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Exhibit 10.35
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT entered into as of the 26th day of April, 1999, by
and among xxxxxxx.xxx, INC., a Nevada corporation (the "Company") and XXXX X.
XXXXXXXX ("Xxxxxxxx").
1. EMPLOYMENT. The company hereby employs Xxxxxxxx and Xxxxxxxx hereby
accepts employment with the Company as its President upon the terms and
conditions hereinafter set forth. Xxxxxxxx'x employment shall not be deemed an
"at will" employment.
2. DUTIES. Xxxxxxxx will serve the Company as its President and will
faithfully and diligently perform the services and functions as mutually agreed
to in writing, relating to such office and position or otherwise reasonably
incident to such office and position, provided that all such services and
functions will be reasonable and within Xxxxxxxx'x areas of expertise.
Xxxxxxxx'x specific duties shall include those related to (i) coordination of
the company's operations and planning, (ii) development of the Company's
strategic relationships and (iii) such other duties as the Company may
reasonably direct. Xxxxxxxx will, during the term of this Agreement (or any
extension thereof), devote his time, attention, skills, and best efforts as a
full-time employee to the promotion of the business of the Company. For purposes
of this agreement, full-time is defined as an average of forty hours per week.
3. Term. This Agreement and Xxxxxxxx'x employment shall commence on
April 26, 1999 (the "Effective Date"), and shall continue for a term of four
years ("Initial Term") unless terminated earlier in accordance with this
Agreement. The term of this Agreement may be extended by agreement among the
Company and Xxxxxxxx.
4. COMPENSATION. As compensation for the services rendered to the
Company under this Agreement commencing on the Effective Date, Xxxxxxxx will be
paid a base salary of $125,000 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
or decreased if so determined by the Board of Directors of the Company (the
"Board") after a review of Xxxxxxxx'x performance of his duties hereunder.
Xxxxxxxx will also receive as compensation under this Agreement 50,000 shares
(the "Shares") of the Company's $.001 par value common stock ("Common Stock") to
be transferred directly from Xxxxxxx X. Xxxxxxxx, Company's Chief Executive
Officer. In the event Xxxxxxxx'x employment with the Company is terminated on or
before April 26, 2000 for "Cause" (as hereinafter defined) or by voluntary
termination of this Agreement by Xxxxxxxx, then the 50,000 Shares shall be sold
by Xxxxxxxx to the Company at the greater of $10.00 per share or fair market
value at the time of termination.
5. TERMINATION. This Agreement will terminate upon the occurrence of
any of the following events:
a. The death of Xxxxxxxx;
b. The "Total Disability" (as hereinafter defined) of Xxxxxxxx;
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c. Written notice to Xxxxxxxx from the Company of termination for
"Cause" (as hereinafter defined);
d. The voluntary termination of this Agreement by Xxxxxxxx upon
thirty (30) days prior written notice; or
e. The later of four (4) years from the Effective Date of this
Agreement or the date to which this Agreement is extended in
accordance with Section 3 above.
"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 where
Xxxxxxxx is unable to reasonably perform the duties he was performing for the
Company immediately prior to such disability. The determination shall rest upon
the opinion of the physician regularly attending Xxxxxxxx. If the Company
disagrees with said physician's opinion, the Company may engage at their own
expense a physician to examine Xxxxxxxx, and Xxxxxxxx hereby consents to such
examination and to waive, if applicable, any privilege between the physician and
Xxxxxxxx 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 Xxxxxxxx and the Company.
"Cause" means (i) Xxxxxxxx has failed to substantially perform his
duties as reasonably determined by the Board, (ii) Xxxxxxxx has failed to comply
with the reasonable directives and policies of the Board that is not cured
within thirty (30) days after counseling by the Company, or (iii) Xxxxxxxx
breaches his fiduciary duty to the Company or commits any dishonest, unethical,
fraudulent, or felonious act in respect to Xxxxxxxx'x duties to the Company.
6. STOCK OPTIONS. Xxxxxxxx shall be granted "incentive stock options"
meeting the requirements of Section 422A of the Internal Revenue Code to
purchase up to 350,000 shares of Common Stock (the "Options") Pursuant to the
Company's Amended and Restated 1998 Stock Option Plan (the "Plan") At $10.00 per
share, all of which Options shall vest and be exercisable on the Effective Date.
Notwithstanding anything to the contrary contained herein, the Options shall be
subject to the terms and conditions of the Plan.
Xxxxxxxx acknowledges that the Company is in the process of completing
an initial public offering of its securities (an "IPO") and that as part of the
IPO Xxxxxxxx may be required to lock up the Shares and the Common Stock
underlying the Options for a period not to exceed six (6) months from the
effective date of the IPO. Accordingly, Xxxxxxxx agrees to execute any agreement
necessary to lock up the Shares and the Common Stock underlying the Options.
7. LOAN. The Company will loan Xxxxxxxx $100,000 (the "Loan") on the
Effective Date. The Loan shall be evidenced by a promissory note (the "Note")
with interest payable at 10% per annum and with all principal and accrued but
unpaid interest due one year from the Effective Date, if not sooner paid. The
Company agrees that if
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Xxxxxxxx has been employed by the Company for six (6) continuous months from the
Effective Date, 50% of the principal balance and accrued but unpaid interest
shall be forgiven by Company, and if Xxxxxxxx has been employed by the Company
for twelve (12) continuous months from the Effective Date, the remaining 50% of
the principal balance and accrued but unpaid interest shall be forgiven by the
Company, and the Note evidence the Loan shall be canceled and deemed paid in
full.
8. BENEFITS. Xxxxxxxx shall be entitled to receive any benefits,
including health insurance, life insurance, vacation time, etc., which are
offered to other Company executives.
9. EXPENSES. Xxxxxxxx is authorized to incur reasonable expenses as he
deems necessary and appropriate for promoting the business of the company,
including expenses for entertainment, travel, and similar items. The company
shall reimburse Xxxxxxxx for all such expenses on the presentation by Xxxxxxxx
of itemized accounts of such expenditures in accordance with the guidelines set
forth by the Company and the Internal Revenue Service.
10. NON-COMPETITION AND CONFIDENTIALITY.
a. Non-Competition. The company and Xxxxxxxx acknowledge and
agree that Xxxxxxxx'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, Xxxxxxxx agrees
that for a period of two years after the termination of this employment by the
Company, irrespective of the reason for such termination, Xxxxxxxx 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, with the exception
of Xxxxxxx Xxxxxx, 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 Xxxxxxxx will not act as an
officer, director, employee, consultant, 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 at the effective date of this Agreement.
b. Confidentiality.
1. Xxxxxxxx acknowledges that in Xxxxxxxx'x employment
hereunder, Xxxxxxxx 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. Xxxxxxxx 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 the Company. In consideration of employment by
the Company, Xxxxxxxx agrees that during the Initial Term
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and any renewal term of this Agreement and upon and after leaving the employ of
the company for any reason whatsoever, Xxxxxxxx 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 Xxxxxxxx as a result
of Xxxxxxxx'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 Xxxxxxxx, the services
rendered by Xxxxxxxx, 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 Xxxxxxxx'x employment under this Agreement for
any reason whatsoever, Xxxxxxxx shall return to the Company all Records (whether
furnished by the Company or prepared by Xxxxxxxx), and Xxxxxxxx shall neither
make nor retain any copies of any of such Records after such termination.
Company acknowledges and agrees that Xxxxxxxx has in his possession and
extensive contact list and that this list will remain Xxxxxxxx'x personal
property and will not become property of the Company.
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 Xxxxxxxx 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 Xxxxxxxx'x employment by the Company will be
disclosed promptly by Xxxxxxxx to the Company and shall be the sole and
exclusive property of the company. All copyrightable works created by Xxxxxxxx
and covered by this Section 10b(3) shall be deemed to be works for hire.
Xxxxxxxx shall cooperate with the Company in patenting or copyrighting all such
inventions, ideas, report, 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. 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
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specifically enforceable by the Company notwithstanding any claim by Xxxxxxxx
that the Company has violated or breached this Agreement or any claim that
Xxxxxxxx is entitled to any offset or compensation.
To induce the Company to enter into this Agreement, Xxxxxxxx represents
and warrants to the Company that Section 10 of this Agreement is enforceable by
the company in accordance with its terms.
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 X. Xxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
If to Xxxxxxxx: Xxxx X. Xxxxxxxx
One Arizona Center
000 X. Xxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
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.
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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 of
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.
19. ACKNOWLEDGEMENT OF VENTURE CAPITAL ACTIVITIES AND OUTSIDE
INVESTMENT INTERESTS. Company acknowledges Xxxxxxxx has venture capital
activities and outside investment interests and will continue to have the right
to invest in outside ventures that are not in direct competition with the
Company. Company also acknowledges that Xxxxxxxx is a major investor and/or on
the board of directors of the following companies: Blue Cross & Blue Shield of
Arizona, Xxxxx Fargo & Co. AZ (Advisory Board), Xxxxxxx Electric Wire & Cable
Inc., Xxxxxxx-Xxxxxxxx Group, Southwest Harvard Group Companies, XXXX LLC,
SERI Construction LLC, SERI/HighPoint LLC, World Wide Wireless LLC, and Xxxxxxxx
Asset Management. Company also acknowledges that the following investment
opportunities and outside activities are in process and will not detract from
Xxxxxxxx'x abilities to perform his duties as defined in Section 2:
--Hispanic direct mail media advertising
--Hispanic recording studios
--Hispanic telephone communication company
--Hispanic Parking Company of America
--State of Arizona School Facilities Board
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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
Date: 4/26/99 by: /s/ Xxxxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxx
Chief Executive Officer
XXXXXXXX:
Date: 4/26/99
/s/ Xxxx X. Xxxxxxxx
Xxxx X. Xxxxxxxx
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