1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of March 16, 2001,
by and between Xxxxx Xxxxxxxxxxxx, who resides at 0000 Xxxxxxx Xxxxxx, Xxx
Xxxx, XX 00000 ("Employee") and Xxxxxxxxx.xxx, Inc., a Delaware business
corporation with its principal place of business at 0000 Xxxxxxxxx Xxxxxx Xx.,
Xxxxx 000, Xxxxxxxxx, XX 00000 ("Crosswalk"), each a "party" and collectively
the "parties." In consideration of the employment of Employee by Crosswalk,
Crosswalk and Employee hereby agree as follows:
1. Employment, Complete Agreement, and Modification. Crosswalk agrees to
employ Employee and Employee agrees to be employed by Crosswalk on the terms
and conditions set forth herein. This Agreement supersedes all previous
representations, either written or oral, between the parties. No provision of
this Agreement may be modified except by a writing signed by both parties.
2. Position. Subject to the Bylaws of Crosswalk and to the direction of the
Board of Directors of Crosswalk (the "Board"), Employee shall serve as Chief
Executive Officer and President ("CEO") of Crosswalk, performing such duties
and carrying out such responsibilities as are normally related to the position
of CEO in accordance with industry standards, and in such additional
management position(s) as the Board may designate. As a bona fide occupational
qualification for this position, Employee will subscribe to the Statement of
Faith as stated in Article XIII, Section 2 of the Bylaws of Crosswalk. The
Board shall either vote, or recommend to the shareholders of Crosswalk, as
appropriate, that during the Term of this Agreement, (2.1) Employee be
nominated for election as a director at each meeting of shareholders held for
the election of directors; and (2.2) Crosswalk shall not confer on any other
officer or employee authority, responsibility, powers, or prerogatives
superior or equal to the authority, responsibility, prerogatives, and powers
vested in Employee under this Agreement.
3. Compensation. During the Term of this Agreement, Crosswalk shall pay to
Employee for all his services a base salary in periodic installments in
accordance with Crosswalk's usual practice for its similarly situated
employees, at an annual rate of $127,000 and retroactive to January 10, 2001.
4. Incentive Compensation. In addition to the compensation provided in Section
3, Employee shall be entitled to receive payments under Crosswalk's incentive
compensation and/or bonus program(s) (as in effect from time to time), if any,
in such amounts as are determined by the Board to be appropriate. For the year
2001, Employee will be paid a cash incentive of $10,000 within thirty days of
the end of each fiscal quarter, if Crosswalk's net loss before interest and
taxes, as reviewed by independent audit, is equal to or better than the
quarterly 2001 budgeted net loss before interest and taxes approved by the
Board, as indicated in Attachment "B". Any incentive compensation which is not
deductible, in the opinion of Crosswalk's counsel, under Section 162(m) of the
Internal Revenue Code shall be deferred and paid, without interest, in the
first year or years when and to the extent such payment may be deducted.
5. Stock Options. In accordance with the provisions of Crosswalk's 1998
Incentive Stock Option Plan (the "Plan") and the specific authorization of the
Board, Crosswalk hereby grants to Employee, subject to all of the terms and
conditions of the Plan and this Agreement, options to acquire shares of
Crosswalk's outstanding common stock ("Option Stock") in the amount and per
the vesting schedule as indicated in Attachment "A". The exercise price for
all such options shall be $0.9688, the market price of Crosswalk's common
stock on the NASDAQ stock exchange at the close of trading on January 10,
2001. All options offered herein shall expire January 10, 2011. In the event
of termination of this Agreement, Employee has the right to retain only those
options that have vested prior to the effective date of such termination,
until their natural expiration. All unvested options, warrants, and similar
rights shall remain the property of Crosswalk.
2
6. Benefits. During the Term of this Agreement:
6.1. Employee shall be entitled to four (4) weeks of paid vacation time
per year, to be taken at times mutually acceptable to Employee and
Crosswalk.
6.2.Crosswalk shall provide paid accident and health insurance for
Employee and his family comparable to that Crosswalk provides for other
Crosswalk employees and their families.
6.3. Crosswalk shall obtain at its expense (subject to Employee's
insurability) an insurance policy on the life of Employee, adjusted at
policy anniversary date, subject to the last sentence of this Section 6.3,
in the minimum face amount of Employee's current annual base salary.
Employee shall have the exclusive right to designate the beneficiaries of
such policy and change such beneficiaries from time to time. Such policy
and the proceeds and cash value thereof shall be the sole property of
Employee and Crosswalk shall not retain any benefit therein.
6.4. Employee shall be entitled to sick leave benefits in accordance with
the customary policies of Crosswalk for its executive officers, but in no
event less than one (1) week per year. In the event of Employee's
Disability, Crosswalk shall provide disability insurance that shall
provide for the payment of Employee's annualized salary at the time of the
Disability, for a period of not less than one (1) year from the date of
Disability. For purposes of this Agreement, "Disability" shall mean a
written determination by a physician mutually agreeable to Crosswalk and
Employee (or, in the event of Employee's total physical or mental
disability, Employee's legal representative) that Employee is physically
or mentally unable to perform his duties of CEO under this Agreement and
that such disability has continued for ninety (90) days and can reasonably
be expected to continue for a period of six (6) consecutive months or for
shorter periods aggregating one hundred and eighty (180) days in any
twelve-(12)-month period.
6.5. In addition to the vacation provided pursuant to Section 6.1 hereof,
Employee shall be entitled to not less than ten (10) paid holidays (other
than weekends) per year, generally on such days consistent with
Crosswalk's employment policies.
6.6. Employee shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by him (in accordance with the policies and
procedures established by Crosswalk or the Board for similarly situated
employees of Crosswalk) in performing services hereunder.
6.7. Employee shall be eligible to participate in benefits not
inconsistent or duplicative of those set forth in this Section 6 as
Crosswalk shall establish or maintain for its employees or executives
generally. Employee shall be solely responsible for any applicable income
taxes relating to benefits provided under this Section 6.
7. Term and Termination. The Term of this Agreement shall begin on the date of
execution stated above and shall continue until this Agreement is terminated
by either party as provided herein. Either party may terminate this Agreement
and Employee's employment hereunder at any time, with or without cause, upon
thirty (30) days prior written notice of termination to the other party.
3
8. Severance. Upon termination of his employment with Crosswalk, and execution
of a termination agreement, Employee shall continue to receive as severance
his current base salary and such benefits as are provided under Sections 6.2
and 6.3 for an additional six (6) months.
9. Protective Covenant. During the period of his employment by Crosswalk,
Employee shall: (9.1) to the best of his ability, devote his full professional
and business time and best efforts to the performance of his duties for
Crosswalk and its subsidiaries and affiliates; and (9.2) not acquire, assume,
or participate in, directly or indirectly, any position, investment, action or
interest adverse or antagonistic to Crosswalk, its business or prospects,
financial or otherwise.
10. Conciliation. The parties agree that any claim or dispute arising from or
related to this Agreement shall be settled by biblically based mediation and,
if necessary, legally binding arbitration in accordance with the Rules of
Procedure for Christian Conciliation of the Institute for Christian
Conciliation, 0000 Xxxxxx X, Xxxxx 000, Xxxxxxxx, XX 00000. Judgment upon an
arbitration decision may be entered in any court otherwise having
jurisdiction. These methods shall be the sole remedy for any controversy or
claim arising out of this Agreement and the parties expressly waive their
respective right to file a lawsuit in any civil court against one another for
such disputes, except to enforce an arbitration decision. The parties agree
that any claim or dispute hereunder shall expire if not brought within one (1)
year of arising. Any claim or dispute arising from or related to the
Noncompetition and Proprietary Information Agreement between Crosswalk and
Employee, or any subsequent noncompetition, nonsolicitation, confidentiality,
and/or proprietary information agreement or covenant between Crosswalk and
Employee, shall not be subject to this Section 10.
11. Governing Law. This Agreement shall be governed and interpreted in
accordance with the laws of the State of Virginia without regard to principles
of conflict of laws.
12. Severability. Should any provision or clause of this Agreement be held to
be void, invalid, or unenforceable, the remaining provisions of this Agreement
shall not be affected and shall continue in effect and the invalid provision
shall be deemed modified to the least degree necessary to remedy such
invalidity.
13. Assignment. This Agreement and the rights and obligations of the parties
shall bind and inure to the benefit of each of the parties hereto and shall
also bind and inure to the benefit of any successor or successors of
Crosswalk, but, except as to any such successor of Crosswalk, neither this
Agreement nor any rights or benefits hereunder may be assigned by either party
without the prior written consent of the other party. This assignment includes
the property of existing stock options held by Employee at the time this
contract is executed.
14. Notice. Any notice required or permitted to be given hereunder shall be
effective when received and shall be sufficient if in writing and if
personally delivered or send by prepaid express delivery service, to the party
to receive such notice at its address set forth at the beginning of this
Agreement or at such other address as a party may be notice specify to the
other.
15. No Conflicting Obligations. Each party represents and warrants that it is
under no obligation or restriction, nor will it assume any such obligation or
restriction, that does or would in any way violate, interfere, or conflict
with the performance to be rendered under this Agreement.
4
16. Agreement Read, Understood, and Fair. Employee has carefully read and
considered all provisions of this Agreement and agrees that all of the
restrictions set forth are fair and reasonable and are reasonably required for
the protection of the Interests of Crosswalk.
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE DULY EXECUTED THIS AGREEMENT AS OF
THE DATE FIRST WRITTEN ABOVE.
XXXXX XXXXXXXXXXXX XXXXXXXXX.XXX, INC.
/s/ Xxxxx Xxxxxxxxxxxx /s/ Xxxxx X. Buick
----------------------- ----------------------
Xxxxx Xxxxxxxxxxxx Xxxxx X. Buick
("Employee") Chairman of the Board
5
ATTACHMENT A
TO EMPLOYMENT AGREEMENT
BETWEEN
XXXXXXXXX.XXX, INC.
AND XXXXX XXXXXXXXXXXX
VESTING OF STOCK OPTIONS
------------------------
Stock Options Vesting Criteria: Options Vesting
------------------------------ ---------------
- January 10, 2001 50,000
- One year anniversary of the execution of this Employment Agreement 25,000
- Two year anniversary of the execution of this Employment Agreement 25,000
Total Options 100,000
The exercise price for all such options shall be $0.9688, the market price of
Crosswalk's common stock on the NASDAQ stock exchange at the close of trading
on January 10, 2001. All options offered herein shall expire January 10, 2011.
In the event of termination of this Agreement, Employee has the right to
retain only those options that have vested prior to the effective date of such
termination, until their natural expiration. All unvested options, warrants,
and similar rights shall remain the property of Crosswalk.
6
ATTACHMENT B
TO EMPLOYMENT AGREEMENT
BETWEEN
XXXXXXXXX.XXX, INC.
AND XXXXX XXXXXXXXXXXX
2001 INCENTIVE COMPENSATION
---------------------------
Incentive Plan Earnout Criteria: Cash Incentive
------------------------------- --------------
- First Quarter 2001 Net Income Before Interest and Taxes Budget $10,000
- Second Quarter 2001 Net Income Before Interest and Taxes Budget $10,000
- Third Quarter 2001 Net Income Before Interest and Taxes Budget $10,000
- Fourth Quarter 2001 Net Income Before Interest and Taxes Budget $10,000
Total Cash Incentive $40,000
Employee will be paid earned cash incentive within thirty days of the end of
each fiscal quarter, if Crosswalk's net loss before interest and taxes, as
reviewed by independent audit, is equal to or better than the budgeted
quarterly 2001 net loss before interest and taxes, as approved by the Board,
and set forth herein.
