EXHIBIT 10(b)
XXXXXXXX, INC. AND A. XXXX XXXXXX
PERSONAL SERVICES AGREEMENT AND
ACKNOWLEDGMENT OF TERMINATION OF EXECUTIVE EMPLOYMENT
THIS AGREEMENT (the "Agreement") effective May 31, 1999, is
made and entered into by and between XXXXXXXX, INC. (the
"Company") and A. XXXX XXXXXX ("Xxxxxx").
WHEREAS the Company and Xxxxxx wish to terminate Xxxxxx'x
full time employment as the Chief Financial Officer with the
Company effective March 15, 1999, and Xxxxxx'x full time
employment with the Company as Principal Financial and
Accounting Officer effective May 31, 1999 and
WHEREAS, the Company and Xxxxxx wish, instead, to enter
into a personal services agreement effective June 1, 1999
whereby Xxxxxx shall be an employee of the company working on an
as-needed basis, subject to his availability or as otherwise set
forth on Exhibit "A" attached hereto.
NOW, THEREFORE, the parties hereto acknowledge and agree as
follows:
1. Termination and Resignation. Xxxxxx and the Company
hereby mutually agree that Xxxxxx'x employment as Vice President
- Finance, Chief Financial Officer and Treasurer will terminate
effective March 15, 1999. Xxxxxx and the Company hereby mutually
agree that Xxxxxx'x employment as Principal Financial and
Accounting Officer and his position as an Officer of the company
will terminate on May 31, 1999. Xxxxxx further resigns as a
Director and Officer of all of the Company's subsidiaries
effective May 31, 1999.
2. Retention. Xxxxxx shall continue to be an employee of the
Company working in a consulting capacity effective June 1, 1999,
pursuant to the terms and conditions set forth below.
3. Term. The term of this Agreement shall commence on June
1, 1999, and continue for a term of two (2) years thereafter
(i.e., until May 31, 2001
4. Services.
a. The Company and Xxxxxx agree that Exhibit "A" attached to
the Agreement is part of the Agreement and Xxxxxx agrees to
complete the projects and/or provide the services listed.
b. Upon reasonable request of the Company's Chief Executive
Officer and/or the Board of Directors, and subject to
Xxxxxx'x availability, Xxxxxx shall work with the Company's
Chief Executive Officer and staff as a special consultant
to Xxxxxxxx UK Ltd., Xxxxxxxx Canada, in other areas
relating to international affairs and other special
projects. The non-availability of Xxxxxx shall not be
deemed to be a breach of this contract
5. Compensation. All payments by the Company to Xxxxxx shall
have appropriate taxes and withholdings deducted.
a. The Company agrees to pay Xxxxxx through May 31, 1999, at
an annualized salary rate of one hundred sixty thousand
dollars ($160,000). With the final salary check, for May
1999, shall be included the sum of nine thousand two
hundred thirty dollars ($9,230.00) as payment for three (3)
weeks vacation pay which will have accrued at that time.
b. Commencing June 1, 1999, the Company shall pay Xxxxxx one
hundred sixty thousand dollars ($160,000), payable over the two
(2) year term of this Agreement in fifty-two (52) substantially
equal bi-weekly installments (the "payments").
c. With reference to exhibit "A" attached to this Agreement,
compensation shall be as follows:
Items 1 through 7 - Compensation is deemed to be included
in 5.a. above.
Item 8 - Class Action - there will be no additional
compensation.
Item 9 - Fiscal 1999 year-end - payment shall be at $333
per day.
d. If the Company's Chief Executive Officer requests Xxxxxx to
work after May 31, 1999, on projects which are not listed
on Exhibit "A" attached, and, provided Xxxxxx is available
to work for the Company, remuneration shall be at $333 per
day, which is in addition to the payments to be made in
5.b. above.
6. Acceleration of Compensation Payments. Upon thirty (30)
days written request of either party to this Agreement, the
second year's payments as required under paragraph 5 above, may
be accelerated and paid in a lump sum, provided however, that
both parties approve said acceleration in writing, which
approval shall not be unreasonably withheld. Said acceleration
payment is only for the second year's payments and cannot be
requested prior to April 1, 2000, and shall in no way be
construed as relieving Xxxxxx from his consulting obligations
hereunder. If Xxxxxxxx is acquired either by merger or
acquisition, said payments due hereunder shall become
immediately due and payable.
7. Employee Status. Xxxxxx will be an employee of Xxxxxxxx
for the term of this Agreement and will continue to receive the
full benefits of employment. Notwithstanding the foregoing,
Xxxxxx shall not accrue vacation, sick and/or personal time
during the term of this Agreement.
8. Health and Hospital Insurance. In accordance with his
employee status, the Company shall continue to provide Xxxxxx
with basic health insurance during the term of this Agreement.
9. Stock Options. During the term of this Agreement, all
options currently held or hereafter acquired by Xxxxxx shall
vest in accordance with the vesting period provided by each
option grant and shall be exercisable in accordance with the
terms of the applicable Stock Option Plan.
10. Expenses. Xxxxxx is authorized to incur reasonable
expenses for conducting the business of the Company, including
but not necessarily limited to travel and similar items,
provided such expenses are preapproved by the Company's Chief
Executive Officer. The Company will reimburse Xxxxxx for all
such expenses upon the presentation by Xxxxxx, from time to
time, of an itemized account of such expenditures.
11. Proprietary Interests of Company.
a. Recognizing and acknowledging that nothing in this
Agreement prevents Xxxxxx from providing services to other
companies which are in direct competition with the Company,
Xxxxxx acknowledges and agrees that he will not disclose
confidential and proprietary information of the Company which
are valuable, special, and unique assets of the Company's
business ("Trade Secrets"), nor xxxx Xxxxxx use any of the
Company's Trade Secrets for any purpose other than in connection
with the employment within the Company.
b. The work product resulting from the services provided under
this Agreement shall be and remain the property of the Company
unless otherwise agreed in writing by both parties.
12. Goodwill and Reputation of the Company and Xxxxxx. Xxxxxx
shall at all times conduct himself in such manner as to preserve
and protect the reputation and goodwill of the Company. The
Company shall at all times conduct its affairs in such manner as
to preserve and protect the goodwill and reputation of Xxxxxx.
13. Notices. Any notice required or permitted to be given under
this Agreement, shall be sufficient if in writing and delivered
in person or sent by registered or certified mail to the address
set forth below Xxxxxx'x signature hereon in the case of Xxxxxx
or to its principal office in the case of the Company, or to
such other address as either party has assigned in a written
notice, as provided herein.
14. Waiver. The waiver of any provision of this Agreement
shall not operate or be construed as a waiver of any other
provision of this Agreement. No waiver shall be valid unless in
writing and executed by the party to be charged therewith.
15. Severability/Modification. In the event that any clause or
provision of this Agreement shall be determined to be invalid,
illegal or unenforceable, such clause or provision may be
severed or modified to the extent necessary, as, as severed
and/or modified, this Agreement shall remain in full force and
effect.
16. Assignment. The rights and obligations of the Company
under this Agreement shall inure to the benefit of and shall be
binding upon the successors and assigns of the Company. Xxxxxx
acknowledges that the services to be rendered under this
Agreement are unique and personal. Accordingly, Xxxxxx may not
assign his rights and obligations under this Agreement.
17. Entire Agreement. This instrument contains the entire
agreement concerning the employment arrangement between the
parties and shall, as of the effective date hereof, supersede
all other such agreements between the parties. It may not be
amended except by an agreement in writing signed by both
parties.
18. Governing Law and Jurisdiction. This Agreement shall be
interpreted, construed, and enforced under the laws of the State
of California. The courts and authorities of the State of
California shall have sole jurisdiction and venue over all
controversies, which may arise with respect to this Agreement.
19. No Authority to Bind. Xxxxxx is not by this Agreement
granted any right or authority, express or implied, on behalf of
or in the name of the Company to bind the Company in any manner
whatsoever unless specifically requested by the Company.
20. Release.
a. As consideration for the payments and benefits described
herein, Xxxxxx hereby releases the Company and its predecessors,
successors and affiliates and the officers, directors,
employees, agents, attorneys, representatives and assigns of
each of them (the "Released Parties") from any and all claims,
causes of action, damages, losses, liabilities and lawsuits
(including but not limited to, claims for wrongful termination,
claims for breach of contract, tort claims, claims under the
California Fair Employment and Housing Act, claims under the Age
Discrimination in Employment Act and claims under other state
and federal statutes), he may have that are based on employment
of Xxxxxx by the Company, the change in the status of such
employment, his resignation as Chief Financial Officer or on any
other event or omission occurring on or prior to the effective
date of this Agreement. Xxxxxx hereby agrees not to xxx or
bring claim, or be a party in any claim or lawsuit, against the
Released Parties with respect to any matters released herein.
b. The foregoing release includes any and all claims, rights
and/or remedies arising under the Age Discrimination in
Employment Act ("ADEA") and the Older Workers Benefit Protection
Act ("OWBPA"). In compliance with the ADEA and OWBPA:
x. Xxxxxx acknowledges that prior to signing this Agreement,
he was given a period of 21 days to consider its provisions;
ii. Xxxxxx understands that he is entitled to revoke this
Agreement within 7 days after its execution. Further, this
Agreement will not be effective or enforceable until the
revocation period has expired; and
iii. Xxxxxx acknowledges and agrees that he has been advised to
consult with an attorney prior to signing this Agreement.
x. Xxxxxx waives any rights he may have under Section 1542 of
the Civil Code of the State of California or any comparable
provisions of state and federal law. Section 1542 of the Civil
Code of the State of California states:
"A general release does not extend to claims which the
creditor does not know of or suspect to exist in is
favor at the time of executing the release, which if
known by him must have materially affected his
settlement with the debtor."
Notwithstanding the provisions of Section 1542, and for the
purpose of implementing a full and complete release and
discharge of all claims, Xxxxxx expressly acknowledges that
this release is intended to include all claims which Xxxxxx
does not know or suspect to exist in his favor at this
time, and that this release contemplates extinguishment of
such claims.
21. Counterparts. This Agreement may be executed in
counterparts, each of which shall be an original but all of
which shall constitute one and the same instrument.
IN WITNESS WHREOF, the parties have executed this
Agreement the date and year indicated below, effective
the date indicated above.
THE COMPANY:
XXXXXXXX, INC.
Date: March 4, 1999 By:
/s/ Xxxxxxx X. Xxxxxx, Xx.
President & Chief Executive Officer
Address: 0000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxx 00000
XXXXXX:
Date: March 4, 1999 /s/ A. Xxxx Xxxxxx
A. Xxxx Xxxxxx
Address: 0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xx 00000
STATE OF CALIORNIA )
) SS.
COUNTY OF SAN DIEGO )
Subscribed and sworn to before me this 4th day of March, 1999.
/s/ Xxxxxxx Xxxxxxxxx
Notary Public
EXHIBIT "A" to
XXXXXXXX, INC. AND A. XXXX XXXXXX
PERSONAL SERVICES AGREEMENT AND
ACKNOWLEDGEMENT OF TERMINATION OF EXECUTIVE
EMPLOYMENT
Project to Complete/Assist Date(s)/Day(s) Needed
------------------------------- ---------------------
1. Close Company Books for April '99 Through May 31, 1999
2. Establish Accounting Policies & Procedures By the end of April '99
For Xxxxxxxx Canada
3. Establish Accounting Policies & Procedures By the end of April '99
For Xxxxxxxx U.K. Including New Hires
4. Gross Margin Calculations-Train New Person Complete by May 31, 1999
5. Inventory Reserve Calculations-Train New Complete by May 31, 1999
New Person
6. Annual Meeting - Assist in Preparing For and
Attendance at March 26, 1999 Annual Meeting
7. Board Meeting Q2 - Assist in Preparing For By May 31, 1999
and Attendance at May '99 Board Meeting
8. Assist with Information for Class Action Law 2 Days per month through
Suit Filed Against Company and Any Other December 31, 1999, on dates
Related Issues Resulting form Class Action to be mutually agreed by
CEO and Xxxx Xxxxxx
9. Fiscal 1999 Year-End Consulting 3 Business Days in
November 1999
