AMENDED EMPLOYMENT AGREEMENT
This Agreement is made as of this 21st day of March 2000, by and
between eConnect, a Nevada corporation (the "Company"), and
Xxxxxxx X. Xxxxxx (the "Executive").
Recitals
The Company desires to employ Executive as President and Chief
Operating Officer under the terms and conditions set forth in
this Agreement; and
Executive is willing to accept such employment on the terms and
conditions set forth in this Agreement.
Covenants
1. Position and Term of Employment. Executive's employment
hereunder shall commence as of March 21, 2000 and shall end March
20, 2004, with two-year extensions thereafter, unless terminated
sooner or extended beyond pursuant to Section 4 of this
Agreement. During the term hereof, Executive shall be employed as
President and Chief Operating Officer of the Company and shall
devote his time, skill, attention and best efforts in carrying
out his duties and promoting the best interests of the Company.
2. Executive shall have full power of the President and Chief
Operating Officer of the Company, subject always to the
instructions and control of the Board of Directors of the
Company.
3. Executive Compensation.
3.1 Base Salary. Executive shall be paid an initial salary at
the monthly rate of$30,000 per month, payable in advance on March
21, 2000 for the first six months of this Agreement, which amount
will be earned on receipt.
3.2 Annual Bonus. Executive will be eligible for an annual cash
bonus, payable March 1st of each year, at 50% of base salary with
a 200% multiplier for achieving board of directors compensation
committee established goals.
3.3 Earned on Receipt Signing Bonus. In order to induce
Executive to accept this Agreement on an emergency basis and to
dedicate his efforts to the Company, the Company agrees to pay
Executive a signing bonus, provide warrants and stock options
which shall be earned on receipt, as follows:
3.3.1 $100,000 in cash on March 24,2000;
3.3.2 1,000,000 of the Company's warrants, exercisable at
$1.00 per share, (with a "look back" provision and downward
adjustment to the lowest average daily trading price of the
Company's common stock in the first 90 days of executive's
employment), for the maximum period permitted under the Company's
registered warrant plan, but not less than twelve months ending
March 24,2001, to be vested in full, registered, eligible for
cashless exercise and tendered to Executive. Should Executive's
employment be terminated for "good cause" under section 4 of this
Agreement on or before March 24,2001, any unexercised warrants
will expire as of the date of termination.
3.3.3 Stock Options -Executive also shall be eligible for
6,000,000 stock options vesting one quarter at the beginning of
each year of employment, exercisable on a cashless basis for a
period often years, with a strike price of$.40 for the 1,500,000
shares granted in 2000, (with a repricing provision and downward
adjustment to the lowest average daily trading price of the
Company's common stock in the first 90 days of executive's
employment), and computed thereafter as described in the current
eConnect stock plan. In addition, executive shall be eligible for
such other stock option grants as provided under the plan as well
as other upper level management compensation programs as may be
in existence at the Company at the time of his employment and
from time to time thereafter.
3.4 Severance. If terminated for reasons other than "good
cause" (as defined herein) the remainder of the salary base for
the initial term, but not less than two years, will be due within
30 days. In addition, all of Executive's then granted stock
options and warrants will vest and be exercisable for their
entire term Should there be a change of control, the job
responsibilities be diminished, the titles changed or the
executive required to move more than 50 miles from his home, then
the executive will be assumed to have been terminated without
good cause and the applicable severance payments due within 30
days.
3.5 Warrant and Stock Option Expiration. If Executive resigns
voluntarily or ceases to be employed by the Company for "good
cause" as described in Section 4. or 4.3 of this Agreement, the
unexercised warrants and stock options to be provided under
section 3.3.2 and 3.3.3 shall be null and void. All other
compensation provided in this Agreement is earned on receipt and
shall not be returned by Executive under any circumstances
contemplated by this Agreement.
3.6 Expenses. During the term hereof, the Company shall pay or
reimburse Executive for a monthly auto allowance of $1,000,
payment of Executive's currently in force $2 million term life
insurance, provisioning of a DSL connection at his residence and
cellular phone expenses. Executive shall also be eligible for
reimbursement in accordance with the Company's normal practices,
including but not limited to any travel, hotel and other expenses
or disbursements reasonably incurred or paid by Executive in
connection with the services performed by Executive hereunder.
3.7 Other Benefits. During the Employment Period, the Executive
(and his eligible spouse and dependents) shall be provided paid
medical, hospitalization, dental & vision, through the
Executive's COBRA (expiring 3/01/01 - premium $657.46 per month),
until expiration of COBRA, at which such time Executive shall be
entitled to participate the Company's medical, dental, and
hospitalization plans. In addition, during the Employment Period,
the Executive shall be eligible to participate in all disability,
accidental death and dismemberment, travel accident insurance,
pension, retirement, savings and other employee benefit plans and
programs maintained from time to time by the Company for the
benefit of its senior executives. Executive shall be allowed five
(5) weeks vacation annually. Vacation not taken during the
applicable fiscal year (but not in excess of three weeks) shall
be carried over to the next following fiscal year.
3.8 Directors and Officers Insurance. The Company shall provide
Executive Directors and Officers Insurance by an insurance
company acceptable to Executive ensuring Executive against
liability up to $20 million per occurrence, effective throughout
the term of this Agreement.
3.9 Indemnification. The Company shall indemnify Executive to
the maximum extent permitted by applicable law, against all
liabilities, costs, charges and expenses (including reasonable
attorneys' fees and disbursements) incurred or sustained by it or
them in connection with any action, suit or proceeding to which
it or they may be made a party as a result of their services
hereunder on behalf of the Company pursuant to this Agreement,
provided that such liabilities, costs, charges and expenses do
not result from the willful misconduct or gross negligence of
such indemnified parties.
3.10 Fees and Expenses. The Company shall pay all legal fees
and
related expenses (including the costs of experts, evidence and
counsel) incurred by the Executive as they become due as a result
of (a) the Executive's termination of employment (including all
such fees and expenses, if any, incurred in contesting or
disputing any such termination of employment), and (b ) the
Executive seeking to obtain or enforce any right or benefit
provided by this Agreement, including, but not limited to, any
such fees and expenses incurred in connection with any dispute
regarding the initial signing bonus compensation, whether as a
result of any applicable government proceeding, audit or
otherwise.
4. Termination.
4.1 This Agreement shall terminate upon Executive' s death.
4.2 The Company may terminate Executive's employment hereunder
upon thirty (30) days' written notice if Executive's physical or
mental disability has continued or is expected to continue for
one hundred and eighty (180) consecutive days and as a result
thereof, Executive will be unable to continue the proper
performance of his duties hereunder. Under these circumstances,
Executive will be entitled to his severance benefits including
the opportunity to vest and exercise all stock options and
warrants then granted for the remaining term of his employment
period.
4.3 The Company may terminate Executive's employment hereunder
for "good cause" (as hereinafter defined). If Executive's
employment is terminated for good cause, Executive's salary and
all other rights not then vested under this Agreement shall
terminate upon thirty (30) days written notice of termination
being given by the board of directors. As used herein, the term
"good cause" means the following:
Good Cause - The Company shall have the right to terminate the
Executive's employment for "Good Cause." For purposes of this
Agreement, the Company shall have "Good Cause" to terminate the
Executive's employment only upon the Executive's: (I) conviction
of a felony or willful gross misconduct that, in either case,
results in material and demonstrable damage to the business or
reputation of the Company; or (II) willful and continued failure
to perform his duties (other than such failure resulting from the
Executive's incapacity due to physical or mental illness) within
ten business days after the Company delivers to him a written
demand for performance that specifically identifies the actions
to be performed. For purposes of this Section, no act or failure
to act by the Executive shall be considered "willful" if such act
is done by the Executive in the good faith belief that such act
is or was to be beneficial to the Company, or such failure to act
is due to the Executive's good faith belief that such action
would be materially harmful to the Company. "Good Cause" shall
not exist unless and until the Company has delivered to the
Executive a copy of a resolution duly adopted by a majority of
the Board (excluding the Executive for purposes of determining
such majority) at a meeting of the Board called and held for such
purpose after reasonable (but in no event less than thirty days')
notice to the Executive and an opportunity for the Executive,
together with his counsel, to be heard before the Board, finding
that in the good faith opinion of the Board that "Good Cause"
exists, and specifying the particulars thereof in detail. This
Section shall not prevent the Executive from challenging in any
court of competent jurisdiction the Board's determination that
"Good Cause" exists or that the Executive has failed to cure any
act (or failure to act) that purportedly formed the basis for the
Board's determination.
5. Successors and Assigns. This Agreement is intended to bind
and inure to the benefit of and be enforceable by Executive and
the Company and their respective legal representatives,
successors and assigns. Neither this Agreement nor any of the
duties or obligations hereunder shall be assignable by Executive.
6. Governing Law; Jurisdiction. This Agreement shall be
interpreted and construed in accordance with the laws of the
State of California. Each of the Company and Executive consents
to the jurisdiction of any state or federal court sitting in
California, in any action or proceeding arising out of or
relating to this Agreement.
7. Headings. The paragraph headings used in this Agreement are
for convenience of reference only and shall not constitute a part
of this Agreement for any purpose or in any way affect the
interpretation of this Agreement.
8. Severability. If any provision, paragraph or subparagraph
of this Agreement is adjudged by any court to be void or
unenforceable in whole or in part, this adjudication shall not
affect the validity of the remainder of this Agreement.
9. Complete Agreement. This document embodies the complete
agreement and understanding among the parties, written or oral,
which may have related to the subject matter hereof in any way
and shall not be amended orally, but only by the mutual agreement
of the parties hereto in writing, specifically referencing this
Agreement.
10. Counterparts. This Agreement may be executed in one or more
separate counterparts, all of which taken together shall
constitute one and the same Agreement.
eConnect
By: /s/ Xxxxxx X. Xxxxxx
Print: Xxxxxx X. Xxxxxx
Title: Chairman & CEO
Executive
By: /s/ Xxxxxxx X. Xxxxxx
Print: Xxxxxxx X. Xxxxxx
