EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is entered into as of
January 2, 2001 (the "Effective Date"), by and between Xxxxxx X. Xxxx (the
"Executive") and XxxXxxxxxx.xxx, Inc., a Delaware corporation (the "Company").
RECITALS
The Company desires that the Executive be employed by the Company in
the capacities described below, on the terms and conditions hereinafter set
forth, and the Executive is willing to accept such employment on such terms and
conditions.
AGREEMENT
The Executive and the Company agree as follows:
1. Duties.
1.1 Retention. The Company does hereby hire, engage, and employ the
Executive as the President and Chief Executive Officer of the Company,
and the Executive does hereby accept and agree to such hiring,
engagement, and employment. During the Period of Employment (as
defined in Section 2), the Executive shall serve the Company in such
position, and shall have duties and authority consistent with such
position, subject, however, to the other provisions of this Agreement,
directives of the Board of Directors of the Company (the "Board"), and
the corporate policies and budgets of the Company as they presently
exist, and as such policies and budgets may be amended, modified,
changed, or adopted during the Period of Employment. During the Period
of Employment, the Executive shall report to the Board. The Executive
shall also serve as a member of the Board of Directors during the
Period of Employment.
1.2 No Other Employment. Throughout the Period of Employment, the
Executive shall devote his full business time, energy, and skill to
the performance of his duties for the Company (vacations and other
leave authorized under this Agreement excepted) and shall devote his
best efforts to advancing the interests of the Company. The Executive
agrees that any appointment to or continuing service on the board of
directors of any corporation other than the Company must be approved
in writing by the board of directors of the Company, such approval not
to be unreasonably withheld based upon such appointment not being
likely to interfere with the performance of the Executive's duties
hereunder; provided, that the Company's advance approval is not
required for the Executive to serve on the board of directors or as an
officer of any subsidiary of the Company, non-profit trade
association, or non-profit civic, educational or other charitable
organization (in each case subject to the following sentence). The
Executive's continued membership on any board or in any other position
referenced in the preceding sentence, on or in which he may now or in
the future serve, is subject to the conditions (a) that the
Executive's membership or position does not materially interfere with
the performance of the Executive's duties hereunder, and (b) that the
entity with which the Executive is affiliated does not compete (within
the meaning of Section 9 of this Agreement, without giving effect to
the last sentence
thereof) with the business then being actively conducted of any entity
within the Company Group. For purposes of this Agreement, the "Company
Group" includes, collectively, the Company and any subsidiary or
affiliate of the Company.
1.3 No Breach of Contract. The Executive hereby represents to the Company
that his execution and delivery of this Agreement and the performance
of his duties hereunder will not constitute a breach of, or otherwise
contravene, the terms of any employment or other agreement or policy
to which the Executive is a party or otherwise bound. The Company
hereby represents to the Executive that it is authorized to enter into
this Agreement and that the execution and delivery of this Agreement
and the employment of the Executive hereunder will not constitute a
breach of, or otherwise contravene, the terms of any law, agreement or
policy by which it is bound.
1.4 Termination of Consulting Agreement. The Executive and the Company
hereby terminate the independent contractor Consulting Agreement; made
and entered into as of the 15th day of May 2000, by and between Xxxxxx
X. Xxxx and XxxXxxxxx.xxx, Inc. In connection with such termination,
Xx. Xxxx agrees to cancel all stock options granted in connection with
the agreement pursuant to Section 6(f). Such options were granted to
him on February 1, 2000 under a previously outstanding agreement by
and between the Company and Xx. Xxxx, dated February 1, 2000.
2. Period of Employment.
The "Period of Employment" shall, unless sooner terminated as provided
herein, be a one (1) year period commencing on the Effective Date and
ending at the close of business on the day before the first (1st)
anniversary of the Effective Date. Notwithstanding the preceding
sentence, commencing on the first anniversary of the Effective Date and
each anniversary thereof (each an "Extension Date"), the Period of
Employment shall be automatically extended for an additional one-year
period, unless the Company provides the other party hereto at least six
(6) months prior written notice before the next scheduled Extension
Date that the Period of Employment shall not be so extended. The term
"Period of Employment" shall include any extension that becomes
applicable pursuant to the preceding sentence.
3. Compensation.
3.1
Base Salary and Bonus. The Executive's initial Base Salary shall be at
a rate of $350,000 annually. (As used in this Agreement, "Base Salary"
shall mean Base Salary as it may be increased by the Company, in its
discretion, from time to time.) The Executive's Base Salary, as in
effect from time to time, shall not be decreased for any reason or for
any purpose (including for purposes of determining any amounts due to
the Executive upon a termination of his employment) during the Period
of Employment. The Executive shall be eligible for profit-sharing
bonuses and/or discretionary bonuses, to be determined by the Board of
Directors.
3.2 Note Receivable. Executive shall be provided with an advance of
$170,000 in connection with the execution of this Agreement, the terms
of which are set forth in the Note and other related documents annexed
hereto as Exhibit A.
3.3 Equity Compensation. Upon execution of this Agreement, Executive shall
be granted 400,000 options to purchase Company Common Stock for $1.25
per share. Such options shall vest according to the following
schedule: (i) 300,000 options will become fully vested upon execution
of this Agreement and (ii) the remaining 100,000 options shall vest 12
months from the date hereof. The Executive shall be considered for
additional annual stock option grants, in accordance with the policies
and procedures of the Company then in effect for executive management
stock option grants.
3.4 Board of Director Compensation. The Executive shall be compensated as
a member of the Board of Directors in an amount consistent with other
non-employee Board members of the Company, including annual stock
option grants issued to Board members.
4. Benefits.
4.1 Health and Welfare. During the Period of Employment, the Executive
shall be entitled to participate in all pension and welfare benefit
plans and programs generally made available to the Company's executive
management, as such plans or programs may be in effect from time to
time, including, without limitation, pension, profit sharing, savings
and other retirement plans or programs, medical, dental,
hospitalization, short-term and long-term disability and life
insurance plans, accidental death and dismemberment protection, travel
accident insurance, and any other pension or retirement plans or
programs and any other employee welfare benefit plans or programs that
may be sponsored by the Company from time to time, including any plans
that supplement the above-listed types of plans or programs, whether
funded or unfunded. The Company shall supplement the insurance
coverage and benefits in a separate executive benefits plan that
includes a minimum of $1 million life insurance coverage and
appropriate long-term disability coverage, which benefit plans, for
the Executive and his dependents, shall be fully paid by the Company.
4.2 Reimbursement of Business and Other Expenses; Perquisites
4.2.1 Expense Reimbursement. The Executive is authorized to incur
reasonable expenses in carrying out his duties and
responsibilities under this Agreement and the Company shall
promptly reimburse him for all business expenses incurred in
connection with carrying out the business of the Company, subject
to the Company's reimbursement policies and procedures for
executive officers in effect from time to time. Business expenses
shall include cellular phone costs and a home business telephone
line, with broadband access.
4.2.2 Other. Executive shall participate in an executive perk fund with
the same parameters as are made available to other members of the
Company's executive management.
4.3 Vacations and Other Leave. During the Period of Employment, the
Executive shall receive at least three (3) weeks paid vacation per
year, accrued in advance upon the Effective Date of this Agreement, or
on the extension date of future periods. The Executive shall also be
entitled to all other holiday and leave pay generally available to
other members of the Company's executive management.
5. Death or Disability.
5.1 Definition of Disabled and Disability. For purposes of this Agreement,
the terms "Disabled" and "Disability" shall mean the Executive's
inability, because of physical or mental illness or injury, to perform
the essential function of his customary duties pursuant to this
Agreement, with or without reasonable accommodation, and the
continuation of such disabled condition for a period of one hundred
twenty (120) continuous days, or for not less than one hundred eighty
(180) days during any continuous twenty-four (24) month period. The
Company reserves the right, in good faith, to make the determination
of disability under this Agreement based upon information supplied by
the Executive and/or his medical personnel, as well as information
from medical personnel or others selected by the Company or its
insurers.
5.2 Termination Due to Death or Disability. If the Executive dies or
becomes Disabled during the Period of Employment, the Period of
Employment and the Executive's employment shall automatically cease
and terminate as of the date of the Executive's death or the date of
Disability (which date shall be determined under Section 6.1 above),
as the case may be. In the event of the termination of the Executive's
employment due to his death or Disability, the Executive (or, in the
event of his death, his estate) shall be entitled to receive only
those benefits set forth in Section 7.1; provided that if the
Executive's employment is terminated by reason of the Executive's
Disability, he shall, so long as his Disability continues, remain
eligible for all benefits provided under any long-term disability
programs of the Company in effect at the time of such termination,
subject to the terms and conditions of any such programs, as the same
may be changed, modified or terminated for or with respect to
employees of the Company generally.
6. Termination.
6.1 Termination For Cause. The Company may, by providing written notice to
the Executive, terminate the Period of Employment and the Executive's
employment hereunder for Cause at any time. The term "Cause" for
purposes of this Agreement shall mean:
(a) the Executive is convicted of, or has pleaded guilty or entered a
plea of nolo contendere to, a felony (under the laws of the
United States or any state thereof);
(b) fraudulent conduct by the Executive in connection with the
business or other affairs of any member of the Company Group or
the theft, embezzlement, or other criminal misappropriation of
funds by the Executive from any member of the Company Group;
(c) the Executive's failure to perform the duties of the Company's
President and Chief Executive Officer, after reasonable notice
has been provided of such non-performance and, if such failure is
curable, Executive has not cured such failure within a reasonable
period following such notice;
(d) the Executive's failure to comply with reasonable directives of
the Company's Board of Directors which are communicated to him in
writing, after reasonable notice has been provided of such
non-performance and, if such failure is curable, Executive has
not cured such failure within a reasonable period following such
notice.
If the Executive's employment is terminated by the Company for Cause,
the termination shall take effect on the effective date (pursuant to
Section 14.9) of written notice of such termination to the Executive.
In the event of the termination of the Period of Employment and the
Executive's employment hereunder due to a termination by the Company
for Cause, then the Executive shall be entitled to receive only those
benefits set forth in Section 7.2.1, and all amounts of principal and
accrued interest outstanding under that Note and any related
agreements annexed hereto as Exhibit A, shall be accelerated and
immediately due and payable.
6.2 Termination Without Cause. The Company may, with or without reason,
terminate the Period of Employment and the Executive's employment
hereunder without Cause at any time by providing the Executive written
notice of such termination. If the Executive's employment is
terminated without Cause, the termination shall take effect on the
effective date (pursuant to Section 14.9) of written notice of such
termination to the Executive. If the Executive's employment is
terminated without Cause, he shall be entitled to those benefits as
specified in Section 7.1 (a), (b), (c) and (d).
In the event of the termination of the Period of Employment and the
Executive's employment hereunder due to a termination by the Company
without Cause (other than due to the Executive's death or Disability)
on the consummation of, or within four (4) months prior to or
following, a Change in Control (as such term is defined below), or a
requirement that the Executive relocate outside the state of
California, the Executive shall be entitled to receive:
(a) those benefits set forth in Section 7.1 (a), (b), (c) and (d)
hereof;
(b) a lump sum severance payment equal to twelve (12) times the
Executive's monthly Base Salary in effect immediately prior to
such termination; and
If a Change in Control occurs, or in the event of a diminution of the
Executive's senior management position, responsibilities or
compensation and benefits as President and Chief Executive Officer or
a change in his reporting responsibility to the Board of Directors, he
may, within four months of such Change in Control or diminution or
change in reporting responsibility, terminate his employment and be
entitled to those benefits specified in Sections 6.2(a) and (b) above.
For purposes of this Section 6.2, "Change in Control" means any of the
following:
(w) Change in a majority of the Board of Directors members during any
12-month period.
(x) Approval by the shareholders of the Company of the dissolution or
liquidation of the Company;
(y) Consummation of a merger, consolidation, or other reorganization,
with or into, or the sale of all or substantially all of the
Company's business and/or assets as an entirety to, one or more
entities that are not subsidiaries or other affiliates of the
Company (a "Business Combination"), unless (1) as a result of the
Business Combination more than 70% of the outstanding voting
power entitled to vote generally in the election of directors of
the surviving or resulting entity or a parent thereof (the
"Successor Entity") immediately after the reorganization are, or
will be, owned, directly or indirectly, by holders of the
Company's voting securities outstanding immediately prior to the
Business Combination; and (2) no "person" or "group" [as such
term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended, excluding the Successor Entity
or an Excluded Person (as such term is defined below)]
beneficially owns, directly or indirectly, more than 30% of the
outstanding shares or the combined voting power of the
outstanding voting securities of the Successor Entity, after
giving effect to the Business Combination, except to the extent
that such ownership existed prior to the Business Combination; or
(z) Any "person" or "group"(as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended),
other than an Excluded Person becomes the beneficial owner (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934,
as amended), directly or indirectly, of securities of the
Corporation representing more than 30% of the combined voting
power of the Corporation's then outstanding securities entitled
to then vote generally in the election of directors of the
Corporation, other than as a result of an acquisition by any
employee benefit plan (or related trust) sponsored or maintained
by the Company or a Successor Entity.
"Excluded Person" means (a) any person described in and satisfying the
conditions of Rule 13d-1(b)(1) under the Securities Exchange Act of
1934, as amended, (b) the Company, (c) an employee benefit plan (or
related trust) sponsored or maintained by the Company or the Successor
Entity, or (d) any person who is the beneficial owner (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of
more than 10% of the outstanding shares of Common Stock on the
Effective Date (or any affiliate, successor or related party of or to
any such person).
6.3 Termination by Executive. In the event that the Executive terminates
his employment with the Company for any reason other than death or
Disability, all amounts of principal and accrued interest outstanding
under the Note and any related agreements annexed hereto as Exhibit A
shall be accelerated and immediately due and payable.
7. Expiration of Period of Employment.
7.1 Benefits Upon Expiration of Period of Employment. If the Company
elects not to extend the Period of Employment pursuant to Section 2,
unless the Executive's employment is earlier terminated pursuant to
Sections 6 or 7, termination of the Executive's employment hereunder
shall be deemed to occur at the close of business on the day
immediately preceding the next anniversary of the Effective Date which
occurs at least six (6) months after delivery of the non-extension
notice in accordance with Section 2. If the Company elects not to
extend the Period of Employment, upon the Executive's termination in
accordance with the preceding sentence he will be entitled to receive:
(a) those benefits set forth in Section 7.2.1 hereof;
(b) the greater of: (i) those payments due under the Period of
Employment or (ii) a lump sum severance payment equal to twelve
(12) times the Executive's monthly Base Salary in effect
immediately prior to such termination; and
(c) all options exercisable to acquire shares of Company Common Stock
granted to the Executive by the Company during his employment
term will become fully vested.
(d) medical and other insurance coverage benefits will be extended
for a period of twelve (12) months from the termination date
7.2 General Termination Provisions.
7.2.1 General Termination Benefits. Subject to the other provisions of
this Agreement, in the case of any of the foregoing terminations
or the expiration of the Period of Employment, the Executive or
his estate shall be entitled to (without duplication of
benefits):
(a) any accrued but unpaid Base Salary as of the date of such
termination, including unused vacation;
(b) any earned but unpaid cash incentive compensation as of the
date of such termination;
(c) any reimbursements or allowances due but not yet paid to the
Executive; and
(d) such employee benefits described in Section 5.1 as the
Executive or his estate may be entitled to hereunder or
under the employee benefit plans, programs and arrangements
of the Company.
All amounts due the Executive in accordance with this Section
7.2.1 shall be paid promptly following their becoming due as
provided hereunder.
7.2.2 Other Termination Provisions. In the event of any
termination of employment under this Agreement, the
Executive shall be under no obligation to seek other
employment and there shall be no offset against amounts due
the Executive under this Agreement on account of any
remuneration attributable to any subsequent employment that
he may obtain except (i) on account of any claims the
Company may have against the Executive under the terms of
this Agreement or otherwise, or (ii) on account of any
amounts outstanding under the terms of the Note and any
related agreements annexed hereto as Exhibit A, in either
case the amounts of which shall be offset against amounts
due to Executive under the Agreement. Any amounts due under
Sections 5, 6, or 7 are in the nature of severance payments
considered to be reasonable by the Company and are not in
the nature of a penalty.
8. Means and Effect of Termination. Any termination of the Executive's
employment under this Agreement shall be communicated by written
notice of termination from the terminating party to the other party.
The notice of termination shall indicate the specific provision(s) of
this Agreement relied upon in effecting the termination and shall set
forth in reasonable detail the facts and circumstances alleged to
provide a basis for termination, if any such basis is required by the
applicable provision(s) of this Agreement.
9. Non-Competition.
The Executive acknowledges and recognizes the highly competitive
nature of the businesses of the Company Group, the amount of sensitive
and confidential information involved in the discharge of the
Executive's position as President and Chief Executive Officer of the
Company, and the harm to the Company Group that would result if such
knowledge or expertise was disclosed or made available to a
competitor, and accordingly agrees as follows:
(a) During the Period of Employment and, as a result of the
particular nature of the Executive's relationship with the
Company as its President and Chief Executive Officer, for the one
(1) year period immediately following the termination of the
Period of Employment, the Executive will not, directly or
indirectly, (i) engage in any business for the Executive's own
account that competes with the business of any entity within the
Company Group, (ii) enter the employ of, or render any services
to, any person engaged in any business that competes with the
business of any entity within the Company Group, (iii) acquire a
financial interest in any person engaged in any business that
competes with the business of any entity within the Company
Group, directly or indirectly, as an individual, partner,
shareholder, officer, director, principal, agent, trustee or
consultant, or (iv) interfere with business relationships
(whether formed before or after the date of this Agreement)
between the Company, any of its affiliates or subsidiaries, and
any customers, suppliers, officers, employees, partners, members
or investors of any entity within the Company Group.
(b) Notwithstanding anything to the contrary in this Agreement, the
Executive may, directly or indirectly, own, solely as an
investment, securities of any person engaged in the business of
any member of the Company Group which are publicly traded on a
national or regional stock exchange or on an over-the-counter
market if the Executive (i) is not a controlling person of, or a
member of a group which controls, such person and (ii) does not,
directly or indirectly, own one percent (1%) or more of any class
of securities of such person.
For purposes of this Agreement, businesses in competition with the
Company Group shall include businesses which any entity within the
Company Group has specific plans to conduct in the future and as to
which planning the Executive is aware.
10. Confidentiality; Assignment of Inventions.
10.1 Confidentiality.
10.1.1. Confidential Information. During the term of Executive's
employment by the Company or any other member of the Company Group, and
at any time following the termination of Executive's employment by the
Company or any other member of the Company Group, for any or no reason,
whether voluntary or involuntary, with or without cause, Employee will
not, without the express prior written consent of the Company, disclose
to others, use or publish (other than as may be required by Executive's
duties while employed by the Company or any other member of the Company
Group, or in the ordinary course of the business of the Company or any
other member of the Company Group) any proprietary, secret or
confidential information of the Company or any other member of the
Company Group ("Company Information"), which for the purposes hereof
shall include, without limitation, information designated by the
Company or any other member of the Company Group as "proprietary,"
"secret," or "confidential" (or otherwise similarly designated) or
information which is not generally known to those outside of the
Company Group detailing, listing, describing or otherwise relating to:
(i) the business, conduct or operations of the Company, any other
member of the Company Group, or any of the customers, licensors,
licensees, suppliers, consultants or employees of any member of
the Company Group; or
(ii) any materials, devices, processes, methods, ways of business,
programs, and/or formulae, technology, research, development,
lists naming the parties in the categories described in
subprovision (i) above and the like, used in organizing,
promoting, conducting, managing or exploiting the products or
services of any member of the Company Group; or
(iii) the existence or betterment of, or possible new uses or
applications for, any of the products or services of any member
of the Company Group.
The obligations of confidentiality set forth in this Section 10.1
extend to any proprietary information of any third parties contracting
with any member of the Company Group whether or not any member of the
Company Group has undertaken an express obligation of confidentiality
with regard to such persons. Notwithstanding the foregoing, the term
Company Information shall not apply to information (u) Employee is
compelled pursuant to an order of a court or other body having
jurisdiction over such matter to do so (in which case the Company shall
be given prompt written notice of such intention to divulge not less
that five (5) days prior to such disclosure or such shorter period as
the circumstances may reasonably permit), (v) which the Company or an
Affiliate has voluntarily disclosed to the public without restriction,
(w) which has otherwise lawfully entered the public domain, (x) which
the Company or an Affiliate has permitted Employee to disclose by its
prior written consent; or (y) which Employee may disclose at a forum,
workshop or round table conference with the prior knowledge and consent
of the Company.
10.1.2. Return of Confidential Information. Upon the termination of
Executive's employment by the Company, Executive agrees that he will
not take from (nor keep copies or duplicates of), but will promptly
return to the Company, any drawings, notes, plans, lists, computer
programs or files, blueprints, letters, writings or any other documents
whatsoever or reproductions thereof recording, reflecting or embodying
any Company Information.
10.1.3 Non-disclosure Agreements with Third Parties. Executive
acknowledges that members of the Company Group are now and may
hereafter be subject to non-disclosure or confidentiality agreements
with third persons or entities pursuant to which members of the Company
Group must protect or refrain from use of proprietary information which
is the property of such third persons. Executive hereby agrees upon the
direction of the Company to be bound by the terms of such agreements in
the event Executive has access to the proprietary information protected
thereunder to the same extent as if Executive was an original
individual signatory thereto.
10.2 Assignment of Inventions.
(a) Any and all inventions, processes, procedures,
systems, discoveries, designs, configurations, technology, works of
authorship (including but not limited to computer programs), trade
secrets and improvements (whether or not patentable and whether or not
they are made, conceived or reduced to practice during working hours or
using the data or facilities of any member of the Company Group)
(collectively, the "Inventions") which Executive makes, conceives,
reduces to practice, or otherwise acquires during the term of this
Agreement (either solely or jointly with others), and which are related
to the present or planned business, services or products of the Company
or any other member of the Company Group, shall be the sole property of
the Company and shall at all times and for all purposes be regarded as
acquired and held by Executive in a fiduciary capacity for the sole
benefit of the Company. All Inventions that consist of works of
authorship capable of protection under copyright laws shall be prepared
by Executive as "works made for hire", with the understanding that the
Company shall own all of the exclusive rights to such works of
authorship under the United States copyright law and all international
copyright conventions and foreign laws. Executive hereby assigns to the
Company, without further compensation, all such Inventions and any and
all patents, copyrights, trademarks, trade names or applications
therefor, in the United States and elsewhere, relating thereto.
Executive shall promptly disclose to the Company and to no other party
all such Inventions and shall assist the Company for its own benefit in
obtaining and enforcing patents and copyright registrations on such
Inventions in all countries. Upon request, Executive shall execute all
applications, assignments, instruments and papers and perform all acts
(such as the giving of testimony in interference proceedings and
infringement suits or other litigation) necessary or desired by the
Company to enable the Company and its successors, assigns and nominees
to secure and enjoy the full benefits and advantages of such
Inventions.
(b) In the event the Company is unable, after reasonable effort,
to secure Executive's signature on any document or instrument
necessary to secure trademarks, letters patent, copyrights or other
analogous protection relating to an Invention, whether because of
Executive's physical or mental incapacity or for any other reason
whatsoever, Executive hereby irrevocably designates and appoints the
Company and its duly authorized officers and agents as Executive's
agent and attorney-in-fact, to act for and in Executive's behalf and
stead to execute and file any such application or applications and to
do all other lawfully permitted acts to further the prosecution and
issuance of trademarks, letters patent, copyright or other analogous
protection thereon with the same legal force and effect as if executed
by Executive.
(c) Executive hereby represents and warrants to the
Company that Executive (i) is not presently under and will not
hereafter become subject to any obligation to any person which is
inconsistent or in conflict with this Agreement or which would
prevent, limit or impair in any way Executive's performance of
Executive's obligations hereunder and (ii) has not disclosed and will
not disclose to the Company, nor use for the Company's benefit, any
confidential information or trade secrets of any prior employer or
principal, unless and until such confidential information and trade
secrets have become public knowledge without Executive's
participation, or unless such disclosure is expressly permitted by any
agreement with such prior employer or principal.
11. Antisolicitation; No Disparagement.
The Executive promises and agrees that during the Period of Employment
and for a period of two (2) years thereafter:
(a) he will not influence or attempt to influence customers of any
entity within the Company Group (as it may now or in the future
be composed), either directly or indirectly, to divert their
business away from the Company Group to any individual,
partnership, firm, corporation or other entity then in
competition with the business of any entity within the Company
Group; and
(c) he will not make disparaging statements, whether oral or written,
regarding any entity within the Company Group.
The Company promises and agrees that during the Period of Employment
and for a period of two (2) years thereafter that it will not make
disparaging statements, whether oral or written, regarding Executive.
12. Soliciting Employees.
The Executive promises and agrees that for a period of one year
following termination of his employment he will not directly or
indirectly solicit any person who is then, or at any time within six
months prior thereto was, an employee of an entity within the Company
Group who earned on an annual basis $25,000 or more as an employee of
such entity at any time during the last six months of his or her own
employment to work for any business, individual, partnership, firm,
corporation, or other entity then in competition with the business of
any entity within the Company Group.
13. Indemnification.
The Company agrees to indemnify the Executive to the fullest extent
permitted by the law of the jurisdiction in which the Company is
incorporated against claims asserted against him personally arising out
of, or related to, the business of the Company or the Executive's
services for the Company. The Company shall provide officers' liability
insurance coverage to the Executive consistent with the levels of
coverage that it provides generally to its other executive officers
from time to time.
14. General.
14.1 Assignment. This Agreement is personal in its nature and neither
of the parties hereto shall, without the consent of the other, assign
or transfer this Agreement or any rights or obligations hereunder;
provided, however, that, in the event of a merger, consolidation, or
transfer or sale of all or substantially all of the assets of the
Company with or to any other individual(s) or entity, this Agreement
shall, subject to the provisions hereof, be binding upon and inure to
the benefit of such successor and such successor shall discharge and
perform all the promises, covenants, duties, and obligations of the
Company hereunder.
14.2 Governing Law. This Agreement and the legal relations hereby
created between the parties hereto shall be governed by and construed
under and in accordance with the internal laws of the State of
California, without regard to conflicts of laws principles thereof.
The Executive and the Company agree (a) that his or its legal counsel
participated in the preparation of this Agreement and/or he or it has
had ample opportunity to have his or its legal counsel fully examine
this Agreement, and (b) that the rule of construction that ambiguities
are to be resolved against the drafting party shall not be employed in
the interpretation of this Agreement to the favor of either party
hereto against the other.
14.3. Entire Agreement. This Agreement embodies the entire agreement of the
parties hereto respecting the matters within its scope. This Agreement
supersedes all prior agreements of the parties hereto on the subject
matter hereof. Any prior negotiations, correspondence, agreements,
proposals or understandings relating to the subject matter hereof
shall he deemed to be merged into this Agreement and to the extent
inconsistent herewith, such negotiations, correspondence, agreements,
proposals, or understandings shall be deemed to be of no force or
effect. There are no representations, warranties, or agreements,
whether express or implied, or oral or written, with respect to the
subject matter hereof, except as set forth herein.
14.4 Modifications. This Agreement shall not be modified by any oral
agreement, either express or implied, and all modifications hereof
shall be in writing and signed by the parties hereto.
14.5 Waiver. Failure to insist upon strict compliance with any of the
terms, covenants, or conditions hereof shall not be deemed a waiver of
such term, covenant, or condition, nor shall any waiver or
relinquishment of, or failure to insist upon strict compliance with,
any right or power hereunder at any one or more times be deemed a
waiver or relinquishment of such right or power at any other time or
times.
14.6 Number and Gender. Where the context requires, the singular shall
include the plural, the plural shall include the singular, and any
gender shall include all other genders.
14.7 Section Headings. The section headings in this Agreement are for the
purpose of convenience only and shall not limit or otherwise affect
any of the terms hereof.
14.8 Severability. In the event that a court of competent jurisdiction
determines that any portion of this Agreement is in violation of any
statute or public policy, then only the portions of this Agreement
which violate such statute or public policy shall be stricken, and all
portions of this Agreement which do not violate any statute or public
policy shall continue in full force and effect. Furthermore, any court
order striking any portion of this Agreement shall modify the stricken
terms as narrowly as possible to give as much effect as possible to
the intentions of the parties under this Agreement.
14.9 Notices. All notices under this Agreement shall be in writing and
shall be either personally delivered or mailed postage prepaid, by
certified United States mail, return receipt requested, delivered by
overnight courier, delivered by facsimile (with confirmation back), or
delivered by e-mail (with proof of delivery):
(a) if to the Company, at the address of the Company's principal
executive offices to the attention of the Chief Financial
Officer; or
(b) if to the Executive, at the address of the Executive's principal
residence as last reflected on the Company's records.
Either party may change its address set forth above by written notice
given to the other party in accordance with the foregoing. Any notice
shall be effective when personally delivered, three (3) business days
after being mailed in accordance with the foregoing, one day after
being delivered to an overnight courier of national reputation when
identified for priority and next day delivery, or upon delivery by
facsimile or e-mail.
14.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same instrument.
14.11 Withholding Taxes. The Company may withhold from any amounts
payable under this Agreement such federal, state and local income,
employment, or other taxes as may be required to be withheld pursuant
to any applicable law or regulation.
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IN WITNESS WHEREOF, the Company and the Executive have executed this
Employment Agreement as of the date first above written.
THE COMPANY
Xxxxxxxxxx.xxx, Inc.,
a Delaware corporation
By:
-----------------------------------------
Xxxxx Xxxxxxx
Chief Financial Officer, on behalf of the
Compensation Committee
THE EXECUTIVE
-----------------------------------------
Xxxxxx X. Xxxx
