EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
effective as of June 19, 2000, between XxxxXx.xxx, Inc., a Nevada corporation
(the "Corporation"), and Xxxxxx Xxxxxx ("Officer").
R E C I T A L S
A. Officer desires to become employed by the Corporation as
Senior Vice President pursuant to theterms and conditions set forth in this
Agreement.
B. The Corporation desires to employ Officer in such capacity
pursuant to the terms and conditionsset forth in this Agreement.
THE PARTIES AGREE AS FOLLOWS:
1. Duties. During the term of this Agreement, Officer agrees to be
employed by and to serve the Corporation as Senior Vice President, and the
corporation agrees to employ and retain Officer in such capacity. Officer shall
devote his best efforts and all of his business time, energy, and skill to the
affairs of the Corporation; provided, however, that Officer may undertake such
specific additional charitable and business activities, if any, as the Board of
Directors of the corporation may reasonably approve (including, without
limitation, activities for affiliates of the Corporation). In the performance of
his duties hereunder, Officer shall at all times be subject to the directions of
the Board of Directors of the Corporation.
2. Term of Employment.
2.1 Definitions. For purposes of this Agreement,
the following terms shall have the following meanings:
(a) "Gross Revenues" shall mean all revenues of the
Corporation, other than investment income, calculated in
accordance with generally accepted accounting principles.
(b) "Net Income" shall mean the net income of the
Corporation, calculated in accordance with generally accepted
accounting principles, after payment of taxes by the
Corporation all as determined by the independent auditors
retained by the Corporation.
(c) "Termination for Cause" shall mean termination by
the Corporation of Officer's employment for reason of (i)
Officer's willful and persistent inattention to his duties
and/or acts amounting to gross negligence or willful
dishonesty towards, fraud upon, or deliberate injury or
attempted injury to, the Corporation, (ii) Officer's willful
breach of any term or provision of this Agreement; or (iii)
the commission by Officer of any Oct or any failure by Officer
to act involving serious criminal conduct or moral turpitude,
whether or not directly relating to the business and affairs
of the Corporation.
(d) "Termination other than for Cause" shall mean
termination by the Corporation of Officer's employment other
than a Termination for Cause.
(e) "Voluntary Termination" shall mean termination by
Officer of Officer's employment by the Corporation and shall
exclude termination by reason of Officer's death or disability
as described in Sections 2.5 and 2.6.
2.2 Basic Term. The term of employment of Officer by the
Corporation shall terminate, unless extended by mutual written
agreement of Officer and the Corporation, or unless earlier terminated
in accordance with this Agreement three years from the date hereof.
2.3 Termination for Cause. Termination for Cause may be
effected by the Corporation at any time during the term of this
Agreement and shall be effected by written notification to Officer.
Upon Termination for Cause, Officer shall be immediately paid all
accrued base salary, bonuses, any vested deferred compensation (other
than pension plan or profit sharing plan benefits which will be paid in
accordance with the applicable plan), reimbursements for certain
expenses and taxes as provided in this Agreement and vacation pay,
through the date of termination, but Officer shall not be paid any
other compensation of any kind, including without limitation, severance
compensation.
2.4 Termination Other than for Cause. Notwithstanding anything
else in this Agreement, the Corporation may effect a Termination other
than for Cause at any time upon giving notice to Officer and tendering
immediately therewith all accrued base salary, bonuses, any vested
deferred compensation (other than pension plan or profit sharing plan
benefits which will be paid in accordance with the applicable plan)
reimbursements for certain expenses and taxes as provided in this
Agreement and vacation pay, through the date of termination in
addition, in the event of a Termination other than for cause, the
corporation shall pay Officer severance compensation as provided in
Section 4. Officer shall be entitled to no other compensation of any
kind.
2.5 Termination by Reason of Disability. In the event that
Officer should, in the reasonable judgment of the Board of Directors of
the Corporation, fail to perform his duties under this Agreement on
account of illness or physical or mental incapacity, and such illness
or incapacity shall continue for a period of more than three months,
the Corporation shall have the right to terminate Officer's employment
hereunder by written notification to Officer and payment to Officer of
all accrued base salary, bonuses, any vested deferred compensation
(other than pension plan or profit sharing plan benefits which will be
paid in accordance with the applicable plan), reimbursements for
certain expenses and taxes as provided in this Agreement and vacation
pay. In addition, in the event of a termination for the disability of
Officer, the corporation shall pay to Officer severance compensation as
provided in Section 4 until the later to occur of (i) one year, or (ii)
the expiration of Officer's employment as provided in section 2.2 of
this Agreement. Officer shall be entitled to no other compensation of
any kind.
2.6 Death. In the event of Officer's death during the term of
this Agreement, Officer's employment shall be deemed to have terminated
as of the last day of the month during which his death occurred, and
the Corporation shall pay to his estate accrued base salary, bonuses,
any vested deferred compensation (other than pension plan or profit
sharing plan benefits which will be paid in accordance with the
applicable plan), reimbursements for certain expenses and taxes as
provided in this Agreement and vacation day, through the date of
termination. In addition, in the event of termination for reason of the
death of Officer, the Corporation shall pay to Officer's spouse, if she
survives him, or, if Officer is not married on the date of his death,
then to his estate, severance compensation as provided in section 4
until the earliest of (i) the expiration of one year from the date of
Officer's death, or (ii) if Officer is married on the date of his
death, the date of death of such spouse, or (iii) the expiration of
Officer's employment as provided in Section 2.2 of this Agreement.
Officer's estate or spouse shall be entitled to no other compensation
of any kind.
2.7 Voluntary Termination. In the event of a Voluntary
Termination, the Corporation shall immediately pay all accrued salary,
bonuses, any vested deferred compensation (other than pension plan or
profit sharing plan benefits which will be paid in accordance with the
applicable plan), reimbursements for certain expenses and taxes as
provided in this Agreement and vacation Day, through the date of
termination, but no other compensation of any kind, including without
limitation severance pay.
3. Salary and Benefits.
3.1 Base Salary. As payment for the services to be rendered by
Officer as provided in Section 1, and subject to the terms and
conditions of Section 2, the Corporation agrees to pay Officer a base
annual salary of not less than $125,000.00 payable on the 15th day (or
the business day immediately preceding such date) and the last day (or
the business day immediately preceding such date) of each month or in
such other periodic installments as the Board of Directors of the
Corporation may establish from time to time for senior management,
until the first anniversary of the effective date of this Agreement.
The base salary payable to Officer for each remaining year of the term
of this Agreement following the first anniversary of the effective date
of this Agreement shall be established on an annual basis by the Board
of Directors of the Corporation.
3.2 Bonuses. In addition to the base salary payable pursuant
to Section 3.1, during the Corporation's first fiscal year, the
Corporation shall pay Officer a bonus, equal to 1 % of the
Corporation's Net Income, which bonus shall be payable within thirty
(30) days of the end of each fiscal quarter. Officer shall be entitled
to draw a monthly amount on account of his share of net profits up to a
maximum of $250.00 semimonthly. Payments to Officer shall be adjusted
on a quarterly basis, using the quarterly estimates and year-end
statement to determine the amount of compensation due, all payments to
be made within thirty business days after the issuance of the estimate
or year-end statement, In no event shall the annual bonus based upon
Net Income, exceed $100,000. The amount and terms of the bonus, if any,
payable to Officer during each remaining fiscal year of the term of
this Agreement shall be annually established by the Board of Directors
of the Corporation.
3.3 Employee Benefit Plans. Officer shall be eligible to
participate in such of the corporation's benefit plans as may be
established by the Board of Directors of the Corporation and made
generally available of the Corporation (including without limitation
any plans and programs of affiliates of the corporation in which the
Corporation has elected to participate), including any retirement,
profit sharing, deferred compensation, stock option, medical, dental,
and health insurance plans.
3.4 Lease of Automobile and Expenses. The Corporation shall
lease an automobile for Officer's use for an amount up to $400.00 per
month. The corporation shall also pay a parking allowance to Officer
and shall reimburse Officer for insurance and for other expenses in
accordance with Internal Revenue service guidelines regarding
reimbursement of expenses incurred in connection with the use of an
automobile for business purposes.
3.5 Vacations; Taxes; Business Expenses. Officer will be
entitled to vacation periods each year similar to those taken by the
corporation's other key Officers up to four (4) weeks. Officer will
also be entitled to reimbursement for his reasonable business expenses
incurred in connection with the performance of his duties hereunder
commencing on the effective date hereof, including expenditures for
entertainment, gifts and travel, provided that (a) each such
expenditure is of a nature qualifying it as a prior deduction on the
federal and state income tax returns of the corporation and (b) Officer
furnishes to the corporation adequate records and other documentary
evidence required by federal and state statutes and regulations issued
by the appropriate tax authorities for the substantiation of each such
expenditure as an income tax deduction. Officer shall also be entitled
to reimbursement by the corporation for local, city and state personal
income or property taxes incurred by him during the term hereof.
3.6 Deferred Compensation. Any reduction in the first year
base salary, bonus, benefits, auto lease, vacation, expense or tax
reimbursement shall, nonetheless, be carried forward as deferred
compensation or reimbursement and be payable in cash in full upon
termination of the Officer's employment, without regard to the reason
for such termination.
3.7 Indemnification. The Corporation will indemnify and hold
harmless the Officer in connection with the defense of any action, suit
or proceeding to which he is a party or threat thereof, by reason of
his being or having been an Officer or director of the Corporation to
the fullest extent that may be permitted by applicable law.
4. Severance Compensation.
4.1 Termination other than for Cause. In the event Officers
employment is terminated in a termination other than for Cause, Officer
shall be paid concurrently with the notice of termination as severance
pay an amount equal to his then base salary until the later to occur of
(i) the expiration of the term of this Agreement as set forth in
Section 2.2, or (ii) one year.
4.2 Other Termination. In the event of a Voluntary
Termination or Termination for Cause, Officer or his estate shall not
be paid any severance pay.
5. Non-competition.
5.1 During the Term of Employment. During the term of his
employment under this Agreement, Officer shall not directly or
indirectly, as an owner, partner, shareholder, employee, consultant, or
in any similar manner, engage in any activity competitive with or
adverse to the business in which the Corporation is engaged at the
time. Notwithstanding the foregoing, Officer shall be free, without the
Corporation's consent, to purchase or hold as an investment or
otherwise, up to one percent of the outstanding stock or other
securities of any corporation which has its securities publicly traded
on any recognized securities exchange or in the over-the-counter market
or, one percent of the stock or other securities of any privately held
corporation that might be in competition with the corporation.
5.2 After Termination. In the event of a Voluntary Termination
or Termination for Cause, Officer covenants that he shall not for one
year following such termination directly or indirectly as an owner,
partner, shareholder, employee, consultant, or in any similar manner
engage, in competition with the corporation, in the same type of
business as the corporation is engaged at the time of the termination,
it being understood that the competitive nature of any other ownership,
employment, consultation or other activity shall be determined in good
faith by the Board of Directors of the Corporation. Notwithstanding the
foregoing, the purchase or holding by Officer as an investment or
otherwise of up to one percent of the outstanding stock or other
securities of any such competitive corporation or business which has
its securities publicly traded on any recognized securities exchange or
in the over-the-counter market or five percent of the stock of any
privately held corporation shall not constitute a breach of the
covenant contained in this Section 5.2.
6. Confidentiality. Officer agrees that all confidential and
proprietary information (including without limitation any and all information,
books, records, and documents relating to the corporation's operations, customer
lists, financial data, any and all reports to the Corporation by Officer during
the course of his employment by the Corporation, and any and all information
regarding personnel, customers, pricing, terms of sale, research and
development, or otherwise relating to the business of the corporation) relating
to the business or operations of the corporation or if its affiliates, shall be
kept and treated as confidential both during and after the term of this
Agreement, provided that Officer shall not incur any liability for disclosure of
information which (a) was permitted in writing by the Corporation's Board of
Directors, or (b) is within the public domain or comes within the public domain
without any breach of this Agreement. All notes, memoranda, reports, drawings,
blueprints, manuals, computer programs, records, materials, data and other
papers of every kind which were in or shall come into Officer's possession at
any time during Officer's employment by the Corporation relating to any such
confidential and proprietary information shall be the sole and exclusive
property of the Corporation. This property shall be surrendered to the
Corporation upon termination of the employment period or upon request by the
corporation at any other time either before or after such termination, and
Officer agrees not to retain any copies, notes or excerpts thereof.
7. Copyright. Officer agrees that, except as provided in the preceding
sentence, any and all writings produced at any time during the term hereof by
Officer as a part of the performance of his duties hereunder are and will be the
sole property of the Corporation, and that the Corporation will have the
exclusive right to copyright such writings in any country.
8. Miscellaneous.
8.1 Waiver. The waiver of the breach of any provision of this
Agreement shall not operate or be construed as a waiver of any
subsequent breach of the same or other provision hereof.
8.2 Entire Agreement; Modifications. Except as otherwise
provide is Agreement represents the entire understanding among the
parties with respect to the subject matter hereof, and this Agreement
supersedes any and all prior understandings, agreements, plans and
negotiations, written or oral, with respect to the subject matter
hereof, including without limitation any understandings, agreements or
obligations respecting any past or future compensation, bonuses,
reimbursements, or other payments to of Officer from the Corporation.
All modifications to the Agreement must be in writing and signed by the
party against whom enforcement of such modification is sought.
8.3 Notices. All notices and other communications under this
Agreement shall be in writing and shall be delivered personally or
given by telegraph or facsimile transmission or first class mail and
shall be deemed to have been duly given when personally delivered or
seven days after mailing or one day after facsimile or telegraph
transmission to the respective persons named below:
If to the Corporation: XxxxXx.xxx, Inc.
00000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxxx 00000
If to Officer: Xxxxxx X. Xxxxxxxxxxx
0000 X. 000xx Xxxxx
Xxxxx, Xxxxxxxx 00000
Any party may change its address for notices by notice duly
pursuant to this Section 8.3.
8.4 Headings. The Section headings herein are
intended for reference and shall not by themselves determine the
construction or interpretation of this Agreement.
8.5 Governing Law; Consent to Jurisdiction. Agreement shall be
governed by and construed in accordance with the laws of the State of
Nebraska. Officer and Corporation each agree that service upon them in
any such action may be made by first class mail, certified or
registered, in the manner provided for delivery of notices in Section
8.3.
8.6 Injunctive Relief. The parties acknowledge and agree that
the extent of damages to the Corporation in the event of a breach of
Sections 5, 6 or 7 of this Agreement would be difficult or impossible
to ascertain and that there is and will be available to the Corporation
no adequate remedy at law in the event of any such breach. Accordingly,
Officer agrees that, in the event of such breach, the Corporation shall
be entitled to enforce such sections by injunctive or other equitable
relief in addition to any other relief to which the corporation may be
entitled.
8.7 Survival; Non-Assignability. The Corporation's obligations
hereunder shall not be terminated by reason of any liquidation,
dissolution, bankruptcy, cessation of business, or similar event
relating to the corporation. This Agreement shall not be terminated by
any merger or consolidation or other reorganization of the Corporation.
In the event any such merger, consolidation, or reorganization shall be
accomplished by transfer of stock or by transfer of assets or
otherwise, the provisions of this Agreement shall be binding upon and
shall inure to the benefit of the surviving or resulting corporation or
person. This Agreement shall be binding upon and inure to the benefit
of the executors, administrators, heirs, successors and assigns of the
parties; provided, however, that, except as herein expressly provided,
this Agreement shall not be assignable either by the Corporation
(except to an affiliate of the Corporation) or by Officer.
8.8 Counterparts. This Agreement may be executed in
one or more counterparts, all of which taken together shall
constitute one and the same Agreement.
8.9 Severability. If any portion of this Agreement
is determined to be invalid or unenforceable, the remainder shall
be valid and enforceable to the maximum extent possible.
8.10 Attorneys. In the event legal action is brought to
interpret or enforce this Agreement, the prevailing party shall be
entitled to recover its reasonable attorneys fees and related costs.
WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the day and year first above written.
OFFICER:
Xxxxxx Xxxxxx
COMPANY:
Xxxxxx X. Xxxxxxxxxxx
XxxxXx.xxx, Inc.
CEO/President
