Exhibit 99.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of the
27th day of October 2004, by and between Advanced Marketing Services, Inc., a
Delaware Corporation (the "Company"), and Xxxxx X. Xxxxx ("Executive").
WHEREAS, effective November 12, 2004, Executive has been appointed as
President and Chief Executive Officer ("CEO") of the Company;
WHEREAS, the parties believe it to be in their mutual interest to set
forth in writing the terms and conditions of Executive's employment; and
WHEREAS, this Agreement shall govern the employment relationship between
the parties from and after the date stated above and supersedes and negates all
previous agreements made between the parties, whether written or oral, relating
to Executive's employment with the Company, provided however, that Executive's
Change of Control Agreement and Indemnification Agreement shall remain in full
force and effect.
NOW, THEREFORE, in consideration of the foregoing, and the mutual promises
and covenants contained below, the parties hereby agree as follows:
I. EMPLOYMENT.
A. POSITION. Upon the terms and conditions hereinafter set forth, the
Company hereby engages Executive and shall appoint him as President and CEO,
effective November 12, 2004.
B. TERM. Subject to termination as provided for in this Agreement, the
term of this Agreement shall commence November 12, 2004, and shall end on April
11, 2006 ("the Term of the Agreement").
II. COMPENSATION.
A. SALARY. The Company shall pay to Executive an base salary at the rate
of Four Hundred Fifty Thousand dollars ($450,000) per annum (less taxes,
required withholdings, and authorized deductions)(the "Base Salary").
Executive's Base Salary shall not be decreased and shall be earned monthly and
paid periodically in accordance with the Company's normal payroll practices.
B. BONUS PLAN. With respect to the period April 12, 2004, through
November 12, 2004, during which Executive served as the Company's Executive
Vice President and Chief Financial Officer, Executive shall be paid,
immediately, a bonus of Forty Thousand Dollars ($40,000).
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With respect to remaining portion of the Company's fiscal year 2005,
Executive will be entitled to earn a bonus of 50% of Base Salary, pro-rated for
the remaining five months of the fiscal year, based upon the achievement of
qualitative and new quantitative goals to be agreed upon by Executive and the
Company's Board of Directors ("the Board") before November 30, 2004.
With respect to the Company's fiscal year 2006, Executive will be entitled
to earn a bonus of 50% of Base Salary based upon the achievement of qualitative
and quantitative goals to be agreed upon by Executive and the Board prior to the
beginning of the Company's fiscal year 2006.
C. STOCK OPTIONS. Pursuant to and subject to the terms and conditions of
the Company's Equity Incentive Plan, as amended, and the Company's standard
Non-Qualified Stock Option Agreement, the Company shall grant the Executive the
right and option to purchase all or any part of an aggregate of 100,000 shares
of the presently authorized and unissued Common Stock, no par value, of the
Company.
D. OTHER BENEFITS. Executive shall be entitled during his employment to
participate in the Company's other benefit plans or policies then applicable
generally to senior executives of the Company, including, but not limited to, a
car allowance in the amount currently paid to the Company's President and CEO.
III. TERMINATION.
A. TERMINATION BY THE COMPANY. The Company may terminate Executive's
employment at any time, with or without cause, upon written notice to
Executive.
B. TERMINATION BY EXECUTIVE. Executive may terminate Executive's
employment at any time, with or without cause, upon written notice to the
Company.
C. OBLIGATIONS OF THE COMPANY UPON TERMINATION.
1. Termination by the Company Without Cause. In the event
Executive's employment is terminated by the Company without Cause during the
Term of the Agreement, Executive shall be entitled to (i) continued payment of
the remaining Base Salary during the Term of the Agreement and (ii) additional
severance payments in accordance with the Company's policies for senior
executives in effect at the time of termination and in any event no less than
six months' Base Salary, each subject to tax withholding and authorized
deductions and paid in the Company's normal payroll cycles. For the purposes
of this Agreement, Cause shall mean a determination by the Company's Board of
Directors that Executive has committed willful misconduct or fraud, or if
Executive is convicted of or pleads nolo contendre to a felony.
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2. Termination by the Company with Cause. In the event Executive's
employment is terminated by the Company with Cause, Executive shall not be
entitled to receive any salary continuation or severance payments.
3. Change of Control Termination. The benefits Executive shall be
entitled to in the event of a termination of his employment following a Change
of Control shall be determined by Executive's Change of Control Agreement
attached hereto as Exhibit A.
4. Termination by the Executive. Except as otherwise provided in the
Change of Control Agreement, Executive shall not be entitled to any salary
continuation or severance payments in the event Executive terminates his
employment with the Company.
IV. CONFIDENTIALITY. Concurrently with the execution of this Agreement,
Executive shall execute the Company's standard confidentiality agreement for
senior executives.
V. MISCELLANEOUS.
A. ENTIRE AGREEMENT; WAIVER; MODIFICATION. This instrument,
including agreements referred to herein and attached hereto, constitutes the
entire agreement of the parties hereto and supersedes and replaces any other
written or oral agreement or understanding with respect to the subject matter
hereof. This instrument constitutes an integrated agreement. This Agreement may
only be modified, amended or waived by a written instrument executed by both
parties. No waiver of a breach hereof shall be deemed to constitute a waiver of
a future breach, whether of a similar or a dissimilar nature.
B. COMMUNICATIONS. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if hand-delivered or if mailed by registered or certified mail,
postage prepaid, addressed to Executive at Executive's last know address as it
appears on the records of the Company or addressed to the Company at its
principal office at 0000 Xxxxxxx Xxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx 00000.
Either party may change the address at which notice shall be given by written
notice given in the above manner.
C. SAVINGS CLAUSE. Should any valid federal or state law or final
determination of any administrative agency or court of competent jurisdiction
affect any provision of this Agreement, the provision or provisions so affected
shall be automatically conformed to the law or determination, and if any such
law or determination renders any provisions of this Agreement prohibited or
unenforceable, the provision or provisions so rendered shall be effective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and otherwise this Agreement shall continue in full
force and effect. To the extent permitted by applicable law, the parties hereto
hereby waive any provision of law that renders any provision hereof prohibited
or unenforceable in any respect.
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D. HEADINGS. The headings to the Sections in this Agreement have been
inserted for convenience of reference only and shall not be deemed a part or
affect the construction or interpretation of any provision of this Agreement.
E. CONSTRUCTION. Each party has cooperated in the drafting and
preparation of this Agreement. Hence, in any construction to be made of this
Agreement, the same shall not be construed against any party on the basis that
the party was the drafter.
F. GOVERNING LAWS. This Agreement shall be governed as to its validity
and effect by the laws of the State of California without regard to principles
of conflict of laws.
G. ASSIGNMENT. Executive agrees that this Agreement is personal to him
and his rights and interests hereunder may not be assigned, nor may his
obligations and duties hereunder by delegated, except as provided by law.
H. ATTORNEYS' FEES. In any legal action or in any other proceeding to
enforce any of the provisions or rights under this Agreement, the prevailing
party, as determined by the Court in a final judgment or decree, shall be
entitled to costs, expenses, and reasonable attorneys' fees (including, without
limitation, costs, expenses, and fees in connection with any appeal).
I. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Photographic copies of
such signed counterparts may be used in lieu of the originals for any purpose.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date first written above.
EXECUTIVE ADVANCED MARKETING SERVICES, INC.
/s/ Xxxxx X. Xxxxx /s/ Xxxx Xxxxx
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Xxxxx X. Xxxxx By: Xxxx Xxxxx
Its: Executive Vice President, General
Counsel and Secretary
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