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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement"), dated March 15, 1999, is by and between
CRL Network Systems, Inc., a Delaware corporation (the "Company"), and Xxxxx X.
Xxxxx ("Executive") residing in Xxxxxxx Xxxxxxx, Xxxxxx 00000.
RECITALS
WHEREAS, Executive has served as President and Chief Executive Officer
of the Company since its formation and has been instrumental in helping the
Company achieve its objectives; and
WHEREAS, the parties wish to continue this relationship and to provide
for certain matters, recognizing the value to the Company of the efforts and
activities of Executive;
NOW, THEREFORE, in consideration of foregoing recitals, the mutual
promises of the parties and the mutual benefits they will gain by the
performance thereof, and other good an valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties do hereby agree as
follows:
1. TERM OF EMPLOYMENT. The Company agrees to continue to employ Executive in his
current executive capacity, and Executive agrees to remain in the full-time
employ of the Company in such executive capacity and to perform his duties
provided herein, through February 28, 2002 (the period from the date hereof
through February 28, 2002, or such later date as this Agreement may be extended
in accordance with its provisions, being referred to herein as the "Term"),
unless earlier terminated pursuant to the provisions of this Agreement or upon
his earlier death. The Term shall automatically be extended for consecutive
one-year periods unless terminated by either party by written notice given at
least three (3) months prior to the expiration of the unextended initial term or
any subsequent one-year extension period.
2. AUTHORITY AND PERFORMANCE OF DUTIES. During the Term, the Company agrees to
employ Executive, and Executive agrees to serve, as the President and Chief
Executive Officer of the Company. At a minimum, Executive's duties,
responsibilities and authority will include all traditional duties,
responsibilities and authority of a President and Chief Executive Officer of a
corporation, and all duties, responsibilities and authority that Executive has
had prior to the date hereof. Without limiting the generality of the foregoing,
Executive's duties, responsibilities and authority shall include the authority
to hire, fire and discipline the workforce, set the terms and conditions of
work, and establish the compensation, benefits, bonuses and awards for the
Company's employees, all under the general policies and budget set forth by the
Board of Directors. Neither the Board of Directors nor any other person shall
interfere with Executive's day-to-day management of the Company's employees or
affairs. Executive agrees to devote his entire time and attention to the
business of the Company except insofar as he may be otherwise permitted by the
Board of Directors. The Company acknowledges Executive's residence and principal
place of performance of his duties in the State of Nevada. However, Executive
shall perform his duties at all such Company
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offices and other locations as are reasonably necessary or appropriate to
fulfill his duties and functions as requested by the Company.
3. COMPENSATION AND BENEFITS.
A. Salary. Executive shall receive for his services rendered hereunder
an annual base salary of Three Hundred Twenty Thousand Dollars ($320,000) (the
"Base Salary") payable on a monthly basis in twelve (12) equal monthly
installments, subject to standard withholdings for taxes and social security and
the like. Executive's compensation may be increased at any time by resolution of
the Board of Directors without the necessity of amending this Agreement or any
renewal thereof, and such increase shall not be deemed to be a change in the
terms or conditions of this Agreement.
B. Bonus. During the Term, Executive may receive, at the discretion of
the Board of Directors, such annual or special bonuses as it may determine.
C. Benefits. During the Term, Executive shall be entitled to participate
in any group insurance, hospitalization, medical, dental, health and accident,
disability or similar plan or program of the Company now existing or established
hereafter, to the extent that he is eligible under the general provisions
thereof. Notwithstanding the foregoing, Executive shall only be entitled to
participate in any such plan or program if executive officers of the Company are
generally eligible to participate in such plan or program. The Company may, in
its sole discretion and from time to time, establish additional senior
management benefit programs as it deems appropriate. Executive understands that
any such plans may be modified or eliminated in the discretion of the Company in
accordance with applicable law.
D. Vacation. Executive shall be entitled to a period of annual paid
vacation time equal to not less than four (4) weeks per year. The days selected
for Executive's vacation shall be mutually agreeable to the Company and
Executive.
E. Board Membership. During the Term, Executive shall serve as a member
of the Board of Directors of the Company.
4. REASONABLE BUSINESS EXPENSES AND SUPPORT. Executive shall be reimbursed for
documented and reasonable business expenses in connection with the performance
of his duties hereunder and in accordance with the Company's general policies
relating thereto. Executive shall be furnished reasonable office space,
assistance and facilities.
5. TERMINATION OF EMPLOYMENT.
A. Termination by the Company. This Agreement may be terminated by the
Company at any time with or without cause as set forth in this Agreement.
(i) Without Cause. If, for any reason other than any "Certain
Event" (as defined below) during the Term, Executive's services hereunder shall
be terminated by the Company, he shall be entitled to receive, and the Company
shall pay to Executive, twelve (12)
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months salary, which shall be paid in twelve (12) equal monthly installments
over the 12-month period following such termination. In addition, upon such
termination, Executive shall continue to be entitled to receive, for a period of
twelve (12) months following the date of termination, whatever other employee
benefits he was receiving at the time of such termination. The Company shall
also pay to Executive any salary earned but unpaid, and accrued but unused
vacation, as of the date of termination. Apart from the salary and benefit
continuation described in this subparagraph, Executive acknowledges that he is
entitled to no additional compensation in the event he is terminated without
cause. As used herein, a "Certain Event" means termination for "Cause" (as
hereinafter defined), Total and Permanent Disability (as hereinafter defined),
or death.
(ii) For Cause. Notwithstanding the provisions of paragraph 1
hereof, the Company may at any time terminate Executive's employment hereunder
for cause. For purposes of this Agreement, the Company shall have "cause" to
terminate Executive's employment hereunder only upon (a) the continued use of
drugs or alcohol to the extent Executive becomes unable to substantially perform
his duties hereunder, (b) the engaging by Executive in willful misconduct that
is demonstrably and materially injurious to the Company, monetarily or
otherwise, (c) the commission by Executive or an act of fraud or embezzlement
against the Company, (d) the conviction of Executive of a felony involving moral
turpitude, or (e) the material breach by Executive of the provisions of
paragraphs 6 and 7 of this Agreement. Executive may not be terminated for cause
unless the Company first shall have given or delivered to Executive (i)
reasonable written notice setting forth the reasons for the Company's intention
to terminate for cause, and (ii) a notice of termination stating that in the
good faith opinion of the Board of Directors, Executive was guilty of conduct
set forth above in clauses (a), (b), (c), (d) or (e), and specifying the
particulars thereof in detail. In the event Executive is terminated for cause,
the Company shall pay to Executive any salary earned but unpaid, and accrued but
unused vacation as of the date of termination, and nothing more.
B. Termination By Executive.
(i) Voluntary Resignation. If at any time Executive wishes to
terminate his obligations under this Agreement, he shall give the Company at
least thirty (30) days notice. If Executive resigns his employment under this
subparagraph, the Company shall pay to Executive any salary earned but unpaid,
and accrued but unused vacation as of the last day worked by Executive, and
nothing more.
(ii) Death Of Executive. In the event of the death of Executive
while employed under this Agreement, the Company shall pay to Executive's
designated beneficiary(s) as shown in the records of the Company any salary
earned but unpaid, and accrued but unused vacation as of the end of the month in
which Executive dies, and nothing more.
(iii) Disability. For purposes hereof, "Total and Permanent
Disability" means inability to perform the services required hereunder due to
physical or mental disability that continues for 180 consecutive days or more,
or for an aggregate of 180 days in any period
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of twelve months. Evidence of such disability shall be certified by a physician
acceptable to both the Company and Executive. In the event Executive's
employment is terminated as a result of his disability as defined herein, the
Company shall pay to Executive any salary earned but unpaid and accrued but
unused vacation as of the end of the month in which the termination for
disability occurs.
C. Notice. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been duly given or
delivered if delivered personally or mailed by registered or certified mail,
return receipt requested, with first class postage prepaid, to each of the
members of the Board of Directors in the case of the Company and to the
Executive at: Xxx 0000, Xxxxxxx Xxxxxxx, Xxxxxx 00000.
6. NON-COMPETITION. Executive agrees that, during the Term, he will not engage
or participate directly or indirectly in the conduct or management of any other
business that is similar to or in competition with the business of the Company
or its affiliates except as otherwise permitted by the Board of Directors.
7. DISCLOSURE OF INFORMATION. Executive recognizes and acknowledges that the
Company's confidential and proprietary information, as may exist from time to
time, are valuable, special and unique assets of the Company access to and
knowledge of which are essential to the performance of the duties of Executive
hereunder. Executive will not, during or after the Term in whole or in part,
disclose such confidential or proprietary information to any person, firm,
corporation or other entity for any reason or purpose whatsoever, nor shall
Executive make use of any such property for his own purposes for the benefit of
any person, firm, corporation or other entity (except the Company) under any
circumstances, during or after the Term, provided that after the Term these
restrictions shall not apply to such information which is then in the public
domain (provided that Executive was not responsible, directly or indirectly, for
such information entering the public domain without the Company's consent).
8. KEY MAN LIFE INSURANCE. Executive shall take such actions as may be
reasonably necessary or appropriate to permit the Company to obtain a key man
life insurance policy insuring Executive and naming the Company as beneficiary.
Notwithstanding the foregoing, for purposes of this Section 8, Executive shall
not be required to cease or be subject to restriction of his lawful activities
provided such activities would not be a basis for the Company's termination of
his employment for cause under this Agreement.
9. SUCCESSORS. This Agreement shall be binding upon the parties hereto, their
heirs, executors, administrators, successors and assigns. Executive, however,
shall not assign any part of his rights under this Agreement unless the Company
agrees thereto in writing. In event of a merger, consolidation or reorganization
involving the Company, this Agreement shall continue in force and become an
obligation of the Company's successor or successors.
10. ENTIRE AGREEMENT. This instrument contains the entire agreement of the
parties. It may not be changed orally but only by an agreement in writing signed
by the party against whom enforcement of any waiver, change, modification,
extension, or discharge is sought.
11. BINDING ARBITRATION. All disputes and differences which may arise out of or
in connection with this Agreement will be settled as far as possible by means of
negotiations
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between the parties hereto. Except with regard to any disputes and differences
arising in connection with Paragraphs 6 and 7 of this Agreement, in which case
relief may be sought in any court of competent jurisdiction and proper venue,
such disputes and differences which are not settled by common accord are to be
resolved only by submission to binding arbitration to be conducted in San
Francisco, California in conformity with the Commercial Arbitration Rules of the
American Arbitration Association. The award of the arbitrator or arbitration
panel shall be final and binding on both parties hereto.
12. ATTORNEY FEES. If any legal proceeding is necessary to enforce or interpret
the terms of this Agreement, or to recover damages for breach therefor, the
prevailing party shall be entitled to reasonable attorney's fees, as well as
costs and disbursements, in addition to any other relief to which he or it may
be entitled.
13. CHOICE OF LAW. All questions concerning the construction, validity and
interpretation of this Agreement will be governed by the laws of the internal
law, and not the law of conflicts, of the State of Nevada.
This Agreement has been entered into the parties effective as of the date set
forth above.
/S/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
CRL NETWORK SERVICES, INC.
By: /S/ Xxxxx X. Xxxxx
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Title: President and Chief Executive Officer
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