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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "AGREEMENT") is made as of April 4, 2000,
by and between, eVENTURES GROUP, INC., a Delaware corporation, with its
principal office at 000 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000 (the
"COMPANY"), and XXXXXXX X. XXXXXX residing at 0000 Xxxxxx Xxxxx Xxxx., Xxxxxx,
Xxxxx 00000 ("EXECUTIVE").
WITNESSETH:
WHEREAS, effective April 3, 2000 (the "COMMENCEMENT DATE"), the Company
desires to employ Executive as its Chairman and Chief Executive Officer, and
Executive desires to accept such employment; and
WHEREAS, the Company and Executive desire to enter into this Agreement as
to the terms of his employment by the Company.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the parties
agree as follows:
1. Term of Employment. Except for earlier termination as provided in
Section 7 hereof, Executive's employment under this Agreement shall be for a
three (3) year term (the "EMPLOYMENT TERM") commencing on the Commencement Date
and ending on April 2, 2003 (the "EXPIRATION DATE").
2. Position.
(a) Executive shall serve as the Chairman of the Board and Chief
Executive Officer of the Company (the "CHIEF EXECUTIVE OFFICER"), reporting
directly to the Board of Directors of the Company (the "BOARD"). During the
Employment Term, the Company shall use its reasonable best efforts to
nominate Executive to serve as Chairman of the Board and upon such
nomination, Executive shall agree to so serve. If requested by the Board,
Executive shall also serve on committees of the Board, subject to
Executive's consent (which consent shall not be unreasonably withheld),
and/or as an executive, officer and director of subsidiaries of the Company
without additional compensation and subject to any policy of the
Compensation Committee of the Company's Board (the "COMPENSATION
COMMITTEE") with regard to retention or turnover of the director's fees.
(b) Executive shall have such duties and authority, consistent with
his position, as shall be assigned to him from time to time by the Board.
Executive shall be responsible for, and have control over, the operations
of the Company, subject to supervision only by the Board and the applicable
requirements of the Delaware General Corporation Law.
(c) During the Employment Term, Executive shall devote substantially
all of his business time and efforts to the performance of his duties
hereunder. Nothing contained herein shall be construed to prohibit
Executive from (i) owning less than ten
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percent (10%) of the outstanding securities of any publicly traded entity,
(ii) pursuing any business opportunity that is not in Competition, as such
term is defined in Section 10(b) below, with the Company or its
subsidiaries or any portfolio company in which the Company or its
subsidiaries hold securities (other than entities in which the Company or
its subsidiaries make a nominal investment) (provided the time devoted by
Executive to such personal investment does not materially interfere with
Executive's duties hereunder), (iii) continuing service as a consultant of
Broadband NOW, in the same capacity and extent as Executive rendered such
service immediately prior to the Commencement Date, or (iv) continuing
service on any board of directors on which Executive serves as of the
Commencement Date or service as a director of a company that is not in
Competition with the Company or its subsidiaries or any portfolio company
in which the Company or its subsidiaries hold securities (other than
entities in which the Company or its subsidiaries make a nominal
investment), provided, however, that Executive shall not hold more than
five (5) board seats of for-profit businesses at any time exclusive of his
membership on the Board or the board of directors of any subsidiary or
affiliate of the Company (such activities described in clause (i), (ii),
(iii) or (iv) immediately preceding being herein referred to as the
"ALLOWED ACTIVITIES"). Executive shall be entitled to retain any
consideration that he receives from service permitted by clauses (iii) and
(iv) of the immediately preceding sentence on any board of directors of a
corporation unrelated to the Company. For purposes of this Section 2(c) and
Section 10(b) to the extent expressly applicable, a "nominal investment" of
the Company or its subsidiaries will be determined in relation to the size
of investments made from time to time by the Company or its subsidiaries in
its portfolio companies (including, without limitation, investments made in
exchange for cash, securities or services rendered).
3. Base Salary. During the Employment Term, the Company shall pay
Executive a Base Salary at the annual rate of Two Hundred Thousand Dollars
($200,000). Base Salary shall be payable in accordance with the usual payroll
practices of the Company. Executive's Base Salary may be reviewed annually by
the Board or the Compensation Committee and may be increased, but not decreased,
from time to time by the Board or the Compensation Committee. The Base Salary as
determined as aforesaid, from time to time for the applicable fiscal year shall
constitute "BASE SALARY" for purposes of this Agreement.
4. Incentive Compensation.
(a) Bonus. For each fiscal year or portion thereof during the
Employment Term, Executive shall be entitled to participate in an incentive
bonus plan established by the Company on such terms and conditions, and
subject to such standards, as shall be determined from time to time in the
sole discretion of the Board or the Compensation Committee. Such incentive
bonus for any such fiscal year shall be payable in cash and shall not be
greater than fifty percent (50%) of Executive's rate of Base Salary in
effect for the fiscal year to which such incentive bonus relates. During
the Employment Term, the Company shall maintain an incentive bonus plan
providing a target bonus equal to not less than fifty percent (50%) of
Executive's rate of Base Salary in effect for the fiscal year to which the
bonus relates.
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(b) Stock Options. The Company hereby grants to Executive stock
options (the "STOCK OPTIONS") to purchase 3,910,000 shares of Common Stock
of the Company. The Stock Options shall be granted pursuant to a stock
option award agreement or agreements between Executive and the Company
substantially in the form attached hereto as Exhibit "B" (the "STOCK OPTION
GRANTS"). The exercise price for such Stock Options shall be equal to
$23.00 per share of Common Stock. Subject to the terms and provisions of
the Stock Option Grants, the Stock Options shall become exercisable on the
dates indicated below as to that number of shares of Common Stock of the
Company as set forth below opposite each such date.
Date Number of Shares
------------- ----------------
July 2, 2000 977,500
April 2, 2001 977,500
April 2, 2002 977,500
April 2, 2003 977,500
The foregoing schedule to the contrary notwithstanding, the Stock Options
shall become fully and immediately exercisable in the event the Employment
Term terminates prior to the Expiration Date by reason of termination of
the Executive's employment hereunder by Executive for Good Reason or by the
Company without Cause (as such terms are hereinafter defined). The Stock
Options shall in all events expire on the date ten years after the
Commencement Date, if not terminated or canceled earlier. The Executive
shall be permitted to transfer the Stock Options to the Executive's
immediate family members and/or lineal descendents (or a trust or family
limited partnership established solely for the benefit of any such
immediate family member and/or lineal descendent). Notwithstanding anything
in the Stock Option Grants to the contrary, to the extent any provisions
contained therein are inconsistent with or differ from the explicit terms
and conditions of this Agreement, the terms and conditions of this
Agreement shall control. To the extent this Agreement does not specifically
address an issue or term set forth in the Stock Option Grants, then the
provisions and terms of the Stock Option Grants shall apply.
(c) Adjustments. As more fully specified in the Stock Option Grants,
the number of shares covered by, and the option price per share of, the
Stock Options will be subject to adjustment by the Company for any stock
split, reclassification, combination or similar change in the Company's
capital stock.
5. Employee Benefits and Vacation.
(a) During the Employment Term, Executive shall be entitled to
participate in all pension, profit sharing, long-term incentive
compensation, retirement, savings, welfare and other employee benefit plans
and arrangements and fringe benefits and perquisites generally maintained
by the Company from time to time for the benefit of senior executive
officers of the Company of a comparable level, in each case in accordance
with their respective terms as in effect from time to time (other than any
special arrangement entered into by contract with an executive or that
applies on a grandfathered basis).
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Without limiting the foregoing, the Company shall pay all premiums for
Executive and his dependent family members under health, hospitalization,
disability, dental, life and other employee benefit plans that the Company
may have in effect from time to time. Executive acknowledges that the
Company does not currently provide a profit sharing plan, and has no
current intention of providing profit sharing benefits to its employees.
(b) During the Employment Term, Executive shall be entitled to at
least three (3) weeks paid vacation each year in accordance with the
Company's policies in effect from time to time. Executive shall also be
entitled to such periods of sick leave as is customarily provided by the
Company to its senior executive employees.
(c) If the Company shall provide employment-related benefits of the
type described in this Section 5 to any other senior executive of the
Company in an aggregate amount greater, or on more favorable terms and
conditions, on an aggregate basis, than such benefits are provided to
Executive, Executive shall be provided such benefits in a substantially
comparable amount and/or under the substantially comparable terms and
conditions, as applicable, on an aggregate basis.
6. Business Expenses. The Company shall reimburse Executive for the
reasonable travel, entertainment and other business expenses incurred by
Executive, subject to such pre-approval procedures as may be established from
time to time by the Board, in the performance of his duties hereunder, in
accordance with the Company's policies as in effect from time to time.
7. Termination.
(a) The employment of Executive and the Employment Term shall
terminate as provided in Section 1 hereof or, if earlier, upon the earliest
to occur of any of the following events:
(i) the death of Executive;
(ii) the termination of Executive's employment by the Company
due to Executive's Disability (as defined in Exhibit "A")
pursuant to Section 7(b) hereof;
(iii) the termination of Executive's employment by Executive for
Good Reason (as defined in Exhibit "A") pursuant to Section
7(c) hereof,
(iv) the termination of Executive's employment by the Company
without Cause (as defined in Exhibit "A") pursuant to
Section 7(e) hereof;
(v) the termination of employment by Executive without Good
Reason upon thirty (30) days prior written notice pursuant
to Section 7(f) hereof; or
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(vi) the termination of Executive's employment by the Company
for Cause pursuant to Section 7(d) hereof.
(b) Disability. If Executive is unable to perform his material duties
hereunder due to a physical or mental condition and the Company desires to
terminate Executive's employment for Disability (as defined in Exhibit
"A"), the Company shall deliver to Executive a written Notice of Disability
Termination (herein so called), effective upon the date (the "DISABILITY
TERMINATION DATE") which is the later of (i) the date such condition
becomes a Disability or (ii) thirty (30) days following the delivery of the
Notice of Disability Termination; provided that the Disability Termination
Date shall be suspended, and the Employment Term shall not terminate, so
long as Executive returns to the full performance of his duties by and
following such date.
(c) Termination for Good Reason. A Termination for Good Reason (herein
so called) means a termination by Executive by written notice given within
thirty (30) days after Executive knows of the occurrence of the Good Reason
event, unless such circumstances are corrected prior to the date of
termination specified in the Notice of Termination for Good Reason and the
Company informs Executive of such correction prior to such date. In such
event, the Employment Term shall not terminate. A Notice of Termination for
Good Reason shall mean a notice that shall indicate the specific Good
Reason event in Section (d) of Exhibit "A" relied upon and shall set forth
in reasonable detail the facts and circumstances claimed to provide a basis
for Termination for Good Reason. The failure by Executive to set forth in
the Notice of Termination for Good Reason any facts or circumstances which
contribute to the showing of Good Reason shall not waive any right of
Executive hereunder or preclude Executive from asserting such fact or
circumstance in enforcing his rights hereunder. The Notice of Termination
for Good Reason shall provide for a date of termination not less than
thirty (30) nor more than sixty (60) days after the date such Notice of
Termination for Good Reason is given.
(d) Cause. Executive's employment hereunder may be terminated by the
Company for Cause following delivery to Executive of a Notice of
Termination (as defined in this Section 7(d)) and a meeting of the Board at
which Executive is given the opportunity to appear. A Notice of Termination
for Cause (herein so called) shall mean a notice that shall indicate the
specific termination provision in Section (a) of Exhibit "A" relied upon
and shall set forth in reasonable detail the facts and circumstances which
provide for a basis for Termination for Cause. The effective date of
termination for a Termination for Cause shall be the date indicated in the
Notice of Termination. Any purported Termination for Cause which is held by
a court by a non-appealable final judgment not to have been based on the
grounds set forth in this Agreement or not to have followed the procedures
set forth in this Agreement shall be deemed a termination by the Company
without Cause.
(e) Termination without Cause. The Company may terminate its
employment of Executive for reasons other than Cause at any time upon
thirty (30) days prior written notice.
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(f) Voluntary Resignation. Executive may terminate his employment with
the Company at any time upon thirty (30) days prior written notice.
8. Consequences of Termination of Employment. Executive shall be entitled
to the following compensation from the Company (in lieu of all other sums owed
or payable to Executive) upon the termination of employment as described below:
(a) Death, Disability, Voluntary Resignation without Good Reason or by
the Company with Cause. If Executive's employment and the Employment Term
are terminated (1) by reason of Executive's death or Disability, (2) by
Executive without Good Reason or (3) by the Company for Cause, the
employment period under this Agreement shall terminate without further
obligations to Executive or Executive's legal representatives under this
Agreement except for: (i) any Base Salary earned but unpaid, any accrued
but unused vacation pay payable pursuant to the Company's policies and any
unreimbursed business expenses payable pursuant to Section 6 (which
amounts, in the case of the death of Executive, shall be promptly paid in a
lump sum to Executive's estate), (ii) any other amounts or benefits earned,
accrued and owing to Executive under the then applicable employee benefit
plans, long term incentive plans or equity plans and programs of the
Company, including, without limitation, any earned but unpaid incentive
bonus for any prior completed fiscal year, and (iii) except in the case of
a termination by the Company for Cause or by Executive without Good Reason,
a pro-rata portion (based on the number of days Executive is employed by
the Company during the fiscal year of such termination) of Executive's
incentive bonus earned for the fiscal year in which termination occurs,
which, in any case, shall be paid in accordance with the applicable plans,
programs and agreements, and any unpaid reimbursable business expenses
(such amounts referred to in clauses (i) and (ii), collectively, the
"ACCRUED AMOUNTS").
(b) Termination by Executive for Good Reason or Termination by Company
without Cause. If Executive's employment and the Employment Term are
terminated (i) by Executive for Good Reason, or (ii) by the Company without
Cause (and other than for Disability or as a result of expiration of the
Employment Term), Executive shall be entitled to receive the Accrued
Amounts and shall, subject to Sections 9(b), 9(c) and 10 hereof, be
entitled to receive equal monthly payments of an amount equal to his
monthly rate of Base Salary in effect at the time of such termination plus
his incentive bonus paid for the most recently ended fiscal year (provided,
however, if Executive was employed hereunder for only a portion of such
prior fiscal year, such bonus shall be annualized for purposes of this
calculation, and, if no bonus was paid for such prior fiscal year, the
current fiscal year's bonus, at 100 percent of target, shall be deemed to
be the incentive bonus paid for the most recently ended fiscal year for
purposes of this calculation) divided by twelve (12) for a period equal to
the greater of (x) twelve (12) months or (y) the remaining period of time
from the date of such termination through the Expiration Date (the
"Severance Payments"). Notwithstanding the immediately preceding sentence
to the contrary, if Executive's employment is terminated by the Company
without Cause (and other than for Disability or as a result of expiration
of the Employment Term), or if Executive terminates his employment for Good
Reason, the Severance Payments shall be paid to Executive in a lump-sum
following such termination.
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(c) Termination Upon Expiration of Employment Term. If Executive's
employment with the Company terminates on the Expiration Date by reason of
expiration of the Employment Term, Executive shall be entitled to receive
the Accrued Amounts and shall, subject to Sections 9(b), 9(c) and 10
hereof, be entitled to receive equal monthly payments of an amount equal to
his monthly rate of Base Salary in effect immediately prior to the
Expiration Date plus his incentive bonus paid for the most recently ended
fiscal year divided by twelve (12) for a period of twelve (12) months.
9. No Mitigation; No Set-Off.
(a) In the event of any termination of employment under Section 8,
Executive shall be under no obligation to seek other employment and there
shall be no offset against any amounts due Executive under this Agreement
on account of any remuneration attributable to any subsequent employment
that Executive may obtain. Any amounts due under Section 8 are in the
nature of severance payments and are not in the nature of a penalty. Such
amounts are inclusive, and in lieu of any amounts payable under any other
salary continuation or cash severance arrangement of the Company and to the
extent paid or provided under any other such arrangement shall be offset
from the amount due hereunder.
(b) (i) Executive agrees that, as a condition to receiving the
payments and benefits provided under Section 8(b) or (c) hereunder he will
execute, deliver and not revoke (within the time period permitted by
applicable law) a release of all claims of any kind whatsoever against the
Company, its affiliates, officers, directors, employees, agents and
shareholders in the then standard form being used by the Company for senior
executives (but without release of the right of indemnification hereunder
or under the Company's By-laws or rights under benefit or equity plans that
by their terms are intended to survive termination of his employment or
claims that the Company fulfill its obligations under this Agreement).
(ii) The Company agrees that, as a condition to Executive's
agreements under Section 10 hereof, the Company will execute and
deliver a release of all claims of any kind whatsoever against
Executive (but without release of claims that Executive fulfill his
obligations under this Agreement). The Company's release under this
paragraph (b)(ii) of this Section 9 shall be executed and delivered
simultaneously with the execution and delivery of Executive's release
under paragraph (b)(i) of this Section 9. The releases referred to in
this paragraph (b) of this Section 9 shall apply to all claims
described in this paragraph existing from the beginning of time
through the date of each party's execution of his or its release.
(c) Upon any termination of employment, Executive hereby resigns
as an officer and director of the Company, any subsidiary and any affiliate
and as a fiduciary of any benefit plan of any of the foregoing. Executive
shall promptly execute any further documentation thereof as requested by
the Company and, if Executive is to receive any
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payments from the Company, execution of such further documentation
shall be a condition thereof.
10. Confidential Information, Non-Competition and Non-Solicitation of
the Company.
(a) (i) Executive acknowledges that as a result of his employment
by the Company, Executive will obtain secret and confidential
information as to the Company and its affiliates and create
relationships with customers, suppliers and other persons dealing with
the Company and its affiliates and the Company and its affiliates will
suffer irreparable damage, which would be difficult to ascertain, if
Executive should use such confidential information or take advantage
of such relationships and that because of the nature of the
information that will be known to or obtained by Executive and the
relationships created it is necessary for the Company and its
affiliates to be protected by the prohibition against Competition as
set forth herein, as well as the confidentiality restrictions set
forth herein.
(ii) Executive acknowledges (A) that the retention of
nonclerical employees, employed by the Company and its affiliates
in which the Company and its affiliates have invested training
and depends on for the operation of their businesses, is
important to the businesses of the Company and its affiliates,
and (B) that Executive will obtain unique information as to such
employees as an executive of the Company and will develop a
unique relationship with such persons as a result of being an
executive of the Company. Therefore, it is necessary for the
Company and its affiliates to be protected from Executive's
Solicitation (defined below) of such employees as set forth
below.
(iii) Executive acknowledges that the provisions of this
Agreement are reasonable and necessary for the protection of the
businesses of the Company and its affiliates and that part of the
compensation paid under this Agreement and the agreement to pay
severance in certain instances is in consideration for the
agreements in this Section 10.
(b) COMPETITION shall mean: participating, directly or
indirectly, as an individual proprietor, partner, stockholder,
officer, employee, director, joint venturer, investor, lender with
equity participation, consultant or in any capacity whatsoever
(within the United States of America, or in any country where the
Company or its affiliates do business) in a Competing Business;
provided, however, that such participation shall not include (i) the
ownership of not more than ten percent (10%) of the total outstanding
stock of a publicly held company; (ii) following a termination of
Executive's employment hereunder, the ownership of not more than five
percent (5%) of the total outstanding stock of a private company if
Executive is neither a member of, or represented on, the board of
directors of such private company and does not have an executive
officer role in such private company; (iii) the Allowed Activities;
or (iv) any activity engaged in with the prior written approval of
the Board. As used herein, "Competing Business" means any business
that the Company and/or its subsidiaries and/or any entity in which
the Company and/or its subsidiaries holds securities (other
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than entities in which the Company or its subsidiaries make a "nominal
investment" (determined as described in Section 2(c) hereof)) are engaged
in (I) from time to time (while Executive is employed by the Company) or
(II) at the time of termination (upon termination of Executive's
employment) (consisting principally of the services described in the
Company's Registration Statement on Form 10 under the Securities Exchange
Act of 1934, as amended, and any amendments thereof). For purposes of the
immediately preceding sentence, but solely following a termination of
Executive's employment hereunder, the Company and its subsidiaries shall be
deemed to have made a "nominal investment" in an entity if, at the time of
such termination of employment, the Company and its subsidiaries own or
control less than ten percent (10%) of the outstanding equity interests, on
a fully diluted basis, of such entity. The Company shall furnish Executive
with a list of all Competing Businesses on or promptly following
termination of his employment hereunder.
(c) SOLICITATION shall, subject to paragraph (g) of this Section 10
mean: recruiting, soliciting or inducing, of any nonclerical employee or
employees of the Company or its affiliates to terminate their employment
with the Company or its affiliates or hiring or assisting another person or
entity to hire any nonclerical employee of the Company or its affiliates or
any person who within twelve (12) months before had been a nonclerical
employee of the Company or its affiliates and were recruited or solicited
for such employment or other retention while an employee of the Company;
provided, however, that solicitation shall not include any of the foregoing
activities engaged in with the prior written approval of the Board.
(d) If any restriction set forth with regard to Competition or
Solicitation is found by any court of competent jurisdiction, or in
arbitration, to be unenforceable because it extends for too long a period
of time or over too great a range of activities or in too broad a
geographic area, it shall be interpreted to extend over the maximum period
of time, range of activities or geographic area as to which it may be
enforceable. In the event that the agreements in this Section 10 shall be
determined by any court of competent jurisdiction to be unenforceable by
reason of their extending for too great a period of time or over too great
a geographical area or by reason of their being too extensive in any other
respect, they shall be interpreted to extend only over the maximum period
of time for which they may be enforceable and/or over the maximum
geographical area as to which they may be enforceable and/or to the maximum
extent in all other respects as to which they may be enforceable, all as
determined by such court in such action.
(e) During the Employment Term and for two (2) years following a
termination of Executive's employment for any reason whatsoever, whether by
the Company or by Executive and whether or not for Cause, Good Reason or
non-extension of the Employment Term, Executive shall hold in a fiduciary
capacity for the benefit of the Company and its affiliates all secret or
confidential information, knowledge or data relating to the Company and its
affiliates, and their respective businesses, including any confidential
information as to customers of the Company and its affiliates, (i) obtained
by Executive during his employment by the Company and its affiliates and
(ii) not otherwise public knowledge or known within the applicable
industry. Executive shall not, without
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prior written consent of the Company, unless compelled pursuant to the
order of a court or other governmental or legal body having jurisdiction
over such matter, communicate or divulge any such information, knowledge or
data to anyone other than the Company and those designated by it. In the
event Executive is compelled by order of a court or other governmental or
legal body to communicate or divulge any such information, knowledge or
data to anyone other than the foregoing, he shall promptly notify the
Company of any such order and he shall cooperate fully with the Company in
protecting such information (at the Company's expense) to the extent
possible under applicable law. In the event Executive's cooperation with
the Company's protection of such information is required in accordance with
the immediately preceding sentence, the Company shall pay or reimburse
reasonable expenses, costs and fees incurred by Executive to provide such
cooperation (against reasonable documentation therefor in accordance with
Company policies).
(f) Upon termination of his employment with the Company and its
affiliates, or at any time as the Company may request, Executive will
promptly deliver to the Company, as requested, all documents (whether
prepared by the Company, an affiliate, Executive or a third party) relating
to the Company, an affiliate or any of their businesses or property which
he may possess or have under his direction or control other than documents
provided to Executive in his capacity as a participant in any employee
benefit plan, policy or program of the Company or any agreement by and
between Executive and the Company with regard to Executive's employment or
severance.
(g) During the Employment Term and for two (2) years following a
termination of Executive's employment for any reason whatsoever, whether by
the Company or by Executive and whether or not for Cause, Good Reason or
non-extension of the Employment Term, Executive will not engage in
Solicitation; provided, however, that if Executive's employment and the
Employment Term are terminated by Executive for Good Reason, or by the
Company without Cause, or due to non-extension of the Employment Term and
the Company fails to make a good faith offer for continued employment, then
Solicitation shall not include any of the activities described in paragraph
(c) of this Section 10 with respect to any employee of Marcus & Partners
immediately prior to the Commencement Date who became an employee of the
Company, including, without limitation, the following three individuals:
Xxxxxx X. XxXxxxxx, Xxxxxx X. Xxxxxx, and Xxxx X. Xxxxx; provided further,
however, that if Executive's employment and the Employment Term are
terminated due to non-extension of the Employment Term and the Company has
made a good faith offer for continued employment, then Solicitation shall
not include any of the activities described in paragraph (c) of this
Section 10 engaged in after nine (9) months following the date of such
termination with respect to any employee of Marcus & Partners immediately
prior to the Commencement Date who became an employee of the Company,
including, without limitation, the following three individuals: Xxxxxx X.
XxXxxxxx, Xxxxxx X. Xxxxxx, and Xxxx X. Xxxxx.
(h) During the Employment Term and for the Restricted Period (as
hereinafter defined) following a termination of Executive's employment,
Executive will not enter into Competition with the Company. The Restricted
Period shall be (i) for a termination
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for Cause, twelve (12) months from the date of such termination; (ii)
for a termination as a result of the voluntary resignation of
Executive without Good Reason, twelve (12) months from the date of
termination; and (iii) for termination as a result of expiration or
non-renewal of this Agreement, after the Company has made a good faith
offer for continued employment, nine (9) months following the date of
termination. For avoidance of doubt, there shall be no Restricted
Period following termination of Executive's employment without Cause
by the Company (and other than for Disability or as a result of
expiration of the Employment Term) or for Good Reason by Executive or
if the Employment Term expires and the Company fails to make a good
faith offer for continued employment.
(i) In the event of a breach or potential breach of this Section
10, Executive acknowledges that the Company and its affiliates will be
caused irreparable injury and that money damages may not be an
adequate remedy and agree that the Company and its affiliates shall be
entitled to injunctive relief (in addition to its other remedies at
law) to have the provisions of this Section 10 enforced. It is hereby
acknowledged that the provisions of this Section 10 are for the
benefit of the Company and all of the affiliates of the Company and
each such entity may enforce the provisions of this Section 10 and
only the applicable entity can waive the rights hereunder with respect
to its confidential information and employees.
(j) Furthermore, in addition to and not in limitation of any
other remedies provided herein or at law or in equity, in the event of
breach of this Section 10 by Executive, while he is receiving amounts
under Section 8(b) or (c) hereof, Executive shall not be entitled to
receive any future amounts pursuant to Section 8(b) or (c) hereof
after the earlier to occur of (i) ninety (90) days following the
Company's notification of Executive of its good faith determination of
such breach, specifying in reasonable detail the grounds for such
determination, and (ii) a final determination by an arbitrator or
court of competent jurisdiction of such breach, and, upon such final
determination, which is not appealable, he shall reimburse the Company
for any amounts previously paid to Executive pursuant to Section 8(b)
or (c) hereof.
11. Indemnification. The Company shall indemnify and hold harmless
Executive to the extent provided in the Certificate of Incorporation, the
By-Laws of the Company and the Delaware General Corporation Law as amended
and as applicable, for any action or inaction of Executive while serving as
an officer and director of the Company or, at the Company's request, as an
officer or director of any subsidiary or affiliate of the Company or as a
fiduciary of any benefit plan. The Company shall cover Executive under
directors and officers liability insurance both during and, while potential
liability exists, after the Employment Term in the same amount and to the
same extent as the Company covers its other officers and directors.
12. Intellectual Property.
(a) Executive shall disclose promptly to the Company copyrights,
trade secrets, proprietary information, patents, unpatented
inventions, trademarks, service marks, processes, techniques, methods,
know-how, flow charts, diagrams, computer programs and/or databases,
and any and all significant conceptions and ideas for
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inventions, improvements and valuable discoveries, whether patentable or
not (all of the foregoing, collectively, "INTELLECTUAL PROPERTY"), which
are conceived, created, developed or made by Executive, solely or jointly
with another, during the period of employment or within one (1) year
thereafter, and which are substantially related to the business or
activities of the Company or its subsidiaries which Executive conceived,
created, developed or made as a result of his employment by the Company or
any of its subsidiaries. Executive hereby assigns and agrees to assign all
of his right, title and interest throughout the world in any Intellectual
Property to the Company or its nominee. Whenever requested to do so by the
Company, Executive shall execute any and all applications, assignments or
other instruments that the Company shall deem necessary to apply for and
obtain registrations of copyrights or marks, or Letters Patent of the
United States or any foreign country or to otherwise protect the Company's
interest in Intellectual Property.
(b) Executive agrees that he will not, during or after the Employment
Term, disclose the specific terms of the Company's relationships or
agreements with its significant vendors or customers or any other
significant material trade secrets of the Company, whether in existence or
proposed (other than any of the foregoing that becomes public knowledge
other than through disclosure by Executive), to any person, firm,
partnership, corporation or business for any reason or purpose whatsoever,
except as is disclosed in the ordinary course of business, unless compelled
by a court order upon advice of counsel.
13. Legal and Other Fees and Expenses. In the event that a claim for
payment or benefits under this Agreement is disputed, the non-prevailing party
shall pay all reasonable attorney, accountant and other professional fees and
reasonable expenses incurred by the prevailing party associated with such claim.
14. Certain Additional Payments. Executive shall be grossed up for any
excise tax payable under Section 4999 of the Internal Revenue Code of 1986, as
amended (the "Code"), in accordance with Exhibit C attached hereto.
15. Resolution of Disputes. The parties shall use their best efforts and
good will to settle all disputes by amicable negotiations. The Company and
Executive agree, for purposes of the resolution of any disputes under this
Agreement, that such disputes shall be settled by arbitration in Dallas, Texas,
or such other place agreed to by the parties, in accordance with the rules and
procedures of the American Arbitration Association, as follows:
(a) Any such arbitration shall be heard before a panel consisting of
one to three arbitrators, each of whom shall be impartial. All arbitrators
shall be appointed in the first instance by agreement between the parties
hereto. If the parties cannot agree upon a single arbitrator, each of the
Company and the Executive shall be entitled to appoint one arbitrator.
These two appointed arbitrators shall then appoint a third arbitrator by
their mutual agreement.
(b) An arbitration may be commenced by either party to this Agreement
by the service of a written request for arbitration upon the other affected
party. Such request
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for arbitration shall summarize the controversy or claim to be arbitrated.
If the panel of arbitrators is not appointed within thirty (30) days
following such service, either party may apply to any court within the
State of Texas for an order appointing arbitrators qualified as set forth
below. No request for arbitration shall be valid if it relates to a claim,
dispute, disagreement or controversy that would have been time barred under
the applicable statute of limitations had such claim, dispute, disagreement
or controversy been submitted to the courts of the State of Texas.
(c) The parties hereby expressly waive punitive damages, and under no
circumstances shall an award contain any amount that in any way reflects
punitive damages.
(d) Judgment on the award rendered by the arbitrators may be entered
in any court having jurisdiction thereof.
16. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas without reference to
principles of conflict of laws.
(b) Entire Agreement/Amendments. This Agreement and the instruments
contemplated herein, contain the entire understanding of the parties with
respect to the employment of Executive by the Company from and after the
Commencement Date and supersedes any prior agreements between the Company
and Executive with respect thereto. There are no restrictions, agreements,
promises, warranties, covenants or undertakings between the parties with
respect to the subject matter herein other than those expressly set forth
herein and therein. This Agreement may not be altered, modified, or amended
except by written instrument signed by the parties hereto.
(c) Construction and Severability. If any provision of this Agreement
shall be held invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired, and the parties
undertake to implement all efforts which are necessary, desirable and
sufficient to amend, supplement or substitute all and any such invalid,
illegal or unenforceable provisions with enforceable and valid provisions
which would produce as nearly as may be possible the result previously
intended by the parties without renegotiation of any material terms and
conditions stipulated herein.
(d) No Waiver. Any failure of a party to insist upon strict adherence
to any term of this Agreement on any occasion shall not be considered a
waiver of such party's rights or deprive such party of the right thereafter
to insist upon strict adherence to that term or any other term of this
Agreement. Any such waiver must be in writing and signed by Executive or an
authorized officer of the Company, as the case may be.
(e) Assignment. This Agreement shall not be assignable by Executive.
This Agreement shall be assignable by the Company only to an entity which
is owned, directly
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or indirectly, in whole or in part by the Company or by any successor to
the Company or an acquirer of all or substantially all of the assets of the
Company or all or substantially all of the assets of a group of
subsidiaries and divisions of the Company, provided such entity or acquirer
promptly assumes all of the obligations hereunder of the Company in a
writing delivered to Executive and otherwise complies with the provisions
hereof with regard to such assumption. Upon such assignment and assumption,
all references to the Company herein shall be to such assignee.
(f) Successors; Binding Agreement; Third Party Beneficiaries. This
Agreement shall inure to the beneficiaries and permitted assignees of the
parties hereto. In the event of Executive's death while receiving amounts
payable pursuant to Section 8(b) hereof, any remaining amounts shall be
paid to Executive's estate.
(g) Communications. For the purpose of this Agreement, notices and all
other communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given (i) when faxed or delivered, or
(ii) two (2) business days after being mailed by United States registered
or certified mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth on the initial page of this Agreement,
provided that all notices to the Company shall be directed to the attention
of the General Counsel and Secretary of the Company, or to such other
address as any party may have furnished to the other in writing in
accordance herewith. Notice of change of address shall be effective only
upon receipt.
(h) Withholding Taxes. The Company may withhold from any and all
amounts payable under this Agreement such Federal, state and local taxes as
may be required to be withheld pursuant to any applicable law or
regulation.
(i) Survivorship. The respective rights and obligations of the parties
hereunder, including without limitation Section 10 and Section 11 hereof,
shall survive any termination of Executive's employment to the extent
necessary to the agreed preservation of such rights and obligations.
(j) Counterparts. This Agreement may be signed in counterparts, each
of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.
(k) Headings. The headings of the sections contained in this Agreement
are for convenience only and shall not be deemed to control or affect the
meaning or construction of any provision of this Agreement.
(l) Executive's Representation. Executive represents and warrants to
the Company that there is no legal impediment to him entering into this
Agreement, and entering into this Agreement will not violate any agreement
to which he is a party or any other legal restrictions, and he has provided
to the Company true and complete copies of any agreements or covenants to
which he is a party that could restrict or adversely affect his performance
under this Agreement. Executive further represents and warrants that in
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performing his duties hereunder he will not wrongfully use or disclose any
confidential information of any prior employer or other person or entity.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
COMPANY:
--------
eVENTURES GROUP, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxx
----------------------------------------------
Name: Xxxxx X. Xxxx
--------------------------------------------
Title: Chairman of Compensation Committee
-------------------------------------------
EXECUTIVE:
----------
/s/ Xxxxxxx X. Xxxxxx
------------------------------------------------
XXXXXXX X. XXXXXX
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EXHIBIT "A"
TO THE
EMPLOYMENT AGREEMENT
BETWEEN
eVENTURES GROUP, INC.
AND
XXXXXXX X. XXXXXX
DEFINITIONS
(a) Cause. For purposes of this Agreement, the term "CAUSE" shall be
limited to the following:
(i) Executive's willful misconduct with regard to the Company
or its affiliates or their business, assets or employees
(including, without limitation, Executive's fraud or
embezzlement), or Executive's willful misconduct other than
the foregoing, which in any case has a material adverse
impact on the Company or its affiliates, whether economic,
or reputationwise or otherwise, each as determined by the
Board, and which is not fully rectified or cured, if
susceptible to rectification or cure, within thirty (30)
days after written notice is given to Executive; provided,
however, that this clause (i) shall not include an action
or omission of Executive done or omitted to be done in his
good faith exercise of business judgment or in good faith
reliance on advice of legal counsel to the Company;
(ii) Executive's conviction of, or pleading nolo contendere to,
a felony or other crime involving fraud or dishonesty;
(iii) Executive's refusal or willful failure to follow the lawful
written direction of the Board which is not remedied within
ten (10) business days after receipt by Executive of a
written notice specifying the details thereto;
(iv) Executive's breach of Section 10 or Section 12 hereof,
which has a material adverse economic impact on the Company
or its affiliates, as determined by the Board; or
(v) the representations or warranties in Section 16(l) hereof
prove false, which has a material adverse economic impact
on the Company or its affiliates, as determined by the
Board.
(b) Change in Control. For purposes of this Agreement, the term "CHANGE IN
CONTROL" shall mean the occurrence of any of the following:
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(i) any "person" as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934 ("Act") (other
than (a) Permitted Assignees, (b) the Company, (c) any
trustee or other fiduciary holding securities under any
employee benefit plan of the Company, or (d) any company
owned, directly or indirectly, by the stockholders of the
Company in substantially the same proportions as their
ownership of Common Stock of the Company) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the
Act), directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the combined
voting power of the Company's then outstanding securities.
Permitted Assignees shall mean the holders of the equity
securities (whether or not voting) of any shareholder of
the Company owning more than fifteen percent (15%) of the
Company on the date after the date of execution of this
Agreement, so long as the voting power and disposition
authority with respect to the securities of such holders is
held directly or indirectly by any two or three of the
following individuals: Xxxxxxx X. Xxxxxxx, Xxxxx X. Xxxx or
Xxxxx X. Xxxxxxx;
(ii) during any period of two (2) consecutive years, individuals
who at the beginning of such period constitute the Board,
and any new director (other than a director designated by a
person who has entered into an agreement with the Company
to effect a transaction described in clause (i), (iii), or
(iv) of this paragraph) whose election by the Board or
nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds of the directors
then still in office who either were directors at the
beginning of the two-year period or whose election or
nomination for election was previously so approved, cease
for any reason to constitute at least a majority of the
Board;
(iii) a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which
would result in the voting securities of the Company
outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity)
more than fifty percent (50%) of the combined voting power
of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or
consolidation; or
(iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or the sale or disposition by
the Company of assets where the proceeds thereof are not
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retained by the Company, in a single transaction or a
series of related transactions, that result in a 66-2/3
percent or greater decline in the enterprise value of the
Company, valued based on the weighted average fair market
value of any outstanding class of stock of the Company plus
the book value of the outstanding indebtedness of the
Company.
(c) Disability. For purposes of this Agreement, "DISABILITY" shall mean if
Executive is unable to perform his material duties pursuant to this Agreement,
as determined by the Board, because of mental or physical incapacity, including,
without limitation, alcoholism or drug abuse, which requires a leave of absence
in excess of ninety (90) consecutive days in any twelve (12) month period.
(d) Good Reason. For purposes of this Agreement, "GOOD REASON" shall mean
the occurrence, without Executive's express written consent, in the case of (i),
(ii), (iii), (iv) or (v), of any of the following circumstances:
(i) (a) any demotion of Executive from his position as Chairman
and Chief Executive Officer, (b) any assignment of duties
to Executive materially and adversely inconsistent with
Executive's position as Chairman and Chief Executive
Officer, or (c) any material adverse change in the job
duties, reporting relationship, benefits, perquisites, or
office accommodations of the Executive (except, in any
case, in connection with the termination of Executive's
employment for Cause or due to Disability or as a result of
Executive's death, or temporarily as a result of
Executive's illness or other absence);
(ii) a failure by the Company to pay to Executive any amounts
due under this Agreement in accordance with the terms
hereof;
(iii) the failure to elect and maintain Executive as a member of
the Board and as Chairman of the Board at any time during
the Employment Term;
(iv) any other material breach by the Company of this Agreement;
(v) relocation of the Company's headquarters following the
Commencement Date;
(vi) a Change in Control; or
(vii) any claim, litigation, investigation or other legal action
by a governmental agency or other third party arising out
of the operations of the Company and its subsidiaries prior
to the Commencement Date which would reasonably be expected
to have
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a material adverse effect on the financial condition,
operations or prospects of the Company and its subsidiaries
or would reasonably be expected to result in a material
liability for any or all of the officers and directors of
the Company and its subsidiaries (whether or not indemnified
or insured); provided that to the extent this clause relates
to any filings made by the Company and its subsidiaries with
the Securities and Exchange Commission prior to the
Commencement Date, this clause also applies to such filing
in the form in which it is ultimately declared effective.
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EXHIBIT "B"
TO THE
EMPLOYMENT AGREEMENT
BETWEEN
eVENTURES GROUP, INC.
AND
XXXXXXX X. XXXXXX
STOCK OPTION GRANTS
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EXHIBIT "C"
TO THE
EMPLOYMENT AGREEMENT
BETWEEN
eVENTURES GROUP, INC.
AND
XXXXXXX X. XXXXXX
XXXXX-UP PAYMENT
As provided in Section 14 of the Employment Agreement of which this Exhibit C is
a part:
(a) In the event that Executive shall become entitled to payments and/or
benefits provided by this Agreement or any other amounts in the "nature of
compensation" (whether pursuant to the terms of this Agreement or any other
plan, arrangement or agreement with the Company, any person whose actions result
in a change of ownership or effective control covered by Section 280G(b)(2) of
the Code or any person affiliated with the Company or such person) as a result
of such change in ownership or effective control (collectively the "Company
Payments"), and such Company Payments will be subject to the tax (the "Excise
Tax") imposed by Section 4999 of the Code, the Company shall pay to Executive,
subject to required withholding, at the time specified in subsection (d) below
an additional amount (the "Gross-up Payment") such that the net amount retained
by Executive, after deduction of any Excise Tax on the Company Payments and on
the Gross-Up Payment provided for under this paragraph (a) and any U.S. federal,
state, and local income or payroll tax upon the Gross-up Payment provided for by
this paragraph (a), but before deduction for any U.S. federal, state, and local
income or payroll tax on the Company Payments, shall be equal to the Company
Payments.
(b) In the event that the Excise Tax is subsequently determined by the
Company to be less than the amount taken into account hereunder at the time the
Gross-up Payment is made, Executive shall repay to the Company, at the time that
the amount of such reduction in Excise Tax is finally determined, the portion of
the prior Gross-up Payment attributable to such reduction (plus the portion of
the Gross-up Payment attributable to the Excise Tax and U.S. federal, state and
local income tax imposed on the portion of the Gross-up Payment being repaid by
Executive), plus interest on the amount of such repayment at the rate provided
in Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is later
determined by the Company or the Internal Revenue Service to exceed the amount
taken into account hereunder at the time the Gross-up Payment is made (including
by reason of any payment the existence or amount of which cannot be determined
at the time of the Gross-up Payment), the Company shall make an additional
Gross-up Payment in respect of such excess (plus any interest or penalties
payable with respect to such excess) at the time that the amount of such excess
is finally determined.
(c) The Gross-up Payment or portion thereof provided for in subsection (c)
above shall be paid not later than the thirtieth (30th) day following delivery
by Executive to the Company of notice that an event that subjects Executive to
the Excise Tax has occurred; provided, however, that if the amount of such
Gross-up Payment or portion thereof cannot be
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finally determined on or before such day, the Company shall pay to Executive on
such day an estimate, as determined in good faith by the Company, of the minimum
amount of such payments and shall pay the remainder of such payments (together
with interest at the rate provided in Section 1274(b)(2)(B) of the Code)
promptly following such time as the amount thereof has been determined. In the
event that the amount of the estimated payments exceeds the amount subsequently
determined to have been due, such excess shall constitute a loan by the Company
to Executive, payable on the fifth day after demand by the Company (together
with interest at the rate provided in Section 1274(b)(2)(B) of the Code).
(d) In the event of any controversy with the Internal Revenue Service (or
other taxing authority) with regard to the Excise Tax, Executive shall permit
the Company to control issues related to the Excise Tax, but Executive shall
control any other issues. In the event of any conference with any taxing
authority as to the Excise Tax or associated income taxes, Executive shall
permit the representative of the Company to accompany Executive, and Executive
and Executive's representative shall cooperate with the Company and its
representative.
(e) The Company and Executive shall promptly deliver to each other copies
of any written communications, and summaries of any verbal communications, with
any taxing authority regarding the Excise Tax covered by this Exhibit C.
7
