EMPLOYMENT AGREEMENT
Dated for reference the 1st day of February 1999
This EMPLOYMENT AGREEMENT dated as of February 1, 1999 is
between Xxxxxxx Xxxxxx (hereinafter "Employee") and
XXxxxxxx.xxx Inc. (hereinafter "Employer").
WITNESSETH:
WHEREAS, Employer desires to employ Employee and to be
assured of its rights to Employee's services upon the terms
and conditions hereinafter set forth; and
WHEREAS, Employee is willing to accept such employment on
the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises, the
covenants and conditions contained herein, the promises made
hereby and other good and valuable consideration, the receipt
of which is hereby acknowledged, it has been and IT IS HEREBY
AGREED AS FOLLOWS:
1. Employment. Employer hereby employs Employee
as CEO.
Subject to the terms of this Agreement, Employee
hereby agrees to serve Employer, and the Employer hereby
agrees to serve Employee, in this capacity for a five (5) year
period commencing on February 1, 1999. This agreement is
automatically renewable for periods of two (2) years unless
terminated by either party upon (90) day prior written notice.
2. Acceptance of the Employment and Extent and Place of
Service. The Employee's full time, attention and energies,
during regular and customary business hours, or as otherwise
directed by the Board of Directors of Employers, shall be
devoted to the business of Employer (including its
subsidiaries and affiliates), and Employee shall assume and
perform such responsibilities and duties as are associated
with the position described in Paragraph 1 of this Agreement.
3. Working Facilities. Employee shall be furnished with
appropriate facilities and services adequate for the
performance of Employee's duties.
4. Compensation. As compensation for the services to
Employer during the Employment Term, in whatever capacity
rendered, Employee following the commencement of the
Employment Term, shall receive a salary of $10,000 USD per
month during the initial funding stage, not to exceed ninety
(90) days. After completion of the initial funding stage
Employee shall receive salary of $175,000 USD per year.
The Employee shall also be entitled to receive an
incentive bonus computed according to the following formula:
Annual Company Revenues Bonus Payable
From Operations to Employee
$ 1,000,000 to $ 3,000,000 $ 25,000USD
$ 3,000,000 to $ 5,000,000 $ 75,000USD
$ 5,000,000 to $ 10,000,000 $ 125,500USD
Over $10,501,000 $ 250,000USD
The term "annual Company Revenues" shall mean the
combined gross revenues of the Employer (net of returns,
allowances and discounts) as shown in the Employer's audited
financial statements.
The Employee shall also be granted options to purchase
shares of the Company's Common Stock.
The Employee shall be entitled to receive additional
stock options, stock bonuses and similar forms of compensation
to the extent such compensation is approved by the Employer's
Board of Directors. Nothing herein however shall preclude the
payment of cash bonuses if such bonuses are approved by the
Employer's Board of Directors.
Once the company is operating profitably, compensation to
the Employee shall be determined by industry standards subject
to Board of Director approval.
5. Employee Benefits. During the Employment Term,
Employee shall be entitled to four weeks of paid vacation and
the right to participate, subject to qualification
requirements, in any life insurance, group insurance,
hospitalization , profit sharing, pensions or thrift plan
presently in effect, or hereinafter instituted by Employer,
and applicable to its officers and employees generally.
6. Expenses. During the Employment Term, Employer
will reimburse Employee for expenses reasonably incurred by
Employee which is payable upon receipt unless other
arrangements are specified at the time of expenditures in
connection with the performance of Employee's services
hereunder.
7. Disclosure of Information. Employee acknowledges
that from time to time during the Employment term, Employee
will come into possession of certain information regarding
Employer, and its scientific and intellectual property,
including, but not limited to, chemical information,
copywritable brochures, customer lists, price books,
mechanical drawings, research and development data and other
information considered confidential. Employee will not,
during or after the Employment Term disclose, except to other
employees of Employer and its Board of Directors, without
authorization of the Board of Directors, all or any portion of
such information to any person, firm, corporation, association
or other entity. In the event of a threatened breach of the
provisions
of this paragraph, Employer shall be entitled to an
injunction restraining Employee from making any such
disclosure. If Employee breaches the provisions of this
paragraph during the Employment Term, such action shall be
grounds for termination of this Agreement as hereinafter
provided.
If Employee retains in any manner or form any of the
information specified hereinafter after the termination of
this Agreement for whatever reason or Employee discloses all
of or any portion of such specified information, all
Employer's obligations, if any, hereunder shall be deemed to
be completely fulfilled.
Nothing herein shall be construed as prohibiting Employer
from pursuing any other remedies available to Employer for
such breach or threatened breach, including the recovery of
damages from Employee.
8. Inventions, Patent Rights and Copyrights. All
inventions made by the Employee during the employment term,
which inventions apply to the Employer's business, will be
assigned to the Employer. In the event any of such inventions
are of a patentable nature, Employee agrees to apply for a
patent on the invention and assign any patent rights relating
to the invention to the Employer. The Employer will bear the
costs of any patent applications pursued by the Employee.
Employee understands that the Employee's duties may
involve writing or drafting various documents, brochures or
publications for the Employer. Employee hereby assigns any
and all rights to such documents, brochures or publications to
Employer, together with the right to secure copyright
therefore and all extensions and renewals of copyright
throughout the entire world. Employer shall have the right to
make any and all versions, omissions, additions, changes,
specifications and adaptations, in whole or in part, with
respect to such documents, brochures or publications.
9. Engaging in a Competing Business. Except as
otherwise expressly consented to in writing by Employer,
Employee agrees that during the Employment Term and for a one
(1) year period thereafter, Employee will not, directly or
indirectly, own, manage, operate, control, join, or
participate in the ownership, management, operation or control
of, or be employed by, or be connected with, any business
which is in competition with the business of Employer.
Nothing herein contained shall prevent Employee, upon
termination of the Employment Term, from holding or making
investments in securities on a national securities exchange or
sold in the over-the-counter market provided such investments
do not exceed in the aggregate 5% of the issued and
outstanding capital stock of a corporation which is a
competitor within the meaning of this paragraph 9.
10. Termination of Employment Term. The Employment Term
and all obligations of the Employer hereunder, except as
hereinafter provided, shall be terminated only by and
notwithstanding the following any termination of employment
shall not terminate any payment obligations included
hereunder:
(a) The death of Employee;
(b) the vote of a majority of the disinterested
members of the Board of Directors of the
Employer, which determination shall be based upon
competent medical evidence, that Employee will be
unable to perform the Employee's duties hereunder
by reason of injury, illness, or other physical
or mental disability after absences for a period
or periods aggregating in excess of ninety (90)
working days in any 12-month period during the
Employment Term hereunder;
(c) the vote of a majority of the disinterested
members of the Board of Directors of Employer to
so remove Employee any time after Employee shall
be absent from employment for whatever cause,
excluding allowable vacations or sickness and
disability, for a period of more than 180 working
days in any calendar year;
(d) the vote of a majority of the disinterested
members of the Board of Directors of Employer
determining that Employee has become so
intemperate in the use of alcohol or drugs as
seriously to interfere with the performance of
the Employee's duties under this agreement.
(e) A bona fide decision by the Employer to
terminate its business and liquidate its assets,
not including a sale of substantially all of the
assets.
(f) A vote of a majority of the disinterested
members of Employer's Board of Directors finding
that Employee has: (1) breached any of the
substantive provisions of this Agreement; or (2)
knowingly violated any statute or regulation, or
earnings or welfare, or has been grossly
negligent or engaged in willful misconduct in the
performance of the Employee's duties hereunder;
(g) The expiration of the Employment term as
provided in Section 1 of this Agreement.
As used herein, the term "Disinterested Director" means
any director other than the Employee, should the Employee than
be a director of the Employer and the term "cause" means, the
occurrence of any circumstances set forth in clauses a, b, c,
d, and of Section 10.
Notwithstanding anything contained herein to the
contrary, in the event the Employee, during the Employment
Term, becomes totally and permanently disabled, and such
disability is not the result of the intemperate use of drugs
or alcohol, then the Employee will pay to the Employee a
disability benefit equal to 50% of the Employee's base salary,
determined at the time of disability, and payable to the
Employee for what would have been the remaining term of this
Agreement, provided however that this disability benefit will
in any event, terminate upon the Employee's death.
11. Indemnification. Throughout the Term of Employment, Company
shall obtain and maintain in force and effect a policy of Directors
and Officers Liability Insurance, naming Employee as an additional
insured. The terms and policy limits of said insurance shall be
determined by the Company in its discretion. Notwithstanding
the foregoing, throughout the Term of Employment, Employee
shall be indemnified by the Company in accordance with the terms of
Company's By-Laws.
12. Notices. All notices, requests, demands, and other
communications under this Agreement shall be in writing and
shall be deemed to have been duly given on the date of service
if served
personally on the party to whom notice is to be
given, or on the third day after mailing if mailed to the
party to whom notice is to be given, by first class mail,
registered or certified, postage prepaid to the address last
shown on the payroll records of the Employer.
12. Miscellaneous Provisions. This Agreement contains
the entire Agreement and understanding between the parties
hereto, and supersedes all prior agreements and
understandings. The section headings throughout this
Agreement are for convenience and reference only, and shall in
no way be deemed to define, limit, or add to the meaning of
any provision of this Agreement. This Agreement and any
provision hereof, may not be waived, changed, modified, or
discharged orally, but only by an agreement in writing signed
by the party against whom enforcement of any waiver, change,
modification, or discharge is sought. Except as otherwise
expressly provided herein, no waiver of any covenant,
condition, or provision of this Agreement shall be deemed to
have been made unless expressly in writing and signed by the
party against whom such waiver is charged; and (i) the failure
of any party to insist in any one or more cases upon the
performance of any of the provisions, covenants, or
conditions, (ii) the acceptance of performance of the breach
or failure of a covenants, or conditions of this Agreement or
to exercise any option herein contained shall not be construed
as a waiver by any party of one breach by another party shall
be construed as a waiver with respect to any other or
subsequent breach. This Agreement and its application shall
be governed by the laws of the State of California. This
Agreement shall inure to and be binding upon the heirs,
executors, personal representatives, successors and assigns of
each of the parties to this Agreement. If any of the
provisions of this Agreement shall be held invalid, the
remainder of this Agreement shall not be affected thereby.
IN WITNESS WHEREOF, Employer has caused this
Agreement to be executed on its behalf by a duly authorized
officer and its corporate seal to be affixed hereto and
attested by its Secretary, each of whom has been thereto duly
authorized, and Employee has hereunto signed this Agreement,
all as of the day and year first written above.
XXxxxxxx.xxx Inc.
\s\ Xxxxxxx Xxxxxx \s\ Xxxxxx Xxxxxx
________________________ ________________________
Xxxxxxx Xxxxxx, Director Xxxxxx Xxxxxx, Director
EMPLOYEE:
\s\ Xxxxxxx Xxxxxx
_________________________
Xxxxxxx Xxxxxx
