EXHIBIT 10.9
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement"), effective September 13, 1999,
is entered into by and between Xxxxxxxxxx.xxx Inc., a Delaware corporation
("Pawnbroker"), and xxxxxxxxxx.xxx, a Delaware corporation ("Employer"), and
Xxxx XxXxxxx, a resident of the State of California ("Executive").
RECITALS
WHEREAS, Pawnbroker is a publicly-traded corporation which owns one hundred
percent (100%) of the issued and outstanding stock of Employer; and
WHEREAS, Employer desires to retain the services of Executive on the terms
and conditions set forth in this Agreement, and Executive desires to be employed
by Employer on such terms and conditions; and
WHEREAS, Executive understands and acknowledges that the employment, salary
and other compensation and other benefits he will receive under this Agreement
are good and sufficient consideration for the restrictive covenants contained in
this Agreement.
NOW, THEREFORE, in consideration of the promises, the mutual agreements set
forth below and other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties agree as follows:
1. Employment. Employer hereby agrees to employ the Executive, and the Executive
agrees to accept such employment and perform services for Employer, upon the
terms and conditions set forth in this Agreement.
2. Term. This Agreement shall take effect on September 13, 1999 ("Effective
Date") and shall expire on the third anniversary of the Effective Date (the
"Term"); provided, however, that this Agreement may be terminated at an earlier
date in accordance with Section 11 of this Agreement.
3. Position and Duties.
A. Service with Employer. During the Term, Executive will serve as
Employer's Chief Executive Officer and Member of the Board of Directors,
provided that he is duly elected by Employer's shareholders as required by
Employer's Articles of Incorporation and Bylaws. The Board of Directors will
appoint Executive to serve on the Board of Directors on an interim basis until
an election is held pursuant to the company's Articles of Incorporation and
By-Laws. The Board of Directors will nominate Executive to serve on the Board of
Directors in the next election. Executive will report directly to and will work
at the pleasure of Employer's Board of Directors.
1
B. Performance of Duties. Executive agrees to perform the duties assigned
to him by the Employer's Board of Directors, to serve Employer faithfully and to
the best of his ability, and to devote his full time, attention and efforts to
Employer's business and affairs during his employment by Employer. However,
Executive may participate in reasonable charitable activities and personal
investment activities so long as such activities do not interfere with the
performance of his obligations under this Agreement.
4. Executive's Representations and Warranties.
A. No Inconsistent Commitments. Executive represents and warrants that he
is under no contractual commitments inconsistent with his obligations set forth
in this Agreement and that during his employment by Employer, he will not render
or perform services for any other corporation, firm, entity or person, unless
Employer's Board of Directors gives its prior written consent to Executive
providing the services.
B. Tax and Legal Advice. Executive represents and warrants that he has
consulted with independent tax and legal counsel regarding the terms, and
ramifications of the terms, of this Agreement.
C. Except as provided to Employer by Executive prior to signing this
Agreement, if provided, Executive represents and warrants that he has no
Inventions (as defined in Section 8 below), software, writings or other works of
authorship useful to Employer in the normal course of Employer's business, which
were conceived, made or written prior to the date of this Agreement and which
are excluded from the operation of this Agreement.
D. Executive represents and warrants to Employer that he has not assigned
or otherwise transferred any rights in any Invention (as defined in Section 8
below) to any third party and that he is unaware of any claim that any Invention
infringes upon the Intellectual Property rights of any third party.
5. Compensation.
A. Base Salary. As compensation in full for all services rendered by the
Executive under this Agreement, Employer shall pay to the Executive an annual
base salary of $200,000, less deductions and withholdings, and according to
Employer's customary payroll practices. During the Term, Executive's base salary
may be adjusted only as described in Section 5.B, below.
B. Adjustments to Base Salary. Within 90 days after the Executive signs
this Agreement, Employer's Board of Directors, with the significant assistance
of Executive, will establish a set of reasonable business goals that Executive
will accomplish during the first 12 months of the Term. Within thirty days of
the end of that 12-month period, if Employer's Board of Directors reasonably
determines that Executive has met or exceeded each of the established goals,
Employer shall increase Executive's annual base salary by twelve percent (12%).
2
Within 60 days of the 12-month anniversary after the Effective Date,
Employer's Board of Directors, with the assistance of Executive, will establish
a set of reasonable business goals that Executive must accomplish during the
second 12 months of the Term. Within thirty days of the end of that 12-month
period, if Employer's Board of Directors reasonably determines that Executive
has met or exceeded each of the goals established for that 12-month period,
Employer shall increase Executive's then current annual base salary by twelve
percent (12%).
Executive will also receive an Equity Financing Bonus ("Equity Financing
Bonus") of twenty-five thousand dollars ($25,000.00) net after applicable
withholdings if the Employer closes on a financing package of three-million
dollars ($3,000,000.00) or greater on or before April 30, 2000.
C. Stock Options.
(1) Grant of Stock Options. Pursuant and subject to the terms and
conditions set forth in the Incentive Stock Option Plan (the "Plan") of
Pawnbroker, adopted in compliance with Section 422 of the Internal Revenue
Code and the Securities laws of the United States, Pawnbroker grants to
Executive options exercisable to purchase up to 782,590 shares of common
stock of Pawnbroker ("Executive Option").
(2) Vesting. The shares of common stock of Pawnbroker which may be
purchased by Executive pursuant to these Executive Options are hereafter
termed the "Stock." Subject to Subsection C.(5) below, after, and only
after, the conditions of the Plan have been satisfied, Executive may
exercise that portion of his Options becoming vested pursuant to the
vesting schedule set forth herein. If Executive's employment with Employer
remains full-time and continuous at all times to any of the "Vesting Date"
specified below, then Executive is entitled to exercise on the applicable
Vesting Date that number of shares determined by multiplying the number of
shares of each Executive Option by the "Vesting Fraction" set forth below:
Vesting Date Vesting Fraction
------------ ----------------
On or after Sept. 13, 2000 1/3
13th day of each month thereafter 1/36 of balance
for 36 months
(3) Price at Exercise. The price per share Executive shall pay to
Pawnbroker for the shares he purchases on exercise of the Executive Option
shall be $6.75 per share, or as required by the terms of the Plan or by
Internal Revenue Code Section 422.
3
(4) Terms of Plan. The Plan has been established pursuant to Section 422 of
the Internal Revenue Code. The terms of the Plan are as set forth therein.
If recapitalization of Employer is required for any reason, adjustsments
will be made to the number and class of shares, pursuant to the Plan.
(5) Bonus Options. Employer shall grant to Executive options exercisable to
acquire additional shares of common stock of Pawnbroker as an incentive
stock option bonus (the "Bonus Options"); provided that Executive remains
employed full-time with Pawnbroker as Chief Executive Officer. Pawnbroker
shall grant bonus options as follows:
On September 13 of each year beginning September 13, 2000 and ending
September 13, 2005, options exercisable to acquire shares of common stock
in an amount equal to 1% of the issued and outstanding common shares on the
date of such grant.
(6) Option Adjustments. Employer agrees that if any equity financing of
Pawnbroker is made (including any successor enterprise), Employer will
grant additional stock options exercisable to acquire common stock in an
amount sufficient to maintain the Executive's pro rata percentage of shares
of Pawnbroker that he received on the date of the last stock option grant
to Executive (the "Adjustment Options"), provided that Executive is
actively employed on the effective date of the equity financing. The term
"equity financing" in this means and includes any investment in Pawnbroker,
including any debt obligation that is convertible or accompanied by
warrants, options or rights to invest in Pawnbroker.
(7) Terms of Option Adjustments and Bonus Options.
(a) Exercise Price. The exercise price of the Option Adjustments and
Bonus Options, if any, shall be equal to the fair market value of such
common stock, which shall be determined based on the five (5) day average
closing price of such common stock on the NASD Over-The-Counter Bulletin
Board or such other public market for such common stock on the date of
grant.
(b). Vesting Schedule. The Adjustment Options and Bonus Options, if
any, shall vest and become immediately exercised by the Executive pursuant
to the vesting schedule set forth below.
Vesting Date Vesting Fraction
------------ ----------------
One year from the date of grant 1/3
Two years from the date of grant 1/3
Three years from the date of grant 1/3
4
(8) Tax Indemnification. Executive specifically acknowledges and agrees
that Employer has made no representations to him regarding the tax
consequences of any amounts received by him or for his benefit pursuant to
this Agreement. In consideration for the mutual promises and agreements
contained herein, and for other valuable consideration, Executive agrees to
pay all federal or state taxes, if any, which are required by law to be
paid with respect to this Agreement, save and except those amounts withheld
by Employer in satisfaction of such taxes as provided in Section 5.A above.
Executive further agrees to indemnify and hold Employer, its predecessors,
officers, directors, employees, attorneys, representatives, successors and
assigns harmless from any claims, demands, deficiencies, levies,
assessments, executions, judgments or recoveries by any governmental entity
against Employer, or any of the foregoing persons or entities, for any
amounts claimed due on account of this Agreement or pursuant to claims made
under any federal or state tax laws, and any costs, expenses or damages
sustained by them by reason of any such claims, including any amounts paid
by Employer, its predecessors, officers, directors, employees, attorneys,
representatives, successors and assigns as taxes, attorneys' fees,
deficiencies, levies, assessments, fines, penalties, interest or otherwise.
(9) Vesting Upon "Change of Control.
(a). "Change of Control" Defined. A "Change of Control" shall be
deemed to have occurred if the conditions set forth in any one of the
following paragraphs shall have been satisfied:
(i) Any "person" (as such term is used in Section 13(d) and 14(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of
securities of Pawnbroker (not including in the securities
beneficially owned by such person any securities acquired
directly from Pawnbroker or its affiliates) representing fifty
percent (50%) or more of the combined voting power of
Pawnbroker's then outstanding securities; provided that the term
"person" for purposes of this subsection shall exclude
Pawnbroker; any trustee or other fiduciary holding securities
under an employee benefit plan of Pawnbroker; any company owned,
directly or indirectly, by the stockholders of Pawnbroker in
substantially the same proportions as their ownership of the
stock of Pawnbroker; or
(ii) The stockholders of Pawnbroker approve a merger or
consolidation of Pawnbroker with any other corporation or other
business entity, other than (a) a merger or consolidation which
would result in the voting securities of Pawnbroker outstanding
immediately prior thereto continuing to represent (either by
5
remaining outstanding or by being converted into voting
securities of the surviving entity), in combination with the
ownership of any trustee or other fiduciary holding securities
under an employee benefit plan of Pawnbroker, at least
seventy-five percent (75%) of the combined voting power of the
voting securities of Pawnbroker or such surviving entity
outstanding immediately after such merger or consolidation. or
(b) a merger or consolidation effected to implement a
recapitalization of Pawnbroker (or similar transaction) in which
no person acquires more than fifty percent (50%) of the combined
voting power of Pawnbroker's then outstanding securities; or
(iii) The stockholders of Pawnbroker approve a plan of complete
liquidation of Pawnbroker or an agreement for the sale or
disposition by Pawnbroker of all or substantially all
Pawnbroker's assets.
(b) Vesting of the Options Upon Change of Control. Upon a Change of
Control of Pawnbroker and so long as Executive is a full-time employee
of Employer, the Options granted to the Executive as of the effective
date of the Change of Control shall be deemed immediately fully vested
and may be exercised by Executive pursuant to this Agreement and the
Plan.
(10) Termination without cause. Should Employer terminate Executive without
cause during the term of this Agreement, then the stock options, Bonus
Options, Option Adjustments, and Grants that would have been awarded at the
next anniversary date from the date of termination, as set forth in
subsection C (2) above, shall vest and become immediately exercisable. For
example, if Executive is terminated in the third month of his second year
of this Agreement, then Executive shall be treated as if he completed the
second year of employment and would therefore be entitled to exercise the
stock option available for the end of the second year of his employment.
(11) Securities Laws Restrictions. Options will be exercised and common
stock issued only upon compliance with the Securities Act of 1933, as
amended, and any other applicable state and federal securities law.
6. Benefits. During the term of this Agreement, Executive and his spouse and
legal dependents residing with Executive shall be entitled to all medical,
dental, and other benefit plans offered to all employees by Employer. If
Employer, in its sole discretion, determines to offer additional medical,
dental, and other benefit plans to its executive employees, then Employer will
offer the same additional benefits to Executive. Until such time as the Employer
6
offers medical insurance to Executive comparable to his benefits as of the
Execution Date, Employer will reimburse Executive $600.00 per month for his
medical insurance premium.
A. Vacation. Executive shall receive up to but no more than three weeks of
paid vacation during each 12-month period of the Term. Executive may carry over
any accrued vacation pay from year to year, up to the vacation accrual maximum
for all employees.
B. Automobile Lease. Employer will reimburse Executive for lease payments
on one automobile leased by Executive, up to a maximum of $375.00 per month. If
Executive leases an automobile with a monthly lease rate greater than $375.00
Executive shall be solely responsible for paying the balance of the lease rate.
To the extent required by law, the lease payments Employer makes will reported
as income to Executive. Employer makes no and expressly disclaims any
representations regarding the tax consequences of this Section 6.B.
C. Life Insurance. Subject to Executive's qualification for group term life
insurance at terms agreeable to Employer, Employer will pay the premiums of
group term life insurance coverage for Executive, in an amount equal to
Executive's base salary on the Effective Date, multiplied by two. Employer will
not pay premiums for Executive in excess of 1.5 times the premium quoted by
Employer's insurance broker for an average man of Executive's age. In addition,
should Executive desire to purchase additional life insurance at Executive's own
expense, Employer shall assist Executive in obtaining such additional insurance.
Subject to the above cap on the premium, the coverage will increase
proportionate to increases in Executive's salary.
D. Directors and Officers Insurance. Employer will use its best efforts to
obtain and maintain, within ninety (90) days of the Effective Date, Directors
and Officers insurance coverage for Executive in the amount as shall be
determined by the Board of Directors in their sole discretion.
E. Travel Expenses. Executive shall be entitled to receive full
reimbursement for all ordinary and necessary travel and entertainment expenses
necessarily incurred in the performance of duties hereunder against appropriate
receipts and vouchers describing the specific business purpose for each such
expenditure.
7. Work Location. Executive's primary work location will be the Employer's
principal place of business or a Northern California office to be established by
Executive during the Term. Employer may not require Executive to have a primary
work location other than in Northern California. Employer shall provide
Executive with a high speed Internet service as available, preferably a DSL
line, a laptop computer, cellular telephone, adequate office space and office
equipment, and administrative support suitable to Executive's position and
adequate for the performance of his duties.
8. Assignment of Inventions. Executive hereby assigns, transfers, and sells to
the Employer and/or its nominees all of his right, title, and interest in all
Inventions (as defined below), including all right, title, and interest in any
patents, copyrights, patent applications, or copyright
7
applications based thereon, that are conceived or reduced to practice by him
(alone or jointly by others) for Employer in the future in connection with
Executive's employment by Employer. Executive will assist Employer and/or its
nominees (without charge but at no expense to Executive) at any time and in
every proper way to obtain for its and/or their own benefit, patents and
copyrights for all such Inventions anywhere in the world and to enforce its
and/or their rights in legal proceedings.
A. As used in this Section 8, the term "Inventions" includes, but is not
limited to, all discoveries, improvements, processes, developments, designs,
know-how, data, computer programs and formulae, whether patentable or
unpatentable or protectable by copyright or other intellectual property law,
except, in accordance with California Labor Code Section 2872, those that
qualify fully under California Labor Code Section 2870, namely, those for which
no equipment, supplies, facility or trade secret information of Employer were
used and which were developed entirely on Executive's own time, and in addition
(1) did not relate at the time of conception or reduction to practice (a)
directly or indirectly to the business of Employer, or (b) to Employer's actual
or demonstrably anticipated research or development, or (2) did not result from
any work performed by Executive for Employer.
B. Executive agrees to communicate to Employer all Inventions conceived or
reduced to practice by him (alone or jointly by others) for the Employer in the
future in connection with Executive's work for and employment with Employer.
C. Notwithstanding the foregoing, Executive also assigns to Employer (or to
any of its nominees) all rights which he may have or acquire in any Invention,
full title to which is required to be in the United States by a contract between
Employer and the United States or any of its agencies.
D. Executive hereby irrevocably designates and appoints Employer and each
of its duly authorized officers and agents as his agent and attorney-in-fact to
act for and in his behalf and stead to execute and file any document and to do
all other lawfully permitted acts to further the prosecution, issuance and
enforcement of patents, copyrights and other proprietary rights with the same
force and effect as if executed and delivered by him.
9. Confidential Information. In consideration for Employer's and Pawnbroker's
promises under this Agreement, Executive agrees that during his employment with
Employer and thereafter, he will not directly or indirectly disclose or use any
confidential information that Executive has obtained about Employer's or
Pawnbroker's business activities while an employee of Employer, without the
prior written consent of Employer's or Pawnbroker's Board of Directors,
respectively.
"Confidential Information" means information that is proprietary to
Employer or to Pawnbroker, or to others and is entrusted to Employer or
Pawnbroker, whether or not trade secrets. Confidential Information includes, but
is not limited to, information relating to software, business plans as to the
business as conducted or anticipated to be conducted by Employer or
8
Pawnbroker, customer or subscriber lists and any database relating to customers
which was created by Employer or Pawnbroker, and to past or current or
anticipated products or services of Employer or Pawnbroker. Confidential
Information also includes, without limitation, information concerning Employer's
or Pawnbroker's purchasing, accounting, marketing, selling, and services. All
information that Executive has a reasonable basis to consider confidential is
Confidential Information, whether or not originated by him and without regard to
the manner in which he obtains access to it.
10. Restrictive Covenants.
A. Noncompetition. In consideration of Employer's hiring of Executive and
Executive's employment hereunder, Executive agrees that, during the "Restricted
Period" (as hereinafter defined), Executive shall not, directly or indirectly,
solicit or seek to perform service or do any business with or interact with in
exchange for a fee or other compensation, any "Client" of Employer (as
hereinafter defined), in any manner or capacity (e.g., as an advisor, principal,
agent, partner, officer, director, shareholder, executive, member of any
association or otherwise). As used herein, "Client" shall mean all Clients of
Employer or Pawnbroker existing during the Term of this Agreement or within six
(6) months after the date Executive's employment terminates. "Restricted Period"
shall mean the term of Executive's employment with Employer.
(1) Geographical Extent of Covenant. Because Employer's and
Pawnbroker's business operates on a world-wide basis, the obligations
of Executive under this Section 10 shall apply anywhere in North
America.
(2) Limitation on Covenant. Ownership by Executive, as a passive
investment, of less than two (2) percent of the outstanding shares of
capital stock of any corporation listed on a national securities
exchange or publicly traded in the over-the-counter market shall not
constitute a breach of this Section 10.A.
B. Nonsolicitation, Non-hire and Noninterference. During the Restricted
Period or for a period of one (1) year thereafter, Executive shall not (a)
induce or attempt to induce any employee of Employer or Pawnbroker to leave the
employ of Employer or Pawnbroker, or in any way interfere adversely with the
relationship between any such employee and Employer or Pawnbroker; (b) induce or
attempt to induce any employee of Employer or Pawnbroker to work for, render
services to, provide advice to, or supply confidential business information or
trade secrets of Employer or Pawnbroker to any third person, firm or
corporation; (c) employ, or otherwise pay for services rendered by, any employee
of Employer or Pawnbroker in any business enterprise with which Executive may be
associated, connected or affiliated; or (d) induce or attempt to induce any
customer, supplier, licensee, licensor or other business relation of Employer or
Pawnbroker to cease doing business with Employer or Pawnbroker, or in any way
interfere with the relationship between any such customer, supplier, licensee,
licensor or other business relation and Employer or Pawnbroker.
C. Indirect Competition or Solicitation. Executive agrees that, during the
Restricted Period, Executive will not, either directly or indirectly, assist,
solicit or encourage any other
9
person in carrying out any activity that would be prohibited by the provisions
of this Section 10 if such activity were carried out by Executive; and, in
particular, Executive agrees that Executive will not, either directly or
indirectly, induce any employee of Employer or Pawnbroker to carry out any such
activity.
D. Notification of Employment. If at any time during the Restricted Period
or within six months thereafter Executive accepts new employment or becomes
affiliated with a third party, Executive shall immediate notify Employer of the
identity and business of the new employer or affiliation. Without limiting the
foregoing, Executive's obligation to give notice under this Section 10.D shall
apply to any business ventures in which Executive proposes to engage, even if
not with a third-party employer (such as, without limitation, a joint venture,
partnership or sole proprietorship). Executive hereby consents to Employer
notifying any such new employer or business venture of the terms of the
covenants in this Section10.
11. Termination of Employment.
A. Grounds for Termination. Executive's employment shall terminate prior to
the expiration of the initial term set forth in Section 2 or any extension
thereof in the event that at any time:
(1) Executive dies, or
(2) Executive becomes "disabled," so that he cannot perform the
essential functions of his position with or without reasonable
accommodation, or
(3) The Board of Directors of Employer elects to terminate this
Agreement for "cause" and notifies Executive in writing of such
election, or
(4) The Board of Directors of Employer elects to terminate this
Agreement without "cause" and notifies Executive in writing of such
election, or
(5) Executive elects to terminate this Agreement voluntarily and
notifies Employer in writing of such election.
If this Agreement is terminated pursuant to clause (1), (2) or (3) of this
Section 11.A, such termination shall be effective immediately. If this Agreement
is terminated pursuant to clause (4) or (5) of this Section 11.A, such
termination shall be effective 30 days after delivery of the notice of
termination, with the Employer reserving the right to pay Executive in lieu of
said notice.
B. "Cause" Defined. "Cause" means:
(1) Employer reasonably believes that Executive has breached the
provisions of Section 8, 9 or 10 of this Agreement in any respect, or
10
(2) Employer reasonably believes that Executive has engaged in willful
and material misconduct, including a violation of any of Employer's
written policies, or willful and material failure to perform
Executive's duties as an officer or employee of Employer, or
(3) Employer reasonably believes that Executive has committed fraud,
misappropriation or embezzlement in connection with Employer's
business, or
(4) Executive has been arrested, convicted or has pleaded nolo
contendere to criminal misconduct (except for parking violations and
occasional minor traffic violations).
In the event that Employer terminates Executive's employment for "cause"
pursuant to clause (1), (2), (3), (4), (5), (6), or (7) of this Section 11.B and
Executive objects in writing to the Board's determination that there was proper
"cause" for such termination within 20 days after Executive is notified of such
termination, the matter shall be resolved by arbitration in accordance with the
provisions of Section 12.A. If Executive fails to object to any such
determination of "cause" in writing within such 20-day period, he shall be
deemed to have waived his right to object to that determination. If such
arbitration determines that there was not proper "cause" for termination, such
termination shall be deemed to be a termination pursuant to clause (4) of
Section 11.A and Executive's sole remedy shall be to receive the wage
continuation benefits contemplated by Section 11.F.
C. Effect of Termination. Notwithstanding any termination of this
Agreement, Executive, in consideration of his employment hereunder to the date
of such termination, shall remain bound by the provisions of this Agreement
which specifically relate to periods, activities or obligations upon or
subsequent to the termination of Executive's employment.
D. "Disabled" Defined. "Disabled" means any mental or physical condition
that renders Executive unable to perform the essential functions of his
position, with reasonable accommodation (which shall not impose an undue burden
on Employer), for a period in excess of six (6) months.
E. Surrender of Records and Property. Upon termination of his employment,
Executive shall deliver promptly to Employer all Confidential Information (as
that term is defined above) and all records, manuals, books, blank forms,
documents, letters, memoranda, notes, notebooks, reports, computer equipment,
computer disks, computer software, computer programs (including source code,
object code, on-line files, documentation, testing materials and plans and
reports), designs, drawings, formulae, data, tables or calculations or copies
thereof that are the property of Employer or Pawnbroker, or that relate in any
way to the business, products, practices or techniques of Employer or
Pawnbroker, and all other property, trade secrets and confidential information
of Employer or Pawnbroker, including, but not limited to, all documents and all
tangible, written, graphical, machine readable and other materials (including
all copies) that in whole or in part contain any trade secrets or confidential
information of Employer or Pawnbroker, which in any of these cases are in
Executive's possession or under his control.
11
Notwithstanding the above, Executive may, at his option, elect to purchase any
equipment he has been using, provided Executive surrenders all Employer
information that may be contained on such equipment (e.g. computer databases).
Purchase price of equipment is fair market value at time of purchase.
F. Salary Continuation. If Executive's employment is terminated by Employer
pursuant to clause 2 or 4 of Section 11.A within one year of the Effective Date,
Employer shall continue to pay to Executive his base salary (less any payments
received by Executive from any disability income insurance policy provided to
him by Employer) and shall continue to provide health insurance benefits for
three months from the date of termination. This salary/benefit continuation
period will be six months if Executive is terminated more than one year after
the Effective Date. These payments are conditioned upon Executive executing a
release of claims in a form acceptable to Employer. If this Agreement is
terminated pursuant to clauses 1 or 5 of Section 11.A, Executive's right to base
salary and benefits shall immediately terminate, except as may otherwise be
required by applicable law. The salary continuation period will commence on the
day after termination of the Agreement.
G. If Executive's employment terminates for any reason, Executive will
immediately resign from Employer's Board of Directors. Such resignation will be
effective as of the date of such termination.
12. Settlement of Disputes.
A. Arbitration. Except as provided in Section 12.B, any claims or disputes
of any nature between Employer and Executive arising from or related to the
performance, breach, termination, expiration, application or meaning of this
Agreement or any matter relating to Executive's employment or the termination of
that employment by Employer shall be resolved exclusively by arbitration in
Santa Xxxxx County, California, in accordance with the applicable rules of the
American Arbitration Association. In the event of submission of any dispute to
arbitration, each party shall, not later than 30 days prior to the date set for
hearing, provide to the other party and to the arbitrator(s) a copy of all
exhibits upon which the party intends to rely at the hearing and a list of all
persons each party intends to call at the hearing. The fees of the arbitrator(s)
and other costs incurred by Executive and Employer in connection with such
arbitration shall be paid to the prevailing party in such arbitration.
The decision of the arbitrator(s) shall be final and binding upon both
parties. Judgment of the award rendered by the arbitrator(s) may be entered in
any court of competent jurisdiction.
B. Resolution of Certain Claims--Injunctive Relief. Section 12.A shall have
no application to claims by Employer asserting a violation of Section 8, 9, or
10 or seeking to enforce, by injunction or otherwise, the terms of Section 8, 9
or 10. Such claims may be maintained by Employer in a lawsuit subject to the
terms of Sections 12.C and 12.D. Executive acknowledges that it would be
difficult to fully compensate Employer for damages resulting from any breach by
him of the provisions of this Agreement. Accordingly, Executive agrees that, in
addition to, but not to the exclusion of any other available remedy, Employer
shall have the right
12
to enforce the provisions of Sections 8, 9 or 10 by applying for and obtaining
temporary and permanent restraining orders or injunctions from a court of
competent jurisdiction without the necessity of filing a bond therefor, and
without the necessity of proving actual damages, and Employer shall be entitled
to recover from Executive its reasonable attorneys' fees and costs in enforcing
the provisions of Sections 8, 9, or 10.
C. Venue. Any action at law, suit in equity or judicial proceeding arising
directly, indirectly, or otherwise in connection with, out of, related to or
from this Agreement, or any provision hereof, shall be litigated only in the
courts of the State of California, Santa Xxxxx County, or the United States
District Court for the Northern District of California sitting in Santa Xxxxx
County. Executive, Employer and Pawnbroker consent to the jurisdiction of such
courts over the subject matter set forth in Section 12.B. Executive waives any
right he may have to transfer or change the venue of any litigation brought
against him by Employer or Pawnbroker.
D. Governing Law. This Agreement is made under and shall be governed by and
construed in accordance with the laws of the State of California, without regard
to conflicts of laws principles.
13. Miscellaneous Provisions.
A. Survival of Terms. Notwithstanding the termination or expiration of this
Agreement for any reason, Executive, in consideration of his employment
hereunder to the date of such termination or expiration, agrees that the
provisions of this Agreement which specifically relate to periods, activities or
obligations during, upon or subsequent to the termination of Executive's
employment, including, but not limited to, the covenants contained in Section 8,
9 or 10 hereof, will survive any termination or expiration of this Agreement,
and that he shall remain bound by those provisions according to their terms.
B. Prior Agreements. This Agreement (including other agreements
specifically mentioned in this Agreement) contains the entire agreement of the
parties relating to the employment of Executive by Employer and the other
matters discussed herein and supersedes all prior promises, contracts,
agreements and understandings of any kind, whether express or implied, oral or
written, with respect to such subject matter (including, but not limited to, any
promise, contract or understanding, whether express or implied, oral or written,
by and between Employer and Executive), and the parties hereto have made no
agreements, representations or warranties relating to the subject matter of this
Agreement which are not set forth herein or in the other agreements mentioned
herein.
C. Amendments. No amendment or modification of this Agreement shall be
deemed effective unless made in writing and signed by Executive, Employer and
Pawnbroker.
D. No Waiver. No term or condition of this Agreement shall be deemed to
have been waived, nor shall there be any estoppel to enforce any provisions of
this Agreement, except by a statement in writing signed by the party against
whom enforcement of the waiver or estoppel is sought. Any written waiver shall
not be deemed a continuing waiver unless specifically stated,
13
shall operate only as to the specific term or condition waived, and shall not
constitute a waiver of such term or condition for the future or as to any act
other than as specifically set forth in the waiver.
E. Assignment. This Agreement shall not be assignable, in whole or in part,
by any party without the written consent of the other party, except that
Employer or Pawnbroker may, without the consent of Executive, assign their
rights and obligations under this Agreement to any corporation, firm or other
business entity with or into which Employer or Pawnbroker may merge or
consolidate, or to which Employer or Pawnbroker may sell or transfer all or
substantially all of its assets, or of which 50% or more of the equity
investment and of the voting control is owned, directly or indirectly, by, or is
under common ownership with, Employer or Pawnbroker. After any such assignment,
Employer and Pawnbroker shall be discharged from all further liability hereunder
and such assignee shall thereafter be deemed to be Employer or Pawnbroker for
the purposes of all provisions of this Agreement.
F. Severability. To the extent any provision of this Agreement shall be
determined to be invalid or unenforceable in any jurisdiction, such provision
shall be deemed to be deleted from this Agreement as to such jurisdiction only,
and the validity and enforceability of the remainder of such provision and of
this Agreement shall be unaffected. In furtherance of and not in limitation of
the foregoing, Executive expressly agrees that should the duration of,
geographical scope of, or business activities covered by, any provision of this
Agreement be in excess of that which is valid or enforceable under applicable
law in a given jurisdiction, then such provision, as to such jurisdiction only,
shall be construed to cover only that duration, geography or activities that may
validly or enforceably be covered. Executive acknowledges the uncertainty of the
law in this respect and expressly stipulates that this Agreement shall be
construed in a manner that renders its provisions valid and enforceable to the
maximum extent (not exceeding its express terms) possible under applicable law
in each applicable jurisdiction.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set
forth in the first paragraph.
XXXXXXXXXX.XXX INC. XXXXXXXXXX.XXX
By /s/ Xxxxxx Xxxxxxxx By /s/ Xxxxxx Xxxxxxxx
-------------------------- ----------------------------
Its President Its President
EXECUTIVE EXECUTIVE'S SPOUSE
/s/ Xxxx X. XxXxxxx [/s/ Illegible]
------------------------------ ------------------------------
Xxxx X. XxXxxxx ------------------------------
(Print Name)
14
