EXHIBIT 10.24
EMPLOYMENT AGREEMENT
This employment agreement (the "Agreement"), to be effective on July
19, 2004 (the "Effective Date"), by and between iLinc Communications, Inc., a
Delaware corporation (the "Company"), and Xxxx X. Xxxxxxx ("Employee").
WHEREAS, the Company wishes to offer employment to Employee on the
terms and conditions expressed herein; and,
WHEREAS, the Employee wishes to accept employment with the Company on
the terms and conditions described herein;
NOW THEREFORE, in consideration of the mutual premises and conditions
contained herein, including the recitals hereto, which, by this reference, are
incorporated herein and made a part hereof, the parties agree as follows:
1. EMPLOYMENT. The Company hereby agrees to employ Employee, and Employee
hereby accepts employment by the Company, upon the terms and subject to the
conditions hereinafter set forth.
2. DUTIES. Employee shall serve as a Senior Vice President and Chief Financial
Officer of the Company (the "Position") reporting to the Company's
President. Employee's duties and powers shall be those consistent with the
Position, with such additional duties or titles as determined necessary and
appropriate from time to time by the Company's President. Employee agrees to
devote his full time, attention and best efforts to the Company in the
performance of Employee's duties. All of the Employee's powers and
authorities shall be subject to the reasonable direction and control of the
Company's President. Employee acknowledges that the executive offices of the
Company will be located in Phoenix, Arizona and that he shall be required to
perform his duties under this Agreement from those offices.
3. TERM. Unless earlier terminated in accordance with Section 6 hereof, the
term of this Agreement shall be for twelve (12) months (the "Term"),
beginning on the Effective Date. The Company shall have the option, but not
the obligation, to renew this Agreement for one like period of time as the
initial Term by providing no less than sixty (60) days prior written notice
of its intent to renew this Agreement.
4. COMPENSATION AND BENEFITS. In consideration for the services of the Employee
hereunder, the Company will compensate Employee as follows:
a. BASE SALARY. Beginning with the Effective Date and continuing
thereafter until this Agreement is terminated, Employee shall
receive a monthly minimum base salary (the "Base Salary") equal to
fourteen thousand five hundred eighty three and 34/100 dollars
($14,583.34) per month. Employee's Base Salary shall be paid in
accordance with Company's standard policy regarding payment of
compensation to employees but no less frequently than monthly.
b. BONUS. Commencing with the Effective Date and continuing
thereafter until this Agreement is terminated, Employee will be
eligible to receive an annual bonus of up to twenty five percent
(25%) of the Employee's Base Salary that shall be based upon the
Company achieving the revenue targets established by the
President, as may be amended hereafter from time to time. Such
bonus, if any, shall be payable by the Company to Employee
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annually as approved by the Compensation Committee of the
Company's Board of Directors. Notwithstanding anything to the
contrary herein or contained in the writing related hereto, any
bonus due to Employee shall be due up to and including the
termination date of this Agreement, but no bonus shall accrue
after the termination date of this Agreement.
c. BENEFITS. Employee shall be entitled to medical, dental and
retirement benefits which are generally made available to
employees of a like position, and specifically Company will pay
the total premium costs associated with the medical and dental
insurance, not including deductibles and/or co-payments, covering
the health of Employee, Employee's spouse and Employee's
dependants. During each year of his employment Employee shall be
entitled to fifteen (15) days of paid vacation, and such other
days of compensated absences, (i.e. sick leave or personal days)
in accordance with the Company's policies and procedures as
determined from time to time by the President.
5. EXPENSES. It is acknowledged by the parties that Employee, in connection
with the services to be performed by him pursuant to the terms of this
Agreement, will be required to make payments for travel, meals, hotel,
entertainment of business associates, mobile telephone and similar expenses
(the "Out of Pocket Expenses"). The Company will reimburse Employee for all
reasonable and necessary Out of Pocket Expenses incurred by Employee in the
performance of his duties. Employee will comply with such budget
limitations, approval and reporting requirements with respect to such Out of
Pocket Expenses as the Company may establish from time to time.
6. TERMINATION. Employee's employment will begin on the Effective Date and
continue until the end of the Term, including any renewals thereof, except
that the employment of Employee hereunder will terminate upon the occurrence
of the following events:
a. BY EMPLOYEE. Employee's employment will terminate upon Employee's
notice to Company, in writing at least thirty (30) days prior to
Employee's last day of employment, of Employee's intent to
terminate this Agreement. In the event of the termination of this
Agreement pursuant to this sub-section 6(a), Employee will not be
entitled to any Severance Amount (as hereinafter defined) or
further consideration, except for any portion of the Base Salary
accrued but unpaid from the last monthly payment date to the date
of termination and expense reimbursements under Section 5 hereof
for expenses incurred in the performance of his duties hereunder
prior to termination.
b. DEATH OR DISABILITY. Employee's employment will terminate
immediately upon the death of Employee during the term of his
employment hereunder or, at the option of the Company, in the
event of Employee's disability, upon 30 days notice to Employee.
Employee will be deemed "disabled" if, as a result of Employee's
incapacity due to physical or mental illness, Employee shall have
been continuously absent from his duties with the company on a
full-time basis for 120 consecutive business days, and Employee
shall not reasonably be expected to be able to resume his duties
within 60 days of the end of such 120 day period. In the event of
the termination of this Agreement pursuant to this subsection
6(b), Employee will not be entitled to any Severance Amount (as
hereinafter defined) or other compensation except for any portion
of his Base Salary accrued but unpaid from the last monthly
payment date to the date of termination and expense reimbursements
under Section 5 hereof or for expenses incurred in the performance
of his duties hereunder prior to termination.
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c. FOR CAUSE. The Company may terminate the Employee's employment
"for cause" immediately upon written notice by the Company to
Employee. For purposes of this Agreement, a termination will be
for Cause if: (i) Employee willfully and continuously fails to
perform his duties with the Company (other than any such failure
resulting from incapacity due to physical or mental illness); (ii)
Employee willfully engages in gross misconduct materially and
demonstrably injurious to the Company; (iii) Employee has been
convicted of a felony which the President reasonably believes will
result in injury to the Company or which would disqualify employee
for coverage by the Company's surety bond; (iv) Employee
materially breaches the representations contained in Section 9
(Employee Representations) after written notice and failure to
cure such breach. In the event of the termination of this
Agreement pursuant to this sub-section 6(c), Employee will not be
entitled to any Severance Amount (as hereinafter defined) or
further consideration, except for any portion of the Base Salary
accrued but unpaid from the last monthly payment date to the date
of termination and expense reimbursements under Section 5 hereof
for expenses incurred in the performance of his duties hereunder
prior to termination.
d. BY COMPANY WITHOUT CAUSE. The Company may terminate this Agreement
during the Term at any time for any reason "without cause." In the
event of the termination of this Agreement pursuant to this
subsection 6(d) and only in that event, then the Company will pay
Employee, as Employee's sole remedy in connection with such
termination, severance (the "Severance Amount") in an amount
determined by multiplying Employee's monthly Base Salary by twelve
(12) months. The Company will also pay Employee the portion of his
Base Salary and bonus accrued but unpaid from the last monthly
payment date to the date of termination and expense reimbursements
under Section 5 hereof for expenses incurred in the performance of
his duties hereunder prior to termination. The Company will pay
the Severance Amount in a lump sum and within thirty (30) days of
the Employee's last day of employment. The Company will be
entitled to offset or mitigate the amount due under this
subsection by any other amounts payable to Employee, including
amounts payable or paid to Employee by third parties for
Employee's services after the date of termination.
7. STOCK OPTIONS. Employee shall be granted an option (the "Option") to
purchase from the Company all or any part of a total of 225,000 shares of
the Company's Common Stock, par value $.001 per share, at an exercise price
equal to the closing price of the Company's Common stock on the date of
grant (the "Date of Grant") of the Option. The Option will be an "incentive
stock option" within the meaning of Section 422 of the Internal Revenue
Code. The Option will expire on the day prior to the tenth (10th)
anniversary of the Date of Grant, or such earlier date as may be provided in
the 1997 Stock Compensation Plan (the "Plan"). Subject to the provisions of
Plan, the Option may be exercised as follows; on the date that is six (6)
months from the Date of Grant, twenty-five percent (25.000%) of the options
granted shall be vested, and thereafter beginning on the first day of the
seventh month after the Date of Grant, one thirty-sixth (1/36) of the
remaining portion shall vest on the first day of each month, from month to
month, until fully vested. In addition to the foregoing stock option grant,
Employee will be eligible to participate in the Company's stock option plan
and therefore eligible for an annual grant of additional stock options, if
any, that are awarded to all of the Company's employees. If Employee is
terminated "without cause" under Section 6(d) above, then the effect of the
termination of the Employee's employment on such options shall be determined
by the terms of the Plan and the option agreement related to such Options.
If Employee is terminated "for cause" under Section 6(c) above, then the
Options shall be terminated. In the event of a "Change of Control" as
defined in the Plan while this Agreement remains in effect, then the Options
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issued and outstanding to Employee shall immediately vest (100%), and the
Employee may exercise his options at any time during the original term of
the option agreement (as defined therein), and such termination of this
Agreement shall not cause termination or expiration of the Option.
8. CONFIDENTIAL INFORMATION. Employee recognizes and acknowledges that certain
assets of the Company and its affiliates, including without limitation
information regarding customers, pricing policies, methods of operation,
proprietary computer programs, sales, products, profits, costs, markets, key
personnel, formulae, product applications, technical processes, and trade
secrets (herein called "Confidential Information") are valuable, special and
unique assets of the Company and its affiliates. Employee will not, during
or after the term of his employment, disclose any of the Confidential
Information to any person, firm, corporation, association, or any other
entity for any reason or purpose whatsoever, directly or indirectly, except
as may be required pursuant to his employment hereunder, unless and until
such Confidential Information becomes publicly available other than as a
consequence of the breach by Employee of his confidentiality obligations
hereunder. In the Event of the termination of his employment, whether
voluntary or involuntary, and whether by the Company or Employee, Employee
will deliver to the Company all documents and data pertaining to the
Confidential Information and will not take with him any documents or data of
any kind or any reproductions (in whole or in part) of any items relating to
the Confidential Information.
9. REPRESENTATIONS OF EMPLOYEE.
a. NON-COMPETITION AND NON-SOLICITATION. For the period beginning
with the Effective Date and continuing thereafter until the
expiration of twelve (12) months after termination of Employee's
employment with the Company, then Employee covenants, warrants and
represents that he will not: (i) engage directly or indirectly,
alone or as a shareholder, partner, officer, director, employee or
consultant of any other business organization, including as an
agent or reseller of another company that engages in any business
activities that are directly competitive with the Company,
including but not limited to the web conferencing, eLearning or
audio conferencing industries; (ii) divert to any competitor of
the Company any customer of the Company or induce a customer to
cease doing business with the Company or, (iii) solicit or
encourage any employee of the Company to leave their employment
with the Company or seek employment by or with any competitor of
the Company or hire directly or indirectly any employee of the
Company. The parties hereto acknowledge that Employee's
non-competition obligations hereunder will not preclude Employee
from owning less than 5% of the common stock of any publicly
traded corporation conducting business activities that are
competitive with the Company or serving as an officer, director,
stockholder or employee of an entity whose business operations are
not competitive with those of the Company. Employee will continue
to be bound by the provisions of this Section 9 until their
expiration and will not be entitled to any compensation from the
Company with respect thereto. If at any time the provisions of
this Section 9 are determined to be invalid or unenforceable, by
reason of being vague or unreasonable as to area, duration or
scope of activity, this Section 9 will be considered divisible and
will become and be immediately amended to only such area,
duration, scope of activity as will be determined to be reasonable
and enforceable by the court or other body having jurisdiction
over the matter; and Employee agrees that this Section 9 as so
amended will be valid and binding as though any invalid or
unenforceable provision had not been included herein.
b. GENERAL REPRESENTATIONS. As of the Effective Date, Employee
expressly warrants and represents to the Company that: (i) All
employment agreements, employment letters or employment
relationships, whether as an employee or as an independent
contractor, have been terminated (ii) The execution and delivery
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of this Agreement does not violate any provision of any existing
employment agreement to which Employee is a party and which on the
Effective Date remain in effect; and (iii) Employee is not (by
virtue of any act or omission) in violation of any non-competition
or like covenant that would have the effect of prohibiting
Employee from lawfully engaging in the activities contemplated by
this Agreement.
10. GENERAL.
a. NOTICES. All notices and other communications hereunder will be in
writing or by written telecommunication, and will be deemed to
have been duly given if delivered personally or if mailed by
certified mail, return receipt requested or by written
telecommunication, to the relevant address set forth below, or to
such other address as the recipient of such notice or
communication will have specified to the other party hereto in
accordance with this Section 10(a):
If to the Company, to: If to Employee:
iLinc Communications, Inc. Xxxx X. Xxxxxxx
0000 X. 00xx Xxxxxx, Xxxxx 000 00000 Xxxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxx 00000 Xxxxx, Xxxxxxx 00000
Attn: President 000-000-0000 (Home)
Fax No.: (000) 000-0000 xxxxxxxxxxx@xxx.xxx
b. WITHHOLDING AND OFFSET. All payments required to be made by the
Company under this Agreement to Employee will be subject to the
withholding of such amounts, if any, relating to federal, state
and local taxes as may be required by law. All payments under this
Agreement will be subject to offset or reduction attributable to
any amount Employee may owe to the Company.
c. EQUITABLE REMEDIES. Each of the parties hereto acknowledges and
agrees that upon any breach by Employee of his obligations under
any of the Sections 8 and 9 hereof, the Company will have no
adequate remedy at law, and accordingly will be entitled to
specific performance and other appropriate injunctive and
equitable relief.
d. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid or unenforceable, such provision will be fully
severable and this Agreement will be construed and enforced as if
such illegal, invalid or unenforceable provision never comprised a
part hereof; and the remaining provisions hereof will remain in
full force and effect and will not be affected by the illegal,
invalid or unenforceable provision or by its severance herefrom.
Furthermore, in lieu of such illegal, invalid or unenforceable
provision, there will be added automatically as part of this
Agreement a provision as similar in its terms to such illegal,
invalid or unenforceable provision as may be possible and be
legal, valid and enforceable. Any and all covenants and
obligations of either party hereto which by their terms or by
reasonable implication are to be performed, in whole or in part,
after the termination of this Agreement, shall survive such
termination, including specifically the obligations arising under
Sections: 6, 7, 8 and 9.
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e. WAIVERS. No delay or omission by either party hereto in exercising
any right, power or privilege hereunder will impair such right,
power or privilege, nor will any single or partial exercise of any
such right, power or privilege preclude any further exercise
thereof or the exercise of any other right, power or privilege.
f. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which will be deemed an original, and all of
which together will constitute one and the same instrument.
g. CAPTIONS. The captions in this Agreement are for convenience of
reference only and will not limit or otherwise affect any of the
terms or provisions hereof.
h. REFERENCE TO AGREEMENT. Use of the words "herein," "hereof,"
"hereto " and the like in this Agreement refer to this Agreement
only as a whole and not to any particular subsection or provision
of this Agreement, unless otherwise noted.
i. BINDING AGREEMENT. This Agreement will be binding upon and inure
to the benefit of the parties and will be enforceable by the
personal representatives and heirs of Employee and the successors
of the Company. If Employee dies while any amounts would still be
payable to him hereunder, such amounts will be paid to Employee's
estate. This Agreement is not otherwise assignable by Employee.
j. ENTIRE AGREEMENT. Except as provided in the benefit plans and
programs referenced herein, this Agreement contains the entire
understanding of the parties, supersedes all prior agreements and
understandings relating to the subject matter hereof and may not
be amended except by a written instrument hereafter signed by each
of the parties hereto. Any modification of this Agreement shall be
effective only if it is in writing and signed by the parties
hereto.
k. GOVERNING LAW. This Agreement and the performance hereof will be
construed and governed in accordance with the laws of the State of
Arizona, without regard to its choice of law principles.
l. ATTORNEYS' FEES. If legal action is commenced by either party to
enforce or defend its rights under this Agreement, the prevailing
party in such action shall be entitled to recover its court costs
and reasonable attorneys' fees, including expert witnesses fees
actually incurred which shall be awarded to the that party, in
addition to any other relief granted.
m. AUTHORITY. The signatories to this Agreement represent and warrant
that such signatory has the authority to enter into this
Agreement, and that neither that signatory nor the party on whose
behalf this Agreement may be signed has assigned any claims
related to the parties' relationship or this Agreement to any
person or entity.
11. BINDING ARBITRATION. Any controversy or claim arising out of or relating to
this Agreement, or breach thereof, shall be settled exclusively by
arbitration in Phoenix, Arizona, in accordance with the Commercial
Arbitration Rules of the American Arbitration Association then in effect. A
sole arbitrator shall conduct Arbitration and he shall render his award, if
any, within five (45) days of the arbitration hearing. Judgment upon the
award rendered by the arbitrator may be entered in, and enforced by, any
court having jurisdiction thereof. The award of the arbitrator may grant any
relief consistent with the terms and provisions of this Agreement, in law or
in equity; and the award may contain a provision for payment of costs and
attorney's fees to the prevailing party.
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EXECUTED to be effective as of the Effective Date first written above.
ILINC COMMUNICATIONS, INC. EMPLOYEE:
By: ______________________________ By: ___________________________________
Xxxxx X. Xxxxxx, Xx., Xxxx X. Xxxxxxx,
President Individually
Date: ___________________________ Date: _____________________________
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