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EXHIBIT 99.5
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), dated as of the 1st day
of September, 2000, by and between XxxxxxXxxxx.xxx, Inc., a Nevada corporation
("Employer"), and Xxxx Xxxxx, an individual ("Executive");
W I T N E S S E T H:
WHEREAS, Employer desires to retain the services of Executive and
Executive desires to be retained by Employer; and WHEREAS, as an inducement to
Employer to enter into this Agreement, Executive has agreed to be employed by
Employer to the extent set forth below;
AGREEMENT:
NOW, THEREFORE, in consideration of the premises, covenants and
agreements contained herein and the payments by Employer to Executive required
below, the parties hereto agree as follows:
1. Employment. Subject to the termination provisions of Se ctions 6, 7
and 8, Employer shall employ Executive as Executive Vice President, or such
other or different position as may be designated by CEO, from time-to-time and
consented to by Executive (which consent will not unreasonably be withheld or
delayed). Executive shall be employed for an initial period of 12 months from
the date hereof (the "Commencement Date") ("Initial Period") which period shall
automatically renew for a 12 month period at the expiration of the Initial
Period and successive 12 month periods thereafter ("Term") unless and until
terminated as provided herein. Executive shall perform such duties and
responsibilities as the Board of Employer may request from time-to-time.
Executive shall diligently, faithfully and competently perform all duties
required hereunder and shall not have any other employment.
2. Base Salary. During the Term, Employer will pay Executive a salary
at a rate of Two Hundred Thousand Dollars ($200,000) per annum until September
30, 2001 and Two Hundred Fifty Thousand Dollars ($250,000) per annum thereafter
unless and until increased by the Board of Directors ("Base Salary"), payable in
substantially equal semi-monthly installments. All compensation paid hereunder
is subject to all applicable withholding and other taxes.
3. Benefits. While Executive is employed by Employer, Employer will
provide for Executive's participation in benefit programs on the same basis as
other executive officers of Employer, including health and dental insurance for
Executive and his family and "key man" life insurance. Employer will provide
indemnification to Executive in connection with the services provided to or on
behalf of Employer as set forth in Employer's Articles of Incorporation and
Bylaws. In addition, Employer shall issue to Executive 100,000 shares of common
stock of Employer.
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4. Option. The parties acknowledge that Employer intends to implement a
Stock Option Plan (the "Plan"), but such Plan must be approved by the Board and
the Shareholders of Employer. If the Plan is approved by the Board and
Shareholders, then it is the intention of Employer that Executive shall receive
an option to purchase 500,000 shares of Employer common stock at an exercise
price equal to the fair market value on the date of grant. The Option is
intended to vest in accordance with the following schedule:
125,000 shares on each of February 28, 2001, September 1,
2001, February 28, 2002 and September 1, 2002 (provided
Executive remains employed hereunder) (the "Non-contingent
Options").
All of the options will be subject to the terms of the Plan when
adopted and all agreements required thereby. Upon a change of control (to be
defined in the Option Agreement) of Employer, all unvested, Non-contingent
Options shall be vested and exercisable for a period of ninety (90) days after
the change in control.
5. Methods of Termination. This Agreement may be terminated as follows:
(a) By the CEO and/or the Board of Employer for "Cause," upon
the delivery of written notice thereof to Executive. For purposes of
this Agreement, "Cause" shall mean the occurrence of any of the
following on the part of Executive:
(i) Executive's conviction of or plea of guilty or
nolo contendere to a crime involving moral turpitude or
providing for a term of imprisonment;
(ii) Executive's engagement in willful misconduct
(including but not limited to employee discrimination or
harassment) materially injurious to Employer or its reputation
which remains uncured for thirty (30) days after written
notice to Executive;
(iii) Executive's engagement in activities which
constitute a material breach of this Agreement or any other
agreement between Executive and Employer which remains uncured
for thirty (30) days after written notice to Executive;
(iv) Executive's gross negligence in the execution
of, or Executive's willful failure which remains uncured for
thirty (30) days after written notice to Executive (or
continued failure, which need not be willful) to carry out,
his duties and responsibilities hereunder up to the standards
of performance which could reasonably be expected from an
employee in his position; or
(v) An act or acts of fraud, embezzlement or
dishonesty, either: (A) taken by Executive to the detriment of
Employer; or (B) by others in conspiracy or affiliation with
Executive and intended to result in enrichment or advantage to
Executive at the expense of Employer or with use of Employer's
assets or information.
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Notwithstanding the foregoing, regarding (ii), (iii) and (iv) above, the
Board of Employer will not be obligated to give Executive an opportunity to cure
any individual claim more than three (3) times in any twelve (12) month period.
(b) By the CEO and/or the Board of Employer without Cause upon
two (2) weeks written notice to Executive;
(c) By Executive upon two (2) weeks written notice to the
Board of Employer;
(d) Upon the death or Disability of Executive. For purposes of
this Agreement, "Disability" means the inability of Executive to
perform his duties or services as provided in this Agreement because of
mental, physical or other illness, disease or injury, where such
disability: (i) shall have existed for an aggregate of 3 months in any
12 month period and Employer shall have so notified Executive, or any
guardian or representative of Executive, thereof; or (ii) has prevented
Executive from performing substantially all of his duties under this
Agreement for a period of 3 consecutive months; or
(e) By express mutual written agreement signed by Executive
and the Board of Employer.
6. Termination. In the case of the termination or cancellation of this
Agreement by the CEO and/or the Board of Employer under Section 5(a) or
Executive under Section 5(c) and subject to Section 13, Employer shall have no
obligation to pay Executive any further salary, commission payment or benefit
under this Agreement and Executive may not exercise the Options or any part
thereof, and any unvested portion of the Option shall be automatically
terminated and canceled upon such termination. If the CEO and/or the Board of
Employer terminates Executive's employment without Cause, Employer will continue
to pay the Base Salary ("Severance Pay") until the expiration of the later of
(i) the Initial Term or (ii) 12 months after termination; and, in addition, all
then unvested, Non-contingent Options will be immediately vested and be
exercisable for a period of ninety (90) days.
7. Other Terminations. In the case of the termination or cancellation
of this Agreement pursuant to 5(d), Employee or Employee's heirs, executors or
administrators of his property or estate, as applicable, shall receive, subject
to Section 13, in full satisfaction of Employer's obligations to Executive
hereunder all amounts due and payable on or prior to the date of such
termination under Sections 2 and 3 of this Agreement. In addition, any unvested
portion of the Option shall be automatically terminated and canceled and the
vested portion of the Option shall remain exercisable for a period of ninety
(90) days after termination subject to the provisions of this Agreement and the
Option Agreement.
8. Release. Employer shall not be obligated to make any of the payments
referred to in Sections 6 or 7 unless and until Employer has received a Release
of Claims executed by Executive or Executive's heirs, executors, administrators,
or guardian, as applicable, in a form satisfactory to Employer at its reasonable
discretion.
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9. Non-Disclosure. Executive shall not at any time or in any manner
either during the Term or at any time thereafter, directly or indirectly, use or
disclose to any party other than Employer any trade secrets or other
Confidential Information (as defined below) learned or obtained by him while a
stockholder, officer or employee of Employer. As used herein, the term
"Confidential Information" means information disclosed to or known by Executive
as a consequence of his position with Employer and not generally known in the
industry in which Employer is engaged and that in any way relates to Employer's
products, processes, services, inventions (whether patentable or not), formulas,
software, programs, algorithms, techniques or know-how, including, but not
limited to, information relating to distribution systems and methods, research,
development, purchasing, licensing, accounting, engineering, marketing,
merchandising and selling.
10. Inventions. During the Term, Executive agrees that all inventions,
discoveries, written materials, brochures, training programs, training
materials, products, processes, services, inventions (whether patentable or
not), formulas, software, programs, algorithms, techniques or know-how,
including, but not limited to, information relating to distribution systems and
methods, research, development, purchasing, licensing, accounting, engineering,
marketing, merchandising and selling, conceived of or developed by Executive
during the Term or otherwise, whether alone or jointly with others and whether
during working hours or otherwise, which relate to any business of Employer
shall be Employer's exclusive property. Executive shall: (a) promptly disclose
in writing to Employer each invention, written material, brochure, training
program, training material, product, process, service, invention (whether
patentable or not), formula, item of software, program, algorithm, technique or
item of know-how, including, but not limited to, information relating to
distribution systems and methods, research, development, purchasing, licensing,
accounting, engineering, marketing, merchandising and selling, conceived by or
developed by Executive during the Term or otherwise; (b) assign all rights to
the same to Employer; and (c) assist Employer, if requested, at Employer's
expense to obtain and protect any patents, trademarks, copyrights or service
marks on the same.
11. Affiliate Transactions. For as long as Executive is employed by
Employer or Executive or any member of his family is the beneficial owner of any
stock of Employer, neither Executive, any member of her family nor any affiliate
(as such term is used in the Federal securities laws) of Executive shall engage,
directly or indirectly, in any business transaction with Employer without the
express approval of 80% of the Board.
12. Effect of Breach. In addition to the consequences described in
Section 5(a), in the event Executive breaches his obligations under Sections 9,
10 or 11 at any time, Employer shall have no further obligation to pay any
amounts owed to Executive hereunder or otherwise and all such amounts shall be
forfeited to Employer. Section 12 shall not, nor shall it be deemed, to
abrogate, limit or substitute for, any remedy available to Employer, whether in
equity or at law, for such breach.
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13. Specific Performance. The parties hereto agree that their rights
hereunder are special and unique and that any violation thereof would not be
adequately compensated by money damages, and each grants the other the right to
specifically enforce (including injunctive relief where appropriate) the terms
of this Agreement.
14. Assignment. This Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective heirs, successors and permitted assigns, but neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned by
Executive, except as otherwise provided herein.
15. Governing Law; Waiver of Jury Trial. This Agreement shall be
governed by the law of the State of Missouri as to all matters, including, but
not limited to, matters of validity, construction, effect and performance,
except that no doctrine of choice of law shall be used to apply any law other
than that of the State of Missouri. IN THE EVENT OF ANY LITIGATION WITH RESPECT
TO ANY MATTER CONNECTED WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREUNDER ALL OF THE PARTIES HERETO WAIVE ALL RIGHTS TO A TRIAL BY JURY AND THE
EXECUTIVE HEREBY CONSENTS TO THE JURISDICTION OF THE FEDERAL AND STATE COURTS IN
THE STATE OF MISSOURI.
16. Severability. Employer and Executive believe the covenants relating
to non-disclosure and inventions, contained in this Agreement are reasonable and
fair in all respects, and are necessary to protect the interests of Employer.
However, in case any 1 or more of the provisions or parts of a provision
contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect any other provision or part of a
provision of this Agreement or any other jurisdiction, but this Agreement shall
be reformed and construed in any such jurisdiction as if such invalid or illegal
or unenforceable provision or part of a provision had never been contained
herein and such provision or part shall be reformed so that it would be valid,
legal and enforceable to the maximum extent permitted in such jurisdiction.
17. Miscellaneous. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. The section headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. This Agreement
embodies the entire agreement and understanding of the parties hereto in respect
of the subject matter contained herein and may not be modified orally, but only
by a writing subscribed by the party charged therewith. There are no
restrictions, promises, representations, warranties, covenants or undertakings,
other than those expressly set forth or referred to herein. This Agreement
supersedes all prior agreements and understandings (whether oral or written)
between the parties with respect to such subject matter. This Agreement shall be
deemed drafted by both parties despite any legal presumptions to the contrary.
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IN WITNESS WHEREOF, the parties hereto have made and entered into this
Agreement the date first hereinabove set forth.
XXXXXXXXXXX.XXX, INC.
By:
Name: Xxxx Xxxxxxxx
Title: President
Xxxx Xxxxx, an Individual
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