Exhibit 10.44
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
this 5th day of December, 2001 with an effective date of December 10, 2001 (the
"Employment Date"), by and between Integrated Information Systems, Inc., a
Delaware corporation (the "Company"), having its principal place of business at
0000 Xxxxx Xxxxxxx Xxxxx, Xxxxx, Xxxxxxx 00000, and Xxxx X. Xxxxxx, an
individual ("Employee"), residing at 00 Xxxx Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx
00000.
1. EMPLOYMENT. Employee's employment hereunder shall commence on the
Employment Date and continue in effect thereafter until terminated as provided
in Section 10.
2. POSITION AND DUTIES. Employee is hereby employed to serve as Vice
President, General Counsel and Assistant Secretary of the Company, reporting to
the Chief Financial Officer, at the Tempe, Arizona headquarters of the Company.
Employee shall be the chief legal officer of the Company and, in connection
therewith, shall perform such executive and managerial duties and
responsibilities as are customary to his offices and as are reasonably
necessary, consistent with his positions, to the operations of the Company. Such
duties and responsibilities shall include, without limitation, (i) providing
legal counsel and guidance to the directors, officers and authorized
representatives of the Company, (ii) providing legal counsel in connection with
financing arrangements, sales of securities, mergers and acquisitions and
divestitures, business affiliations and contracts, (iii) preparing and
submitting required regulatory filings, (iv) managing and responding to claims,
threats and litigation and the initiation of litigation, (v) selecting and
retaining outside counsel, (vi) setting the department budget and (vii)
assisting with the preparation of documents required for meetings of the
Company's Board of Directors and its Committees. Employer acknowledges that from
the Employment Date through February 28, 2002, Employee may consult with a
former employer from time to time. Throughout the term of this Agreement,
Employee may engage in charitable and civic activities, provided that such
activities do not materially interfere with the performance of Employee's duties
and responsibilities under this Agreement.
3. COMPENSATION. As compensation for his services hereunder, Employee
shall receive a beginning annual salary of $120,000, with an initial salary
review within six (6) months of the Employment Date. Thereafter, salary will
increase periodically, generally annually, in accordance with the company's
policies and practices for salary increases. Salary will be paid in accordance
with the Company's normal payroll policies and practices.
4. EMPLOYEE BENEFITS.
A. REGULAR EMPLOYEE BENEFITS. Employee shall be entitled to
participate in any employee benefits offered by the Company to its
full-time employees
generally. The Company reserves the right, however, to change, modify, add
to, or delete all or any portion of said benefits from time to time in its
sole and absolute discretion.
B. CASH BONUS. Company will pay Employee an annual bonus of up to 50%
of then current annual salary in accordance with the Company's policies and
practices for bonuses to officers and key employees, subject to the
achievement of Company and Employee performance goals, which goals shall be
determined in good faith and in advance jointly by Company and Employee.
Notwithstanding the foregoing qualification, for the calendar year 2002
only, Company agrees to pay a cash bonus of at least one-third of the total
cash bonus potential assuming annual performance review results in
acceptable or better rating.
C. STOCK OPTIONS. Stock options will be granted periodically to
Employee in accordance with the Company's policies and practices for stock
option grants to officers and key employees. Employee shall receive an
initial grant of stock options for 75,000 shares on the Employment Date
("Initial Stock Options"), vesting 1/6 every six months, for full vesting
over a three-period. The precise terms and conditions governing price,
vesting, and exercising of the Initial Stock Options shall be as set forth
in the Integrated Information Systems, Inc. 1997 Long-Term Incentive Plan
Non-Qualified Stock Option Agreement entered into between the Company and
Employee on the Employment Date.
D. VACATION. Employee shall annually accrue three weeks of paid
vacation. At Employee's option, the Company will pay Employee for unused
vacation time at Employee's then current pay rate, but only to the extent
that accrued vacation exceeds ten days.
5. EMPLOYEE BUSINESS EXPENSES. The Company will promptly reimburse
Employee for all reasonable business expenses incurred by Employee in performing
his duties hereunder, including but not limited to expenditures for travel,
business meals, bar and professional association dues and cellular phone and
remote connectivity charges. Employee shall furnish to the Company adequate
records and other documentary evidence required by Federal and State statutes
and regulations for substantiation of each such expenditure as an income tax
deduction.
6. CONFIDENTIALITY AND NON-DISCLOSURE. During his employment with the
Company, Employee will have access to and become acquainted with various
information belonging to the Company including confidential and proprietary
data, business plans, customer lists, and pricing information. Said information
shall be considered "Trade Secrets" of the Company, and Employee will not
disclose the same, directly or indirectly, to any third party not entitled
thereto, or use the same in any way detrimental to the interests of the Company,
either during his employment with the Company or anytime thereafter. All
documents containing or evidencing any such Trade Secrets shall be immediately
returned to the Company by Employee upon the termination of his employment. The
term "Trade Secrets" does not include information known to Employee prior to the
commencement of his employment with the Company or information available to the
public (other than through Employee's improper disclosure).
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The prohibition on disclosure of Trade Secrets does not apply to a disclosure
under court order or subpoena or as otherwise may be required by law, but, to
the extent permitted by law, Employee agrees to give the Company notice of any
such disclosure and the opportunity to intervene to prevent such disclosure.
7. NON-COMPETITION. During his employment with the Company and for a
period of six (6) months thereafter, unless his employment is terminated by the
Company without Cause (as defined below) or is terminated by Employee for Good
Reason (as defined below), Employee shall not, directly or indirectly, either as
an employee, employer, consultant, director, or in any other individual or
representative capacity, engage or participate in any business that directly
competes with the Company. For purposes of the foregoing sentence, "competes"
shall mean engagement, in a principal or significant line of business, in
designing, building, integrating and managing complex information systems.
8. NON-SOLICITATION.
A. EMPLOYEES. During the term of this Agreement and for a period of
twelve (12) months after the termination of Employee's employment for any
reason (except in conjunction with a general solicitation for employees),
Employee shall not solicit, or induce to resign, any employee of the
Company or assist in such hiring by any other person or business entity or
encourage any such employee to terminate his or her employment with the
Company.
B. CUSTOMERS. During the term of this Agreement and for a period of
twelve (12) months after the termination of Employee's employment for any
reason, Employee shall not either directly or indirectly: (i) solicit,
divert or attempt to divert from the Company to Employee or to any other
person or business entity the business of any of the customers of the
Company; or (ii) provide services, whether on your own behalf or as an
owner, manager, consultant, director, officer, partner or employee of any
other person or business entity, to any of the customers of the Company;
provided, however, that clause (ii) shall not prohibit Employee from
accepting employment as a direct employee of customers. For the purposes of
this Section 8.b, "customer" means a business to which the Company provided
services during the twelve (12) months immediately preceding the date of
termination of Employee's employment.
9. COMPANY POLICIES AND PROCEDURES. In addition to his other duties and
obligations hereunder, Employee further agrees to comply with, and be bound by,
all company policies and procedures instituted by the Company from time to time.
10. TERM OF AGREEMENT; PAYMENT UPON TERMINATION.
A. GENERAL. Employee may terminate this Agreement at any time and
shall use his best efforts to provide Employer with three (3) weeks' prior
written notice. Employer may terminate Employee's employment with or
without cause.
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B. TERMINATION FOR CAUSE. In the event the Company terminates
Employee's employment for Cause, the Company shall pay Employee salary and
accrued and untaken vacation through the date of termination, vested stock
options shall remain vested and freely exercisable and all unvested stock
options shall lapse and be surrendered by the Employee to the Company
without further consideration. "Cause" shall include any one of the
following: (i) Employee's failure or refusal to perform the material duties
required hereunder, which failure or refusal shall not be cured within
fifteen (15) days following receipt of written notice from the CEO of the
Company specifying the factors or events constituting such failure or
refusal; (ii) Employee's conviction of a felony or a crime of moral
turpitude or entry into a plea of nolo contendere (or similar plea) to a
charge of such an offense; (iii) Employee's commission of any act of
criminal fraud, material dishonesty or misappropriation relating to or
involving the Company; or (iv) Employee materially violates a rule,
regulation, policy or plan governing employee performance, Employee engages
in any unauthorized disclosure of Trade Secrets of the Company or Employee
acts in a manner that is materially and demonstrably contrary to the best
interest of the Company.
C. TERMINATION WITHOUT CAUSE. In the event the Company terminates
Employee's employment without Cause, the Company shall pay Employee for
accrued and untaken vacation through the date of termination and shall
continue to pay Employee his then current salary in accordance with its
normal payroll policies for a period of three (3) months. Vested stock
options shall remain vested and freely exercisable, and Company shall
permit Employee (including dependents) to continue to participate on the
same basis as the other senior executives of the Company in all medical,
dental, disability and life insurance coverage in which Employee (including
dependents) was participating on the date of termination (as such coverages
are from time to time in effect at the Company).
D. CHANGE IN CONTROL. In the event Employee's employment is
terminated, or if Employee terminates his employment for Good Reason, upon
or within six months after a Change in Control, the Company shall pay
Employee, in a lump sum payment within fifteen days following the date of
termination, his bonus for the prior year (calculated as not less than 40%
of then current annual salary) and twelve months of his then current
salary. Vested stock options shall remain vested and freely exercisable and
unvested stock options shall lapse and be surrendered by the Employee to
the Company without further consideration. Company shall permit Employee
(including dependents) to continue to participate on the same basis as the
other senior executives of the Company in all medical, dental, disability
and life insurance coverage in which Employee (including dependents) was
participating on the date of termination (as such coverages are from time
to time in effect at the Company). "Change of Control" means the
consummation of a merger of the Company with or into another entity or
acquisition of more than 50% of the Company's equity voting securities or
assets by another person or entity, other than an entity formed by or
previously affiliated with the Company before such merger or acquisition.
"Good Reason" means the occurrence of any of the following: (a) a reduction
in Employee's job title or job responsibility; (b) a reduction in
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Employee's base annual salary; or (c) Employee's relocation to a location
more than thirty miles from the Tempe, Arizona office of the Company,
except for customary required travel for the business of the Company.
E. In the event Employee voluntarily terminates his employment (for
other than Good Reason), or his employment is terminated because of death
or total disability, the Company shall pay Employee (or, in the case of
death, his estate) for accrued and untaken vacation through the date of
termination and salary through the date of termination.
11. MISCELLANEOUS PROVISIONS.
A. ENTIRE AGREEMENT. This Agreement contains the entire statement of
the agreement between the parties concerning the subject matter hereof.
This Agreement may only be amended by an instrument in writing, signed by
all parties hereto.
B. PARTIES BOUND BY AGREEMENT, SUCCESSORS AND ASSIGNS. The terms,
conditions, and obligations of this Agreement shall insure to the benefit
of, and be binding upon the parties hereto and the respective heirs,
executors, administrators, successors and assigns thereof. This Agreement
may not be assigned by Employee without the Company's prior written
consent.
C. HEADINGS. The headings of the Sections and paragraphs of this
Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction hereof.
D. NOTICES. Any notices required or permitted to be given by either
party to the other party hereunder shall be given in writing, and shall be
deemed given when deposited in the United States Mail, registered or
certified mail, return receipt requested and postage prepaid, and addressed
to the party at the address set forth in the introductory paragraph to this
Agreement. Either party may change its said address by written notice to
the other party in accordance with the provisions of this paragraph.
E. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Arizona.
F. ARBITRATION. Any dispute or controversy arising under or in
connection with this Agreement shall be settled by arbitration in Phoenix,
Arizona in accordance with the rules of, but not administered by, the
American Arbitration Association. Judgment may be entered on the
arbitrator's award in any court having jurisdiction over this Agreement.
G. ATTORNEY'S FEES. In the event any action be instituted by either
party to interpret or enforce any of the terms or conditions of this
Agreement, the prevailing party shall be entitled to recover attorney's,
accountant's, and expert witness fees and costs.
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H. PARTIAL INVALIDITY. In the event any of the terms or provisions of
this Agreement are determined by a court of competent jurisdiction to be
invalid or unenforceable, such partial invalidity shall not affect the
remaining provisions of this Agreement all of which shall remain in full
force and effect, and to that end, this Agreement is severable.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed on its behalf as of the date first above written.
EMPLOYEE INTEGRATED INFORMATION SYSTEMS, INC.,
A DELAWARE CORPORATION
/s/ Xxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxx
Xxxx X. Xxxxxx Name: Xxxxxxx X. Xxxxx
Title: Chief Financial Officer
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