1
EXHIBIT 10.14
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT is entered into between xxxxxxx.xxx, a
Delaware Corporation with a principal place of business at 0000 Xxxxxxxx Xxxx,
Xxxxx 000, Xx Xxxx, Xxxxxxxxxx, 00000 ("COMPANY") and Xxx Xxxx of 0000 Xxxxxx
Xx., Xxxxx Xxxx, XX 00000 ("EXECUTIVE").
1. Employment.
COMPANY hereby employs EXECUTIVE, and EXECUTIVE hereby agrees to accept
employment from COMPANY, as Executive Vice President of Web Technology for
COMPANY. EXECUTIVE agrees during the term of his employment under this Agreement
to perform the duties and responsibilities customarily required of such
position, and to be subject to COMPANY's bylaws and Delaware Corporation law.
EXECUTIVE agrees to perform such services as shall be determined from time to
time by the Chief Executive Officer of COMPANY and its Board of Directors.
EXECUTIVE further agrees to use his best efforts to promote the interests of
COMPANY and to devote his full business time and energies to the business and
affairs of COMPANY, unless otherwise authorized by the Chief Executive Officer
of COMPANY. EXECUTIVE may, however, engage in civic and not-for-profit
activities so long as such activities do not materially interfere with the
performance of his duties to COMPANY hereunder.
2. Term of Employment.
The employment under this Agreement shall commence on May 10,1999 and
shall end on March 29, 2000, provided that the term of the Agreement shall be
extended automatically for successive periods of one year unless otherwise
terminated under Paragraph 5 of this Agreement.
3. Compensation.
2
(a) Base Salary. As compensation for services provided to COMPANY,
EXECUTIVE shall receive a salary at the annual rate of $185,000, less such
payroll and withholding taxes as required by law to be deducted and such other
amounts as EXECUTIVE shall authorize in writing. The salary shall be payable in
semi-monthly installments. Such salary may be increased, but not decreased, from
time to time as decided in the discretion of the Board of Directors of COMPANY.
(b) Bonus. As additional compensation for services rendered by
EXECUTIVE, EXECUTIVE shall be entitled to participate in any incentive bonus
program that COMPANY's Board of Directors may establish for its executive
employees. Such bonus program shall provide a maximum bonus of fifty percent
(50%) of the salary paid during the year in which the bonus is earned, based
upon factors established by the Board of Directors.
(c) Equity Compensation. As further compensation for the services
rendered by EXECUTIVE, upon his commencement of employment with COMPANY pursuant
to this Agreement and approval by COMPANY's Board of Directors, EXECUTIVE will
be granted an incentive stock option to purchase shares of Common Stock of
COMPANY at an exercise price per share equal to the fair market value of the
Common Stock (as determined by the Board of Directors) as of the date of this
Agreement. Such options shall be issued pursuant to, and their exercise and the
issuance of shares upon exercise shall be subject to, the conditions of the
COMPANY's 1999 Equity Incentive Plan (the "Plan").
(i) Vesting of Options. EXECUTIVE'S incentive stock options shall vest
according to the following schedule:
Upon EXECUTIVE's completion of the first six (6) months of employment
under this Agreement, 13% of the option shares shall vest and be
subject to exercise immediately.
3
Upon EXECUTIVE's completion of the second six (6) months of employment
under this Agreement, 12% of the option shares shall vest and be
subject to exercise immediately.
EXECUTIVE's 15,000 remaining option shares shall vest and be subject to
exercise at the rate of 416.67 shares for each full month that
EXECUTIVE'S employment continues under this Agreement after the
first anniversary hereunder.
In the event that COMPANY undergoes a "change in control" (as
defined below) and EXECUTIVE's employment is terminated without cause or
EXECUTIVE's duties are significantly changed within twelve (12) months
thereafter (measured from the effective date of the change in control),
the balance of the options for 20,000 shares granted to EXECUTIVE under
this Agreement that have not vested as of the date of such termination
or significant change in duties shall vest immediately. "Change in
control" shall mean either 1) a merger of COMPANY into, or a
consolidation of COMPANY with, another person or business entity with
the result that less than fifty percent (50%) of the directors of the
resulting business entity immediately following the merger or
consolidation were directors of COMPANY immediately prior to the merger
or consolidation; 2) a sale by COMPANY of more than fifty percent (50%)
of its assets at the time of the agreement to sell or 3) a transaction
or series of transactions by which more than 50% of the voting equity
securities of COMPANY come to be under the control of a single entity or
a group of entities acting in concert to acquire control of COMPANY.
4. Participation in Benefit Plans, Reimbursement of Business Expenses and
Moving Expenses.
(a) Benefit Plans. During the term of this Agreement, EXECUTIVE shall
be provided with medical insurance, vacation benefits, sick leave benefits, and
holidays which
-3-
4
are not less than, and on terms no less favorable than, COMPANY provides to its
other executive employees.
(b) Reimbursement of Business Expenses. During the term of this
Agreement, COMPANY shall reimburse EXECUTIVE promptly for all expenditures,
including travel, entertainment, parking, business meetings, including the dues
and business related expenses of memberships at appropriate business clubs,
provided such memberships are approved in writing by the Chief Executive Officer
of COMPANY, and such expenses are incurred and submitted for reimbursement in
accordance with the policies established from time to time by the Board of
Directors.
(c) Moving Expenses. COMPANY shall reimburse EXECUTIVE for all actual
relocation expenses, up to a maximum of $130,000 for EXECUTIVE's relocation to
the San Diego area in accordance with the terms of the Relocation Benefits
Agreement, which Agreement is attached hereto as Appendix A. Any amounts paid to
EXECUTIVE to compensate him for taxes on amounts received by him hereunder which
are not tax deductible shall be subject to, not in addition to, the limit of
$130,000 set forth in the preceding sentence.
5. Termination of Employment.
(a) Automatic Termination. This Agreement will automatically terminate
in the event of EXECUTIVE's death, or EXECUTIVE's disability which prevents
EXECUTIVE from performing substantially all of his duties and responsibilities
for a continuous period of ninety (90) days. COMPANY shall have no further
obligations to EXECUTIVE or his estate upon such automatic termination, except
to honor the exercise of any stock options that have vested prior to the date of
such termination, subject to the applicable conditions of
-4-
5
the Plan. (b) Termination Not for Cause. In the event that COMPANY terminates
this Agreement without cause, COMPANY shall, subject to the conditions set forth
in Section 6(b), below, continue to pay EXECUTIVE his salary at the level in
effect at the time of termination for a period of twelve (12) months, plus any
accrued, but unused vacation, and less any applicable payroll and withholding
taxes or other legally required deductions, provided EXECUTIVE first executes
the Waiver and Release, attached to this Agreement as Appendix B. The salary
continuation for EXECUTIVE shall be paid in the same manner and at the same
intervals as if EXECUTIVE continued his employment during that one year period.
COMPANY reserves the right to pay the one-year salary continuation amount in a
lump sum, discounted to present value using a discount factor or 6%. No other
compensation or benefits shall be due to EXECUTIVE.
(c) Termination for Cause. Notwithstanding the provisions of
Sub-paragraph 5(b), COMPANY may terminate EXECUTIVE's employment for cause. For
purposes of this Agreement, COMPANY shall have "cause" to terminate EXECUTIVE's
employment in the event of the following:
1) EXECUTIVE commits a criminal act of dishonesty;
2) EXECUTIVE commits a repeated violation of a written COMPANY
Policy after being provided with written notice by COMPANY which
specifies the initial Policy violation;
3) Continued failure by EXECUTIVE to perform the material aspects
of EXECUTIVE's duties and responsibilities after written warning
from the Board of Directors specifying the duties or
responsibilities which EXECUTIVE has failed to perform;
4) A material breach by EXECUTIVE of any provision of this
Agreement.
-5-
6
In the event EXECUTIVE's employment is terminated for cause, he will not
be entitled to receive any severance pay or any other severance
compensation.
(d) Resignation. EXECUTIVE retains the right to resign or
otherwise voluntarily terminate his employment with COMPANY upon ninety
(90) days' written notice to the Chief Executive Officer. In the event
EXECUTIVE resigns or otherwise voluntarily terminates his employment
with COMPANY, EXECUTIVE shall not be entitled to any compensation,
including benefits, beyond the effective date of his resignation.
(e) Stock Options. Subject to the Change in Control provisions
of Section 3(c)(ii), above, only the shares subject to the stock options
granted to EXECUTIVE above that have vested up to the date of the
termination of or his resignation from his employment under this
agreement may be exercised by EXECUTIVE, such exercise to be subject to
the conditions set forth in the Plan. Any stock options that are
unvested as of the date of EXECUTIVE's termination shall be null and
void.
6. Noncompetition, Confidentiality and Conflicts of Interest.
(a) EXECUTIVE agrees and understands that, due to the nature of his
position with the COMPANY, he will gain possession of confidential information
about COMPANY and the way it conducts its business. In conjunction with the
execution of, and as part of the consideration given for, this Agreement,
EXECUTIVE will execute the Proprietary Information and Inventions Agreement that
is attached to this Agreement as Appendix C. EXECUTIVE's duties and obligations
under Appendix C shall survive termination of his employment with COMPANY.
EXECUTIVE acknowledges that a remedy at law for any breach or threatened breach
by him of the provisions of Appendix C would be inadequate to protect COMPANY
against the consequences of such breach,
7
and he therefore agrees that the COMPANY shall be entitled to injunctive relief
in case of any such breach or threatened breach.
(b) Restrictive Covenant. During any period that EXECUTIVE is receiving
severance compensation from COMPANY following the termination date of
EXECUTIVE's employment under this Agreement, EXECUTIVE shall not, without first
obtaining the prior written approval of COMPANY, directly or indirectly engage
in any activities in competition with COMPANY, or accept employment or establish
a business relationship with a business engaged in competition with COMPANY
(specifically, promoting and receiving revenue for the marketing, sale and
distribution of goods, equipment and services in the "Healthcare Field" via the
Internet, as that term is defined in the license agreement between COMPANY and
among others, iBO$, Inc. dated March 25, 1999), and such other businesses as
COMPANY comes to be actively engaged in during the term of this Agreement, in
any geographical area in which COMPANY, as of the termination date, either
conducts or plans to conduct business. In the event that EXECUTIVE undertakes
any such activities without written permission from COMPANY, COMPANY'S
obligation to pay EXECUTIVE severance compensation under this provision shall
cease.
(c) Conflicts of Interest. EXECUTIVE agrees not to acquire, assume or
participate in, directly or indirectly, any position, investment or interest
known by him to be adverse or antagonistic to COMPANY, its business or
prospects, financial or otherwise. However, EXECUTIVE may own, as a passive
investor, securities of any publicly traded companies, provided his beneficial
ownership of the stock of any one such corporation does not exceed 1% of such
corporation's voting stock.
8
(d) Non-interference. While employed by COMPANY, and for a period of one
(1) year immediately following the termination of his employment, EXECUTIVE
will not interfere with the business of COMPANY by:
(i) soliciting, attempting to solicit, inducing or otherwise
causing any employee of COMPANY to terminate his or her employment in
order to become an employee, consultant or contractor to or for any
competitor of COMPANY;
(ii) directly or indirectly soliciting the business of any
customer of COMPANY which at the time of termination or one year prior
thereto was listed on COMPANY's customer list, which solicitation, if
successful, would result in the loss of business or potential business
for COMPANY.
7. Notices.
For purposes of this Agreement, notices and other communications
provided for in the Agreement shall be in writing and shall be deemed to have
been duly given when delivered or mailed by United States Registered or
Certified Mail, return receipt requested, postage prepaid, addressed as follows:
If to EXECUTIVE:
If to COMPANY: xxxxxxx.xxx, Inc.
000 Xxxxxxxx Xxxx, Xxxxx 000
Xx Xxxx, Xxxxxxxxxx 00000
Attn: The Chief Executive Officer
or at such other address as any party may have furnished to the other in writing
subsequent to the execution of this Agreement or, in the case of EXECUTIVE, to
the address listed for him in
9
COMPANY's records, and in the case of COMPANY, to the address known by EXECUTIVE
to be where the office of the Chief Executive Officer of COMPANY is located.
8. Modifications; Waivers; Applicable Law.
No provision in this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed to in writing, signed by
EXECUTIVE and by the Chief Executive Officer of COMPANY.
9. Severability.
If any provision of this Employment Agreement is determined to be
invalid or is in any way modified by any governmental agency, tribunal, or court
of competent jurisdiction, such determination shall be considered as a separate,
distinct, and independent part of this Agreement and shall not affect the
validity or enforceability of any of the remaining provisions of this Agreement.
10. Successor Rights and Assignment.
This Agreement shall bind, inure to the benefit of and be enforceable by
EXECUTIVE's personal or legal representatives, executors, administrators,
successors, heirs, distributees, and legatees. The rights and obligations of
COMPANY under this Agreement may be assigned by COMPANY, in which event it shall
be binding upon, and inure to the benefit of, the person(s) or entity(ies) to
whom it is assigned. EXECUTIVE may not assign his duties hereunder and he may
not assign any of his rights hereunder without the written consent of COMPANY.
IN WITNESS WHEREOF, EXECUTIVE and COMPANY have signed this Agreement on
the dates indicated below.
10
EXECUTIVE:
Dated: 5/15/99 /s/ Xxx Xxxx
------------------------- ----------------------------
XXXXXXX.XXX, INC.
Dated: 5/10/99 By: /s/ XXXXXX X. XXXXXX
------------------------- --------------------------
Its:
-------------------------
-10-
11
AMENDMENT TO EMPLOYMENT AGREEMENT
THIS AMENDMENT TO EMPLOYMENT AGREEMENT (this "Agreement") is made and
entered into effective as of January 28, 2000 by and between XXXXXXX.XXX, INC.,
a Delaware corporation (the "Company") and XXXXXX XXXX ("Executive").
A. Executive is the EXECUTIVE VICE PRESIDENT AND CHIEF INFORMATION
OFFICER of the Company pursuant to an employment agreement dated as of MAY 10,
1999, as amended (the "Employment Agreement"); and
B. Because of Executive's intimate knowledge of the business of the
Company, the Company and Executive desire to amend the Employment Agreement to
provide for a consulting agreement between the Company and Executive upon
Executive's termination of employment.
NOW, THEREFORE, in consideration of the above facts and the mutual
promises set forth in this Agreement, the parties agree as follows:
1. AMENDMENT OF EMPLOYMENT AGREEMENT.
1.1 The parties agree to replace the provisions relating to severance
payments with the Consulting Agreement and terms as contemplated in this
Amendment.
1.2 Section 5(b) of the Employment Agreement is hereby amended and
replaced in its entirety by the following:
"Termination Not for Cause. In the event that COMPANY terminates
this Agreement without cause, then upon EXECUTIVE furnishing
COMPANY with an executed Waiver and Release (in the form attached
hereto as Appendix B), COMPANY and EXECUTIVE shall then each
execute and deliver a Consulting Agreement in the form attached
hereto as EXHIBIT A. Notwithstanding the foregoing, if any party
fails to deliver an executed copy of the Consulting Agreement,
such agreement shall be deemed to be entered into by both parties
and shall continue in full force and effect. The parties
acknowledge that EXECUTIVE shall not be entitled to any payment
or benefit under the Consulting Agreement unless EXECUTIVE shall
first execute the Waiver and Release."
1.3 The heading for Section 6 of the Employment Agreement is hereby
modified and replaced in its entirety by the following:
"Confidentiality, Conflicts of Interest and Non-Interference."
1.4 Section 6(b) ("Restrictive Covenant") of the Employment Agreement is
hereby deleted from the Employment Agreement and replaced with the following:
"[Deleted]"
1.5 Except as expressly modified hereby, all of the terms of the
Employment Agreement shall continue in full force and effect.
1.
12
2. GOVERNING LAW. This Agreement is made in San Diego, California and shall be
interpreted and enforced under the internal laws of the State of California.
3. ENTIRE AGREEMENT. This Agreement and any agreements referenced herein
constitute the entire agreement between the parties and may be waived, modified
or amended only by an agreement in writing signed by both parties.
4. ASSIGNMENT. This Agreement shall inure to the benefit of, and be binding
upon, the successors and permitted assigns of the parties hereto. This Agreement
may not be assigned by Executive. This Agreement may not be assigned by the
Company except in connection with a merger of the Company or pursuant to the
sale, transfer or other conveyance of all or substantially all of the assets of
the Company.
5. WAIVER. No covenant, term or condition of this Agreement or breach thereof
shall be deemed waived unless the waiver is in writing, signed by the party
against whom enforcement is sought, and any waiver shall not be deemed to be a
waiver of any preceding or succeeding breach of the same or any other covenant,
term or condition.
6. NOTICE. All notices and other communications required or permitted to be
given under this Agreement shall be in writing and shall be deemed to have been
given if delivered personally or sent by certified mail, return receipt
requested, postage prepaid, to the parties at the following addresses or to such
other address as either party to this Agreement shall specify by notice to the
other:
If to the Company:
Chairman of the Board
xxxxxxx.xxx, Inc.
00000 Xxxxxxx Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
If to Executive:
Xxxxxx Xxxx
X.X. Xxx 0000
Xx Xxxxx, XX 00000
7. HEADINGS. Headings or captions of paragraphs or sections of this Agreement
are for convenience of reference only and shall not be considered in the
interpretation of this Agreement.
8. COUNTERPART. This Agreements may be executed in two counterparts, each of
which shall be deemed an original, all of which together shall constitute one
and the same instrument.
9. ATTORNEY CONSULTATION. Each party has been informed of his/her/its right to
consult with his/her/its attorney prior to signing this Agreement and has either
done so or has considered the matter and decided not to do so.
2.
13
IN WITNESS WHEREOF, the parties hereto have executed this AMENDMENT TO
EMPLOYMENT AGREEMENT as of the date set forth in the first paragraph hereof.
The Company:
XXXXXXX.XXX, INC.
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxx
---------------------------
Title: CEO
--------------------------
Executive:
/s/ Xxxxxx Xxxx
---------------------------------
----------------
3.
14
EXHIBIT A
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT (this "Agreement") is made and entered into
effective as of ________________, 200__ by and between XXXXXXX.XXX, INC., a
Delaware corporation (the "Company") and XXXXXX XXXX ("Consultant").
A. Consultant and the Company previously entered into an employment
agreement dated as of _____________, as amended (the "Employment Agreement");
and
B. Consultant and the Company desire to enter into a consultancy
arrangement upon the terms set forth in this Agreement.
NOW, THEREFORE, in consideration of the above facts and the mutual
promises set forth in this Agreement, the parties agree as follows:
1. CONSULTING.
1.1 In consideration for the promises and covenants set forth herein,
for the period (the "Engagement Period") beginning on the effective date of
Consultant's termination of employment under the Employment Agreement (the
"Consulting Date") and ending on the date one year after the Consulting Date,
the Company and Consultant agree that Consultant shall perform the services and
undertake the duties and responsibilities set forth in Schedule A attached
hereto and incorporated herein (collectively, the "Services"). Consultant shall
render the Services under the terms and conditions set forth in this Agreement.
1.2 During the Engagement Period, Consultant will not be considered an
agent or an employee of the Company; Consultant will not have authority to make
any representation, contract, or commitment on behalf of the Company and
Consultant agrees not to do so; and Consultant will not be entitled to any of
the benefits which the Company may make available to its employees, such as
group insurance, profit sharing, or retirement benefits.
1.3 During the Engagement Period, Consultant will be solely responsible
for all tax returns and payments to any federal, state, or local tax authority
with respect to Consultant's performance of services and the receipt of fees or
other compensation and benefits under this Agreement. The Company will report
amounts paid to Consultant by filing Form 1099-MISC with the Internal Revenue
Service as required by law. The Company will not: make withholdings or
deductions from Consultant's payment checks; make contributions for Social
Security, employment insurance or disability insurance; or obtain workers'
compensation insurance on Consultant's behalf. During the Engagement Period,
Consultant shall comply with all applicable state and federal laws governing
self-employed individuals, including obligations such as payment of taxes,
Social Security, disability and other contributions based on compensation and
benefits paid to Consultant under this Agreement. Consultant hereby indemnifies
the Company against any and all such taxes or contributions, including penalties
and interest.
1.
15
1.4 During the Engagement Period, subject to the terms and restrictions
of this Agreement, Consultant may engage in employment, consulting or other work
relationships in addition to Consultant's work for the Company. The Company
agrees to make reasonable arrangements to enable Consultant to perform
Consultant's consulting services for the Company at such times and in such a
manner so that it does not unreasonably interfere with other work activities in
which Consultant may engage.
2. TERM. The term of this Agreement (the "Term") shall commence upon the
Consulting Date. This Agreement shall remain in full force and effect until
completion of the Engagement Period.
3. CONSULTING FEES. As payment for the Services, Consultant shall receive cash
fees as set forth in Schedule B attached hereto and incorporated herein, which
shall constitute complete payment for the Services.
4. NO OTHER BENEFITS. During the Term, Consultant shall not be entitled to any
other compensation or benefits, including benefits provided generally to
employees of the Company, and Consultant's compensation shall not be subject to
withholding, unless, in the Company's view, withholding is required by
applicable law.
5. CONFIDENTIAL INFORMATION. In connection with the performance of Services
under the Employment Agreement and this Agreement, Consultant may become
familiar with trade secrets and confidential information of the Company (which
shall include all trade secrets and work product resulting from Consultant's
provision of the Services to the Company), which derive independent economic
value, actual or potential, from not being generally known to the public or to
other persons who can obtain economic value from its disclosure or use
("Confidential Information"). Except as may be reasonably necessary while
providing the Services, Consultant agrees that, during the Term of this
Agreement and thereafter, Consultant and any agents and employees of Consultant
will not disclose or utilize any of the Confidential Information (including
without limitation techniques, designs, buying plans, drawings, leases, store
designs, rollout plans, developments, equipment, prototypes, sales, supplier and
customer information and relationships, and business and financial information
relating to the business, products, practices and techniques of the Company) to
which Consultant has been privy, unless Consultant becomes legally required to
disclose any such Confidential Information, in which event Consultant shall
provide the Company with prompt notice thereof so that the Company may seek a
protective order or other appropriate remedy. Upon the termination of this
Agreement, Consultant shall deliver to the Company all equipment, notes,
documents, memoranda, reports, files, books, correspondence, lists or other
written or graphic records and the like belonging to the company which are or
have been in Consultant's possession or control.
6. PRESERVATION OF CONFIDENTIAL INFORMATION; NONCOMPETITION.
6.1 Consultant agrees that, in order to protect the Confidential
Information of the Company and in consideration of the fees received hereunder,
during the Term of this Agreement, Consultant shall not, without first obtaining
the prior written approval of the Company, directly or indirectly engage in any
activities in competition with the Company, or become an officer, director or
employee of, or consultant to, or investor in, a business engaged in
2.
16
competition with the Company's current business (specifically, any person or
entity whose principal business is promoting and facilitating via the Internet
transactions between third parties for the wholesale sale and distribution of
goods, equipment and services in the healthcare field) and such other business
or businesses in which the Company comes to be actively engaged during the term
of Consultant's employment with the Company under the Employment Agreement. For
purposes of this agreement, "healthcare field" means the provision of goods
and/or services to any person, firm, corporation, business, partnership, limited
liability company, association or other entity involved directly in the
healthcare industry and/or to any person with respect to their medical or
healthcare needs, including, without limitation, hospitals, surgical centers,
medical clinics, outpatient facilities, medical groups, managed care
organizations, health maintenance organizations, medical or health related
associations, nursing homes, extended care facilities, doctors, physicians,
dentists, chiropractors, veterinarians and other healthcare providers,
practitioners, suppliers, patients or any other person providing or receiving
healthcare service of any nature whatsoever.
6.2 Ownership by Consultant, as a passive investment, of less than one
percent (1%) of the outstanding shares of capital stock of any corporation with
one or more classes of its capital stock listed on a national securities
exchange or publicly traded in the over-the-counter market shall not constitute
a breach of this Section 6.
7. SEVERABILITY. To the extent any provision of this Agreement shall be
adjudicated to be invalid or unenforceable, it shall be considered deleted
herefrom and the remainder of such provision and of this Agreement shall be
unaffected, such deletion to apply only with respect to the operation of this
Agreement in the particular jurisdiction in which such adjudication is made. In
furtherance and not in limitation of the foregoing, should the duration or
geographical extent of, or business activities covered by, any provision of this
Agreement be in excess of that which is valid and enforceable under applicable
law, then such provision shall be construed to cover only the duration, extent
or activities which may validly and enforceably be covered.
8. REMEDIES. In any event of a breach of Consultant's obligations under this
Agreement, Consultant agrees that (a) any and all proceeds, funds, payments and
proprietary interests, of every kind and description, arising from, or
attributable to, such breach shall be the sole and exclusive property of the
Company and (b) the Company shall be entitled to recover any additional actual
damages incurred as a result of such breach.
9. INJUNCTIVE RELIEF. Consultant understands and agrees that the Company could
not be reasonably or adequately compensated in damages in an action at law for
Consultant's breach of his obligations under this Agreement. Accordingly,
Consultant specifically agrees that the Company shall be entitled to an
injunction enjoining Consultant or any person or persons acting for or with
Consultant in any capacity whatsoever from violating any of the terms herein.
This provision with respect to injunctive relief shall not diminish the right of
the Company to claim and recover damages pursuant to Section 9 in addition to
injunctive relief.
10. REPRESENTATIONS AND WARRANTIES. Consultant represents and warrants that (a)
Consultant is not restricted or prohibited, contractually or otherwise, from
entering into and performing each of the terms and covenants contained in this
Agreement, and (b) Consultant's
3.
17
execution and performance of this Agreement is not a violation or breach of any
other agreement to which Consultant is a party.
11. GOVERNING LAW. This Agreement is made in San Diego, California and shall be
interpreted and enforced under the internal laws of the State of California.
12. ENTIRE AGREEMENT. This Agreement and any agreements referenced herein
constitute the entire agreement between the parties and may be waived, modified
or amended only by an agreement in writing signed by both parties.
13. ASSIGNMENT. This Agreement shall inure to the benefit of, and be binding
upon, the successors and permitted assigns of the parties hereto. This Agreement
may not be assigned by Consultant. This Agreement may not be assigned by the
Company except in connection with a merger of the Company or pursuant to the
sale, transfer or other conveyance of all or substantially all of the assets of
the Company.
14. WAIVER. No covenant, term or condition of this Agreement or breach thereof
shall be deemed waived unless the waiver is in writing, signed by the party
against whom enforcement is sought, and any waiver shall not be deemed to be a
waiver of any preceding or succeeding breach of the same or any other covenant,
term or condition.
15. NOTICE. All notices and other communications required or permitted to be
given under this Agreement shall be in writing and shall be deemed to have been
given if delivered personally or sent by certified mail, return receipt
requested, postage prepaid, to the parties at the following addresses or to such
other address as either party to this Agreement shall specify by notice to the
other:
If to the Company:
Chairman of the Board
xxxxxxx.xxx, Inc.
00000 Xxxxxxx Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
If to Executive:
--------------------
--------------------
--------------------
16. HEADINGS. Headings or captions of paragraphs or sections of this Agreement
are for convenience of reference only and shall not be considered in the
interpretation of this Agreement.
17. COUNTERPART. This Agreements may be executed in two counterparts, each of
which shall be deemed an original, all of which together shall constitute one
and the same instrument.
4.
18
18. ATTORNEY CONSULTATION. Each party has been informed of his/her/its right to
consult with his/her/its attorney prior to signing this Agreement and has either
done so or has considered the matter and decided not to do so.
IN WITNESS WHEREOF, the parties hereto have executed this AMENDMENT TO
EMPLOYMENT AGREEMENT as of the date set forth in the first paragraph hereof.
The Company:
XXXXXXX.XXX, INC.
a Delaware corporation
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Consultant:
----------------------------------------
----------------
5.
19
SCHEDULE A
SERVICES, DUTIES AND RESPONSIBILITIES
During the Term, Consultant shall, upon request, consult with the
Company by telephone, by mail and in person from time to time on a part-time
basis during regular business hours. The consultation shall concern the
management, operation, marketing, sales, purchasing, technology, financing and
other aspects of the business of the Company, and may include Consultant's
direct contacting of third parties at the reasonable request of the Company.
1.
20
SCHEDULE B
CONSULTING FEE AND BENEFITS
The Company shall pay to Consultant for the Services an annual amount
equal to the sum of:
(i) an amount equal to the annual salary of Consultant in effect
at the time of termination under the Employment Agreement (the
"Consulting Fee") plus
(ii) to the extent the payment of the amount described in (i)
above is subject to state or federal taxation beyond that to
which it would have been subject as severance pay under the
Employment Agreement, the Company will pay an additional amount
(the "Gross-Up Payment") such that after payment of all state and
federal taxes on the Consulting Fee and the Gross-Up Payment,
Consultant will retain an amount equal to the amount Consultant
would have received as severance pay under the Employment
Agreement.
The total amount described in (i) and (ii) above shall be paid monthly during
the Term as provided herein.
To the extent provided by the federal COBRA law or, if applicable, state
insurance laws, and by the Company's group health insurance policies, Consultant
will be eligible to continue Consultant's health insurance benefits. In the
event Consultant elects continued coverage under COBRA, the Company, as part of
this Agreement and in consideration thereof, will reimburse Consultant for the
same portion of Consultant's COBRA health insurance premium that the Company
previously paid for Consultant's coverage under the Employment Agreement.
Consultant will be responsible for the same portion of the COBRA health
insurance that Consultant previously paid for coverage under the Employment
Agreement.
The Company shall pay on Consultant's behalf, or reimburse Consultant
for, any expenses reasonably incurred in connection with his rendering of the
Services and which are not incurred in violation of any policy or policies
regarding expenses which may be adopted by the Board of Directors from time to
time. Consultant agrees to submit receipts and other documentation to support
the above expenses as a condition of reimbursement therefor.
Consultant will fully and completely cooperate with the Company with
respect to all matters associated with the taxation or potential taxation of any
payments and reimbursements hereunder. Consultant acknowledges that Consultant
is responsible for consulting his or her own tax advisor with respect to any
taxation matters.
1.
