EXHIBIT 10.5
EMPLOYMENT AGREEMENT, effective as of this 18th day of April, 2005 (this
"Agreement"), between Xxxxxx Xxxxxx, residing at 00-X Xxxxxxxxx Xxxxxx, Xxxx
Xxxxx, Xxx Xxxxxx 00000 (the "Executive"), and Xxxxxxx.xxx, Inc., an Utah
corporation with an office currently at 000 Xxxxxx Xxxxxx, Xxxxxxx, XX 00000
(the "Company").
W I T N E S S E T H :
WHEREAS, the Company and the Board of Directors of the Company desire to
memoralize the employment of the Executive on a full-time basis as its President
and Chief Executive Officer and the Executive desires to accept such employment
subject to the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements and covenants
set forth herein, the parties hereto agree as follows:
ARTICLE I
POSITION; DUTIES; TERM
Position. The Company hereby employs the Executive as the President and
Chief Executive Officer of the Company, which employment the Executive hereby
accepts, all in the capacity and on the terms and conditions hereinafter set
forth.
1.2 Duties. (a) During the Term (as defined below), the Executive shall be a
full-time employee of the Company, all under and subject to the direction and
control of the Board of Directors of the Company (the "Board"). The Executive
shall be invited to all Board meetings, and after the initial 12-month period of
the Term, the Board shall consider recommending that the shareholders of the
Company appoint the Executive as a member of the Board.
(b) In his capacity as President and Chief Executive Officer, the Executive
shall be the senior executive officer of the Company with principal
responsibility for controlling the operations of the Company and shall perform
such duties for the Company as are consistent with the foregoing, including,
without limitation, preparing and obtaining approval from the Board of the
Company's annual budget and plan.
(c) The services to be performed by the Executive shall be commensurate
with the position of the Executive as the most senior executive employee of the
Company. In this connection, during the Term (i) the Executive shall not render
services to or for any other person, firm, corporation or business in this
capacity and (ii) shall have no interest directly or indirectly in any other
person, firm, corporation or business whose business is related to or
competitive with the business of the Company; provided, however, the Executive
may own, directly or indirectly, solely as an investment, securities of any
entity which are traded on any national securities exchange or which are
admitted to quotation on The NASDAQ Stock Market Inc. if the Executive (a) is
not a controlling person of, or a member of a group which controls, such entity
and (b) does not, directly or indirectly, own one percent or more of any class
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of securities of such entity. Notwithstanding the foregoing, so long as it does
not interfere with his full time employment hereunder, the Executive may attend
to outside investments and serve as a director, trustee or officer of or
otherwise participate in charitable and civic organizations and serve as
director of corporations whose business is unrelated to the business of the
Company and continue to pursue his other business interests.
1.3 Term. The term of employment shall commence as of the date set forth above
and shall continue until this Agreement is terminated in accordance with the
terms hereof (the "Term"). Notwithstanding anything contained herein to the
contrary, the Executive can terminate his employment hereunder at any time
hereafter upon sending written notice of termination to the Company at least
sixty (60) days prior to the termination.
ARTICLE II
SALARY; BONUS; OPTIONS
2.1 Annual Base Salary. During each twelve month period of the Term, the
annual base salary (the "Base Salary") to be paid by the Company to the
Executive shall be One Hundred Sixty Thousand Dollars ($160,000), payable in
equal bi-monthly installments, or in such other manner as the parties shall
mutually agree, subject to withholding for applicable taxes. The Base Salary
shall be subject to an annual increase at the discretion of the Board.
2.2 Bonus. In addition to the Base Salary, the Executive shall be eligible
for a bonus (the "Bonus") of up to Eighty Thousand Dollars ($80,000). The Bonus
shall be based on the Company's overall performance and meeting established
objectives which shall be submitted by the Executive and approved by the Board.
2.3 Shares. The Company hereby grants the Executive 2,650,000 shares of
common stock of the Company. The shares shall vest pro ratably every 3 months
over a 3-year period commencing on April 4, 2005.
ARTICLE III
BENEFITS
3.1 Business Expenses The Company, upon presentation by the Executive of
appropriate documentation, shall reimburse the Executive for all reasonable and
necessary business expenses incurred by the Executive in connection with the
performance of his duties under this Agreement, including reasonable
accommodation expenses during travel required in connection with the performance
of the Executive's duties. Such reimbursement shall be paid to the Executive
within five (5) business days thereafter.
3.2 Directors' and Officers' Liability Insurance. The Executive shall be
covered by the directors' and officers' insurance policy to be obtained by the
Company. The Company agrees to defend the Executive from and against any and all
lawsuits initiated against the Company and/or the Executive.
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3.3 Additional Benefits. The Executive shall be entitled to participate in
any pension or profit sharing plans, group health, accident or life insurance
plans, group medical and hospitalization plan, and other similar benefits as may
be available to the employees of the Company. The Executive shall assist the
Company in adopting the proper plans for the Company.
ARTICLE IV
TERMINATION
4.1 Termination without Cause. (a) The Executive's employment hereunder
may be terminated by the Company without Cause at any time within the
three-month period after the date hereof, upon sixty (60) days' prior written
notice from the Company to the Executive. In lieu of the 60-days notice, the
Company could terminate the employment of the Executive without cause and
without notice if the Company pays the Executive under normal payroll practices
for a 60-day period.
(b) If the Executive's employment is terminated by the Company without
Cause at any time after the three month period commencing on the date hereof,
the Company shall pay the Executive the annual Base Salary in effect as of the
date of termination. For purposes of clarity, if the Executive's employment is
terminated by the Company without Cause after said three month period, the
annual Base Salary in effect as of the date of termination shall be paid to the
Executive even if the termination without Cause is as a result of a change in
control of the Company. Said payment shall be made in twelve (12) equal monthly
installments.
4.2 Termination with Cause. If the Executive's employment is terminated by
the Company for Cause or by the Executive for any reason, including without
limitation, the Executive's death or disability, the Company shall pay the
Executive or his heirs or personal representatives the Base Salary accrued
through the date of termination. For purposes hereof, "Cause" shall mean any one
of the following: (i) willful and continuing disregard of his job
responsibilities or material breach by the Executive of this Agreement, which
continues for 20 days after delivery to the Executive of notice thereof or (ii)
fraud, embezzlement, conviction of a felony or serious crime, violation of
ethics code or other serious misconduct.
ARTICLE V
REPRESENTATION; NON-COMPETITION; CONFIDENTIALITY
5.1 Executive Representation. The Executive represents that the Executive's
execution of this Agreement and the performance of his duties required hereunder
will neither be a breach of any other employment or other agreement nor a breach
of any non-competition or similar agreement.
5.2 Non-Competition. (a) The Executive agrees that during the Term and for
the period of one (1) year thereafter, he will not engage, directly or directly,
either as principal, agent, consultant, proprietor, creditor, stockholder,
director, officer or employee, or participate in the ownership, management,
operation or control of any business which directly or indirectly competes with
the business of the Company. The Executive acknowledges and agrees that the
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current market for the Company's business extends throughout the world and that
it is therefore reasonable to prohibit the Executive from competing with the
Company anywhere in such territory. This Section shall not apply to the
Executive's ownership of less than five percent (5%) of the capital stock of a
company having a class of capital stock which is traded on any national stock
exchange or on the over-the-counter market.
(b) During the Term and for the period of one (1) year thereafter,
the Executive agrees that he will not, directly or indirectly, (i) solicit,
divert or recruit or encourage any of the employees of the Company, or any
person who was an employee of the Company during the Term, to leave the employ
of the Company or terminate or alter their contractual relationship in a way
that is adverse to the Company's interests, (ii) solicit or divert business from
the Company, or assist any person or entity in doing so or attempting to do so
or (iii) cause or seek to cause any person or entity to refrain from dealing or
doing business with the Company or assist any person or entity in doing so or
attempting to do so.
5.3 Confidential Information. (a) The Executive agrees that he shall hold
in strict confidence and shall not at any time during or after his employment
with the Company, directly or indirectly, (i) reveal, report, publicize,
disclose, or transfer any Confidential Information (as described below) or any
part thereof to any person or entity, (ii) use any of the Confidential
Information or any part thereof for any purpose other than in the course of his
duties on behalf of the Company, or (iii) assist any person or entity other than
the Company to secure any benefit from the Confidential Information or any part
thereof. All Confidential Information (regardless of the medium retained) and
all abstracts, summaries or writings based upon or reflecting any Confidential
Information in the Executive's possession shall be delivered by the Executive to
the Company upon request therefor by the Company or automatically upon the
expiration of the Term or termination of this Agreement.
(b) For purposes of this Agreement, "Confidential Information"
shall mean any information relating to the business, operations, affairs, assets
or condition (financial or otherwise) of the Company which is not generally
known by non-company personnel, or is proprietary or in any way constitutes a
trade secret (regardless of the medium in which information is maintained) which
the Executive develops or which the Executive obtains knowledge of or access to
through or as a result of the Executive's relationship with the Company.
Confidential Information specifically includes, without limitation, business and
marketing plans, financings, cost and pricing information, supplier information,
all source code, system and user documentation, and other technical
documentation pertaining to the hardware and software programs of the Company,
including any proposed design and specifications for future products and
products in development, and all other technical and business information
considered confidential by the Company. Confidential Information shall not
include any information that is generally publicly available or otherwise in the
public domain other than as a result of a breach by the Executive of his
obligations hereunder. For purposes of this Agreement, information shall not be
deemed Confidential Information if (i) such information is available from public
sources, (ii) such information is received from a third party not under an
obligation to keep such information confidential, or (iii) the Executive can
conclusively demonstrate that such information had been independently developed
by the Executive.
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5.4 Remedies. The Executive agrees and acknowledges that the foregoing
restrictions and the duration and the territorial scope thereof as set forth in
this Sections 5.2 and 5.3 are under all of the circumstances reasonable and
necessary for the protection of the Company and its business. In the event that
the Executive shall breach any of the provisions of Sections 5.2 or 5.3, in
addition to and without limiting or waiving any other remedies available to the
Company, at law or in equity, the Company shall be entitled to immediate
injunctive relief in any court, domestic or foreign, having the capacity to
grant such relief, to restrain any such breach or threatened breach and to
enforce the provision of this Agreement.
ARTICLE VI
MISCELLANEOUS
6.1 Entire Agreement. This Agreement constitutes the entire understanding
between the Company and the Executive with respect to the subject matter hereof
and supersedes any and all previous agreements or understandings between the
Executive and the Company concerning the subject matter hereof, all of which are
merged herein.
6.2 Successors. This Agreement shall be binding upon and inure to the
benefit of the Executive and his heirs and personal representatives, and the
Company and its successors and assigns.
6.3 Notices. All notices and other communications required or permitted
hereunder shall be delivered personally, sent via facsimile, certified or
registered mail, return receipt requested, or next day express mail or
overnight, nationally recognized courier, postage prepaid with proof of receipt,
to the address or telephone number (in the case of facsimile) set forth above.
Such addresses and/or telephone numbers may be changed by notice given in the
manner provided herein. Any such notice shall be deemed given (i) when delivered
if delivered personally, (ii) the day after deposit with the express or courier
service when sent by next day express mail or courier, (iii) five (5) days after
deposit with the postal service when sent by certified or registered mail, or
(iv) when sent over a facsimile system with answer back response set forth on
the sender's copy of the document.
6.4 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey, without regard to choice of
law principles.
6.5 Amendment and Modification. This Agreement may be amended, modified or
supplemented only by written agreement executed by the Company and the
Executive.
6.6 Headings. The section headings herein are inserted for the convenience
of the parties only and are not to be construed as part of the terms of this
Agreement or to be taken into account in the construction or interpretation of
this Agreement.
6.7 Counterparts. This Agreement may be executed in counterparts and by
facsimile, each of which shall be deemed to be an original but both of which
together will constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have entered into this Executive
Employment Agreement as of the day and year first above written.
XXXXXXX.XXX, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Chief Technology Officer and Director
/s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
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