Exhibit 10.11
XA, INC.
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement") is made between XA,
Inc., a Nevada corporation (the "Company"), and Xxxxx Xxxxxxxx ("Executive")
(collectively sometimes referred to as the "Parties" and individually sometimes
referred to as "Each Party"). Unless otherwise indicated, all references to
Sections are to Sections in this Agreement. This Agreement is effective as of
the "Effective Date" set forth in Section 14 below.
W I T N E S S E T H:
WHEREAS, the Company desires to obtain the services of Executive, and
Executive desires to be employed by the Company upon the terms and conditions
hereinafter set forth;
WHEREAS, the Parties have previously entered into an Executive Employment
Agreement which is effective as of August 1, 2004 (the "Prior Agreement"); and
WHEREAS, the Parties desire that this Agreement supercede and take the
place of the Prior Agreement as well as any other previous employment agreements
which the Executive may have entered into with the Company, and as a result,
when this Agreement becomes effective on the Effective Date (as set forth in
Section 14 below), this Agreement shall be the sole employment Agreement in
effect between the Parties.
NOW, THEREFORE, in consideration of the premises, the agreements herein
contained and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties hereto agree as of the date hereof as follows:
1. Employment. The Company hereby agrees to employ Executive, and Executive
hereby agrees to serve the Company, as Chairman of the Company's Board of
Directors ("Employment") for a period of twenty-four (24) months beginning on
the Effective Date. This Agreement is renewable at the election of the Company
at the end of the period of Employment.
2. Scope of Employment.
(a) During the Employment, Executive will serve as the Chairman of the
Company's Board of Directors. In that connection, Executive will (i) will
diligently and to the best of his ability perform all duties incident to his
employment hereunder; and (ii) use his best efforts to promote the interests and
goodwill of the Company.
(b) Section 2(a) shall not be construed as preventing Executive from
(i) serving on corporate, civic or charitable boards or committees, or (ii)
making investments in other businesses or enterprises; provided that in no event
shall any such service, business activity or investment require the provision of
substantial services by Executive to the operations or the affairs of such
businesses or enterprises such that the provision thereof would interfere in any
respect with the performance of Executive's duties hereunder; and subject to
Section 6.
3. Compensation and Benefits During Employment. During the Employment, the
Company shall provide compensation to Executive as follows.
(a) The Company shall pay Executive base compensation of $100,000 per year.
The Company shall be responsible for the withholding of all taxes to the
Internal Revenue Service as well as any and all other taxes payable in the
United States including taxes payable to any state or local jurisdiction.
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(b) The Company shall reimburse Executive for business expenses incurred by
Executive in connection with the Employment in accordance with the Company's
then-current policies only as pre-approved in writing by the Company's
management.
(c) Executive will be entitled to participate in any health insurance or
other employee benefit plan which the Company may adopt in the future.
(d) Executive will be entitled to participate in any incentive program or
discretionary bonus program of the Company which may be implemented in the
future by the Board of Directors.
(e) Executive will be entitled to participate in any stock option plan of
the Company which may be approved in the future by the Board of Directors.
(f) The Company shall maintain a lease of a car for the use of Executive or
shall provide a car allowance not to exceed $2,000 per month during the term of
this Agreement.
Any act, or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board or based upon the advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be done, by
Executive in good faith and in the best interests of the Company and thus shall
not be deemed grounds for Termination for Cause.
4. Confidential Information.
(a) Executive acknowledges that the law provides the Company with
protection for its trade secrets and confidential information. Executive will
not disclose, directly or indirectly, any of the Company's confidential business
information or confidential technical information to anyone without
authorization from the Company's management. Executive will not use any of the
Company's confidential business information or confidential technical
information in any way, either during or after the Employment with the Company,
except as required in the course of the Employment.
(b) Executive will strictly adhere to any obligations that may be owed to
former employers insofar as Executive's use or disclosure of their confidential
information is concerned.
(c) Information will not be deemed part of the confidential information
restricted by this Section 4 if Executive can show that: (i) the information was
in Executive's possession or within Executive's knowledge before the Company
disclosed it to Executive; (ii) the information was or became generally known to
those who could take economic advantage of it; (iii) Executive obtained the
information from a party having the right to disclose it to Executive without
violation of any obligation to the Company, or (iv) Executive is required to
disclose the information pursuant to legal process (e.g., a subpoena), provided
that Executive notifies the Company immediately upon receiving or becoming aware
of the legal process in question. No combination of information will be deemed
to be within any of the four exceptions in the previous sentence, however,
whether or not the component parts of the combination are within one or more
exceptions, unless the combination itself and its economic value and principles
of operation are themselves within such an exception or exceptions.
(d) All originals and all copies of any drawings, blueprints, manuals,
reports, computer programs or data, notebooks, notes, photographs, and all other
recorded, written, or printed matter relating to research, manufacturing
operations, or business of the Company made or received by Executive during the
Employment are the property of the Company. Upon Termination of the Employment,
whether or not for Cause, Executive will immediately deliver to the Company all
property of the Company which may still be in Executive's possession. Executive
will not remove or assist in removing such property from the Company's premises
under any circumstances, either during the Employment or after Termination
thereof, except as authorized by the Company's management.
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(e) For a period of one (1) year after the date of Termination of the
Employment, Executive will not, either directly or indirectly, hire or employ or
offer or participate in offering employment to any person who at the time of
such Termination or at any time during such one year period following the time
of such Termination was an employee of the Company without the prior written
consent of the Company.
5. Ownership of Intellectual Property.
(a) The Company will be the sole owner of any and all of Executive's
Inventions that are related to the Company's business, as defined in more detail
below.
(b) For purposes of this Agreement, "Inventions" means all inventions,
discoveries, and improvements (including, without limitation, any information
relating to manufacturing techniques, processes, formulas, developments or
experimental work, work in progress, or business trade secrets), along with any
and all other work product relating thereto.
(c) An Invention is "related to the Company's business"
("Company-Related Invention") if it is made, conceived, or reduced to practice
by Executive (in whole or in part, either alone or jointly with others, whether
or not during regular working hours), whether or not potentially patentable or
copyrightable in the U.S. or elsewhere, and it either: (i) involves equipment,
supplies, facilities, or trade secret information of the Company; (ii) involves
the time for which Executive was or is to be compensated by the Company; (iii)
relates to the business of the Company or to its actual or demonstrably
anticipated research and development; or (iv) results, in whole or in part, from
work performed by Executive for the Company.
(d) Executive will promptly disclose to the Company, or its
nominee(s), without additional compensation, all Company-Related Inventions.
(e) Executive will assist the Company, at the Company's expense, in
protecting any intellectual property rights that may be available anywhere in
the world for such Company-Related Inventions, including signing U.S. or foreign
patent applications, oaths or declarations relating to such patent applications,
and similar documents.
(f) To the extent that any Company-Related Invention is eligible under
applicable law to be deemed a "work made for hire," or otherwise to be owned
automatically by the Company, it will be deemed as such, without additional
compensation to Executive. In some jurisdictions, Executive may have a right,
title, or interest ("Right," including without limitation all right, title, and
interest arising under patent law, copyright law, trade-secret law, or
otherwise, anywhere in the world, including the right to xxx for present or past
infringement) in certain Company-Related Inventions that cannot be automatically
owned by the Company. In that case, if applicable law permits Executive to
assign Executive's Right(s) in future Company-Related Inventions at this time,
then Executive hereby assigns any and all such Right(s) to the Company, without
additional compensation to Executive; if not, then Executive agrees to assign
any and all such Right(s) in any such future Company-Related Inventions to the
Company or its nominee(s) upon request, without additional compensation to
Executive.
6. Non-competition. As a condition to, and in consideration of, the
Company's entering into this Agreement, and giving Executive access to certain
confidential and proprietary information, which Executive recognizes is valuable
to the Company and, therefore, its protection and maintenance constitutes a
legitimate interest to be protected by the provisions of this Section 6 as
applied to Executive and other employees similarly situated to Executive, and
for ten dollars ($10) and other good and valuable consideration, the receipt and
sufficiency of which Executive hereby acknowledges, Executive acknowledges and
hereby agrees as follows:
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(a) that Executive is and will be engaged in the business of the
Company;
(b) that Executive has occupied a position of trust and confidence
with the Company prior to the Effective Date, and that during such period and
the period of Executive's Employment under this Agreement, Executive has, and
will, become familiar with the Company's trade secrets and with other
proprietary and confidential information concerning the Company;
(c) that the obligations of this Agreement are directly related to the
Employment and are necessary to protect the Company's legitimate business
interests; and that the Company's need for the covenants set forth in this
Agreement is based on the following: (i) the substantial time, money and effort
expended and to be expended by the Company in developing technical designs,
computer program source codes, marketing plans and similar confidential
information; (ii) the fact that Executive will be personally entrusted with the
Company's confidential and proprietary information; (iii) the fact that, after
having access to the Company's technology and other confidential information,
Executive could become a competitor of the Company; and (iv) the highly
competitive nature of the Company's industry, including the premium that
competitors of the Company place on acquiring proprietary and competitive
information; and
(d) that for a period commencing on the Effective Date and ending
twelve (12) months following Termination as provided in Section 11, Executive
will not, directly or indirectly, serve as employee, agent, consultant,
stockholder, director, co-partner or in any other individual or representative
capacity, own, operate, manage, control, engage in, invest in or participate in
any manner in, act as consultant or advisor to, render services for (alone or in
association with any person, firm, corporation or entity), or otherwise assist
any person or entity that directly or indirectly engages or proposes to engage
in (i) the same, or a substantially similar, type of business as that in which
the Company engages; or (ii) the business of distribution or sale of (A)
products and services distributed, sold or license by the Company at the time of
termination; or (B) products and services proposed at the time of Termination to
be distributed, sold or licensed by the Company, anywhere in North America (the
"Territory"); provided, however
(e) that nothing contained herein shall be construed to prevent
Executive from investing in the stock or securities of any competing corporation
listed on any recognized national securities exchange or traded in the over the
counter market in the United States, but only if (i) such investment is of a
totally passive nature and does not involve Executive devoting time to the
management or operations of such corporation and Executive is not otherwise
involved in the business of such corporation; and if (ii) Executive and his
associates (as such term is defined in Regulation 14(A) promulgated under the
Securities Exchange Act of 1934, as in effect on the Effective Date),
collectively, do not own, directly or indirectly, more than an aggregate of two
percent (2%) of the outstanding stock or securities of such corporation.
7. Legal Fees and Expenses. In the event of a lawsuit, arbitration, or
other dispute-resolution proceeding between the Company and Executive arising
out of or relating to this Agreement, the prevailing party, in the proceeding as
a whole and/or in any interim or ancillary proceedings (e.g., opposed motions,
including without limitation motions for preliminary or temporary injunctive
relief) will be entitled to recover its reasonable attorneys' fees and expenses
unless the court or other forum determines that such a recovery would not serve
the interests of justice.
8. Successors.
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(a) This Agreement shall inure to the benefit of and be binding upon
(i) the Company and its successors and assigns; (ii) Executive and Executive's
heirs and legal representatives, except that Executive's duties and
responsibilities under this Agreement are of a personal nature and will not be
assignable or delegable in whole or in part; and (iii) Executive Parties as
provided in Section 10.
(b) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation, Acquisition or otherwise) to all
or substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "the Company" shall mean the Company
as hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
9. Arbitration.
(a) Except as set forth in paragraph (b) of this Section 9 or to the
extent prohibited by applicable law, any dispute, controversy or claim arising
out of or relating to this Agreement will be submitted to binding arbitration
before a single arbitrator in accordance with the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association in
effect on the date of the demand for arbitration. The arbitration shall take
place before a single arbitrator, who will preferably but not necessarily be a
lawyer but who shall have at least five years' experience in working in or with
event planning companies. Unless otherwise agreed by the parties, the
arbitration shall take place in the city in which Executive's principal office
space is located at the time of the dispute or was located at the time of
Termination of the Employment (if applicable). The arbitrator is hereby
directed to take all reasonable measures not inconsistent with the interests of
justice to expedite, and minimize the cost of, the arbitration proceedings.
(b) To protect inventions, trade secrets, or other confidential
information of Section 4, and/or to enforce the non-competition provisions of
Section 6, the Company may seek temporary, preliminary, and/or permanent
injunctive relief in a court of competent jurisdiction, in each case, without
waiving its right to arbitration.
(c) At the request of either party, the arbitrator may take any
interim measures s/she deems necessary with respect to the subject matter of the
dispute, including measures for the preservation of confidentiality set forth in
this Agreement.
(d) Judgment upon the award rendered by the arbitrator may be entered
in any court having jurisdiction.
10. Indemnification.
(a) The Company agrees to indemnify and hold harmless Executive, his
nominees and/or assigns ("Executive Parties") (a reference in this Section 10 to
Executive also includes a reference to Executive's nominees and/or assigns)
against any and all losses, claims, damages, obligations, penalties, judgments,
awards, liabilities, costs, expenses and disbursements (incurred in any and all
actions, suits, proceedings and investigations in respect thereof and any and
all legal and other costs, expenses and disbursements in giving testimony or
furnishing documents in response to a subpoena or otherwise), including without
limitation, the costs, expenses and disbursements, as and when incurred, of
investigating, preparing or defending any such action, suit, proceeding or
investigation that is in any way related to the Executive's employment with the
Company (whether or not in connection with any action in which the Executive is
a party). Such indemnification does not apply to acts performed by Executive,
which are criminal in nature or a violation of law. The Company also agrees that
Executive shall not have any liability (whether direct or indirect, in contract
or tort, or otherwise) to the Company, for, or in connection with, the
engagement of the Executive under the Agreement, except to the extent that any
such liability resulted primarily and directly from Executive's gross negligence
and willful misconduct.
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(b) These indemnification provisions shall be in addition to any
liability which the Company may otherwise have to Executive or the persons
indemnified below in this sentence and shall extend to the following: the
Executive, his affiliated entities, partners, employees, legal counsel, agents,
and controlling persons (within the meaning of the federal securities laws), and
the officers, directors, employees, legal counsel, agents, and controlling
persons of any of them (collectively, the "the Executive Parties").
(c) If any action, suit, proceeding or investigation is commenced, as
to which any of the Executive parties propose indemnification under the
Agreement, they shall notify the Company with reasonable promptness; provided
however, that any failure to so notify the Company shall not relieve the Company
from its obligations hereunder. The Executive Parties shall have the right to
retain counsel of their own choice (which shall be reasonably acceptable by the
Company) to represent them, and the Company shall pay fees, expenses and
disbursements of such counsel; and such counsel shall, to the extent consistent
with its professional responsibilities, cooperate with the Company and any
counsel designated by the Company. The Company shall be liable for any
settlement of any claim against the Executive Parties made with the Company's
written consent, which consent shall not be unreasonably withheld. The Company
shall not, without the prior written consent of the party seeking
indemnification, which shall not be reasonably withheld, settle or compromise
any claim, or permit a default or consent to the entry of any judgment in
respect thereof, unless such settlement, compromise or consent includes, as an
unconditional term thereof, the giving by the claimant to the party seeking
indemnification of an unconditional release from all liability in respect of
such claim.
(d) The indemnification provided by this Section 10 shall not be
deemed exclusive of, or to preclude, any other rights to which those seeking
indemnification may at any time be entitled under the Company's Articles of
Incorporation, Bylaws, any law, agreement or vote of shareholders or
disinterested Directors, or otherwise, or under any policy or policies of
insurance purchased and maintained by the Company on behalf of Executive, both
as to action in his Employment and as to action in any other capacity.
(e) Neither Termination nor completion of the Employment shall effect
these indemnification provisions which shall then remain operative and in full
force and effect.
11. Termination
This Agreement and the employment relationship created hereby will
terminate (i) upon the disability or death of Executive under Section 11 (a) or
11(b); (ii) with cause under Section 11 (c); (iii) for good reason under Section
11 (d); or (iv) without cause under Section 11(e).
(a) Disability. Company shall have the right to terminate the
employment of Executive under this Agreement for disability in
the event Executive suffers an injury, illness, or incapacity of
such character as to substantially disable his from performing
his duties without reasonable accommodation by Executive
hereunder for a period of more than thirty (30) consecutive days
upon Company giving at least thirty (30) days written notice of
termination.
(b) Death. This agreement will terminate on the Death of the
Executive.
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(c) With Cause. Company may terminate this Agreement at any time
because of, (i) the conviction of Executive of an act or acts
constituting a felony or other crime involving moral turpitude,
dishonesty or theft or fraud; or (ii) Executive's negligence in
the performance of his duties hereunder.
(d) Good Reason. The Executive may terminate his employment for "Good
Reason" by giving Company ten (10) days written notice:
(i) he is assigned, without his express written consent, any
duties materially inconsistent with his positions, duties,
responsibilities, or status with the Company change as of a
date after this Agreement becomes effective, or a change in
his reporting responsibilities or titles that occurs as of a
date after this Agreement becomes effective; the Company
shall have the opportunity to cure such Good Reason within
thirty (30) days of receipt of such notice as provided in
this subsection (i);
(ii) his compensation is reduced; or
(iii) Company does not pay any material amount of compensation
due hereunder and then fails either to pay such amount
within the ten (10) day notice period required for
termination hereunder or to contest in good faith such
notice. Further, if such contest is not resolved within
thirty (30) days, Company shall submit such dispute to
arbitration under Section 9.
(e) Without Cause. Company may terminate this Agreement without
cause.
12. Obligations of Company Upon Termination.
(a) In the event of the termination of Executive's employment pursuant
to Section 11 (a), (b) or (c), Executive will be entitled only to the
compensation earned by his hereunder as of the date of such termination (plus
life insurance or disability benefits).
(b) In the event of the termination of Executive's employment pursuant
to Section 11 (d) or (e), Executive will be entitled to receive as severance
pay, an amount equal to $50,000 in addition to all payments of salary earned
through the date of termination in one lump sum.
13. Other Provisions.
(a) All notices and statements with respect to this Agreement must be
in writing. Notices to the Company shall be delivered to the Chairman of the
Board or any vice president of the Company. Notices to Executive may be
delivered to Executive in person or sent to Executive's then-current mailing
address as indicated in the Company's records.
(b) This Agreement sets forth the entire agreement of the parties
concerning the subjects covered herein; there are no promises, understandings,
representations, or warranties of any kind concerning those subjects except as
expressly set forth in this Agreement.
(c) Any modification of this Agreement must be in writing and signed
by all parties; any attempt to modify this Agreement, orally or in writing, not
executed by all parties will be void.
(d) If any provision of this Agreement, or its application to anyone
or under any circumstances, is adjudicated to be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability will not affect any other
provision or application of this Agreement which can be given effect without the
invalid or unenforceable provision or application and will not invalidate or
render unenforceable such provision or application in any other jurisdiction.
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(e) This Agreement will be governed and interpreted under the laws of
the United States of America and the laws of the State of Illinois as applied to
contracts made and carried out in Illinois by residents of Illinois.
(f) No failure on the part of any party to enforce any provisions of
this Agreement will act as a waiver of the right to enforce that provision.
(g) Section headings are for convenience only and shall not define or
limit the provisions of this Agreement.
(h) This Agreement may be executed in several counterparts, each of
which is an original. It shall not be necessary in making proof of this
Agreement or any counterpart hereof to produce or account for any of the other
counterparts. A copy of this Agreement signed by one party and faxed to another
party shall be deemed to have been executed and delivered by the signing party
as though an original. A photocopy of this Agreement shall be effective as an
original for all purposes.
14. Summary of Terms of Employment
Effective Date March 1, 2005
Term & Commitment Twenty-Four Months, full-time,
renewable
Office / Position Chairman of the Board of Directors
Salary $100,000 per year
This Agreement contains provisions requiring binding arbitration of
disputes. By signing this Agreement, Executive acknowledges that she (i) has
read and understood the entire Agreement; (ii) has received a copy of it (iii)
has had the opportunity to ask questions and consult counsel or other advisors
about its terms; and (iv) agrees to be bound by it.
Executed the 17th day of February 2005, to be effective as of the Effective
Date.
XA, INC.: EXECUTIVE:
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/s/ Xxxxxx Xxxxxx /s/ Xxxxx Xxxxxxxx
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XXXXXX XXXXXX XXXXX XXXXXXXX
President
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