EXHIBIT 10.15
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement") is entered into
as of January 17, 2000, between McGlen Internet Group, Inc., a Delaware
corporation (the "Company") and XXXXX XXXXXXX, 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 financial and operational matters
involving publicly held companies and has experience in acting as the Chief
Financial Officer for such companies.
C. The Company desires to employ Executive as the Company's Chief
Financial 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 Financial Officer ("CFO") and such other offices as are
designated by the Company's Board of Directors in the future and Executive
hereby accepts such employment, for the term and subject to the provisions set
forth below.
2. Term. Unless sooner terminated as set forth in Section 6
below, this Agreement shall remain in force for a period of three year (the
"Term") commencing on January 17, 2000, and terminating on January 16, 2003. 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. Executive shall be employed as the Chief Financial
Officer of the 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 devote his full time and efforts to the performance of
Executive's duties hereunder and work exclusively for the Company unless
otherwise requested by the Company. Executive shall use his best efforts to
manage the Company's financial business and affairs for the maximum benefit of
the Company. In addition to the normal duties associated with the position of
CFO of publicly held companies of similar size and nature, Executive shall have
the duties of CFO, in-house accountant and the following specific duties, which
he shall at all times faithfully, honestly, industriously and to the best of his
ability perform.
(a) Traditional Duties.
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(i) Direct assistance and oversight of all
aspects of the Company's accounting practices and requirements, including all
accounting related matters customary in a publicly held company trading on
Nasdaq, accounts payable, accounts receivable, inventory control, customer
orders, payroll, internal control matters, invoicing, purchasing and borrowing
compliance and reporting requirements. The duties shall include supervision of a
limited staff, and a hands-on approach to ensure that work in each of the areas
is performed efficiently and at a high standard of quality. Focus on identifying
and implementing internal control policies and procedures to ensure that
customer sales and vendor purchases are recorded timely, accurately and in
compliance with authorized contract terms.
(ii) Direct assistance and oversight of the
preparation of timely, accurate and useful financial reports that meet SEC
reporting and all other regulatory requirements, and the needs of management,
the Board of Directors of the Company, lenders and other users. An initial
priority will be to identify and implement and automated accounting system that
meets the accounting and financial reporting needs of the Company.
(iii) Preparation and continued update and
maintenance of a strategic business plan for the Company, which incorporates
budgets, financial forecasts, marketing plans and key operating and production
objectives into the business plan.
(iv) Make recommendations concerning operating,
production and financial performance targets.
(v) Maintain relationships with banks, lenders
and the SEC. The banking relationships center on the Company's bank accounts,
and the utilization of cash management practices that optimize the use of cash
resources. The lending relationships involve managing matters relating to the
line-of-credit facility, and monitoring the Company's compliance with loan
covenants and payment terms. The SEC relationship requires monitoring and
reporting on matters relating to the Company in compliance with SEC rules and
regulations.
(vi) Maintain familiarity with all of the
Company's accounting and financial compliance requirements, as they change from
time to time, including reporting requirements to all state and federal agencies
such as the IRS, the SEC and the Franchise Tax Board and the SEC and all lenders
to the Company.
(vii) Act as the visible spokesman for the Company
on financial and accounting issues. Effectively present the historical results,
current status and future financial outlook to the Company's shareholders, the
investment community, industry participants and other key customers and vendors.
(vii) Oversee the Company's accountants for all
audits and tax matters. Direct the preparation of supporting information to
expedite the timing and minimize the cost of the audit and tax return
preparation.
(viii) Meet regularly with executive management and
the Board of Directors. Communicate clearly and effectively on all financial
matters concerning the Company.
(ix) Handle all payroll matters, including
completion of or supervision of services handling all federal, state and local
payroll reporting requirements.
(b) Additional Duties.
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The Company and Executive acknowledge that the Company
currently has a limited number of customers and limited number of suppliers and
the internal financial and accounting duties of Executive may not require
Executive's full time, every day. Executive shall therefore also act as an
assistant operations officer. As such, Executive will be expected to play a
large role in the day to day operation of the Company, and assist in the
following areas.
(i) Assist in the management, supervision,
training and review of the Company's personnel.
(ii) Assist the Company's President in the
preparation and periodic review and update of the Company procedures and
policies.
(iii) Assist the Company's President with
shareholder relations and investor matters and act as its liaison with
investment bankers.
(iv) Deal with suppliers and customers of the
Company, as needed.
(v) Assist the Company in the registration
process of its securities and interact with accountants and attorneys as
requested by the Company's President.
4. Compensation.
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(a) Monthly Salary. The Company shall pay Executive an
annual salary of $130,000 (the "Salary") during the Employment Period.
(b) Vacation and Sick Leave. Executive shall be entitled
to one week of sick eave and two weeks paid vacation per year in addition to
standard holidays recognized by the Company.
(c) Medical Insurance. The Company shall reimburse
Executive for reasonable nsurance premiums for Executive and his family.
Executive shall have an opportunity to participate in any medical insurance plan
the Company adopts.
(d) Expenses. Executive shall be entitled to 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 then regular
procedures of the Company. Executive shall also be entitled to reimbursement for
training fees incurred for continual education for certified public accountants,
however, if Executive is terminated pursuant to Section 6 of this Agreement or
voluntarily resigns from the Company, Executive shall not be entitled to such
reimbursement and shall return any reimbursed amount to the Company.
(e) Automobile. The Company shall provide Executive with an
automobile allowance of $600 per month.
5. Stock Options. The Company shall grant Executive the option to
purchase up to 120,000 shares of the Company's common stock (the "Options")
exercisable at the closing price of December 30, 1999. It is also mutually
agreed upon by the Company and the Executive that the closing price of December
30, 1999 is $3 5/8 . The option to purchase up to 50,000 shares of the Company's
common stock shall vest on the first anniversary of the date of the execution of
this Agreement and the option to purchase an additional 35,000 shares of the
Company's common stock shall vest on the second anniversary of the date of the
execution of this Agreement and the option to purchase an additional 35,000
shares of the Company's common stock shall vest on the third anniversary of the
date of the execution of this Agreement. The terms and conditions of the Options
grant will be set forth in an Option Agreement.
6. Performance-Based Bonus. As additional compensation, Executive may
be entitled to receive an annual bonus of up to 10% of the Salary (the "Bonus")
if mutually agreed upon goals are achieved and as is reasonably agreed to by the
Board of Directors for each fiscal year.
7. Termination. The Employment Period shall terminate under the
following conditions.
(a) Probation Period. The Employment Period is subject to a
three months probation period from commencement of the Term during which time
either the Company or the Executive may terminate Executive's employment at any
time with or without cause.
(b) 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) Embezzles or misappropriates any of the
Company's funds or assets;
(iii) Is adjudicated to be incompetent or, in the
reasonable opinion of a licensed physician or psychiatrist retained by the
Company, is unable by reason of mental or physical illness or incapacity;
(iv) Is in material breach of this Agreement;
(v) 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;
(vi) Commits fraud or behaves in a dishonest
manner with respect to affairs of the business;
(vii) Is grossly negligent with respect to
discharge of Executive's duties hereunder;
(viii) Is insubordinate to his superior, including
the Board, Chief Executive Officer, President and other management officers or
interferes with the operations or business of the Company.
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 6(iii) and 6(v).
(c) By Permanent Disability. The Employment Period shall
terminate, without liability except as provided in this Section 6(c), 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
Annual Salary to which he is entitled pursuant to Section 4(a) through the
termination date and (B) any unissued stock or options to be issued to Executive
pursuant to Section 5, and all benefits under Executive's Disability Insurance
Plan, if any.
(d) By The Company Without Cause. The Term may be
terminated by the ompany without "Cause" provided the Company pays to Executive
at the time of termination, the sum of three months salary.
8. Affirmative Covenants. Executive makes the following promises
and covenants to the Company.
(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,
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, 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 as a consultant of the Company;
(iii) Executive shall not use, directly or
indirectly, for his own benefit or for the benefit or another, any of such
proprietary Information, other than for the benefit of the Company as may be
required in the ordinary course of performing his duties as a consultant of the
Company; and
(iv) 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
employment, or noncompetition or confidentiality agreement.
The Proprietary Information shall be the
exclusive property of the Company. Executive agrees that he shall deliver to the
Company all files, records, documents, drawings, memoranda, and other material,
whether electronic, hard copy, or maintained in any other form relating to the
Proprietary Information or pertaining of his work with the Company, in the event
of the termination of his employment for any reason, and that he will not take
with him any of the foregoing, any reproduction of any of the foregoing, or any
Proprietary Information that is embodied in a tangible medium of expression.
(b) Non-Competition. Executive agrees that at all times during
the Term and for the period of one (1) year after the termination of this
Agreement, unless the Company should terminate this Agreement without cause:
(i) Executive shall not, without the prior
written consent of the Company, serve or act as an officer, president, executive
director, administrator, manager, or in any other administrative or managerial
capacity, or otherwise serve or act as an employee, consultant or agent or as
the employer, principal, partner, shareholder, corporate officer of director of
such an employee, agent or consultant, on behalf of another company which sells
computer components via internet operating within any County in the State of
California or any State in the United States, or any other business that is in
competition with the business of the Company; or interfere with, disrupt or
attempt to disrupt the relationship, contractual or otherwise, between the
Company and any contractor or employee of the Company;
(ii) 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 competitive 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
(iii) 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.
(c) 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 three years from the date of this
Agreement.
(d) Remedies for Breach of Affirmative Covenants of Executive.
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(i) Subject to the limitations provided by
applicable law, the covenants set forth in this Section 7 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 7 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.
(d) Further Duties. Executive shall perform such other
duties and work for, consult to, or assist such other entities as may be
requested from time to time by the Company.
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, (ii) Executive is under no physical or mental
disability that would impair the performance of Executive's duties under this
Agreement; and (iii) Executive has reviewed this Agreement with Executive's
legal counsel.
10. 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 Internet Group, Inc.
0000 Xxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
IF TO EXECUTIVE: Xxxxx Xxxxxxx
0000 X. Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
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.
11. 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 except an action
pursuant to Section 7 hereof 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
JAMS/Endispute ("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.
12. 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.
13. 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.
14. 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. All faxed signatures
shall be deemed originals.
15. 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.
16. 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.
17. 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.
18. 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.
19. 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.
20. 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.
21. 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.
22. 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.
23. 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 XXXXXXX, an individual
"THE COMPANY"
McGlen Internet Group, Inc., a Delaware
corporation
By: /s/Xxxx Xxxx
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Xxxx Xxxx, President
