Contract
EXHIBIT 10.12EMPLOYMENT AGREEMENTThis Employment Agreement (this “Agreement”) is entered into as of and effective on the 1st day of November, 2001 (the “Effective Date”) by and between XXXXX X. XXXX (“Employee”) and NEW CENTURY EQUITY HOLDINGS CORP., a Delaware corporation (the “Company”). WITNESSETH:WHEREAS, the Company and Employee desire to enter into an agreement to establish the terms of Employee’s employment with the Company and to set forth each party’s duties and obligations to the other; NOW, THEREFORE, in consideration of the foregoing promises, the mutual agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, this Agreement is entered into to read as follows: ARTICLE IDUTIES1.1 Duties. During the term of this Agreement, the Company agrees to employ Employee as Executive Vice President and Chief Financial Officer of the Company, and Employee agrees to serve the Company in such capacities or in such other capacities (subject to Employee’s termination rights under Section 4.2) as the Board of Directors of and Company may direct, all upon the terms and subject to the conditions set forth in this Agreement. 1.2 Extent of Duties. Employee shall devote all of his business time, energy and skill to the affairs of the Company as the Company, acting through its Board of Directors, shall reasonably deem necessary to discharge Employee’s duties in such capacities. Employee may participate in social, civic, charitable, religious, business, education or professional associations, so long as such participation would not materially detract from Employee’s ability to perform his duties under this Agreement. Employee shall not engage in any other business activity during the term of this Agreement without the prior written consent of the Company, other than the passive management of employee’s personal investments or activities which would not materially detract from Employee’s ability to perform his duties under this Agreement. ARTICLE IITERM OF EMPLOYMENT2.1 General Term of Employment. The term of this Agreement shall commence on the Effective Date and continue for a period of eighteen (18) months. The term of this Agreement shall be automatically extended at the conclusion of each eighteen (18) month period after the Effective Date for an additional eighteen (18) month term unless, at least thirty (30) days prior to the end of the then effective term, the Company shall give Employee written notice of its election to terminate this Agreement as of the end of each effective term. This Agreement is also subject to earlier termination as hereinafter provided. In the event the Agreement is terminated, the Employee is entitled to payment under the applicable provisions of Article IV. |
ARTICLE III COMPENSATION3.1 Annual Base Compensation. As compensation for services rendered under this Agreement, Employee shall be entitled to receive from Company an annual base salary of $192,500 (before standard deductions) during the term of this Agreement. Employee’s base salary, shall be subject to review and adjustment by the Compensation Committee of the Company (the “Compensation Committee”) on an annual basis, provided that any such adjustment shall not result in a reduction in Employee’s annual base salary below $192,500 without Employee’s consent. Employee’s annual base salary shall be payable at regular intervals in accordance with the prevailing practice and policy of the Company. 3.2 Incentive Bonus. As additional compensation for services rendered under this Agreement, the Compensation Committee may, in its sole discretion and without any obligation to do so, declare that Employee shall be entitled to an annual incentive bonus (whether payable in cash, stock, stock rights or other property) as the Compensation Committee shall determine. If any such bonus is declared, the bonus shall be payable in accordance with the terms prescribed by the Compensation Committee. 3.3 Other Benefits. Employee shall, in addition to the compensation provided for in Sections 3.1 and 3.2 above, be entitled to all benefits available to Company executives, including the following: |
| (a) Automobile Allowance. An automobile to be chosen by the Employee, replaceable every two years and complete payment of all lease, operating, insurance and maintenance expenses attendant thereto. Upon termination of the Company’s obligation to provide this benefit, Employee shall have an option, exercisable within 90 days of such termination, to purchase such automobile at its net book value as shown upon the Company’s records (or the leasing company records) as of the date of termination. |
| (b) Country Club Membership. Payment in full of membership fees and dues to a country club of the Employee’s choice in the area of his employment together with payment or reimbursement of all charges incurred at such club relating to entertainment of business guests. Upon termination of this Agreement under Section 4.1, 4.2 or 4.6 hereof, such country club membership shall be transferred to Employee without further consideration. |
| (c) Health Club Membership. Payment in full of membership fees and dues in a lunch or health club of the Employee’s choice, in the area of his employment together with payment or reimbursement of all charges incurred at such club relating to entertainment of business guests. |
| (d) Medical, Health and Disability Benefits. Employee shall be entitled to receive all of the medical, health and disability benefits that may, from time to time, be provided by the Company to its executive officers. |
| (e) Other Benefits. Employee shall, also be entitled to receive any other benefits provided by the Company to all employees of the Company as a group, or all executive officers of the Company as a group, including any profit sharing, 401(k), deferred compensation or retirement benefits. |
| (f) Vacation Pay. Employee shall be entitled to an annual vacation as determined in accordance with the prevailing practice and policy of the Company. |
| (g) Holidays. Employee shall be entitled to holidays in accordance with the prevailing practice and policy of the Company. |
| (h) Reimbursement of Expenses. The Company shall reimburse Employee for all expenses reasonably incurred by Employee on behalf of the Company in accordance with the prevailing practice and policy of the Company, including those necessary to maintain his professional licenses. |
| (i) Taxes Payable on Benefits. Not later than 45 days after the conclusion of each calendar year during which any term of this Agreement shall be effective, Company shall pay to Employee an amount of money equal to the federal, state and local taxes payable by Employee on account of the treatment of any benefits hereunder (including this subparagraph (i)) as Employee’s imputed or “gross income” (as defined by the Internal Revenue Code, as amended) during such calendar year. |
For purposes of this Agreement, “good reason” shall mean the occurrence of any of the following events: |
| (a) Removal from the offices Employee holds on the date of this Agreement or a material reduction in Employee’s authority or responsibility, including, without limitation, involuntary removal from the Board of Directors, but not including termination of Employee for “cause,” as defined below; |
| (b) A reduction in the Employee’s then effective base salary under Section 3.1; or |
| (c) A requirement that Employee relocate more than, thirty-five (35) miles from the Company’s current corporate headquarters; or |
| (d) The Company otherwise commits a material breach of this Agreement. |
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4.3 Termination by the Company for Cause. The Company may terminate this Agreement at any time if such termination is for cause, (as defined below), by delivering to Employee written notice describing the cause of termination thirty (30) days before the effective date of such termination and by granting Employee at least thirty (30) days to cure the cause. In the event the employment of Employee is terminated for “cause,” Employee shall be entitled only to the base salary earned pro rata to the date of such termination with no entitlement to any base salary continuation payments or benefits continuation (except as specifically provided by the terms of an employee benefit plan of the Company). Except as otherwise provided in this Agreement, the determination of whether Employee shall be terminated for cause, shall be made by the Board of Directors of the Company, in the reasonable exercise of its business judgment, and shall be limited to the occurrence of the following events: |
| (a) Conviction of or a plea of nolo contendere to the charge of a felony (which, through lapse of time or otherwise, is not subject to appeal); |
| (b) Willful refusal without proper legal cause to perform, or negligence in performing, Employee’s duties and responsibilities; |
| (c) Material breach of fiduciary duty to the Company through the misappropriation of Company funds or property; or |
| (d) The unauthorized absence of Employee from work (other than for sick leave or disability) for a period of thirty (30) working days or more during any period of forty-five (45) working days during the term of this Agreement. |
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4.4 Termination Upon Death or Permanent Disability. In the event that Employee dies, this Agreement shall terminate upon Employee’s death. Likewise, if Employee becomes unable to perform the essential functions of the position, with or without reasonable accommodation, on account of illness, disability or other reason whatsoever for a period of more than six (6) consecutive or nonconsecutive months in any twelve (12)-month period, this Agreement shall terminate effective upon such incapacity, and Employee (or his legal representatives) shall be entitled only to the base salary earned pro rata to the date of such termination with no entitlement to any base salary continuation payments or benefits continuation (except as specifically provided by the terms of an employee benefit plan of the Company). 4.5 Voluntary Termination by Employee. Employee may terminate this Agreement at any time upon delivering thirty (30) days’ written notice of resignation to the Company. In the event of such voluntary termination other than for “good reason” (as defined above), Employee shall be entitled to his base salary earned pro rata to the date of his resignation, but no base salary continuation payments or benefits continuation (except as specifically provided by the terms of an employee benefit plan of the Company). On or after the date the Company receives notice of Employee’s resignation, the Company may, at its option, pay Employee his base salary through the effective date of his resignation and terminate his employment immediately. 4.6 Termination following Change of Control. |
| (a) Notwithstanding anything to the contrary contained herein, should Employee at any time within 24 months of the occurrence of a “change of control” (as defined below), cease to be an employee of the Company (or its successor), by reason of (i) termination by the Company (or its successor) other than for “cause”, (following a change of control, “cause” shall be limited to the conviction of or a plea of nolo contendere to the charge of a felony which, through lapse of time or otherwise, is not subject to appeal, or a material breach of fiduciary duty to the Company through the misappropriation of Company funds or property) or (ii) voluntary termination by Employee for “good reason upon change of control” (as defined below), then in any such event, (1) the Company shall pay Employee, within 30 days of the severance of employment described in this Section 4.6, an amount equal to all compensation and benefits payable under Article III hereof for a period of twenty-four (24) months, to the extent continuation of such compensation and benefits is not prohibited by applicable state and/or federal law, and (2) immediately prior to the effective date of such termination, all outstanding stock options held by Employee, not already vested and exercisable, shall become fully vested and exercisable by Employee for the remainder of the exercise period established under the option agreement or two (2) years following the date of termination, whichever occurs later. |
| (b) As used in this Section, voluntary termination by Employee for “good reason upon change of control” shall mean (i) removal of Employee from the offices and responsibilities Employee holds on the date of this Agreement, (ii) a material reduction in Employee’s authority or responsibility, including, without limitation, involuntary removal from the Board of Directors, including the Board of Directors of an investee, subsidiary or affiliate of the Company, (iii) relocation of the Employee’s office location from Bexar County, Texas, (iv) a reduction in Employee’s then effective base salary under Section 3.1 or (v) the Company otherwise commits a breach of this Agreement. |
| (c) As used in this Agreement, a “change of control” shall be deemed to have occurred if (i) any “Person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is or becomes a “beneficial owner” (as defined in Rule l3d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing more than 30% of the combined voting power of the Company’s then outstanding securities, or (ii) at any time during the 24-month period after a tender offer, merger, consolidation, sale of assets or contested election, or any combination of such transactions, at least a majority of the Company’s Board of Directors shall cease to consist of “continuing directors” (meaning directors of the Company who either were directors prior to such transaction or who subsequently became directors and whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least two thirds of the directors then still in office who were directors prior to such transaction), or (iii) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation, other than a merger or consolidation that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 60% of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or (iv) the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement of sale or disposition by the Company of all or substantially all of the Company’s assets. |
5.2 Noncompetition. The Company and Employee agree that the services rendered by Employee hereunder are unique and irreplaceable. For this reason and in consideration of the benefits of this Agreement, specifically including but not limited to applicable termination pay provisions, as well as confidential/proprietary/trade secret information provided to Employee, Employee hereby agrees that, during the term of this Agreement, he shall not (except in the course of his employment under this Agreement and in furtherance of the business of the Company (or any of its subsidiaries)) (i) engage in, as principal, consultant or employee, any segment of a business of a company, partnership or firm (“Business Segment”) that is directly competitive with any significant business of the Company (and only including significant businesses in which the Company owns at least a 50% interest) in one of its major commercial or geographic markets or (ii) hold an interest (except as a holder of less than 5% interest in a publicly traded firm or mutual funds, or as a minority stockholder or unitholder in a form not publicly traded) in a company, partnership or firm, with a Business Segment that is directly competitive, without the prior written consent of the Company. Such provision shall not be applicable should Employee be terminated under Section 4.6 of the Agreement. 5.3 Validity of Noncompetition. The foregoing provisions of Section 5.2 shall not be held invalid because of the scope of the territory covered, the actions restricted thereby or the period of time such covenant is operative. Any judgment of a court of competent jurisdiction may define the maximum territory, the actions subject to and restricted by Section 5.2 and the period of time during which such agreement is enforceable. 5.4 Noncompetition Covenants Independent. The covenants of Employee contained in Section 5.2 will be construed as independent of any other provision in this Agreement, and the existence of any claim or cause of action by the Employee against the Company will not constitute a defense to the enforcement by the Company of said covenants. Employee understands that the covenants contained in Section 5.2 are essential elements of the transaction contemplated by this Agreement, and but for the agreement of Employee to Section 5.2, the Company would not have agreed to enter into such transaction. Employee has been advised to consult with counsel in order to be informed in all respects concerning the reasonableness and propriety of Section 5.2 and its provisions with specific regard to the nature of the business conducted by the Company, and Employee acknowledges that Section 5.2 and its provisions are reasonable in all respects. 5.5 Cooperation. In the event of termination, and regardless of the reason for such termination, Employee agrees to cooperate with the Company and its representatives by responding to questions, attending meetings, depositions, administrative proceedings and court hearings, executing documents and cooperating with the Company and its legal counsel with respect to issues, claims, litigation or administrative proceedings of which Employee has personal or corporate knowledge. Employee further agrees to maintain in strict confidence any information or knowledge Employee has regarding current or future claims, litigation or administrative proceedings involving the Company (or any of its subsidiaries). Employee agrees that any communication with a party adverse to the Company, or with a representative, agent or counsel for such adverse party, relating to any claim, litigation or administrative proceeding, shall be solely and exclusively through counsel for the Company. |
5.6 Remedies. In the event of a breach or threatened breach by the Employee of any of the provisions of Sections 5.1, 5.2 or 5.5, the Company shall be entitled to a temporary restraining order and an injunctive restraining the Employee from the commission of such breach. Nothing herein shall be construed as prohibiting the Company from pursuing any other remedies available to it for such breach or threatened breach, including the recovery of money damages. ARTICLE VI
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ARTICLE VIII
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8.7 Assignment. The rights and obligations of the parties under this Agreement shall be binding upon and inure to the benefit of their respective successors, assigns, executors, administrators and heirs, provided however, that neither the Company nor Employee may assign any duties under this Agreement without the prior written consent of the other. 8.8 Limitation. This Agreement shall not confer any right or impose any obligation on the Company to continue the employment of Employee in any capacity, or limit the right of the Company or Employee to terminate Employee’s employment. 8.9 Attorneys’ Fees and Costs. If any action at law or in equity is brought to enforce or interpret the terms of this Agreement or any obligation owing thereunder, venue will be in Bexar County, Texas and the prevailing party shall be entitled to reasonable attorney’s fees and all costs and expenses of suit, including, without limitation, expert and accountant fees, and such other relief which a court of competent jurisdiction may deem appropriate. 8.10 Notices. All notices and other communications under this Agreement shall be in writing and shall be given in person or by either personal delivery, overnight delivery or first-class mail, certified or registered with return receipt requested, with postage or delivery charges prepaid, and shall be deemed to have been duly given when delivered personally, upon actual receipt, and on the next business day when sent via overnight delivery, or three (3) days after mailing first class, certified or registered with return receipt requested, to the respective persons named below: |
| If to the Company: | Corporate Secretary New Century Equity Holdings Corp. 00000 Xxxxxxx Xxxxx, Xxxxx 000 Xxx Xxxxxxx, Xxxxx 00000 |
| If to Employee: | Xxxxx X. Xxxx 00000 Xxxxxxx Xxxxx, Xxxxx 000 Xxx Xxxxxxx, Xxxxx 00000 |
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IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the day and year indicated above. |
| COMPANY: | NEW CENTURY EQUITY HOLDINGS CORP. By: /s/ XXXXXX X. XXXXXX, XX. —————————————— Name: Xxxxxx X. Xxxxxx, Xx. Title: Chairman & CEO |
| EMPLOYEE: |
/s/ XXXXX X. XXXX —————————————— Xxxxx X. Xxxx |
