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Exhibit 10.12
EMPLOYMENT AGREEMENT
Employment Agreement ("Agreement") made and entered into as of September 1,
1999 by and between XxxxXxxxxxxx.xxx, Inc., a Nevada corporation (the
"Company"), and Xxx Xxxxxx (the "Executive").
The Executive is being employed by the Company as an executive officer. The
parties desire to enter into an employment agreement and to set forth herein the
terms and conditions of the Executive's continued employment by the Company and
its subsidiaries.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and the mutual benefits to be derived here from, the Company and
the Executive agree as follows:
1. Employment.
(a) Duties. The Company shall employ the Executive, on the terms set
forth in this Agreement, as its Vice-President and Secretary. The Executive
accepts such employment with the Company and shall perform and fulfill such
duties as are assigned to her hereunder consistent with her status as a senior
executive of the Company devoting her best efforts and a substantial portion of
her time and attention to the performance and fulfillment of her duties and to
the advancement of the interests of the Company, subject only to the direction,
approvals, control and directives of the Company's Board of Directors (the
"Board"). Nothing contained herein shall be construed, however, to prevent the
Executive from trading in or managing, for her own account and benefit, in
stocks, bonds, securities, real estate, commodities or other forms of
investments (subject to law and Company policy with respect to trading in
Company securities). Without any additional consideration, Executive shall also
serve as an officer of any or all subsidiaries of the Company. Unless otherwise
indicated by the context, the term "Company" shall include the Company and all
its subsidiaries.
(b) Place of Performance. In connection with her employment by the
Company, the Executive shall be based at the Company's principal place of
business in New York, except when required for travel in Company business.
(c) Nomination as Director. The Company agrees that it will nominate
the Executive as a member of the Board of Directors each year during the term of
this Agreement and will use its best efforts to ensure that the Executive is
elected to the Board of Directors.
2. Term. The Executive's employment under this Agreement shall commence as
of September 1, 1999 (the "Commencement Date") and shall, unless sooner
terminated in accordance with the provisions hereof, continue uninterrupted
until September 30, 2001
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("Term"). As used herein "Year" shall refer to a twelve month period ending
September 30th. Unless notice of non-renewal is given by either party at least
sixty (60) days prior to the end of the Term or prior to the end of any Year
thereafter, the Term of this Agreement shall be automatically extended for an
additional period of one year.
3. Compensation. Executive shall receive a "Base Salary" during the Term.
The Base Salary for the term shall be at the rate of $52,000 per annum with
increases, subject to a semi-annual review by the Board of Directors.
4. Expenses.
(a) Reimbursement of Expenses. The Executive shall be reimbursed for
all items of travel, entertainment and miscellaneous expenses that the Executive
reasonably incurs in connection with the performance of her duties hereunder,
provided the Executive submits to the Company such statements and other evidence
supporting said expenses as the Company may reasonably require.
(b) Automobile Allowance. The Executive shall be reimbursed for the
expenses of owning or leasing an automobile suitable for her position and
consistent with Company practices, including the expenses of operating, insuring
and parking such automobile, provided the Executive submits to the Company such
statements and other evidence supporting such expenses as the Company may
require.
5. Vacation. The Executive shall be entitled to not less than four (4)
weeks of vacation in any calendar year. Any unused vacation time in a year shall
be accumulated and increase the amount of vacation time in subsequent years.
6. Termination of Employments.
(a) Death or Total Disability. In the event of the death of the
Executive during the Term, this Agreement shall terminate as of the date of the
Executive's death. In the event of the Total Disability (as that term is defined
below) of the Executive for sixty (60) days in the aggregate during any
consecutive nine (9) month period during the Term, the Company shall have the
right to terminate this Agreement by giving the Executive thirty (30) days'
prior written notice thereof, and upon the expiration of such thirty (30) day
period, the Executive's employment under this Agreement shall terminate. If the
Executive shall resume her duties within thirty (30) days after receipt of such
a notice of termination and continue to perform such duties for four (4)
consecutive weeks thereafter, this Agreement shall continue in full force and
effect, without any reduction in Base Salary and other benefits, and the notice
of termination shall be considered null and void and of no effect. Upon
termination of this Agreement under this Paragraph 6(a), the Company shall have
no further obligations or liabilities under this Agreement, except to pay to the
Executive's estate or the Executive, as the case may be, (i) the portion, if
any, that remains unpaid of the Base Salary for the Year in which termination
occurred, but in no event less than six (6) months' Base Salary; and (ii) the
amount of any expenses reimbursable in accordance with Paragraph 4 above, and
any automobile allowance due
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under Paragraph 4 above; and (iii) any amounts due under any Company benefit,
welfare or pension plan. Except as otherwise provided by their terms, any stock
options not vested at the time of the termination of this Agreement under this
Paragraph 6(a) shall immediately become fully vested.
The term "Total Disability" as used herein, shall mean a mental or
physical condition which in the reasonable opinion of an independent medical
doctor selected by the Company renders the Executive unable or incompetent to
carry out the material duties and responsibilities of the Executive under this
Agreement at the time the disabling condition was incurred. In the event the
Executive disagrees with such opinion, the Executive may, at her sole expense,
select an independent medical doctor and, in the event that doctor disagrees
with the opinion of the doctor selected by the Company, they shall select a
third independent medical doctor, and the three doctors shall, by majority vote,
determine whether the employee has suffered Total Disability. The expense of the
third doctor shall be shared equally by the Company and the Executive.
(b) Discharge for Cause. The Company may discharge the Executive for
"Cause" upon notice and thereby immediately terminate her employment under this
Agreement. For purposes of this Agreement, the Company shall have "Cause" to
terminate the Executive's employment if the Executive, in the reasonable
judgment of the Company, (i) materially breaches any of her agreements, duties
or obligations under this Agreement and has not cured such breach or commenced
in good faith to correct such breach within thirty (30) days after notice; (ii)
embezzles or converts to her own use any funds of the Company or any client or
customer of the Company; (iii) converts to her own use or unreasonably destroys,
intentionally, any property of the Company, without the Company's consent; (iv)
is convicted of a crime; (v) is adjudicated an incompetent; or (vi) is
habitually intoxicated or is diagnosed by an independent medical doctor to be
addicted to a controlled substance (any disagreement of Executive shall be
resolved using the procedure provided in Paragraph 6(a) above).
(c) Termination by Executive. Executive may terminate this Agreement
for the failure by the Company to comply with the material provisions of this
Agreement which failure is not cured within thirty (30) days after notice ("Good
Reason").
(d) No Mitigation. The Executive shall not be required to mitigate
the amount of any payment or benefit provided for in this Agreement by seeking
other employment or otherwise, not shall the amount of any payment provided for
in this Agreement be reduced by any compensation earned by the Executive as the
result of her employment by another employer.
7. Restrictive Covenant.
(a) Competition. As used herein "Company Business" shall mean any
business which the Company is actively pursuing or actively considering while
the executive was employed by the Company provided that upon termination or
execution of this agreement the term "Company Business" shall refer to any
arrangement or contract or relation of the Company or any subsidiary existing or
actually pursued at the time of termination or expiration of the
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Agreement. The Executive undertakes and agrees that during the term of this
Agreement and for a period of two years after the date of termination or
expiration of this Agreement he will not compete, directly or indirectly, with
respect to a Company Business or participate as a director, officer, employee,
agent, consultant, representative or otherwise, or as a stockholder, partner or
joint venturers, or have any direct or indirect financial interest, including,
without limitation, the interest of a creditor, in any business competing with
respect to a Company Business. Executive acknowledges that such prospects
represent a corporate opportunity or are the property of the Company and
Executive should have no rights with respect to such properties on projects.
Executive further undertakes and agrees that during the term of the Agreement
and for a period of one year after the date of termination or expiration of this
Agreement he will not, directly or indirectly employ, cause to be employed, or
solicit for employment any of Company's or its subsidiaries' employees.
Notwithstanding the foregoing, the provisions of the Paragraph 6(a) shall not
apply to termination by the Executive pursuant to Section 6(c) or by the Company
without cause.
(b) Scope of Covenant. Should the duration, geographical area or
range or proscribed activities contained in Paragraph 7(a) above be held
unreasonable by any court of competent jurisdiction, then such duration,
geographical area or range of proscribed activities shall be modified to such
degree as to make it or them reasonable and enforceable.
(c) Non-Disclosure of Information.
(i) The Executive shall (i) never, directly or indirectly,
disclose to any person or entity for any reason, or use for her own personal
benefit, any "Confidential Information" (as hereinafter defined) either during
her employment with the Company or following termination of that employment for
any reason (ii) at all times take all precautions necessary to protect from loss
or disclosure by her of any and all documents or other information containing,
referring or relating to such Confidential Information, and (iii) upon
termination of her employment with the Company for any reason, the Executive
shall promptly return to the Company any and all documents or other tangible
property containing, referring or relating to such Confidential Information,
whether prepared by her or others.
(ii) Notwithstanding any provision to the contrary in this
Paragraph 7(c), this paragraph shall not apply to information which the
Executive is called upon by legal process regular on its face (including,
without limitation, by subpoena or discovery requirement) to disclose or to
information which has become part of the public domain or is otherwise publicly
disclosed through no fault or action of the Executive.
(iii) For purposes of this Agreement, "Confidential Information"
means any information relating in any way to the business of the Company
disclosed to or known to the Executive as a consequence of, result of, or
through the Executive's employment by the Company which consists of technical
and nontechnical information about the Company's products, processes, computer
programs, concepts, forms, business methods, data, any and all financial and
accounting data, marketing, customers, customer lists, and services and
information corresponding thereto acquired by the Executive during the term of
the Executive's employment
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by the Company. Confidential Information shall not include any of such items
which are published or are otherwise part of the public domain, or freely
available from trade sources or otherwise.
(iv) Upon termination of this Agreement for any reason, the
Executive shall turn over to the Company all tangible property then in the
Executive's possession or custody which belongs or relates to the Company. The
Executive shall not retain any copies or reproductions of computer programs,
correspondence, memoranda, reports, notebooks, drawings, photographs, or other
documents which constitute Confidential Information.
8. Arbitration.
(a) Any and all other disputes, controversies and claims arising out
of or relating to this Agreement, or with respect to the interpretation of this
Agreement, or the rights or obligations of the parties and their successors and
permitted assigns, whether by operation of law or otherwise, shall be settled
and determined by arbitration in New York City, New York pursuant to the then
existing rules of the American Arbitration Association ("AAA") for commercial
arbitration.
(b) In the event that the Executive disputes a determination that
Cause exists for terminating her employment hereunder pursuant to Paragraph
6(b), or the Company disputes the determination that Good Reason exists for the
Executive's termination of this Agreement pursuant to Paragraph 6(c), either
party disputing this determination shall serve the other with written notice of
such dispute ("Dispute Notice") within thirty (30) days after the date the
Executive is terminated for Cause or the date the Executive terminates this
Agreement for Good Reason. Within fifteen (15) days thereafter, the Executive or
the Company, as the case may be, shall, in accordance with the Rules of the AAA,
file a petition with the AAA for arbitration of the dispute, the costs thereof
to be shared equally by the Executive and the Company unless an order of the AAA
provides otherwise. If the Executive serves a Dispute Notice upon the Company,
an amount equal to the portion of the Base Salary Executive would be entitled to
receive hereunder shall be placed by the Company in an interest-bearing escrow
account mutually agreeable to the parties or the Company shall deliver an
irrevocable letter of credit for such amount plus interest containing terms
mutually agreeable to the parties. If the AAA determines that Cause existed for
the termination, the escrowed funds and accrued interest shall be paid to the
Company. However, in the event the AAA determines that the Executive was
terminated without Cause or that Executive resigned for Good Reason, the
escrowed funds and accrued interest shall be paid to the Executive.
(c) Any proceeding referred to in Paragraph 8(a) or (b) shall also
determine Executive's entitlement to legal fees as well as all other disputes
between the parties relating to Executive's employment.
(d) The parties covenant and agree that the decision of the AAA shall
be final and binding and hereby waive their right to appeal therefrom.
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9. Indemnity. The Company shall indemnify and hold Executive harmless from
all liability to the full extent permitted by the laws of its state of
incorporation.
10. Miscellaneous.
(a) Notices. Any notice, demand or communication required or
permitted under this Agreement shall be in writing and shall either be
hand-delivered to the other party or mailed to the addresses set forth below by
registered or certified mail, return receipt requested or sent by overnight
express mail or courier or facsimile to such address, if a party has a facsimile
machine. Notice shall be deemed to have been given and received when so
hand-delivered or after three (3) business days when so deposited in the U.S.
Mail, or when transmitted and received by facsimile or sent by express mail
properly addressed to the other party. The addresses are:
To the Company: XxxxXxxxxxxx.xxx, Inc.
0000 00xx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
(000) 000-0000 (telecopier)
To the Executive: Xxx Xxxxxx
000 Xxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
The foregoing addresses may be changed at any time by notice given in the manner
herein provided.
(b) Integration; Modification. This Agreement constitutes the entire
understanding and agreement between the Company and the Executive regarding its
subject matter and supersedes all prior negotiations and agreements, whether
oral or written, between them with respect to its subject matter. This Agreement
may not be modified except by a written agreement signed by the Executive and a
duly authorized officer of the Company.
(c) Enforceability. If any provision of this Agreement shall be
invalid or unenforceable, in whole or in part, such provision shall be deemed to
be modified or restricted to the extent and in the manner necessary to render
the same valid and enforceable, or shall be deemed excised from this Agreement,
as the case may require, and this Agreement shall be construed and enforced to
the maximum extent permitted by law as if such provision had been originally
incorporated herein as so modified or restricted, or as if such provision had
not been originally incorporated herein, as the case may be.
(d) Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties, including and their respective heirs, executors,
successors and assigns, except that this Agreement may not be assigned by the
Executive.
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(e) Waiver of Breach. No waiver by either party of any condition or
of the breach by the other of any term or covenant contained in this Agreement,
whether by conduct or otherwise, in any one (1) or more instances shall be
deemed or construed as a further or continuing waiver of any such condition or
breach or a waiver of any other condition, or the breach of any other term or
covenant set forth in this Agreement. Moreover, the failure of either party to
exercise any right hereunder shall not bar the later exercise thereof with
respect to other future breaches.
(f) Governing Laws. This Agreement shall be governed by the
internal laws of the State of New York.
(g) Headings. The headings of the various sections and paragraphs
have been included herein for convenience only and shall not be considered in
interpreting this Agreement.
(h) Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
(i) Due Authorization. The Company represents that all corporate
action required to authorize the execution, delivery and performance of this
Agreement has been duly taken.
IN WITNESS WHEREOF, this Agreement has been executed by the Executive and,
on behalf of the Company, by its duly authorized officer on the day and year
first above written.
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XXX XXXXXX
XXXXXXXXXXXX.XXX, INC.
By:________________________________
Xxxxx Xxxxxxxx
Chief Executive Officer
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