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EXHIBIT 10.4
EMPLOYMENT AGREEMENT
This Agreement, dated April 1, 1999, is by and between XXXX XXXXXX DIRECT,
INC. (the "Corporation") and XXXX X. XXXXXXXX (the "Employee").
The Corporation desires to employ the Employee and the Employee desires to
be employed by the Corporation, upon the terms and conditions set forth in this
Agreement.
The parties hereby enter into this Agreement to set forth their mutual
promises and understandings, and mutually acknowledge the receipt and
sufficiency of valuable consideration in addition to the mutual promises,
conditions and understandings set forth below.
ARTICLE I
EMPLOYMENT DUTIES
AND RESPONSIBILITIES
Section 1.1 Employment. The Corporation hereby employs the Employee. The
Employee accepts such employment and agrees to abide by the Articles of
Incorporation, By-Laws and the decisions of the Board of Directors of the
Corporation.
Section 1.2 Term of Employment. The term of this Agreement shall be for
a period of two (2) years commencing on the 1st day of April, 1999.
Section 1.3 Duties and Responsibilities. The Employee is employed
pursuant to the terms of this Agreement and agrees to devote his time,
attention, skill, energies and efforts to the faithful performance of his
duties under this Agreement. The Employee shall serve as a Senior Vice
President of the Corporation, and shall perform such duties as may be
determined and assigned to him by the Board of Directors of the Corporation.
The Employee agrees to dedicate up to (20) hours per week of his work time to
the affairs of the Corporation in his capacity as defined herein.
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Section 1.4 Working Facilities. The Employee shall be furnished with
materials, equipment, facilities and services suitable to the position and
adequate for the performance of the duties of the Employee under this Agreement.
The parties anticipate that the Employee shall discharge his duties hereunder
from his offices in Denver, Colorado.
Section 1.5 Expenses. Employee shall be reimbursed for reasonable travel
and other business-related expenses incurred in the furtherance of the business
of the Corporation in accordance with the general policy of the Corporation as
adopted from time to time by the Board. Reimbursement of expenses shall be made
by the Corporation upon submission by Employee of a statement itemizing the
expenses incurred or such other verification as the Corporation may reasonably
request.
Section 1.6 Review by Corporation. The Employee agrees that all work
performed pursuant to this Agreement shall be subject to the review and study of
the Corporation.
ARTICLE II
COMPENSATION
Section 2.1 Base Salary. The Corporation shall pay to the Employee during
the term of this Agreement a monthly salary of $5,000.00 payable in accordance
with the Corporation's usual payment practices, but not less frequently than
monthly.
Section 2.2 Bonus. In addition to the annual salary, the Employee shall
receive an incentive bonus, to be determined by the Corporation's Board of
Directors, which shall be commensurate with other executive-level bonuses.
Such bonus shall be paid within sixty (60) days after each fiscal year end
of the Corporation.
All such compensation shall be subject to customary withholding taxes and
other employment taxes as required with respect thereto.
Section 2.3 Incentive Stock Option. The Employee shall be granted an
incentive stock option pursuant to the Corporation's Incentive Stock Option
Plan.
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ARTICLE III
TERM OF EMPLOYMENT
AND TERMINATION
Section 3.1 Term. This Agreement shall be for a period of two years
commencing on its effective date, subject, however, to termination during such
period as provided in this Article. This Agreement shall be renewed
automatically for succeeding periods of one year on the same terms and
conditions as contained in this Agreement unless either the Corporation, by its
Board of Directors, or the Employee shall, at least 30 days prior to the
expiration of the initial two year term or at least 30 days prior to the
expiration of any subsequent one year period, give written notice to the other
party of the intention not to renew this Agreement.
Section 3.2 Termination by Employee or Termination by the Corporation
Without Cause. The Employee may terminate this Agreement at any time upon
giving 30 days' written notice to the Board of Directors. In such event, the
Employee, if requested by the Board of Directors, shall continue to render the
services required under this Agreement and shall be paid the compensation set
forth in this Agreement up to the date of termination.
The Board of Directors, without cause, may terminate this Agreement at any
time upon giving 30 days' written notice to the Employee. In such event, the
Employee, if requested by the Board of Directors, shall continue to render the
services required under this Agreement and shall be paid the compensation set
forth in this Agreement up to the date of termination. Provided however, if the
Corporation terminates the employment without cause during the initial two-year
term, the Employee shall receive severance pay equal to the monthly
compensation due hereunder multiplied by a number equal to the number of full
months remaining under the initial two-year term divided by three. Said payments
shall be payable on a monthly basis thereafter until paid in full.
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Section 3.3 Termination With Cause. The Board of Directors of the
Corporation may terminate the Employee at any time without notice by reason of
misconduct by the Employee or for other cause contrary to the best interests of
the Corporation immediately upon written notice, for good cause, which for the
purposes of this Agreement shall mean:
(a) the intentional and continued failure by Employee to
substantially perform his duties pursuant to this Agreement after a written
demand by the Corporation identifying the manner in which it believes Employee
has not substantially performed his duties; or
(b) a breach of this Agreement, or
(c) indictment of a criminal proceeding against Employee or
commission of an act involving a felony or moral turpitude; or
(d) the commission of common law fraud, embezzlement, theft or
unethical business conduct against the Corporation or conduct involving a third
party which, directly or indirectly significantly impairs the reputation of, or
xxxxx, the Corporation, its subsidiaries or affiliates; or
(e) the commission of intentional wrongful damage to property of the
Corporation; or
(f) a breach of Employee's fiduciary obligations to the Corporation
or its subsidiaries; or
(g) any willful acts by the Employee which are knowingly not in the
best interests of the Corporation.
Neither the Employee nor his heirs shall be entitled to receive from the
Corporation, its successors or assigns, upon, after or as a result of any
termination of Employee's employment and/or termination or expiration of this
Agreement pursuant to any provision of this paragraph, any type of salary
continuation, severance payment, bonus or any further compensation or benefits.
Section 3.4 Termination Upon Disability of Employee. In the event the
Employee, by reason of physical or mental disability (excluding transitory
illnesses), shall be unable to perform the services required of Employee
hereunder for a continuous thirty (30) day period or for more than sixty (60)
days in any twelve-
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month period, the Board of Directors may terminate employment upon ten (10)
days' prior written notice. In the event of a disagreement concerning the
existence of any such disability, the determination shall be made by two
physicians, one designated by the Corporation and one by the Employee. If these
two physicians cannot agree, they shall appoint a third physician and the
determination of the majority shall be conclusive and binding on the
Corporation and the Employee. All costs so incurred shall be borne equally by
the Corporation and such Employee.
Section 3.5 Termination Upon Death of Employee. This Agreement is
terminated in the event of the Employee's death.
ARTICLE IV
PROPRIETARY INFORMATION INVENTIONS AGREEMENT
AND NON-COMPETE
The Employee shall execute a Proprietary Information Inventions Agreement
and a Non-Compete Agreement in the form attached hereto and incorporated herein
by reference as Exhibit A.
ARTICLE V
GENERAL MATTERS
Section 5.1 Colorado Law. It is the intention of the parties hereto that
this Agreement and its performance hereunder be construed in accordance with
and pursuant to the laws of the State of Colorado and that, in any action,
special proceeding, or other proceeding that may be brought arising out of, in
connection with, or by reason of this Agreement, the law of the State of
Colorado shall be applicable and shall govern to the exclusion of any forum,
without regard to the jurisdiction in which any action or special proceeding
may be instituted.
Section 5.2 No Waiver. No provision of this Agreement may be waived
except by an agreement in writing signed by the waiving party. A waiver of any
term or provision shall not be construed as a waiver of any other term or
provision.
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Section 5.3 Amendment. This Agreement may be amended, altered or revoked
at any time, in whole or in part, by filing with this Agreement a written
instrument setting forth such changes, signed by all of the parties.
Section 5.4 Effect of Agreement. The terms of this Agreement shall be
binding upon and inure to the benefit of the Employee and the Corporation and
their heirs, personal representatives, successors and assigns to the extent
that any such benefits survive or may be assigned under the terms of this
Agreement. Notwithstanding anything to the contrary herein the Employee's
services contracted under this Agreement are personal to the Employee and shall
not be assignable.
Section 5.5 Survival of Representations, Warranties and Agreements. All
representations, warranties and agreements contained in this Agreement shall
survive the termination of this Agreement.
Section 5.6 Construction. Throughout this Agreement the singular shall
include the plural, and the plural shall include the singular, and the
masculine and neuter shall include the feminine, wherever the context so
requires.
Section 5.7 Text to Control. The headings of articles and sections are
included solely for convenience or reference. If any conflict between any
heading and the text of this Agreement exists, the text shall control.
Section 5.8 Severability. If any provision of this Agreement is declared
by any court of competent jurisdiction to be invalid for any reason, such
invalidity shall not affect the remaining provisions. On the contrary, such
remaining provisions shall be fully severable, and this Agreement shall be
construed and enforced as if such invalid provisions never had been inserted in
the Agreement.
Section 5.9 Complete Agreement. This Agreement contains the complete
agreement concerning the employment arrangement between the parties and shall,
as of the effective date hereof, supercede all other agreements between the
parties, whether oral or written. The parties acknowledge that neither of them
has made any representations with respect to the subject matter of this
Agreement, including the execution and
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delivery hereof, except such representations as are specifically set forth
herein, and each of the parties hereto acknowledges that he or it has relied on
his or its own judgment in entering into this Agreement. The parties hereto
further acknowledge that any statement or representation that may have
heretofore been made by either of them to the other are of no effect and that
neither of them has relied thereon in connection with his or its dealings with
the other.
Dated this 1st day of April, 1999.
XXXX XXXXXX DIRECT, INC.:
By: /s/ Xxxxxxx X. Xxxxxxxxx, Xx.
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Xxxxxxx X. Xxxxxxxxx, Xx.,
President and CFO
EMPLOYEE:
/s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx
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