Employment Agreement
March
31,2006
Xxxx,
Xxxxxxx 00000
Dear
Xx.
Xxxxxx X. Xxxxx, Xx:
This
letter will serve as the entire agreement between YP Corp (the "Company") and
Xxxx X. Xxxxxxxxxxxx
(the "Employee"), with respect to your employment with the Company.
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1.
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Term
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The
Employee will work full-time, beginning on April 1, 2006 (the "Beginning Date").
As an employee of
the
Company you will serve as its Chief Financial Officer and perform such services
as are customary for an individual having such title and holding such
position.
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2.
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Salary
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Initially,
the Employee will be paid an annual salary (the "Salary") of $160,000. Salary
for any portion of a
month
will be prorated based upon the number of normal workdays remaining in the
month. The salary will
be
subject to increase by the Company from time to time. The salary will be
processed through payroll
and paid at the same time as other employees.
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3.
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Incentive
Bonus and Equity Participation
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The
Employee will be entitled to receive incentive cash bonuses and/or warrants
or
options for the purchase
of the Company's stock as may be approved by the Board of Directors. As long
as
the employee remains
a
partner of Xxxxx, Employee will share with Xxxxx a portion of his or her
economic interest in any
stock
options or equity bonus that the Company may grant the Employee and may also
share with Xxxxx
(to
the extent specified in the Resources Agreement referenced below) a portion
of
any cash bonus and severance paid to the Employee by the Company. The Company
acknowledges and consents to such arrangement.
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4.
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Xxxxx
Resources
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The
Company acknowledges and agrees that the Employee is and will remain a partner
of, and has and will
retain an interest in, Xxxxx, which will benefit the Company in that the
Employee will have access to certain
Xxxxx resources pursuant to a certain Full-Time Engagement Resources Agreement
between the Company
and Xxxxx (the "Resources Agreement").
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5.
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Employee
Benefits
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The
Employee will be eligible for vacation and holidays consistent with the
Company's policy as it applies
to senior management.
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The
Company will reimburse the Employee for all out-of-pocket business expenses
promptly after they are
incurred.
The
Employee may elect to participate in the Company's employee retirement plan
and/or 401(k) plan, and
the
Employee will be exempt from any delay periods required for
eligibility.
In
lieu
of the Employee participating in the Company-sponsored employee medical
insurance benefit, the Employee
will remain on his or her current Xxxxx medical plan. The Company will reimburse
the Employee for amounts paid by the Employee for such medical insurance for
him/herself and (where applicable) his/her family of up to $500 per month upon
presentation of reasonable documentation of premiums
paid by the Employee to Xxxxx. In accordance with the U.S. federal tax law,
such
amount will not
be
considered reportable W-2 income, but instead non-taxable benefits
expense.
The
Employee must receive written evidence that the Company maintains adequate
directors' and officers' insurance
to cover the Employee in an amount reasonably acceptable to the Employee at
no
additional cost
to
the Employee, and the Company will maintain such insurance at all times while
this agreement remains
in effect.
Furthermore,
the Company will maintain such insurance coverage with respect to occurrences
arising during
the term of this agreement for at least three years following the termination
or
expiration of this agreement
or will purchase a directors' and officers' extended reporting period, or
"tail," policy to cover the
Xxxxx
Partner.
The
Company agrees to indemnify the Employee to the full extent permitted by law
for
any losses, costs, damages, and expenses, including reasonable attorneys' fees,
as they are incurred, in connection with any cause
of
action, suit, or other proceeding arising in connection with Employee's
employment with the Co
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6.
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Termination;
Severance Payment
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The
Company may terminate this Agreement at any time. In the event this Agreement
is
terminated other than
by
Employee voluntarily or by the Company for Cause (as defined below), or by
reason of Employee's
death or permanent disability, Employee shall be entitled to the
following:
If
the
termination of this agreement is within 9 months of the Beginning Date, the
Employee will be entitled
to receive a severance payment ("Severance Payment") equal to three month's
salary. After that employee shall receive the remainder of this one year
contract.
The
Company will pay directly to Xxxxx a portion of any Severance Payments that
the
Company may make to Employee equal to the same percentage that applies above
with respect to Salary. For purposes hereof,
"Severance Payment" means any payments to Employee by Company in connection
with
the termination
of Employee's employment.
This
agreement will terminate immediately upon the death or disability of the
Employee. For purposes of this
agreement, disability will be as defined by the applicable policy of disability
insurance or, in the absence
of such insurance, by the Company's Board of Directors acting in good
faith.
The
Salary will be prorated for the final pay period based on the number of days
in
the final pay period up to
the
effective date of termination or expiration.
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7.
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Miscellaneous
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This
agreement contains the entire agreement between the parties, superseding any
prior oral or written statements
or agreements.
Neither
the Employee nor the Company will be deemed to have waived any rights or
remedies accruing under
this agreement unless such waiver is in writing and signed by the party electing
to waive the right or
remedy. This agreement binds and benefits the successors of the
parties.
The
provisions of this agreement concerning the payment of salary and bonuses,
directors' and officers' insurance and confidentiality will survive any
termination or expiration of this agreement.
The
terms
of this agreement are severable and may not be amended except in a writing
signed by the parties.
If any portion of this agreement is found to be unenforceable, the rest of
this
agreement will be enforceable except to the extent that the severed provision
deprives either party of a substantial portion of its
bargain.
This
agreement will be governed by and construed in all respects in accordance with
the laws of the State of Arizona, without giving effect to conflicts-of-laws
principles.
Each
person signing below is authorized to sign on behalf of the party indicated,
and
in each case such signature is the only one necessary.
Please
sign below and return a signed copy of this letter to indicate your agreement
with its terms and conditions.
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Sincerely
yours,
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By:
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/s/ Xxxxxx X. Xxxxx, Xx. | |||
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Signature
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Name:
Xxxxxx X. Xxxxx, Xx.
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Title:
Chairman and acting CEO
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Acknowledged
and agreed by:
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EMPLOYEE
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/s/
Xxxx Xxxxxxxxxxxx
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(Signature)
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Xxxx
Xxxxxxxxxxxx
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(Print
name)
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Date:
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3/31/06
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