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 Xxxx X. Xxxxx, 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
September 1, 2006 or upon change of control of Xxxxxxx Delaware with a
salary increase to $65,000 and a further increase in salary to $100,000 to
begin January 1, 2007. Until such time as this Agreement becomes
effective under Xxxxxxx Delaware, Executive shall continue in the employ
of Xxxxxxx Tennessee in accordance with the terms and conditions stated
herein.
Section 2. Services to be Provided.
(a) Duties and Responsibilities. Executive is hereby employed as
the General Counsel and Corporate Secretary of the Company. Subject to
the direction and supervision of the Board of Directors of the Company
(the "Board of Directors"), the CEO and President of the Company, Executive
shall perform such duties as are customarily associated with the offices of
General Counsel and Corporate Secretary. Executive's principal base of
operations for the performance of her duties hereunder shall be the
executive offices of the Company in Xxxxxxxx, Tennessee or McMinnville,
Tennessee if they should relocate.
(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. Beginning January 1, 2007, the Company shall pay
Executive an annual salary of $100,000 (the "Base Salary"), 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) Cash Bonus. If for any calendar year the Company meets its
budget (as determined by the Board of Directors), the Company shall pay
Executive a cash bonus equal to fifteen percent (15%) of his Base Salary
for such year. Any bonus payable hereunder with respect to any year shall
be due and payable on or before March 15 of the succeeding year. The
amount of the bonus for any partial year (including 2006) shall be
prorated.
(c) Restricted Stock Award. On October 23, 2006, the Company shall
issue to Executive 75,000 restricted shares of common stock pursuant to a
Restricted Stock Agreement in substantially the form attached hereto as
Exhibit A.
(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. The Company shall
also pay for Executive's membership in the Association for Corporate
Counsel and provide for her to attend the ACC Annual meeting each
year as some of her continuing professional education requirement.
(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. The Company shall provide Professional Liability
Insurance with limits that are similar to those held by other companies of
comparable size and risk.
(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.
(g) Taxes. All payments made by the Company under this Agreement
will be subject to withholding of such amounts as is required pursuant to
any applicable law or regulation.
Section 4. Term. The term of this Agreement shall commence as of
September 1, 2006 and will continue until October 31, 2011 (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) 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's employment 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. 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 Xxxxxx 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: Xxxx X. Xxxxx
Address:
Facsimile No.:
COMPANY:
XXXXXXX CORPORATION
By:
Title:
Address:
Facsimile No.:
