EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement') is made and entered into by
and between QCOMM INTERNATIONAL INC., a Utah. corporation (the "Company" or
"Employer"), and XXXXXXX X. XXXXXXXX ("Employee").
A. Employer is a company engaged in the business of providing
management services;
B. Employee has been engaged in and has a great deal of experience and
reputation in the above-designated business;
C The Company desires to provide for the employment of Employee, to
clearly set forth the relationship between the parties and restrict
Employee from using certain confidential information and from
competing with the Employer in the future.
Agreement
NOW, THEREFORE, in consideration of the foregoing recitals which are
incorporated as a part of this Agreement, and of the mutual covenants
contained herein and the mutual benefits to be derived hereunder, the
parties agree as follows:
1. Employment. Employer hereby employs Employee to perform those duties
generally described in this Agreement, and Employee hereby accepts and
agrees to such employment on the terms and conditions hereinafter set
forth, all as of the date provided in paragraph 32, below (the "Effective
Date").
2. Duties. Employer hereby employs Employee on a full-time basis to serve as
president of the Company, and Employee agrees serve in such office and, at
the pleasure of the board of directors, in such additional and/or other
offices or positions consistent with his stature and responsibilities
hereunder, with Employer as shall, from time to time, be determined by
Employer's board of directors, without compensation except as set forth
herein.
3. Reasonable Best Efforts. Employee agrees that he will at all times
faithfully, industriously, and to the reasonable best of his ability,
experience, and talents, perform all of the duties that may be required of
and from him pursuant to the express and explicit term, hereof,
4. Vacations. Employee shall be entitled each year to a paid vacation of at
least two weeks. Vacations shall be taken by Employee at times and with
starting and ending dates determined by Employee taking into account the
reasonable needs of Employer. Vacation or portions of vacations not used
in one employment year shall carry over to succeeding employment year, but
shall thereafter expire if not used within such succeeding year.
5. Term. The term of this Agreement shall be for the period commencing, on
the Effective Date and continuing through December 31, 2003. This
Agreement may be renewed for successive one-year terms, upon the agreement
of the Employer and Employee to renew this Agreement. For all purposes of
the Agreement, including for purposes of applying the renewal provisions
of the Section to any term subsequent to the term then being extended, the
Expiration Date shall mean December 31, 2003, for the initial term hereof,
of December 31 at the end of any one-year renewal term, as the case may
be.
6. Base Salary. Employer shall pay to Employee a base salary of $120,000 per
annum for the period ending December 31, 2002, and for each successive
one-year term of this Agreement. Base salary is payable biweekly in
accordance with the payroll procedures established by Employer for all its
employees. Such salary shall be subject to an annual review and may be
increased, but not decreased, by the Company's board of directors. The
salary to Employee and all other compensation and benefits hereunder shall
be subject withholding and other applicable taxes.
7. Stock Option. As an inducement to the Employee, and in consideration of
the agreement of Employee to accept employment with Employer, on the
Effective Date of this Agreement Employer shall issue and deliver to
Employee an option to purchase shares of the Employer's common stock in
the form known as the Q Comm International Stock Option Plan, attached at
Exhibit A and Exhibit B.
8. Employment Benefits. Employer shall provide life, long-term disability,
and health and medical insurance for Employee in a form and program to be
chosen by Employer for its full-time employees. Employee shall be entitled
to participate in all of Employer's benefit plans, including but not
limited to, any stock option, medical, dental, life insurance, retirement,
pension, profit sharing, or other plan as in effect from time to time on
the same basis as provided generally to all other employees.
9. Working Facilities. Employer will provide to Employee at Employer's
principal executive offices suitable executive offices and facilities
appropriate for his position and suitable for the performance of his
responsibilities.
10. Expenses. Employer shall bear the cost of all expenses reasonably incurred
by the Employee in performing his duties under this Agreement. The
expenses for which Employer will reimburse Employee include, but are not
limited to, expenses for travel, lodging, meals, beverages, entertainment,
and similar items. The Employee shall provide to 5mployer a monthly
accounting of such expenses, all on a basis consistent with a reasonable
policy established by Employer for its executive officers. Any amount
owing on the monthly accounting will be paid by the Employer or reimbursed
by the Employee, as the case may be, within 30 day, following the end of
the month. Employee agrees to submit such documentation as may be
necessary to substantiate the deductibility of the foregoing expenses for
income tax purposes, which are permitted under the Internal Revenue, Code.
Employee agrees to keep such records as are required under the Internal
Revenue Code and the Regulations thereunder to enable substantiation of
each of the said expenditures or reimbursements. In the event a dispute
should arise regarding any matter set forth ill this paragraph 10, the
determined with respect thereto shall be made by Employer's certified
public accountants, which determination shall be final and binding on all
parties hereto
11. Non-Solicitation. During the period of this Agreement, and for an
additional period after termination or expiration of this Agreement equal
to one year, Employee agrees that he will not, directly or indirectly,
solicit may employee of Employer or any subsidiary of Employer (the
"Employer Group") who was employed by the Employer Group at any time
within six months prior to the date of termination or expiration of this
Agreement. During the period of this Agreement and for additional period
after termination or expiration of this Agreement equal to one year,
Employee agrees that he will not, directly or indirectly, solicit in
connection with any business that is the same as or similar to the
business of the Employer Group any person, firm, or business that was a
customer or client of the Employer Group at any time during the two year
prior to the date of termination or expiration of this Agreement or any
person, firm, or business that was solicited by any of the Employer Group
to be a customer or client of the Employer Group at any time during the
six-month period prior to the date o(pound) termination or expiration of
this Agreement. The obligation not to solicit as described above is not
limited by territory. If in may judicial proceeding a court shall refuse
to enforce any of the covenants included in this paragraph, then the
unenforceable covenants shall be deemed eliminated from these provisions
for the purpose for the purpose of those proceeding and solely for the
geographical area covered by the jurisdiction of the court presiding over
the proceedings to the extent necessary to permit the remainder covenants
to be enforced. The foregoing covenants shall survive the termination of'
this Agreement. Employee also agrees not to compete with the company for a
period of one after termination of employment as long as Employee was not
terminated without cause.
12. Non-Disclosure of Information. In further consideration of employment and
the continuation of employment by Employer, Employee agrees as follows:
(a) During the period of this Agreement and after termination or expiration of
this Agreement for any reason, Employee will not, directly or indirectly:
(i) use for his own benefit or give to any person not authorized by
Employer to receive or use such information, except for the sole
benefit of Employer, any data, information, marketing or
installation plans, procedures, results, method, ideas, processes,
or research and development, which are proprietary to Employer;
(ii) use for his own benefit or give to any person not authorized by
Employer to receive it, any plan or specifications, customer 1ists,
data, study, table, report, written technical information, or the
like owned by Employer, or any copy thereof; or
(iii) use for his own benefit or give to any persons not authorized by
employer to receive it any information that is not generally known
to anyone other than Employer, or that is designated by Employer as
"Limited", "Private", "Confidential", or similarly designated.
(b) Employee will not, except when authorized by Employer or required for the
performance of his duties hereunder, remove any of Employer's physical
property from Employer's premises. He will return to Employer, immediately
upon termination of employment, all of Employer's physical property in his
possession or control.
13. Termination. Either party may terminate this Agreement at any time for any
reason on not less than 30 days' prior written notice to the other party.
In connection such termination, the Employee shall receive all base salary
and benefits due him through the date of termination.
In the event termination occurs other than (i) on expiration of term of
this Agreement under paragraph 5, above, or (ii) by the Company for
"Cause" (as hereinafter defined), the Employee's option with respect to
the "Stock Option Plan" shall vest as provided in paragraph 2 of the
Option Plan dated January 1, 2001 and January 1, 2002.
In the event this Agreement is terminated by the Employee for "Good
Reason" (as hereinafter defined), the Employee's option with respect to
the "Stock Option Plan" shall vest as provided in paragraph 2 o(pound) the
Option Plan dated January l, 2001 and January 1, 2002.
In the event this Agreement is terminated by the Company for Cause or by
the Employee without Good Reason, the Employee's option with respect to
the "Stock Option Plan", shall not vest except in accordance with the
Stock Option Plan.
For purposes hereof, "Cause" shall mean any of (a) a conviction of
Employee in any criminal proceeding other than traffic violations and
other minor offenses, (b) Employee being found by a court of competent
jurisdiction in a civil, action to have engaged in any conduct consuming
fraud, conversion of property, or theft, or (c) any breach by Employee of
the terms of this Agreement that is not cured within 30 days after
Employee receives written notice detailing the breach.
For purposes hereof, "Good Reason" shall mean any of (x) a substantial
reduction in the duties, title, or responsibilities of the Employee
hereunder without the Employee's written consent, (y) a reduction in the
base salary or benefits due Employee hereunder without the Employee's
written consent, or (z) moving Employee's primary place of employment
outside the Orem, Utah metropolitan area without the Employee's written
consent.
In the event the Employment Agreement is terminated by the Company without
Cause or is terminated by the Employee with Good Reason as defined in
Paragraph 13, the right to exercise existing options with respect to any
of the Performance Option Shares that are subject to vesting on the
occurrence of future events following the date of termination shall
immediately vest and be exercisable in accordance with the terms of the
current Stock Option Plans.
14. Death During Employment. If the Employee dies during the term of the
employment, Employer shall pay to the estate of Employee an amount equal
to all base salary earned as of the date of death.
15. Non-transferability. Neither Employee, his spouse, his designated
contingent beneficiary, nor their estates shall have any right to
anticipate, encumber, or dispose of any payment due under this Agreement.
Such payments and other rights are expressly declared non-assignable and
nontransferable except as specifically provided herein.
16. Indemnification. Employer shall indemnify Employee and hold him harmless
from liability for, and shall advance to him on a current basis any
expenses incurred in connection with, acts, omissions, or decisions made
by him while performing services for Employer to the greatest extent
permitted by applicable law. Employer shall also use its best efforts to
obtain and maintain during the term of this Agreement coverage for
Employee in his capacity as an officer and director of Employer of any of
its subsidiaries or affiliates under any insurance policy now in force or
hereafter obtained during the term of this Agreement insuring officers and
directors of Employer, in amounts acceptable to Employee, against such
liability.
17. Assignment. This Agreement may not be assigned (other than by will or by
operation of law), by either party without the prior written consent of
the other party. Subject to this limitation, this Agreement shall be
binding upon and inure to the benefit of the proxies hereto and their
heirs, executors, administrators, successors, legal representatives, and
permitted assigns.
18. Entire Agreement. This agreement, including the option arrangements
referred to herein, is and shall be considered to be only agreement or
understanding between the parties hereto with respect to the employment of
Employee by Employer. All negotiations, commitments, and understandings
acceptable to both parties have been incorporated herein. No letter,
telegram, or communication passing between the parties hereto shall be
deemed a part of this Agreement; nor shall it have the effect of modifying
or adding to this Agreement unless it is distinctly stated in such letter,
telegram, or communication that it is to constitute a part of this
Agreement and is to be attached as a rider to this Agreement and is signed
by the parties to this Agreement.
19. Modification of Contract. This Agreement cannot be modified by tender,
acceptance or endorsement of any instrument of payment, including check.
Any words contained in an instrument of payment modifying this contract,
including a waiver or release of any claims or a statement referring to
paying in full is void, This Agreement can only be modified in a separate
writing, other than an instrument of payment, signed by the parties.
20. Counterpart and Headings. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument. All headings in
this Agreement are inserted for convenience of reference and shall not
affect its meaning or interpretation.
21. Cooperation. The parties shall deal with each other in good faith meaning
honesty in fact cud the observance of all commercial standards of fair
dealing and usages of trade, which are regularly observed within the
industry. 'In this regard, Employer shall not engage in any course of
conduct that is oppressive to Employee and intended by Employer to force
Employee's resignation.
22. No Strict Construction, The language used in this Agreement shall be
deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against
any party.
23. Notices. Any notice, request, instruction, report or other document to be
given to the parties shall be in writing and delivered personally or sent
by certified mail, postage prepaid, 'the parties shall be in writing and
delivered personally or sent by certified mail, postage prepaid,
If to Employee: Xxxxxxx X. Xxxxxxxx
0000 X. Xxxxxx Xxxx Xxxx
Xxxxx, Xxxx 00000
If to Employee: Q Comm International, Inc.
Attn: Xxxx Xxxxxx
1l45 South 0000 Xxxx
Xxxx, Xxxx 00000
Or at such other address as any party shall specify to the other party in
writing.
25. Arbitration. In the event of dispute or controversy between the parties as
to the performance hereof, this Agreement shall be and remain in full
force and effect and all terms hereof shall continue to be complied with
by both parties, it shall be submitted to two arbitrators, one to be
appointed by each, and if those arbitrators do not agree, they shall
select a third disinterested and competent person to act with them, and
the decision of the three, or a majority of them, shall be final and
conclusive. If either party does not
appoint an arbitrator as aforesaid within 90 days after receipt of notice
to the other that it desires arbitration, which notice shall state the
name and address of the arbitrator appointed by such other, and does not
within such period furnish to such other party the name and address of the
second arbitrator, then the arbitrator first named shall appoint a
disinterested and competent arbitrator for the party thus defaulting, and
the two arbitrators so appointed shall select a third to act with them as
aforesaid and with like effect. Cost o(pound) arbitration shall be borne
by the parties equally. Judgment upon the reward rendered may be entered
in any court having jurisdiction thereof.
26. Enforcement. Employee acknowledges that any remedy at law for breach of
paragraphs 11 and 12 would be inadequate, acknowledges that Employer would
be irreparably damaged by an actual or threatened breach thereof, and
agrees that Employer shall be entitled to an injunction restraining
Employee from any actual or threatened breach of paragraphs 11 and 12 as
well as any further appropriate equitable relief without any bond or other
security being required. In addition to the foregoing, each of the parties
hereto shall be entitled to any remedies available at law or in equity
with respect to the breach of the terms of this Agreement by the other
party.
27. Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the state of Utah.
28. Severability. If and to the extent that nay court of competent
jurisdiction holds any provision or any part thereof of this Agreement to
be invalid or unenforceable, such holding shall in no way affect the
validity of the remainder of this Agreement.
29. Waiver. No failure by an party to insist upon the performance of any
covenant, duty, agreement, or condition of this Agreement or to exercise
any right or remedy consequent, upon a breach hereof shall constitute a
waiver of any such breach or of any other covenant, agreement, term, or
condition.
30. Non-Disclosure. Employer shall not reveal the terms of this Agreement to
any party, except as may be required by law or upon the reasonable request
of any bank, investment-banking firm., or present or proposed lender of
Employer.
3l. Non-Conflict. Each of Employer and Employee hereby represents that this
Agreement does not, and as of the Effective Date will not, conflict with
any other agreement to which it is a party.
32. Attorneys' Fees. In any action at law or in equity to enforce any of the
provisions or rights under this Agreement, the unsuccessful party of such
litigation, as determined by the court in a final judgment or decree,
shall pay the successful party or party's costs, expenses, and reasonable
attorneys' fees incurred therein by such party or parties (including,
without limitation, such costs, expenses, and fees on any appeal(s), and
if such successful party shall recover judgment in any such action or
proceeding, such costs, expenses, and attorney's fees shall be included as
part of such judgment and the collection thereof.
33. EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.
This Agreement contains the entire understanding between the parties
hereto and supersedes any prior employment agreement between the Employer
or any predecessor of the Employer and Employee, except that this
Agreement shall not affect or operate to reduce any benefit or
compensation inuring to the Employee of a kind elsewhere provided. No
provision of this Agreement shall be interpreted to mean that Employee is
subject to receiving fewer benefits than those available to him without
reference to this Agreement.
34. Effective Date. This Agreement shall be effective ("Effective Date"), and
the term hereof shall commence upon May 3, 2002.
IN WITNESS WHEREOF, the parties have executed this Agreement at the offices of Q
Comm International, Inc. in Orem, Utah the 3rd day of May 2002.
EMPLOYER:
Q COMM INTERNATIONAL, INC.
By /s/ Xxxx X. Xxxxxx
-----------------------
Xxxx X. Xxxxxx, CEO
EMPLOYEE:
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Xxxxxxx X. Xxxxxxxx
