EXHIBIT 2
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("AGREEMENT") is made as of March 22, 2000,
between Grow Biz International, Inc. ("EMPLOYER") and Xxxx X. Xxxxxx
("EMPLOYEE").
INTRODUCTION
Employer desires to employ Employee under the terms of this Agreement,
including the non-solicitation, registration rights and other covenants stated
below, and Employee is willing to enter into such covenants in return for the
benefits hereunder.
AGREEMENT
In consideration of the foregoing, the parties agree as follows:
1. NATURE AND CAPACITY OF EMPLOYMENT. Employer agrees to employ Employee as
Chief Executive Officer of Employer under the terms of this Agreement.
Employee agrees to perform, or be available to perform, on a full-time
basis, the functions of this position, under the terms of this
Agreement.
2. TERM OF EMPLOYMENT. The term of this Agreement will commence as of March
23, 2000 and continue until such time as terminated under Section 9
below.
3. ANNUAL BASE SALARY. The annual base salary, exclusive of any benefits or
bonuses, which Employer agrees to pay to Employee for the first year of
this Agreement will be Fifty Thousand Dollars ($50,000). All amounts
paid under this Agreement will be paid consistent with Employer's normal
payroll practice and will be subject to all normal and required
withholdings.
4. BONUS. The Compensation Committee of Employer's Board of Directors may,
in its sole discretion, establish certain criteria under which Employee
may become eligible to receive an annual bonus payment, and will also
maintain the right to adjust such criteria in its sole discretion,
however the Committee is not obligated to grant any bonus to Employee.
5. EMPLOYEE EXPENSES. Employer agrees to reimburse Employee for the
reasonable business expenses Employee incurs on behalf of Employer upon
proof of expenditure.
6. EMPLOYEE BENEFITS. Employee will be eligible for those benefits provided
to executive management employees.
7. EMPLOYEE FRINGE BENEFITS. Employee will receive the following fringe
benefits ("EMPLOYEE FRINGE BENEFITS"):
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7.1 STOCK OPTIONS. Employee will be issued a six year option (the
"OPTION"), under the terms of the stock option agreement
attached hereto as EXHIBIT A, to purchase 600,000 shares of
Employer's common stock (the "OPTION SHARES"), at an exercise
price of $5 per share, vesting at the rate of 120,000 shares per
year on the anniversaries of this Agreement.
7.2 REGISTRATION RIGHTS. Employer has agreed to register under the
Securities Act of 1993, as amended ("SECURITIES ACT"), the
Option, the Option Shares and the 700,000 shares of Employer's
common stock which Employee and others are purchasing from K.
Xxxxxxx Xxxxxxxx, for resale by Employee.
8. UNDERTAKINGS OF EMPLOYEE. Employee agrees to spend Employee's full
working time and effort in performing Employee's duties with Employer so
long as employed by Employer, and will not, during the course of
employment by Employer, without prior written approval of Employer,
become an employee, director, officer, agent, partner of or consultant
to, or a stockholder of (except a stockholder of a public company in
which Employee owns less than five percent (5%) of the issued and
outstanding capital stock of such company) any company or other business
entity which is a significant competitor, supplier, or customer of
Employer.
9. TERMINATION OF EMPLOYMENT AGREEMENT. Employee's employment under this
Agreement may be terminated, by either party for any reason or no reason
upon 30 days written notice to Employee.
10. CONFIDENTIAL INFORMATION. For purposes hereof, "CONFIDENTIAL
INFORMATION" means any information that Employee learns or develops
during the course of employment that derives independent economic value
from being not generally known by the public and includes trade secrets,
methods of research and testing, customer lists, vendor lists and
financial information, and information relating to such matters as
management systems and sales or marketing techniques. Employee will not
directly or indirectly use or disclose any Confidential Information for
anyone other than Employer either during the course of employment or
after the termination of employment. Employee recognizes that the
Confidential Information constitutes a valuable asset of Employer and
agrees to act in such a manner as to prevent its disclosure and use by
any person unless such use is for Employer. Employee's obligations under
this paragraph are unconditional and will not be excused by any Employer
conduct, except prior voluntary disclosure by Employer of this
information.
11. INVENTIONS. Employee agrees to promptly disclose to Employer in writing
any invention, improvement, work of authorship, discovery or idea
(including those which may be subject to copyright protection)
generated, conceived, or reduced to practice by Employee alone or in
conjunction with others, during or after working hours, while an
employee of Employer ("INVENTIONS"); and all such Inventions will be
Employer's exclusive property
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and are hereby assigned to Employer. Further, Employee will, at
Employer's expense, give Employer all assistance it reasonably requires
to perfect, protect, and use its rights to Inventions. In particular,
Employee will sign all documents, do all things, and supply all
information that Employer may deem necessary to: (i) transfer or record
the transfer of Employee's entire right, title and interest in
Inventions; and (ii) enable Employer to obtain copyright or trademark
protection for Inventions. Employee's obligations under this Section
will continue beyond the termination of employment with respect to
Inventions and will be binding on assigns, executors, and other legal
representatives.
NOTICE: PURSUANT TO MINNESOTA STATUTES SS. 181.78, EMPLOYEE IS NOTIFIED
THAT THE AGREEMENT DOES NOT APPLY TO ANY INVENTION FOR WHICH NO
EQUIPMENT, SUPPLIES, FACILITY, OR TRADE SECRET INFORMATION OF EMPLOYER
WAS USED AND WHICH WAS DEVELOPED ENTIRELY ON EMPLOYEE'S OWN TIME, AND
WHICH DOES NOT RELATE DIRECTLY TO EMPLOYER'S BUSINESS OR TO ITS ACTUAL
OR DEMONSTRABLY ANTICIPATED RESEARCH OR DEVELOPMENT, OR WHICH DOES NOT
RESULT FROM ANY WORK EMPLOYEE PERFORMED FOR EMPLOYER.
12. NON-SOLICITATION. Employee covenants that during the term of his
employment by Employer, and for one year after the termination of his
employment, regardless of the cause of termination, Employee will not,
without Employer's prior written consent, directly or indirectly, employ
or seek to employ, in any capacity, any person who, within the preceding
six months, has been an employee of Employer, or any franchisee of
Employer.
13. INDEMNIFICATION BY EMPLOYER. In addition to any indemnification to which
Employee may be entitled in his capacity as an officer and director of
Employer, Employer shall indemnify, defend and hold harmless Employee
from and against any and all costs, expenses, losses, damages, claims,
liabilities, obligations, actions or causes of action (including,
without limitation, reasonable attorneys' fees and expenses) incurred,
sustained or suffered by him as a result of any claim, suit, cause of
action, investigation or proceeding, whenever instituted or commenced,
against Employee by a third party that is not directly or indirectly
affiliated or related to Employee, arising out of the actions or
inactions of Employer with respect to Employer's business prior to March
22, 2000. Should any claim covered by the indemnity provided in Section
13 be asserted, Employee shall promptly notify Employer and give
Employer an opportunity to defend the same either in Employer's name or,
as required by applicable laws and regulations, in Employee's name;
provided, that the failure to give prompt notice shall not affect the
rights of Employee to indemnification hereunder except to the extent
that such failure either shall have materially prejudiced Employer in
the defense of such claim or shall have increased the amount of the
obligation of Employer. Employee shall extend reasonable cooperation in
connection with such defense and shall have the right, at his own
expense, to participate in, but not to control, any such defense by
Employer. If Employer shall fail, after notice from Employee, to defend
against such claim within a reasonable time, then Employee shall be
entitled to assume the defense thereof, and
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Employer shall be liable to repay Employee for all of his expenses
reasonably incurred in connection with such defense, including
reasonable attorney's fees and settlement payments. No settlement shall
be made by Employee of any claim which Employer has assumed pursuant to
this Section 13, or of any other claim or actions with respect to which
indemnification is claimed hereunder, without the prior written consent
of Employer, so long as such consent is not unreasonably withheld or
delayed.
14. NO RESTRICTIONS. Employee represents and warrants to Employer that he is
not subject to any covenant, agreement, understanding or restriction of
any kind or nature which would prohibit, restrict or interfere in any
way with his ability to perform the functions of his positions with
Employer.
15. MISCELLANEOUS.
15.1 INTEGRATION. This Agreement and the Stock Option Agreement of
even date herewith contains the entire agreement and
understanding among the parties relative to the subject matter
hereof and supersedes all prior agreements and understandings
relating thereto.
15.2 APPLICABLE LAW. This Agreement and the rights of the parties
will be governed by and construed and enforced under the laws of
the state of Minnesota. The venue for any action hereunder will
be in the state of Minnesota, and the parties consent to the
jurisdiction of the courts of the state of Minnesota, County of
Hennepin, and the U.S. District Court, District of Minnesota.
15.3 BINDING EFFECT. Except as herein provided, this Agreement will
be binding upon and will benefit the parties and their
respective heirs, successors, assigns and personal
representatives; provided, however, that Employee may not assign
his rights or obligations hereunder without Employer's prior
written consent. Employer may assign its rights and obligations
under this Agreement, provided the assignee agrees to fulfill
Employer's obligations hereunder.
15.4 NOTICES. All notices, requests and other communications
hereunder will be given in writing and deemed to have been given
if personally delivered, or sent by first class, certified mail,
return receipt requested, postage prepaid, to the party at the
address as provided below, or to such other address as such
party may hereafter designate by written notice to the other
party:
(a) If to Employer, to the address of its then principal
office.
(b) If to Employee, to the address last shown in Employer's
records.
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15.5 MODIFICATION. This Agreement will not be modified or amended
except by a written instrument signed by the parties.
15.6 SEVERABILITY. The invalidity or partial invalidity of any
portion of this Agreement will not invalidate the remainder
thereof. If any provision of this Agreement is, for any reason,
held to be excessively broad as to scope, activity, subject or
otherwise, so as to be unenforceable at law, such provision will
be construed by the appropriate judicial body by limiting or
reducing it, so as to be enforceable to the maximum extent
compatible with then applicable law.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date herein first above written.
EMPLOYER
Grow Biz International, Inc.
Dated: March 22, 2000 By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx, Vice Chairman
EMPLOYEE:
Dated: March 22, 2000 By: /s/ Xxxx X. Xxxxxx
--------------------------------------
Xxxx X. Xxxxxx
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