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EXHIBIT 10.1
THIRD AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIRD AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement")
entered into as of the 22nd day of September, 2000, by and among XXXXXXX.XXX,
INC., a Nevada corporation (the "Company"), and XXXX X. XXXXX ("Xxxxx").
RECITALS
A. The Company and Xxxxx entered into an Employment Agreement dated
January 29, 1999, an Amendment of Employment Agreement dated April 7, 1999 an
Amended and Restated Employment Agreement dated August 1, 1999, a Second Amended
and Restated Employment Agreement dated December 1, 1999, a confirming letter
dated May 9, 2000 and an Amendment of Employment Agreement dated June 29, 2000
(collectively, the "Employment Agreement").
B. The Company and Xxxxx desire to amend and restate the Employment
Agreement in its entirety.
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree that the Employment Agreement is hereby amended and restated as follows:
1. EMPLOYMENT. The Company hereby employs Xxxxx and Xxxxx hereby
accepts employment with the Company as its Chief Financial Officer and Senior
Vice President, Finance and Accounting upon the terms and conditions hereinafter
set forth. Xxxxx'x employment shall be deemed an "at will" employment.
2. DUTIES. Xxxxx will serve the Company as its Chief Financial Officer
and Senior Vice President, Finance and Accounting and will faithfully and
diligently perform the services and functions relating to such offices and
positions or otherwise reasonably incident to such offices and positions,
provided that all such services and functions will be reasonable and within
Xxxxx'x areas of expertise. Xxxxx will perform these duties on a part-time
basis, and the Company acknowledges that Xxxxx may have other employment while
performing his duties hereunder.
3. SCOPE OF EMPLOYMENT. Xxxxx will make himself available as reasonably
necessary to carry out his duties hereunder, including outside of normal
business hours, but shall not be required to be in the Company's offices on a
daily basis. Xxxxx'x duties will include participation as reasonably required in
the preparation of all required filings by the Company with the Securities and
Exchange Commission. Xxxxx will be compensated on an hourly basis pursuant to
Section 4 below, but will not work more than 20 hours in a week without prior
approval from the Company's President and Chief Executive Officer.
4. COMPENSATION. Xxxxx will continue to receive his current salary
through September 30, 2000. Commencing October 1, 2000, as compensation for the
services rendered to the Company
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under this Agreement, Xxxxx will be paid an hourly rate of $125.00; provided,
that Xxxxx shall be paid for at least ten hours each week regardless of the
number of hours actually worked in that week for so long as this Agreement
remains in effect. Xxxxx'x compensation shall be paid to him in accordance with
the then current payroll policies of the Company or as otherwise agreed to by
the parties. In addition, Xxxxx shall receive a bonus of $10,000 payable upon
the closing of a Change of Control (as defined below). A "Change of Control" is
a transaction constituting (i) a sale of all or substantially all of the assets
of the Company or (ii) a merger, acquisition, consolidation or other transaction
involving the transfer or issuance of at least 30% of the outstanding voting
stock of the Company. If this Agreement is terminated pursuant to Section 5(a),
(b) or (e) after a definitive agreement for a Change of Control is entered into
by the Company but before the Change of Control has closed, Xxxxx shall receive
a bonus of $5,000 payable on the date of termination, and shall receive an
additional bonus of $5,000 payable upon such closing (these bonuses are in lieu
of the $10,000 bonus referred to above). In addition, upon termination of this
Agreement pursuant to Sections 5(a), (b), (e) or, following the closing of a
Change of Control, 5(d), the Company will transfer ownership to Xxxxx of the
following items of technology equipment currently used by Xxxxx: laptop
computer; office PC and Monitor; office Fax/Printer; Cellular Phone; and Palm
Pilot.
5. TERMINATION. This Agreement will terminate upon the occurrence of
any of the following events:
a. The death of Xxxxx;
b. The "Total Disability" (as hereinafter defined) of Xxxxx;
c. Written notice to Xxxxx from the Company of termination for
"Cause" (as hereinafter defined);
d. The voluntary termination of this Agreement by Xxxxx upon two
weeks prior written notice;
e. Two weeks prior written notice to Xxxxx from the Company for
any reason without "Cause".
"Total Disability" means physical or mental disability, or both,
determined to be (or reasonably expected to be, based upon then available
medical information) of not less than twelve months duration where Xxxxx is
unable to reasonably perform the duties he was performing for the Company
immediately prior to such disability. The determination shall rest upon the
opinion of the physician regularly attending Xxxxx. If the Company disagrees
with said physician's opinion, the Company may engage at their own expense a
physician to examine the Xxxxx, and Xxxxx hereby consents to such examination
and to waive, if applicable any privilege between the physician and Xxxxx that
may arise as a result of said examination. If after conferring, the two
physicians cannot concur on a final opinion, they shall choose a third
consulting physician whose opinion shall control. The expense of the third
consulting physician shall be borne equally by the Xxxxx and the Company.
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"Cause" means (i) Xxxxx has failed to substantially perform his duties
as reasonably determined by the Board, (ii) Xxxxx engages in poor performance
that is not cured within thirty days after counseling by the Company, (iii)
Xxxxx has failed to comply with the reasonable directives and policies of the
Board, or (iv) Xxxxx breaches his fiduciary duty to the Company or commits any
dishonest, unethical, fraudulent, or felonious act in respect to Xxxxx'x duties
to the Company. Xxxxx'x refusal to relocate from the Phoenix, Arizona
metropolitan area if requested by the Company shall not constitute the basis for
termination of Xxxxx'x employment for Cause.
If Xxxxx'x employment is terminated pursuant to Sections 5(a), (b) or
(e) of this Agreement and the Company closes a Change of Control within six
months of the date of termination of employment, Xxxxx shall receive the $10,000
bonus on the closing date of the Change of Control.
6. STOCK OPTIONS. Notwithstanding anything to the contrary in any
previous agreement between Xxxxx and the Company, in the event Xxxxx'x
employment is terminated for any reason other than pursuant to Section 5(c),
Xxxxx may exercise such portion of his or her stock options as was exercisable
by Xxxxx at the date of such termination (the "Termination Date") at any time
within three months following the Termination Date; provided, however, that if
Xxxxx'x employment is terminated due to disability within the meaning of
Internal Revenue Code section 422A, he may exercise such portion of his stock
options as was exercisable on the Termination Date within one year following the
Termination Date. Stock options not exercised within the applicable period
specified above shall terminate. If Xxxxx'x employment is terminated pursuant to
Section 5(c) all of his stock options shall terminate immediately and shall not
be exercisable.
7. LOAN. The Company acknowledges that the $20,000 loan made to Xxxxx
upon commencement of his employment with the Company has been forgiven in full
in accordance with its terms.
8. BENEFITS. Xxxxx shall be entitled to continued participation in the
Company' medical and dental insurance coverage and 401(k) plan on the same basis
as other executives of the Company. These benefits shall continue through the
last day of the month in which Xxxxx'x employment with the Company is terminated
for any reason. Commencing October 1, 2000, Xxxxx will no longer be entitled to
any paid vacation days from the Company and will no longer receive a car
allowance. Any accrued and unused vacation days as of September 30, 2000 shall
be paid to Xxxxx on September 30, 2000 based upon his current annual salary.
9. BUSINESS EXPENSES. Xxxxx is authorized to incur, with the prior
approval of the Company's President and Chief Executive Officer, reasonable
expenses for promoting the business of the Company, including expenses for
entertainment, travel and similar items. The Company shall reimburse Xxxxx for
all such expenses on the presentation by Xxxxx of itemized accounts of such
expenditures in accordance with guidelines set forth by the Company and the
Internal Revenue Service.
10. NON-COMPETITION AND CONFIDENTIALITY.
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a. Non-Competition. The Company and Xxxxx acknowledge and
agree that Xxxxx'x services are of a special and unusual character which have a
unique value to the Company, the loss of which cannot be adequately compensated
by damages in an action at law and if used in competition with the Company,
could cause serious harm to the Company. Accordingly, Xxxxx agrees that during
the Term of this Agreement and for a period of two years after the termination
of this employment by the Company, irrespective of the reason for such
termination, Xxxxx will not (1) enter into any agreement with or directly or
indirectly solicit or attempt to solicit any employee or other representatives
of the Company for the purpose of causing them to leave the Company to take
employment with any other business entity, or (2) compete, directly or
indirectly, with the Company in any way and that Xxxxx will not act as an
officer, director, employee, consultant, shareholder, lender or agent of any
entity engaged in any business of the same nature as, or in competition with,
the business in which the Company is now engaged, was engaged during Xxxxx'x
employment or is engaged at the time of Xxxxx'x termination of employment,
except for the ownership of less than 5% of the outstanding capital stock of a
publicly traded company.
b. Confidentiality.
(1) Xxxxx acknowledges that in Xxxxx'x employment
hereunder, Xxxxx will be making use of, acquiring and adding to the Company's
trade secrets and its confidential and proprietary information of a special and
unique nature and value relating to such matters as, but not limited to, the
Company's business operations, internal structure, financial affairs, programs,
software systems, procedures, manuals, confidential reports, lists of clients
and prospective clients and sales and marketing methods, as well as the amount,
nature and type of services, equipment and methods used and preferred by the
Company's clients and the fees paid by such clients, all of which shall be
deemed to be confidential information. Xxxxx acknowledges that such confidential
information has been and will continue to be of central importance to the
business of the Company and that disclosure of it to or its use by others could
cause substantial loss to the Company. In consideration of employment by the
Company, Xxxxx agrees that during the Term and any renewal term of this
Agreement and upon and after leaving the employ of the Company for any reason
whatsoever, Xxxxx shall not, for any purpose whatsoever, directly or indirectly,
divulge or disclose to any person or entity any of such confidential information
which was obtained by Xxxxx as a result of the Xxxxx'x employment with the
Company or any trade secrets of the Company, but shall hold all of the same
confidential and inviolate.
(2) All contracts, agreements, financial books,
records, instruments and documents; client lists; memoranda; data; reports;
programs; software, tapes; Rolodexes; telephone and address books; letters;
research; card decks; listings; programming; and any other instruments, records
or documents relating or pertaining to clients serviced by the Company or Xxxxx,
the services rendered by Xxxxx, or the business of the Company (collectively,
the "Records") shall at all times be and remain the property of the Company.
Upon termination of this Agreement and Xxxxx'x employment under this Agreement
for any reason whatsoever, Xxxxx shall return to the Company all Records
(whether furnished by the Company or prepared by Xxxxx), and Xxxxx shall neither
make nor retain any copies of any of such Records after such termination.
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(3) All inventions and other creations, whether or
not patentable or copyrightable, and all ideas, reports and other creative
works, including, without limitation, computer programs, manuals and related
materials, made or conceived in whole or in part by Xxxxx while employed by the
Company and within one year thereafter, which relate in any manner whatsoever to
the business, existing or proposed, of the Company or any other business or
research or development effort in which the Company or any of its subsidiaries
or affiliates engages during Xxxxx'x employment by the Company will be disclosed
promptly by Xxxxx to the Company and shall be the sole and exclusive property of
the Company. All copyrightable works created by Xxxxx and covered by this
Section 12b(3) shall be deemed to be works for hire. Xxxxx shall cooperate with
the Company in patenting or copyrighting all such inventions, ideas, reports and
other creative works, shall execute, acknowledge, seal and deliver all documents
tendered by the Company to evidence its ownership thereof through the world, and
shall cooperate with the Company obtaining, defending and enforcing its rights
therein.
c. Enforceability. In the event of a breach by either party to
this Agreement of the covenants contained in this Section 10, it is understood
that damages will be difficult to ascertain and the Company may petition a court
of law or equity for injunctive relief in addition to any other relief which the
Company may have under the law, this Agreement or any other agreement executed
in connection herewith. In connection with the bringing of any legal or
equitable action for the enforcement of this Agreement, the Company shall be
entitled to recover, whether the Company seeks equitable relief, and regardless
of what relief is afforded, such reasonable attorneys' fees and expenses as the
Company may incur in prosecution of the Company's claim for breach hereof.
It is hereby agreed that the provisions of this Section 10 are separate
and independent from the other provisions of this Agreement, that these
provisions are specifically enforceable by the Company notwithstanding any claim
by Xxxxx that the Company has violated or breached this Agreement or any claim
that Xxxxx is entitled to any offset or compensation.
To induce the Company to enter into this Agreement, Xxxxx represents
and warrants to the Company that Section 10 of this Agreement is enforceable by
the Company in accordance with its terms.
The parties hereto agree that to the extent that any provision or
portion of Section 10 of this Agreement shall be held, found or deemed to be
unreasonable, unlawful or unenforceable by a court of competent jurisdiction,
then any such provision or portion thereof shall be deemed to be modified to the
extent necessary in order that any such provision or portion thereof shall be
legally enforceable to the fullest extent permitted by applicable law; and the
parties hereto do further agree that any court of competent jurisdiction shall,
and the parties hereto do hereby expressly authorize, request and empower any
court of competent jurisdiction to, enforce any such provision or portion
thereof or to modify any such provision or portion thereof in order that any
such provision or portion thereof shall be enforced by such court to the fullest
extent permitted by applicable law.
11. WAIVER OF BREACH. The waiver by any party hereto of a breach of any
provision of this Agreement will not operate or be construed as a waiver of any
subsequent breach by any party.
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12. NOTICES. Any notices, consents, demands, request, approvals and
other communications to be given under this Agreement by either party to the
other will be deemed to have been duly given if given in writing and personally
delivered, faxed or if sent by mail, registered or certified, postage prepaid
with return receipt requested, as follows:
If to the Company: xxxxxxx.xxx, inc.
One Arizona Center
000 X. Xxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Chief Executive Officer
If to Xxxxx: Xxxx X. Xxxxx
One Arizona Center
000 X. Xxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Notices delivered personally will be deemed communicated as of actual
receipt, notices by fax shall be deemed delivered when such notices are faxed to
recipient's fax number and notices by mail shall be deemed delivered when
mailed.
13. ENTIRE AGREEMENT. This Agreement and the agreements contemplated
hereby constitute the entire agreement of the parties regarding the subject
matter hereof, and supersede all prior agreements and understanding, both
written and oral, among the parties, or any of them, with respect to the subject
matter hereof.
14. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future laws effective during
this Agreement, such provision will be fully severable and this Agreement will
be construed and enforced as if such illegal, invalid or unenforceable provision
never comprised a part hereof; and the remaining provisions hereof will remain
in full force and effect and will not be affected by the illegal, invalid or
unenforceable provision or by its severance herefrom. Furthermore, in lieu of
such illegal, invalid or unenforceable provision, there will be added
automatically, as part of this Agreement, a provision as similar in its terms to
such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable.
15. GOVERNING LAW. To the extent permitted by applicable law, this
Agreement and the rights and obligations of the parties will be governed by and
construed and enforced exclusively in accordance with the substantive laws (but
not the rules governing conflicts of laws) of the State of Arizona and the State
of Arizona shall have exclusive jurisdiction regarding any legal actions
relating to this Agreement.
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16. CAPTIONS. The captions in this Agreement are for convenience of
reference only and will not limit or otherwise affect any of the terms or
provisions hereof.
17. GENDER AND NUMBER. When the context requires, the gender of all
words used herein will include the masculine, feminine and neuter, and the
number of all words will include the singular and plural.
18. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of which will
constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
THE COMPANY:
xxxxxxx.xxx, inc., a Nevada corporation
By: /s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx, Chairman/Chief
Executive Officer
XXXXX:
/s/ Xxxx X. Xxxxx
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