EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement (this "Agreement") is made by and
between XxxxxxxxXxx.xxx, Inc., a Nevada corporation (the "Company"), and Xxxxx
X. Xxxxxx ("Executive").
WHEREAS, the Company wishes to enter into an agreement with Executive, and
Executive wishes to enter into an agreement with the Company, whereby Executive
shall be employed by the Company under the terms and conditions set forth below;
THEREFORE, the parties agree as follows:
I. EMPLOYMENT: THIS AGREEMENT.
Executive's employment with the Company shall be at-will, meaning it may be
terminated by the Company or Executive at any time, with or without reason or
cause, although Executive agrees to remain employed by the Company for a period
of not less than thirty-six (36) months immediately following the date of this
Agreement.
Executive's employment with the Company shall be governed by the provisions
of this Agreement for the period commencing with the date of this Agreement and
continuing until this Agreement is terminated pursuant to section VII below (the
"Employment Period").
II. DUTIES AND RESPONSIBILITIES.
A. Executive shall be employed by the Company in the position of Senior
Vice President of Sales, and shall be given responsibilities commensurate with
his position, which responsibilities may change as business needs and market
conditions change from time to time.
B. During the Employment Period, Executive shall devote his full business
time, best efforts, abilities, energies and skills to the good faith performance
of his duties and responsibilities hereunder, and shall perform said duties and
responsibilities at all reasonable times and places in accordance with
reasonable directions and requests made by the Company consistent with
Executive's position and the Company's business needs. During the Employment
Period, except with respect to Executive's current investment activity as
disclosed to the Company prior to the date hereof, Executive shall not engage in
any other employment, business, or business related activity unless Executive
receives the Company's prior written approval from the Chief Executive Officer
or Chief Operating Officer to hold such outside employment or engage in such
business or activity, which written approval shall not be unreasonably withheld
if such outside employment, business or activity would not in any way be
competitive with the business or proposed business of the Company or otherwise
conflict with or adversely affect in any way Executive's performance under this
Agreement.
III. CASH COMPENSATION.
A. Executive shall be paid a base salary at a rate of $250,000.00 per
annum, together with an automobile allowance of $1,000 per month, and a mobile
or cellular phone allowance of up to $300 per month. Such rates shall be subject
to review and change by the Company, in its discretion from time to time,
generally on an annual basis. Executive's base salary shall be paid at periodic
intervals in accordance with the Company's payroll practices for salaried
employees.
B. Executive shall be paid certain bonus payments assuming performance
objectives to be established in a plan mutually developed by the Company and
Executive are met in all respects, payable in such manner as set forth in such
plan. Executive shall submit such plan to the Company for approval within thirty
(30) days after the date of this Agreement, whereupon Company shall review such
plan and work in good faith with Executive to finalize such plan. The plan shall
be subject to approval by the Company in its reasonable discretion.
C. In addition to the bonus payments from Section III.B. above, subject to
the terms and conditions in effect from time to time, Executive shall be
eligible to participate in the Company's bonus or incentive compensation plan in
effect for executive level employees which may take into account the following
factors: the Company's achievement of the financial objectives and performance
milestones established by the Company's Board of Directors (the "Board") for
each bonus/incentive compensation period; Executive's achievement of individual
performance objectives as agreed by Executive and Executive's supervisor for
such period; and Executives continued employment through the close of such
period.
D. With respect to any and all cash compensation payable to Executive
hereunder, the Company shall comply with all applicable tax withholding
requirements, and shall make such other deductions as may be authorized by
Executive.
IV. EMPLOYEE BENEFITS AND EXPENSE REIMBURSEMENT.
A. Executive shall be eligible to participate in all employee benefits
generally made available to employees of the Company from time to time,
including group insurance and health and welfare benefit plans, as well as such
benefits that the Company generally makes available to its executives, provided
the Executive meets the relevant qualification criteria for such benefits.
Subject to the policies in effect from time to time, Executive initially shall
accrue paid vacation during the Employment Period at the rate of fifteen (15)
days per annum. Executive shall be entitled to all paid holidays in accordance
with the policy of the Company with respect to all employees.
B. The Company shall provide Executive with corporate housing in Las Vegas,
Nevada unless Executive elects to locate permanent housing, in which event the
Company shall pay up to $5,000 in relocation expenses incurred by Executive in
accordance with the Company's relocation policy.
C. Subject to the policies in effect from time to time, Executive shall be
entitled to receive reimbursement from the Company for all reasonable and
necessary business travel, business and business entertainment expenses incurred
by Executive in the performance of his duties hereunder.
V. CONFIDENTIAL AND PROPRIETARY INFORMATION.
Throughout the Employment Period, Executive shall execute, not later than
two (2) business days after being requested by the Company, the Company's form
or amended or supplemental form of confidential/proprietary/trade secret
information, non-disclosure and/or inventions assignment agreement, and shall
comply at all relevant times with such agreement(s).
VI. STOCK OPTIONS.
Simultaneously herewith, the Company will issue to Executive options
(collectively, "Stock Options") to acquire up to 200,000 shares of the Company's
Common Stock ("Shares") in accordance herewith and otherwise under the 1999
Stock Plan of XxxxxxxxXxx.xxx, Inc. (the "Plan"), at a price per Share equal to
the Fair Market Value (as such term is defined in the Plan) on the date of this
Agreement (subject to SEC rules and restrictions imposed upon the officers and
major shareholders of the Corporation), as set forth in the option agreement
between you and the Company in the forms attached hereto as Exhibit A.
VII. TERMINATION OF EMPLOYMENT.
Executive's employment shall be terminable pursuant to the following
procedures:
A. Death. Upon Executive's death, Executive's employment shall immediately
and automatically terminate.
B. Disability or for Cause. Executive's employment may be terminated by the
Company at any time, upon written notice, due to Executive's Disability or for
Cause. Such termination shall be effective immediately upon such notice, or on
such prospective date specified in such notice.
1. For the purpose of this Agreement, "Disability" means Executive's
inability, either with or without reasonable accommodation, by reason of
any physical or mental injury, illness or impairment, to substantially
perform the essential functions required of his under this Agreement for a
period of ninety (90) or more consecutive days.
2. For the purpose of this Agreement, "Cause" means any of the
following reasons:
a. Executive's conviction or plea of nolo contendre to a felony
offense;
b. The Company's good faith determination that:
(1) the Executive has engaged in theft, fraud, embezzlement
or intentional dishonest conduct with respect to Company property
or funds, or intentional dishonest conduct with respect to any
vendor, partner, affiliate or customer of the Company which is
harmful to the Company;
(2) the Executive has materially breached the Company's
confidential/proprietary/trade secret information, non-disclosure
and/or inventions assignment agreement(s) signed by Executive;
(3) the Executive has materially breached one or more of his
obligations under this Agreement;
(4) the Executive has engaged in an intentional act or
misconduct which has had, or potentially will have, a materially
adverse effect upon the Company's business, operations or
reputation;
(5) the Executive has materially breached Executive's
fiduciary obligations as an officer of the Company, if
applicable; or
c. Executive's continued failure to adequately perform the
duties, functions or responsibilities of his position, provided
however, that the Company shall have given written notice to
Executive, and Executive shall have had a period of thirty (30) days
within which to cure the failure(s), described in such written notice,
giving rise to possible termination for Cause under this Section
XII(B)(2)(c).
C. Without Cause. Executive's employment under this Agreement may be
terminated without Cause:
1. By the Company at any time for any reason (excluding Executive's
death or Disability, or for Cause), by giving Executive written notice of
such termination; or
2. By Executive at any time after the thirty-six (36) month period
immediately following the date of this Agreement for any reason by giving
the Company, through Executive's direct supervisor and a copy to the
Company's Vice President of Human Resources, written notice of such
termination.
D. Obligation of Company upon Any Termination. Except as specified in
Section VIII, below, upon termination of Executive's employment, the Company
shall only be required:
1. to pay Executive (or his estate) any unpaid base salary for
services rendered, for all accrued but unused vacation and any
bonus/incentive compensation, earned by Executive through the date of such
termination;
2. to allow Executive and/or his dependents to continue participation
only in those health benefits in which Executive and/or his dependents are
entitled to participate pursuant to the terms and conditions of the
Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
("COBRA"): and
3. to allow Executive (or his estate) to enjoy the benefits of his
vested Stock Options, if any, subject to the terms and conditions then
applicable to those Stock Options. Unless Executive's stock or Stock Option
agreement(s), or any addendum or stock acceleration waiver provide
otherwise, stock and option vesting also will cease as of the date of
termination, although Executive (or his estate) would be allowed to
exercise Executive's vested options during the time period set forth in,
and in accordance with, Executive's stock or Stock Option agreement(s).
VIII. SEVERANCE.
A. Definitions. For the purpose of this Section VIII, the following
definitions shall apply:
1. "Involuntary Termination" shall exclude any termination of
Executive's employment by reason of Executive's death or Disability or by
the Company for Cause, and shall mean only:
a. the Company's termination of Executive's employment Without
Cause, including within ninety (90) days following a Change in Control
of the Company (as such term is defined in Section 2(b) of the Plan);
or
b. Executive voluntary resignation within ninety (90) days
following:
(1) a reduction in his total cash compensation potential
(annual base salary rate and bonus opportunity) by more than ten
percent (10%); or
(2) notice from the Company that it is requiring a
relocation of his principal place of residence without his
consent.
X. Xxxxxxxxx Benefits. In the event of his Involuntary Termination,
Executive shall be entitled to the following:
1. Salary Continuation. For a period of twelve (12) months measured
from the date of his involuntary Termination, salary continuation payments
at the monthly rate of base salary in effect for Executive under Section
III(A), above, just prior to the time of the act or omission resulting in
his Involuntary Termination. Such salary continuation payments shall be
paid at periodic intervals in accordance with the Company's payroll
practices for salaried employees, and shall be subject to all applicable
tax withholding requirements.
2. Bonus/Incentive Compensation Continuation. Payment of the full
annual bonus/incentive compensation potential in effect for Executive under
Section III(B), above, just prior to the time of the act or omission
resulting in his Involuntary Termination, to the extent not yet paid to
Executive. Such bonus/incentive compensation payment shall be made in a
single lump sum payment not later than thirty (30) days after the effective
date of Executive's Involuntary Termination, and shall be subject to all
applicable tax withholding requirements.
3. Health Plan Coverage. Continued coverage under the Company's group
health plans, without charge, for Executive and his eligible dependents
upon his election to receive such continued coverage under COBRA. Such
Company-paid coverage shall continue until the earlier of: (i) the
expiration of the twelve (12) month period measured from the effective date
of Executive's Involuntary Termination, or (ii) the first date on which
Executive is covered under another employer's health plan(s) without
exclusion for any pre-existing medical condition. Any additional health
care coverage to which Executive and his dependents may be entitled under
COBRA following the period of such Company-paid coverage shall be at
Executive's sole cost and expense.
C. Limitations on Severance Benefits.
1. The benefits provided Executive under this Section VIII are the
only severance benefits, or measure of damages or loss, to which Executive
is entitled under this Agreement upon the termination of his employment
with the Company, and no other severance benefits shall be provided to
Executive by the Company pursuant to any other severance plan or program of
the Company (or of its parent or subsidiary or related company).
2. The severance provided by this Section VIII(B), shall be reduced by
any amount to which Executive may be entitled under the federal Worker
Adjustment Retraining Notification Act.
3. In the event Executive breaches any of his obligations under
Sections V or IX:
a. Executive shall cease to be entitled to any severance benefits
otherwise to be provided under Section VIII(B);
b. the Company shall be entitled to recover from Executive any
and all amounts paid to or on behalf of the Executive as severance
under Section VIII(B), and
c. the Company shall be entitled to take any and all action
necessary to pursue legal and equitable remedies against Executive,
including, without limitation, injunctive relief; provided, however,
this Agreement will remain in full force and effect notwithstanding
any such action by the Company.
IX. RESTRICTIVE COVENANTS.
During the Employment Period and for a period that is not less than one (1)
year after the termination of Executive's employment for any reason other than
death, Executive shall be subject to the following restrictive covenants:
A. Executive shall not directly or indirectly encourage or solicit any
employee, consultant or independent contractor to leave the employment or
service of the Company, or of its parent or subsidiary or related company, for
any reason or interfere in any other manner with such relationships at the time
existing between the Company (or its parent or subsidiary or related company)
and its employees, consultants and independent contractors.
B. Executive shall not directly or indirectly solicit any customer, vendor,
supplier, licensor, licensee or other business affiliate of the Company or of
its parent or subsidiary or related company; or directly or indirectly induce
any such person to terminate its existing business relationship with the Company
(or its parent or subsidiary or related company) or interfere in any other
manner with any existing business relationship between the Company (or its
parent or subsidiary or related company) and any such customer, vendor,
supplier, licensor, licensee or other business affiliate.
C. Executive shall not serve as an employee, agent, consultant, advisor,
independent contractor, general partner, officer, director, stockholder,
investor, lender or guarantor, or in any other capacity, directly or indirectly,
of or for any corporation, partnership or other entity, to the extent any
material portion of the business of such corporation, partnership or other
entity is related to the research or development with respect to, or the
marketing or sale of, any products or services for the carrying on of electronic
commerce transactions using technology or technologies similar in the design or
functionality to the proprietary technology of the Company (hereafter
collectively referred to as a "Business") in the United States or throughout the
world, nor shall Executive permit the use of Executive's name in connection with
any Business.
D. Notwithstanding the foregoing, Executive may own, directly or
indirectly, solely as an investment, up to one percent (1%) of any class of
"publicly traded securities" of any business that is competitive or
substantially similar to the Businesses or any person who owns a business that
is competitive or substantially similar to the Businesses. The term "publicly
traded securities" shall mean securities that are traded on a national
securities exchange or listed on the NASDAQ Stock Market or Bulletin Board.
E. The parties agree that if any of the foregoing restrictive covenants is
found by a court to be unreasonable, the court shall reduce and limit such
covenants to such area, scope or period as shall be deemed reasonable and the
parties shall comply with such reductions and limitations.
F. Executive hereby acknowledges that monetary damages may not be
sufficient to compensate the Company for any economic loss which may be incurred
by reason of Executive's breach of the foregoing restrictive covenants.
Accordingly, in the event of any such breach, the Company shall, in addition to
the termination of this Agreement and any remedies available to the Company at
law, be entitled to obtain equitable relief in the form of an injunction
precluding Executive from continuing such breach, or in the form of a decree
requiring specific performance of the covenants set forth herein.
X. MISCELLANEOUS.
A. Governing Law. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Nevada without regard to
its choice of law rules.
B. Severability; Judicial Modification. Should any provision, or portion of
a provision, of this Agreement become or be deemed unenforceable by reason of
the scope, extent or duration of its coverage, then such provision shall be
deemed amended to the extent necessary to conform to applicable law so as to be
valid and enforceable. Should any provision, or portion of a provision, of this
Agreement be deemed unenforceable for any other reason, such unenforceability
will not affect any other provision, or portion of a provision, of this
Agreement and this Agreement shall be construed as if such unenforceable
provision, or portion of provision, had never been contained herein.
C. Remedies. Except as otherwise provided herein, all rights and remedies
provided pursuant to this Agreement or by law shall be cumulative, and no such
right or remedy shall be exclusive of any other. A party may pursue any one or
more rights or remedies hereunder or may seek damages or specific performance in
the event of another party's breach hereunder or may pursue any other available
remedy.
D. Arbitration. Any and all disputes between Executive and the Company
which arise out of Executive's employment under the terms of this Agreement or
the termination of such employment shall be resolved through final and binding
arbitration. Such disputes shall include, without limitation, disputes relating
to this Agreement, Executive's employment by the Company or the termination
thereof, claims for breach of contract or breach of the covenant of good faith
and fair dealing, and any claims of discrimination or other claims under Title
VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act,
the Americans With Disabilities Act, or any other federal, state or local law or
regulation now or later in concerning Executive's employment with the Company or
its termination. The only claims not covered by this Agreement are:
1. Executive's claims for benefits under the worker's compensation or
unemployment insurance laws, which will be resolved pursuant to those laws;
and
2. Any claims by the Company or by Executive arising from or relating
to Section V or Section IX of this Agreement.
Binding arbitration will be conducted in accordance with existing procedures for
resolution or employment disputes of the American Arbitration Association in the
largest metropolitan area within one hundred (100) miles of Executive's most
recent principal residence. Each party will share equally the cost of the
arbitration filing and hearing fees, and the cost of the arbitrator, and the
prevailing party shall be entitled to recover his/its reasonable attorneys fees
and costs incurred with respect to the arbitration. The parties understand and
agree that the arbitration shall be instead of any civil litigation and that
each is waiving the right to a jury trial as to such claims. The parties further
understand and agree that the arbitrator's decision shall be final and binding
to the fullest extent permitted by law and enforceable by any court having
jurisdiction thereof.
E. Assignment; Successors. This Agreement may not be assigned by Executive
without the Company's written consent.
This Agreement shall be binding on the heirs, executors, administrators,
personal representatives, successors and assigns of Executive and the Company.
F. Counterparts. This Agreement may be executed in more than one
counterpart, each of which shall be deemed an original, but all of which
together shall constitute but one and the same instrument.
G. Changes to Agreement. This Agreement may only be changed by another
written agreement signed by Executive and an authorized officer of the Company.
H. Notices. Any and all notices under this Agreement, including notice of
change of address, shall be in writing and shall be deemed given when delivered
personally, when received by overnight delivery, or three (3) days after deposit
in the United States mail, certified or registered, postage prepaid, return
receipt requested, addressed to the party to whom such notice is being given.
1. To the Company: To the Executive's direct supervisor, with a copy
to the Company's Vice President of Human
Resources, at each such person's principal place of employment with the Company.
2. To Executive: To the Executive at 0000 Xxxxxxxx Xxxxx, Xxxx Xxxx,
Xxxxxxxx 00000, with a copy to counsel designated by Executive in writing
to the Company from time to time.
I. Complete Agreement: There are no promises, representations or
commitments made between Executive and the Company that do not appear in this
Agreement. This Agreement supersedes, cancels and replaces any and all prior
verbal and written agreements between Executive and the Company arising from or
relating to the subject matters covered (including but not limited to any and
all offer letters, employment, termination, change in control, severance and
compensation agreement) except the following which shall remain in full force
and effect in accordance with their respective terms:
1. The Company's Employee Proprietary Information and Inventions
Agreement or other confidential/proprietary/trade secret information and
inventions assignment agreements entered from time to time by Executive and
the Company; and
2. Any stock option grant notice or stock option agreement, stock
purchase/issuance agreements, addenda to stock option/purchase/issuance
agreement(s), and/or stock acceleration waiver entered from time to time by
Executive and the Company.
Dated:__________________________________ XxxxxxxxXxx.xxx, Inc.
By __________________________________
Title:_______________________________
Dated:____________________________ EXECUTIVE
_____________________________________
Xxxxx X. Xxxxxx
