EMPLOYMENT AGREEMENT
This AGREEMENT (the "Agreement") is made as of the date signed (the
"Effective Date"), by and between STAR SOLUTIONS of Delaware, Inc., a Delaware
corporation ("Employer") with its headquarters located in Boulder, Colorado (the
"Employer"), and Xxxxxx Xxxxxxx (the "Executive"). In consideration of the
mutual covenants contained in this Agreement, the Employer and the Executive
agree as follows:
1. EMPLOYMENT. The Employer agrees to employ the Executive and the
Executive agrees to be employed by the Employer on the terms and conditions set
forth in this Agreement.
2. CAPACITY; LOCATION. The Executive shall serve the Employer as
President of Employer. In her capacity as President, Executive will report to
the Chairman of the Board of Directors (the "Chairman"), and shall be
responsible for the overall management and operations of Employer subject to the
direction of the Chairman. In such capacity, the Executive shall perform such
services and duties in connection with the business, affairs and operations of
the Employer as may be assigned or delegated to the Executive from time to time
by or under the authority of the Chairman. Executive's employment with Employer
will be based in Employer's San Diego, California offices; PROVIDED, that
Employee may be required from time to time to travel in connection with
Employer's business needs.
3. TERM. Executive shall be considered an at-will employee of Employer
and, subject to the provisions of Section 6, the employment relationship
described herein may be terminated by either Executive or Employer at any time.
4. COMPENSATION AND BENEFITS. The regular compensation and benefits
payable to the Executive under this Agreement shall be as follows:
(a) SALARY. For all services rendered by the Executive under
this Agreement, the Employer shall pay the Executive a salary (the
"Salary") at the annual rate of Two Hundred Forty Thousand Dollars
($240,000.00), subject to increase from time to time in the discretion
of the Employer. The Salary shall be payable in periodic installments
in accordance with the Employer's usual practice for its senior
executives.
(b) BONUS. For the fiscal year ending December 31, 2005,
Executive shall be eligible for an annual bonus of up to One Hundred
Thousand Dollars ($100,000.00), paid in quarterly installments, based
upon performance as
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determined by the Employer. Thereafter, Executive shall be eligible to
participate in an incentive program established by the Employer, with
such terms as may be established in the sole discretion of the
Employer.
(c) CAR ALLOWANCE. Employer shall pay Executive a monthly car
allowance of Seven Hundred Fifty ($750.00).
(d) DISABILITY COVERAGE. Employer shall pay for the current
long term disability insurance of Executive until such time as
Employer's regular benefits include disability coverage.
(e) REGULAR BENEFITS. The Executive shall be entitled to
health insurance benefits from Employer, and shall also be entitled to
participate in any employee benefit plans, life insurance plans,
disability income plans, retirement plans, expense reimbursement plans
and other benefit plans which the Employer may from time to time have
in effect for all or most of its executive management employees. Such
participation shall be subject to the terms of the applicable plan
documents, generally applicable policies of the Employer, applicable
law and the discretion of the Employer or any administrative or other
committee provided for in or contemplated by any such plan. Except with
respect to the aforementioned health insurance benefits, nothing
contained in this Agreement shall be construed to create any obligation
on the part of the Employer to establish any such plan or to maintain
the effectiveness of any such plan which may be in effect from time to
time.
(f) VACATION. The Executive shall be entitled to vacation
according to Employer's vacation policy, such vacation time to accrue
on a per-pay-period basis.
(g) TAXATION OF PAYMENTS AND BENEFITS. The Employer shall
undertake to make deductions, withholdings and tax reports with respect
to payments and benefits under this Agreement to the extent that it
reasonably and in good faith believes that it is required to make such
deductions, withholdings and tax reports. Payments under this Agreement
shall be in amounts net of any such deductions or withholdings. Nothing
in this Agreement shall be construed to require the Employer to make
any payments to compensate the Executive for any adverse tax effect
associated with any payments or benefits or for any deduction or
withholding from any payment or benefit.
(h) EXPENSES. The Employer shall reimburse the Executive for
all reasonable and necessary business related travel expenses incurred
or paid by the Executive in performing his duties under this Agreement
and which are consistent with applicable policies of the Employer. All
payments for reimbursement of such expenses shall be made upon
presentation by the Executive of expense statements or vouchers and
such other supporting information as the Employer may from time to time
reasonably request.
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(i) STOCK OPTIONS. Executive shall also be eligible for
participation in Employer's Parent's Stock Option Plan and Executive
shall be entitled to receive stock options pursuant to the terms of
option agreements.
(j) EXCLUSIVITY OF SALARY AND BENEFITS. The Executive shall
not be entitled to any payments or benefits other than those provided
under this Agreement.
5. EXTENT OF SERVICE. During the Executive's employment under this
Agreement, the Executive shall devote the Executive's full business time, best
efforts and business judgment, skill and knowledge to the advancement of the
Employer's interests and to the discharge of the Executive's duties and
responsibilities under this Agreement. The Executive shall not engage in any
other business activity, except as may be approved by the Employer; PROVIDED,
that nothing in this Agreement shall be construed as preventing the Executive
from:
(a) investing the Executive's assets in any Employer or other
entity in a manner not prohibited by Section 7(d) and in such form or
manner as shall not require any material activities on the Executive's
part in connection with the operations or affairs of the companies or
other entities in which such investments are made; and
(b) engaging in religious, charitable or other community or
non-profit activities that do not impair the Executive's ability to
fulfill the Executive's duties and responsibilities under this
Agreement.
6. TERMINATION AND TERMINATION BENEFITS. Notwithstanding the provisions
of Section 3, the Executive's employment under this Agreement shall terminate
under the following circumstances set forth in this Section 6.
(a) TERMINATION BY THE EMPLOYER FOR CAUSE. The Executive's
employment under this Agreement may be terminated for "Cause" without
further liability on the part of the Employer, effective immediately
upon a vote of the managers of the Employer and written notice to the
Executive. Only the following shall constitute "Cause" for such
termination:
(i) dishonest or fraudulent statements or acts of the
Executive with respect to the Employer or any affiliate of the
Employer;
(ii) the Executive's conviction of, or entry of a
plea of guilty or nolo contendere for, (A) a felony or (B) any
misdemeanor (excluding minor traffic violations) involving
moral turpitude, deceit, dishonesty or fraud;
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(iii) gross negligence, willful misconduct or
insubordination of the Executive with respect to the Employer
or any affiliate of the Employer; or
(iv) material breach by the Executive of any of the
Executive's obligations under this Agreement, or any other
agreement to which Executive and Employer are now or hereafter
a party to.
(b) TERMINATION BY THE EMPLOYER WITHOUT CAUSE. Subject to the
payment of Termination Benefits pursuant to Section 6(d), the
Executive's employment under this Agreement may be terminated by the
Employer without Cause upon written notice to the Executive (a
termination "Without Cause").
(c) TERMINATION BY EXECUTIVE. The Executive's employment under
this Agreement may be terminated by the Executive by written notice to
Employer at least thirty (30) days prior to such termination.
(d) CERTAIN TERMINATION BENEFITS. Unless otherwise
specifically provided in this Agreement or otherwise required by law,
all compensation and benefits payable to the Executive under this
Agreement shall terminate on the date of termination of the Executive's
employment under this Agreement. Notwithstanding the foregoing, in the
event of termination of the Executive's employment with the Employer
Without Cause pursuant to Section 6(b) above, the Employer shall
provide to the Executive the following termination benefits
("Termination Benefits"):
(i) payment of the Executive's Salary at the rate
then in effect pursuant to Section 4(a) for the period from
the date of termination until the later of the date that is
six (6) months after the date of termination or one (1) year
from the Effective Date; and
(ii) continuation of group health plan benefits to
the extent authorized by and consistent with 29 U.S.C. ss.
1161 ET SEQ. (commonly known as "COBRA"), with the cost of the
regular premium for such benefits shared in the same relative
proportion by the Employer and the Executive as in effect on
the date of termination for six (6) months and at a cost of
102% of premium provided under COBRA, for up to an additional
six (6) months.
Notwithstanding the foregoing, nothing in this Section 6(d)
shall be construed to affect the Executive's right to receive COBRA
continuation entirely at the Executive's own cost to the extent that
the Executive may continue to be entitled to COBRA continuation after
the Executive's right to cost sharing under Section 6(d)(ii) ceases.
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(e) DISABILITY. If the Executive shall be disabled so as to be
unable to perform the essential functions of the Executive's then
existing position or positions under this Agreement with reasonable
accommodation, the Employer may remove the Executive from any
responsibilities and/or reassign the Executive to another position with
the Employer during the period of such disability. Notwithstanding any
such removal or reassignment, the Executive shall continue to receive
the Executive's full Salary (less any disability pay or sick pay
benefits to which the Executive may be entitled under the Employer's
policies) and benefits under Section 4 of this Agreement (except to the
extent that the Executive may be ineligible for one or more such
benefits under applicable plan terms) for a period of time equal to
nine (9) months. If any question shall arise as to whether during any
period the Executive is disabled so as to be unable to perform the
essential functions of the Executive's then existing position or
positions with reasonable accommodation, the Executive may, and at the
request of the Employer shall, submit to the Employer a certification
in reasonable detail by a physician selected by the Employer to whom
the Executive or the Executive's guardian has no reasonable objection
as to whether the Executive is so disabled or how long such disability
is expected to continue, and such certification shall for the purposes
of this Agreement be conclusive of the issue. The Executive shall
cooperate with any reasonable request of the physician in connection
with such certification. If such question shall arise and the Executive
shall fail to submit such certification, the Employer's determination
of such issue shall be binding on the Executive. Nothing in this
Section 6(e) shall be construed to waive the Executive's rights, if
any, under existing law including, without limitation, the Family and
Medical Leave Act of 1993, 29 U.S.C. ss.2601 ET SEQ. and the Americans
with Disabilities Act, 42 U.S.C. ss.12101 ET SEQ.
7. CONFIDENTIAL INFORMATION, NONCOMPETITION AND COOPERATION.
(a) CONFIDENTIAL INFORMATION. As used in this Agreement,
"Confidential Information" means information belonging to the Employer
which is of value to the Employer in the course of conducting its
business and the disclosure of which could result in a competitive or
other disadvantage to the Employer. Confidential Information includes,
without limitation, financial information, reports, and forecasts;
inventions, improvements and other intellectual property; trade
secrets; know-how; designs, processes or formulae; software; market or
sales information or plans; customer lists; and business plans,
prospects and opportunities (such as possible acquisitions or
dispositions of businesses or facilities) which have been discussed or
considered by the management of the Employer. Confidential Information
includes information developed by the Executive in the course of the
Executive's employment by the Employer, as well as other information to
which the Executive may have access in connection with the Executive's
employment. Confidential Information also includes the confidential
information of others with which the Employer has a business
relationship. Notwithstanding the foregoing, Confidential Information
does not include information in the public domain, unless due to breach
of the Executive's duties under Section 7(b).
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(b) CONFIDENTIALITY. The Executive understands and agrees that
the Executive's employment creates a relationship of confidence and
trust between the Executive and the Employer with respect to all
Confidential Information. At all times, both during the Executive's
employment with the Employer and after its termination, the Executive
will keep in confidence and trust all such Confidential Information,
and will not use or disclose any such Confidential Information without
the written consent of the Employer, except as may be necessary in the
ordinary course of performing the Executive's duties to the Employer.
(c) DOCUMENTS, RECORDS, ETC. All documents, records, data,
apparatus, equipment and other physical property, whether or not
pertaining to Confidential Information, which are furnished to the
Executive by the Employer or are produced by the Executive in
connection with the Executive's employment will be and remain the sole
property of the Employer. The Executive will return to the Employer all
such materials and property as and when requested by the Employer. In
any event, the Executive will return all such materials and property
immediately upon termination of the Executive's employment for any
reason. The Executive will not retain with the Executive any such
material or property or any copies thereof after such termination.
(d) NONCOMPETITION AND NONSOLICITATION. Without the prior
written consent of the CEO, during the period that Executive is
employed by Employer and for one (1) year thereafter, the Executive (i)
will not, directly or indirectly, whether as owner, partner,
shareholder, consultant, agent, employee, co-venturer or otherwise,
engage, participate, assist or invest in any Competing Business (as
hereinafter defined); (ii) will refrain from directly or indirectly
employing, attempting to employ, recruiting or otherwise soliciting,
inducing or influencing any person to leave employment with the
Employer; and (iii) will refrain from soliciting or encouraging any
customer or supplier to terminate or otherwise modify adversely its
business relationship with the Employer. The Executive understands that
the restrictions set forth in this Section 7(d) are intended to protect
the Employer's interest in its Confidential Information and established
employee, customer and supplier relationships and goodwill, and agrees
that such restrictions are reasonable and appropriate for this purpose.
For purposes of this Agreement, the term "Competing Business" shall
mean any business that provides or intends to provide the same or
similar types of services or products as those provided or targeted by
Employer or any of its subsidiaries in any geographic area then served
or targeted by Employer or any of its subsidiaries. Notwithstanding the
foregoing, the Executive may own up to two percent (2%) of the
outstanding stock of a publicly held corporation.
(e) THIRD-PARTY AGREEMENTS AND RIGHTS. The Executive hereby
confirms that the Executive is not bound by the terms of any agreement
with any previous employer or other party which restricts in any way
the Executive's use or disclosure of information or the Executive's
engagement in any business. The
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Executive represents to the Employer that the Executive's execution of
this Agreement, the Executive's employment with the Employer and the
performance of the Executive's proposed duties for the Employer will
not violate any obligations the Executive may have to any such previous
employer or other party. In the Executive's work for the Employer, the
Executive will not disclose or make use of any information in violation
of any agreements with or rights of any such previous employer or other
party, and the Executive will not bring to the premises of the Employer
any copies or other tangible embodiments of non-public information
belonging to or obtained from any such previous employment or other
party.
(f) LITIGATION AND REGULATORY COOPERATION. During and after
the Executive's employment, the Executive shall cooperate fully with
the Employer in the defense or prosecution of any claims or actions now
in existence or which may be brought in the future against or on behalf
of the Employer which relate to events or occurrences that transpired
while the Executive was employed by the Employer. The Executive's full
cooperation in connection with such claims or actions shall include,
but not be limited to, being available to meet with counsel to prepare
for discovery or trial and to act as a witness on behalf of the
Employer at mutually convenient times. During and after the Executive's
employment, the Executive also shall cooperate fully with the Employer
in connection with any investigation or review of any federal, state or
local regulatory authority as any such investigation or review relates
to events or occurrences that transpired while the Executive was
employed by the Employer. The Employer shall reimburse the Executive
for any reasonable out-of-pocket expenses incurred in connection with
the Executive's performance of obligations pursuant to this Section
7(f) and shall pay the Executive for his time at his annual salary rate
in effect at the time of the termination of his employment.
(g) INJUNCTION. The Executive agrees that it would be
difficult to measure any damages caused to the Employer which might
result from any breach by the Executive of the promises set forth in
this Section 7, and that in any event money damages would be an
inadequate remedy for any such breach. Accordingly, subject to Section
8 of this Agreement, the Executive agrees that if the Executive
breaches, or proposes to breach, any portion of this Agreement, the
Employer shall be entitled, in addition to all other remedies that it
may have, to an injunction or other appropriate equitable relief to
restrain any such breach without showing or proving any actual damage
to the Employer.
8. ARBITRATION OF DISPUTES. Any controversy or claim arising out of or
relating to this Agreement or the breach thereof or otherwise arising out of the
Executive's employment or the termination of that employment (including, without
limitation, any claims of unlawful employment discrimination whether based on
age or otherwise) shall, to the fullest extent permitted by law, be settled by
arbitration in any forum and form agreed upon by the parties or, in the absence
of such an agreement, under the auspices of the American Arbitration Association
("AAA") in San Diego, California
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in accordance with the Employment Dispute Resolution Rules of the AAA,
including, but not limited to, the rules and procedures applicable to the
selection of arbitrators. In the event that any person or entity other than the
Executive or the Employer may be a party with regard to any such controversy or
claim, such controversy or claim shall be submitted to arbitration subject to
such other person or entity's agreement. Judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. This Section
8 shall be specifically enforceable. Notwithstanding the foregoing, this Section
8 shall not preclude either party from pursuing a court action for the sole
purpose of obtaining a temporary restraining order or a preliminary injunction
in circumstances in which such relief is appropriate; PROVIDED, that any other
relief shall be pursued through an arbitration proceeding pursuant to this
Section 8.
9. CONSENT TO JURISDICTION. To the extent that any court action is
permitted consistent with or to enforce Section 8 of this Agreement, the parties
hereby consent to the jurisdiction of the courts of the State of California.
Accordingly, with respect to any such court action, the Executive (a) submits to
the personal jurisdiction of such courts; (b) consents to service of process;
and (c) waives any other requirement (whether imposed by statute, rule of court,
or otherwise) with respect to personal jurisdiction or service of process.
10. INTEGRATION. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements between the parties with respect to any related subject matter.
11. ASSIGNMENT; SUCCESSORS AND ASSIGNS, ETC. Neither the Employer nor
the Executive may make any assignment of this Agreement or any interest herein,
by operation of law or otherwise, without the prior written consent of the other
party; PROVIDED, that the Employer may assign its rights under this Agreement
without the consent of the Executive in the event that the Employer shall effect
a reorganization, consolidate with or merge into any other corporation,
partnership, organization or other entity, or transfer all or substantially all
of its properties or assets to any other corporation, partnership, organization
or other entity. This Agreement shall inure to the benefit of and be binding
upon the Employer and the Executive, their respective successors, executors,
administrators, heirs and permitted assigns.
12. ENFORCEABILITY. If any portion or provision of this Agreement
(including, without limitation, any portion or provision of any section of this
Agreement) shall to any extent be declared illegal or unenforceable by a court
of competent jurisdiction, then the remainder of this Agreement, or the
application of such portion or provision in circumstances other than those as to
which it is so declared illegal or unenforceable, shall not be affected thereby,
and each portion and provision of this Agreement shall be valid and enforceable
to the fullest extent permitted by law.
13. WAIVER. No waiver of any provision hereof shall be effective unless
made in writing and signed by the waiving party. The failure of any party to
require the performance of any term or obligation of this Agreement, or the
waiver by any party of
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any breach of this Agreement, shall not prevent any subsequent enforcement of
such term or obligation or be deemed a waiver of any subsequent breach.
14. NOTICES. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and delivered
in person or sent by a nationally recognized overnight courier service or by
registered or certified mail, postage prepaid, return receipt requested, to the
Executive at the last address the Executive has filed in writing with the
Employer or, in the case of the Employer, at 0000 Xxxxx Xxxxxx, Xxxxxxx, XX
00000, ATTN: Xxxxxx X. Xxxxxxx III, and shall be effective on the date of
delivery in person or by courier or three (3) days after the date mailed.
15. AMENDMENT. This Agreement may be amended or modified only by a
written instrument signed by the Executive and by a duly authorized
representative of the Employer.
16. GOVERNING LAW. This is a California contract and shall be construed
under and be governed in all respects by the laws of the State of California,
without giving effect to the conflict of laws principles of such State.
17. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be taken to be
an original; but such counterparts shall together constitute one and the same
document.
IN WITNESS WHEREOF, this Agreement has been executed by the Employer
and by the Executive as of the Effective Date.
STAR SOLUTIONS OF DELAWARE, INC.:
By: /s/Xxxxxx X. Xxxxxxx III Dated: February 18, 2005
-------------------------------------
Name: Xxxxxx X. Xxxxxxx III
Title: Chairman of the Board of Directors
EXECUTIVE:
/s/Xxxxxx Xxxxxxx Dated: February 18, 2005
------------------
Xxxxxx Xxxxxxx
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