1
Exhibit 10.8
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered effective as of April 1, 2000 by and
between SUNDERLAND CORPORATION, a Delaware corporation (the "Corporation"), and
Xxxxx Xxxxxxxx (the "Executive") with reference to the following facts:
WITNESSETH:
WHEREAS, the Corporation previously hired Executive in the position of
Chief Financial Officer of the Corporation; and
WHEREAS, there have been significant changes in the Corporation since
Executive's employment; and
WHEREAS, in order to retain the services of the Executive and to
maximize the period of his continued availability, the Corporation desires to
enter into the Agreement with Executive as is more fully set forth herein.
NOW, THEREFORE, on the basis of the foregoing facts and in
consideration of the mutual covenants and agreements contained herein, the
parties hereto agree as follows:
1. Employment. The Corporation hereby agrees to, and does hereby,
employ the Executive and Executive hereby accepts employment with the
Corporation on the terms and conditions set forth in this Agreement (the
"Agreement").
2. Term. The term of this Agreement shall commence on April 1, 2000,
and shall continue for a period of three (3) years until March 31, 2003 (the
"Term"). After the original Term, this Agreement shall continue for successive
one (1) year periods unless either party hereto shall notify the other in
writing at least thirty (30) days prior to the end of the Term of their
intention of not renewing the same. The Corporation agrees not to terminate the
Executive during the Term except for Cause. Executive shall be considered
terminated, at the Executive's election, if (i) there is a Change of Control of
the Corporation or (ii) a reduction in Executive's duties or salary with the
Corporation.
3. Duties and Services.
a. The Corporation and the Executive hereby agree that,
subject to the provisions of this Agreement, the
Corporation will employ the Executive and the
Executive will serve the Corporation as Chief
Financial Officer during the Term.
b. Executive agrees during the term of this Agreement
not to usurp a corporate opportunity for his own
financial gain. A corporate opportunity shall be
2
defined as a business opportunity which the
Corporation is financially able to undertake, is,
from its nature, in the line of the Corporation's
business and is one in which the Corporation has an
interest or a reasonable expectancy. Executive agrees
that he shall offer a corporate opportunity to the
Corporation. The Corporation shall have ten (10) days
to either take the opportunity for itself or to
reject the opportunity in which case Executive shall
have the right to pursue such opportunity for
himself. Failure to notify Executive within such ten
(10) day period shall be deemed a rejection of the
opportunity by the Corporation.
4. Definitions. The following terms shall have the following meanings
when used herein:
a. Change of Control. For the purpose of this Agreement,
a "Change in Control" of the Corporation shall be
deemed to occur if any person or entity directly or
indirectly acquires ownership, control, power to
vote, or proxies representing more than thirty-five
percent (35%) of the Voting Stock of Sunderland, or
of any entity controlling Sunderland, or obtains
control of the election of a majority of the members
of the Board of Directors of Sunderland (the "Board")
or of any entity controlling Sunderland.
b. Cause. Cause shall exist when and only when Executive
(i) after receipt of written notification by the
Board of Directors or the CEO has wilfully failed and
continues to fail after such written notice for a
period of thirty (30) days to substantially perform
his duties (other than failure resulting from
incapacity due to physical or mental illness), (ii)
is convicted of a crime constituting a felony, or
(iii) has been proven to be dishonest, has embezzled
or has committed common law fraud ("for Cause").
5. Compensation.
a. As salary during the Term, the Corporation shall pay
the Executive, in accordance with its normal payroll,
a minimum annual salary of Two Hundred Ninety-Six
Thousand Dollars ($296,000.00) such salary to be paid
no less than semi-monthly during the Term. The
Executive shall receive such additional salary as the
Board of Directors of the Corporation may from time
to time determine during the Term. Unless expressly
agreed in writing by the parties hereto, no such
additional compensation or benefits shall be deemed
to modify or otherwise affect the terms or conditions
of this Agreement. Notwithstanding the foregoing if
Executive is terminated other than (i) for Cause, as
defined herein, or (ii) as a result of a Change of
Control, as defined herein, Executive shall be
entitled to twelve (12) months salary as severance as
Executive's sole and exclusive rights pursuant to
this Agreement. In the event of a Change of Control,
Executive shall be entitled
2
3
to two (2) years salary, as severance,
provided Executive exercises his right pursuant to
this Agreement to treat such change of control as a
termination of this Agreement. In the event Executive
does not exercise his right to be terminated upon a
Change of Control the Executive shall continue his
employment pursuant to the Salary Continuation
Agreement. In the event Executive is terminated other
than for cause or there is a Change in Control, all
obligations to pay Executive shall be due and owed in
a lump sum payment exactly thirty (30) days from the
earlier of the date of termination, the date of the
Change of Control and/or the date Executive elects
termination pursuant to the provisions of Paragraph 2
hereof.
b. Executive shall receive an automobile and living
allowance in the amount of One Thousand Dollars
($1,000.00) per month during the Term.
6. Other Benefits. During the Term the Executive shall receive all
rights and benefits for which he is then eligible under any employee benefit
plan or bonus plan which the Corporation generally provides for its employees.
Such benefits shall include, but not be limited to, a bonus plan, which shall be
explicitly set forth by the Corporation's Board of Directors within one hundred
eighty (180) days of the execution of this Agreement, and full medical, dental
and health insurance for Executive. Further, Executive shall receive disability
insurance guarantying payments equal to sixty percent (60%) of his salary.
7. Intentionally left blank.
8. Death or Disability. In the event of the death of the Executive or
the disability of the Executive, this Agreement shall immediately terminate and
the Corporation shall pay to the Executive or his estate one (1) year's salary
in a single lump sum payment which payment shall be due and payable upon the
sooner of (i) thirty (30) days of Executive's death or (ii) thirty (30) days
after Executive is declared by his physician incapable of performing his duties
as specified in this Agreement. The Corporation shall have the right to fund
Executive's death and/or disability benefit through life insurance.
9. Place of Performance. In connection with his employment by the
Corporation during the Term, the Executive shall at all times be entitled to an
office at the principal executive offices of the Corporation, located in Las
Vegas, Nevada, or at such other office of the Corporation, in Las Vegas, Nevada,
as the Chief Executive Officer of the Corporation shall, in his reasonable
discretion deem to be in the best interest of the Corporation. In the event the
Corporation moves its principal place of business outside of Las Vegas, Nevada,
Executive at his option shall have the right to terminate this Agreement and
receive the greater of such salary due him for the remaining Term of this
Agreement but in no event less than twelve (12) months' salary or to cause the
Corporation to maintain an office in Las Vegas, Nevada for the Executive during
the Term.
10. Outside Activities and Non-Competition.
3
4
a. Covenant Not to Compete. Executive recognizes that
the Corporation's decision to enter into this
Agreement is induced primarily because of the
covenants and assurances made by Executive, that
Executive's covenant not to compete is necessary to
ensure the continuation of the business of the
Corporation and the reputation of the Corporation,
and that irrevocable harm and damage will be done to
the Corporation if Executive competes with the
Corporation. Therefore, Executive agrees that during
the term of this Agreement and for a period of one
(1) year following termination of this Agreement,
Executive shall not, directly or indirectly, as an
employee, employer, contractor, consultant, agent,
principal, shareholder, corporate officer, director,
or in any other individual or representative
capacity, engage or participate in any business or
practice within the Practice Territory that is in
competition in any manner whatsoever with the
business of the Corporation without the written
permission of the Corporation. The term "in
competition in any manner whatsoever with the
business of the Corporation" shall include the
practice of accounting in the Practice Territory and
engaging in the mortgage business in the State of
Nevada. Practice Territory shall be defined as any
area in which the Corporation has an office or
conducts business. Executive agrees:
(i) If Executive should set up an office within
the Practice Territory in competition with
the business of the Corporation, it would
cause economic harm and loss of goodwill to
the Corporation resulting in immediate and
irreparable loss, injuries, and damage to
the Corporation.
(ii) Notwithstanding anything to the contrary in
this Section 10, Executive is not prohibited
from owning less than five percent (5%) of
the equity of any publicly traded entity.
b. Enforcement. The Corporation and Executive further
agree that if any restriction in this Article is held
by any court to be unenforceable or unreasonable, a
lesser restriction will be enforced in its place and
the remaining restrictions in this Agreement will be
enforced independently of each other. In any action
to enforce any provision of this Article 10, the
court may award reasonable attorneys' fees, costs,
and expenses to the prevailing party. Notwithstanding
the prior provisions of this Article, Executive shall
be immediately released from the restrictive covenant
in this Article and may practice in competition with
the Corporation within the Practice Territory after
the termination of this Agreement by purchasing the
covenants described in this Article 10.a. The parties
believe that reasonable compensation to the
Corporation for the release of Executive from the
restrictive covenants of this Article 10 would be
Fifty Thousand Dollars
4
5
($50,000.00), which is the Corporation's anticipated
costs of recruiting and training a replacement for
Executive. Executive promises to pay, and the
Corporation agrees to accept, that amount as
consideration if Executive should desire to be
released from the restrictive covenants of this
Article 10.
c. Survival. The provisions of this Article 10 shall
survive the termination of this Agreement for one (1)
year.
11. Confidentiality of Information.
a. Confidential Information. Executive agrees to keep
confidential and not to use or to disclose to others
during the term of this Agreement and for a period of
five (5) years thereafter, except as expressly
consented to in writing by the Corporation or
required by law, any secrets or confidential
technology, proprietary information, patient lists,
or trade secrets of the Corporation, or any matter or
thing ascertained by Executive through Executive's
affiliation with the Corporation, the use or
disclosure of which matter or thing might reasonably
be construed to be contrary to the best interest of
the Corporation, the use or disclosure of which
matter or thing might reasonably be construed to be
contrary to the best interests of the Corporation.
This restriction shall not apply to any information
that (i) is or becomes generally available to and
known by the public (other than as a result of an
unpermitted disclosure directly or indirectly by
Executive or Executive's affiliates, advisors, or
representatives); (ii) is or becomes available to
Executive on a nonconfidential basis from a source
other than the Corporation or its affiliates,
advisors, or representatives, provided that, at the
time of disclosure to Executive, Executive is not
aware that such source was bound by a confidentiality
agreement with or other obligation of secrecy to the
Corporation; or (iii) has already been or is
hereafter independently acquired or developed by the
Corporation; without violating any confidentiality
agreement with or other obligation of secrecy to the
Corporation.
b. Departure. Except as provided herein, should
Executive leave the employment of the Corporation,
Executive will neither take nor retain, without prior
written authorization from the Corporation, any
papers, client lists, fee books, client records,
files, or other documents or copies thereof or other
confidential information of any kind belonging to the
Corporation pertaining to the Corporation's clients,
business, sales, financial condition, or products.
Without limiting other possible remedies to the
Corporation for the breach of this covenant,
Executive agrees that injunctive or other equitable
relief shall be available to enforce this covenant,
such relief to be without the necessity of posting a
bond, cash or otherwise. Executive further agrees
that if any restriction contained in this paragraph
is held by
5
6
any court to be unenforceable or unreasonable, a
lesser restriction shall be enforced in its place and
remaining restrictions contained herein shall be
enforced independently of each other.
c. Exceptions.
(i) Executive shall not be prohibited from
releasing any confidential or proprietary
information to Executive's legal counsel or
financial advisors, provided that Executive
places such advisors under legal obligation
not to disclose the confidential
information.
(ii) It shall not be a breach of Executive's
covenants under this Article 11 if a
disclosure is made pursuant to a court
order, a valid administrative agency
subpoena, or a lawful request for
information by an administrative agency.
Executive shall give the Corporation prompt
notice of any such court order, subpoena, or
request for information.
12. Notice. All Notices and other communications hereunder shall be in
writing and shall be deemed to have been validly served, given or delivered five
(5) days after deposit in the United States mail, by certified mail with return
receipt requested and postage prepaid, when delivered personally, one (1) day
after delivery to any overnight courier, or when transmitted by facsimile
transmission facilities, and addressed to the party to be notified as follows:
If to Corporation at: 0000 Xx Xxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
If to Executive at: 0000 X. Xxxxxxx Xxx.
Xxx Xxxxx, XX 00000
13. Miscellaneous.
a. This Agreement shall inure to the benefit of and be
binding upon the Corporation, its successors and
assigns. This Agreement may not be assigned by the
Corporation without the prior written consent of the
Executive. The obligations and duties of the
Executive hereunder shall be personal and not
assignable.
b. Whenever possible, each provision of this Agreement
shall be interpreted in such a neater as to be valid
and effective under applicable law, but if any
provision of this Agreement is found to be prohibited
or invalid under applicable law, such provision will
be ineffective to the extent of such prohibition or
invalidity without invalidating the remainder of such
provision or the remaining provisions of this
Agreement.
6
7
c. For purposes of this Agreement an "affiliate" of a
person shall include any person, firm, corporation,
association, organization, or unincorporated trade or
business that, now or hereinafter directly or
indirectly, controls, or is controlled by, or
practices is under common control with such person.
d. Any waiver, alteration or modification of any term of
this Agreement will be valid only if made in writing
and signed by the parties hereto. Each party hereto
from time to time may waive any of his or its rights
hereunder without effecting a waiver with respect to
any subsequent occurrences or transactions hereunder.
e. Captions and paragraph heading used herein are for
convenience only are not a part hereof and shall not
be used in construing this Agreement.
f. This Agreement constitutes the entire understanding
and agreement of the parties and, except as otherwise
provided hereunder, there are no other agreements or
understandings, written or oral, in effect between
the parties relating to the employment of the
Executive by the Corporation during the Term. All
prior negotiations or agreements, if any, between the
parties relating solely to the employment of the
Executive by the Corporation during the Term are
hereby superseded.
g. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of Nevada.
h. This Agreement may be executed in counterparts, each
of which shall be deemed an original,, but both of
which taken together shall constitute one and the
same instrument.
14. Arbitration. Any controversy between the parties hereto, including
the construction or application of any of the terms, covenants or conditions of
this Agreement, shall on written request of one party served on the other be
settled exclusively by arbitration in accordance with the rules of the American
Arbitration Association then in effect. The arbitrator selected must be a member
of the National Academy of Arbitrators and must have significant experience in
arbitrating labor disputes. Further, the Arbitrator must be an attorney
practicing labor law in the Southern California area. The cost of such
arbitration shall be borne by the losing party or in such proportions as the
Arbitrator(s) shall decide. Judgment may be entered on the arbitrator's award in
any court of competent jurisdiction.
15. The Executive's Employment. Nothing contained in this Agreement (i)
obligates the Corporation or any subsidiary of the Corporation to employ the
Executive in any capacity whatsoever, or (ii) prohibits or restricts the
corporation (or any such subsidiary) from terminating the employment, if any, of
the Executive at any time or for any reason whatsoever, with or without cause,
subject to the terms and conditions of this Agreement.
IN WITNESS WHEREOF, this Agreement is effective as of the day and year
first above written.
7
8
"EXECUTIVE"
------------------------------------
Xxxxx Xxxxxxxx
SUNDERLAND CORPORATION,
A DELAWARE CORPORATION
By:
---------------------------------
Name:
Title:
8