EMPLOYMENT AGREEMENT
This Agreement is made effective as of January 19, 1999, by and between Xxxxxxx
Xxxx ("Employee") and INTELLICELL, CORP., a Delaware corporation ("Employer" or
the "Company")
RECITALS
A. Employer desires to employ Employee as its Vice President of Marketing
and Business Development and to be assured of his services as such on the
terms and conditions hereinafter set forth.
C. Employee is willing to accept employment in the above-described capacity on
such terms and conditions.
For all the reasons set forth above, and in consideration of the mutual
covenants and promises of the parties, and intending to be legally bound hereby,
Employer and Employee agree as follows:
Section I
Employment
Employee shall perform the duties and responsibilities of Vice President of
Marketing and Business Development, reporting directly to the President and CEO
and its Board of Directors ("Board"). Such duties and responsibilities shall be
reasonably related to Employee's position. Employee shall devote all of his
business time, attention, knowledge and skills faithfully, diligently and to the
best of his ability, in furtherance of the business and activities of the
Company and may not, directly or indirectly, in any capacity, do any work for or
on behalf of himself exclusively, or any other company, person or entity,
irrespective of whether or not same is in a competing business. Employee is,
under California law, considered employed at will. The principal place of
performance by Employee of his duties hereunder shall be out of Employee's home
office or such other place as the Board shall determine, although Employee may
be required to travel outside of the area where his office is located in
connection with the business of the Company.
Section II
Term of Employment
The term of employment shall be three (3) years commencing as of the date
hereof (the "Effective Date") (such period being referred to as the "Initial
Term" and any year commencing on the Effective Date or any anniversary of the
Effective Date being hereinafter referred to as an "Employment Year"). After
the Initial Term, this Agreement shall be renewable automatically for successive
one year periods (each such period being referred to as a "Renewal Term"),
unless, approximately sixty (60) days prior to the expiration of the Initial
Term or any Renewal Term, either the Employee or the Company give written notice
that the employment will not be renewed.
Section III
Compensation
Employer shall pay employee a monthly salary ("Salary") of Ten Thousand
Dollars ($10,000.00), payable twice monthly, on the 15th and 30th days of each
month (pro-rated, as applicable), or at such other times as may mutually be
agreed upon between Employer and Employee.
Subject to formal Board approval, Employer shall grant 50,000 Incentive
Options to purchase 50,000 shares of common stock of the Company, under the
Employer's 1998 Stock Option Plan. Options are granted with an exercise price
equal to the fair market value of the Company's common stock on the date of
grant. These options will vest one-third per year, at the end of the year, over
3 years pending continued employment with Employer.
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Section IV
Benefits
(a) During the term of this Agreement, Employee shall have the right to
receive or participate in all benefits and plans which the Company may form time
to time institute during such period for its employees and for which Employee is
eligible. Nothing paid to Employee under any plan or arrangement presently in
effect or made available in the future shall be deemed to be in lieu of salary
or any other obligation payable to Employee pursuant to this Agreement.
(b) During the term of this Agreement Employee shall be entitled to the
number of paid holidays, personal days off and sick leave days in each calendar
year as are determined by the Company from time to time. Employee shall be
entitled to one (1) week of vacation during his first year of employment and two
(2) weeks per year for each year thereafter. Such vacation shall be taken in
Employee's discretion with the prior approval of Employer, and at such times as
are not inconsistent with the reasonable business needs of the Company.
Section V
Travel and Other Expenses
All travel and other expenses incidental to the rendering of services
reasonably incurred on behalf of the Company by Employee during the term of this
Agreement shall be paid by Employer. If any such expenses are paid in the first
instance by Employee, Employer shall reimburse him therefor within a reasonable
time of presentation of appropriate receipts for such expenses.
Section VI
Termination
(a) Notwithstanding anything in this Agreement to the contrary, Employer
shall have the right to discharge Employee, for cause in the event: (i)
Employee shall be unable to perform his full duties pursuant to this Agreement
to the satisfaction of Employer as a result of illness, disability, or other
incapacity for a aggregate period of 90 days or more during the term hereof; or
(ii) Employee shall fail to perform any reasonable duties assigned to him; or
(iii) Employee shall commit a willful or intentional breach of his duties and
obligations to Employer; or (iv) Employee shall otherwise violate an provision
of this Agreement; or (v) Employee shall be adjudicated an incompetent; or (vi)
Employee engages in criminal misconduct (including, without limitation,
embezzlement and criminal fraud); or (vii) Employee shall be guilty of material
dishonesty or shall be convicted of any felony, or Employee shall have breached
any warranty given under this Agreement. Upon discharge pursuant to this
Section, Employer shall have no further obligation or duties to Employee other
than payment of salary and reimbursement of expenses through the effective date
of termination of Employee.
(b) In the event that Employee's employment is terminated with cause, then
Employer shall have no further obligation or duties to Employee, other than for
payment of amount as provided under Section V. In the event of such termination
without cause, after six months from date of employment, Employer shall continue
to pay Employee, at the current Salary rate either, (i) for the remainder of the
Initial Term, or the remainder of the current Renewal Term if this Agreement has
been renewed, or (ii) for a further period of three (3) months following
termination, whichever is less.
(c) Notwithstanding the discharge of Employee pursuant to this Section,
Employee shall continue to be bound by the provisions of Sections VII and VIII
of this Agreement.
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Section VII
Non-Disclosure and Non-Competition
(a) Employer and Employee acknowledge that the services to be performed by
Employee under this Agreement are unique and extraordinary and, as a result of
such employment, Employee will come unto possession of confidential information
relating to the business and practices of the Company. The term "Confidential
Information" shall mean any and all information (verbal and written) relating to
the Company or any of its affiliates, or any of their respective activities,
other than such information which can be shown by Employee to be in the public
domain (such information not being deemed to be in the public domain merely
because it is embraced by more general information which is in the public
domain) other than as a result of a breach of the provisions of this Section,
including, but limited to: trade secrets, research projects, personnel lists,
financial information, services used, pricing, customers, customer lists and
prospects, product sourcing, marketing and selling and servicing. Employee will
not at any time, either during or after the term of this Agreement, divulge any
Confidential Information to any other person, firm, or entity, nor use or permit
the use of any said Confidential Information, other than pursuant to Employment
on behalf of Employer hereunder. Without limiting the generality of the
foregoing, upon the termination of Employment for any reason, Employee shall
forthwith deliver to Employer all documents and other material in his possession
or under his control containing any Confidential Information and/or relating to
the business of Employer.
(b) It is understood and agreed by Employee that all business
relationships and goodwill now existing with respect to customers and suppliers
of Employer, whether or not created or served by Employee hereunder, and all
such relationships and goodwill which may hereafter become known to or be
created or enhanced by Employee in the course of Employment hereunder,
constitute valuable proprietary rights and interests of Employer, and are, and
shall at all times remain, the sole property of, and shall inure to the sole
benefit of Employer. Accordingly, Employee agrees that during the term of
Employment and for a further period of one (1) year beginning on the date of
termination of Employment for any reason, Employee will not, as proprietor,
partner, joint venturer, stockholder, director, officer, trustee, principal,
agent, servant, employee consultant or in any other capacity whatever, directly
or indirectly, solicit orders from, sell, or render services to any customer
within the United States, its territories and possessions, with respect to any
product or service competitive with any product or service sold or developed by
Employer or any subsidiary or affiliated corporation at any time during
Employment, nor shall Employee directly or indirectly aid or assist any other
person, firm, or corporation to do any of the aforesaid acts. In addition, for
a period of one (1) year after termination of Employment for any reason,
Employee shall not, in any of the aforesaid capacities, directly or indirectly
do or participate in business with any suppliers of Employer concerning any of
the products which have been, or are being, or are planned to be manufactured
for or supplied to Employer by such supplier at the time of Employee's
termination.
(c) During Employment and for a further period of one (1) year beginning
on the termination of Employment under any circumstances, Employee shall not, as
a proprietor, partner, joint venturer, stockholder, director, officer, trustee,
principal, agent, servant, employee, consultant or any other capacity whatever,
directly or indirectly, (i) engage in, or be financially interested in any
business operating within the United States, and any other country in which
Employer conducts substantial business, which is competitive with business
either, engaged-in or contemplated, by Employer as of the date Employee's
termination from employment, or (ii) solicit or induce any officer, salesman, or
other employee of Employer or any subsidiary or affiliated corporation, for any
employment in a line of business to any conducted by Employer, nor shall
Employee directly or indirectly aid or assist any other person, firm, or
corporation to do any of the aforesaid acts.
(d) Employee acknowledges that, as an executive of Employee, he will
become familiar with the affairs, customers and other Confidential Information
of Employer. Employee acknowledges that his compliance with the provisions of
this Agreement and, in particular, this Section is necessary to protect the
goodwill and other proprietary interests of Employer, that their enforcement
will not significantly impair the ability of Employee to earn a livelihood and
that, but for the covenants entered into hereunder, Employer would not enter
into this Agreement with Employee. Employee acknowledges that his breach of any
of the provisions of this Section will result in irreparable and continuing
damage to the business of Employer for which there will be no adequate remedy at
law and agrees that in the event of any such breach, Employer and its successors
and
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assigns shall be entitled to injunctive relief and to such other and further
relief as may be proper.
(e) The parties hereto hereby acknowledge that, in addition to any other
remedies the Company may have under paragraph (d) of this Section, the Company
shall have the right and remedy to require Employee to account for any pay over
to the Company all compensation, profits, monies, accruals, increments or other
benefits (collectively, "Benefits") derived or received by Employee as the
result of any transactions constituting a breach of this Section VII or Section
VIII below, and Employee hereby agrees to account for and pay over such Benefits
to the Company.
(f) Each of the rights and remedies enumerated above shall be independent
of the other and shall be severally enforceable. All such rights and remedies
shall be in addition to, and not in lieu of, any other rights and remedies
available to the Company under law or in equity.
(g) If any provision contained in this Section VII, or Section VIII below,
is hereafter construed to be invalid or unenforceable, the same shall not effect
the remainder of the covenants with shall be give full effect, without regard to
the invalid portions.
(h) If any provision contained in this Section VII, or Section VIII below,
is found to be unenforceable by reason of the extent, duration or scope thereof,
or otherwise, then the court making such determination shall have the right to
reduce or scope, or other provision, and in its reduced form any such
restriction shall thereafter be enforceable as contemplated hereby.
(i) It is the intent of the parties hereto that the covenants contained in
this Section VII, or Section VIII below shall be enforced to the fullest extent
under the laws and public policies of each jurisdiction in which enforcement is
sought (Employee acknowledges that said restrictions are reasonably necessary
for the protection of the Company). Accordingly, it is hereby agreed that if
any of the provisions of this Section VII, or Section VIII below, shall be
adjudicated to be invalid or unenforceable for any reason whatsoever, said
provision shall be (only with respect to the operation thereof in the particular
jurisdiction in which such adjudication is made) construed by limiting and
reducing it so as to be enforceable to the extent permissible, without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of said provision in any other jurisdiction.
Section VIII
Discoveries and Inventions
(a) Any discovery, invention, formula, process, improvement or idea
("Discovery" or "Discoveries"), whether or not patentable, relating to or useful
in the business of Employer and wholly or partially conceived, made or learned
by Employee during the period of Employment shall be the sole and exclusive
property of Employer. Employee shall disclose any Discovery to Employer
promptly and shall upon request, assist Employer in obtaining and assigning to
it all rights, title and interest in any United States or foreign patent on any
Discovery.
(b) If any Discovery is described in a patent application or is disclosed
to third parties, directly or indirectly, by Employee within two (2) years
following termination of his employment with the Company, it is to be presumed
that the Discovery was conceived or made during the period of Employee's
employment by the Company.
(c) Employee will not assert rights to any Discovery as having been
made or acquired by him prior to the date of this Agreement, except
for Discoveries, if any, disclosed to the Company in writing prior
to the date hereof.
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Section IX
Indemnification
Employee agrees to indemnify and hold harmless Employer and its successors
and assigns against any loss, cost, liability or expense incurred by any of them
(including, without limitation, attorney's fees and costs of suit) by reason of
breach or nonfulfillment by Employee of any provision of this Agreement
Section X
Arbitration
Any differences, claims, or matters in dispute arising between the parties
out of this agreement or connected with this agreement shall be submitted by
them to arbitration by the American Arbitration Association or its successor,
and the determination of the American Arbitration Association or its successor,
and the determination of the American Arbitration Association or its successor
shall be final and absolute. The arbitrator shall be governed by the rules and
regulations of the American Arbitration Association or its successor, and the
pertinent provisions of the laws of the State of California relating to
arbitration. The decision of the arbitrator may be entered as a judgement in
any court of the State of California or elsewhere.
Section XI
Provisions of General Application
(a) Employee warrants and represents that (i) he is in good health and not
suffering from any impairment to his general well being, (ii) the execution of
this Agreement and discharge of Employee's obligations hereunder does not and
will not constitute a breach of or default under (A) any employment agreement or
non-competition agreement to which Employee is a party, or (B) any other
contract, agreement, or understanding between Employee and any other party or
parties, and (iii) Employee has ideas, information and know-how relating to the
type of business conducted by Employer, and Employee's disclosure of such ideas,
information and know-how to Employer will not conflict with or violate the
rights of any third party or parties.
(b) This Agreement contains the entire agreement of the parties relating
to the subject matter hereof. This Agreement supersedes and is in lieu of any
and all other employment arrangements between Employee and Employer.
(c) Any notice required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been effectively given for all
purposes (i) if delivered personally, upon delivery, or (ii) if mailed, upon
deposit in the United States mail, registered or certified mail, postage
prepaid, addressed to Employee's residence (as last known to Employer), in the
case of Employee, or to the principal office of Employer, in the case of
Employer. Either party may change the address at which such party is to receive
notice by notice to the other party.
(d) Any waiver, change, modification, extension or discharge in connection
with this Agreement must be in writing and signed by the party to be bound
thereby. The waiver by Employer of a breach by Employee of, or failure of
Employee to comply with, any provision of this Agreement shall not be construed
as, or constitute, a continuing waiver of, or a waiver of any breach of, or
failure to comply with any provision of this Agreement.
(e) Employer may sell, assign and transfer all or part of its rights under
this Agreement to any Affiliates of Employer or any purchaser of Employer or
successor to the business or assets of Employer, provided, however, that such
purchaser or successor assumes the obligations of Employer hereunder. This
Agreement is personal to Employee, and Employee may not sell, assign, pledge or
otherwise transfer any of these rights under this Agreement.
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(f) All provisions of this Agreement are intended to be interpreted and
construed in a manner making such provisions valid, legal and enforceable. In
the event any provision of this Agreement or portion thereof is found to be
wholly or partially invalid, illegal or unenforceable in any judicial
proceeding, such provision shall be deemed to be modified or restricted to the
extent necessary to make such provision valid, legal and enforceable. In the
event such provision or portion thereof cannot be so modified or restricted,
such provision or portion thereof shall be deemed to be excised from this
Agreement, and the validity, legality and enforceability of the remainder of
this Agreement shall not be affected or impaired in any manner.
(g) Confidential Information shall constitute a "Trade Secret" as defined
and subject to protection by Employer, under the Uniform Trade Secrets Act.
This Agreement is entered into in the State of California and shall not be
governed by and construed in accordance with the laws and decisions of the State
of California.
IN WITNESS WHEREOF, Employer and Employee have executed this Agreement as
of the date first above written.
INTELLICELL CORP.
By /s/ Xxxx X. Xxxxxxxxx /s/ Xxxxxxx Xxxx
--------------------------------------- ---------------------------------
Xxxx X. Xxxxxxxxx, CEO Xxxxxxx Xxxx
"Employer" "Employee"
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