EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is entered into as
of __________ ___, 2006, by and between Xxxxxxx Corporation, a Delaware
corporation (the "Company" or "Employer"), and Xxxxx X. Xxxxxxx, a resident
of the State of Tennessee ("Executive").
RECITALS:
WHEREAS, Executive and the Company are entering into this Agreement to
describe the terms of Executive's employment by the Company.
AGREEMENT:
NOW, THEREFORE, for and in consideration of the mutual covenants and
promises contained herein and other good and valuable consideration set
forth hereafter, the receipt and sufficiency of which are hereby
acknowledged, Executive and the Company hereby agree as follows:
Section 1. Effective Time. This Agreement shall become effective upon
the date of this Agreement (the "Agreement Date"). Executive's salary will
remain at One Hundred Fifty Thousand dollars ($150,000) until Seven and a
half Million Dollars ($7,500,000) is raised in the private placement offerings
at that time the salary increase stated herein will occur. Until such time as
this Agreement becomes effective, Executive shall continue in the employ of
Xxxxxxx Tennessee in accordance with the terms and conditions previously
agreed by Executive and Xxxxxxx Tennessee. Without limiting the generality
of the preceding sentence, Xxxxxxx Tennessee shall continue to pay Executive
a base salary of $150,000 per year.
Section 2. Services to be Provided.
(a) Duties and Responsibilities. Executive is hereby employed as the
Chief Executive Officer of the Company. Subject to the direction and
supervision of the Board of Directors of the Company (the "Board of
Directors"), Executive shall perform such duties as are customarily
associated with the office of Chief Executive Officer. Executive's principal
base of operations for the performance of his duties hereunder shall be the
office of the Company located in Morrison, Tennessee.
(b) Appropriate Business Attention. Executive agrees to devote his
appropriate time and attention to the business and affairs of the Company.
Section 3. Compensation. In consideration of the services provided
hereunder by Executive to the Company, the Company, during the Term, shall
pay Executive the compensation and provide to Executive the benefits
described below.
(a) Base Salary. The Company shall pay Executive an annual salary
(the "Base Salary") of Four Hundred Thousand ($400,000) through the first
anniversary of the Agreement date, a Base Salary of Five Hundred Thousand
($500,000) beginning on the day following the first anniversary of the
Agreement Date and continuing through the second anniversary of the
Agreement Date, and a Base Salary of Six Hundred Thousand ($600,000)
beginning the day following the second anniversary of the Agreement Date
and continuing through the end of the Term; provided, however, that until
such time as the Company raises in total $7.5 million or more in one or
more offerings of debt or equity, Executive's Base Salary shall be
$150,000. Executives Base Salary shall be, subject to increase from time to
time in the sole discretion of the Board of Directors or a duly authorized
committee thereof. The Company shall pay the Base Salary in arrears in
equal installments in accordance with the Company's payroll policy in effect
from time to time, but in no event shall the Company pay Executive such
installments less frequently than monthly.
(b) Restricted Stock Award. On October 23, 2006, the Company shall
issue to Executive One Million Two hundred Thousand (1,200,000) restricted
shares of common stock pursuant to a Restricted Stock Agreement in
substantially the form attached hereto as Exhibit A.
(c) Car Allowance. The Company shall pay to Executive a monthly
auto allowance of $650 (or, if less, the actual lease payments paid by
Executive) or Executive shall be permitted to use a company vehicle.
Any purchase option contained in any lease agreement hereunder shall belong
to Executive.
(d) Vacation, Etc. For each calendar year during the Term:
(i) Executive shall be entitled to four weeks of vacation,
prorated for any partial year. Unused vacation time may not be
carried over to any succeeding year.
(ii) Executive shall be entitled to thirty (30) business days of
paid medical leave. For purposes hereof, such leave shall be
available only with respect to injuries or illness that prevent
Executive from performing services hereunder or with respect to
injuries to or illness of Executive's spouse, children or parents.
(iii) Executive shall be entitled to five (5) business days of
paid leave for purposes of attending continuing professional
education programs. The Company shall pay reasonable costs and
expenses for Executive to attend such programs.
(e) Other Benefits. The Company shall include Executive in all
employee benefit plans (such as, by way of example, health insurance plans
and 401(k) plans) as are offered for the general benefit of the Company's
employees, subject to the provisions of such plans as may be in effect from
time to time, and Executive will be entitled to the same holidays as
observed by the Company's employees of similar seniority and responsibilities
in accordance with policies established by the Company from time to time.
(f) Expense Reimbursement. The Company shall reimburse Executive for
all reasonable business expenses actually incurred by Executive in connection
with the performance of Executive's obligations hereunder, subject to policies
of the Company relating to reimbursement, including, without limitation, any
requirement for the itemization of such expenses and submission of receipts
in connection therewith. Without limiting the generality of the foregoing,
Executive, in his discretion, shall be entitled to fly first or business
class on all flights, whether international or domestic, and receive full
reimbursement hereunder. In addition to the foregoing, Executive shall also
be entitled to reimbursement for reasonable costs and expenses (including
reasonable attorneys' fees) related to the preparation and negotiation of
this Agreement.
(g) Taxes. All payments made by the Company under this Agreement
will be subject to withholding of such amounts as is required pursuant to any
applicable law or regulation.
Section 4. Term. The term of this Agreement shall commence as of the
Agreement Date and will continue until October 31, 2011 (the "Term"), unless
earlier terminated pursuant to Section 5 of this Agreement. Thereafter, this
Agreement and Executive's employment by the Company hereunder may be renewed
only upon the written agreement of the Company and Executive.
Section 5. Termination of Employment.
(a) Termination by the Company for Cause. The Company may terminate
Executive's employment at any time for Cause upon written notice to Executive.
Upon such termination, the Company shall have no further obligation to make
payments under this Agreement, other than accrued salary and benefits through
the effective date of termination of employment. For purposes hereof, "Cause"
means any of the following:
(i) Executive's act of fraud, misappropriation, embezzlement, or
dishonesty with respect to the Company;
(ii) indictment of Executive for any crime that is a felony or
involves moral turpitude, fraud, embezzlement or theft;
(iii) Executive's negligence or act of misconduct in the
performance of his duties which is not remedied within thirty
(30) days following receipt of written notice thereof from the
Company; or
(iv) Executive's breach of any other provision of this Agreement
or deviation from any other lawful policy of, or instruction from,
the Company which is not remedied within thirty (30) days
following receipt of written notice thereof from the Company.
(b) Termination Due to Death of Executive. The Company's employment of
Executive shall immediately terminate upon the death of Executive, and the
Company shall thereupon have no further obligation to make payments under
this Agreement, other than accrued salary and benefits through the date of
Executive's death.
(c) Termination Due to Disability of Executive. The Company may
terminate Executive's employment at any time following Executive's
Disability upon written notice to Executive. Likewise, Executive may
terminate his employment at any time following his Disability upon written
notice to the Company. Upon any termination of Executive's employment
hereunder, the Company shall have no further obligation to make payments
under this Agreement, other than (i) accrued salary and benefits through
the effective date of termination of employment, and (ii) a lump sum
payment equal to one year's Base Salary (determined at the time notice of
termination is provided) (the "Severance Payment"). The Severance Payment
shall be made within thirty (30) following termination of Executive's
employment; provided, however, that if at the time of such termination
Executive is a "specified employee" of the Company (as determined under
Section 409A of the Internal Revenue Code of 1986, as amended), the Severance
Payment shall be made six months and one day following termination. For
purposes of this Agreement, "Disability" shall occur if the Company
determines (in accordance with applicable law) that Executive has been
unable, due to physical or mental illness or incapacity, to perform the
essential duties of his employment with reasonable accommodation
for a continuous period of ninety (90) days or an aggregate of one
hundred twenty (120) days during any consecutive 12-month period; provided,
however, that in the event the Company maintains disability insurance
covering Executive, such time periods shall be consistent with the
comparable time periods set forth in the applicable policy(ies).
(d) Termination by Executive for Good Reason. Executive may
terminate his employment with the Company at any time for Good Reason.
Upon any such termination, the Company shall have no further obligation
to make payments under this Agreement, other than (i) accrued salary and
benefits through the effective date of termination of employment, and
(ii) the Severance Payment. The Severance Payment shall be made in
accordance with Section 5(c) above. For purposes of this Agreement,
"Good Reason" means (A) any change in Executive's responsibilities,
status, title or duties that represents a reduction in his responsibilities,
status, title or duties immediately prior thereto or any assignment to
Executive of any additional responsibilities, status, title or duties;
(B) any reduction in Executive's compensation or benefits; or (C) any
material breach by the Company of this Agreement; provided that upon
the occurrence of any of the events described in clauses (A) through (C),
Executive shall provide written notice thereof to the Company, and the
Company shall have thirty (30) days following receipt of such notice within
which to cure such event.
(e) Termination by the Company Other Than for Cause or Upon Death or
Disability. The Company may terminate Executive's employment other than for
Cause or upon Executive's death or Disability upon at least thirty (30) days'
written notice to Executive. Upon any such termination, the Company shall
have no further obligation to make payments under this Agreement, other than
(i) accrued salary and benefits through the effective date of termination of
employment, and (ii) the Severance Payment. The Severance Payment shall be
made in accordance with Section 5(c) above.
(f) Termination by Executive Other Than Upon Disability or for Good
Reason. Executive may voluntarily terminate his employment other than upon
his Disability or for Good Reason upon at least thirty (30) days' written
notice to the Company. Upon any such termination, the Company shall have
no further obligation to make payments under this Agreement, other than
accrued salary and benefits through the effective date of termination of
employment.
Section 6. Confidentiality; Intellectual Work Product.
(a) Confidentiality. Except in connection with Executive's performance
of his duties under this Agreement, Executive shall not disclose any
Confidential Information nor shall Executive use such information for
his direct or indirect benefit, or the direct or indirect benefit of
any third party. Executive's obligation of confidentiality shall not
apply with respect to disclosures of Confidential Information compelled
in any legal, administrative or investigative proceeding before any court,
or any governmental or regulatory authority, agency or commission; provided,
that Executive shall notify the Company thereof and cooperate with the
Company to obtain a protective order or other similar determination with
respect to such information. Executive acknowledges that the Confidential
Information is vital, sensitive, confidential and proprietary to the
Company. For purposes of this Agreement, "Confidential Information" means
any information relating to the business or affairs of the Company,
including, without limitation, information relating to: (i) marketing or
distribution data; (ii) business methods, plans and efforts; (iii)
personnel data; (iv) courses of dealings or contracts with actual or
potential customers, vendors, distributors and suppliers; (v) financial
statements; and (vi) servicing methods, equipment, programs, analyses or
profit margins. Failure to xxxx information as confidential or proprietary
will not adversely affect its status as Confidential Information.
(b) Intellectual Work Product.
(i) Executive hereby acknowledges that all writings, documents,
inventions, processes, products, methods, discoveries, computer
programs or instructions (whether in source code, object code
or other form), plans, customer lists, memoranda, tests, research,
designs, specifications, models, data, diagrams, flow charts,
techniques and similar or dissimilar intellectual work product
(whether reduced to a written form or otherwise) that Executive
may make, conceive, discover or develop, either solely or jointly
with any other person, at any time while employed by the Company
(the "Employment Period"), whether or not copyrightable or
patentable, whether conceived or developed during working hours or
at the Company's offices or at any other time or location,
and whether upon the request or suggestion of the Company or
otherwise, that relate to or may in any way be useful in
connection with any business carried on by the Company during
the Employment Period (collectively, the "Intellectual Work
Product") is and will be the Company's sole and exclusive property.
Executive shall promptly and fully disclose to the Company all of
the Intellectual Work Product. Executive acknowledges that all
Intellectual Work Product that is copyrightable will be considered
a work made for hire under United States copyright laws.
(ii) To the extent that any copyrightable Intellectual Work Product
may not be considered a work made for hire under United States
copyright laws, or to the extent that, notwithstanding the provisions
of paragraph (i) of this Section 6(b), Executive retains an interest
in any Intellectual Work Product that is not copyrightable, Executive
hereby irrevocably assigns and transfers to the Company any and all
right, title and interest that Executive may have in and to the
Intellectual Work Product under copyright, patent, trade secret
and trademark law and any other laws providing for the protection
of intellectual or industrial property or similar rights in
perpetuity or for the longest period otherwise permitted by law,
without the necessity of further consideration. The Company shall
have the exclusive right to obtain and hold in its name all
copyrights, patents, trade secrets, trademarks, and other
intellectual or industrial property or similar rights with respect
to the Intellectual Work Product.
Section 7. Indemnification. The Company shall indemnify the Executive
to the fullest extent that would be permitted by applicable law (including a
payment of expenses in advance of final disposition of a proceeding) as in
effect at the time of the subject act or omission, or by the Certificate of
Incorporation or Bylaws of the Company as in effect at such time, or by the
terms of any indemnification agreement between the Company and the Executive,
whichever affords greatest protection to the Executive, and the Executive
shall be entitled to the protection of any insurance policies the Company may
elect to maintain generally for the benefit of its officers or, during the
Executive's service in such capacity, directors (and to the extent the
Company maintains such an insurance policy or policies, in accordance with
its or their terms to the maximum extent of the coverage available for
any company officer or director), against all costs, charges and expenses
whatsoever incurred or sustained by the Executive (including but not limited
to any judgment entered by a court of law) at the time such costs, charges
and expenses are incurred or sustained, in connection with any action, suit
or proceeding to which the Executive may be made a party by reason of his
being or having been an officer or employee of the Company, or serving as
an officer or employee of an affiliate of the Company, at the request of
the Company.
Section 8. Representation by Counsel. Each of the Company and
Executive was represented by counsel in connection with the preparation
and negotiation of this Agreement. Following execution of this Agreement,
counsel for Executive, Xxxxxxxx & Xxx, PLC ("Xxxxxxxx & Xxx"), may become
counsel to the Company. If thereafter there arises a dispute between the
Company and Executive, then regardless of the origin or nature of such
dispute, the Company agrees that Xxxxxxxx & Xxx may represent Executive
in connection therewith and agrees further to waive any conflict related
to Xxxxxxxx & Xxx'x representation of the Company.
Section 9. Miscellaneous.
(a) Entire Agreement; Amendments; Survival. This Agreement contains
the entire understanding of the parties with respect to employment of
Executive by the Company. It merges and supersedes all prior and/or
contemporaneous agreements and understandings between the parties, written
or oral, with respect to its subject matter and there are no restrictions,
agreements, promises, warranties, covenants or undertakings between the
parties with respect to the subject matter hereof other than those expressly
set forth herein. This Agreement may be amended only by a written instrument
duly executed by all parties or their respective heirs, successors, assigns
or legal personal representatives. The provisions of Sections 6 through 9
hereof and any provision(s)s herein related to the Severance Payment shall
survive termination for any reason or expiration of this Agreement for the
period described or referenced in each such Section or, if no period is
described or referenced in such Section, indefinitely.
(b) Assignment. Executive acknowledges that the services to be
rendered by him are unique and personal in nature. Accordingly, Executive
may not assign any of his rights or delegate any of his duties or
obligations under this Agreement. 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.
(c) Disclosure. Executive acknowledges that the Company may
provide a copy of this Agreement or any portion of this Agreement to any
Person with, through or on behalf of which Executive may, directly or
indirectly, breach or threaten to breach any of the provisions of this
Agreement.
(d) Attorneys' Fees. In any action brought hereunder or in
connection with the transactions contemplated herein, the non-prevailing
party shall pay the prevailing party's reasonable attorneys' (and
paralegals') fees and expenses incurred in prosecuting or defending such
action.
(e) Governing Law; Forum; Service of Process. This Agreement shall
be governed by and construed in accordance with the laws of the State of
Tennessee. This Agreement and its subject matter have substantial contacts
with Tennessee, and all actions, suits, or other proceedings with respect
to this Agreement shall be brought only in a court of competent jurisdiction
sitting in Xxxxxxxxxx County, Tennessee, or in the Federal District Court
having jurisdiction over that county. In any such action, suit, or
proceeding, such court shall have personal jurisdiction of all of the
parties hereto, and service of process upon them under any applicable
statutes,laws, and rules shall be deemed valid and good.
(f) Severability. If any provision of this Agreement, or the
application thereof to any person or circumstance, is held by a court
of competent jurisdiction to be invalid, illegal or unenforceable in any
respect in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement
or the application of that provision to any other person or circumstance,
and this Agreement shall then be construed in that jurisdiction as if such
invalid, illegal or unenforceable provision had not been contained in this
Agreement, but only to the extent of such invalidity, illegality or
unenforceability.
(g) Counterparts. This Agreement may be executed in counterparts,
each of which will be deemed to be an original copy of this Agreement and
all of which, when taken together, will be deemed to constitute one and
the same agreement.
(h) Notices. All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be
deemed to have been duly given and received when (a) delivered by hand
(with confirmation of receipt), (b) sent by facsimile with confirmation
of transmission by the transmitting equipment, (c) received by the
addressee, if sent by certified mail, return receipt requested, or (d)
received by the addressee, if sent by a nationally recognized overnight
delivery service, return receipt requested, in each case to the
appropriate addresses or facsimile numbers set forth below each
party's signature hereto (or to such other addresses or facsimile
numbers as a party may designate by notice to the other parties).
(remainder of page intentionally left blank)
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by themselves or their duly authorized representatives. This
Agreement shall be effective as of the time set forth in Section 1 hereof.
EMPLOYEE:
Printed Name: Xxxxx X. Xxxxxxx
Address:
Facsimile No.:
COMPANY:
XXXXXXX CORPORATION
By:
Title:
Address:
Facsimile No.:
