EXHIBIT 10.4
AMENDED EMPLOYMENT AGREEMENT
This Amended Employment Agreement, dated _June 30, 1999, by and between
XXXX INTERACTIVE SERVICES, INC. a Colorado Corporation ("XXXX"), formerly known
as ONLINE SYSTEM SERVICES, INC. and XXXXX XXXXX, an individual residing in
Denver, Colorado ("Executive") (the "Amended Employment Agreement"), amends and
supersedes the Employment Agreement, dated March 9, 1999, by and between XXXX,
Executive and NetIgnite2, L.L.C., a Colorado limited liability company (the
"Original Employment Agreement").
WHEREAS, NetIgnite, Inc., a member with Xxxx of NetIgnite2, L.L.C. has
merged with XXXX;
WHEREAS, XXXX and the Executive wish to amend the rights, duties and
responsibilities of Executive under the Original Employment Agreement; and,
WHEREAS, in order to effectuate this amendment, XXXX and the Executive have
agreed to replace the Original Employment Agreement with this Amended Employment
Agreement (except as set forth in Section 6.3 below);
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the parties agree to replace the Original Employment Agreement
with this Amended Employment Agreement as follows:
1. Employment. XXXX, its subsidiaries and affiliate companies
(collectively, the "Company") agree to employ Executive and Executive hereby
agrees to be employed by the Company on a full-time basis. Executive represents
and warrants that the execution of this Agreement and his performance under this
Agreement does not breach any other agreement and does not require the consent
of any other person.
2. Duties. Executive shall be employed as Company's President and shall
be appointed as a member of the Board of Directors of the Company (the "Board")
and perform the duties, bear the responsibilities commensurate with his position
and serve the Company faithfully and to the best of his ability. In addition,
the Executive will hold, without additional compensation, such other offices and
directorships for the Company to which he may be appointed or elected from time
to time. Executive's conduct must promote the best interests of the Company and
must not discredit the Company, its products or services.
3. Exclusivity. Executive shall devote his full business time, efforts,
attention, skill and energy to the Company's business. Executive shall not
engage in any other business activity that requires significant personal
services by Executive. However, Executive may take reasonable personal time for:
3.1. personal investments that do not require any
significant services by Executive;
3.2. participation in volunteer or charitable activities;
3.3. participation in industry-related organizations;
3.4. serving as a Director for other companies; and
3.5. activities approved in advance by the Board;
except that Executive shall cease any such outside activity if the Board
determines that such activity will interfere or conflict with the Company's
interests.
4. Conflicts of Interest. Executive shall not engage in any activity that
may interfere or conflict with the proper performance of Executive's duties or
the Company's interests. If Executive has any interest in a proposed transaction
involving the Company, that interest must be fully disclosed to the Board and a
majority of the disinterested Board must approve the transaction.
5. Confidentiality. The relationship between the Company and Executive is
one of confidence and trust. Executive agrees that the provisions of this
Section are fair and reasonable because as a result of his employment by the
Company he will have access to proprietary Company information and that such
information is a highly-valued asset of the Company.
5.1. confidential Information. The term "Confidential Information"
means all information relating to the Company, its affiliates, customers and
suppliers considered by the Company to be confidential, including, without
limitation:
5.1.1. the Company's plans, products, processes and
personnel;
5.1.2. the nature of the Company's services and any
area where such services are performed or planned to be
performed;
5.1.3. research, development, manufacturing,
purchasing, and engineering;
5.1.4. markets, marketing strategies, customer lists
and prospect lists;
5.1.5. merchandising, selling, pricing, tariffs or
contractual terms,
5.1.6. inventions, discoveries, concepts and ideas,
whether patentable or not, processes, methods, formulas,
and techniques, trade secrets, related improvements and
knowledge;
5.1.7. financial and accounting information;
5.1.8. the Company's technology, expertise or
business; and
5.1.9. any component of Confidential Information or
anything derived from Confidential Information.
The Company's determination that specific information constitutes
Confidential Information shall be binding, except for information already
in the public domain other than by Executive's act and except for
information which is no longer a trade secret as defined by the Uniform
Trade Secrets Act.
5.2. Non-disclosure. Executive agrees that he shall at no time,
whether during his employment or at any time thereafter, disclose or
use any Confidential Information for any purpose other than the
conduct of the Company's business. Upon the breach or threatened
breach of this covenant by Executive, the Company shall be entitled
without notice to obtain relief pursuant to Section 11 below.
5.3. Notice to Company. Executive will immediately notify the
Company if he learns that Confidential Information has been disclosed
or is about to be disclosed, whether by Executive's acts, acts of
third parties, law, regulation or court order. Executive will
cooperate with the Company's efforts to prevent or limit disclosure of
Confidential Information.
5.4. Ownership. Any Confidential Information that is directly
originated, developed or perfected to any degree by Executive during
his employment hereunder shall be and remain the sole property of the
Company and shall be deemed trade secrets of the Company. To the
extent that any Confidential Information constitutes an original work
of authorship by Executive which is protectable by copyright,
Executive acknowledges that such work is a "work for hire" as defined
by the U.S. Copyright Act (17 U.S.C. (S)101 et seq.).
5.5. Return of Confidential Information. Upon termination of
Executive's employment, Executive or his legal representative shall
deliver to the Company all original and duplicates and/or copies of
all documents, records, notebooks, computer records or media, and
similar materials containing Confidential Information then in his
possession.
5.6. Further Assurances. Executive agrees to execute such
separate and further confidentiality agreements embodying and
enlarging upon the provisions of this Section as the Company may
reasonably request.
6. Compensation and Benefits. In consideration of the services to be
rendered pursuant to this Agreement, Executive shall receive the following
compensation and benefits during the term of his employment:
6.1. Salary and Bonus. The Company shall pay Executive an annual
base salary, payable semi-monthly in arrears. The annual base salary
during the term hereof shall be $190,000 with annual increases as
approved by the Company. Executive will have an opportunity to earn an
incentive bonus based upon Executive's accomplishment of objectives
that are mutually defined and agreed upon between Executive and the
Company. The Company shall annually review the amounts of the base
salary and bonus. The bonus for calendar 1999 shall be in a cash
amount of up to 50% of Executive's base salary on an annualized basis,
based upon the Executive's accomplishment of the aforementioned
objectives.
6.2. Benefits. The Company shall provide Executive with the
benefits of such insurance plans, hospitalization plans, retirement
plans and other employee benefits generally provided to executive
employees of the Company and for which Executive may be eligible under
the terms and conditions thereof.
6.3. Stock Options. Executive shall retain his option to purchase
80,00 shares of XXXX Common Stock, granted in Section 6.3 of the
Original Employment Agreement (the "Original Option"), according to
the terms and conditions set forth therein, and which terms are hereby
incorporated into this Agreement. Executive shall also be granted an
option to purchase an additional 200,000 shares of XXXX Common Stock
(the "Additional Option") pursuant to the XXXX 1995 Stock Option Plan,
the shares subject thereto to vest (subject to acceleration as
provided therein) one-third per year from June 1,1999, subject to
Executive's continuous employment by the Company, to have a term of
five years and to have an exercise price equal to the fair market
value of XXXX Common Stock on June 1, 1999. The Additional Option
shall be in the form attached hereto as Exhibit A.
6.4 Annual Leave. Executive shall be entitled to vacations, sick
leaves, personal days and other tine off in accordance with the
Company's policies in effect for officers and executive employees of
the Company.
6.5 Reimbursement of Expenses. Upon receipt of an itemized
accounting of such expenses with reasonable supporting documentation,
the Company shall reimburse Executive for all reasonable and necessary
out-of-pocket expenses incurred by Executive in connection with the
business of the Company and in performance of Executive's duties under
this Agreement.
7. Duration. Executive's employment hereunder shall commence on June 1,
1999 and continue until terminated in accordance with Section 8. The initial
term of Employee's employment shall be two years ("Initial Term"), with renewal
terms of one year. After termination of Executive's employment, the applicable
provisions of Sections 5, 8, and 9 shall remain in full force and effect until
the time specified in each such section.
8. Termination. Executive's employment may be terminated as follows:
8.1. Expiration of Term. Upon written notice by either party
delivered at least 30 days before the expiration of the Initial Term
or renewal term (collectively, "Term"), Executive's employment will
terminate at the expiration of the Term.
8.2. Death; Disability. If Executive dies or becomes disabled
during the Term of his employment, his employment shall be deemed
terminated on the date of his death or disability. The Company shall
provide Executive with any death or disability benefits generally
provided to executive employees of the Company.
8.3. Cause. The Company may immediately terminate Executive's
employment at any time for:
8.3.1. gross negligence or willful misconduct by
Executive of any material duties as an executive officer of
the Company which continues after 15 days written notice
specifying such negligence or willful misconduct; or
8.3.2. the commission of any theft, fraud,
embezzlement or similar crime involving the commission of
any felony, for acts of dishonesty or moral turpitude, for
intentional violations of the securities laws or for a
material breach of any provision of this Agreement which is
not cured within 10 days after Executive has received
written notice of such breach from the Company.
9. Covenant Not to Compete. Since Executive will be a key employee of the
Company, Executive shall have access to Confidential Information, and the
national scope of the Company's proposed business, Employee agrees that the
restrictions on his future activities contained in this Section are fair,
reasonable and necessary.
9.1. Covenant Period. The covenants contained in this Section shall
continue until one year after the termination of Executive's employment
(the "Covenant Period").
9.2 Restrictions on Future Employment. In the event that Executive
gives a notice of nonrenewal of the Term of this Agreement in accordance
with Section 8.1 hereof, resigns his employment hereunder or is terminated
for cause in accordance with Section 8.3 hereof, then, until the Covenant
Period expires, Executive shall not own, manage, operate, control, be
employed by, assist or participate in the ownership, management, operation
or control of a business operating in the United States that is engaged in
a business which is in competition with XXXX'x business as such business
was being conducted at the time of Executive's employment hereunder.
Nothing herein shall prohibit Executive from employment with or providing
consulting services to a business whose activities include as a portion of
its operations the business described in this subsection; provided that
Executive does not assist or otherwise provide services to such business
operations. In the event that Executive is terminated without cause, this
provision shall not apply
9.3 Non-solicitation. Executive shall not directly or indirectly:
9.3.1. induce any employee of the Company to leave the employ
of the Company;
9.3.2. interfere with the relationship between the Company and
any employee;
9.3.3. hire any Company employee to work for any organization
of which Executive is an officer, director, employee, consultant,
independent contractor or owner of an equity or other financial
interest;
9.3.4. solicit or service any actual or prospective supplier,
client, customer of the Company who was solicited or serviced during
Executive's employment; or
9.3.5. interfere or attempt to interfere with any transaction
involving the Company;
until the Covenant Period expires.
10. Securities Matters. Since the Executive will have access to
Confidential Information, his ability to engage in securities transactions
(including securities issued by the Company and by others) will be limited.
Executive agrees to:
10.1. not engage in any transactions that violate the securities
laws;
10.2. file all reports required by securities regulatory authorities;
10.3. provide information about securities transactions when
requested by the Company;
10.4. follow written Company policies concerning securities
transactions;
10.5. when requested by the Board, execute any "lock-up" agreements
or other restrictions on transactions, provided that all executive
employees of the Company are being requested to execute similar lock-up
agreements;
10.6. comply with securities law requirements for all transactions.
While Executive may request the Company's permission for proposed securities
transactions, Executive is still responsible for compliance with legal
requirements.
11. Injunctive Relief. Upon a material breach or threatened material
breach by Executive of any of the provisions of Sections 3, 4, 5, 9 and 10 of
this Agreement, the Company shall be entitled to an injunction restraining
Executive from such breach, together with any other relief or remedy available,
for such breach or threatened breach, including the recovery of damages.
Nothing herein shall be construed as prohibiting the Company from pursuing any
other remedies for such breach or threatened breach. If the Company or
Executive takes legal action to enforce the provisions of this Agreement or to
enjoin Executive or the Company from violating this Agreement, the prevailing
party, as part of its damages, shall be entitled to recover its legal fees and
expenses incurred in such action from the losing party
12. Change of Control. Upon commencement of full-time employment
hereunder, Executive will enter into another employment agreement with the
Company which provides for certain employment rights in the event of a "change
of control" of the Company, as defined in the Agreement (the "Change of Control
Agreement"). A copy of the Change of Control Agreement is attached hereto as
Exhibit B. In the event of a "change of control" of the Company, Executive shall
be entitled to the benefits of the Change of Control Agreement. In the event
that the terms of the Change of Control Agreement are in conflict with any of
the terms of this Agreement, Executive shall be entitled to the terms of this
Agreement or the Change of Control Agreement, which ever are most favorable to
him.
13. Severability. It is the desire and intent of the parties that the
provisions of this Agreement shall be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, if any particular provision or portion of
this Agreement shall be adjudicated to be invalid or unenforceable, this
Agreement shall be deemed amended to delete therefrom the
portion thus adjudicated to be invalid or unenforceable, such deletion to apply
only with respect to the operation of such Section in the particular
jurisdiction in which such adjudication is made.
14. Notices. All communications, requests, consents and other notices
under this Agreement shall be given in writing and delivered by facsimile,
courier, registered or certified mail (postage prepaid) to the receiving party
at the address set forth below or the recipient's last known address. Notice
shall be deemed given on the date of delivery as shown by the facsimile
confirmation or delivery receipt.
15. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Colorado.
16. Assignment. The Company may assign its rights and obligations under
this Agreement to any successor corporation and all covenants and agreements
hereunder shall inure to the benefit of and be enforceable by or against any
such assignee. Neither this Agreement nor any rights or duties hereunder may be
assigned or delegated by Executive.
17. No Waiver. A waiver by the Company of a breach of any provision of
this Agreement by Executive shall not operate or be construed as a waiver of any
subsequent or other breach by Executive.
18. Amendments. No provision of this Agreement shall be altered, amended,
revoked or waived, except by an instrument in writing, signed by the Company and
Executive.
20. Binding Effect. Except as otherwise provided herein, this Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective legal representatives, heirs, successors and assigns.
21. Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
22. Entire Agreement. This Agreement sets forth the entire agreement and
understanding of the parties with respect to the subject matter hereof and
supersedes all prior understandings, agreements or representations by or between
the parties, whether written or oral.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
XXXX INTERACTIVE SERVICES, INC.
A Colorado Corporation
By R. Xxxxxx Xxxxx
Its Chairman of the Board and CEO
0000 Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000-0000
XXXXX XXXXX
Xxxxx Xxxxx
0000 Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000-0000
