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EXHIBIT 10.1
MANAGEMENT SERVICES AGREEMENT
THIS MANAGEMENT SERVICES AGREEMENT ("AGREEMENT") is made and entered
into effective as of the 1st day of July, 2000 (the "EFFECTIVE DATE"), by and
between JCM Partners, LLC, a Delaware limited liability company (the "COMPANY"),
and JCIV, LLC, a California Limited Liability company ("EXECUTIVE").
In consideration of the promises herein made and on the terms and
subject to the conditions herein contained, the Company and Executive hereby
agree as follows:
1. Engagement. The Company hereby retains Executive for the period
commencing on the Effective Date and continuing through April 30, 2001, subject
to termination as provided under Section 4 below. Executive accepts such
engagement.
2. Duties.
(a) Executive will employ Xxxx Xxxxxxxx IV ("XXXXXXXX") to act as
the Chief Executive Officer and President of the Company and cause Xxxxxxxx to
report directly to the Company's Board of Directors ("BOARD"). Xxxxxxxx will
have the day-to-day responsibility for the management and direction of the
Company as well as such other duties and responsibilities commensurate with a
chief executive officer and president.
(b) Xxxxxxxx will perform his duties in conformity with the
reasonable and appropriate directions of the Board. Xxxxxxxx will devote
approximately ninety percent (90%) of his working time, attention and energies
to the business and affairs of the Company.
(c) Xxxxxxxx will, subject to reasonable travel requirements on
behalf of the Company, be based at the Company's offices in Concord, California.
3. Compensation.
(a) Fee. The Company will pay to Executive a fee (the "FEE") at
the monthly rate of Forty-One Thousand Six Hundred Sixty-Six Dollars ($41,666)
per month, payable semi-monthly on the 15th and last day of each month. The
Company will not withhold any taxes from such Fee.
(b) Benefits. Executive will be responsible for payment of
Xxxxxxxx'x withholding obligations and health benefits.
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(c) Directors and Officers Insurance; Indemnity. The Company will
maintain $5,000,000 of directors and officers insurance coverage and $5,000,000
of liability insurance. The Company will name Executive as an additional
insured. Subject to the exceptions specified in the Company's form of
Indemnification Agreement, the Company will indemnify, defend and hold Executive
and Xxxxxxxx harmless against any claims, costs (including legal fees) or
liabilities respecting Executive's or Xxxxxxxx'x actions on behalf of the
Company.
(d) Reimbursement. The Company will reimburse Executive for its
reasonable Company-related expenses.
4. Termination of Employment.
(a) Termination at Will by Either Party. Subject to the payment
to Executive of the applicable termination payment as provided in Section 4(e)
below, if any, either party may terminate this Agreement, for any reason, with
or without Cause or Good Reason (as defined at Section 4(c) and (d) below), upon
written notice to the other.
(b) Death or Permanent Disability of Xxxxxxxx. This Agreement
will terminate automatically upon the death or permanent disability of Xxxxxxxx.
Xxxxxxxx will be deemed permanently disabled for the purpose of this Agreement
if in the good faith determination of the Board, Xxxxxxxx has become physically
or mentally incapable of performing his duties hereunder for a continuous period
of 90 days, in which event Xxxxxxxx will be deemed permanently disabled upon the
expiration of such 90-day period. In the event of a termination of this
Agreement due to the death or permanent disability of Xxxxxxxx, Executive will
be entitled only to the Fee earned through the date of such death or permanent
disability in accordance with Section 3, but to no other termination payment.
(c) Executive's Termination for Cause. The Board will have the
right to terminate this Agreement for "Cause" at any time effective upon its
giving written notice to Executive specifying with particularity the facts and
circumstances constituting such Cause. For such purposes, "CAUSE" means the
occurrence of one or more of the following: (i) conviction of Xxxxxxxx of any
crime constituting either a felony or embezzlement, fraud or theft with respect
to the property of the Company; (ii) habitual alcohol or drug abuse by Xxxxxxxx
which adversely affects his job performance; (iii) the intentional breach of
fiduciary duty to the Company; (iv) gross neglect or bad faith misconduct in the
performance of Xxxxxxxx'x duties hereunder which causes material loss, damage or
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injury to or otherwise materially endangers the property, reputation or
employees of the Company; (vi) failure or refusal to perform the duties required
by this Agreement and as may be assigned to Xxxxxxxx; provided such duties are
commensurate with Xxxxxxxx'x position; (vii) commission of any other action with
the intent to materially harm or injure the Company; or (viii) the breach of any
material provision of this Agreement by Executive.
(d) Executive's Resignation with Good Reason. Executive will have
the right to terminate this Agreement with Good Reason at any time effective
upon thirty (30) days written notice to the Company of the facts and
circumstances constituting Good Reason in order to provide the Company an
opportunity to remedy the facts and circumstances constituting such Good Reason.
For purposes of this Section 4(d), "GOOD REASON" will mean (i) any reduction by
the Company in Executive's compensation payable hereunder; (ii) a material
diminution or material adverse change in Xxxxxxxx'x powers, duties, or reporting
responsibilities; (iii) the assignment to Xxxxxxxx of duties that are
inconsistent with his position; (iv) a requirement that Xxxxxxxx relocate his
residence; or (v) the sale of the Company or a change in the majority of the
current managers on the Board.
(e) Compensation Upon Termination.
(i) In the event the Company terminates this Agreement for
Cause or Executive voluntarily terminates this Agreement without Good Reason,
Executive will be entitled to only: (A) the compensation provided for in Section
3(a) hereof for the period of time ending with the date of termination; and (B)
reimbursement for such expenses as Executive may have properly incurred on
behalf of the Company as provided in Section 3(d) above prior to the date of
termination.
(ii) In the event the Company terminates this Agreement
without Cause or Executive terminates this Agreement with Good Reason, Company
further will pay Executive Forty-One Thousand Six Hundred Sixty-Six Dollars
($41,666) for each month or partial month remaining in the term of this
Agreement up to a maximum termination payment of Two Hundred Fifty Thousand
Dollars ($250,000).
5. Assignment and Transfer.
(a) Company. This Agreement may not be assigned by the Company to
any purchaser of all or substantially all of the Company's business or assets
without the written consent of Executive.
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(b) Executive. Executive's rights and obligations under this
Agreement will not be transferable by Executive by assignment or otherwise,
except to any entity controlled by either Executive or Xxxxxxxx. Any purported
assignment, transfer or delegation thereof will be void.
6. Confidentiality. Executive agrees that all trade secrets,
confidential or proprietary information with respect to the activities and
businesses of the Company including, without limitation, personnel information,
business plans, marketing plans, forecasts, strategies and information which
have been or are learned by Executive in the course of its employment by the
Company (collectively, "PROPRIETARY INFORMATION") will be kept and held in
confidence and trust by Executive. Executive will not use or disclose
Proprietary Information except as necessary in the normal course of the business
of the Company for its sole and exclusive benefit, unless Executive is compelled
so to disclose under process of law, in which case Executive will first notify
the Company promptly after receipt of a demand to so disclose. Executive agrees
and acknowledges that it will cause Xxxxxxxx to comply with the terms of Section
6 of this Agreement.
7. Arbitration. Any dispute hereunder will be submitted to binding
arbitration before a single arbitrator in accordance with the Employment Dispute
Resolution Rules of the American Arbitration Association, provided that: (i) the
arbitrator will be instructed and empowered to take whatever steps to expedite
the arbitration as he or she deems reasonable; (ii) each party will pay fifty
percent (50%) of the fees of the arbitration; (iii) the arbitrator's judgment
will be final and binding upon the parties, except that it may be challenged on
the grounds of fraud or gross misconduct; and (iv) the arbitration will be held
in San Francisco, California. Judgment upon any verdict in arbitration may be
entered in any court of competent jurisdiction. The parties hereby consent to
the jurisdiction of, and proper venue in, the federal and state courts located
in San Francisco, California. The procedures specified in this Section 7 will be
the sole and exclusive procedures for the resolution of disputes and
controversies between the parties arising out of or relating to this Agreement;
provided, however, that a party may seek a preliminary injunction or other
provisional judicial relief if in its judgment such action is necessary to avoid
irreparable damage or to preserve the status quo. Despite such action the
parties will continue to participate in good faith in the procedures specified
in this Section 7.
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8. Independent Contractor. It is the express intention of the parties
that Executive is an independent contractor and neither it nor Xxxxxxxx are
employees of the Company. Executive reserves the right to determine the method,
manner and means by which the services will be performed. Executive shall not be
entitled to employ anyone other than Xxxxxxxx to perform the services provided
by this Agreement, without the express written consent of the Company. Unless
specifically requested by the Company, Executive is not required to perform the
services during a fixed hourly or daily time.
9. Miscellaneous.
(a) Governing Law; Interpretation. This Agreement will be
governed by the substantive laws of the State of California applicable to
contracts entered into and fully performed in such jurisdiction. The headings
and captions of the Sections of this Agreement are for convenience only and in
no way define, limit or extend the scope or intent of this Agreement or any
provision hereof. This Agreement will be construed as a whole, according to its
fair meaning, and not in favor of or against any party, regardless of which
party may have initially drafted certain provisions set forth herein.
(b) Notices. Any notice, request, claim or other communication
required or permitted hereunder will be in writing and will be deemed to have
been duly given if delivered by hand or if sent by Federal Express to Executive
at the address set forth below its signature, or to the Company at its address
as set forth below its signature, or to such other address or addresses as
either party may have furnished to the other in writing in accordance herewith.
(c) Entire Agreement; Amendments. This Agreement constitutes the
final and complete expression of all of the terms of the understanding and
agreement between the parties hereto with respect to the subject matter hereof,
and this Agreement replaces and supersedes any and all prior or contemporaneous
negotiations, communications, understandings, obligations, commitments,
agreements or contracts, whether written or oral, between the parties respecting
the subject matter hereof. This Agreement may not be modified, amended, altered
or supplemented except by means of the execution and delivery of a written
instrument mutually executed by both parties.
(d) Attorneys' Fees. In the event it becomes necessary for any
party to initiate arbitration or any other proceeding to enforce, defend or
construe such party's rights or obligations under this Agreement, the prevailing
party (i.e., the party receiving substantially the benefits or relief sought by
that party), except as provided in clause (ii) of Section 7 of this Agreement,
will be entitled to its
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reasonable costs and expenses, including attorneys' fees, incurred in connection
with such arbitration or proceeding whether or not brought to final judgment.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
JCM PARTNERS, LLC, JCIV, LLC,
a Delaware limited liability company a California limited liability company
By: /s/ XXXXXX X. XXXXXX By: /s/ XXXX XXXXXXXX IV
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Xxxx Xxxxxxxx IV 9/13/00
Its: CHAIRMAN Its: Managing Member
0000 Xxxxxx Xxxxxx, Xxxxx 000 0 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000-0000 Xxxx Xxxxxx, XX 00000
Fax: 000-000-0000 Fax: 000-000-0000
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