EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is entered
into as of __________ ___, 2006, by and between Xxxxxxx Corporation, a
Delaware corporation (the "Company" or "Employer"), and XXXXXX X.
XXXXXX, XX., a resident of the State of Tennessee ("Executive").
RECITALS:
WHEREAS, Executive and the Company are entering into this
Agreement to describe the terms of Executive's employment by the
Company.
AGREEMENT:
NOW, THEREFORE, for and in consideration of the mutual covenants and
promises contained herein and other good and valuable consideration set
forth hereafter, the receipt and sufficiency of which are hereby
acknowledged, Executive and the Company hereby agree as follows:
Section 1. Effective Time. This Agreement shall become effective
upon the entered into above (the "Agreement Date"). Until such time as
this Agreement becomes effective, Executive will be under the employ of
Xxxxxxx Tennessee in accordance with the terms and conditions herein.
Section 2. Services to be Provided.
(a) Duties and Responsibilities. Executive is hereby employed as
the Chief Financial Officer of the Company. Subject to the direction and
supervision of the CEO of the Company, Executive shall perform such duties
as are customarily associated with the offices of Chief Financial Officer.
Executive's principal base of operations for the performance of his duties
hereunder shall be the offices of the Company in the Brentwood, Tennessee
area (the "Brentwood Office").
(b) Appropriate Business Attention. Executive agrees to devote his
appropriate time and attention to the business and affairs of the Company.
Section 3. Compensation. In consideration of the services provided
hereunder by Executive to the Company, the Company, during the Term,
shall pay Executive the compensation and provide to Executive the benefits
described below.
(a) Base Salary. The Company shall pay Executive an annual salary
of $180,000 (the "Base Salary"), subject to increase from time to time in
the sole discretion of the Board of Directors or a duly authorized committee
thereof. The Company shall pay the Base Salary in arrears in equal
installments in accordance with the Company's payroll policy in effect from
time to time, but in no event shall the Company pay Executive such
installments less frequently than monthly.
(b) Cash Bonus. If for any calendar year the Company meets its budget
(as determined by the Board of Directors), the Company shall pay Executive a
cash bonus equal to one-fourth (1/4) of his Base Salary for such year. Any
bonus payable hereunder with respect to any year shall be due and payable on
or before March 15 of the succeeding year. No bonus will earned or paid for
the 2006 year.
(c) Restricted Stock Award. On October 23, 2006, the Company shall
issue to Executive 200,000 restricted shares of common stock pursuant to a
Restricted Stock Agreement in substantially the form attached hereto as
Exhibit A.
(d) Vacation, Etc. For each calendar year during the Term:
(i) Executive shall be entitled to four weeks of vacation, prorated
for any partial year. Unused vacation time may not be carried over to
any succeeding year.
(ii) Executive shall be entitled to thirty (30) business days of
paid medical leave. For purposes hereof, such leave shall be
available only with respect to injuries or illness that prevent
Executive from performing services hereunder or with respect to
injuries to or illness of Executive's spouse, children or parents.
(iii) Executive shall be entitled to five (5) business days of paid
leave for purposes of attending continuing professional education
programs. The Company shall pay reasonable costs and expenses for
Executive to attend such programs.
(e) Other Benefits. The Company shall include Executive in all employee
benefit plans (such as, by way of example, health insurance plans and 401(k)
plans) as are offered for the general benefit of the Company's employees,
subject to the provisions of such plans as may be in effect from time to time,
and Executive will be entitled to the same holidays as observed by the
Company's employees of similar seniority and responsibilities in accordance
with policies established by the Company from time to time.
(f) Expense Reimbursement. The Company shall reimburse Executive for all
reasonable business expenses actually incurred by Executive in connection
with the performance of Executive's obligations hereunder, subject to policies
of the Company relating to reimbursement, including, without limitation, any
requirement for the itemization of such expenses and submission of receipts
in connection therewith.
(g) Taxes. All payments made by the Company under this Agreement will
be subject to withholding of such amounts as is required pursuant to any
applicable law or regulation.
Section 4. Term. The term of this Agreement shall commence as of
September 12, 2006 and will continue until October 31 , 2010 (the "Term"),
unless earlier terminated pursuant to Section 5 of this Agreement. Thereafter,
this Agreement and Executive's employment by the Company hereunder may be
renewed only upon the written agreement of the Company and Executive.
Section 5. Termination of Employment.
(a) Termination by the Company for Cause. The Company may terminate
Executive's employment at any time for Cause upon written notice to Executive.
Upon such termination, the Company shall have no further obligation to make
payments under this Agreement, other than accrued salary and benefits through
the effective date of termination of employment. For purposes hereof, "Cause"
means any of the following:
(i) Executive's act of fraud, misappropriation, embezzlement, or
dishonesty with respect to the Company;
(ii) indictment of Executive for any crime that is a felony or
involves moral turpitude, fraud, embezzlement or theft;
(iii) Executive's negligence or act of misconduct in the performance
of his duties which is not remedied within thirty (30) days following
receipt of written notice thereof from the Company; or
(iv) Executive's breach of any other provision of this Agreement or
deviation from any other lawful policy of, or instruction from, the
Company which is not remedied within thirty (30) days following receipt
of written notice thereof from the Company.
(b) Termination Due to Death of Executive. The Company's employment of
Executive shall immediately terminate upon the death of Executive, and the
Company shall thereupon have no further obligation to make payments under
this Agreement, other than accrued salary and benefits through the date of
Executive's death.
(c) Termination Due to Disability of Executive. The Company may
terminate Executive's employment at any time following Executive's
Disability upon written notice to Executive. Likewise, Executive may
terminate his employment at any time following his Disability upon written
notice to the Company. Upon any termination of Executive's employment
hereunder, the Company shall have no further obligation to make payments
under this Agreement, other than (i) accrued salary and benefits through the
effective date of termination of employment, and (ii) a lump sum payment
equal to one year's Base Salary (determined at the time notice of termination
is provided) (the "Severance Payment"). The Severance Payment shall be
made within thirty (30) following termination of Executive's employment;
provided, however, that if at the time of such termination Executive is a
"specified employee" of the Company (as determined under Section 409A of
the Internal Revenue Code of 1986, as amended), the Severance Payment
shall be made six months and one day following termination. For purposes
of this Agreement, "Disability" shall occur if the Company determines (in
accordance with applicable law) that Executive has been unable, due to
physical or mental illness or incapacity, to perform the essential duties of his
employment with reasonable accommodation for a continuous period of
ninety (90) days or an aggregate of one hundred twenty (120) days during any
consecutive 12-month period; provided, however, that in the event the
Company maintains disability insurance covering Executive, such time
periods shall be consistent with the comparable time periods set forth in the
applicable policy(ies).
(d) Termination by Executive for Good Reason. Executive may
terminate his employment with the Company at any time for Good Reason.
Upon any such termination, the Company shall have no further obligation to
make payments under this Agreement, other than (i) accrued salary and
benefits through the effective date of termination of employment, and (ii) the
Severance Payment. The Severance Payment shall be made in accordance
with Section 5(c) above. For purposes of this Agreement, "Good Reason"
means (A) any change in Executive's responsibilities, status, title or duties
that represents a reduction in his responsibilities, status, title or duties
immediately prior thereto or any assignment to Executive of any additional
responsibilities, status, title or duties; (B) any reduction in Executive's
compensation or benefits; (C) any material breach by the Company of this
Agreement, or (D) the relocation of Executive to a location that is more than
30 miles from the current location of the Company's offices; provided that
upon the occurrence of any of the events described in clauses (A) through
(D), Executive shall provide written notice thereof to the Company, and the
Company shall have thirty (30) days following receipt of such notice within
which to cure such event.
(e) Termination by the Company Other Than for Cause or Upon
Death or Disability. The Company may terminate Executive's employment
other than for Cause or upon Executive's death or Disability upon at least
thirty (30) days' written notice to Executive. Upon any such termination, the
Company shall have no further obligation to make payments under this
Agreement, other than (i) accrued salary and benefits through the effective
date of termination of employment, and (ii) the Severance Payment. The
Severance Payment shall be made in accordance with Section 5(d) above.
(f) Termination by Executive Other Than Upon Disability or for Good
Reason. Executive may voluntarily terminate his employment other than
upon his Disability or for Good Reason upon at least thirty (30) days' written
notice to the Company. Upon any such termination, the Company shall have
no further obligation to make payments under this Agreement, other than
accrued salary and benefits through the effective date of termination of
employment.
Section 6. Confidentiality; Intellectual Work Product.
(a) Confidentiality. Except in connection with Executive's
performance of his duties under this Agreement, Executive shall not disclose
any Confidential Information nor shall Executive use such information for his
direct or indirect benefit, or the direct or indirect benefit of any third
party. Executive's obligation of confidentiality shall not apply with respect
to disclosures of Confidential Information compelled in any legal,
administrative or investigative proceeding before any court, or any
governmental or regulatory authority, agency or commission; provided, that
Executive shall notify the Company thereof and cooperate with the Company
to obtain a protective order or other similar determination with respect to
such information. Executive acknowledges that the Confidential Information
is vital, sensitive, confidential and proprietary to the Company. For
purposes of this Agreement, "Confidential Information" means any information
relating to the business or affairs of the Company, including, without
limitation, information relating to: (i) marketing or distribution data; (ii)
business methods, plans and efforts; (iii) personnel data; (iv) courses of
dealings or contracts with actual or potential customers, vendors, distributors
and suppliers; (v) financial statements; and (vi) servicing methods,
equipment, programs, analyses or profit margins. Failure to xxxx information
as confidential or proprietary will not adversely affect its status as
Confidential Information.
(b) Intellectual Work Product.
(i) Executive hereby acknowledges that all writings, documents,
inventions, processes, products, methods, discoveries, computer programs
or instructions (whether in source code, object code or other form), plans,
customer lists, memoranda, tests, research, designs, specifications, models,
data, diagrams, flow charts, techniques and similar or dissimilar
intellectual work product (whether reduced to a written form or otherwise)
that Executive may make, conceive, discover or develop, either solely or
jointly with any other person, at any time while employed by the Company
(the "Employment Period"), whether or not copyrightable or patentable,
whether conceived or developed during working hours or at the Company's
offices or at any other time or location, and whether upon the request or
suggestion of the Company or otherwise, that relate to or may in any way be
useful in connection with any business carried on by the Company during the
Employment Period (collectively, the "Intellectual Work Product") is and
will be the Company's sole and exclusive property. Executive shall promptly
and fully disclose to the Company all of the Intellectual Work Product.
Executive acknowledges that all Intellectual Work Product that is
copyrightable will be considered a work made for hire under United States
copyright laws.
(ii) To the extent that any copyrightable Intellectual Work Product
may not be considered a work made for hire under United States copyright
laws, or to the extent that, notwithstanding the provisions of paragraph (i)
of this Section 6(b), Executive retains an interest in any Intellectual Work
Product that is not copyrightable, Executive hereby irrevocably assigns and
transfers to the Company any and all right, title and interest that Executive
may have in and to the Intellectual Work Product under copyright, patent,
trade secret and trademark law and any other laws providing for the protection
of intellectual or industrial property or similar rights in perpetuity or for
the longest period otherwise permitted by law, without the necessity of
further consideration. The Company shall have the exclusive right to obtain
and hold in its name all copyrights, patents, trade secrets, trademarks,
and other intellectual or industrial property or similar rights with respect
to the Intellectual Work Product.
Section 7. Indemnification. The Company shall indemnify the Executive
to the fullest extent that would be permitted by applicable law (including a
payment of expenses in advance of final disposition of a proceeding) as in
effect at the time of the subject act or omission, or by the Certificate of
Incorporation or Bylaws of the Company as in effect at such time, or by the
terms of any indemnification agreement between the Company and the Executive,
whichever affords greatest protection to the Executive, and the Executive
shall be entitled to the protection of any insurance policies the Company
may elect to maintain generally for the benefit of its officers or, during
the Executive's service in such capacity, directors (and to the extent the
Company maintains such an insurance policy or policies, in accordance with
its or their terms to the maximum extent of the coverage available for any
company officer or director), against all costs, charges and expenses
whatsoever incurred or sustained by the Executive (including but not limited
to any judgment entered by a court of law) at the time such costs, charges
and expenses are incurred or sustained, in connection with any action, suit
or proceeding to which the Executive may be made a party by reason of his
being or having been an officer or employee of the Company, or serving as
an officer or employee of an affiliate of the Company, at the request of the
Company.
Section 8. Miscellaneous.
(a) Entire Agreement; Amendments; Survival. This Agreement contains
the entire understanding of the parties with respect to employment of
Executive by the Company. It merges and supersedes all prior and/or
contemporaneous agreements and understandings between the parties, written
or oral, with respect to its subject matter and there are no restrictions,
agreements, promises, warranties, covenants or undertakings between the
parties with respect to the subject matter hereof other than those expressly
set forth herein. This Agreement may be amended only by a written instrument
duly executed by all parties or their respective heirs, successors, assigns or
legal personal representatives. The provisions of Sections 6 through 9 hereof
and any provision(s)s herein related to the Severance Payment shall survive
termination for any reason or expiration of this Agreement for the period
described or referenced in each such Section or, if no period is described or
referenced in such Section, indefinitely.
(b) Assignment. Executive acknowledges that the services to be
rendered by him are unique and personal in nature. Accordingly, Executive
may not assign any of his rights or delegate any of his duties or obligations
under this Agreement. The rights and obligations of the Company under this
Agreement shall inure to the benefit of, and shall be binding upon, the
successors and assigns of the Company.
(c) Disclosure. Executive acknowledges that the Company may provide a
copy of this Agreement or any portion of this Agreement to any Person with,
through or on behalf of which Executive may, directly or indirectly, breach
or threaten to breach any of the provisions of this Agreement.
(d) Attorneys' Fees. In any action brought hereunder or in connection
with the transactions contemplated herein, the non-prevailing party shall
pay the prevailing party's reasonable attorneys' (and paralegals') fees
and expenses incurred in prosecuting or defending such action.
(e) Governing Law; Forum; Service of Process. This Agreement shall be
governed by and construed in accordance with the laws of the State of
Tennessee. This Agreement and its subject matter have substantial
contacts with Tennessee, and all actions, suits, or other proceedings with
respect to this Agreement shall be brought only in a court of competent
jurisdiction sitting in Xxxxxx County, Tennessee, or in the Federal District
Court having jurisdiction over that county. In any such action, suit, or
proceeding, such court shall have personal jurisdiction of all of the parties
hereto, and service of process upon them under any applicable statutes, laws,
and rules shall be deemed valid and good.
(f) Severability. If any provision of this Agreement, or the application
thereof to any person or circumstance, is held by a court of competent
jurisdiction to be invalid, illegal or unenforceable in any respect in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement or the application of that provision to
any other person or circumstance, and this Agreement shall then be construed
in that jurisdiction as if such invalid, illegal or unenforceable provision
had not been contained in this Agreement, but only to the extent of such
invalidity, illegality or unenforceability.
(g) Counterparts. This Agreement may be executed in counterparts,
each of which will be deemed to be an original copy of this Agreement and
all of which, when taken together, will be deemed to constitute one and the
same agreement.
(h) Notices. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have been
duly given and received when (a) delivered by hand (with confirmation of
receipt), (b) sent by facsimile with confirmation of transmission by the
transmitting equipment, (c) received by the addressee, if sent by certified
mail, return receipt requested, or (d) received by the addressee, if sent by
a nationally recognized overnight delivery service, return receipt requested,
in each case to the appropriate addresses or facsimile numbers set forth
below each party's signature hereto (or to such other addresses or facsimile
numbers as a party may designate by notice to the other parties).
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by themselves or their duly authorized representatives. This
Agreement shall be effective as of the time set forth in Section 1 hereof.
EMPLOYEE:
Printed Name: Xxxxxx X. Xxxxxx
Address:
Facsimile No.:
COMPANY:
XXXXXXX CORPORATION
By:
Title:
Address:
Facsimile No.: