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EXHIBIT 10.9
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. XXXXXXX residing at 0000 Xxxxxxxxxxx, Xxxxxx, Xxxxx
00000 ("EXECUTIVE").
WITNESSETH:
WHEREAS, effective April 3, 2000 (the "COMMENCEMENT DATE"), the Company
desires to employ Executive as its President, 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 President of the Company (the
"PRESIDENT"), reporting directly to the Chief Executive Officer of the
Company (the "CHIEF EXECUTIVE OFFICER"). If requested by the Board of
Directors of the Company (the "BOARD") or the Chief Executive Officer,
Executive shall also serve on the Board and committees thereof, as an
executive, officer and director of subsidiaries of the Company and/or
as a director of associated companies 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
Chief Executive Officer.
(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 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),
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(iii) continuing service as a managing director, manager, partner, or
member, directly or indirectly, of any investment management business
in which Executive serves in such capacity on the Commencement Date,
(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 at any time
exclusive of his membership (if any) on the Board or the board of
directors of any subsidiary or affiliate of the Company, or (v) service
on the boards of directors of a reasonable number of charitable
organizations so long as such service is not inconsistent with his
position and duties hereunder (such activities described in clause (i),
(ii), (iii), (iv) or (v) 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
hereof, 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 One Hundred Ninety Thousand
Dollars ($190,000). 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.
(b) Stock Options. The Company hereby grants to Executive
stock options (the "STOCK OPTIONS") to purchase 1,400,000 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
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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 350,000
April 2, 2001 350,000
April 2, 2002 350,000
April 2, 2003 350,000
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). 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.
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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.
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
(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
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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. Subject to the notification provisions of this
Section 7(d), Executive's employment hereunder may be terminated by the
Company for Cause. 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.
(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,
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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. Notwithstanding
the immediately preceding sentence to the contrary, (1) 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, other than Good
Reason as defined in clause (i)(b) or clause (iv) of Section (d) of
Exhibit "A", the Severance Payments shall be paid to Executive in a
lump-sum following such termination, and (2) if Executive terminates
his employment for Good Reason as defined in clause (i)(b) or clause
(iv) of Section (d) of Exhibit "A", he shall, following the date which
is six (6) months following the date of such termination, upon his
request, receive payment in a lump-sum of the Severance Payments
remaining unpaid on such date.
(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.
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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
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
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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 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
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interests, on a fully diluted basis, of such entity and are not
represented on the board of directors 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 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 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.
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(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.
(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 for Cause, twelve
(12) months following the date of termination, (ii) for termination
without Cause by the Company, or by Executive for Good Reason, as
defined in clause (i)(b) or clause (iv) of Section (d) of Exhibit "A",
the period in which the Company is making payments to Executive as
specified in Section 8(b) above, (iii) for a termination as a result of
the voluntary resignation of Executive without Good Reason, twelve (12)
months from the date of termination; and (iv) 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 (other than as defined in clause (i)(b) or clause (iv) of
Section (d) of Exhibit "A"), 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
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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 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 Company shall pay all
reasonable attorney,
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accountant and other professional fees and reasonable expenses incurred in such
dispute unless the finder of fact determines that the Company is the prevailing
party in such dispute.
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 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
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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 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.
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(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 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/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
---------------------------------------
Title: Chairman and Chief Executive Officer
--------------------------------------
EXECUTIVE:
/s/ Xxxxxxx X. Xxxxxxx
--------------------------------------------
XXXXXXX X. XXXXXXX
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EXHIBIT "A"
TO THE
EMPLOYMENT AGREEMENT
BETWEEN
eVENTURES GROUP, INC.
AND
XXXXXXX X. XXXXXXX
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, the
Chief Executive Officer or his designee 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.
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(b) Change in Control. For purposes of this Agreement, the
term "CHANGE IN CONTROL" shall mean the occurrence of any of the following:
(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
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(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 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), or (iii), of any of the following circumstances:
(i) (a) any material demotion of Executive from his
position as President or (b) any assignment of
duties to Executive materially and adversely
inconsistent with Executive's position as President
(except 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, which failure is not cured within
fifteen (15) days following receipt by the Company
of written notice from Executive of such failure;
(iii) any other material breach by the Company of this
Agreement that remains uncured for fifteen (15)
days after written notice thereof by Executive to
the Company;
(iv) a Change in Control; or
(v) the Board requires Executive to relocate to an area
other than the Dallas, Texas greater metropolitan
area; or if the Company's corporate headquarters
are located in an area other than the Dallas, Texas
greater metropolitan area, to an area more than
fifty (50) miles from the Company's corporate
headquarters, and Executive declines to so
relocate.
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EXHIBIT "B"
TO THE
EMPLOYMENT AGREEMENT
BETWEEN
eVENTURES GROUP, INC.
AND
XXXXXXX X. XXXXXXX
STOCK OPTION GRANTS
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EXHIBIT "C"
TO THE
EMPLOYMENT AGREEMENT
BETWEEN
eVENTURES GROUP, INC.
AND
XXXXXXX X. XXXXXXX
GROSS-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.
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