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EXHIBIT 10.9
EMPLOYMENT AGREEMENT
BY AND BETWEEN
MAXXIS GROUP, INC.
AND
XXXXXX XXXXXXXXX
DATED: OCTOBER 13, 1998
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TABLE OF CONTENTS
PAGE
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1. Employment............................................1
2. Term..................................................1
3. Compensation and Benefits.............................1
4. Termination...........................................2
5. Trade Secrets, Non-Solicitation and Related Matters...3
6. Successors; Binding Agreement.........................5
7. Notice................................................5
8. Settlement of Claims..................................5
9. Modification and Waiver...............................6
10. Governing Law.........................................6
11. Severability..........................................6
12. Entire Agreement......................................6
13. Headings..............................................6
14. Counterparts..........................................6
15. Definitions...........................................6
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EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is made by and between
MAXXIS GROUP, INC., a Georgia corporation (the "Company"), and XXXXXX XXXXXXXXX,
an individual resident of the State of Georgia (the "Employee"), as of this 13th
day of October, 1998.
The Company currently employs the Employee as its Chief Financial
Officer. The Company recognizes the importance of the Employee's contribution to
the growth and success of the Company. The Company desires to provide for the
continued employment of the Employee which the Company believes will reinforce
and encourage the dedication of the Employee to the Company and will promote the
best interests of the Company and its shareholders. The Employee is willing to
continue serving the Company on the terms and conditions herein provided.
Certain terms used in this Agreement are defined in Section 15 hereof.
In consideration of the foregoing, the mutual covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Employment. The Company shall continue to employ the Employee, and
the Employee shall continue to serve the Company, as the Company's Chief
Financial Officer upon the terms and conditions set forth herein. The Employee
shall have such authority and responsibilities as are consistent with his
position and which may be set forth in this Agreement, in the Bylaws or assigned
by the President (the "President") of the Company from time to time. The
Employee shall devote his full business time, attention, skill and efforts to
the performance of his duties hereunder, except during periods of vacation and
leaves of absence consistent with Company policy.
2. Term. Unless earlier terminated as provided herein, the Employee's
employment under this Agreement shall be for a continuing term (the "Term") of
one year, which shall be extended automatically (without further action of the
Company or the Employee) each day for an additional day so that the remaining
term shall continue to be one year; provided, however, that either party may at
any time, by written notice to the other, fix the Term to a finite term of one
year, without further automatic extension, commencing with the date of such
notice. Notwithstanding the foregoing, the Term of employment hereunder will end
on the date that the Employee attains the age of 65.
3. Compensation and Benefits.
a. Effective the date hereof, the Company shall pay the Employee a
salary at a rate of $75,000.00 per year to be paid in accordance with the salary
payment practices of the Company. The Compensation Committee shall review the
Employee's salary at least annually (on July 1, 1999, for the first review) and
may increase the Employee's base salary if the Compensation Committee determines
in its sole discretion that an increase is appropriate.
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b. The Employee shall participate in a bonus program and shall be
eligible to receive quarterly or annual payments of a performance bonus based
upon achievement of targeted levels of performance and such other criteria as
the Board of Directors of the Company shall establish from time to time pursuant
to the bonus program.
c. The Employee shall be entitled to participate in all retirement,
welfare, deferred compensation, life and health insurance and other benefit
plans or programs of the Company now or hereafter applicable to the Employee or
applicable to all employees of the Company generally.
d. The Board of Directors agrees to grant to the Employee as of the
date hereof a non-qualified stock option (the "Option") to purchase 6,819 shares
of Common Stock of the Company for no consideration per share, of which 50%
shall vest immediately and the remainder shall vest on the first anniversary of
the date hereof. The parties agree that the Option will be subject to the terms
and conditions of the Maxxis Group, Inc. 1998 Stock Option Plan and that the
parties will enter into a stock option agreement to memorialize the grant of the
Option.
e. The Company shall reimburse the Employee for reasonable travel
and other expenses actually incurred by the Employee that are directly related
to the Employee's duties set forth in this Agreement; provided, however, that
the Employee must timely submit written documentation of such expenses in a form
acceptable to the Company and the Employee shall have otherwise complied with
all other accounting practices of the Company.
4. Termination.
a. The Employee's employment under this Agreement may be terminated
prior to the end of the Term only as follows:
(i) upon the death of the Employee;
(ii) by the Company due to the Disability of the Employee
upon delivery of a Notice of Termination to the
Employee;
(iii) by the Company for Cause upon delivery of a Notice of
Termination to the Employee;
(iv) by the Company without Cause upon delivery of a
Notice of Termination to the Employee; or
(v) by Employee's resignation on the date of such
resignation.
b. If the Employee's employment with the Company shall be terminated
during the Term (i) by reason of the Employee's death, (ii) by the Company for
Disability or Cause, or (iii) by Employee's resignation, the Company shall pay
to the Employee (or in the case of his death, the Employee's estate) within 15
days after the Termination Date, a lump sum cash
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payment equal to the Accrued Compensation and, if such termination is other than
by the Company for Cause, any accrued performance bonus.
c. If the Company terminates the Employee without Cause pursuant to
Section 4(a)(iv) above, the Company shall pay to the Employee in cash at the end
of each week during the six-month period following the Termination Date an
amount equal to $1,440. The Employee shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise, and no such payment shall be offset or reduced by the amount of
any compensation or benefits provided to the Employee in any subsequent
employment.
d. The severance pay and benefits provided for in this Section 4
shall be in lieu of any other severance or termination pay to which the Employee
may be entitled under any Company severance or termination plan, program,
practice or arrangement. The Employee's entitlement to any other compensation or
benefits shall be determined in accordance with the Company's employee benefit
plans and other applicable programs, policies and practices then in effect.
e. In the event that the Employee is a director of the Company or
any of its affiliates and his employment hereunder is terminated for any reason,
the Employee shall, and does hereby, tender his resignation as a director of the
Company and any of its affiliates effective as of the Termination Date.
5. Trade Secrets, Confidential Business Information, Non-Solicitation
and Related Matters.
a. The Employee shall not, at any time, either during the Term of
his employment or after the Termination Date, use or disclose any Trade Secrets
of the Company, except in fulfillment of his duties as the Employee during his
employment, for so long as the pertinent information or data remain Trade
Secrets, whether or not the Trade Secrets are in written or tangible form.
b. The Employee agrees to maintain in strict confidence and, except
as necessary to perform his duties for the Company, not to use or disclose any
Confidential Business Information during his employment and for a period of 24
months after the Termination Date.
c. Upon termination of employment, the Employee shall leave with the
Company all business records relating to the Company and its affiliates
including, without limitation, all contracts, calendars and other materials
relating to the business records, the Company's business or its customers,
including all physical, electronic and computer copies thereof, whether or not
the Employee prepared such materials or records himself. Upon such termination,
the Employee shall retain no copies of any such materials, provided, however,
the Employee may remove and retain all personal items and materials.
d. The Employee may disclose Trade Secrets or Confidential Business
Information pursuant to any order or legal process requiring him (in his legal
counsel's reasonable
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opinion) to do so; provided, however, that the Employee shall first have
notified the Company of the request or order to so disclose the Trade Secrets or
Confidential Business Information in sufficient time to allow the Company to
seek an appropriate protective order.
e. If the Employee is terminated or resigns for any reason, then for
a period of one year following the Termination Date, the Employee shall not
(except on behalf of or with the prior written consent of the Company) either
directly or indirectly, on the Employee's own behalf or in the service or on
behalf of others, (i) solicit, divert, or appropriate to or for a Competing
Business, or (ii) attempt to solicit, divert, or appropriate to or for a
Competing Business, any person or entity that was a customer of the Company or
any of its affiliates on the Termination Date; provided, however, that if the
Employee is terminated without Cause, then the non-solicit period under this
Section 5(e) shall be for a period of 180 days following the Termination Date.
For purposes of this Agreement, a "customer" refers to any person or group of
persons with whom the Employee had direct material contact with regard to the
selling, delivery or support of the Company's products and services (including
servicing such person's or group's account) during the period of two years
preceding the Termination Date.
f. If the Employee is terminated or resigns for any reason, then for
a period of one year following the Termination Date, the Employee will not,
either directly or indirectly, on the Employee's own behalf or in the service or
on behalf of others, (i) solicit, divert, or hire away, or (ii) attempt to
solicit, divert, or hire away any employee of, independent associate of or
consultant to the Company or any of its affiliates engaged or experienced in the
Business, regardless of whether the employee or consultant is full-time or
temporary, the employment or engagement is pursuant to written agreement, or the
employment or engagement is for a determined period or is at will; provided,
however, that if the Employee is terminated without Cause, then the non-solicit
period under this Section 5(f) shall be for a period of 180 days following the
Termination Date.
g. The Employee acknowledges and agrees that great loss and
irreparable damage would be suffered by the Company if the Employee should
breach or violate any of the terms or provisions of the covenants and agreements
set forth in this Section 5. The Employee further acknowledges and agrees that
each of these covenants and agreements is reasonably necessary to protect and
preserve the interests of the Company. The parties agree that money damages for
any breach of clauses (a) through (f) of this Section 5 will be insufficient to
compensate for any breaches thereof, and that the Employee or any of the
Employee's affiliates, as the case may be, will, to the extent permitted by law,
waive in any proceeding initiated to enforce such provisions any claim or
defense that an adequate remedy at law exists. The parties agree that the
Company shall be entitled to injunctive relief in the event of any such breach
or threatened breach without the necessity of proving monetary damages. The
existence of any claim, demand, action or cause of action against the Company,
whether predicated upon this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of any of the covenants or agreements
in this Agreement; provided, however, that nothing in this Agreement shall be
deemed to deny the Employee the right to defend against this enforcement on the
basis that the Company has no right to its enforcement under the terms of this
Agreement.
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h. The Employee acknowledges and agrees that: (i) the covenants and
agreements contained in clauses (a) through (f) of this Section 5 are the
essence of this Agreement; (ii) that the Employee has received good, adequate
and valuable consideration for each of these covenants; (iii) each of these
covenants is reasonable and necessary to protect and preserve the interests and
properties of the Company. The Employee also acknowledges and agrees that: (i)
irreparable loss and damage will be suffered by the Company should the Employee
breach any of these covenants and agreements; (ii) each of these covenants and
agreements in clauses (a) through (f) of this Section 5 is separate, distinct
and severable not only from the other covenants and agreements but also from the
remaining provisions of this Agreement; and (iii) the unenforceability of any
covenants or agreements shall not affect the validity or enforceability of any
of the other covenants or agreements or any other provision or provisions of
this Agreement. The Employee acknowledges and agrees that if any of the
provisions of clauses (a) through (f) of this Section 5 shall ever be deemed to
exceed the time, activity or geographic limitations permitted by applicable law,
then such provisions shall be and hereby are reformed to the maximum time,
activity or geographical limitations permitted by applicable law.
6. Successors; Binding Agreement.
a. This Agreement shall be binding upon and shall inure to the
benefit of the Company, its Successors and Assigns and the Company shall require
any Successors and Assigns to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession or assignment had taken place.
b. Neither this Agreement nor any right or interest hereunder shall
be assignable or transferable by the Employee, his beneficiaries or legal
representatives, except by will or by the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Employee's
legal personal representative.
7. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement (including the Notice of
Termination) shall be in writing and shall be deemed to have been duly given
when personally delivered or sent by certified mail, return receipt requested,
postage prepaid, addressed to the respective addresses last given by each party
to the other; provided, however, that all notices to the Company shall be
directed to the attention of the President with a copy to the Secretary of the
Company. All notices and communications shall be deemed to have been received on
the date of delivery thereof.
8. Settlement of Claims. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Company may have against the Employee or others. The Company may, however,
withhold from any benefits payable under this Agreement all federal, state, city
or other taxes as shall be required pursuant to any law or governmental
regulation or ruling.
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9. Modification and Waiver. No provisions of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by the Employee and the Company. No waiver by
any party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.
10. Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Georgia without giving
effect to the conflict of laws principles thereof. Any action brought by any
party to this Agreement shall be brought and maintained in a court of competent
jurisdiction in the State of Georgia.
11. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability of the other provisions hereof.
12. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto and supersedes all prior agreements, if
any, understandings and arrangements, oral or written, between the parties
hereto with respect to the subject matter hereof.
13. Headings. The headings of Sections herein are included solely
for convenience of reference and shall not control the meaning or interpretation
of any of the provisions of this Agreement.
14. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
15. Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:
a. "Accrued Compensation" shall mean an amount which shall
include all amounts earned or accrued through the Termination Date but not paid
as of the Termination Date, including (i) base salary and (ii) reimbursement for
reasonable and necessary expenses incurred by the Employee on behalf of the
Company during the period ending on the Termination Date.
b. "Business" shall mean the development, marketing or
implementation of a network marketing distribution business, a long distance
reselling business or any other related business which the Company or any of its
affiliates is engaged in as of the Termination Date.
c. "Bylaws" shall mean the Amended and Restated Bylaws of the
Company, as amended, supplemented or otherwise modified from time to time.
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d. The termination of the Employee's employment shall be for
"Cause" if it is the result of:
(i) the commission or omission by the Employee of a
willful or negligent act which causes harm to the
Company;
(ii) the conviction of the Employee for the commission or
perpetration by the Employee of any felony or any act
of fraud;
(iii) the failure of the Employee to devote his full time
and attention to the business as provided in Section
1; or
(iv) the failure of the Employee to perform his duties
hereunder in a manner satisfactory to the President,
as determined in his sole discretion; provided,
however, that the Employee shall have 30 days to cure
such failure after receiving notice from the Company.
The Company shall be obligated to provide only one
notice to Employee pursuant to this Section
15(d)(iv). Thereafter, the Company may terminate the
Employee, without the Employee having a right to
cure, if the Employee fails to perform his duties in
a manner satisfactory to the President, as determined
in his sole discretion.
e. "Competing Business" shall mean any business that, in whole
or in part, is the same or substantially the same as the Business.
f. "Confidential Business Information" shall mean any non-public
information of a competitively sensitive or personal nature, other than Trade
Secrets, acquired by the Employee, directly or indirectly, in connection with
the Employee's employment (including his employment with the Company prior to
the date of this Agreement), including (without limitation) oral and written
information concerning the Company or its affiliates relating to financial
position and results of operations (revenues, margins, assets, net income,
etc.), annual and long-range business plans, marketing plans and methods,
account invoices, oral or written customer information and personnel
information. Confidential Business Information also includes information
recorded in manuals, memoranda, projections, minutes, plans, computer programs
and records, whether or not legended or otherwise identified by the Company and
its affiliates as Confidential Business Information, as well as information
which is the subject of meetings and discussions and not so recorded; provided,
however, that Confidential Business Information shall not include information
that is generally available to the public, other than as a result of disclosure,
directly or indirectly, by the Employee, or was available to the Employee on a
non-confidential basis prior to its disclosure to the Employee.
g. "Disability" shall mean a physical or mental infirmity which
impairs the Employee's ability to substantially perform his duties with the
Company for a period of 180 consecutive days, as determined by an independent
physician selected with the approval of both the Company and the Employee.
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h. "Notice of Termination" shall mean a written notice of
termination from the Company which specifies an effective date of termination,
indicates the specific termination provision in this Agreement relied upon, and
sets forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Employee's employment under the provision so
indicated.
i. "President" shall have the meaning ascribed to such term in
Section 1.
j. "Successors and Assigns" shall mean a corporation or other
entity acquiring all or substantially all the assets and business of the Company
(including this Agreement), whether by operation of law or otherwise.
k. "Termination Date" shall mean, in the case of the Employee's
death, his date of death, in the case of Employee's resignation, the date of
such resignation, and in all other cases, the date specified in the Notice of
Termination.
l. "Trade Secrets" shall mean any information, including but not
limited to technical or non-technical data, a formula, a pattern, a compilation,
a program, a device, a method, a technique, a drawing, a process, financial
data, financial plans, product plans, information on customers or a list of
actual or potential customers or suppliers, which: (i) derives economic value,
actual or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use; and (ii) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed and its seal to be affixed hereunto by its officers thereunto duly
authorized, and the Employee has signed and sealed this Agreement, effective as
of the date first above written.
MAXXIS GROUP, INC.
ATTEST:
By: /s/ Xxxxx Xxxxxx By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxx Xxxxxx Name: Xxxxxx X. Xxxxx
Title: Executive Assistant Title: Chief Executive Officer
and President
EMPLOYEE
/s/ Xxxxxx XxXxxxxxx
-------------------------------------
Xxxxxx XxXxxxxxx
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