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EXHIBIT 10.07
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), is entered into as of the 29th
day of January, 1999, by and among XXXXXXX.XXX, INC., a Nevada corporation (the
"Company") and XXXX XXXXX ("Xxxxx").
WHEREAS, the Company desires to employ Xxxxx as provided herein; and,
WHEREAS, Xxxxx desires to accept such employment,
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. EMPLOYMENT. The Company hereby employs Xxxxx and Xxxxx hereby
accepts employment with the Company as Chief Financial Officer and as Vice
President of Finance upon the terms and conditions hereinafter set forth.
2. DUTIES. Xxxxx will serve the Company as Chief Financial Officer and
as Vice President of Finance and will faithfully and diligently perform the
services and functions relating to such positions or otherwise reasonably
incident to such position, provided that all such services and functions will
be reasonable and within Xxxxx'x area of expertise. Xxxxx'x specific duties
shall include those related to (i) coordinating all financial matters,
(ii) financial management, (iii) accounting, (iv) budgeting, (v) cash
management, and (vi) such other duties as the Company may reasonably direct.
Xxxxx will, during the term of this Agreement (or any extension thereof),
devote his time, attention and skills and best efforts as a full time employee
to the promotion of the business of the Company.
3. TERM. This Agreement and Xxxxx'x employment shall commence on the
29th day of January, 1999, (the "Effective Date") and shall continue for a term
of three years ("Initial Term") unless terminated earlier in accordance with
this Agreement. The term of this Agreement may be extended by agreement of the
Company and Xxxxx.
4. COMPENSATION. As compensation for the services rendered to the
Company under this Agreement commencing on the Effective Date hereof, Xxxxx
will be paid a base salary of One Hundred Thousand dollars ($100,000) per year,
payable monthly, in arrears, in two monthly installments or in accordance with
the then current payroll policies of the Company or as otherwise agreed to by
the parties (the "Salary"). At any time and from time to time, the Salary may
be increased if so determined by the Company's board of directors after a
review of Xxxxx'x performance of his duties hereunder.
5. TERMINATION. This Agreement will terminate upon the occurrence of
any of the following events:
a. The death of Xxxxx;
b. The "Total Disability" (as herein defined) of Xxxxx;
c. Written notice to Xxxxx from the Company of termination for "Cause"
(as hereinafter defined);
d. The voluntary termination of this Agreement by either party upon sixty
(60) days' prior written notice;
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e. The later of three (3) years from the Effective Date of this Agreement or
the date to which this Agreement is extended in accordance with Section 3
above; or
f. Written notice to Xxxxx from the Company for any reason without "Cause".
For purposes of Section 5b, the term "Total Disability" means physical or
mental disability, or both, determined to be (or reasonably expected to be,
based upon then available medical information) of not less than twelve (12)
months duration or more. The determination shall rest upon the opinion of the
physician regularly attending Xxxxx. If the Company disagrees with said
physician's opinion, the Company may engage at their own expense a physician to
examine the Xxxxx, and Xxxxx hereby consents to such examination and to waive,
if applicable any privilege between the physician and Xxxxx that may arise as a
result of said examination. If after conferring, the two physicians cannot
concur on a final opinion, they shall choose a third consulting physician whose
opinion shall control. The expense of the third consulting physician shall be
borne equally by the Xxxxx and the Company.
For purposes of Section 5c, "Cause" means (i) Xxxxx has failed to
substantially perform his duties as reasonably determined by any Officer of the
Company or the Board of Directors of the Company, (ii) Xxxxx engages in poor
performance that is not cured within thirty (30) days after counseling by the
Company, (iii) Xxxxx has failed to comply with the reasonable directives and
policies of the Board of Directors of the Company or of any Officer of the
Company, or (iv) Xxxxx breaches his fiduciary duty to the Company or commits any
dishonest, unethical, fraudulent, or felonious act in respect to Xxxxx'x duties
to the Company.
6. BENEFITS. Xxxxx shall be entitled to participate in any Company
benefits as they become available, if at all, including group medical and dental
insurance, life insurance, incentive compensation, deferred compensation, stock
option plans or other Company programs or plans. At reasonable times and upon
prior Company approval, Xxxxx shall be entitled to three weeks paid vacation per
calendar year for each year employed during the term of this Agreement.
7. STOCK OPTIONS. Specifically subject to Section 10c and contingent upon
Xxxxx being employed by the Company, Xxxxx shall be granted options to purchase
100,000 shares of the Company's Common Stock (the "Stock Options") exercisable
at $8.00 per share, with 20,000 Stock Options to vest upon the Effective Date
and with the remaining 80,000 Stock Options to vest and be exercisable over the
three (3) year period from the Effective Date in accordance with Section 7.3(b)
of the Company's 1998 Stock Option Plan. In the event of any termination of
Xxxxx'x employment, any Stock Options that have not previously vested shall
immediately terminate. In addition, all Stock Options to be granted herein
shall be exercisable, except as otherwise set forth herein, in accordance with
the Company's 1998 Stock Option Plan and subject to Section 10c below.
8. LOAN. The Company will loan to Xxxxx Twenty Thousand dollars ($20,000)
to be loaned and disbursed on the Effective Date. All amounts loaned will be
evidenced by a promissory note with interest at 10% per annum and with all
principal and accrued but unpaid interest due one (1) year from the Effective
Date if not sooner paid. The Company agrees that if Xxxxx has been employed by
the Company for six continuous months from the Effective Date, 50% of the
principal balance and accrued but unpaid interest shall be forgiven and, if
Xxxxx has been employed by the Company for a total of twelve continuous months
of employment by the Company, then the remaining principal balance and accrued,
but unpaid interest shall be forgiven by the Company and the Note evidencing
such loan shall be canceled.
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9. BUSINESS EXPENSES. Upon submission of proper documentation, the
Company shall pay or reimburse Xxxxx for all reasonable and necessary office,
telephone, travel and other expenses, which are incurred by Xxxxx in the
pursuit of Xxxxx'x duties on behalf of the Company.
10. NON-COMPETITION AND CONFIDENTIALITY.
a. Non-Competition. The Company and Xxxxx acknowledge and agree that
Xxxxx'x services are of a special and unusual character which have a unique
value to the Company, the loss of which cannot be adequately compensated by
damages in an action at law and if used in competition with the Company, could
cause serious harm to the Company. Accordingly, Xxxxx agrees that during the
term of this Agreement and for a period of two (2) years after the termination
of this employment by the Company, irrespective of the reason for such
termination, Xxxxx will not (1) enter into any agreement with or directly or
indirectly solicit or attempt to solicit any employee or other representatives
of the Company (the "Company") for the purpose of causing them to leave the
Company to take employment with any other business entity, or (2) compete,
directly or indirectly, with the Company in any way and that Xxxxx will not act
as an officer, director, employee, consultant, shareholder, lender or agent of
any entity engaged in any business of the same nature as, or in competition
with, the business in which the Company is now engaged, was engaged during
Xxxxx'x employment or is engaged at the time of Xxxxx'x termination of
employment, except for the ownership of less than five percent (5%) of the
outstanding capital stock of a publicly traded company.
b. Confidentiality.
(1) Xxxxx acknowledges that in Xxxxx'x employment hereunder, Xxxxx
will be making use of, acquiring and adding to the Company's trade secrets and
its confidential and proprietary information of a special and unique nature and
value relating to such matters as, but not limited to, the Company's business
operations, internal structure, financial affairs, programs, software systems,
procedures, manuals, confidential reports, lists of clients and prospective
clients and sales and marketing methods, as well as the amount, nature and type
of services, equipment and methods used and preferred by the Company's clients
and the fees paid by such clients, all of which shall be deemed to be
confidential information. Xxxxx acknowledges that such confidential information
has been and will continue to be of central importance to the business of the
Company and that disclosure of it to or its use by others could cause
substantial loss to the Company. In consideration of employment by the Company,
Xxxxx agrees that during the Initial Term and any renewal term of this
Agreement and upon and after leaving the employ of the Company for any reason
whatsoever, Xxxxx shall not, for any purpose whatsoever, directly or
indirectly, divulge or disclose to any person or entity any of such
confidential information which was obtained by Xxxxx as a result of the Xxxxx'x
employment with the Company or any trade secrets of the Company, but shall hold
all of the same confidential and inviolate.
(2) All contracts, agreements, financial books, records, instruments
and documents; client lists; memoranda; data; reports; programs; software,
tapes; Rolodexes; telephone and address books; letters; research; card decks;
listings; programming; and any other instruments, records or documents relating
or pertaining to clients serviced by the Company or Xxxxx, the services
rendered by Xxxxx, or the business of the Company (collectively, the "Records")
shall at all times be and remain the property of the Company. Upon termination
of this Agreement and Xxxxx'x employment under this Agreement for any reason
whatsoever, Xxxxx shall return to the Company all Records (whether furnished by
the Company or prepared by Xxxxx), and Xxxxx shall neither make nor retain any
copies of any of such Records after such termination.
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(3) All inventions and other creations, whether or not patentable or
copyrightable, and all ideas, reports and other creative works, including,
without limitation, computer programs, manuals and related materials, made or
conceived in whole or in part by Xxxxx while employed by the Company and within
one year thereafter, which relate in any manner whatsoever to the business,
existing or proposed, of the Company or any other business or research or
development effort in which the Company or any of its subsidiaries or
affiliates engages during Xxxxx'x employment by the Company will be disclosed
promptly by Xxxxx to the Company and shall be the sole and exclusive property
of the Company. All copyrightable works created by Xxxxx and covered by this
Section 10b(3) shall be deemed to be works for hire. Xxxxx shall cooperate with
the Company in patenting or copyrighting all such inventions, ideas, reports
and other creative works, shall execute, acknowledge, seal and deliver all
documents tendered by the Company to evidence its ownership thereof through the
world, and shall cooperate with the Company obtaining, defending and enforcing
its rights therein.
c. Certain Claims Upon Termination. Xxxxx understands that if within
one year prior to the termination of Xxxxx'x employment with the Company, Xxxxx
has either (i) committed an act of theft, dishonesty, gross dereliction of
duty, fraud, embezzlement, misappropriation, or breach of fiduciary duty
against the Company or any other act of comparable misconduct against the
Company; or (ii) breached any of his obligations under this Agreement, then the
Company shall have the right to purchase any or all shares of Common Stock of
the Company owned by Xxxxx at the time of such termination for a purchase price
equal to the amount that Xxxxx paid for such shares, together with interest
thereon at a rate of ten percent (10%) per annum. If the Company desires to
exercise such right, it shall notify Xxxxx within 60 days after the date of
such termination and Xxxxx shall tender the shares being purchased by the
Company at the time and place designated in such notice from the Company upon
receipt of the purchase price for such shares. If Xxxxx fails to tender such
shares, the shares shall be deemed to be canceled as of the date the Company
tenders payment of the purchase price thereof.
d. Enforceability. In the event of the breach of the covenants by either
party contained in this Section 10, it is understood that damages will be
difficult to ascertain and the Company may petition a court of law or equity
for injunctive relief in addition to any other relief which the Company may
have under the law, this Agreement or any other agreement executed in
connection herewith. In connection with the bringing of any legal or equitable
action for the enforcement of this Agreement, the Company shall be entitled to
recover, whether the Company seeks equitable relief, and regardless of what
relief is afforded, such reasonable attorneys' fees and expenses as the Company
may incur in prosecution of the Company's claim for breach hereof.
It is hereby agreed that the provisions of this Section 10 are separate
and independent from the other provisions of this Agreement, that these
provisions are specifically enforceable by the Company notwithstanding any
claim by Xxxxx that the Company has violated or breached this Agreement or any
claim that Xxxxx is entitled to any offset or compensation.
To induce the Company to enter into this Agreement, Xxxxx represents and
warrants to the Company that Section 10 of this Agreement is enforceable by the
Company in accordance with its terms.
The parties hereto agree that to the extent that any provision or portion
of Section 10 of this Agreement shall be held, found or deemed to be
unreasonable, unlawful or unenforceable by a court of competent jurisdiction,
then any such provision or portion thereof shall be deemed to be modified to
the extent necessary in order that any such provision or portion thereof shall
be legally enforceable to the fullest extent permitted by applicable law; and
the parties hereto do further agree that any court of
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competent jurisdiction shall, and the parties hereto do hereby expressly
authorize, request and empower any court of competent jurisdiction to, enforce
any such provision or portion thereof or to modify any such provision or
portion thereof in order that any such provision or portion thereof shall be
enforced by such court to the fullest extent permitted by applicable law.
11. WAIVER OF BREACH. The waiver by any party hereto of a breach of any
provision of this Agreement will not operate or be construed as a waiver of any
subsequent breach by any party.
12. NOTICES. Any notices, consents, demands, request, approvals and other
communications to be given under this Agreement by either party to the other
will be deemed to have been duly given if given in writing and personally
delivered, faxed or if sent by mail, registered or certified, postage prepaid
with return receipt requested, as follows:
If to the Company: xxxxxxx.xxx, inc.
One Arizona Center
000 Xxxx Xxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
If to Xxxxx: Xxxx Xxxxx
Notices delivered personally will be deemed communicated as of actual receipt,
notices by fax shall be deemed delivered when such notices are faxed to
recipient's fax number and notices by mail shall be deemed delivered when
mailed.
13. ENTIRE AGREEMENT. This Agreement and the agreements contemplated
hereby constitute the entire agreement of the parties regarding the subject
matter hereof, and supersede all prior agreements and understanding, both
written and oral, among the parties, or any of them, with respect to the subject
matter hereof.
14. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future laws effective during
this Agreement, such provision will be fully severable and this Agreement will
be construed and enforced as if such illegal, invalid or unenforceable provision
never comprised a part hereof; and the remaining provisions hereof will remain
in full force and effect and will not be affected by the illegal, invalid or
unenforceable provision or by its severance herefrom. Furthermore, in lieu of
such illegal, invalid or unenforceable provision, there will be added
automatically, as part of this Agreement, a provision as similar in its terms to
such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable.
15. GOVERNING LAW. To the extent permitted by applicable law, this
Agreement and the rights and obligations of the parties will be governed by and
construed and enforced exclusively in accordance with the substantive laws (but
not the rules governing conflicts of laws) of the State of Arizona and the
State of Arizona shall have exclusive jurisdiction regarding any legal actions
relating to this Agreement.
16. CAPTIONS. The captions in this Agreement are for convenience of
reference only and will not limit or otherwise affect any of the terms or
provisions hereof.
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17. GENDER AND NUMBER. When the context requires, the gender of all words
used herein will include the masculine, feminine and neuter, and the number of
all words will include the singular and plural.
18. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of which will
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
THE COMPANY:
xxxxxxx.xxx, inc., a Nevada corporation
By: /s/ Xxxxxxx Xxxxxxxx
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Xxxxxxx Xxxxxxxx, Chief Executive Officer
XXXXX:
/s/ Xxxx Xxxxx
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Xxxx Xxxxx
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