EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is
entered into as of __________ ___, 2006, by and between Xxxxxxx
Corporation, a Delaware corporation (the "Company" or "Employer"),
and Xxxxxxx X. Xxxx, a resident of the State of Tennessee ("Executive").
RECITALS:
WHEREAS, Executive and the Company are entering into this
Agreement to describe the terms of Executive's employment by the
Company.
AGREEMENT:
NOW, THEREFORE, for and in consideration of the mutual
covenants and promises contained herein and other good and valuable
consideration set forth hereafter, the receipt and sufficiency
of which are hereby acknowledged, Executive and the Company
hereby agree as follows:
Section 1. Effective Time. This Agreement shall become
effective upon the date of this Agreement (the "Agreement Date").
Executive's salary will remain at Two Hundred Ten Thousand dollars
($210,000) until Seven and a half Million Dollars ($7,500,000) is
raised in the private placement offerings at that time the salary
increase stated herein will occur. Until such time as this Agreement
becomes effective, Executive shall continue in the employ of Xxxxxxx
Tennessee in accordance with the terms and conditions previously agreed
by Executive and Xxxxxxx Tennessee. Without limiting the generality of
the preceding sentence, Xxxxxxx Tennessee shall continue to pay
Executive a base salary of $210,000 per year.
Section 2. Services to be Provided.
(a) Duties and Responsibilities. Executive is hereby employed as
the President and Chief Operations Officer of the Company. Subject to
the direction and supervision of the Board of Directors of the Company
(the "Board of Directors"), Executive shall perform such duties as are
customarily associated with the offices of President and Chief Operations
Officer. Executive's principal base of operations for the performance of
his duties hereunder shall be the offices of the Company to be established
by Executive on behalf of the Company in the Brentwood, Tennessee area
(the "Brentwood Office"). Executive shall have the discretion to
determine all terms and conditions related to the establishment and
maintenance of the Brentwood Office, subject to the approval of the
Board of Directors. The Company shall provide Executive with a full-time
administrative assistant at the Brentwood Office. Such administrative
assistant shall be hired by Executive on such terms and conditions as he
shall determine, subject to the approval of the Board of Directors.
(b) Appropriate Business Attention. Executive agrees to devote
his appropriate time and attention to the business and affairs of the
Company.
Section 3. Compensation. In consideration of the services provided
hereunder by Executive to the Company, the Company, during the Term,
shall pay Executive the compensation and provide to Executive the
benefits described below.
(a) Base Salary. The Company shall pay Executive an annual salary
(the "Base Salary") of Four Hundred Thousand ($400,000) through the first
anniversary of the Agreement date, a Base Salary of Five Hundred Thousand
($500,000) beginning on the day following the first anniversary of the
Agreement Date and continuing through the second anniversary of the
Agreement Date, and a Base Salary of Six Hundred Thousand ($600,000)
beginning the day following the second anniversary of the Agreement
Date and continuing through the end of the Term; provided, however,
that until such time as the Company raises in total $7.5million or more
in one or more offerings of debt or equity, Executive's Base Salary shall
be $210,000. Executives Base Salary shall be, subject to increase from
time to time in the sole discretion of the Board of Directors or a duly
authorized committee thereof. The Company shall pay the Base Salary in
arrears in equal installments in accordance with the Company's payroll
policy in effect from time to time, but in no event shall the Company pay
Executive such installments less frequently than monthly.
(b) Restricted Stock Award. On October 23, 2006, the Company shall
issue to Executive One Million Two hundred Thousand (1,200,000) restricted
shares of common stock pursuant to a Restricted Stock Agreement in
substantially the form attached hereto as Exhibit A.
(c) Car Allowance. The Company shall reimburse Executive for
automobile expenses incurred in connection with the performance of his
duties hereunder based on the mileage rates published form time to time by
the Internal Revenue Service.
(d) Vacation, Etc. For each calendar year during the Term:
(i) Executive shall be entitled to four weeks of vacation,
prorated for any partial year. Unused vacation time may not be
carried over to any succeeding year.
(ii) Executive shall be entitled to thirty (30) business days of
paid medical leave. For purposes hereof, such leave shall be available
only with respect to injuries or illness that prevent Executive from
performing services hereunder or with respect to injuries to or
illness of Executive's spouse, children or parents.
(iii) Executive shall be entitled to five (5) business days of paid
leave for purposes of attending continuing professional education
programs. The Company shall pay reasonable costs and expenses for
Executive to attend such programs.
(e) Other Benefits. The Company shall include Executive in all
employee benefit plans (such as, by way of example, health insurance plans
and 401(k) plans) as are offered for the general benefit of the Company's
employees, subject to the provisions of such plans as may be in effect
from time to time, and Executive will be entitled to the same holidays
as observed by the Company's employees of similar seniority and
responsibilities in accordance with policies established by the Company
from time to time.
(f) Expense Reimbursement. The Company shall reimburse Executive
for all reasonable business expenses actually incurred by Executive in
connection with the performance of Executive's obligations hereunder,
subject to policies of the Company relating to reimbursement, including,
without limitation, any requirement for the itemization of such expenses
and submission of receipts in connection therewith. Without limiting the
generality of the foregoing, Executive, in his discretion, shall be entitled
to fly first or business class on all flights, whether international or
domestic, and receive full reimbursement hereunder. In addition to the
foregoing, Executive shall also be entitled to reimbursement for reasonable
costs and expenses (including reasonable attorneys' fees) related to
the preparation and negotiation of this Agreement.
(g) Taxes. All payments made by the Company under this Agreement
will be subject to withholding of such amounts as isrequired pursuant to
any applicable law or regulation.
Section 4. Term. The term of this Agreement shall commence as of the
Agreement Date and will continue until October 31, 2009 (the "Term"),
unless earlier terminated pursuant to Section 5 of this Agreement.
Thereafter, this Agreement and Executive's employment by the Company
hereunder may be renewed only upon the written agreement of the Company
and Executive.
Section 5. Termination of Employment.
(a) Termination by the Company for Cause. The Company may
terminate Executive's employment at any time for Cause upon written notice
to Executive. Upon such termination, the Company shall have no further
obligation to make payments under this Agreement, other than accrued salary
and benefits through the effective date of termination of employment. For
purposes hereof, "Cause" means any of the following:
(i) Executive's act of fraud, misappropriation, embezzlement,
or dishonesty with respect to the Company;
(ii) indictment of Executive for any crime that is a felony or
involves moral turpitude, fraud, embezzlement or theft;
(iii) Executive's negligence or act of misconduct in the
performance of his duties which is not remedied within thirty
(30) days following receipt of written notice thereof from the
Company; or
(iv) Executive's breach of any other provision of this
Agreement or deviation from any other lawful policy of, or
instruction from, the Company which is not remedied within
thirty (30) days following receipt of written notice thereof from
the Company.
(b) Termination Due to Death of Executive. The Company's employment
of Executive shall immediately terminate upon the death of Executive, and
the Company shall thereupon have no further obligation to make payments
under this Agreement, other than accrued salary and benefits through the
date of Executive's death.
(c) Termination Due to Disability of Executive. The Company may
terminate Executive's employment at any time following Executive's
Disability upon written notice to Executive. Likewise, Executive may
terminate his employment at any time following his Disability upon
written notice to the Company. Upon any termination of Executive's
employment hereunder, the Company shall have no further obligation to
make payments under this Agreement, other than (i) accrued salary and
benefits through the effective date of termination of employment, and
(ii) a lump sum payment equal to one year's Base Salary (determined at
the time notice of termination is provided) (the "Severance Payment").
The Severance Payment shall be made within thirty (30) following
termination of Executive's employment; provided, however, that if at
the time of such termination Executive is a "specified employee" of
the Company (as determined under Section 409A of the Internal Revenue
Code of 1986, as amended), the Severance Payment shall be made six months
and one day following termination. For purposes of this Agreement,
"Disability" shall occur if the Company determines (in accordance with
applicable law) that Executive has been unable, due to physical or mental
illness or incapacity, to perform the essential duties of his employment
with reasonable accommodation for a continuous period of ninety (90) days
or an aggregate of one hundred twenty (120) days during any consecutive
12-month period; provided, however, that in the event the Company
maintains disability insurance covering Executive, such time periods
shall be consistent with the comparable time periods set forth in the
applicable policy(ies).
(d) Termination by Executive for Good Reason. Executive may
terminate his employment with the Company at any time for Good Reason.
Upon any such termination, the Company shall have no further obligation
to make payments under this Agreement, other than (i) accrued salary and
benefits through the effective date of termination of employment, and (ii)
the Severance Payment. The Severance Payment shall be made in accordance
with Section 5(c) above. For purposes of this Agreement, "Good Reason"
means (A) any change in Executive's responsibilities, status, title or
duties that represents a reduction in his responsibilities, status, title
or duties immediately prior thereto or any assignment to Executive of any
additional responsibilities, status, title or duties; (B) any reduction in
Executive's compensation or benefits; or (C) any material breach by the
Company of this Agreement; provided that upon the occurrence of any of the
events described in clauses (A) through (C), Executive shall provide written
notice thereof to the Company, and the Company shall have thirty (30) days
following receipt of such notice within which to cure such event.
(e) Termination by the Company Other Than for Cause or Upon Death or
Disability. The Company may terminate Executive'semployment other than for
Cause or upon Executive's death or Disability upon at least thirty (30)
days' written notice to Executive. Upon any such termination, the Company
shall have no further obligation to make payments under this Agreement,
other than (i) accrued salary and benefits through the effective date of
termination of employment, and (ii) the Severance Payment. The Severance
Payment shall be made in accordance with Section 5(c) above.
(f) Termination by Executive Other Than Upon Disability or for Good
Reason. Executive may voluntarily terminate his employment other than upon
his Disability or for Good Reason upon at least thirty (30) days' written
notice to the Company. Upon any such termination, the Company shall have
no further obligation to make payments under this Agreement, other than
accrued salary and benefits through the effective date of termination of
employment.
Section 6. Confidentiality; Intellectual Work Product.
(a) Confidentiality. Except in connection with Executive's
performance of his duties under this Agreement, Executive shall not
disclose any Confidential Information nor shall Executive use such
information for his direct or indirect benefit, or the direct or indirect
benefit of any third party. Executive's obligation of confidentiality
shall not apply with respect to disclosures of Confidential Information
compelled in any legal, administrative or investigative proceeding before
any court, or any governmental or regulatory authority, agency or
commission; provided, that Executive shall notify the Company thereof
and cooperate with the Company to obtain a protective order or other
similar determination with respect to such information. Executive
acknowledges that the Confidential Information is vital, sensitive,
confidential and proprietary to the Company. For purposes of this
Agreement, "Confidential Information" means any information relating to
the business or affairs of the Company, including, without limitation,
information relating to: (i) marketing or distribution data; (ii) business
methods, plans and efforts; (iii) personnel data; (iv) courses of dealings
or contracts with actual or potential customers, vendors, distributors
and suppliers; (v) financial statements; and (vi) servicing methods,
equipment, programs, analyses or profit margins. Failure to xxxx
information as confidential or proprietary will not adversely affect its
status as Confidential Information.
(b) Intellectual Work Product.
(i) Executive hereby acknowledges that all writings,
documents, inventions, processes, products, methods,
discoveries, computer programs or instructions (whether in
source code, object code or other form), plans, customer lists,
memoranda, tests, research, designs, specifications, models,
data, diagrams, flow charts, techniques and similar or
dissimilar intellectual work product (whether reduced to a
written form or otherwise) that Executive may make, conceive,
discover or develop, either solely or jointly with any other
person, at any time while employed by the Company (the
"Employment Period"), whether or not copyrightable or
patentable, whether conceived or developed during working
hours or at the Company's offices or at any other time or
location, and whether upon the request or suggestion of the
Company or otherwise, that relate to or may in any way be
useful in connection with any business carried on by the
Company during the Employment Period (collectively, the
"Intellectual Work Product") is and will be the Company's sole
and exclusive property. Executive shall promptly and fully
disclose to the Company all of the Intellectual Work Product.
Executive acknowledges that all Intellectual Work Product that
is copyrightable will be considered a work made for hire under
United States copyright laws.
(ii) To the extent that any copyrightable Intellectual Work
Product may not be considered a work made for hire under
United States copyright laws, or to the extent that,
notwithstanding the provisions of paragraph (i) of this Section
6(b), Executive retains an interest in any Intellectual Work
Product that is not copyrightable, Executive hereby irrevocably
assigns and transfers to the Company any and all right, title and
interest that Executive may have in and to the Intellectual Work
Product under copyright, patent, trade secret and trademark law
and any other laws providing for the protection of intellectual
or industrial property or similar rights in perpetuity or for the
longest period otherwise permitted by law, without the
necessity of further consideration. The Company shall have the
exclusive right to obtain and hold in its name all copyrights,
patents, trade secrets, trademarks, and other intellectual or
industrial property or similar rights with respect to the
Intellectual Work Product.
Section 7. Indemnification. The Company shall indemnify the
Executive to the fullest extent that would be permitted by applicable
law (including a payment of expenses in advance of final disposition of
a proceeding) as in effect at the time of the subject act or omission, or
by the Certificate of Incorporation or Bylaws of the Company as in effect
at such time, or by the terms of any indemnification agreement between
the Company and the Executive, whichever affords greatest protection to
the Executive, and the Executive shall be entitled to the protection of
any insurance policies the Company may elect to maintain generally for
the benefit of its officers or, during the Executive's service in such
capacity, directors (and to the extent the Company maintains such an
insurance policy or policies, in accordance with its or their terms to
the maximum extent of the coverage available for any company officer or
director), against all costs, charges and expenses whatsoever incurred or
sustained by the Executive (including but not limited to any judgment
entered by a court of law) at the time such costs, charges and expenses
are incurred or sustained, in connection with any action, suit or
proceeding to which the Executive may be made a party by reason of his
being or having been an officer or employee of the Company, or serving as
an officer or employee of an affiliate of the Company, at the request of
the Company.
Section 8. Representation by Counsel. Each of the Company and
Executive was represented by counsel in connection with the preparation
and negotiation of this Agreement. Following execution of this Agreement,
counsel for Executive, Xxxxxxxx & Xxx, PLC ("Xxxxxxxx & Xxx"), may become
counsel to the Company. If thereafter there arises a dispute between the
Company and Executive, then regardless of the origin or nature of such
dispute, the Company agrees that Xxxxxxxx & Xxx may represent Executive
in connection therewith and agrees further to waive any conflict related
to Xxxxxxxx & Xxx'x representation of the Company.
Section 9. Miscellaneous.
(a) Entire Agreement; Amendments; Survival. This Agreement contains
the entire understanding of the parties with respect to employment of
Executive by the Company. It merges and supersedes all prior and/or
contemporaneous agreements and understandings between the parties,
written or oral, with respect to its subject matter and there are no
restrictions, agreements, promises, warranties, covenants or undertakings
between the parties with respect to the subject matter hereof other than
those expressly set forth herein. This Agreement may be amended only by
a written instrument duly executed by all parties or their respective
heirs, successors, assigns or legal personal representatives. The
provisions of Sections 6 through 9 hereof and any provision(s)s herein
related to the Severance Payment shall survive termination for any reason
or expiration of this Agreement for the period described or referenced
in each such Section or, if no period is described or referenced in
such Section, indefinitely.
(b) Assignment. Executive acknowledges that the services to be
rendered by him are unique and personal in nature. Accordingly, Executive
may not assign any of his rights or delegate any of his duties or
obligations under this Agreement. The rights and obligations of the
Company under this Agreement shall inure to the benefit of, and shall be
binding upon, the successors and assigns of the Company.
(c) Disclosure. Executive acknowledges that the Company may provide
a copy of this Agreement or any portion of this Agreement to any Person
with, through or on behalf of which Executive may, directly or indirectly,
breach or threaten to breach any of the provisions of this Agreement.
(d) Attorneys' Fees. In any action brought hereunder or in
connection with the transactions contemplated herein, the non-prevailing
party shall pay the prevailing party's reasonable attorneys' (and
paralegals') fees and expenses incurred in prosecuting or defending such
action.
(e) Governing Law; Forum; Service of Process. This Agreement shall
be governed by and construed in accordance with the laws of the State of
Tennessee. This Agreement and its subject matter have substantial contacts
with Tennessee, and all actions, suits, or other proceedings with respect
to this Agreement shall be brought only in a court of competent
jurisdiction sitting in Xxxxxxxxxx County, Tennessee, or in the Federal
District Court having jurisdiction over that county. In any such action,
suit, or proceeding, such court shall have personal jurisdiction of all
of the parties hereto, and service of process upon them under any
applicable statutes, laws, and rules shall be deemed valid and good.
(f) Severability. If any provision of this Agreement, or the
application thereof to any person or circumstance, is held by a court
of competent jurisdiction to be invalid, illegal or unenforceable in
any respect in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement
or the application of that provision to any other person or circumstance,
and this Agreement shall then be construed in that jurisdiction as if
such invalid, illegal or unenforceable provision had not been contained
in this Agreement, but only to the extent of such invalidity, illegality
or unenforceability.
(g) Counterparts. This Agreement may be executed in
counterparts, each of which will be deemed to be an original copy of
this Agreement and all of which, when taken together, will be deemed to
constitute one and the same agreement.
(h) Notices. All notices, consents, waivers, and other
communications under this Agreement must be in writing and will be
deemed to have been duly given and received when (a) delivered by
hand (with confirmation of receipt), (b) sent by facsimile with
confirmation of transmission by the transmitting equipment, (c)
received by the addressee, if sent by certified mail, return receipt
requested, or (d) received by the addressee, if sent by a nationally
recognized overnight delivery service, return receipt requested, in
each case to the appropriate addresses or facsimile numbers set forth
below each party's signature hereto (or to such other addresses or
facsimile numbers as a party may designate by notice to the other
parties).
(remainder of page intentionally left blank)
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by themselves or their duly authorized
representatives. This Agreement shall be effective as of the time set
forth in Section 1 hereof.
EMPLOYEE:
Printed Name: Xxxxxxx X. Xxxx
Address:
Facsimile No.:
COMPANY:
XXXXXXX CORPORATION
By:
Title:
Address:
Facsimile No.: