EXHIBIT 10.19
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement") is entered into
as of October 1, 1999, between McGlen Micro Inc., a California corporation (the
"Company") and XXXXX XXXXX XXXX, an individual ("Executive"), with reference to
the following.
RECITALS
A. The Company is in the business of selling computer components
and accessories via internet.
B. Executive is experienced in the development, administration
and maintenance and computer programming of software and information systems of
start-up and emerging growth companies in the computer industry.
C. The Company desires to employ Executive as the Chief
Information Officer and Executive desires to accept such employment subject to
the terms and conditions set forth in this Agreement.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing premises, the
provisions set forth below, and other good and valuable consideration, the
parties agree as follows.
1. Employment. The Company hereby employs Executive as the Company's
Chief Information Officer ("CIO"), and Executive hereby accepts such employment,
for the term and subject to the provisions set forth below. Pursuant to the
Agreement and Plan of Merger dated April 28, 1999, Adrenalin Interactive, Inc.,
a publicly held Delaware company ("ADRN") shall acquire the Company in a stock
swap merger transaction (the "Merger"). The Company and its Principal
Shareholders agree to cause ADRN to assume this Agreement upon completion of the
Merger, and all stock options granted or vested shall continue in accordance
with Section 6 of this Agreement.
2. Term. Unless sooner terminated as set forth below, this Agreement
shall remain in force for a period of two (2) years (the "Term") commencing on
the date hereof. The actual period of time that Executive remains in the employ
of the Company pursuant to this Agreement is referred to herein as the
"Employment Period."
3. Duties.During the Employment Period, Executive shall be employed as
the CIO of he Company and shall hold such other offices or positions with the
Company as may be reasonably requested by the Company from time to time.
Executive shall use his best efforts to manage the Company's technological and
informational systems for the maximum benefit of the Company. In addition to the
normal duties associated with the position of CIO of companies of similar size,
Executive shall have the following specific duties, which he shall at all times
faithfully, industriously and to the best of his ability perform.
a. To develop and program software, operate, maintain,
service and manage the technical and information aspects of the Company.
b. To employ such professionals, employees and
consultants as are necessary for the technical development of the Company.
c. To take all actions necessary to successfully provide
technical and informational support to the Company.
d. Monitor, manage and supervise the technical and
informational support of the Company.
e. To follow the instructions and orders given by
Executive's superior, including, without limitation, the Board of Directors,
President, Executive Vice-President, Chief Executive Officer and Chief Operating
Officer.
4. Compensation.
a. Base Monthly Salary. The Company shall pay Executive
a base annual salary of $105,000 (the "Base Salary") during the Employment
Period.
b. Vacation. Executive shall be entitled to three weeks
paid vacation per year in addition to all holidays as set forth in the Company's
policy.
c. Medical Insurance. The Company shall provide
Executive and Executive's spouse and children with medical insurance. At the
Company's election, the Company may reimburse Executive for the cost of such
insurance obtained by Executive.
d. Expenses. Executive shall be entitled to reasonable
reimbursement during the Employment Period for travel and other out-of-pocket
expenses incurred in the performance of his duties hereunder, upon submission
and approval of written statements and bills in accordance with the Company's
policy as may be set forth from time to time.
5. Performance-Based Bonus. As additional compensation, Executive shall
be entitled to receive an annual bonus (the "Bonus") as may be determined by the
Board of Directors from time to time for each fiscal year based on the
Executive's performance.
6. Stock Option Plan. The Company shall grant Executive the
option to purchase up to 260,000 shares of the Company's common stock (the
"Options") exercisable at $1.00 . The Options shall vest as follows: 60,000
shares of the Company's common stock shall vest upon the execution of this
Agreement; 25,000 shares shall vest quarterly thereafter until either the end of
the Employment Period or termination of this Agreement, whichever is earlier.
7. Termination. The Employment Period shall be immediately and
automatically terminated upon Executive's death. The Employment Period shall
also terminate under the following conditions.
a. Termination for Cause. Notwithstanding anything in
this Agreement to the contrary, the Company may terminate Executive's employment
hereunder at any time if Executive:
(i) Is convicted of, or pleads guilty or nolo
contendere to (i) any felony, or (ii) any misdemeanor involving moral turpitude;
(ii) Commits fraud or dishonesty with respect to
the business or affairs of the Company and embezzles or misappropriates any of
the Company's funds or assets;
(iii) Is in material breach of this Agreement,
including, without limitation, his insubordination to the Company;
(iv) In the reasonable opinion of a licensed
physician or psychiatrist retained by the Company, is substantially unable by
reason of drug (including alcohol) abuse or addiction, to reasonably and
effectively carry out Executive's duties hereunder for any period of time in
excess of Executive's accrued vacation time and sick leave, if any;
(v) Directly causes the material default of the
Company in performing its obligations under contracts with other persons or
business entities intentionally and without authorization; or
(vi) Is grossly negligent with respect other
discharge of Executive's duties hereunder.
Executive agrees to timely submit to reasonable and necessary
medical, physical and psychiatric examination from time to time during the
Employment Period to enable the Company to determine if Executive is incompetent
or subject to any mental or physical illness or incapacity or to drug abuse or
addiction, as contemplated above by paragraphs 7(iv).
b. By Permanent Disability. The Term of Employment shall
terminate, without liability except as provided in this Section 7b, upon the
"Permanent Disability" of Executive. "Permanent Disability" shall mean, with
respect to Executive, (i) the suffering of any mental or physical illness,
disability or incapacity to the extent that Executive shall be unable to perform
his duties or (ii) the absence of Executive from his employment by reason of any
mental or physical illness, disability or incapacity for a period of three
months during any six-month period; provided, however, in either case, that such
illness, disability or incapacity shall be determined to be of a permanent
nature by a licensed physician selected by the Board of Directors. The
termination date in the event of a clause (i) of the immediately preceding
sentence, shall be the date of determination by the physician, and in the case
of clause (ii) of the immediately preceding sentence, the last day of such
three-month period. In the case of Permanent Disability, the Company shall
promptly pay to Executive (or his representative) the sum of (A) the unpaid Base
Salary to which he is entitled pursuant to Section 4(a) through the termination
date and (B) the lump sum amount of any unpaid portion of the bonuses to be paid
pursuant to Section 5, and all benefits under Executive's Disability Insurance
Plan.
c. By The Company Without Cause. The Term may be
terminated by the Company without "Cause" provided that the Company pays to
Executive at the time of termination the sum of three (3) months salary as
severance payment.
8. Affirmative Covenants. Executive promises and covenants to the
Company as follows.
(a) Confidentiality; Trade Secrets. Executive acknowledges
that his position with the Company is one of the highest trust and confidence
both by reason of his position and by reason of his access to and contact with
the trade secrets and confidential and proprietary business information of the
Company. Executive agrees that during the Term and thereafter:
(i) Executive shall use his best efforts and
exercise utmost diligence to protect and safeguard the trade secrets and
confidential and proprietary information of the Company, including, its data,
encryptions, source codes, record, compilations of information, processes,
programs know-how, improvements, discoveries, marketing plans, strategies,
forecasts, unpublished financial statements, budgets, projections, licenses,
prices, costs, files, documents, drawings, memoranda, notes or other documents,
whether maintained electronically or in any other manner, relating to the
business of the Company or its contractors; (all such information is hereinafter
called the "Proprietary Information") other than information known to him
before, learned from third parties not associated with the Company or in the
public domain;
(ii) Executive shall not disclose any of such
Proprietary Information, except as may be required in the ordinary course of
performing his duties to the Company or any affiliated companies;
(iii) Executive shall not use the trade secrets
and confidential and proprietary information of Executive's previous or present
employer to carry out his duties and responsibilities under this Agreement or
bring on to the Company's premises or any other property owned by the Company
any proprietary information of any other entity, in violation of any prior or
present employment, or noncompetition or confidentiality agreement.
(b) Non-Solicitation of Employees. Executive covenants and
agrees that, it shall not, directly or indirectly, solicit or induce, or attempt
to solicit or induce, any employee or consultant of the Company to leave the
employ of the Company for any reason whatsoever or hire any employee or
consultant of the Company for a period of five years from the date of this
Agreement.
(c) Non-Competition. Executive agrees that at all times
during the Term and for the period of six months (6) months after the
termination of this Agreement:
(i) Executive shall not serve in any capacity,
directly or indirectly, with or for, any company or entity in direct competition
with the Company business models or whose primary business focus is selling
computers or computer-related products via the Internet;
(ii) Executive shall not interfere with, disrupt
or attempt to disrupt the relationship, contractual or otherwise, between the
Company and any contractor or employee of the Company;
(iii) Executive shall not directly or indirectly:
(A) employ, intend to employ or otherwise solicit for employment any of the
Company's executive officers, department managers at the Company for any
business or venture that is in direct competition with the Company, including
and without limitation, any business or enterprises which Executive may be a
consultant or recruiter; or (B) contact, communicate with, inquire or otherwise
solicit any executive officers, director, shareholder, department managers at
the Company of the Company to invest in or to purchase, or to offer or subscribe
to purchase, any security or general or equity interest in any venture that is
competitive with or similar to the business of the Company. As used in this
section the terms "employ" and "employment" are used in the broadcast sense to
encompass all associations, including without limitation, that of employee,
agent, independent contractor, owner, officer, director, shareholder, partner,
associate, representative and consultant; and
(iv) If the scope of any restrictions contained
in paragraph (i) and (ii) of this Section is too broad to permit enforcement of
such restrictions of their full extent, then such restrictions shall be enforced
to the maximum extent permitted by law, and Executive hereby consents and agrees
that such scope may be judicially modified accordingly in any proceeding brought
to enforce such restrictions.
(d) Remedies for Breach of Affirmative Covenants of Executive.
(i) Subject to the limitations provided by
applicable law, the covenants set forth in this Section 9 shall continue to be
binding upon Executive in accordance with their terms, notwithstanding the
termination of his employment with Company for any reason whatsoever. Such
covenants shall be deemed and construed as separate agreements independent of
any other provisions of this Agreement and any other agreement between the
Company and Executive. The existence of any claim or cause of action by
Executive against the Company, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Company of
any or all of such covenants in accordance with their terms; and
(ii) The parties hereby agree that any breach or
threatened breach of Section 9 of this Agreement will cause substantial and
irreparable damage to the other in an amount and of a character difficult to
ascertain. Accordingly, for their mutual benefit and to prevent any such breach
or threatened breach, and in addition to any other relief to which a party may
otherwise be entitled, the non-breaching party shall be entitled to immediate
temporary, preliminary and permanent injunctive relief through appropriate legal
proceedings, without proof that actual damages have been incurred or may be
incurred by such a party with respect to such breach or threatened breach. The
parties expressly agree that the party seeking this relief shall not be required
to post any bond or other security as a condition to obtaining any injunctive
relief pursuant to this Section and each of the parties expressly waive any
rights to the contrary.
(e) Litigation. Executive agrees that during the Term and
thereafter as reasonably requested by the Company, Executive shall do all
things, including the giving of evidence in suits and other proceedings, which
the Company shall deem reasonably necessary or proper to obtain, maintain,
defend or assert rights accruing to the Company during the Term and in
connection with which Executive has knowledge, information and expertise.
(f) Future Cooperation. The parties hereto agree to cooperate
with each other without additional compensation from and after the date hereof,
to supply any information and to execute documents reasonably required for the
purpose of giving effect to this Agreement, or in connection with the
consummation of any actions contemplated hereby.
9. Representations and Warranties of Executive. Executive represents
and warrants to the Company that: (i) Executive is under no contractual or other
restriction or obligation that is inconsistent with the execution of this
Agreement, the performance of Executive's duties hereunder or any of the rights
of the Company hereunder; and (ii) Executive is under no physical or mental
disability that would impair the performance of Executive's duties under this
Agreement.
10. Key Person Insurance. The Company may at any time and from time to
time obtain such life and health insurance policies ensuring the life or health
of Executive in such amounts and with such insurers (collectively, "Executive
Insurance") as the Company, in its sole discretion, deems appropriate. The
Company shall have the right to all benefits payable pursuant to any Executive
Insurance obtained by the Company, including without limitation, the sole right
to designate the beneficiary of all such Insurance. Executive agrees to
cooperate with the Company if the Company elects to obtain any Executive
Insurance from time to time, including without limitation, timely submitting to
medical/physical examinations and assisting the Company with the preparation of
insurance applications.
11. Indemnification. The Company shall indemnify, defend and hold
Executive harmless for, from and against any and all liability of any kind or
nature resulting from or related to Executive's employment with the Company,
and/or any prior business deals entered into by Executive.
12. Notices. All notices, requests, demands or other communication
(collectively, "Notice") given to any party pursuant to this Agreement shall not
be effective unless given in writing and addressed to the parties at their
respective addresses as set forth below.
If to the Company: McGlen Micro Inc. / Adrenalin Interactive, Inc.
0000 Xxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
If to Executive: Xxxxx Xxxxx Xxxx
000 X. Xxxxxxx Xxxxxx, Xxx. # X
Xxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Notice shall be deemed duly given when delivered personally or by telegram,
telex or courier, or, if mailed, 48 hours after deposit in the United States
mail, certified mail, postage pre-paid. The addresses of the parties for the
purpose of providing Notice pursuant to this paragraph may be changed from time
to time by Notice to the other party duly given in the foregoing manner.
13. Governing Law; Disputes. This Agreement will be interpreted in
accordance with California law, including all matters of construction, validity,
performance and enforcement, without giving effect to any principles of conflict
of laws. Any dispute or proceeding concerning this Agreement will be resolved by
binding arbitration to be held in Orange County, California. Any party may
demand arbitration through written notice sent by certified mail to the other
(an "Arbitration Demand"). Within fifteen (15) days after the date that the
Arbitration Demand is first mailed, each of the parties will confer to select a
mutually acceptable arbitrator from the Judicial Arbitration and Mediation
Service ("JAMS"). If the arbitrator so selected is unavailable, the parties will
confer to select another arbitrator. If the parties cannot mutually agree to the
selection of an arbitrator, or if one party refuses to participate in the
selection process, JAMS will appoint an arbitrator. The arbitrator will be
governed by the provisions of this Agreement rather than the rules of JAMS.
If JAMS is unable or unwilling to select an arbitrator, the
Presiding Judge of the Orange County Superior Court will select an arbitrator
upon the request of either party, and such selection will be binding on the
parties. The arbitrator so selected will schedule the arbitration hearing within
sixty (60) days after he or she is first selected. The parties will be permitted
written discovery and one deposition each. The arbitrator will have authority to
enter a binding judgment even if the parties do not appear at the arbitration
and may also grant any remedy or relief that the arbitrator reasonably believes
to be just or appropriate, provided that such remedy or relief is within the
scope of this Agreement.
All fees and expenses of the arbitration will be paid equally
by the parties participating in the arbitration. At the conclusion of the
arbitration, the arbitrator will award the prevailing party reasonable costs and
Attorneys' Fees, including all arbitration costs. If the arbitration award is
made, the prevailing party may convert the award into a judgment and execute
upon that judgment.
14. Attorneys' Fees. If any arbitration, litigation, action, suit or
other proceedings is instituted to remedy, prevent or obtain relief from a
breach of this Agreement, in relation to a breach of this Agreement or
pertaining to a declaration of rights under this Agreement, the prevailing party
will recover all such party's attorneys' fees incurred in each and every such
action, suit or other proceeding, including any and all appeals or petitioner
therefrom. As used in this Agreement, Attorneys' Fees will be deemed to be the
full and actual costs of any legal services actually performed in connection
with the matters involved, including those related to any appeal or the
enforcement of any judgment, calculated on the basis of the usual fee charged by
attorneys performing such services, and will not be limited to "reasonable
attorneys' fees" as defined in any statute or rule of court.
15. Amendments/Waivers. This Agreement may be amended, supplemented,
modified or rescinded only through an express written instrument signed by all
the parties or their respective successors and assigns. Either party may
specifically and expressly waive in writing any portion of this Agreement or any
breach hereof, but no such waiver shall constitute a further or continuing
waiver of any preceding or succeeding breach of the same or any other provision.
The consent by one party to any action for which such consent was required shall
not be deemed to imply consent or waiver of the necessity of obtaining such
consent for the same or similar acts in the future.
16. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
17. Severability. Each provision of this Agreement is intended to be
severable and if any term or provision herein is determined invalid or
unenforceable for any reason, such illegality or invalidity shall not affect the
validity of the remainder of this Agreement and, wherever possible, intent shall
be given to the invalid or unenforceable provision.
18. Entire Agreement. This Agreement contains the entire and complete
understanding between the parties concerning its subject matter and all
representations, agreements, arrangements and understandings between or among
the parties, whether oral or written, have been fully merged herein and are
superseded hereby.
19. Remedies. All rights, remedies, undertakings, obligations,
options, covenants, conditions and agreements contained in this Agreement shall
be cumulative and no one of them shall be exclusive of any other.
20. Assignment. Neither this Agreement, nor any interest herein, shall
be assignable (voluntarily, involuntarily, by judicial process or otherwise)
Executive to any person or entity without the prior written consent of the
Company. Any attempt to assign this Agreement without such consent shall be void
and, at the option of the Company, shall be an incurable breach of this
Agreement resulting in the termination of this Agreement.
21. Successors. Subject to the foregoing paragraph, this Agreement
shall be binding upon and inure to the benefit of the parties and their
respective heirs, legatees, legal representatives, successors and permitted
assigns.
22. Interpretation. The language in all parts of this Agreement shall
be in all cases construed simply according to its fair meaning and not strictly
for or against any party. Whenever the context requires, all words used in the
singular will be construed to have been used in the plural, and vice versa, and
each gender will include any other gender. The captions of the paragraphs of
this Agreement are for convenience only and shall not affect the construction or
interpretation of any of the provisions herein.
23. Benefit of Agreement. This Agreement is for the sole and exclusive
benefit of the signators hereto and nothing in this Agreement shall be construed
to give any person or entity other than the parties hereto any legal or
equitable right, claim or remedy.
24. Limitation on Actions. Any claim, dispute, controversy or action
for breach relative to this Agreement must be brought and legal process or
arbitration, as the case may be, initiated within one year after the cause of
action for such claim first accrued or the breach first occurred, whichever is
sooner.
25. Miscellaneous. The recitals and all exhibits, attachments or other
documents referenced in this Agreement are fully incorporated into this
Agreement by reference. Unless expressly set forth otherwise herein, all
references herein to a "day," "month," or "year" shall be deemed to be a
reference to a calendar day, month or year, as the case may be. All
cross-references herein shall refer to provisions within this Agreement, and
shall not be deemed to be references to the overall transaction or to any other
agreement or document.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set
forth above.
"EXECUTIVE"
XXXXX XXXXX XXXX, an individual
"THE COMPANY"
MCGLEN MICRO INC.,
a California corporation
By: /s/Xxxxxx Xxx
-------------------
Xxxxxx Xxx,
Chief Executive Officer
