Exhibit 10.4(1)
BLACK IPO, INC.
A Multicultural Company
XXXXXXX X. XXXXXXX EMPLOYMENT AGREEMENT
Dated June 30, 2000 between BLACK IPO, INC. ("Black IPO"), a Colorado
corporation and XXXXXXX X. XXXXXXX.
IN CONSIDERATION OF THE COVENANTS HEREIN, THE PARTIES AGREE AS FOLLOWS:
1. EMPLOYMENT
1.1. Position. During the Term of this Agreement and subject to the terms
and conditions set forth herein, BLACK IPO agrees to employ Xxxxxxx as its
President and Chief Executive Officer, reporting only to the Board of
Directors of BLACK IPO.
1.2 Election to Office. During the Term of this Agreement, BLACK IPO shall
use its best efforts to continue Xxxxxxx'x position and designation as
President and Chief Executive Officer.
1.3. Duties. During the Term of this Agreement, Xxxxxxx shall (i) devote
his full-time efforts during normal business hours to the performance of
his services, (except during vacation periods and periods of illness or
incapacity and except that nothing in this Agreement shall preclude Xxxxxxx
from devoting reasonable periods required for serving as a director, or
member of a committee of, or holding other positions, in any organization
involving no conflict of interest with the interests of BLACK IPO) and (ii)
perform his services faithfully, diligently and to the best of his skill
and ability.
1.4. Location. During the Term of this Agreement, Xxxxxxx will perform his
duties and services principally at Black IPO"s executive offices, and at
such locations as he shall deem appropriate, and Xxxxxxx agrees to make
such business trips as may be reasonable and necessary in the performance
of his services hereunder.
2. COMPENSATION AND BENEFITS
2.1. Salary. As compensation for the services to be performed by Xxxxxxx,
Black IPO agrees to pay Xxxxxxx during the Term of this Agreement a base
salary (the "Base Salary") of not less than $80,000 per year, which may be
accrued, if not paid, payable bi-monthly in accordance with Black IPO's
regular payroll practices. Black IPO may review Xxxxxxx'x Base Salary and
other compensation (including bonuses and incentive compensation) from time
to time during the Term of this Agreement and, at the recommendation of the
Compensation Committee of the Board of Directors (the "Committee"), may
increase his Base Salary or other compensation (including bonuses and
incentive compensation) from time to time. Any increase in Base Salary or
other compensation (including bonuses or incentive compensation) shall in
no way limit or reduce any other obligation of Black IPO. Once established
at an increased rate, Xxxxxxx'x Base Salary hereunder shall not be reduced.
2.2. Incentive Compensation. During the term of this Agreement, in addition
to the Base Salary provided in Section 2.1 above, Xxxxxxx shall be eligible
to receive additional incentive compensation, upon achievement of
performance or other goals to be established from time to time by the
Committee.
1
Such incentive compensation may be payable in cash, or in stock, stock
options or other stock based awards, or in any combination of cash and
stock based awards, as shall be determined by the Committee.
2.3. Participation in Benefit Plans. During the Term of this Agreement,
Xxxxxxx shall be entitled to participate in any pension plans,
profit-sharing plans and group insurance, medical, hospitalization,
disability and other benefit plans adopted, by The Board of Directors.
2.4. Reimbursement of Expenses. Black IPO will reimburse Xxxxxxx for all
business expenses, including, without limitation, traveling, entertainment
and similar expenses, incurred by Xxxxxxx on behalf of Black IPO during the
Term of this Agreement if such expenses are ordinary and necessary business
expenses incurred on behalf of Black IPO pursuant to Black IPO's standard
expense reimbursement policy, provided that Xxxxxxx shall provide Black IPO
with itemized accounts, receipts or documentation for such expenses.
2.5. Vacation and Sick Leave. During the Term of this Agreement, Xxxxxxx
will be entitled to three weeks of paid vacation per year. Xxxxxxx shall
also be entitled to paid sick leave in accordance with the policy
applicable to the other senior executives of Black IPO.
3. TERM
3.1. Term. The "Term" of employment under this Agreement means the period
commencing July 1, 2000 and expiring on December 31, 2004 or the earlier
termination pursuant to Section 4.1.
4. TERMINATION OF EMPLOYMENT
4.1. Events of Termination. Upon the occurrence of any of the following
events, Xxxxxxx'x employment hereunder shall terminate and Xxxxxxx shall be
entitled to the benefits provided in Section 4.2 hereof.
(i) Termination due to Xxxxxxx'x death.
(ii) Termination due to Xxxxxxx'x Disability. If, as a result of
Xxxxxxx'x incapacity due to physical or mental illness, injury or
disability Xxxxxxx shall have been absent from his duties with Black IPO on
a full-time basis for three consecutive months, and within thirty days
after the receipt of written Notice of Termination (as hereunder defined)
he shall not have returned to the full-time performance of his duties,
Black IPO may terminate Xxxxxxx'x employment for "Disability." "Absent from
his Duties" means, (ii), that Xxxxxxx is devoting less than 40 hours per
week to his duties under this Agreement.
(iii) Black IPO shall be entitled to terminate Xxxxxxx'x employment
for Cause. For purposes of this Agreement, "Cause" shall mean:
(1) the willful and continued failure by Xxxxxxx to substantially
perform his duties with Black IPO in good faith (other than any such
failure resulting from his incapacity due-to physical or mental
illness, injury or disability or any such actual or anticipated
failure resulting from his termination foGood Reason (as hereinafter
defined), after a demand for substantial performance is delivered to
him by the Board of Directors of Black IPO which identifies, in
reasonable detail, the manner in which the Board of Directors believes
that Xxxxxxx has not substantially performed his duties in good faith;
(2) the willful engaging by Xxxxxxx in conduct which causes
material harm to Black IPO, monetarily or otherwise; or Xxxxxxx'x
conviction of a felony arising from conduct during the Term of this
Agreement.
(3) No act, or failure to act, on Xxxxxxx'x part shall be
considered "willful" unless done, or omitted to be done, by him not in
good faith and without reasonable belief that his action or omission
2
was in the best interest of Black IPO or its shareholders.
Notwithstanding the foregoing, Xxxxxxx shall not be deemed to have
been terminated for Cause unless and until there shall have been
delivered to him a copy of a resolution duly adopted by the
affirmative vote of not less than two-thirds of the entire membership
of the Board of Directors at a meeting of the Board of Directors
called and held for such purpose (after ten days notice to him and an
opportunity for him, together with his counsel, to appear before the
Board of Directors), finding that Xxxxxxx was guilty of conduct set
forth above in this Subsection 4. l (iii) in a "Notice of Termination"
setting forth, in reasonable detail, the basis for such finding.
(iv) Xxxxxxx shall be entitled to terminate his employment for
Good Reason. For purposes of this Agreement, "Good Reason" shall,
without Xxxxxxx'x express written consent, mean:
(1) the assignment to Xxxxxxx of any duties substantially
inconsistent with his status as President and Chief Executive
Officer of Black IPO;
(2) a reduction by Black IPO in Xxxxxxx'x Base Salary as in
effect on the date hereof or as the same may be increased from
time to time;
(3) the relocation of Black IPO's principal executive
offices to a location not approved by Xxxxxxx or Black IPO"s
requiring Xxxxxxx to be based location not approved by Xxxxxxx;
(4) the failure by Black IPO to continue in effect any
pension, health, compensation or other benefit plan in which
Xxxxxxx participates, or any similar plans hereafter adopted,
unless an equitable arrangement (as determined by an employee
benefit consultant of national standing selected by Black IPO and
reasonably satisfactory to Xxxxxxx), embodied in an ongoing
substitute or alternative plan, has been made with respect to
such plan, or the failure by Black IPO to continue his
participation therein, or the taking of any action by Black IPO
which would directly or indirectly materially reduce any of such
benefits or deprive Xxxxxxx of any material fringe benefit
presently enjoyed by him;
(5) the failure of Black IPO to obtain a satisfactory
agreement from any successor (by means of merger, consolidation,
sale of assets or otherwise) to assume and agree to perform this
Agreement as contemplated by Section 5 hereof; or
(6) any purported termination of Xxxxxxx'x employment which
is not effected pursuant to a Notice of Termination satisfying
the requirements of Subsection (v) of this Section 4.1 (and, if
applicable, Subsection (iii) of this Section 4.1); and for
purposes of this Agreement, no such purported termination shall
be effective.
Xxxxxxx'x right to terminate his employment pursuant to this Subsection
4.1 (iv) shall not be affected by his incapacity due to physical or
mental illness, injury or disability. Black IPO may, solely during the
period of such incapacity, make arrangements for the discharge of any
of Xxxxxxx'x duties hereunder by another officer of Black IPO, but any
such arrangement shall not affect or in any way diminish Xxxxxxx'x
rights hereunder.
(v) Any purported termination by Black IPO or by Xxxxxxx shall be
communicated by written Notice of Termination to the other party
hereto in accordance with Sections 4.3 and 8.1 hereof.
(vi) Notwithstanding the pendency of a Notice of Dispute (as
hereinafter defined), Black IPO will continue to pay Xxxxxxx his full
compensation in effect when the notice giving rise to the dispute was
given (including, but not limited to, Base Salary) and continue his
participation in all incentive compensation, bonus, option, benefit
and insurance plans in which he was participating when the notice
giving rise to the dispute was given (or provide Xxxxxxx with benefits
substantially similar, as determined by an employee benefit consultant
of national standing selected by Black IPO and reasonably satisfactory
to Xxxxxxx, to those under such plans), until the dispute is finally
resolved. Amounts paid under this Section 4.1 (vi) are in addition to
all other amounts due under this Agreement and shall not be offset
3
against or reduce any other amounts due under this Agreement or
otherwise. If it is finally determined that Xxxxxxx terminated his
employment for other than Good Reason or Black IPO rightfully
terminated Xxxxxxx'x employment for Cause, Xxxxxxx shall reimburse
Black IPO for all amounts paid to him under this Section 4.1 (vi)
(less any amounts determined to be owing to Xxxxxxx under any other
provision of this Agreement), with interest thereon calculated at a
rate of six percent per annum.
4.2 Financial Events on Termination.
(i) Upon the termination of Xxxxxxx'x employment as a result of
his Disability, Xxxxxxx shall be entitled to receive:
(1) His Base Salary for twelve (12) months and any and all
benefits to which he is entitled on the date of such termination
under Black IPO"s pension, life, disability, accident and health
and other benefit plans in accordance with the provisions of such
plans;
(2) One hundred percent (100%) of the maximum amount of
incentive compensation for which Xxxxxxx could have become
eligible during the year in which such termination occurs.
(3) Vested Options. Options to purchase stock (common or
otherwise) in Black IPO granted pursuant to any plan or
otherwise, or any equivalent or similar rights which appreciate
or tend to appreciate as the value of Black IPO"s stock
appreciate shall become immediately and fully vested.
(ii) Upon the termination of Xxxxxxx'x employment as a result of
his Death, Xxxxxxx'x heirs, devises, executors or other legal
representatives shall receive:
(1) for an additional twelve months from the date of such
termination, his Base Salary and any and all benefits to which he
is entitled on the date of such termination under Black IPO"s
pension, life, disability, accident and health and other benefit
plans in accordance with the provisions of such plans; and (B)
one hundred percent (100%) of the maximum amount of incentive
compensation for which Xxxxxxx could have become eligible during
the year in which such termination occurs.
(2) any options to purchase stock (common or otherwise) in
Black IPO granted pursuant to any plan or otherwise, or any
equivalent or similar rights which appreciate or tend to
appreciate as the value of Black IPO"s stock appreciates, shall
become immediately accelerated fully vested and any restrictions
on such options or equivalent or similar rights shall, to the
extent permissible under application securities laws, fully
lapse, and Black IPO shall endeavor to cause any restrictions on
such options or equivalent or similar rights not lapsed by
operation of the clause to so lapse.
(iii) If Xxxxxxx'x employment shall be terminated for Cause,
Black IPO shall pay Xxxxxxx his full Base Salary and other benefits to
which he is entitled for a period of twelve months, (vi)(b) if
Xxxxxxx'x employment shall be terminated for Cause as described in
Section 4. (iii) hereto, Black IPO shall pay, Xxxxxxx his full Base
Salary and other benefits to which he is entitled, through the Date of
Termination at the rate of effect at the Notice of Termination is
given, and Black IPO shall have no further obligations to him under
this Agreement.
(iv) If Xxxxxxx'x employment for Black IPO shall be terminated
(a) by Black IPO other than for Cause, Death or Disability, or (b) by
Xxxxxxx for Good Reason, then Xxxxxxx shall be entitled to the
benefits provided below:
(1) any options to purchase stock (common or otherwise) in
Black IPO granted pursuant to any plan or otherwise, or any
equivalent or similar rights which appreciate or tend to
appreciate as the value of Black IPO"s stock appreciates, shall
become immediately accelerated and fully vested.
4
(2) not later than thirty days following the Date of
Termination, a lump sum in cash equal to twelve months of Base
Salary, at the rate of Xxxxxxx'x Base Salary on the Date of
Termination, discounted to the then present value at a discount
rate often ten percent (10%) per annum applied to each future
payment from the time it would have become payable; and:
(3) one hundred percent (100%) of the maximum amount of
incentive compensation for which Xxxxxxx could have become
eligible during the year in which such termination occurs;
(4) Xxxxxxx shall not be required to mitigate the amount of
any payment provided for in this Section 4.2 by seeking other
employment or otherwise, nor shall the amount of any payment or
benefit provided for in this Section 4.2 be subject to set-off or
reduced by any compensation earned by him as the result of
employment by another employer or by benefits after the Date of
Termination, or otherwise.
4.3 Definitions.
(i) "Notice of Termination" means a written notice which shall
indicate the specific termination provision in this Agreement relied
upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of employment
under the provision so indicated.
(ii) "Date of Termination" means (I) if employment is terminated
for Disability, thirty days after Notice of Termination is given
(provided that Xxxxxxx shall not have returned to the performance of
his duties on a full-time basis during such thirty-day period), and
(ii) if employment is terminated pursuant to Subsection (iii) or (iv)
of Section 4.1 or for any other reason, the date specified in the
Notice of Termination (which, in the case of a termination pursuant to
Subsection (iii) of Section 4.1, shall not be less than ten days and,
in the case of a termination pursuant to Subsection (iv) of Section
4.1, shall not be more than sixty days, respectively, from the date
such Notice of Termination is given); provided that if within thirty
days after any Notice of Termination is given, the party receiving
such Notice of Termination notifies the other party that a dispute
exists concerning the termination (a "Notice of Dispute"), the Date of
Termination shall be the date on which the dispute is finally
determined, either by mutual written agreement of the parties, by a
binding arbitration award, or by a final judgment, order or decree of
a court of competent jurisdiction (the time for appeal therefrom
having expired and no appeal having been perfected); and provided
further that the Date of Termination shall be extended by a Notice of
Dispute only if such notice is given in good faith and the party
giving such notice pursues the resolution of such dispute with
reasonable diligence.
5. SUCCESSORS
5.1 Assumption by Successors. Black IPO shall require any successor
(whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business or assets of
Black IPO to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that Black IPO would be required
to perform it if no such succession had taken place. Failure of Black
IPO to obtain such assumption and agreement prior to the effectiveness
of any such succession shall be a breach of this Agreement and shall
entitle Xxxxxxx to compensation from Black IPO in the same amount and
on the same terms as he would be entitled hereunder if he terminates
his employment for Good Reason, except that for purposes of
implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Date of Termination. As used in
this Agreement, "Company" shall mean Black IPO as hereinbefore defined
and any successor to its business or assets which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
6. NON-COMPETITION AND CONFIDENTIALITY
6.1 Non-competition. During Xxxxxxx'x employment by Black IPO hereunder
and during the period of one year after the termination of Xxxxxxx'x
employment hereunder by Black IPO for Cause or by Xxxxxxx for other
than Good Reason:
5
(i) Xxxxxxx will not directly compete with the business of
Black IPO so as to cause Black IPO to lose material revenue
from any client account which is in existence on the Date of
Termination.
(ii) Xxxxxxx will not directly or indirectly employ or solicit
for employment any person whom he knows to be an employee of
Black IPO or any subsidiary of Black IPO.
6.2 Confidential Information.
(i) Xxxxxxx agrees and acknowledges that the Confidential
Information of Black IPO is valuable, special and unique to
its business; that such business depends on such Confidential
Information; and that Black IPO wishes to protect such
confidential Information by keeping it confidential for the
use and benefit of Black IPO. Based on the foregoing Xxxxxxx
agrees to undertake the following obligations with respect to
such confidential Information:
(1) Xxxxxxx agrees to keep any and all confidential
Information in trust for the use and benefit of Black IPO;
(2) Xxxxxxx agrees that, except as required by Xxxxxxx'x
duties hereunder or authorized in writing by Black IPO, he will
not at any time during and for one year after the termination of
his employment with Black IPO, disclose or use, directly or
indirectly, any Confidential Information of Black IPO;
(3) Xxxxxxx agrees to take all reasonable steps necessary,
or reasonably requested by Black IPO, to ensure that all
Confidential Information of Black IPO is kept confidential for
the use and benefit of Black IPO; and
(4) Xxxxxxx agrees that, upon termination of his employment
by Black IPO or at any other time Black IPO may in writing so
request, he will promptly deliver to Black IPO all materials
constituting Confidential Information (including all copies
thereof) that are in the possession of or under the control of
Xxxxxxx. Xxxxxxx further agrees that, if requested by Black IPO
to return any Confidential Information pursuant to this
Subsection 6.2 (i)(4), he will not make or retain any copy of or
extract from such materials.
(ii) for purposes of this Section 6.2, Confidential Information
means any and all information developed by or for Black IPO of
which Xxxxxxx gained knowledge by reason of his employment by
Black IPO prior to date hereof or his employment under this
Agreement that is not generally known in any industry in which
Black IPO is or may become engaged. Confidential Information
includes, but is not limited to, any and all information
developed by or for Black IPO concerning plans, marketing and
sales methods, materials, processes, business forms, procedures,
devices used by Black IPO, contractors and customers with which
Black IPO has dealt prior to Xxxxxxx'x termination of employment
with Black IPO, plans for development of new products, services
and expansion into new areas or markets, internal operations, and
any trade secrets and proprietary information of any type owned
by Black IPO together with all written, graphic and other
materials relating to all or any part of the same.
In the event that Xxxxxxx is, in the opinion of his legal counsel
(which counsel shall be acceptable to Black IPO in its reasonable
discretion), required to disclose any Confidential Information to
any federal, state, local or foreign judicial, legislative,
administrative or any other authority, agency or instrumentality
or is required to disclose such Confidential Information by
reason of his fiduciary duties to Black IPO or its shareholders
or by any federal, state, local or foreign securities, blue-sky
or other similar laws, rules, regulations or ordinances, then,
6
notwithstanding anything in this Section 6.2 to the contrary,
Xxxxxxx may disclose such Confidential Information to the extent,
and to the persons and entities, so required without any
liability hereunder, without constituting a breach hereunder and
without giving rise to a right of Black IPO to terminate
Xxxxxxx'x employment (for Cause or otherwise) hereunder. Xxxxxxx
shall notify Black IPO of any disclosure required to be made in
connection with the preceding sentence as soon as practicable
after Xxxxxxx becomes aware of such required disclosure.
7. REMEDIES
7.1. Injunctive Relief. Xxxxxxx acknowledges and agrees that the covenants
and obligations contained in Sections 6.1 and 6.2 relate to special, unique
and extraordinary matters and that a violation of any of the terms of such
sections will cause Black IPO irreparable injury for which adequate remedy
at law is not available. Therefore, Xxxxxxx agrees that Black IPO shall be
entitled to an injunction, restraining order, or other equitable relief
from any court of competent jurisdiction, restraining Xxxxxxx from
committing any violation of the covenants and obligations set forth in
Sections 6.1 and 6.2 hereof.
7.2. Remedies Cumulative. Black IPO"s rights and remedies under Section 7.1
hereof are cumulative and are in addition to any other rights and remedies
Black IPO may have at law or in equity.
8. MISCELLANEOUS
8.1. Notices. Any written notice, required or permitted under this
Agreement, shall be deemed sufficiently given if either hand-delivered or
if sent by fax or overnight courier. Written notices must be delivered to
the receiving party at his or its address on the signature page of this
Agreement. The parties may change the address at which written notices are
to be received in accordance with this section.
8.2. Assignment. Neither Black IPO nor Xxxxxxx may assign, transfer, or
delegate its or his rights or obligations hereunder and any attempt to do
so shall be void. This Agreement shall be binding upon and shall insure to
the benefit of Black IPO and its successors and assigns.
8.3. Entire Agreement. This Agreement contains the entire agreement of the
parties with respect to the subject matter hereof, and all other prior
agreements, written or oral, are hereby merged herein and are of no further
force or effect. This Agreement may be modified or amended only by a
written agreement that is signed by Black IPO and Xxxxxxx. No waiver of any
section or provision of this Agreement will be valid unless such waiver is
in writing and signed by the party against whom enforcement of the waiver
is sought.
The waiver by Black IPO of any section or provision of this Agreement shall
not apply to any subsequent breach of this Agreement. Captions to the
various sections in this Agreement are for the convenience of the parties
only and shall not affect the meaning or interpretation of this Agreement.
This Agreement may be executed in several counterparts, each of which shall
be deemed an original, but together they shall constitute one and the same
instrument.
8.4. Severability. The provisions of this Agreement shall be deemed
severable, and if any part of any provision is held illegal, void, or
invalid under applicable law such provision may be changed to the extent
reasonably necessary to make the provision, as so changed, legal, valid and
binding. If any provision of this Agreement is held illegal, void or
invalid in its entirety, the remaining provisions of this Agreement shall
not in any way be affected or impaired but shall remain binding in
accordance with their terms.
7
8.5. Continuing Obligations. All of the sections of this Agreement
including but not by way of limitation, that provide for ongoing
obligations of Black IPO in Sections 4.2, 6.1, and 6.2 shall continue and
survive the termination of this Agreement.
8.6. Applicable Law. This Agreement and the right and obligation of Black
IPO and Xxxxxxx thereunder shall be governed by and construed and enforced
under the laws of the State of Colorado applicable to agreements made and
to be performed entirely within such State.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
BLACK IPO, INC.
ACKNOWLEDGEMENT AGREED AND ACCEPTED
By: By:
------------------------------------ -----------------------------------
Xxxxxxx X. Xxxxxxxx Xxxxxxx X. Xxxxxxx
General Counsel President and Chief Executive Officer
8
