EMPLOYMENT AGREEMENT
AGREEMENT dated as of __________________, 199_ between INTELLICELL CORP., a
Delaware corporation (the "Employer" or the "Company"), and Xxx Xxxxx (the
"Employee").
W I T N E S S E T H :
---------------------
WHEREAS, the Employee is currently the Company's Chairman, President and
Chief Executive Officer;
WHEREAS, the Employer desires to continue to employ the Employee as its
Chairman, President and Chief Executive Officer and to be assured of his
services as such on the terms and conditions hereinafter set forth; and
WHEREAS, the Employee is willing to accept such employment on such terms
and conditions; and
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, and intending to be legally bound hereby, the Employer
and the Employee hereby agree as follows:
1. Term. Employer hereby agrees to continue to employ Employee, and
Employee hereby agrees to continue to serve Employer for a three-year period
commencing on the effective date of the Registration Statement relating to the
Company's initial public offering (the "Effective Date") (such period being
herein referred to as the "Initial Term," and any year commencing on the
Effective Date or any anniversary of the Effective Date being hereinafter
referred to as an "Employment Year"). After the Initial Term, this Agreement
shall be renewable automatically for successive one year periods (each such
period being referred to as a "Renewal Term"), unless, more than thirty days
prior to the expiration of the Initial Term or any Renewal Term, either the
Employee or the Company give written notice that employment will not be renewed.
2. Employee Duties.
(a) During the term of this Agreement, the Employee shall have the duties
and responsibilities of Chairman, President and Chief Executive Officer of the
Employer, reporting directly to the Board of Directors of the Employer (the
"Board"). It is understood that such duties and responsibilities shall be
reasonably related to the Employee's position.
(b) The Employee shall devote substantially all of his business time,
attention, knowledge and skills faithfully, diligently and to the best of his
ability, in furtherance of the
business and activities of the Company. The principal place of performance by
the Employee of his duties hereunder shall be the Company's principal executive
offices or such other place as the Board shall determine, although the Employee
may be required to travel outside of the area where the Company's principal
executive offices are located in connection with the business of the Company.
3. Compensation.
(a) During the term of this Agreement, the Employer shall pay the Employee
a salary (the "Salary") at a rate of $72,000 per annum in respect of each
Employment Year, payable in equal installments semi-monthly, or at such other
times as may mutually be agreed upon between the Employer and the Employee. Such
Salary may be increased from time to time at the discretion of the Board.
(b) In addition to the foregoing, the Employee shall be entitled to such
other cash bonuses and such other compensation in the form of stock, stock
options or other property or rights as may from time to time be awarded to him
by the Board during or in respect of his employment hereunder.
4. Benefits.
(a) During the term of this Agreement, the Employee shall have the right to
receive or participate in all benefits and plans which the Company may from time
to time institute during such period for its employees and for which the
Employee is eligible. Nothing paid to the Employee under any plan or arrangement
presently in effect or made available in the future shall be deemed to be in
lieu of the salary or any other obligation payable to the Employee pursuant to
this Agreement.
(b) During the term of this Agreement, the Employee will be entitled to the
number of paid holidays, personal days off, vacation days and sick leave days in
each calendar year as are determined by the Company from time to time. Such
vacation may be taken in the Employee's discretion with the prior approval of
the Employee, and at such time or times as are not inconsistent with the
reasonable business needs of the Company.
5. Travel Expenses. All travel and other expenses incident to the rendering
of services reasonably incurred on behalf of the Company by the Employee during
the term of this Agreement shall be paid by the Employer. If any such expenses
are paid in the first instance by the Employee, the Employer shall reimburse him
therefor on presentation of appropriate receipts for any such expenses.
-2-
6. Termination. Notwithstanding the provisions of Section 1 hereof, the
Employee's employment with the Employer may be earlier terminated as follows:
(a) By action taken by the Board, the Employee may be discharged
for cause (as hereinafter defined), effective as of such time as the
Board shall determine. Upon discharge of the Employee pursuant to this
Section 6(a), the Employer shall have no further obligation or duties
to the Employee, except for payment of Salary through the effective
date of termination, and as provided in Sections 5 and 8, and the
Employee shall have no further obligations or duties to the Employer,
except as provided in Section 7.
(b) In the event of (i) the death of the Employee or (ii) by
action of the Board and the inability of the Employee, by reason of
physical or mental disability, to continue substantially to perform
his duties hereunder for a period of 180 consecutive days, during
which 180 day period Salary and any other benefits hereunder shall not
be suspended or diminished. Upon any termination of the Employee's
employment under this Section 6(b), the Employer shall have no further
obligations or duties to the Employee, except as provided in Sections
5 and 8.
(c) In the event that Employee's employment with the Employer is
terminated by action taken by the Board without cause, including
termination upon a Change in Control (as hereinafter defined), then
the Employer shall have no further obligation or duties to Employee,
except for payment of the amounts described below and as provided in
Sections 5 and 8, and Employee shall have no further obligations or
duties to the Employer, except as provided in Section 7. In the event
of such termination, the Employer shall continue to pay Salary to the
Employee for the remainder of the Initial Term, or the remainder of
the current Renewal Term if this Agreement has been renewed; provided,
however, that if such termination occurs during the third year of the
Initial Term or the final year of any Renewal Term, the Employer shall
also pay to the Employee an amount equal to the total Salary received
by the Employee during the 12 months prior to the date of termination.
If such termination occurs upon a Change in Control, all amounts
payable to the Employee pursuant to this Section 6(c) shall be paid in
one lump-sum payment payable immediately upon such termination.
(d) For purposes of this Agreement, the Company shall have
"cause" to terminate the Employee's employment under this Agreement
upon (i) the failure by the Employee to substantially perform his
duties under this Agreement, (ii) the engaging by the Employee in
criminal misconduct (including embezzlement and criminal fraud) which
is materially injurious to the Company, monetarily or otherwise, (iii)
the conviction of the Employee of a felony, (iv) gross negligence on
the part of the Employee or (v) other misconduct of the Employee in
the performance of his
-3-
duties hereunder. The Company shall give written notice to the
Employee, which notice shall specify the grounds for the proposed
termination and the Employee shall be given thirty (30) days to cure
if the grounds arise under clauses (i) or (v) above.
(e) For purposes of this Agreement a "Change in Control" shall be
deemed to occur, unless previously consented to in writing by the
Employee, upon the election of directors constituting a majority of
the Board who have not been nominated or approved by the Employee.
7. Confidentiality; Noncompetition.
(a) The Employer and the Employee acknowledge that the services to be
performed by the Employee under this Agreement are unique and extraordinary and,
as a result of such employment, the Employee will be in possession of
confidential information relating to the business practices of the Company. The
term "confidential information" shall mean any and all information (verbal and
written) relating to the Company or any of its affiliates, or any of their
respective activities, other than such information which can be shown by the
Employee to be in the public domain (such information not being deemed to be in
the public domain merely because it is embraced by more general information
which is in the public domain) other than as the result of breach of the
provisions of this Section 7(a), including, but not limited to, information
relating to: trade secrets, personnel lists, financial information, research
projects, services used, pricing, customers, customer lists and prospects,
product sourcing, marketing and selling and servicing. The Employee agrees that
he will not, during or for a period of two years after the termination of
employment, directly or indirectly, use, communicate, disclose or disseminate to
any person, firm or corporation any confidential information regarding the
clients, customers or business practices of the Company acquired by the Employee
during his employment by Employer, without the prior written consent of
Employer; provided, however, that the Employee understands that Employee will be
prohibited from misappropriating any trade secret (as defined for purposes of
Indiana law) at any time during or after the termination of employment.
(b) The Employee hereby agrees that he shall not, during the period of his
employment and for a period of one (1) year following such employment, directly
or indirectly, within any county (or adjacent county) in any State within the
United States or territory outside the United States in which the Company is
engaged in business during the period of the Employee's employment or on the
date of termination of the Employee's employment, engage, have an interest in or
render any services to any business (whether as owner, manager, operator,
licensor, licensee, lender, partner, stockholder, joint venturer,
-4-
employee, consultant or otherwise) competitive with the Company's business
activities.
(c) The Employee hereby agrees that he shall not, during the period of his
employment and for a period of one (1) year following such employment, directly
or indirectly, take any action which constitutes an interference with or a
disruption of any of the Company's business activities including, without
limitation, the solicitations of the Company's customers, or persons listed on
the personnel lists of the Company. At no time during the term of this
Agreement, or thereafter shall the Employee directly or indirectly, disparage
the commercial, business or financial reputation of the Company.
(d) For purposes of clarification, but not of limitation, the Employee
hereby acknowledges and agrees that the provisions of subparagraphs 7(b) and (c)
above shall serve as a prohibition against him, during the period referred to
therein, directly or indirectly, hiring, offering to hire, enticing, soliciting
or in any other manner persuading or attempting to persuade any officer,
employee, agent, lessor, lessee, licensor, licensee or customer who has been
previously contacted by either a representative of the Company, including the
Employee, (but only those suppliers existing during the time of the Employee's
employment by the Company, or at the termination of his employment), to
discontinue or alter his, her or its relationship with the Company.
(e) Upon the termination of the Employee's employment for any reason
whatsoever, all documents, records, notebooks, equipment, price lists,
specifications, programs, customer and prospective customer lists and other
materials which refer or relate to any aspect of the business of the Company
which are in the possession of the Employee including all copies thereof, shall
be promptly returned to the Company.
(f) (i) The Employee agrees that all processes, technologies and
inventions ("Inventions"), including new contributions, improvements, ideas and
discoveries, whether patentable or not, conceived, developed, invented or made
by him during his employment by Employer shall belong to the Company, provided
that such Inventions grew out of the Employee's work with the Company are
related in any manner to the business (commercial or experimental) of the
Company or are conceived or made on the Company's time or with the use of the
Company's facilities or materials. The Employee shall further: (a) promptly
disclose such Inventions to the Company; (b) assign to the Company, without
additional compensation, all patent and other rights to such Inventions for the
United States and foreign countries; (c) sign all papers necessary to carry out
the foregoing; and (d) give testimony in support of his inventorship;
-5-
(ii) If any Invention is described in a patent application or is disclosed
to third parties, directly or indirectly, by the Employee within two years after
the termination of his employment by the Company, it is to be presumed that the
Invention was conceived or made during the period of the Employee's employment
by the Company; and
(iii) The Employee agrees that he will not assert any rights to any
Invention as having been made or acquired by him prior to the date of this
Agreement, except for Inventions, if any, disclosed to the Company in writing
prior to the date hereof.
(g) The Company shall be the sole owner of all products and proceeds of the
Employee's services hereunder, including, but not limited to, all materials,
ideas, concepts, formats, suggestions, developments, arrangements, packages,
programs and other intellectual properties that the Employee may acquire,
obtain, develop or create in connection with and during the term of the
Employee's employment hereunder, free and clear of any claims by the Employee
(or anyone claiming under the Employee) of any kind or character whatsoever
(other than the Employee's right to receive payments hereunder). The Employee
shall, at the request of the Company, execute such assignments, certificates or
other instruments as the Company may from time to time deem necessary or
desirable to evidence, establish, maintain, perfect, protect, enforce or defend
its right, or title and interest in or to any such properties.
(h) The parties hereto hereby acknowledge and agree that (i) the Company
would be irreparably injured in the event of a breach by the Employee of any of
his obligations under this Section 7, (ii) monetary damages would not be an
adequate remedy for any such breach, and (iii) the Company shall be entitled to
injunctive relief, in addition to any other remedy which it may have, in the
event of any such breach.
(i) The parties hereto hereby acknowledge that, in addition to any other
remedies the Company may have under Section 7(h) hereof, the Company shall have
the right and remedy to require the Employee to account for and pay over to the
Company all compensation, profits, monies, accruals, increments or other
benefits (collectively, "Benefits") derived or received by the Employee as the
result of any transactions constituting a breach of any of the provisions of
Section 7, and the Employee hereby agrees to account for any pay over such
Benefits to the Company.
(j) Each of the rights and remedies enumerated in Section 7(h) and 7(i)
shall be independent of the other, and shall be severally enforceable, and all
of such rights and remedies shall be in addition to, and not in lieu of, any
other
-6-
rights and remedies available to the Company under law or in equity.
(k) If any provision contained in this Section 7 is hereafter construed to
be invalid or unenforceable, the same shall not affect the remainder of the
covenant or covenants, which shall be given full effect, without regard to the
invalid portions.
(1) If any provision contained in this Section 7 is found to be
unenforceable by reason of the extent, duration or scope thereof, or otherwise,
then the court making such determination shall have the right to reduce such
extent, duration, scope or other provision and in its reduced form any such
restriction shall thereafter be enforceable as contemplated hereby.
(m) It is the intent of the parties hereto that the covenants contained in
this Section 7 shall be enforced to the fullest extent permissible under the
laws and public policies of each jurisdiction in which enforcement is sought
(the Employee hereby acknowledging that said restrictions are reasonably
necessary for the protection of the Company). Accordingly, it is hereby agreed
that if any of the provisions of this Section 7 shall be adjudicated to be
invalid or unenforceable for any reason whatsoever, said provision shall be
(only with respect to the operation thereof in the particular jurisdiction in
which such adjudication is made) construed by limiting and reducing it so as to
be enforceable to the extent permissible, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of said
provision in any other jurisdiction.
8. Indemnification. The Employer shall indemnify and hold harmless the
Employee against any and all expenses reasonably incurred by him in connection
with or arising out of (a) the defense of any action, suit or proceeding in
which he is a party, or (b) any claim asserted or threatened against him, in
either case by reason of or relating to his being or having been an employee,
officer or director of the Company, whether or not he continues to be such an
employee, officer or director at the time of incurring such expenses, except
insofar as such indemnification is prohibited by law. Such expenses shall
include, without limitation, the fees and disbursements of attorneys, amounts of
judgments and amounts of any settlements, provided that such expenses are agreed
to in advance by the Employer. The foregoing indemnification obligation is
independent of any similar obligation provided in the Employer's Certificate of
Incorporation or Bylaws, and shall apply with respect to any matters
attributable to periods prior to the Effective Date, and to matters attributable
to his employment hereunder, without regard to when asserted.
-7-
9. General. This Agreement is further governed by the following provisions:
(a) Notices. All notices relating to this Agreement shall be in
writing and shall be either personally delivered, sent by telecopy
(receipt confirmed) or mailed by certified mail, return receipt
requested, to be delivered at such address as is indicated below, or
at such other address or to the attention of such other person as the
recipient has specified by prior written notice to the sending party.
Notice shall be effective when so personally delivered, one business
day after being sent by telecopy or five days after being mailed.
To the Employer:
Intellicell Corp.
0000 Xxxxxxxxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
To the Employee:
Xx. Xxx Xxxxx
0000 Xxxxxxxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
With, in either case, a copy in the same manner to:
Xxxxxx Xxxxxxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
(b) Parties in Interest. Employee may not delegate his duties or
assign his rights hereunder. This Agreement shall inure to the benefit
of, and be binding upon, the parties hereto and their respective
heirs, legal representatives, successors and permitted assigns.
(c) Entire Agreement. This Agreement supersedes any and all other
agreements, either oral or in writing, between the parties hereto with
respect to the employment of the Employee by the Employer and contains
all of the covenants and agreements between the parties with respect
to such employment in any manner whatsoever. Any modification or
termination of this Agreement will be effective only if it is in
writing signed by the party to be charged.
(d) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
-8-
(e) Warranty. Employee hereby warrants and represents as follows:
(i) That the execution of this Agreement and the discharge
of Employee's obligations hereunder will not breach or conflict
with any other contract, agreement, or understanding between
Employee and any other party or parties.
(ii) Employee has ideas, information and know-how relating
to the type of business conducted by Employer, and Employee's
disclosure of such ideas, information and know-how to Employer
will not conflict with or violate the rights of any third party
or parties.
(f) Severability. In the event that any term or condition in this
Agreement shall for any reason be held by a court of competent
jurisdiction to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any
other term or condition of this Agreement, but this Agreement shall be
construed as if such invalid or illegal or unenforceable term or
condition had never been contained herein.
(g) Execution in Counterparts. This Agreement may be executed by
the parties in one or more counterparts, each of which shall be deemed
to be an original but all of which taken together shall constitute one
and the same agreement, and shall become effective when one or more
counterparts has been signed by each of the parties hereto and
delivered to each of the other parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
INTELLICELL CORP.
By:
--------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chief Operating Officer
------------------------------------
Xxx Xxxxx
-9-
