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EXHIBIT 10.22
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of the
22nd day of April 1999, between COLLECTORS UNIVERSE, INC., a Delaware
Corporation (the "Company" or "CUI"), and XXXX X. XXXXXX ("Xxxxxx"), with
reference to the following:
CUI desires to employ Xxxxxx as its Chief Financial Officer, and Xxxxxx
desires to accept such employment, all on the terms and conditions set forth
hereinafter in this Agreement.
NOW, THEREFORE, in consideration of the respective promises of each
party made to the other and other good and valuable consideration, the receipt
of which is hereby acknowledged by each of the parties, it is agreed as follows:
1. EMPLOYMENT AS CHIEF FINANCIAL OFFICER.
1.1 Employment as Chief Financial Officer. CUI agrees to
employ Xxxxxx in the position of Chief Financial Officer, and Xxxxxx agrees to
serve in that position on a full time basis, on the terms and subject to the
conditions contained in this Agreement.
1.2 Duties and Responsibilities. As CUI's Chief Financial
Officer, Xxxxxx shall be responsible for (i) formulating, implementing and
maintaining the currency of, CUI's accounting policies and practices, all in
accordance with generally accepted accounting principles, consistently applied
("GAAP"), and any applicable regulations of the Securities and Exchange
Commission (the "SEC"); (ii) participating, together with other executive
officers, in the formulation of strategic initiatives; (iii) conducting
financial planning and preparing operating budgets for CUI, with the objective
of maximizing cash flow and earnings; (iv) arranging lines of credit or other
borrowings that the Company may need for its business; (v) supervising the
maintenance of CUI's financial books and records so as to facilitate the
preparation of annual audits of the Company and its subsidiaries by the
Company's independent public accountants; (vi) participating in the preparation
of financial and other reports, including those, if any, that may be sent to
CUI's shareholders or required in the future to be filed with the SEC; (vii)
arranging lines of credit or other borrowings that the Company may need for its
business; and (viii) making recommendations to the Board of Directors regarding
the selection of the Company's independent public accountants.
1.3 Reporting Responsibilities. Xxxxxx, in his capacity as
Chief Financial Officer, will be an executive officer of the Company, will work
with and report to the Company's Chief Executive Officer and also will report to
the Company's Board of Directors.
1.4 No Conflicting Duties. Executive hereby represents and
warrants that he is under no contractual or other commitments (written or oral)
that are inconsistent with his obligations set forth in this Agreement,
including, but not limited to, any employment, services, consulting,
non-competition, trade secret or confidentiality agreements. Without limiting
the generality of the foregoing, Executive represents that none of the
information that he needs or will use in performing his duties hereunder belongs
to any other person or entity.
2. RIGHTS TO DISCOVERIES, INTELLECTUAL PROPERTY, ETC. Concurrently
herewith, Xxxxxx shall enter into and deliver to CUI the Employee
Confidentiality Agreement in the form attached hereto as Attachment A.
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3. COMPENSATION. Xxxxxx'x compensation for all services rendered to CUI
or to any Affiliate of CUI (including PCGS) shall be as follows:
3.1 A base salary of $203,000 per year, commencing on the date
hereof, which shall increase to $234,000 per year on the first anniversary, and
to $250,000 per year on the second anniversary, of the date hereof.
3.2 Xxxxxx also shall be eligible to receive bonus or
incentive compensation under any bonus or incentive compensation plan that may
be adopted by CUI for its executive officers and may, in the sole discretion of
the Board of Directors or any compensation committee thereof, be considered for
the awarding of discretionary bonuses during the term of this Agreement.
3.3 Medical insurance coverage under CUI's group plan, on the
same terms and conditions as other CUI employees and participation in all other
employee plans in which full time employees or other executive officers are
entitled to participate.
4. GRANT OF STOCK OPTION. There shall be granted to Xxxxxx by CUI
pursuant to its 1999 Stock Incentive Plan, an option to purchase up to 180,000
shares of CUI common stock (the "Option Shares") at an exercise price of $5.00
per share and pursuant to the terms of an Incentive Stock Option Agreement. In
the event of any conflict between the terms of this Agreement and that Incentive
Stock Option Agreement, relating to such option or the Option Shares, the Stock
Option Agreement shall govern.
5. SEVERANCE COMPENSATION AGREEMENT. Concurrently herewith CUI and
Xxxxxx shall enter into a Severance Compensation Agreement substantially in the
form of Attachment B to this Agreement.
6. TERM AND TERMINATION.
6.1 Initial Term. Unless Xxxxxx'x employment is sooner
terminated pursuant to provisions hereinafter set forth in this Section 6, the
term of Xxxxxx'x employment shall be three (3) years commencing on the date of
this Agreement (the "Initial Term").
6.2 Termination by Xxxxxx. If Xxxxxx terminates this Agreement
for any reason (other than due to his death or disability or pursuant to the
Severance Compensation Agreement), CUI shall continue to pay his base salary and
extend medical benefits coverage for a period of three (3) months or until
Xxxxxx accepts other employment, whichever period is shorter.
6.3 Termination or Non-Renewal by CUI. If, for any reason
other than Cause or the death or disability of Xxxxxx, XXX (i) terminates this
Agreement at any time, (ii) does not agree to extend the Initial Term for an
additional period subsequent to the Initial Term and also has not entered into a
new employment agreement with Xxxxxx by the end of the Initial Term, CUI shall
continue to pay Xxxxxx'x base salary and extend medical benefits coverage
unconditionally for a period of one (1) year thereafter (the "Severance
Compensation"). In the event that the Initial Term of this Agreement is extended
for one or more periods beyond the Initial Term (each an "Extension Term"),
Xxxxxx shall be entitled to Severance Compensation as set forth above in the
event he is terminated without Cause (other than due to his disability or death
or a termination that is covered by the Severance Agreement) during such
Extension Term or CUI allows this Agreement to expire at the end of the last of
the Extension Terms without having entered into a new employment agreement with
Xxxxxx.
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6.4 Termination For Cause. If PCGS terminates this Agreement
and Xxxxxx'x employment for Cause, PCGS may terminate salary and medical
coverage benefits immediately on such termination of employment. For purposes of
this Section, "Cause" shall be defined as the occurrence of any of the
following:
(a) Xxxxxx'x conviction of an act that, under
applicable law or government regulations, constitutes a felony, or that
constitutes a misdemeanor involving moral turpitude,
(b) Xxxxxx'x commission of an act that subjects the
Company, CUI or any Affiliate to civil or criminal penalties or fines
or civil liabilities; or
(c) Xxxxxx breaches or violates, and fails to cure
within fifteen (15) days of demand therefor by CUI any such breach or
violation of, (i) any of his covenants contained in the Non-Competition
Agreement or (ii) any of his covenants in his Employee Confidentiality
Agreement, or (iii) any policies from time to time adopted by CUI's
Board of Directors and made applicable generally to the officers of
CUI, including, but not limited to any conflict of interest policies.
Xxxxxx acknowledges that he was not previously employed in the
collectibles industry, and that the restrictions imposed by Section
3(c) hereof will not unreasonably impair his ability to earn a living
upon termination of this Agreement.
(d) Xxxxxx'x excessive absenteeism (other than for
illness), or
(e) Xxxxxx'x insubordination with respect to any
lawful direction of the CUI Board of Directors or the Chief Executive
Officer.
6.5 Termination on Disability or Death. Xxxxxx'x employment
shall terminate immediately, without notice, upon his becoming totally disabled
(as hereinafter defined) or upon his death. Any such termination shall not
constitute a termination without Cause. In the event of a termination due to
Xxxxxx'x total disability or death, CUI shall continue to pay Xxxxxx'x base
salary and extend medical benefits coverage unconditionally for a period of one
(1) year either to Xxxxxx, in the event of a termination due to disability, or
to his dependents in the event of a termination due to his death. For purposes
of this Agreement, the term "totally disabled" or "total disability" means
Xxxxxx'x inability, due to a physical or mental illness, injury or impairment,
to perform a substantial portion of his duties for a period of 120 or more
consecutive days, or for an aggregate of 180 days (whether or not consecutive)
in any 12-month period, as determined by the CUI Board of Directors.
6.6 Effect of Breach by CUI. In the event that CUI commits a
material breach of this Agreement and fails to cure such breach within thirty
(30) days of its receipt of a written notice from Xxxxxx specifying the nature
of such breach, Xxxxxx shall be entitled to terminate his employment with the
Company as his sole right and remedy therefor, effective on ten (10) days' prior
written notice to CUI and, in such event, such termination of employment shall
be deemed to constitute a termination of Xxxxxx'x employment by CUI pursuant to
Section 6.3 hereof, with the same consequences as if such breach and failure to
cure by the Company constituted a termination of Xxxxxx'x employment by the
Company pursuant to that Section 6.3. Notwithstanding the foregoing, if any such
breach also constitutes an event entitling Xxxxxx to terminate his employment
under and to receive the severance compensation provided for in the Severance
Agreement, then the provisions of the Severance Agreement, rather than the
provisions of Section 6.3 this Section 6.6 hereof, shall apply to such
termination.
6.7 Exclusivity of Remedies. In the event of any termination
of Xxxxxx'x employment, whether by Xxxxxx or by CUI, and whether such
termination is or is not for Cause, then, except as otherwise provided in the
Severance Agreement, the respective rights and remedies and the respective
obligations of the parties hereto under this Section 6 shall constitute the sole
and exclusive
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rights, remedies and obligations of the parties arising out of or in connection
with any termination of this Agreement and Xxxxxx'x employment with CUI, and
each party disclaims and other rights or remedies it or he (as the case may be)
would, but for the provisions of this Section 6, have under this Agreement or
applicable law by reason of such termination of employment.
7. WAIVER; REMEDIES. No failure to exercise and no delay on the part of
either party in exercising any right or power hereunder or granted by law will
operate as a waiver thereof; any single or partial exercise of any right, power
or privilege shall not preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. Waiver by either party of any
right or other matter may only be made by an instrument in writing signed by the
party to be charged. The rights and remedies provided in this Agreement are
cumulative and are not exclusive of any rights and remedies provided by law or
by any other agreement between the parties.
8. INDEMNIFICATION. CUI and Xxxxxx shall enter into an indemnification
agreement substantially in the form of Attachment C hereto (the "Indemnification
Agreement").
9. ENTIRE AGREEMENT/AMENDMENT. This Agreement is the entire agreement
of the parties with respect to its subject matter, and supersedes any other
prior or contemporaneous agreements or understandings between the parties
relating to the subject matter of this Agreement. This Agreement may be amended
at any time by a writing signed by the parties.
10. CONSTRUCTION. This Agreement is the result of arms'-length
negotiations between the parties hereto and no provision hereof shall be
construed against a party by reason of the fact that such party or its legal
counsel drafted said provision.
11. NO ASSIGNMENT. No party may transfer or assign any of its rights or
obligations under this Agreement and any attempt to do so shall be null and
void; provided, however, that CUI shall be entitled, on ten (10) days notice to
Xxxxxx, but without the consent of Xxxxxx, to assign this Agreement to any
corporation or other entity that acquires more than a majority of the
outstanding common stock of CUI or all or substantially all of the assets of
CUI, whether by purchase, merger, consolidation or otherwise.
12. BINDING ON SUCCESSORS. Subject to Section 11 hereof, this Agreement
shall be binding on the parties and their respective heirs, legal
representatives and successors and assigns.
13. SECTION HEADINGS. Section and Subsection headings are for
convenience of reference only and shall not affect the meaning or have any
bearing on the interpretation of any provision of this Agreement.
14. SEVERABILITY. If any provision of this Agreement be held invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions hereof shall not be affected or impaired in any way.
15. GOVERNING LAW. This Agreement shall be construed according to the
internal laws of the State of California, excluding choice of law rules.
16. EXCLUSIVE JURISDICTION/WAIVER OF JURY TRIAL/ATTORNEY'S FEES TO
PREVAILING PARTY.
16.1 Jurisdiction. The courts of Orange County, California
shall have exclusive jurisdiction of any controversy or claim arising out of or
relating to this Agreement or any of the Agreements being entered into pursuant
to the express terms of this Agreement, and each party hereto
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agrees not to challenge the subject-matter or personal jurisdiction of such
courts, the convenience of such courts as forums for such controversies and
claims or the adequacy of service of process delivered by certified or
registered mail.
16.2 Waiver of Jury Trial. IF ANY LEGAL PROCEEDING IS BROUGHT
BY ANY PARTY HERETO WITH RESPECT TO OR ARISING OUT OF ANY CLAIM, DISPUTE OR
CONTROVERSY UNDER OR WITH RESPECT TO THIS AGREEMENT, THEN, TO THE MAXIMUM EXTENT
PERMITTED BY LAW EACH PARTY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES SUCH PARTY'S
RIGHTS TO A TRIAL BY JURY IN ANY SUCH PROCEEDING AND EXPRESSLY AND IRREVOCABLY
AGREES THAT THE TRIER OF FACT IN ANY SUCH PROCEEDING SHALL BE THE JUDGE.
16.3 Attorneys Fees. The court shall award to the prevailing
party, in addition to any other relief deemed appropriate, the prevailing
party's attorney's fees and costs of litigation, whether or not those are
otherwise available to the prevailing party by statute.
17. AUTHORITY. CUI represents and warrants to Xxxxxx that it has the
requisite corporate power and authority, and Xxxxxx represents and warrants to
CUI that he has the legal capacity and right, to enter into this Agreement and
to perform its or his respective obligations under this Agreement and that this
Agreement has been duly executed by such party.
18. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute the same instrument.
COLLECTORS UNIVERSE, INC.
By: /s/ XXXXX X. XXXXX
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Xxxxx X. Xxxxx, Chief Executive Officer
/s/ XXXX X. XXXXXX
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Xxxx X. Xxxxxx
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