be deemed to have occurred for purposes of the Option Agreement.
3. Company Property. Employee understands that during Employee’s employment with the Company, Employee will be provided with, use and/or possess Company property. Company property includes but is not limited to internal memoranda, records, forms, computer programs, contacts, phone numbers, customer lists, customer data or information, and other proprietary information pertaining to the Company’s business. Upon termination of Employee’s employment or upon the written request of the Company, Employee shall promptly return all Company property to the Company in good condition. Employee agrees not to retain, download, divert or transfer in any manner any files, documents, information or other data that are the property of the Company. Employee will not retain any copies or reproductions of records, documents, data or other tangible items of Company.
4. Nondisclosure of Confidential Information.
a. Definition. For purposes of this Agreement, “Confidential Information” means any and all sensitive, confidential, proprietary and trade secret information concerning or relating to the Company, including any information which derives independent economic value from not being generally known to or readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use. Examples of Confidential Information which are not to be disclosed or used except as required by Employee’s employment with the Company or as expressly authorized in writing by the Company include, but are not limited to, the following: (i) information concerning actual or potential customers, including their identities, contact information, financial information concerning their actual or prospective business operations, identity and quantity of products or services provided by the Company, any unpublished written materials furnished by or about them to the Company, pricing information relating to products, services and materials the Company provides to customers, customer cost information, and other customer information, data, and documents; (ii) information encompassed in all proposals, marketing and sales plans, financial information, processes and methods by which products or services are provided, information relating to the cost and pricing of the Company of labor and materials provided to customers, and all methods, concepts, know-how or ideas in or related to the business of the Company; and (iii) information concerning the Company’s ownership, management, financial condition, financial operations, business activities or practices, sales activities, marketing activities or plans, research and development, pricing practices, legal matters, and strategic business plans including acquisitions. Failure to xxxx any of the Confidential Information as confidential will not affects its status as Confidential Information.
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b. Confidential Information. Employee shall keep confidential and not disclose to anyone or use, either during or after Employee’s employment with the Company, any Confidential Information of the Company except as required by Employee’s employment with the Company or as expressly authorized in writing by the Company. The contractual obligations contained herein shall be in addition to any and all obligations of confidentiality imposed by law. The obligations of this Section shall continue in full force and effect for three years after the termination of this Agreement and the termination of Employee’s employment with the Company, except as otherwise noted in Section 17 below.
c. Exceptions. The foregoing obligations of confidentiality shall not apply to any information that is generally known outside the Company or readily ascertainable by proper means (for purposes hereof, “proper means” does not include obtaining information by means of court order or subpoena or other judicial or administrative means) or that hereafter becomes generally known outside of the Company through no fault of Employee or by the Company’s voluntary disclosure. Confidential Information is not considered to be generally known or readily ascertainable because such has been disseminated subject to an obligation to keep such information confidential.
d. Ownership and Use of Confidential Information. Employee acknowledges that the Company shall at all times be and remain the owner of all Confidential Information disclosed to and acquired by Employee during Employee’s employment with the Company. Employee acknowledges that Employee may use Confidential Information only for the limited purposes for which it was disclosed under this Agreement and Employee’s employment with the Company. Employee shall use Employee’s best efforts to preserve the confidentiality of such Confidential Information. Employee agrees not to remove from the premises of the Company or the sites at which Employee works, except as an employee of the Company in pursuit of the business of the Company or except as specifically permitted in writing by the Company, any document or object containing or reflecting Confidential Information. Employee recognizes that all such documents and objects are the sole and exclusive property of the Company and Employee shall safeguard such information and property against disclosure, theft or damage.
e. Return of Confidential Information. Upon termination of employment or at such earlier time as the Company may request in writing, Employee shall immediately return to the Company all Confidential Information and shall not retain copies of such Confidential Information.
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5. Termination. Employee’s employment will terminate prior to the end of the Term in any of the following circumstances:
a. Resignation. Employee may terminate Employee’s employment upon at least 30 days’ advance written notice for any reason. In the Company’s sole discretion, the Company may relieve Employee of Employee’s duties and responsibilities any time during the notice period while continuing to provide Employee with Employee’s pay and benefits through the last day of the notice period.
b. Death. Employee’s employment will automatically terminate upon Employee’s death.
c. Disability. The Company may terminate Employee’s employment due to disability, meaning that Employee has a physical or mental impairment that substantially limits one or more major life activities and is such that Employee, even with reasonable accommodations, cannot perform the essential functions of Employee’s position.
d. Without Cause. The Company may terminate Employee’s employment without “Cause,” defined below, upon at least 30 days’ advance written notice.
e. Cause. The Company may terminate Employee’s employment immediately for “Cause” at any time during the Term. For purposes of this Agreement, the term “Cause” shall mean any of the following:
| 1) | Employee’s theft, dishonesty or fraud which has, or could reasonably be expected to have, an adverse effect on the Company, its business, or interests as determined in the Company’s sole discretion; |
| 2) | Employee embezzles or misappropriates assets of the Company; |
| 3) | Employee fails to follow the reasonable and lawful instructions of the Chief Executive Officer of the Company or the Board; provided, however, the Company will not have Cause if Employee has cured, to the Company’s satisfaction, such failure(s) within 30 days after Employee shall have received written notice from the Company of the particulars of such failure(s); |
| 4) | The Company has a reasonable belief Employee engaged in some form of conduct prohibited by Company policy or the law; |
| 5) | Employee fails to devote the working time, attention, skill and efforts to the business of the Company as required by Section 1 of this Agreement in a manner acceptable to the Company; provided, however, the Company will not have Cause if Employee has cured, to the Company’s satisfaction, such failure within 30 days after Employee shall have received written notice from the Company of the particulars of such failure; |
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| 6) | Employee breaches a fiduciary duty or responsibility to the Company after 30 days’ advance written notice; provided, however, the Company will not have Cause if Employee has cured, to the Company’s satisfaction, such breach within 30 days after Employee shall have received written notice from the Company of the particulars of such breach; or |
| 7) | The serious misconduct or gross negligence of Employee that results or could reasonably be expected to result in damage to the Company, its business, or interests. |
6. Payments Upon Termination. Following any termination of Employee’s employment under this Agreement, all compensation and benefits provided to Employee under this Agreement shall cease to accrue as of the date of such termination, with Employee entitled to all base salary and benefits hereunder accrued through the effective date of termination, except as set forth in the paragraphs below.
f. In the case of a termination arising under Section 5(b) from Employee’s death or under Section 5(c) from Employee’s incapacity or disability, the Company shall, for a period of one month following death, incapacity or disability, pay to Employee’s representative or estate an amount equal to Employee’s regular monthly installment of base salary and continue the benefit programs in which Employee was participating at the time of death, incapacity or disability, including paying all premiums for coverage for dependent family members.
g. In the case of a termination arising under Section 5(d) from the Company’s termination of Employee without Cause, then, subject in all cases to Employee’s execution and delivery to the Company of a release and waiver of claims in customary and negotiated form reasonably acceptable to the Company, the Company shall: (i) pay Employee severance pay in the form of continuation of Employee’s then-current base salary, less standard deductions and withholdings, for a period of 12 months from the effective date of Employee’s termination of employment with Company, with such payments to be made at the same time as the base salary otherwise would have been payable had Employee not been terminated; and (ii) if Employee elects continued coverage under COBRA, reimburse him for his health insurance premiums (for both himself and his family) for a period of 12 months from the effective date of Employee’s termination of employment with Company, but only if and to the extent that the Company was paying such premiums at the time of termination.
h. In the case of a termination arising under Section 5(e) from the Company’s termination with Cause or under Section 5(a) from the resignation of the Employee, then (i) no severance or continued benefits shall be due to Employee and (ii), if there are any damages to the Company arising by virtue of the events, actions or omissions constituting Cause, then the Company shall be entitled to offset the amount of any such damages against any amounts owed to Employee under this Section.
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7. Indemnity. The Company will indemnify, defend and hold harmless the Employee, to the maximum extent permitted by applicable law, against all costs, charges and expenses incurred or sustained by Employee in connection with any action, suit or proceeding (including reasonable attorneys’ fees) to which Employee may be made a party by reason of Employee’s employment with Company or of any subsidiary or affiliate of the Company (other than with respect to a claim brought against Employee by the Company itself). Employee shall also be covered under a directors and officers liability insurance policy paid for by the Company to the extent that the Company maintains such a liability insurance policy now or in the future. In addition, the Company shall provide Side A coverage to Employee with a limit of no less than $2 million.
8. Notices. All notices or other communications hereunder will be in writing and will be deemed given on (i) the day given in person, (ii) the next business day if sent by nationally recognized overnight delivery service to the party at the address set forth below or to such other addresses as will be specified by notice to the other party hereunder, or (iii) the next business day if sent by email or facsimile transmission with electronic confirmation obtained:
If to the Company:
Xxxx Xxxxxxxx
Chief Executive Officer
Western Capital Resources, Inc.
00000 X Xxxxxx, Xxxxx 000
Xxxxx, XX 00000
Telephone Number: (000) 000-0000
Fax Number: (000) 000-0000
Email: xxxxx@xxxxxxxx.xxx
If to Employee:
Xxxxx Xxxxxxx
0000 00xx Xxxxxx XX, Xxxxxxxxx 000
Xxxxxxxxxx, X.X. 00000
Telephone Number: (000) 000-0000
Email: xxxxx@xxxxxxx.xxx
9. Reasonableness of Restrictions. Employee agrees that the restrictions set forth in this Agreement are reasonable and do not unduly restrict Employee’s post-employment activities.
10. Employee’s Representations. Employee hereby represents and certifies that Employee is not subject to any other agreement or restrictive covenant that Employee violates by entering into employment with the Company. Further, Employee represents that no conflict of interest or breach of Employee’s fiduciary duties will result by entering into employment with and performing duties for the Company. Employee further agrees and certifies that Employee will not use or disclose to the Company any confidential, proprietary or trade secret information belonging to another individual or entity which may not properly be used or disclosed by Employee to the Company. Notwithstanding the above, the Company acknowledges that Employee was previously an employee of Blackstreet Capital Management, LLC (“BCM”) and is party to various agreements with BCM and its affiliates. Employee’s employment with BCM terminated on February 8, 2015, but notwithstanding that termination any then-existing agreements related to investments and carried interest in BCM, its affiliated funds, their general partners, and/or operating companies remained, and shall be permitted to remain, in place. The Company also acknowledges that Employee is a shareholder of Ladary LLC, an entity which currently leases two properties to the Company or its subsidiaries.
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11. Remedies. The Company and Employee agree and acknowledge that a violation of this Agreement will cause irreparable harm and damage to the Company which may not be compensated by the receipt of money damages. Thus, in addition to any other relief afforded by law, including damages sustained by a breach of this Agreement and without any necessity of proof of actual damage, the Company will have the right to enforce this Agreement by specific remedies, which will include, among other things, temporary and permanent injunctions to stop the breach, threatened breach, or anticipated breach of this Agreement, it being the understanding of the parties that both damages and injunctions will be proper modes of relief and are not to be considered as alternative remedies. With regard to any proceeding filed or brought by any of the parties against another party, the “prevailing party,” as defined below, shall be entitled to recover all of its reasonable costs and expenses incurred in connection with such dispute, including expenses, court costs, witness fees and legal and accounting fees. The term “prevailing party” means that party whose position is substantially upheld in a final and non-appealable judgment rendered in such proceeding.
12. Entire Agreement. This is the entire agreement between the parties with respect to the matters addressed herein, and supersedes and replaces the Original Agreement (except as noted in the final sentence of this Section). There are no other agreements, written or verbal, between the parties concerning these matters, except the Option Agreement which shall remain in place and the provisions in item 2(f) of this Agreement shall override any conflicting provisions in the Option Agreement.
13. Amendments. This Agreement may be amended or supplemented only in writing and signed by both the Employee and by a duly authorized representative of the Company.
14. Governing Law and Venue. The validity, enforceability, construction and interpretation of this Agreement shall be governed by the laws of the State of Nebraska without regard to its conflicts-of-law principles. Any dispute arising out of or related to this Agreement, or any breach or alleged breach hereof, shall be exclusively decided by a state or federal court in the State of Nebraska. Employee irrevocably waives Employee’s right, if any, to have any disputes between Employee and the Company arising out of or related to this Agreement decided in any jurisdiction or venue other than a court in the State of Nebraska, Xxxxxxx County. Employee hereby (a) waives any objection that Employee might have now or hereafter to the foregoing jurisdiction and venue of any such litigation, action or proceeding, (b) irrevocably submits to the exclusive jurisdiction of any such court set forth above in any such litigation, action or proceeding, and (c) waives any claim or defense of inconvenient forum.
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15. Blue Pencil Doctrine. In the event that any one or more of the provisions of this Agreement or any application thereof, shall be found to be invalid, illegal or otherwise unenforceable, the validity, legality and enforceability of the remaining provisions and any application thereof, shall not in any way be affected or impaired thereby. To the extent any provision of this Agreement is judicially determined to be unenforceable, a court of competent jurisdiction may reform any such provision to make it enforceable. The provisions of this Agreement shall, where possible, be interpreted so as to sustain their legality and enforceability.
16. Successors and Assigns. The Company may assign this Agreement to, and this Agreement will bind and inure to the benefit of, any parent, subsidiary, affiliate or successor of the Company. Employee will execute any agreement necessary or appropriate for this Agreement to be assigned to the assignee. This Agreement will not be assignable by Employee.
17. Survival of Provisions. The provisions of this Agreement relating to Employee’s confidentiality obligations, set forth in Sections 4 and 11, will survive the termination of this Agreement and/or Employee’s employment with the Company and will remain in full force and effect for three years thereafter; provided, however, that the obligations of Employee with respect to any trade secrets shall survive any termination of this Agreement and apply thereafter until such trade secrets shall no longer constitute “trade secrets” under applicable law.
18. Counterparts; Delivery. This Agreement may be executed in any number of counterparts, and each such counterpart hereof will be deemed to be an original instrument, and all such counterparts together will constitute but one agreement. Valid and binding signatures to this Agreement may be delivered by electronic transmission, such as facsimile and .PDF.
19. No Waiver. No term or condition of this Agreement will be deemed to have been waived nor shall there be any estoppel to enforce any provision hereof, except by a written instrument executed by the party charged with waiver or estoppel. A party’s delay, waiver or failure to enforce any of the terms of this Agreement or any similar agreement in one instance shall not constitute a waiver of its rights hereunder with respect to other violations of this or any other agreement.
19. Definition. For purposes of Section 3 and 4 of this Agreement, the capitalized term “Company” shall include Western Capital Resources, Inc. together with all of its current and future direct and indirect subsidiary entities.
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IN WITNESS WHEREOF, the parties have executed this Amended and Restated Employment Agreement on the date first stated above.
| XXXXX XXXXXXX | WESTERN CAPITAL RESOURCES, INC. | ||
| /s/ Xxxxx Xxxxxxx | By: | /s/ Xxxx Xxxxxxxx | |
| Xxxx Xxxxxxxx | |||
| Chief Executive Officer | |||
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