EXHIBIT 10.1
EXECUTIVE AGREEMENT
This Executive Agreement (the "Agreement") is made and entered into as of
this date by and between Xxxxxxx International Inc., a Delaware corporation (the
"Corporation"), and Xxxxxxx Xxxxx ("the Executive").
Whereas, the Corporation and the Executive desire that the term of this
Agreement begin as of December 6, 1999 (the "Effective Date").
Whereas, the Corporation desires to employ the Executive as its President,
to serve in such position as its Chief Executive Officer and the Executive is
willing to accept such employment by the Corporation, on the terms and subject
to the conditions set forth in this Agreement.
Now Therefore, it is agreed as follows:
1. Definitions
For the purposes of this Agreement the following terms shall have the
following meanings:
1.1 "Change in Control" shall mean (i) the time that the Corporation first
determines that any person and all other persons who constitute a group (within
the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934
("Exchange Act") have acquired direct or indirect beneficial ownership (within
the meaning of Rule 13d-3 under the Exchange Act) of twenty percent (20%) or
more of the Corporation's outstanding securities, unless a majority of the
"Continuing Directors", as that term is defined in Paragraph 1.3, approves the
acquisition not later than ten (10) business days after the Corporation makes
that determination, or (ii) the first day on which a majority of the members of
the Corporation's Board of Directors are not "Continuing Directors."
1.2 "Constructive Termination" shall mean termination by the Corporation
of the Executive's employment by reason of material breach of this Agreement by
the Corporation, such "Constructive Termination" to be effective upon 30 days
written notice thereof from the Executive to the Corporation.
1.3 "Continuing Directors" shall mean, as of any date of determination,
any member of the Board of Directors of the Corporation who (i) was a member of
that Board of Directors on December 6, 1999, (ii) has been a member of that
Board of Directors for the two years
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immediately preceding such date of determination, or (iii) was nominated for
election or elected to the Board of Directors with the affirmative vote of the
greater of (x) a majority of the Continuing Directors who were members of the
Board at the time of such nomination or election or (y) at least four Continuing
Directors.
1.4 "Effective Date" shall mean December 6, 1999
1.5 "Termination For Cause" shall mean termination by the Corporation of
the Executive's employment by the Corporation by reason of the Executive's
willful dishonesty towards, fraud upon, or deliberate injury or attempted injury
to, the Corporation or by reason of the Executive's willful material breach of
this Agreement which has resulted in material injury to the Corporation. For
purposes of this paragraph, no act, or failure to act, on the Executive's part
shall be considered "willful" or "deliberate" unless done, or omitted to be
done, by him not in good faith and without reasonable belief that his action or
omission was in the best interest of the Corporation. Notwithstanding the
foregoing, the Executive shall not be deemed to have been terminated for Cause
without (i) written notice to the Executive setting forth the reasons for the
Corporation's intention to terminate for Cause, (ii) an opportunity on not less
than 20 days written notice from the Corporation to the Executive for the
Executive, together with his counsel, to be heard before the full Board of
Directors of the Corporation, and (iii) delivery to the Executive of a Notice of
Termination as defined in Paragraph 6.9 hereof from the Board of Directors
finding that, following such hearing before the Board, in the good faith opinion
of such Board, the Executive was guilty of conduct set forth above and
specifying the particulars thereof in detail.
1.6 "Termination for Good Reason" shall mean termination by the Executive
of the Executive's employment by the Corporation because of: (i) a "Change in
Control", as defined in Paragraph 1.1, above, (ii) a failure by the Corporation
to comply with any material provision of this Agreement which has not been cured
within ten (10) days after notice of such noncompliance has been given by the
Executive to the Company, (iii) the determination by the Executive that because
of changes in the composition or policies of the Board of Directors of the
Corporation, or of other events or occurrences of material effect, that the
Executive can no longer properly and effectively discharge his responsibilities
as Chief Executive Officer of the Corporation after giving the Corporation not
less than thirty (30) days prior written notice of the effective date of such
termination, or (iv) any purported termination of the Executive's employment
which is not effected pursuant to a Notice of Termination satisfying the
requirements of Paragraph 6.9 hereof (and for purposes of this agreement no such
purported termination shall be effective).
1.7 "Termination Other Than For Cause" shall mean termination by the
Corporation of the Executive's employment by the Corporation (other than in a
Termination for Cause) and shall include "Constructive Termination", as that
term is defined in Paragraph 1.2.
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1.8 "Termination Upon a Change in Control" shall mean a termination by the
Corporation of the Executive's employment with the Corporation within 120 days
following a "Change in Control", as that term is defined in Paragraph 1.1.
1.9 "Voluntary Termination" shall mean termination by the Executive of the
Executive's employment by the Corporation other than (i) Constructive
Termination, (ii) Termination Upon a Change in Control, (iii) Termination for
Good Reason, and (iv) termination by reason of the Executive's death or
disability as described in Paragraphs 6.4 and 6.5.
2. Employment
During the term of this Agreement, the Executive agrees to be employed by
the Corporation and to serve as its President, serving in such position as the
Corporation's Chief Executive Officer or in such other positions as the
Corporation shall require, and the Corporation agrees to employ and retain the
Executive in such capacities.
3. Duties and Responsibilities
The Executive shall devote a substantial portion of his business time,
energy, and skill to the affairs of the Corporation, reporting to its Board of
Directors, and at all times during the term of this Agreement the Executive
shall have powers and duties at least commensurate with his positions as
President and Chief Executive Officer.
The Corporation hereby acknowledges that the Executive has reviewed with
the Board of Directors of this Corporation, any positions held by him in other
business organizations, and the Corporation agrees to and approves of the
Executive's continuance in such present capacities, none of which are deemed by
the Corporation to reflect a conflict of interest with the Executive's duty of
loyalty to the Corporation. Any future proposed positions or activities in
outside ventures shall be subject to review by the Corporation's Board of
Directors, provided however, that such Board shall not prohibit any such
activities unless a potential material conflict shall exist.
4. Term of Employment
The term of employment of the Executive by the Corporation shall be for a
period of three (3) years beginning with the Effective Date (the "Initial
Term"), unless terminated earlier pursuant to Section 6. At any time prior to
the expiration of the Initial Term, the Corporation and the Executive may by
mutual written agreement extend the Executive's employment under the terms of
this Agreement for such additional periods as they shall mutually agree.
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5. Salary, Benefits and Bonus Compensation
5.1 Base Salary. As payment for the services to be rendered by the
Executive as provided in Section 3, the Corporation agrees to pay to the
Executive a "Base Salary" for the twelve (12) calendar months beginning the
Effective Date at the rate of one hundred thousand US dollars ($100,000) per
annum payable in cash, subject to annual review and increase, as the Board of
Directors shall determine.
5.2 Bonuses. The Executive shall be eligible to receive a discretionary
bonus for each year (or portion thereof) during the term of this Agreement and
any extensions thereof, with the actual amount of any such bonus to be
determined in the sole discretion of the Board of Directors based upon its
evaluation of the Executive's performance during such year. All such bonuses
shall be reviewed annually by the Compensation Committee of the Board of
Directors, if any shall be in existence.
5.3 Additional Benefits. During the term of this Agreement, the Executive
shall be entitled to the following fringe benefits:
5.3.1 Executive Benefits. The Executive shall be eligible to
participate in such of the Corporation's benefits and deferred
compensation plans as are now generally available or later
made generally available to executive officers of the
Corporation, including, without limitation, stock option
plans, profit sharing plans, annual physical examinations,
dental and medical plans, personal catastrophe and disability
insurance, financial planning, retirement plans and
supplementary executive retirement plans, if any. For purposes
of establishing the length of service under any benefit plans
or programs of the Corporation, the Executive's employment
with the Corporation will be deemed to have commenced on the
Effective Date.
5.3.2 Vacation. The Executive shall be entitled to vacation time
during each year during the term of this Agreement and any
extensions thereof, in an amount to be determined by the Board
of Directors.
5.4 Reimbursement for Expenses. During the term of this Agreement, the
Corporation shall reimburse the Executive for reasonable and properly documented
out-of-pocket business and/or entertainment expenses incurred by the Executive
in connection with his duties under this Agreement.
5.5 Compensation Shares in Lieu of Cash Payments. Notwithstanding the
requirements of Paragraph 5.1, above, the Executive and the Corporation agree
and acknowledge that:
5.5.1 From time to time, during the foreseeable future, the
Corporation may not have available the financial resources to pay to the
Executive, in cash, the amount of his Base Salary then due to him. In such
event, with the consent of the Executive, the obligations of the
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Corporation with respect to any unpaid amount of Base Salary may be satisfied by
the issuance to the Executive of shares of the common stock of the Corporation
("Compensation Shares"), which Compensation Shares shall constitute compensation
pursuant to the terms of this Executive Agreement.
5.5.2 All Compensation Shares will be issued to the Executive at a
value, to be determined by the Board of Directors. Where practical, such value
shall be determined to be equal to a percentage of the average of the high and
low bid prices of the Corporation's common stock, during the trading period when
such Compensation Shares were earned, as traded in the over-the-counter market
and quoted in the OTC Bulletin Board or such other public market in the United
States in which the common stock of the Corporation shall then be traded.
5.5.3 From time to time, all or part of the Compensation Shares may
be registered by the Corporation under a Registration Statement on Form S-8,
including a Re-offer Prospectus, as and at such time as the Board of Directors
of the Corporation or the executive committee thereof shall determine.
6. Termination
6.1 Termination For Cause. Termination For Cause may be effected by the
Corporation in accordance with the procedures set forth in Paragraph 1.5 at any
time during the term of this Agreement and shall be effected by written
notification to the Executive in accordance with Paragraph 6.9, below. Upon the
effectiveness of a Termination For Cause, the Executive shall promptly be paid
all accrued salary, bonus compensation to the extent earned, vested deferred
compensation (other than pension play or profit sharing plan benefits which will
be paid in accordance with the applicable plan), any benefits under any plans of
in which the Executive is a participant to the full extent of the Executive's
rights under such plans, accrued vacation pay and any appropriate business
expenses incurred by the Executive in connection with his duties hereunder, all
to the date of termination, but the Executive shall not be paid any other
compensation or reimbursement of any kind.
6.2 Termination Other Than For Cause. Notwithstanding anything else in
this Agreement, the Corporation may effect a Termination Other Than For Cause at
any time upon giving written notice to the Executive of such termination. Upon
the effectiveness of any Termination Other Than For Cause, the Executive shall
promptly be paid all accrued salary, bonus compensation to the extent earned,
vested deferred compensation (other than pension plan or profit sharing plan
benefits which will be paid in accordance with the applicable plan), any
benefits under any plans of in which the Executive is a participant to the full
extent of the Executive's rights under such plans (including accelerated
vesting, if any, of awards granted to the Executive under the Corporation's
stock option plan), accrued vacation pay and any appropriate business expenses
incurred by the Executive in connection with his duties hereunder, all to the
date of termination, and all severance compensation as provided in Paragraph
7.1.
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6.3 Termination For Good Reason. Notwithstanding anything else in this
Agreement, the Executive may effect a Termination for Good Reason at any time
upon giving written notice to the Corporation of such termination in accordance
with the provisions of Paragraph 6.9 hereof. Upon the effectiveness of any
Termination for Good Reason the Executive shall promptly be paid all accrued
salary, bonus compensation to the extent earned, vested deferred compensation
(other than pension plan or profit sharing plan benefits which will be paid in
accordance with the applicable plan), any benefits under any plans of in which
the Executive is a participant to the full extent of the Executive's rights
under such plans (including accelerated vesting, if any, of awards granted to
the Executive under's stock option plan), accrued vacation pay and any
appropriate business expenses incurred by the Executive in connection with his
duties hereunder, all to the date of termination, and all severance compensation
as provided in Paragraph 7.1.
6.4 Termination by Reason of Disability. If, during the term of this
Agreement, the Executive fails to perform his duties under this Agreement on
account of illness or physical or mental incapacity, and such illness or
incapacity continues for a period of more than six (6) consecutive months, the
Corporation shall have the right to terminate the Executive's employment
hereunder by written notification to the Executive and payment to the Executive
of all accrued salary, bonus compensation to the extent earned, vested deferred
compensation (other than pension plan or profit sharing plan benefits which will
be paid in accordance with the applicable plan), any benefits under any plans of
in which the Executive is a participant to the full extent of the Executive's
rights under such plans, accrued vacation pay and any appropriate business
expenses incurred by the Executive in connection with his duties hereunder, all
to the date of termination, with the exception of medical and dental benefits
which shall continue through the expiration of this Agreement, but the Executive
shall not be paid any other compensation or reimbursement of any kind.
6.5 Death. In the event of the Executive's death during the term of this
Agreement, the Executive's employment shall be deemed to have terminated as of
the last day of the month during which his death occurs and the Corporation
shall promptly pay to his estate or such beneficiaries as the Executive may from
time to time designate all accrued salary, bonus compensation to the extent
earned, vested deferred compensation (other than pension plan or profit sharing
plan benefits which will be paid in accordance with the applicable plan), any
benefits under any plans of in which the Executive is a participant to the full
extent of the Executive's rights under such plans, accrued vacation pay and any
appropriate business expenses incurred by the Executive in connection with his
duties hereunder, all to the date of termination, but the Executive's estate
shall not be paid any other compensation or reimbursement of any kind.
6.6 Voluntary Termination. In the event of a Voluntary Termination, the
Corporation shall promptly pay all accrued salary, bonus compensation to the
extent earned, vested deferred compensation (other than pension plan or profit
sharing plan benefits which will be paid in accordance with the applicable
plan), any benefits under any plans of in which the Executive is a participant
to the full extent of the Executive's rights under such plans, accrued vacation
pay
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and any appropriate business expenses incurred by the Executive in connection
with his duties hereunder, all to the date of termination, but no other
compensation or reimbursement of any kind.
6.7 Termination Upon a Change in Control. In the event of a Termination
Upon the effectiveness of a Change in Control, the Executive shall immediately
be paid all accrued salary, bonus compensation to the extent earned, vested
deferred compensation (other than pension plan or profit sharing plan benefits
which will be paid in accordance with the applicable plan), any benefits under
any plans of in which the Executive is a participant to the full extent of the
Executive's rights under such plans (including accelerated vesting, if any, of
any awards granted to the Executive under the Corporation's Stock Option Plan),
accrued vacation pay and any appropriate business expenses incurred by the
Executive in connection with his duties hereunder, all to the date of
termination, and all severance compensation as provided in Paragraph 7.1.
6.8 Constructive Termination. The Executive may give notice to the
Corporation that the Corporation has effected a Constructive Termination of the
Executive's employment by reason of the Corporation's material breach of this
Agreement, by written notification to the Corporation in accordance with
Paragraph 6.9, below. Upon the effectiveness of any Constructive Termination the
Executive shall immediately be paid all accrued salary, bonus compensation to
the extent earned, vested deferred compensation (other than pension plan or
profit sharing plan benefits which will be paid in accordance with the
applicable plan), any benefits under any plans of in which the Executive is a
participant to the full extent of the Executive's rights under such plans
(including accelerated vesting, if any, of any awards granted to the Executive
under the Corporation's Stock Option Plan), accrued vacation pay and any
appropriate business expenses incurred by the Executive in connection with her
duties hereunder, all to the date of termination, and all severance compensation
provided in Paragraph 7.1.
6.9 Notice of Termination. The Corporation may effect a termination of
this Agreement pursuant to the provisions of this Section upon giving thirty
(30) days' written notice to the Executive of such termination. The Executive
may effect a termination of this Agreement pursuant to the provisions of this
Section upon giving thirty (30) days' written notice to the Corporation of such
termination.
7. Severance Compensation
7.1 Severance Compensation in the Event of: Termination Other Than for
Cause Pursuant to Paragraph 6.2; Termination for Good Reason Pursuant to
Paragraph 6.3,; Termination Upon a Change in Control Pursuant to Paragraph 6.7;
or a Constructive Termination Pursuant to Paragraph 6.8. In the event the
Executive's employment is terminated in a termination: Other Than for Cause
pursuant to Paragraph 6.2; for Good Reason pursuant to Paragraph 6.3; a Change
in Control pursuant to Paragraph 6.7; or a Constructive Termination pursuant to
Paragraph 6.8, the Executive shall be paid as severance compensation twice the
amount of his Base Salary (at the rate payable at the time of such termination),
for a period of twelve (12) months from the
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date of such termination. Notwithstanding anything in this Paragraph to the
contrary, the Executive may in the Executive's sole discretion, by delivery of a
notice to the Corporation within thirty (30) days following a Termination Upon a
Change in Control, elect to receive as Severance Compensation a lump sum
severance payment by bank cashier's check equal to the present value of the flow
of cash payments that would otherwise be paid to the Executive pursuant to this
Paragraph. The Executive shall also be entitled to an accelerated vesting of any
awards granted to the Executive under any of the Corporation's then effective
stock option plans or any other employee compensation plans or to the extent
provided in any such plans. The Executive shall continue to accrue retirement
benefits and shall continue to enjoy any benefits under any plans in which the
Executive is a participant to the full extent of the Executive's rights under
such plans, including any perquisites provided under this Agreement, through the
remaining term of this Agreement; provided, however, that the benefits under any
such plans in which the Executive is a participant, including any such
perquisites, shall cease upon re-employment by a new employer.
7.2 No Severance Compensation Upon Other Termination. In the event of
Termination For Cause pursuant to Paragraph 6.1, or termination by reason of the
Executive's Disability or Death pursuant to Paragraphs 6.4 or 6.5, or Voluntary
Termination pursuant to Paragraph 6.6 hereof, neither the Executive nor his
estate shall not be paid any severance compensation.
8. Outside Activities of the Executive; Covenant Not to Compete
The Corporation acknowledges that the Executive has commitments and
business activities not related to the Corporation. There shall be no
restriction on the Executive's ability to fulfill such commitments or engage in
such business activities, provided that during the term of the Executive's
employment under this Agreement and for a period of one year after the
termination of such employment (other than a Termination Other Than For Cause or
a Termination Upon Change in Control) the Executive shall not directly or
indirectly compete with the Corporation and shall not divert away from, for the
Executive's personal benefit, or for the benefit of an organization in which the
Executive has a material financial interest, any opportunity, arising during
such period, in the business segments in which the Corporation is operating at
the time of such termination of employment, unless the Board of Directors of the
Corporation has determined not to pursue such opportunity.
9. Payment Obligations
The Corporation's obligation to pay the Executive the compensation and to
make the arrangements provided herein shall be unconditional, and the Executive
shall have no obligation whatsoever to mitigate damages hereunder. If litigation
after a Change in Control shall be brought to enforce or interpret any provision
contained herein, the Corporation, to the extent permitted by applicable law and
the Corporation's Articles of Incorporation and Bylaws, shall
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indemnify the Executive for the Executive's reasonable attorneys' fees and
disbursements incurred in such litigation.
10. Confidentiality
The Executive agrees that all confidential and proprietary information
relating to the business of the Corporation shall be kept and treated as
confidential both during and after the term of this Agreement, except as may be
permitted in writing by the Corporation's Board of Directors or as such
information is within the public domain or comes within the public domain
without any breach of this Agreement.
11. Withholdings
All compensation and benefits to the Executive hereunder shall be reduced
by all federal, state, local and other withholdings and similar taxes and
payments required by applicable law.
12. Indemnification
In addition to any rights to indemnification to which the Executive is
entitled to under the Corporation's Articles of Incorporation and Bylaws, the
Corporation shall indemnify the Executive at all times during and after the term
of this Agreement to the maximum extent permitted under Delaware Business
Corporation Law or any successor provision thereof and any other applicable
state law, and shall pay the Executive's expenses in defending any civil or
criminal action, suit, or proceeding in advance of the final disposition of such
action, suit or proceeding, to the maximum extent permitted under such
applicable state laws.
13. Notices
Any notices permitted or required under this Agreement shall be delivered
by hand, certified mail, or recognized overnight courier, in all cases with
written proof of receipt required, addressed to the parties as set forth below
and shall be deemed given upon receipt to the Corporation at:
Xxxxxxx International Inc.
00 Xxxxx Xx Xxxxxxxx, Xxxxx 000
Xxxx' Xxxxxx, Xxxxxxxx, Xxxxxx
Xxxxxx X0X 0X0
addressed to the Executive at:
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Xxxxxxx Xxxxx
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx
Xxxxxx X0X 0X0
or at any other address as any party may, from time to time, designate by notice
given in compliance with this Paragraph.
14. Law Governing
This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware.
15. General
15.1 Titles and Captions. All section titles or captions contained in this
Agreement are for convenience only and shall not be deemed part of the context
nor effect the interpretation of this Agreement.
15.2 Entire Agreement. This Agreement contains the entire understanding
between and among the parties and supersedes any prior understandings and
agreements among them respecting the subject matter of this Agreement.
15.3 Agreement Binding. This Agreement shall be binding upon the heirs,
executors, administrators, successors and assigns of the parties hereto.
15.4 Attorney Fees. In the event an arbitration, suit or action is brought
by any party under this Agreement to enforce any of its terms, or in any appeal
therefrom, it is agreed that the prevailing party shall be entitled to
reasonable attorneys fees to be fixed by the arbitrator, trial court, and/or
appellate court.
15.5 Computation of Time. In computing any period of time pursuant to this
Agreement, the day of the act, event or default from which the designated period
of time begins to run shall be included, unless it is a Saturday, Sunday, or a
legal holiday, in which event the period shall begin to run on the next day
which is not a Saturday, Sunday, or legal holiday, in which event the period
shall run until the end of the next day thereafter which is not a Saturday,
Sunday, or legal holiday.
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15.6 Pronouns and Plurals. All pronouns and any variations thereof shall
be deemed to refer to the masculine, feminine, neuter, singular, or plural as
the identity of the person or persons may require.
15.7 Presumption. This Agreement or any section thereof shall not be
construed against any party due to the fact that said Agreement or any section
thereof was drafted by said party.
15.8 Further Action. The parties hereto shall execute and deliver all
documents, provide all information and take or forbear from all such action as
may be necessary or appropriate to achieve the purposes of the Agreement.
15.9 Parties in Interest. Nothing herein shall be construed to be to the
benefit of any third party, nor is it intended that any provision shall be for
the benefit of any third party.
15.10 Savings Clause. If any provision of this Agreement, or the
application of such provision to any person or circumstance, shall be held
invalid, the remainder of this Agreement, or the application of such provision
to persons or circumstances other than those as to which it is held invalid,
shall not be affected thereby.
Date: December 6, 1999
XXXXXXX INTERNATIONAL INC.
By /s/ Xxxxxxx Xxx
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Xxxxxxx Xxx, Secretary/Treasurer
/s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx
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