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EXHIBIT 10.05
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), is entered into as of the 1st
day of November, 1998, by and among INTERNET CENTURY, INC., a Nevada corporation
(the "Company") and XXXXXXX X. XXXXXXXX ("Xxxxxxxx").
WHEREAS, the Company desires to employ Xxxxxxxx as provided herein;
and,
WHEREAS, Xxxxxxxx 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 Xxxxxxxx and Xxxxxxxx hereby
accepts employment with the Company as its President and Chief Executive Officer
upon the terms and conditions hereinafter set forth. Xxxxxxxx'x employment shall
not be deemed an "at will" employment.
2. DUTIES. Xxxxxxxx will serve the Company as its President and its
Chief Executive Officer and will faithfully and diligently perform the services
and functions relating to such office and position or otherwise reasonably
incident to such office and position, provided that all such services and
functions will be reasonable and within Xxxxxxxx'x areas of expertise.
Xxxxxxxx'x specific duties shall include those related to (i) all phases of the
Company's overall operations, (ii) coordination of the Company's overall
operations and strategic planning and (iii) such other duties as the Company may
reasonably direct. Xxxxxxxx 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.
3. TERM. This Agreement and Xxxxxxxx'x employment shall commence on the
1st day of November, 1998, (the "Effective Date") and shall continue for a term
of seven (7) years ("Initial Term") unless terminated earlier in accordance with
this Agreement. The term of this Agreement may be extended by agreement of the
Company and Xxxxxxxx.
4. COMPENSATION. As compensation for the services rendered to the
Company under this Agreement commencing on the effective date hereof, Xxxxxxxx
will be paid a base salary of One Hundred Thousand dollars ($100,000) 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 board of directors
of the Company after a review of Xxxxxxxx'x performance of this duties
hereunder.
5. TERMINATION. This Agreement will terminate upon the occurrence of
any of the following events:
a. The death of Xxxxxxxx;
b. The "Total Disability" (as hereinafter defined) of Xxxxxxxx;
c. Written notice to Xxxxxxxx from the Company of termination for
"Cause" (as hereinafter defined);
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d. The voluntary termination of this Agreement by Xxxxxxxx upon
thirty (30) days prior written notice;
e. The later of seven (7) years from the Effective Date of this
Agreement or the date to which this Agreement is extended in
accordance with Section 3 above; or
For purposes of Section 5(b), 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 where Xxxxxxxx is unable to reasonably perform the
duties he was performing for the Company immediately prior to such disability.
The determination shall rest upon the opinion of the physician regularly
attending Xxxxxxxx. If the Company disagrees with said physician's opinion, the
Company may engage at their own expense a physician to examine the Xxxxxxxx, and
Xxxxxxxx hereby consents to such examination and to waive, if applicable any
privilege between the physician and Xxxxxxxx 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
the Xxxxxxxx and the Company.
For purposes of Section 5(c), "Cause" means (i) Xxxxxxxx has failed to
substantially perform his duties as reasonably determined by the chief executive
officer of the Company or the Board of Directors of the Company, (ii) Xxxxxxxx
engages in poor performance that is not cured within thirty (30) days after
counseling by the Company, (iii) Xxxxxxxx has failed to comply with the
reasonable directives and policies of the Board of Directors of the Company or
of the chief executive officer of the Company, or (iv) Xxxxxxxx breaches his
fiduciary duty to the Company or commits any dishonest, unethical, fraudulent,
or felonious act in respect to Xxxxxxxx'x duties to the Company.
6. STOCK OPTIONS. Contingent upon Xxxxxxxx being employed by the
Company, Xxxxxxxx shall be granted options to purchase up to 50,000 shares of
the Company's common stock (post 284 for 1 forward stock split) at $1.50 per
share pursuant to the Company's 1998 Stock Option Plan to be vested and
exercisable in accordance with the terms of the 1998 Stock Option Plan, except
that the options shall vest immediately on the Effective Date and the exercise
of such options shall not be contingent upon Xxxxxxxx being employed by the
Company. Further, the Company agrees to register the options and the underlying
shares on Form S-8 within 90 days of the effective date of any initial public
offering of the Company's securities.
7. TERMINATION PAYMENT. It is agreed that (i) if Xxxxxxxx'x employment
by the Company is terminated without "Cause", (ii) if his duties and
responsibilities are materially changed by the Company and Xxxxxxxx voluntarily
terminates his employment due to such change in duties or responsibilities, or
(iii) if Xxxxxxxx'x employment terminates due to Total Disability, the Company
shall pay Xxxxxxxx xxxxxxxxx of $200,000 immediately upon the occurrence of
either 7(i), (ii) or (iii) above, together with the amount due for the remaining
portion of the term of this Agreement. If Xxxxxxxx'x employment terminates due
to death, the Company will be obligated to only pay to Xxxxxxxx'x estate any
amounts accrued under this Agreement together with $200,000. It is agreed that
the Company may purchase a disability income insurance policy and/or a life
insurance policy to pay all or part of the amounts due upon termination of
Xxxxxxxx'x employment due to either Total Disability or death, respectively, and
that Xxxxxxxx agrees to cooperate in the obtaining of such insurance.
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8. BENEFITS. Xxxxxxxx shall be entitled to receive any benefits,
including health insurance, life insurance, automobile allowance, vacation time,
etc., which are offered to other Company executives.
9. EXPENSES. Xxxxxxxx is authorized to incur reasonable expenses for
promoting the business of the Company, including expenses for entertainment,
travel and similar items. The Company shall reimburse Xxxxxxxx for all such
expenses on the presentation by Xxxxxxxx of itemized accounts of such
expenditures in accordance with guidelines set forth by the Internal Revenue
Service.
10. NON-COMPETITION AND CONFIDENTIALITY.
x. Xxxxxxxx agrees that during the term of this Agreement, Xxxxxxxx
will not (1) enter into any agreement with or directly or
indirectly solicit or attempt to solicit Xxxxxxxx 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 Xxxxxxxx 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 except for the ownership of less than five percent
(5%) of the outstanding capital stock of a publicly traded
Internet service provider company.
b. For purposes of Section 10a, restrictions regarding competition
by Xxxxxxxx shall only apply to competing businesses or entities
that operate in the continental United States.
c. 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.
d. 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 Xxxxxxxx that the
Company has violated or breached this Agreement or any claim that
Xxxxxxxx is entitled to any offset or compensation.
e. To induce the Company to enter into this Agreement, Xxxxxxxx
represents and warrants to the Company that Section 10 of this
Agreement is enforceable by the Company in accordance with its
terms.
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.
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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: Internet Century, Inc.
000 X. Xxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
If to Xxxxxxxx: Xxxxxxx X. Xxxxxxxx
000 X. Xxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
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.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
THE COMPANY:
INTERNET CENTURY, INC.,
a Nevada corporation
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------------------------
Xxxxxxx X. Xxxxxxxxx, Chief Operating Officer
XXXXXXXX:
/s/ Xxxxxxx X. Xxxxxxxx
----------------------------------------------
Xxxxxxx X. Xxxxxxxx
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AMENDMENT OF EMPLOYMENT AGREEMENT
This Amendment of Employment Agreement is entered into as of the 20th
day of January, 1999, by and between xxxxxxx.xxx, inc., a Nevada corporation
(the "Employer"), and Xxxxxxx X. Xxxxxxxx (the "Employee").
Explanatory Statements
A. Employer and Employee entered into an Employment Agreement dated as
of November 1, 1998 (the "Employment Agreement") whereby the Employer employed
the Employee.
B. The Employer and Employee desire to amend and modify certain terms
and conditions of the Employment Agreement.
NOW, THEREFORE, in consideration of the mutual promises contained
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Employment Agreement is hereby amended and
modified as follows:
1. Section numbered 4, "Compensation" is amended to provide that the
base salary of Employee shall be One Hundred Fifty Thousand dollars ($150,000)
per year.
2. Section numbered 6, "Stock Options" is hereby amended to read as
follows:
"Contingent upon Xxxxxxxx being employed by the Company,
Xxxxxxxx shall be granted options to purchase up to 1,550,000
shares of the Company's common stock (post 284 for 1 forward
stock split which was effective November 1, 1998) pursuant to
the Company's 1998 Stock Option Plan to be vested and
exercisable in accordance with the terms of the 1998 Stock
Option Plan, except that 50,000 options shall be exercisable
at $1.50 per share and vest immediately on the Effective Date
with the remaining 1,500,000 options to be exercisable at
$8.00 per share and with the options for 1,500,000 shares to
vest immediately upon shareholder approval of an increase in
the number of shares of the Company's Common Stock made
available and reserved under the Company's 1998 Stock Option
Plan to 2,500,000 shares. The exercise of all options
hereunder shall not be contingent upon Xxxxxxxx being employed
by the Company. Further, the Company agrees to register the
options and the underlying shares on Form S-8 within 90 days
of the effective date of any initial public offering of the
Company's securities".
3. The first sentence of Section numbered 7, "Termination Payment" is
hereby amended to read as follows:
"It is agreed that (i) if Xxxxxxxx'x employment by the Company
is terminated without "Cause", (ii) if his duties and
responsibilities are materially changed by the
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Company and Xxxxxxxx voluntarily terminates his employment due
to such change in duties or responsibilities, (iii) there is a
change in the control of the Company or (iv) if Xxxxxxxx'x
employment terminates due to Total Disability, the Company
shall pay Xxxxxxxx xxxxxxxxx of $5,000,000 immediately upon
the occurrence of either 7(i), (ii), (iii) or (iv) above,
together with the amount due for the remaining portion of the
term of this Agreement".
4. Section numbered 10, "Non-Competition Confidentiality" is deleted in
its entirety and replaced with the following:
"10. INCENTIVE STOCK OPTION BONUSES. So long as Xxxxxxxx is
employed by the Company, Xxxxxxxx shall be entitled to
incentive stock option bonuses as follows:
a. E-Mail Service. For each 250,000 subscribers that join the
Company's E-Mail service, Xxxxxxxx shall be granted options to
purchase up to an additional 100,000 shares of the Company's
Common Stock at 120% of the current fair market value of such
Shares of Common Stock. The maximum number of shares for which
Xxxxxxxx shall be granted an option based upon the number of
subscribers to the Company's E-Mail shall be 1,000,000 shares.
b. Chat Room Services. For each 250,000 subscribers that join
the Company's Chat Room Service, Xxxxxxxx shall be granted
options to purchase up to an additional 100,000 shares of the
Company's Common Stock at 120% of the current fair market
value of such Shares of Common Stock. The maximum number of
shares for which Xxxxxxxx shall be granted an option based
upon the number of subscribers to the Company's Chat Room
shall be 1,000,000 shares.
5. A new Section numbered 11 shall be added which reads as follows:
"11. BONUS STOCK. It is acknowledged that the Company is in
the process of authorizing "Series B Convertible Common Stock"
which shall have the same rights as all other shares of the
Company's Common Stock except that each one (1) share of the
Series B Convertible Common Stock shall have the same votes as
ten thousand (10,000) shares of all other Company Common Stock
and the Series B Convertible Common Stock shall automatically
convert to shares of the Company's remaining Common Stock on
the basis of one share for one share three (3) years from the
date of issuance of such Series B Convertible Common Stock. As
part consideration for executing this Agreement, the Company
hereby agrees to issue ten thousand (10,000) shares of its
$.001 par value Series B Convertible Common Stock to Xxxxxxxx
upon the Company obtaining the appropriate corporate approvals
for the establishment and issuance of such Series B
Convertible Common Stock."
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6. Section numbered 12, "Notices" is amended by changing the
notification addresses to read as follows:
"If to the Company: xxxxxxx.xxx, inc.
000 X. Xxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
If to Xxxxxxxxx: Xxxxxxx X. Xxxxxxxx
000 X. Xxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000"
7. Section numbers 11 through 18 shall be re-numbered 12 through 19,
respectively.
8. Any and all other terms and conditions of the Employment Agreement
not amended or modified herein shall remain the same and in full force and
effect.
Employer:
XXXXXXX.XXX, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------------------
Xxxxxxx X. Xxxxxxxxx, Chief Financial Officer
Employee:
/s/ Xxxxxxx X. Xxxxxxxx
---------------------------------------------
Xxxxxxx X. Xxxxxxxx
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SECOND AMENDMENT OF EMPLOYMENT AGREEMENT
This Second Amendment of Employment Agreement is entered into as of the
9th day of March, 1999, by and between xxxxxxx.xxx, inc., a Nevada corporation
(the "Company"), and XXXXXXX X. XXXXXXXX ("Xxxxxxxx").
Explanatory Statements
----------------------
A. The Company and Xxxxxxxx entered into an Employment Agreement dated
November 1, 1998 and an Amendment of Employment Agreement dated January 20,
1999 (together, the "Employment Agreement").
B. The Company and Xxxxxxxx desire to amend and modify certain terms and
conditions of the Employment Agreement.
NOW, THEREFORE, in consideration of the mutual promises contained herein
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Employment Agreement is hereby amended and modified
as follows:
1. Section numbered 3, "Term" is hereby amended to read as follows:
"3. TERM. This Agreement and Xxxxxxxx'x employment shall commence on
the 1st day of November, 1998 (the "Effective Date") and shall
continue for a term of four years ("Initial Term") unless terminated
earlier in accordance with this Agreement. The term of this
Agreement may be extended by agreement of the Company and Xxxxxxxx."
2. Section numbered 4, "Compensation" is hereby amended to read as follows:
"4. COMPENSATION. As compensation for services rendered to the Company
under this Agreement commencing on the Effective Date hereof,
Xxxxxxxx will be paid a base salary of One Hundred Fifty Thousand
Dollars ($150,000) 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 Compensation
Committee or the Board of Directors of the Company after a review of
Xxxxxxxx'x performance of his duties hereunder."
3. Subsection (e) of Section numbered 5, "Termination" is hereby amended
to read as follows:
"e. The later of four years from the Effective Date of this Agreement
or the date to which this Agreement is extended in accordance with
Section 3 above."
4. Section numbered 6, "Stock Options" is hereby amended to read as
follows:
"6. STOCK OPTIONS. Contingent upon Xxxxxxxx being employed by the
Company, Xxxxxxxx shall be granted options to purchase up to
1,550,000 shares of the Company's common stock (post 284 for 1
forward stock split which was effective November 1, 1998) pursuant
to the Company's 1998 Stock Option Plan to be vested and exercisable
in accordance with the terms of the 1998 Stock Option Plan, except
that 50,000 options shall be exercisable at $1.50 per share and vest
immediately on the Effective Date with the remaining 1,500,000
options to be exercisable at $8.00 per share and vest immediately
upon shareholder approval of an increase in the number of shares of
the Company's common stock made available and reserved under the
Company's 1998 Stock Option Plan to 2,500,000 shares. Further,
the Company agrees to register the options and the underlying shares
granted hereunder on Form S-8 within 180
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days of the effective date of any initial public offering of the
Company's securities."
5. The first paragraph of Section numbered 7, "Termination Payment" is hereby
amended to read as follows:
"7. TERMINATION PAYMENT. It is agreed that (i) if Xxxxxxxx'x employment by
the Company is terminated without "Cause" or (ii) if his duties and
responsibilities are materially changed by the Company and Xxxxxxxx
voluntarily terminates his employment due to such change in duties or
responsibilities, the Company shall pay Xxxxxxxx severance of
$5,000,000 immediately upon the occurrence of either 7(i) or (ii)
above, together with the amount due for the remaining portion of the
term of this Agreement. If Xxxxxxxx'x employment terminates due to
"Total Disability", the Company will be obligated to only pay Xxxxxxxx
the sum of $150,000."
6. Section numbered 9, "Expenses" is hereby amended to read as follows:
"9. EXPENSES. Xxxxxxxx is authorized to incur reasonable expenses for
promoting the business of the Company, including expenses for
entertainment, travel and similar items. The Company shall reimburse
Xxxxxxxx for all such expenses on the presentation by Xxxxxxxx of
itemized accounts of such expenditures in accordance with guidelines
set forth by the Company and the Internal Revenue Service."
7. Section 11, "Bonus Stock" shall be eliminated in its entirety.
8. Sections 12 through 19 shall be re-numbered 11 through 18, respectively.
9. Any and all other terms and conditions of the Employment Agreement not
amended or modified herein shall remain the same and in full force and effect.
The Company:
xxxxxxx.xxx, inc.
By:/s/ Xxxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chief Operating Officer
Xxxxxxxx:
/s/ Xxxxxxx X. Xxxxxxxx
--------------------------
Xxxxxxx X. Xxxxxxxx
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