Exhibit 10.18
EMPLOYMENT AGREEMENT
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This Employment Agreement (this "Agreement") is entered into as of June 5,
2000 ("Effective Date") between XCEL MANAGEMENT, INC., a Utah corporation with
its principal offices located at 0000 Xxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000
(the "Company"), and Xxxxxxx X. Xxxxx, a resident of Washington (the
"Employee").
In consideration of the promises and the terms and conditions set forth in
this Agreement, the parties agree as follows:
1. Position. During the term of this Agreement, the Company will employ
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the Employee, and the Employee will serve the Company in the capacity of
Corporate Controller. The Employee will report directly to XX Xxxxxxx, the
Company's Chief Financial Officer. The Company acknowledges the importance of
the Employee's involvement in the staffing of account and finance positions at
the Company and agrees that the Employee will be consulted in connection with
the staffing of such positions.
2. Duties. The Employee will perform duties assigned by the Chief
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Financial Officer that are executive in nature and consistent with her title as
outlined in Exhibit A.
3. Exclusive Service. The Employee will devote substantially all her
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working time and efforts to the business and affairs of the Company; provided,
however, that during the first ninety (90) days following the Effective Date,
Employee shall not be required to devote substantially all of her working time
to the Company, to permit Employee's winding up of prior business commitments.
The foregoing shall not, however, preclude the Employee: (a) from engaging in
appropriate civic, charitable or religious activities; (b) from devoting a
reasonable amount of time to private investments; (c) from serving on the boards
of directors of other entities, with the consent of the Company, which consent
shall not be unreasonably withheld; or (d) from providing incidental assistance
to family members on matters of family business, so long as the foregoing
activities and service do not conflict with the Employee's responsibilities to
the Company.
4. Term of Agreement.
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4.1 Initial Term. The Company agrees to continue the Employee's
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employment, and the Employee agrees to remain in the employ of the Company,
pursuant to the terms of this Agreement for a period of three (3) years after
the Effective Date, unless the Employee's employment is earlier terminated
pursuant to the provisions of this Agreement.
4.2 Renewal. The term of this Agreement shall be extended
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automatically, without further action of either party, beginning three (3) years
after the Effective Date and on each succeeding anniversary of that date, for
terms of one (1) year, unless on or before ninety (90) days prior to the last
day of the term of this Agreement or any extension thereof, the Company or the
Employee shall notify the other in writing of its intention not to renew this
Agreement, in which case the Employee's employment shall terminate at the end of
the original
term or any extension thereof. If either party notifies the other of its
intention not to renew this Agreement less than ninety (90) days prior to the
end of the term of this Agreement or any extension thereof, then such
termination shall be effective ninety (90) days from such notice. No notice of
non-renewal may be given by either party after a renewal term has commenced. Any
such renewal shall be upon such terms and conditions set forth in this
Agreement, unless otherwise agreed between the Company and the Employee. The
notice of non-renewal by either party shall in no way constitute a breach of
this Agreement.
5. Compensation and Benefits.
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5.1 Base Salary. The Employee's initial base annual salary will be no
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less than $70,000 per year for the first year of her employment with the
Company. The Employee's salary will be payable as earned in accordance with the
Company's customary payroll practice. The Employee's base salary will be
reviewed by the Chief Financial Officer at least annually and will increase as
follows:
(a) The Employee's base annual salary will increase by no less
than $12,500 per year effective on the first anniversary of the Effective Date;
and
(b) The Employee's base annual salary will increase by no less
than $12,500 per year effective on the second anniversary of the Effective Date.
5.2 Performance Bonus. Based on the Employee's achievement of annual
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objectives or milestones agreed to by Employee and the Company, the Employee
will be paid cash and granted stock option bonuses, no later than ten days
following the anniversary of the Effective Date, in the amounts agreed to by
Employee and the Company. Prior to each anniversary of the Effective Date, the
Company and Employee shall establish objectives or milestones and the targeted
cash bonus and stock option associated with the achievement of such objectives
or milestones for the next twelve-month period commencing June 5 and ending June
4. These annual objectives or milestones and the targeted cash bonus and stock
option associated with their achievement will be evidenced by a written document
that is to be attached to this Agreement as an addendum and made part of this
Agreement. The performance bonus criteria for the period June 5, 2000 through
June 4, 2001 will be developed by the Chief Financial Officer and presented to
the employee by August 5, 2000.
5.3 Additional Benefits. The Employee will be eligible to participate
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in the Company's employee benefit plans of general application, including
without limitation pension and profit-sharing plans, stock option, incentive or
other bonus plans, life, health, disability, accident, vision and dental
insurance programs, paid vacations and sabbatical leave plans, and similar plans
or programs, in accordance with the rules established for individual
participation in any such plan. The Employee will also be entitled to reasonable
holidays and illness days with full pay in accordance with the Company's policy
from time to time in effect. The Employee will be entitled to the same benefits
extended to members of the executive staff of the Company. The employee will
accrue vacation equal to 15 days per year. The Company shall ensure that the
Employee does not suffer a break in health, vision and dental coverage from the
Effective Date until the date the Employee participates in the Company's health,
vision and dental plans. If the Company is unable to extend immediate health,
vision and dental coverage to the Employee as of
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the Effective Date, the Company shall pay the Employee's COBRA premiums for the
Employee to remain covered by her predecessor's health, vision and dental plans
until such date as the Employee participates in the Company's health, vision and
dental plans.
5.4 Initial Stock Option. On the Effective Date, the Employee shall
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be granted a compensatory stock option for 30,000 shares of the Company's Common
Stock at an exercise price per share of $2.00 for the first 30,000 shares (the
"Initial Option"). The Initial Option shall be vested as to the first 7,500
shares on the Effective Date. As to the remaining 22,500 shares, and provided
the Employee continues to be engaged under this Agreement on each of the vesting
dates, the remainder of the Initial Option shall vest in the following manner:
7,500 shares on the one year anniversary of the Effective Date (June 6, 2001),
and thereafter 1/24 of the remaining shares subject to the Initial Option each
month the Employee continues to be engaged under this Agreement. The Initial
Option shall be fully vested on the third anniversary of the Effective Date. The
Initial Option cannot be transferred by the Employee except in the event of her
death, and must be exercised by the Employee (or in the event of her death, by
her estate or such other designee) within ten (10) years from the Effective Date
or if Employee's employment terminates before that date, within the later of:
(a) ninety (90) days following termination of the Employee's engagement under
this Agreement for any or no reason and (b) ninety (90) days following the date
that the shares subject to the options are freely tradable by Employee on a
public market. Forms of permissible consideration to purchase the shares of
common stock on exercise of the Initial Option shall be cash, cashless exercise
(also called net zero transaction), recourse promissory note and such other
forms of consideration with which other executives have or are given the
opportunity to purchase shares. In the event that the number of outstanding
shares of the Company's common stock is changed by a stock dividend,
recapitalization, stock split or similar change in the capital structure of the
Company without consideration, then the number of shares (and exercise price)
subject to the Initial Option will be proportionately adjusted.
5.5 Relocation Expenses. The Company shall provide the Employee
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$3,000 on the Effective Date to cover reasonable expenses incurred by the
Employee in connection with transitional housing, moving the household goods and
personal effects, and other expenses incurred in relation to Employee
relocating.
5.6 Expenses. The Company will reimburse the Employee for all
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reasonable and necessary expenses expected to be incurred by the Employee in
connection with the Company's business. In addition, the Company will pay for or
reimburse employee for expenses relating to CPE classes, Professional
Association Dues, and Professional Association monthly meeting fees.
5.7 Piggyback Registration of Options and Shares. At any time the
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Company files a Form S-8 registration statement or similar registration
statement with the Securities and Exchange Commission registering its common
stock subject to compensatory awards for public distribution, the Company will,
on a best efforts basis and at its sole cost and expense, seek to register the
options or the common stock awarded to the Employee or underlying the options
awarded to Employee with the Securities and Exchange Commission.
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6. Termination.
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6.1 Events of Termination. The Employee's employment with the Company
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shall terminate upon any one of the following:
(a) Thirty (30) days after the date of a written notice sent to
the Employee stating the Company's determination made in good faith that it is
terminating the Employee for "Cause" as defined under Section 6.2 below
("Termination for Cause"); or
(b) Thirty (30) days after the date of a written notice sent to
the Employee stating the Company's determination made in good faith that, due to
a mental or physical incapacity, the Employee has been unable to perform her
duties under this Agreement for a period of not less than six (6) consecutive
months ("Termination for Disability"); or
(c) Upon the Employee's death ("Termination Upon Death"); or
(d) Upon the date of a written notice sent to the Company
stating the Employee's determination made in good faith of "Constructive
Termination" by the Company, as defined under Section 6.3 below ("Constructive
Termination"); or
(e) Thirty (30) days after the date of a notice sent to the
Employee stating that the Company is terminating her employment, without Cause,
which notice can be given by the Company at any time after the Effective Date at
the Company's sole discretion, for any reason or for no reason ("Termination
Without Cause"); or
(f) The date of a notice sent to the Company from the Employee
stating that the Employee is electing to terminate her employment with the
Company ("Voluntary Termination").
6.2 "Cause" Defined. For purposes of this Agreement, "Cause" for the
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Employee's termination will exist at any time after the occurrence of one or
more of the following events:
(a) Any willful act or acts of dishonesty undertaken by the
Employee and intended to result in substantial gain or personal enrichment of
the Employee at the expense of the Company; or
(b) Any willful act of gross misconduct which is materially and
demonstrably injurious to the Company. No act, or failure to act, by the
Employee shall be considered "willful" if done, or omitted to be done, by him in
good faith and in the reasonable belief that her act or omission was in the best
interest of the Company and/or required by applicable law.
6.3 "Constructive Termination" Defined. "Constructive Termination"
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shall mean:
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(a) A material reduction in the Employee's salary or benefits
not agreed to by the Employee;
(b) A material change in the Employee's responsibilities not
agreed to by the Employee;
(c) The Company's failure to comply in any material respect with
any material term of this Agreement after thirty (30) days written notice of the
Employee's claim of such failure; or
(d) A requirement that the Employee relocate to an office that
would increase the Employee's one-way commute distance by more than thirty (30)
miles.
6.4 "Termination Without Cause" shall mean:
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(a) Termination of the Employee's employment with the Company
for any reason other than Cause; or
(b) Termination of the Employee's employment with the Company
for any reason following a Change in Control. "Change in Control" shall mean the
occurrence of any of the following events: (i) a merger or consolidation
involving the Company in which the shareholders of the Company immediately prior
to such merger or consolidation own less that fifty percent (50%) of the voting
power of the surviving corporation; (ii) the sale of all, or substantially all,
of the assets of the Company; (iii) any "person" or "group" (as defined in the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) becoming the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) directly or
indirectly of securities representing more than fifty percent (50%) of the
voting power of the Company then outstanding; or (iv) less than a majority of
the Board of Directors are persons who were either nominated for election by the
Board of Directors or were elected by the Board of Directors.
7. Effect of Termination.
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7.1 Termination for Cause or Voluntary Termination. In the event of
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any termination of the Employee's employment pursuant to Section 6.1(a) or
Section 6.1(f), the Company shall immediately pay to the Employee the
compensation and benefits accrued and otherwise payable to the Employee under
Section 5 through the date of termination. The Employee's rights under the
Company's benefit plans of general application shall be determined under the
provisions of those plans.
7.2 Termination for Disability. In the event of termination of
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employment pursuant to Section 6.1(b):
(a) The Company shall immediately pay to the Employee the
compensation and benefits accrued and otherwise payable to the Employee under
Section 5 through the date of termination;
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(b) For three (3) months after the termination of the Employee's
employment, the Company shall pay the Employee: (i) her salary under Section 5.1
above at the Employee's then-current salary, less applicable withholding taxes,
payable on the Company's normal payroll dates during that period; (ii) any
accrued but unpaid cash bonus and any earned but ungranted stock option under
Section 5.2 above with respect to achievement of objectives or milestones during
such three (3) month period (that is, the Employee is entitled to receive the
unpaid cash bonus and ungranted stock option if the objective or milestone is
achieved within three (3) months after the effective date of termination), any
such option grant shall provide Employee with a period of at least ninety (90)
days in which Employee may exercise such option for shares that are freely
tradable on a public market; and (C) her COBRA premium for a period of three
months;
(c) The Employee shall receive other benefit payments as
provided in the Company's standard benefit plans, and
(d) The Employee shall become fully and immediately vested in
the entire balance of her Initial Option under Section 5.4 above.
7.3 Termination Upon Death. In the event of termination of employment
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pursuant to Section 6.1(c), all obligations of the Company and the Employee
shall cease, except the Company shall immediately pay to the Employee's estate
the compensation and benefits accrued and otherwise payable to the Employee
under Section 5 through the date of termination, and the Employee shall become
fully and immediately vested in the entire balance of her Initial Option under
Section 5.4 above.
7.4 Constructive Termination or Termination Without Cause. In the
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event of any termination of employment pursuant to Section 6.1(d) or Section
6.1(e):
(a) The Company shall immediately pay to the Employee the
compensation and benefits accrued and otherwise payable to the Employee under
Section 5 through the date of termination;
(b) For three (3) months after the termination of the Employee's
employment, the Company shall pay the Employee: (i) her salary under Section 5.1
above at the Employee's then-current salary, less applicable withholding taxes,
payable on the Company's normal payroll dates during that period; (ii) any
accrued but unpaid cash bonus and any earned but ungranted stock option under
Section 5.2 with respect to achievement of milestones during such three (3)
month period (that is, the Employee is entitled to receive the unpaid cash bonus
and ungranted stock option if the objective or milestone is achieved within
three (3) months after the effective date of termination), any such option grant
shall provide Employee with a period of at least ninety (90) days in which
Employee may exercise such option for shares that are freely tradable on a
public market; and (iii) her COBRA premium for a period of three months.
(c) If the termination occurs within the first twelve (12)
months following the Effective Date, in addition to the 15,000 shares vested on
the Effective Date, the Employee shall be vested as of the date of termination
of employment in 10,000 of shares of the
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Initial Option provided in Section 5.4. In addition, in such termination event,
the Employee shall have twelve (1 2) months from the date of such termination of
employment to exercise all of the options described in this paragraph 7.4(c).
(d) If the termination occurs for any reason after a Change in
Control, then in addition to the foregoing benefits, the remainder of the
Initial Option provided in Section 5.4 shall, as of the date of employment
termination, be immediately vested in full and shall remain exercisable for the
periods specified in Section 5.4; provided, that if the total amount of the
benefits available to the Employee under this Section 7.4, either alone or
together with other payments which the Employee has the right to receive from
the Company, would constitute a "parachute payment" as defined in Section 280G
of the Internal Revenue Code (the "Code"), then the Employee will receive
whichever provides him with the greater economic benefit: (i) the total amount
of such benefits; or (ii) the largest amount that would result in no portion of
such benefits being subject to the excise tax imposed by Section 4999 of the
Code. The determination of which of the foregoing would provide the greatest
economic benefit to the Employee shall be made by an independent accounting firm
the fees for which determination shall be paid by the Company.
8. Nondisclosure. The Employee acknowledges that during the course of her
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employment by the Company, the Company will provide, and the Employee will
acquire, knowledge of special and unique value with respect to the Company's
business operations, including, by way of illustration, the Company's existing
and contemplated product line, trade secrets, compilations, business and
financial methods or practices, plans, hardware and software technology
products, systems, programs, projects and know-how, pricing, cost of providing
service and equipment, operating and maintenance costs, marketing and selling
techniques and information, customer data, customer names and addresses,
customer service requirements, supplier lists, and confidential information
relating to the Company's policies, employees, and/or business strategy (all of
such information herein referenced to as the "Confidential Information"). The
Employee recognizes that the business of the Company is dependent upon
Confidential Information and that the protection of the Confidential Information
against unauthorized disclosure or use is of critical importance to the Company.
The Employee agrees that, without prior written authorization of the
Chief Executive Officer of the Company, the Employee will not, during her
employment, divulge to any person, directly or indirectly, except to the Company
or its officers and agents or as reasonably required in connection with the
Employee's duties on behalf of the Company, or make any independent use of,
except on behalf of the Company, any of the Company's Confidential Information,
whether acquired by the Employee during her employment or not. The Employee
further agrees that the Employee will not, at any time after her employment has
ended, use or divulge to any person directly or indirectly any Confidential
Information, or use any Confidential Information in subsequent employment of any
nature. Confidential Information does not include information which (i) was in
the public domain or publicly known or available prior to the date of
disclosure, (ii) becomes generally available to the public other than as a
result of a disclosure by the Employee, or (iii) becomes available to the
Employee on a nonconfidential basis from a source other than any party named in
this Agreement, or their respective advisor, provided that such sources are not
known by the Employee to be bound by a confidentiality agreement with or
obligation of secrecy to any party with respect to such information. If the
Employee is subpoenaed, or is otherwise required by law
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to testify concerning Confidential Information, the Employee agrees to notify
the Company upon receipt of a subpoena, or upon belief that such testimony shall
be required. This nondisclosure provision shall survive the termination of this
Agreement for any reason. The Employee acknowledges that the Company would not
employ the Employee but for her covenants and promises contained in this Section
8.
9. Return of Documents. The Employee agrees that if the Employee's
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relationship with the Company is terminated (for whatever reason), the Employee
shall not remove or take with the Employee, but will leave with the Company or
return to Company, all Confidential Information, in whatever form, including but
not limited to records, files, data, memoranda, reports, customer lists,
customer information, product information, price lists, documents and other
information, in whatever form (including on computer disk), and any and all
copies thereof, or if such items are not on the premises of the Company, the
Employee agrees to return such items immediately upon the Employee's termination
or the request of the Company. The Employee acknowledges that all such items are
and remain the property of the Company.
10. No Interference or Solicitation. The Employee agrees that during her
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employment, and for a period of six (6) months following the termination of her
employment (for whatever reason), that neither he nor any individual,
partner(s), limited partnership, corporation or other entity or business with
which he is in any way affiliated, including, without limitation, any partner,
limited partner, director, officer, shareholder, employee, or agent of any such
entity or business, will: (i) request, induce or attempt to influence, directly
or indirectly, any employee of the Company to terminate their employment with
the Company; or (ii) employ any person who as of the date of this Agreement was,
or after such date is or was, an employee of the Company. The Employee further
agrees that during the period beginning with the commencement of the Employee's
engagement with the Company and ending six (6) months after the termination of
the Employee's employment with the Company (for whatever reason), he shall not,
directly or indirectly, as an employee, agent, consultant, stockholder,
director, partner or in any other individual or representative capacity of the
Company or of any other person, entity or business, solicit or encourage any
present or future customer, supplier, contractor, partner or investor of the
Company to terminate or otherwise alter her, her or its relationship with the
Company. This provision shall survive the termination of this Agreement for any
reason.
11. Non-Competition. In consideration of the numerous mutual promises
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contained in the Agreement between the Company and the Employee, including,
without limitation, those involving Confidential Information, and in order to
protect the Company's Confidential Information and to reduce the likelihood of
irreparable damage which would occur in the event such information is provided
to or used by a competitor of the Company, the Employee agrees that during her
employment and for an additional period of six (6) months immediately following
the termination of her employment, whether voluntary or involuntary (the
"Noncompetition Term"), not to, directly or indirectly, either through any form
of ownership or as a director, officer, principal, agent, employee, employer,
adviser, consultant, shareholder, partner, or in any individual or
representative capacity whatsoever, without the prior written consent of the
Company (which consent may be withheld in its sole discretion): (i) compete for
or solicit application service provider ("ASP") business for or on behalf of any
person or business entity with a place of business in the United States or
Canada; (ii) own, operate, participate in,
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undertake any employment with or have any interest in any entity with a place of
business in the United States or Canada in the business of marketing and selling
of ASP services to persons or business entities, except owning publicly traded
stock for investment purposes only in which the Employee owns less than 5%;
(iii) compete for or solicit ASP services from any customer of the Company (or
its successors by merger); or (iv) use in any competition, solicitation, or
marketing effort any Confidential Information of the Company. The Company
acknowledges and agrees that these non-competition covenants shall apply only to
business entities and individuals that provide applications to customers through
the Internet or World Wide Web which applications such business entity or
individual did not develop. The Company further acknowledges and agrees that the
non-competition covenants are not applicable to business entities or individuals
that sell applications via the Internet or World Wide Web which such business
entity or individual developed, nor shall such covenants extend to internet
hosting or other internet service provider functions other than ASP services as
described in this Section 11.
If, during any period within the Noncompetition Term, the Employee is
not in compliance with the terms of this Section 11, the Company shall be
entitled to, among other remedies, compliance by the Employee with the terms
of this Section 11 for an additional period equal to the period of such
noncompliance. For purposes of this Agreement, the term "Noncompetition Term"
shall also include this additional period. The Employee hereby acknowledges that
the geographic boundaries, scope of prohibited activities and the time duration
of the provisions of this Section 11 are reasonable and are no broader than are
necessary to protect the legitimate business interests of the Company.
This noncompetition provision shall survive the termination of the
Employee's employment and can only be revoked or modified by a writing signed by
the parties which specifically states an intent to revoke or modify this
provision. The Employee acknowledges that the Company would not employ him but
for her covenants or promises contained in this Section 11.
12. Reformation of Section 11. The Company and the Employee agree and
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stipulate that the agreements and covenants not to compete contained in Section
11 hereof are fair and reasonable in light of all of the facts and
circumstances of the relationship between the Employee and the Company; however,
the Employee and the Company are aware that in certain circumstances courts have
refused to enforce certain agreements not to compete. Therefore, in furtherance
of, and not in derogation of the provisions of Section 11, the Company and the
Employee agree that in the event a court should decline to enforce the
provisions of Section 11, that Section 11 shall be deemed to be modified or
reformed to restrict the Employee's competition with the Company or its
affiliates to the maximum extent, as to time, geography and business scope,
which the court shall find enforceable; provided, however, in no event shall the
provisions of Section 11 be deemed to be more restrictive to the Employee than
those contained herein.
13. Injunctive Relief. The Employee acknowledges and agrees that the
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agreements and covenants contained in this Agreement are essential to protect
the Confidential Information, business, and goodwill of the Company. The
Employee further acknowledges that the breach of any of the agreements contained
herein, including, without limitation, the confidentiality
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covenants specified in Section 8, the non-solicitation covenants specified in
Section 10, and the non-competition covenants contained in Section 11, will give
rise to irreparable injury to the Company, inadequately compensable in damages.
Accordingly, the Company shall be entitled to injunctive relief to prevent or
cure breaches or threatened breaches of the provisions of this Agreement and to
enforce specific performance of the terms and provisions hereof in any court of
competent jurisdiction. The Employee further acknowledges and agrees that in the
event of the termination of the Employee's employment with the Company, whether
voluntary or involuntary, that the enforcement of a remedy hereunder by way of
injunction shall not prevent the Employee from earning a reasonable livelihood.
The Employee further acknowledges and agrees that the covenants contained herein
are necessary for the protection of the Company's legitimate business interests
and are reasonable in scope and content.
14. Miscellaneous
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14.1 Indemnification and Errors and Omissions Insurance. The
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Company agrees to indemnify and defend the Employee on terms no less favorable
than any indemnification agreement the Company has at any time during the term
of this Agreement with an executive or officer of the Company. Any errors and
omissions insurance which the Company holds that applies to any officer or
director of the Company shall be applicable to Employee.
14.2 Arbitration. The Employee and the Company shall submit to
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mandatory binding arbitration in any controversy or claim arising out of, or
relating to, this Agreement or any breach hereof. Such arbitration shall be
conducted in accordance with the commercial arbitration rules of the American
Arbitration Association in effect at that time, and judgment upon the
determination or award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. The arbitrator is hereby authorized to award to the
prevailing party the costs (including reasonable attorneys' fees and expenses)
of any such arbitration.
14.3 Severability. If any provision of this Agreement shall be found
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by any arbitrator or court of competent jurisdiction to be invalid or
unenforceable, then the parties hereby waive such provision to the extent that
it is found to be invalid or unenforceable and to the extent that to do so would
not deprive one of the parties of the substantial benefit of its bargain. Such
provision shall, to the extent allowable by law and the preceding sentence, be
modified by such arbitrator or court so that it becomes enforceable and, as
modified, shall be enforced as any other provision hereof, all the other
provisions continuing in full force and effect.
14.4 No Waiver. The failure by either party at any time to require
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performance or compliance by the other of any of its obligations or agreements
shall in no way affect the right to require such performance or compliance at
any time thereafter. The waiver by either party of a breach of any provision
hereof shall not be taken or held to be a waiver of any preceding or succeeding
breach of such provision or as a waiver of the provision itself. No waiver of
any kind shall be effective or binding, unless it is in writing and is signed by
the party against whom such waiver is sought to be enforced.
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14.5 Assignment. This Agreement and all rights hereunder are personal
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to the Employee and may not be transferred or assigned by the Employee at any
time. The Company may assign its rights, together with its obligations
hereunder, to any parent, subsidiary, affiliate or successor, or in connection
with any sale, transfer or other disposition of all or substantially all of its
business and assets, provided, however, that any such assignee assumes the
Company's obligations hereunder.
14.6 Withholding. All sums payable to the Employee hereunder shall be
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reduced by all federal, state, local and other withholding and similar taxes and
payments required by applicable law.
14.7 Entire Agreement. This Agreement constitutes the entire and only
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agreement between the parties relating to employment of the Employee with the
Company, and this Agreement supersedes and cancels any and all previous
contracts, arrangements or understandings with respect thereto.
14.8 Amendment. This Agreement may be amended, modified, superseded,
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canceled, renewed or extended only by an agreement in writing executed by both
parties hereto.
14.9 Notices. All notices and other communications required or
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permitted under this Agreement shall be in writing and hand delivered, sent by
telecopier, sent by registered first class mail, postage pre-paid, or sent by
nationally recognized express courier service. Such notices and other
communications shall be effective upon receipt if hand delivered or sent by
telecopier, five (5) days after mailing if sent by mail, and one (1) day after
dispatch if sent by express courier, to the following addresses, or such other
addresses as any party shall notify the other parties:
If to the Company:
XCEL MANAGEMENT, INC.
Attn: Xxxx X. Xxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
If to the Employee:
Xxxxxxx X. Xxxxx
00000 0/xx/ Xxxxxx XX
Xxxx Xxxxxxx, XX 00000
14.10 Binding Nature. This Agreement shall be binding upon, and inure
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to the benefit of, the successors and personal representatives of the respective
parties hereto.
14.11 Headings. The headings contained in this Agreement are for
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reference purposes only and shall in no way affect the meaning or interpretation
of this Agreement. In this Agreement, the singular includes the plural, the
plural included the singular, the masculine gender includes both male and female
referents, and the word "or" is used in the inclusive sense.
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14.12 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed to be an original but all of which,
taken together, constitute one and the same agreement.
14.13 Governing Law. This Agreement and the rights and obligations of
-------------
the parties hereto shall be construed in accordance with the laws of the State
of Washington, without giving effect to the principles of conflict of laws.
14.14 Attorneys' Fees. In the event of any claim, demand or suit
---------------
arising out of or with respect to this Agreement, the prevailing party shall be
entitled to reasonable costs and attorneys' fees, including any such costs and
fees upon appeal.
IN WITNESS WHEREOF, the Company and the Employee have executed this
Agreement as of the date first above written.
"THE COMPANY" "EMPLOYEE"
XCEL MANAGEMENT, INC.
By: /s/ Xxxx X. Xxxxx /s/ Xxxxxxx X. Xxxxx
-------------------------- ----------------------------
XXXX X. XXXXX XXXXXXX X. XXXXX
Chief Executive Officer & Chairman
12
EXHIBIT "A"
TO
EMPLOYMENT AGREEMENT
DUTIES OF EMPLOYEE
------------------
. Manage operational corporate accounting activities including financial
reporting (monthly, quarterly, annual financial statements), management
reporting, general accounting (accounts receivable and payable), fixed
assets, collections, revenue accounting, sales accounting, and
compensation.
. Analyze financial results and provide executive management with an
understanding of the company's financial performance and the financial
effect of business plans and strategies.
. Manage compliance for federal, state and local tax returns, employment
returns, and SEC filings.
. Manage the benefit plan reporting and administration.
. Manage the maintenance of stock ownership and investor records.
. Accounting system analysis and selection.
. Supervise, train, and mentor in-house accounting / finance department
staff.
. Design, implement, and maintain company wide internal control and
accounting policies and procedures. Automate and streamline existing
processes.
. Develop the internal audit function to perform periodic, limited scope
audits of selected transactions to ensure company accounting procedures
are being adhered to.
. Account for subsidiaries, inter-company activity, and joint ventures.
. Review and account for all legal contracts.
. Manage short-term and long-term operating cash planning and forecasting,
assist CFO in analyzing cash requirements for investment / merger
activities.
. Analyze costs and make cost reduction / elimination recommendations.
. Manage the external audit process.
. Facilitate preparation of annual budget.
. Assist in the development and utilization of business valuation models
for merger / acquisition candidates.
. Assist CFO in developing & implementing the company's merger &
acquisition strategy.
. Assist in due diligence reviews of merger / acquisition candidates.
. Manage post-merger integration of accounting / financial systems and
data.
. Support CFO and other executive management in development and analysis
of new business opportunities.
. Special projects in support of CFO and executive management team.
. Support executive management in the development of corporate strategy &
planning.
13
ADDENDUM NO. 1
TO
EMPLOYMENT AGREEMENT
OF
XXXXXXX X. XXXXX
PERFORMANCE BONUS CRITERIA FOR PERIOD FROM JUNE 6, 2000 THROUGH
JUNE 5, 2001 UNDER PARAGRAPH 5.2 OF EMPLOYMENT AGREEMENT
Each bonus is considered earned and payable when each performance objective
has been met. This agreement is effective November 29, 2000. The options are
Incentive Stock Options with an exercise price of 31/32 or $.96875 per share.
Any portion of the "bonus options" that have been earned prior to November 29,
2000 will vest November 29, 2000. It is recognized that the work done to meet
the objectives will be performed by the accounting team including the
Controller, but not performed solely by the Controller.
1. Accounting clean-up and accounting set-up to enable Xcel
Management, Inc. to earn a "Unqualified" opinion, with the exception of "going
concern language" on the 5/31/00 audit: $0.00 in cash, plus a stock option to
purchase 20,000 shares of the Company's common stock at $0.96875 per share.
These 20,000 options have been earned and are payable as of November 29, 2000;
2. SEC compliance and filings: $0.00 in cash per significant filing,
plus a stock option to purchase 10,000 shares of the Company's common stock at
$0.96875 per share per significant filing (Significant filings include 14c,
10-KSB, 10Q-SB's, SB-2's). 10,000 options each for the DEFA14C filed 7/13/00,
the 10KSB filed 9/13/00, and the 10QSB filed 10/23/00 have been earned and are
payable as of November 29, 2000;
Each of the options granted under this Addendum is not transferable by the
Employee except in the event of the Employee's death, is fully vested upon
grant, and must be exercised within ten (10) years of the date of grant, or if
Employee's employment terminates before that date, within the later of (a) one
year following termination of the Employee's engagement under the Employment
Agreement for any or no reason and (b) one year following the date that the
shares subject to the options are freely tradable by Employee on a public
market. Forms of permissible consideration to purchase the shares on exercise of
the options granted under this Addendum shall be cash, cashless exercise (also
called net zero transaction), recourse promissory note and such other forms of
consideration with which other executives have or are given the opportunity to
purchase shares. These options contain a reload feature of a cashless exercise
is used. In the event that the number of outstanding shares of the Company's
common stock is changed by a stock dividend, recapitalization, stock split or
similar change in the capital structure of the Company without consideration,
then the number of shares (and exercise price) subject to the option granted
under this Addendum will be proportionately adjusted.
IN WITNESS WHEREOF, the Company and the Employee have executed this
Agreement as of November 29, 2000.
"THE COMPANY" "EMPLOYEE"
INSYNQ, INC.
By: /s/ XXXX X. XXXXX /s/ XXXXXXX X. XXXXX
----------------------------- ------------------------------------
XXXX X. XXXXX XXXXXXX X. XXXXX
Chief Executive Officer &
Chairman
