EMPLOYMENT AGREEMENT
This
Employment Agreement (this “Agreement”) is by and between
Western Capital Resources, Inc., a Minnesota corporation (the “Company”), and Xxxx Xxxxxxxx
(“Executive”), and
entered into effective as of March 31, 2010.
INTRODUCTION
A.
The Company engages in the business of (i) short term consumer
finance including without limitation payday lending, check cashing, title
lending, prepaid debit cards and related activities and (ii) the retail sale of
wireless phones, plans and accessories, including without limitation the sale of
used cellular phones, phone flashing and related activities (such activities
being hereinafter collectively referred to as the “Business”).
B.
The Board of Directors of the Company (the “Board”) has determined that
it is in the best interests of the Company to ensure that the Company will have
the continued dedication and service of Executive, in the roles of the Company’s
Chief Executive and Chief Operating Officer, and to obtain the benefit of
certain covenants set forth herein; and Executive desires to serve the Company
in such roles and provide the Company with such covenants.
C.
The parties wish to enter into an agreement, in the form of this
Agreement, to set forth in writing the terms and conditions of their agreement,
and their respective obligations and rights with respect to the
foregoing.
AGREEMENT
Now,
Therefore, in consideration of the foregoing and the mutual promises,
terms, covenants and conditions set forth herein, the parties hereto, intending
to be legally bound, hereby agree as follows:
1.
Certain
Definitions.
1.1
“Code” means the
Internal Revenue Code of 1986, as amended, including and succeeding provisions
of law and any regulations promulgated by the United States Treasury Department
thereunder.
1.2
“Employment Period” means the
period during which Company employs the Executive.
1.3
“Good Cause” means any one or
more of the following: (a) Executive has committed an act constituting a
misdemeanor involving moral turpitude or a felony under the laws of the United
States or any state or political subdivision thereof or any other jurisdiction;
(b) Executive has committed an act constituting a breach of fiduciary duty,
gross negligence or willful misconduct; (c) Executive has engaged in conduct
which violates the Company’s then existing internal policies or procedures and
which is detrimental to the Business or the reputation, character or standing of
the Company or any of its affiliates; (d) Executive has committed an act of
fraud, dishonesty or misrepresentation that is detrimental to the Business or
the reputation, character or standing of the Company or any of its affiliates;
(e) Executive has engaged in a conflict of interest or self-dealing without the
prior written approval of the Board; (f) Executive has materially breached
his obligations as set forth in this Agreement or has neglected or failed to
satisfactorily perform his material duties and responsibilities as chief
executive officer of the Company; (g) Executive has become bankrupt or
insolvent; or (h) Executive has been repeatedly or continuously absent from
the Company without the permission of the Chairman of the Board.
1.4
“Good Reason” means a
termination by Executive of Executive’s employment hereunder upon the occurrence
of any of the following events taking place without Executive’s prior written
approval: (a) Executive’s demotion from his position as Chief Executive
Officer; (b) the Company’s failure to obtain the assumption of this Agreement by
any successor or assign of the Company that is a purchaser of all or
substantially all of the assets of the Company (or that otherwise is a purchaser
of all or substantially all of the Business); or (c) the required relocation of
the place at which Executive must render a majority of his ordinary duties
hereunder by more than 60 miles from such current place (i.e., 11550 “I” Street,
Suite 150, Omaha, NE 68137); provided however, that notwithstanding anything to
the contrary herein, the Company’s hiring of a Chief Operating Officer shall not
constitute “Good Reason.”
2.
Employment and
Duties.
2.1
The Company agrees to continue to employ
Executive for the Employment Period, and Executive agrees to remain in the
employ of the Company for the Employment Period. The term of this
Agreement shall continue until such time as the employment of Executive is
terminated pursuant to Section 7 below.
2.2
The Company is employing Executive hereunder
as the Company’s Chief Executive Officer and Chief Operating Officer. In
this regard, Executive agrees to perform such duties and responsibilities, in
good faith and for the exclusive benefit of the Company, as are prescribed for
his office under the Minnesota Business Corporation Act, the Company’s Amended
and Restated Bylaws (as may be further amended or restated from time to time),
and as otherwise reasonably directed by the Chairman of the Board, to the extent
such direction is reasonable and consistent with the position of a Chief
Executive Officer of a corporation.
2.3
Executive’s entire business time, attention,
energies and skills shall be devoted to the Company and the Business; provided,
however, that Executive shall nonetheless be entitled to participate in social,
civic or professional associations or engage in passive outside investment
activities which may require a limited portion of time and effort to manage
(consistent at all times with Company’s policies and procedures), so long as
such activities do not interfere with the performance of Executive’s duties nor
compete, in any way, with the products or services offered by or through
Company.
3.
Compensation.
For services rendered by Executive during the Employment Period, the Company
shall compensate Executive as follows:
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3.1
Executive shall receive an annual base salary
of $246,000 (the ”Base
Salary”) which will be paid in accordance with the Company’s normal
payroll cycle. During the Employment Period, the Board will review the
Base Salary no less frequently than annually and may, in connection with any
review, increase Executive’s Base Salary. Any decision by the Board to
increase the Base Salary shall not serve to limit or reduce any other obligation
of the Company to Executive under this Agreement.
3.2
Executive shall be eligible for an annual
performance-based cash bonus (the “Annual Bonus”). The
Annual Bonus will be based upon an “EBITDA Target” established by
the Board on an annual basis (and reasonably agreeable to Executive) prior to
the conclusion of the first quarter of each fiscal year, with the initial EBITDA
Target for fiscal year 2010 being $4 million. The Annual Bonus will be
payable in connection with an “Annual Bonus Pool” that the
Board will establish, under which Executive and certain other key executives or
management-level employees identified by Executive and reasonably acceptable to
the Board will be eligible to participate and receive performance-based bonuses
similar to Executive’s Annual Bonus hereunder. Each year during the
Employment Term, Executive’s share of payments from the Annual Bonus Pool, if
any, will be reasonably determined by the Board based upon the number of
participants in the Annual Bonus Pool but shall be in an amount to be determined
by the Executive up to a maximum of 50% of the Annual Bonus Pool. Under
the Annual Bonus Pool, (a) if the Company’s actual EBITDA for a calendar year
(as defined below) is 85%-100% of the applicable EBITDA Target, then the Annual
Bonus Pool will equal 7.5% of Actual EBITDA; (b) if Actual EBITDA is less than
85% of the applicable EBITDA Target, then the Annual Bonus Pool will be zero and
no bonuses (including the Annual Bonus for which Executive is eligible) will be
paid; and (c) if Actual EBITDA exceeds the applicable EBITDA Target, then the
Annual Bonus Pool will equal 7.5% of that portion of the Actual EBITDA equaling
the EBITDA Target, and 15% of that portion of the Actual EBITDA exceeding the
EBITDA Target. Payments under the Annual Bonus Pool, including Executive’s
Annual Bonus, will be payable only if (i) budgeted working capital and capital
expenditure targets and thresholds approved by the Board in the Company’s annual
budget or on or prior to the conclusion of the first quarter of each fiscal
year are met, and (ii) an audit of the Company’s financial statements has been
performed and establishes that Executive (and any other participants in the
Annual Bonus Pool) is eligible to receive such payments. In addition, the
Annual Bonus Pool for fiscal year 2010 shall be prorated based on a percentage
determined by (1) the number of days in fiscal year 2010 from the date of
this Agreement through the end of fiscal year 2010 divided by (2) the
number of days during fiscal year 2010. The Company’s payment of the
Annual Bonus, if any, will be subject to standard deductions and withholdings by
the Company. As used herein, “Actual EBITDA” shall mean,
for any 12-month fiscal year period, an amount equal to the sum of the amounts
for such period of (a) net income, plus (b) interest expense, plus
(c) provisions for taxes based on income, plus (d) total depreciation
expense, plus (e) total amortization expense, plus (f) any management
fees payable to Blackstreet Capital Management, LLC.
3.3
In addition to Base Salary and the Annual
Bonus payable as above provided, Executive shall be entitled during the
Employment Period to participate in all current incentive, savings, and
retirement plans, practices, policies and programs made available from time to
time to other management-level employees of the Company and its
subsidiaries.
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3.4
Executive and Executive’s qualified family
members, as the case may be, shall be eligible to participate in, and shall
receive all benefits under, the welfare benefit plans, practices, policies and
programs (specifically including but not limited to health insurance benefits)
made available from time to time to other management-level employees of the
Company and its subsidiaries.
3.5
During the Employment Period, Executive shall
be entitled to receive prompt reimbursement for all reasonable expenses incurred
by Executive in connection with the Business of the Company in accordance with
the applicable policies, practices and procedures of the Company and its
subsidiaries.
3.6
During the Employment Period, Executive shall
be entitled to four weeks of paid vacation per year, provided that any vacation
not used in a calendar year shall be permanently lost and not carried over any
subsequent calendar year.
3.7
Executive shall report to the Chairman of the
Board (as elected by the shareholders of the Company), and any change in the
Chairman shall not constitute Good Reason.
4.
Inventions.
4.1
Executive agrees that any Invention (as
defined below) shall be the sole and exclusive property of the Company, and
further agrees to: (a) promptly and fully inform the Company in writing of
any such Inventions; (b) assign to the Company all of Executive’s rights in and
to such Inventions, and to applications for patents and/or copyright
registrations and to patents and/or copyright registrations granted upon such
Inventions in the United States or in any foreign country; and (c) promptly
acknowledge and deliver to the Company, without charge to the Company but at the
Company’s expense, such written instruments and do such other acts as may be
necessary, in the reasonable opinion of the Company, to obtain and maintain
patents and/or copyright registrations and to vest the entire rights, interest
in and title thereto in the Company.
4.2
Executive and the Company understand that the
provisions of this Agreement requiring assignment of Inventions to the Company
will not apply to any particular Invention that: (a) Executive develops
entirely on his own time, completely outside of Executive’s working hours; and
(b) Executive develops without using Company equipment, supplies, facilities or
trade-secret or Confidential Information (as defined below); and (c) does not
result from any work performed by Executive for the Company; and (d) does not,
at the time of conception or reduction to practice, directly relate to the
Company’s Business or to its actual or demonstrably anticipated research or
development. Any such Invention meeting all of the criteria set forth in
clauses (a) through (d) above will be owned entirely by Executive, even if
developed by Executive during the term of this Agreement or otherwise during the
time period of his employment with the Company. Finally, Executive agrees
and covenants that he will not individually file any patent applications
relating to Inventions without first obtaining an express release from a duly
authorized Company representative.
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4.3
For purposes of this Agreement, the term
“Inventions” means all
discoveries, improvements, inventions, ideas and works of authorship, whether
patentable or copyrightable, conceived or made by Executive either solely or
jointly with others, and relating to any consultation, work or services
performed by Executive with, for on behalf of or in conjunction with the Company
or based on or derived from Confidential Information.
5.
Confidential
Information.
5.1
Executive will hold all Confidential
Information (as defined below) in the strictest confidence and never use,
disclose or publish any Confidential Information without the prior express
written permission obtained from a representative duly authorized by the
Board. Executive agrees to maintain control over any Confidential
Information obtained prior to or during the term of this Agreement, and restrict
access thereto to the Company’s employees, agents or other associated parties
who have a need to use such Confidential Information for its intended
purpose.
5.2
Promptly upon the Company’s written request,
all records and any compositions, articles, devices and other items which
disclose or embody Confidential Information, including all copies or specimens
thereof in Executive’s possession, whether prepared or made by Executive or
others, will be destroyed by Executive and Executive will certify in writing to
the Company that he has destroyed all Confidential Information and embodiments
thereof as required under this Agreement.
5.3
For purposes of this Agreement, the term
“Confidential
Information” shall mean all information developed by Executive as a
result of his work with, for, on behalf of or in conjunction with the Company
and any information relating to the Company’s processes and products, including
information relating to research, development, manufacturing, know-how,
formulae, product ideas, inventions, trade secrets, patents, patent
applications, systems, products, programs and techniques and any secret,
proprietary or confidential information, knowledge or data of the Company,
except such information that was developed by Executive prior to his employment
by the Company. All information disclosed to Executive or to which
Executive obtains access, whether originated by Executive or by others, which is
treated by the Company as “Confidential Information,” or which Executive has a
reasonable basis to believe is “Confidential Information,” will be presumed to
be “Confidential Information” for purposes of this
Agreement. Notwithstanding the foregoing, the term “Confidential
Information” will not apply to information which (i) Executive can establish by
documentation was known to Executive prior to its receipt by Executive from the
Company, (ii) is lawfully disclosed to Executive by a third party not deriving
such information from the Company, (iii) is presently in the public domain or
becomes a part of the public domain through no fault of Executive, or (iv) is
required to be disclosed pursuant to applicable law, rule, regulation, or court
or administrative order; provided, however, that Executive shall take reasonable
steps to obtain confidential treatment for such items and shall promptly advise
the Company of Executive’s notice of any such requirement in order to permit the
Company to obtain such confidential treatment on its own behalf.
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6.
No Solicitation
of Customers or Employees. Executive acknowledges that the Company
has invested substantial time, effort and expense in compiling its confidential,
proprietary and trade secret information and in assembling its present staff of
personnel. In order to protect the business value of the Company’s
confidential, proprietary and trade secret information, during Executive’s
employment with the Company and for three years immediately following the
termination of that employment with the Company, Executive agrees: (a)
that all information regarding customers and prospective customers of the
Company, of which Executive learns during his employment with the Company,
constitutes “Confidential Information” of the Company; (b) not to, directly
or indirectly, induce or solicit any of the Company’s employees (or employees of
subsidiaries) to leave their employment with the Company or any subsidiaries;
and (c) that he shall not be employed, hired, engaged or otherwise retained
(as an employee, consultant or in any other capacity) by WERCS, a Wyoming
corporation, or any of its past or present officers, directors or shareholders,
or any entity owned or controlled by or affiliated with (directly or
indirectly) any of the foregoing without the unanimous prior written
consent of the Board.
7.
Termination and
Effect. This Agreement will begin on the date first written above
and shall continue until the three-year anniversary of such date.
Nevertheless, Executive’s employment under this Agreement may be earlier
terminated in any of the followings ways: (a) immediately (and
automatically) upon Executive’s death; (b) by the Company upon not less than 14
days prior written notice to Executive of the Company’s desire to terminate this
Agreement as a result of Executive’s incapacity due to physical or mental
illness or injury resulting in Executive’s absence from his full-time duties
hereunder for four consecutive weeks, subject to Executive’s right to cure (no
more than two times per calendar year) during the 14-day period; (c) by the
Company immediately for Good Cause; (d) by the Company upon not less than 14
days prior written notice to Executive for any reason or no reason; (e) by
Executive immediately for Good Reason; or (f) by Executive upon not less than 60
days prior written notice to the Company for any reason or no
reason.
8.
Effects of
Termination. Following any termination of Executive’s employment
under this Agreement, all compensation and benefits provided to Executive under
this Agreement shall cease to accrue as of the date of such termination (with
Executive entitled to all Base Salary and benefits hereunder accrued through the
effective date of termination), except as set forth in the paragraphs
below.
8.1
In the case of a termination arising under
Section 7(a) from Executive’s death or under Section 7(b) from Executive’s
incapacity, the Company shall, for a period of one month following such death,
pay to the estate of Executive an amount equal to Executive’s monthly payment of
Base Salary and continue the welfare benefit programs contemplated under Section
3.4 above, including paying all premiums for coverage for Executive’s dependent
family members under all health, hospitalization, disability, dental, life and
other insurance plans that the Company maintained at the time of Executive’s
death.
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8.2
In the case of a termination arising under
Section 7(d) from the Company’s termination without Good Cause, or under Section
7(e) from Executive’s termination with Good Reason, then, subject in all cases
to Executive’s execution and delivery to the Company of a release and waiver of
claims in customary and negotiated form, the Company shall: (a) pay
Executive severance pay in the form of continuation of Executive’s then-current
Base Salary, less standard deductions and withholdings, for a period of 12
months from the effective date of Executive’s termination of employment with
Company, with such payments to be made at the same time as the Base Salary
otherwise would have been payable had Executive not been terminated; and (b) if
Executive elects continued coverage under COBRA, reimburse Executive for his
health insurance premiums (for both Executive and his family) for a period of 12
months from the effective date of Executive’s termination of employment with
Company, to the extent that the Company was paying such premiums at the time of
termination.
8.3
In the case of a termination arising under
Section 7(c) from the Company’s termination with Good Cause or under
Section 7(f) from the resignation of the Executive, then (a) no severance or
continued benefits shall be due to Executive and (b), if there are any damages
to the Company arising by virtue of the events, actions or omissions
constituting Good Cause, then the Company shall be entitled to offset the amount
of any such damages against any amounts owed to Executive under this Section
8.
9.
Return of
Company Property. All records, designs, patents, business plans,
financial statements, manuals, memoranda, lists, and other property delivered to
or compiled by Executive by or on behalf of the Company (or its subsidiaries or
other affiliates) or its representatives, vendors, or customers that pertain to
the Business of the Company shall be and remain the property of the Company and
be subject at all times to its discretion and control. Likewise, all
correspondence, reports, records, charts, advertising materials, and other
similar data pertaining to the Business, activities, or future plans of the
Company. Any such information or data that is collected by or in the
possession of Executive shall be delivered promptly to the Company upon
termination of Executive’s employment.
10.
Non-Competition
Covenant.
10.1
In consideration of the various benefits
provided by the Company to Executive under this Agreement, Executive agrees to
be bound by the restrictive covenant set forth in this Section. In this
regard, Executive recognizes and acknowledges the competitive and proprietary
nature of the Business. Accordingly, Executive agrees that, during the
applicable Restricted Period (as defined below), Executive shall not, without
the prior written consent of the Company (which the Company may withhold or
condition in its sole and absolute discretion), for himself or on behalf of any
other person or entity, directly or indirectly, either as principal, agent,
shareholder, lender, consultant, officer, director, employee, agent,
representative or in any other capacity, own, manage, operate or control, or be
concerned, connected or employed by, or otherwise associate in any manner with,
or engage in or have any financial interest in, any enterprise engaging in the
Restricted Business (as defined below) anywhere in the Restricted Territory (as
defined below).
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10.2
Nothing contained in this Agreement shall
preclude Executive from purchasing or owning common stock or equity in any
company engaging in the Restricted Business if such stock is publicly traded and
Executive’s holdings therein do not exceed one percent of the issued and
outstanding capital stock of such company. If any part of this Section
should be determined by a court of competent jurisdiction to be unreasonable in
duration, geographic area, or scope, then this Section is intended to and shall
extend only for such period of time, in such geographic area and with respect to
such activity as is determined by such court to be reasonable.
10.3
For purposes of this Agreement: (a)
“Restricted Period”
means the period commencing on the date of this Agreement and ending, as
applicable, on either (i) the three-year anniversary of the expiration or
termination of this Agreement (except for any termination covered in the
following clause (ii)), or (ii) the two-year anniversary of any termination of
this Agreement occurring without Good Cause or with Good Reason under Section
7(c) or 7(e), respectively; (b) “Restricted Business” means
the Business of the Company (including its subsidiaries) as conducted as of the
date of expiration or termination of this Agreement (and as previously conducted
within the two years prior to the date of such expiration or termination or
proposed to be conducted as of the date of such expiration or termination),
including any substantially similar business that is competitive with the
Business; and (c) “Restricted
Territory” means anywhere in the United States where the Company,
directly or indirectly through any of its subsidiaries, conducts the Business as
of the date of expiration or termination of this Agreement, including
anywhere the Company proposes to conduct the Business within six months of the
date of such expiration or termination.
11.
Indemnification.
In the event Executive is made a party to any threatened, pending or completed
action, suit, or proceeding, whether civil, criminal, administrative or
investigative (other than an action directly by the Company against Executive),
by reason of or in connection with the fact that Executive is or was performing
services to the Company under this Agreement or prior to this Agreement, then
the Company shall indemnify Executive against all expenses (including reasonable
attorneys’ fees), judgments, fines and amounts paid in settlement, as actually
and reasonably incurred by Executive in connection therewith to the maximum
extent permitted by applicable law. In the event that both Executive and
the Company are made a party to the same third-party action, complaint, suit or
proceeding, the Company agrees to engage competent legal representation, and
Executive agrees to use the same representation, provided that if counsel
selected by the Company shall have a conflict of interest that prevents such
counsel from representing Executive, Executive may engage separate counsel and
the Company shall pay all reasonable attorneys’ fees of such separate
counsel. To the maximum extent permitted by law, Executive shall not be
entitled to indemnification or expense advances under this Agreement in any case
where he has exhibited gross negligence or willful misconduct, or performed
criminal or fraudulent acts; and the Company may withhold expense advances if it
reasonably determines that Executive is not entitled to indemnification
hereunder because of gross negligence or willful misconduct, or the performance
of criminal or fraudulent acts.
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12.
Parachute
Payments.
If any payment or benefit Executive would receive from the Company pursuant to
or in connection with a “Change in Control” as defined below (any “Payment”) would (i) constitute a
“parachute payment” within the meaning of Code §280G, and (ii) but for this
sentence, be subject to the excise tax imposed by Code §4999 (the “Excise Tax”), then such Payment shall
be adjusted to equal to the Reduced Amount. The “Reduced Amount” shall be
either (x) the largest portion of the Payment (prior to adjustment) that would
result in no portion of the Payment being subject to the Excise Tax or (y) the
largest portion of the Payment (prior to adjustment), which, after taking
into account all applicable federal, state and local employment taxes, income
taxes and the Excise Tax (all computed at the highest applicable marginal rate),
results in Executive’s receipt, on an after-tax basis, of the greater amount of the Payment (than that calculated under clause (x)
above) notwithstanding that all or some portion of the Payment may be subject to
the Excise Tax. If a reduction in payments or benefits constituting
“parachute payments” is necessary so that the Payment equals the Reduced Amount,
reduction shall occur in the following order unless Executive elects, in
writing, a different order (provided, however, that such election shall be
subject to the Company’s approval if made on or after the effective date of the
event that triggers the Payment): reduction of cash payments; cancellation
of accelerated vesting of stock options (if any); and reduction of employee
benefits. In the event that acceleration of vesting of the stock options
is to be reduced, such acceleration of vesting shall be cancelled in the reverse
order of the date of grant of Executive’s stock options (i.e., the earliest
granted stock option will be cancelled last) unless Executive elects, in
writing, a different order for cancellation. Notwithstanding anything to
the contrary herein, Executive shall be responsible for any costs and expenses
(whether or not incurred by the Company) in connection with any reductions made
(or the determination thereof) pursuant to this Section 12. For purposes
of this Section, “Change in Control” shall have the meaning (or any
corresponding meaning) contained in the Treasury Regulations promulgated under
Code §280G.
13.
No Conflicting
Agreements.
Executive represents and warrants to the Company that the execution of this
Agreement by Executive and Executive’s employment by the Company, and the
performance of Executive’s duties hereunder, will not violate or be a breach of
any agreement with any former employer, client or any other person, firm or
entity to which Executive is a party. Executive also represents and
warrants that except for his affiliation with WCR, LLC, a Delaware limited
liability company, he is not affiliated in any manner (whether as a stockholder,
member, partner, manager, director, officer, employee or otherwise) with
any person or entity that has any business relationship with the Company.
Furthermore, Executive agrees to indemnify the Company from and against any and
all losses, liabilities, damages and claims, including but not limited to
reasonable attorneys’ fees and costs and expenses of investigation, arising from
any third-party claim made against the Company and based upon or arising out of
any non-competition or confidentiality agreement between or among Executive and
any such third party.
14.
Assignment;
Binding Effect. Executive understands that the Company is employing
him on the basis of his personal qualifications, experience and skills.
Therefore, Executive agrees that he cannot assign all or any portion of
Executive’s obligations of performance under this Agreement. Subject to
the preceding two sentences, this Agreement shall be binding upon, inure to the
benefit of and be enforceable by the parties hereto and their respective heirs,
legal representatives, and permitted successors and assigns.
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15.
Complete
Agreement. This Agreement is not a promise of future employment.
Except as specifically provided herein, Executive has received no oral
representations, and has no other understandings or agreements with the Company
(oral or written) or any of its officers, directors or representatives covering
the same subject matter as this Agreement. This written Agreement is the
final, complete and exclusive statement and expression of the agreement between
the Company and Executive pertaining to Executive’s employment. This
written Agreement may not be later modified except in a writing signed by a duly
authorized officer of the Company and Executive, and no term of this Agreement
may be waived except by a writing signed by the party waiving the benefit of
such term. This Agreement hereby supersedes any other employment
agreements or understandings, written or oral, between the Company and
Executive.
16.
Notice.
Whenever any notice is required hereunder, it shall be given in writing
addressed as follows:
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If to the
Company:
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00000
“X” Xxxxxx, Xxxxx 000
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Xxxxx,
XX 00000
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Attention:
Chief Financial Officer and
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Chairman
of the Board
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With a copy
to:
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Xxxxxx
Xxxxxxx Xxxxxx & Brand, LLP
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3300
Xxxxx Fargo Center
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00
Xxxxx Xxxxxxx Xxxxxx
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Xxxxxxxxxxx,
XX 00000
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Attention:
Xxxx X. Xxxxxxxxxx
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If to
Executive:
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Xxxx
Xxxxxxxx
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00000
Xxxxxxxxx Xxxxxx
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Xxxxx,
XX 00000
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Notice shall be deemed given and
effective on the earlier of three days after the deposit in the U.S. mail of a
writing addressed as above and sent first-class mail, certified, return receipt
requested, or when actually received. Either party may change the address
for notice by notifying the other party of such change in accordance with this
Section.
17.
Severability. If any portion of
this Agreement is held invalid or inoperative, the other portions of this
Agreement shall be deemed valid and operative and, so far as is reasonable and
possible, effect shall be given to the intent manifested by the portion held
invalid or inoperative.
18.
Dispute
Resolution.
18.1
To the greatest extent possible, the parties will endeavor to resolve any
disputes relating to the Agreement through amicable negotiations. Failing
an amicable settlement, any controversy, claim or dispute arising under or
relating to this Agreement, including the existence, validity, interpretation,
performance, termination or breach of this Agreement, will finally be settled by
binding arbitration before a single arbitrator (the “Arbitration Tribunal”) which
will be jointly appointed by the parties. The Arbitration Tribunal shall
self-administer the arbitration proceedings utilizing the Commercial Rules of
the American Arbitration Association (“AAA”); provided, however, the
AAA shall not be involved in administration of the arbitration. The
arbitrator must be a retired judge of a state or federal court of the United
States or a licensed lawyer with at least 15 years of corporate or commercial
law experience. If the parties cannot agree on an arbitrator, either party
may request a court of competent jurisdiction to appoint an arbitrator, which
appointment will be final.
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18.2
The arbitration will be held in Wilmington, Delaware. Each party
will have discovery rights as provided by the Federal Rules of Civil Procedure
within the limits imposed by the arbitrator; provided, however, that all such
discovery will be commenced and concluded within 60 days of the selection of the
arbitrator. It is the intent of the parties that any arbitration will be
concluded as quickly as reasonably practicable. Once commenced, the
hearing on the disputed matters will be held four days a week until concluded,
with each hearing date to begin at 9:00 a.m. and to conclude at 5:00 p.m.
The arbitrator will use all reasonable efforts to issue the final written report
containing award or awards within a period of five business days after closure
of the proceedings. Failure of the arbitrator to meet the time limits of
this Section will not be a basis for challenging the award. The
Arbitration Tribunal will not have the authority to award punitive damages to
either party. Each party will bear its own expenses, but the parties will
share equally the expenses of the Arbitration Tribunal. The Arbitration
Tribunal shall award attorneys’ fees and other related costs payable by the
losing party to the successful party as it deems equitable. This Agreement
will be enforceable, and any arbitration award will be final and non-appealable,
and judgment thereon may be entered in any court of competent
jurisdiction. Notwithstanding the foregoing, claims for injunctive relief
may be brought in a state or federal court in the state court in
Delaware.
19.
Equitable
Relief. Executive acknowledges and agrees that it would be
difficult to fully compensate the Company for damages resulting from the breach
or threatened breach of the covenants contained in Sections 4, 5, 6 and 10 of
this Agreement, and that any such breach would cause the Company irreparable
harm. Accordingly, the Company will be entitled to seek injunctive relief,
including but not limited to temporary restraining orders, preliminary
injunctions and permanent injunctions, to enforce the terms thereof, without the
need to demonstrate irreparable harm or post any bond. This right to
injunctive relief will not, however, diminish any of the Company’s other legal
rights hereunder or at law.
20.
Governing
Law. This Agreement shall in all respects be construed
according to the laws of the State of Delaware, notwithstanding the
conflicts-of-law provisions of such state.
11
21. WAIVER OF
JURY TRIAL. EACH
OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER OR UNDER
ANY OF THE OTHER DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS
AGREEMENT. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A
MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY
RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL
CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH
PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER
WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER
IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 21
AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
HERETO. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.
22. Further
Assurances. Each party shall, without further consideration,
execute such additional documents as may be reasonably required in order to
carry out the purpose and intent of this Agreement.
23. Counterparts and
Delivery. This Agreement may be executed in counterparts, each
of which shall be deemed an original and all of which together shall constitute
but one and the same instrument. Counterpart signatures delivered by
facsimile or other means of electronic transmission shall be valid and binding
to the same as signatures delivered in original.
* * * * *
12
In
Witness Whereof, the parties hereto have executed this Agreement as of
the date first above written.
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COMPANY:
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EXECUTIVE:
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By:
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Name:
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Xxxx
Xxxxxxxx
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Its:
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Signature
Page to Employment Agreement
