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EXHIBIT 10.23
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), is entered into as of the 23rd day
of February, 1999, by and among xxxxxxx.xxx, inc., a Nevada corporation (the
"Company") and Xxxxxx Xxxxxx ("Xxxxxx").
WHEREAS, the Company desires to employ Xxxxxx as provided herein; and,
WHEREAS, Xxxxxx desires to accept such employment,
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. EMPLOYMENT. The Company hereby employs Xxxxxx and Xxxxxx hereby
accepts employment with the Company as a Vice President of Strategy and
Operations upon the terms and conditions hereinafter set forth.
2. DUTIES. Xxxxxx will serve the Company as a Vice President of
Strategy and Operations and will faithfully and diligently perform the services
and functions relating to such positions or otherwise reasonably incident to
such position, provided that all such services and functions will be reasonable
and within Xxxxxx'x area of expertise. Xxxxxx'x specific duties shall include
those related to organizational development and growth management, strategic
operations planning and execution, strategy review and execution and such other
duties as the Company may reasonably direct. Xxxxxx will, during the term of
this Agreement (or any extension thereof), devote his time, attention and skills
and best efforts as a full time employee to the promotion of the business of the
Company in the Company's Phoenix, Arizona office.
3. TERM. This Agreement and Xxxxxx'x employment shall commence on the
8th day of March 1999 (the "Effective Date"). The term of this Agreement shall
be for three years ("Initial Term") from the Effective Date unless terminated
earlier in accordance with this Agreement. The term of this Agreement may be
extended by agreement of the Company and Xxxxxx.
4. COMPENSATION. As compensation for the services rendered to the
Company under this Agreement commencing on the Effective Date hereof, Xxxxxx
will be paid a base salary of Eighty Thousand dollars ($80,000) per year,
payable in accordance with the then current payroll policies of the Company or
as otherwise agreed to by the parties (the "Salary"). At any time and from time
to time, the Salary may be increased if so determined by the Company's board of
directors after a review of Xxxxxx'x performance of his duties hereunder.
5. TERMINATION. This Agreement will terminate upon the occurrence of
any of the following events;
a. The death of Xxxxxx;
b. The "Total Disability" (as hereinafter defined) of Xxxxxx;
c. Written notice to Xxxxxx from the Company of termination for "Cause"
(as hereinafter defined);
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d. The voluntary termination of this Agreement by Xxxxxx upon (30) days'
prior written notice;
e. The later of three (3) years from the Effective Date of this Agreement
or the date to which this Agreement is extended in accordance with
Section 3 above; or
f. Written notice to Xxxxxx from the Company for any reason without
"Cause" upon 30 days prior written notice.
For purposes of Section 5b, the term "Total Disability" means physical or
mental disability, or both, determined to be (or reasonably expected to be,
based upon then available medical information) of not less than twelve (12)
months duration or more. The determination shall rest upon the opinion of the
physician regularly attending Xxxxxx. If the Company disagrees with said
physician's opinion, the Company may engage at their own expense a physician to
examine Xxxxxx, and Xxxxxx hereby consents to such examination and to waive, if
applicable any privilege between the physician and Xxxxxx that may arise as a
result of said examination. If after conferring, the two physicians cannot
concur on a final opinion, they shall choose a third consulting physician whose
opinion shall control. The expense of the third consulting physician shall be
borne equally by Xxxxxx and the Company.
For purposes of Section 5c, "Cause" means (i) Xxxxxx has failed to
substantially perform his duties as reasonably determined by any Officer of the
Company or the Board of Directors of the Company, (ii) Xxxxxx engages in poor
performance that is not cured within thirty (30) days after counseling by the
Company, (iii) Xxxxxx has failed to comply with the reasonable directives and
policies of the Board of Directors of the Company or of any Officer of the
Company, (iv) the U.S. Government or an agency thereof determines that Xxxxxx
is not eligible to work within the United States, or (v) Xxxxxx breaches his
fiduciary duty to the Company or commits any dishonest, unethical, fraudulent,
or felonious act in respect to Xxxxxx'x duties to the Company.
6. BENEFITS. Xxxxxx shall be entitled to participate in any Company
benefits as they become available, if at all, and which are normal and
customary Company benefits for a like position, including life insurance,
incentive compensation, deferred compensation, stock option plans or other
Company programs or plans. In addition, Xxxxxx shall be entitled to the
following benefits:
(a) full coverage health insurance to be paid by the Company with a maximum
premium not to exceed $350 per month;
(b) at reasonable times and upon prior Company approval, Xxxxxx shall be
entitled to three weeks paid vacation per calendar year for each year
employed during the term of this Agreement;
(c) the Company will provide Xxxxxx with a moving allowance of $15,000 to
cover moving and related expenses in conjunction with relocation from
his current residence to Phoenix, Arizona;
(d) the Company will pay the temporary housing incurred by Xxxxxx for a
term not to exceed 90 days from the Effective Date.
(e) the Company will reimburse Xxxxxx for airfare and ground transportation
costs incurred by either Xxxxxx or his spouse (if Xxxxxx remains in
Phoenix over the weekend) in commuting from Chicago to Phoenix for a
period not to exceed 90 days from the Effective Date.
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7. LOAN. The Company will loan to Xxxxxx Twenty Thousand dollars
($20,000) to be loaned and disbursed on the Effective Date. All amounts loaned
will be evidenced by a promissory note with interest at 10% per annum and with
all principal and accrued but unpaid interest due one (1) year from the
Effective Date if not sooner paid. The Company agrees that if Xxxxxx has been
employed by the Company for six continuous months from the Effective Date, 50%
of the principal balance and accrued but unpaid interest shall be forgiven and,
if Xxxxxx has been employed by the Company for a total of twelve continuous
months of employment by the Company, then the remaining principal balance and
accrued, but unpaid interest shall be forgiven by the Company and the Note
evidencing such loan shall be canceled.
8. STOCK OPTIONS. Specifically subject to Section 8a and 8b below and
Section 10c and contingent upon Xxxxxx being employed by the Company, Xxxxxx
shall be granted options to purchase 60,000 shares of the Company's Common
Stock exercisable at $8.00 per share, with 25,000 Stock Options to vest upon
the Effective Date with the remaining 35,000 to vest and be exercisable over
the three (3) year period from the Effective Date in accordance with the
Company's 1998 Stock Option Plan and in accordance with the following and
Section 10c below:
(a) If Xxxxxx'x employment is terminated for any reason other than "for
Cause" as defined herein, then all options shall vest immediately and will be
exercisable in accordance with the Company's 1998 Stock Option Plan.
(b) If Xxxxxx'x employment by the Company is terminated "for Cause" as
defined in this Agreement, then all unexercised options granted to Xxxxxx shall
immediately terminate and not be exercisable upon notice of Xxxxxx'x
termination of employment "for Cause."
9. BUSINESS EXPENSES. Upon submission of proper documentation, the
Company shall pay or reimburse Xxxxxx for all reasonable and necessary office,
telephone, travel and other expenses that are incurred by Xxxxxx in the pursuit
of Xxxxxx'x duties on behalf of the Company.
10. NON-COMPETITION AND CONFIDENTIALITY.
a. Non-Competition. The Company and Xxxxxx acknowledge and agree that
Xxxxxx'x services are of a special and unusual character which have a unique
value to the Company, the loss of which cannot be adequately compensated by
damages in an action at law and if used in competition with the Company, could
cause serious harm to the Company. Accordingly, Xxxxxx agrees that during the
term of this Agreement and either for a period of two (2) years in the event
Xxxxxx'x employment is terminated "for Cause" or for a period of six (6) months
in the event Xxxxxx'x employment is terminated without "Cause", Xxxxxx will not
(1) enter into any agreement with or directly or indirectly solicit or attempt
to solicit any employee or other representatives of the Company (the "Company")
for the purpose of causing them to leave the Company to take employment with
any other business entity, or (2) compete, directly or indirectly, with the
Company in any way and that Xxxxxx will not act as an officer, director,
employee, consultant, shareholder, lender or agent of any entity engaged in any
business of the same nature as, or in competition with, the business in which
the Company is now engaged, was engaged during Xxxxxx'x employment or is
engaged at the time of Xxxxxx'x termination of employment, except for the
ownership of less than five percent (5%) of the outstanding capital stock of a
publicly traded company.
b. Confidentiality.
(1) Xxxxxx acknowledges that in Xxxxxx'x employment hereunder, Xxxxxx
will be making use of, acquiring and adding to the Company's trade secrets and
its confidential and proprietary
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information of a special and unique nature and value relating to such matters
as, but not limited to, the Company's business operations, internal structure,
financial affairs, programs, software systems, procedures, manuals, confidential
reports, lists of clients and prospective clients and sales and marketing
methods, as well as the amount, nature and type of services, equipment and
methods used and preferred by the Company's clients and the fees paid by such
clients, all of which shall be deemed to be confidential information. Xxxxxx
acknowledges that such confidential information has been and will continue to be
of central importance to the business of the Company and that disclosure of it
to or its use by others could cause substantial loss to the Company. In
consideration of employment by the Company, Xxxxxx agrees that during the
Initial Term and any renewal term of this Agreement and upon and after leaving
the employ of the Company for any reason whatsoever, Xxxxxx shall not, for any
purpose whatsoever, directly or indirectly, divulge or disclose to any person or
entity any of such confidential information which was obtained by Xxxxxx as a
result of the Xxxxxx'x employment with the Company or any trade secrets of the
Company, but shall hold all of the same confidential and inviolate.
(2) All contracts, agreements, financial books, records, instruments and
documents; client lists; memoranda; data; reports; programs; software, tapes;
Rolodexes; telephone and address books; letters; research; card decks; listings;
programming; and any other instruments, records or documents relating or
pertaining to clients serviced by the Company or Xxxxxx, the services rendered
by Xxxxxx, or the business of the Company (collectively, the "Records") shall at
all times be and remain the property of the Company. Upon termination of this
Agreement and Xxxxxx'x employment under this Agreement for any reason
whatsoever, Xxxxxx shall return to the Company all Records (whether furnished by
the Company or prepared by Xxxxxx), and Xxxxxx shall neither make nor retain any
copies of any of such Records after such termination.
(3) All inventions and other creations, whether or not patentable or
copyrightable, and all ideas, reports and other creative works, including,
without limitation, computer programs, manuals and related materials, made or
conceived in whole or in part by Xxxxxx while employed by the Company and within
one year thereafter which relate in any manner whatsoever to the business,
existing or proposed, of the Company or any other business or research or
development effort in which the Company or any of its subsidiaries or affiliates
engages during Xxxxxx'x employment by the Company will be disclosed promptly by
Xxxxxx to the Company and shall be the sole and exclusive property of the
Company. All copyrightable works created by Xxxxxx and covered by this Section
10b(3) shall be deemed to be works for hire. Xxxxxx shall cooperate with the
Company in patenting or copyrighting all such inventions, ideas, reports and
other creative works, shall execute, acknowledge, seal and deliver all documents
tendered by the Company to evidence its ownership thereof through the world, and
shall cooperate with the Company obtaining, defending and enforcing its rights
therein.
c. Certain Claims Upon Termination. Xxxxxx understands that if within one
year prior to the termination of Xxxxxx'x employment with the Company, Xxxxxx
has either (i) committed an act of theft, dishonesty, gross dereliction of
duty, fraud, embezzlement, misappropriation, or breach of fiduciary duty
against the Company or any other act of comparable misconduct against the
Company; or (ii) breached any of his obligations under this Agreement, then the
Company shall have the right to purchase any or all shares of Common Stock of
the Company owned by Xxxxxx at the time of such termination for a purchase
price equal to the amount that Xxxxxx paid for such shares, together with
interest thereon at a rate of ten percent (10%) per annum. If the Company
desires to exercise such right, it shall notify Xxxxxx within 60 days after the
date of such termination and Xxxxxx shall tender the shares being purchased by
the Company at the time and place designated in such notice from the Company
upon receipt of the purchase
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price for such shares. If Xxxxxx fails to tender such shares, the shares shall
be deemed to be canceled as of the date the Company tenders payment of the
purchase price thereof.
d. Enforceability. In the event of the breach of the covenants contained
in this Section 10, it is understood that damages will be difficult to
ascertain and the Company may petition a court of law or equity for injunctive
relief in addition to any other relief which the Company may have under the law,
this Agreement or any other agreement executed in connection herewith. In
connection with the bringing of any legal or equitable action for the
enforcement of this Agreement, the Company shall be entitled to recover, whether
the Company seeks equitable relief, and regardless of what relief is afforded,
such reasonable attorneys' fees and expenses as the Company may incur in
prosecution of the Company's claim for breach hereof.
It is hereby agreed that the provisions of this Section 10 are separate
and independent from the other provisions of this Agreement, that these
provisions are specifically enforceable by the Company notwithstanding any
claim by Xxxxxx that the Company has violated or breached this Agreement or any
claim that Xxxxxx is entitled to any offset or compensation.
To induce the Company to enter into this Agreement, Xxxxxx represents and
warrants to the Company that Section 10 of this Agreement is enforceable by the
Company in accordance with its terms.
The parties hereto agree that to the extent that any provision or portion
of Section 10 of this Agreement shall be held, found or deemed to be
unreasonable, unlawful or unenforceable by a court of competent jurisdiction,
then any such provision or portion thereof shall be deemed to be modified to
the extent necessary in order that any such provision or portion thereof shall
be legally enforceable to the fullest extent permitted by applicable law; and
the parties hereto do further agree that any court of competent jurisdiction
shall, and the parties hereto do hereby expressly authorize, request and
empower any court of competent jurisdiction to, enforce any such provision or
portion thereof or to modify any such provision or portion thereof in order that
any such provision or portion thereof shall be enforced by such court to the
fullest extent permitted by applicable law.
11. WAIVER OF BREACH. The waiver by any party hereto of a breach of any
provision of this Agreement will not operate or be construed as a waiver of any
subsequent breach by any party.
12. NOTICES. Any notices, consents, demands, request, approvals and other
communications to be given under this Agreement by either party to the other
will be deemed to have been duly given if given in writing and personally
delivered, faxed or if sent by mail, registered or certified, postage prepaid
with return receipt requested, as follows:
If to the Company: xxxxxxx.xxx, inc.
One Arizona Center
000 Xxxx Xxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
If to Xxxxxx: Xxxxxx Xxxxxx
000 Xxxxx Xxxxxx Xxxxxx
Xxx Xxxx, Xxxxxxxx 00000
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Notices delivered personally will be deemed communicated as of actual receipt,
notices by fax shall be deemed delivered when such notices are faxed to
recipient's fax number and notices by mail shall be deemed delivered when
mailed.
13. ENTIRE AGREEMENT. This Agreement and the agreements contemplated
hereby constitute the entire agreement of the parties regarding the subject
matter hereof, and supersede all prior agreements and understanding, both
written and oral, among the parties, or any of them, with respect to the subject
matter hereof.
14. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future laws effective during
this Agreement, such provision will be fully severable and this Agreement will
be construed and enforced as if such illegal, invalid or unenforceable provision
never comprised a part hereof; and the remaining provisions hereof will remain
in full force and effect and will not be affected by the illegal, invalid or
unenforceable provision or by its severance herefrom. Furthermore, in lieu of
such illegal, invalid or unenforceable provision, there will be added
automatically, as part of this Agreement, a provision as similar in its terms to
such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable.
15. GOVERNING LAW. To the extent permitted by applicable law, this
Agreement and the rights and obligations of the parties will be governed by and
construed and enforced exclusively in accordance with the substantive laws (but
not the rules governing conflicts of laws) of the State of Arizona and the State
of Arizona shall have exclusive jurisdiction regarding any legal actions
relating to this Agreement.
16. CAPTIONS. The captions in this Agreement are for convenience of
reference only and will not limit or otherwise affect any of the terms or
provisions hereof.
17. GENDER AND NUMBER. When the context requires, the gender of all words
used herein will include the masculine, feminine and neuter, and the number of
all words will include the singular and plural.
18. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of which will
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
THE COMPANY:
xxxxxxx.xxx, inc., a Nevada corporation
By: /s/ Xxxxxxx Xxxxxxxx
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Xxxxxxx Xxxxxxxx, Chief Executive Officer
XXXXXX:
/s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
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