Xxxxxxx Xx. 0
Xxxx & Xx.
Xxxx 10-SB, Amend. No. 2
File No. 0-26607
Employment Agreement
THIS EMPLOYMENT AGREEMENT ("Agreement") is made effective this
15 day of April 1998, by and between Xxxx & Co. a Nevada
corporation ("Employer"), and Xxxxx Xxxx, an individual
("Employee").
Premises
WHEREAS, Employer desires to secure the services of the
Employee pursuant to the terms and conditions of an employment
agreement; and
WHEREAS, the Employee has the requisite skills and experience
in the jewelry industry, and desires to enter into a written
agreement with employer to serve i) on the board of directors
for Employer ii) as president, secretary and treasurer of
Employer;
Agreement
NOW THEREFORE, with the above provisions incorporated herein
by this reference, in consideration of the mutual promises
contained herein, the benefits to be derived by each party
hereunder and other good and valuable consideration, the
sufficiency of which is hereby expressly acknowledged, the
parties hereto mutually agree as follows:
1. Employment. The Employer employs the Employee and the
Employee accepts employment as Employee of Employer upon the
terms and conditions set forth in this Agreement.
2. Term. The term of this Agreement shall commence April 15,
1998, and shall continue for an initial term of three (3) years.
This Agreement may be renewed at the end of the term for an
additional term upon the written agreement of the parties. This
Agreement is also subject to modification at such time as the
Employer reaches revenues of $20,000,000 for the prior 12 months.
If there is no written agreement for additional term then the
employment will continue on a month to month basis subject to
termination by either party upon thirty (30) days written notice
to the other party.
3. Compensation. Employee shall receive a salary payable
monthly based on the following schedule:
Prior 12 months Revenues Monthly Salary
$0 - $500,000 $3,000 per month
$501,000 - $1,000,000 $5,000 per month
$1,001,000 - $5,000,000 $7,000 per month
$5,001,000 - $10,000,000 $10,000 per month
$10,001,000 - $20,000,000 $15,000 per month
Employer agrees to compensate the Employee initially, with
1,000,000 restricted shares of employer's common stock
("Compensation Shares") which shall include salary expense and
reimbursement of other expenses as identified in item (9) for the
first 14.5 months of Employee's services. After such time,
Employee's salary expense shall accrue until the Company has net
income of $50,000 for the prior 12 months. Fifty percent of the
net income from Employer's operations before tax shall go towards
paying down the accrued salary liability.
4. Securities Compliance Employee understands that Employer
will not register the Compensation Shares under the
Securities Act of 1933, as amended ("Securities Act") or any
state securities law, but will instead issue the Compensation
Shares in reliance upon exemptions from the registration and
prospectus delivery requirements for transactions not involving a
public offering under section 4(2). The Compensation shares will
therefore be "restricted securities" within the meaning of the
Securities Act and Rule 144 promulgated under the Securities Act
("Rule 144"). Employee represents that he is fully aware of the
limitations on the resale of restricted securities set forth in
Rule 144. Employee acknowledges that if Rule 144 is available,
Employee may make only routine sales of the Compensation Shares
and in limited amounts, in accordance with Rule 144. If Rule 144
is not available, Employer may refuse to transfer the
Compensation Shares unless Employee or Employee's transferee
furnishes Employer with either: i) a "no action" letter from the
Securities and Exchange Commission; ii) an opinion of counsel
that the transfer is proper; or iii) establishes, to Employer's
satisfaction, than an exemption from registration is available.
Employer's registrar and transfer agent will maintain a stop
transfer order against the Compensation Shares. Until Employee
can present to Employer that the Compensation Shares have no
restriction on resale, all certificates representing the
Compensation Shares, and any and all certificates issued in
replacement thereof or in exchange therefore, shall bear a
legend, in substantially the following form, which Employee has
read and understands:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
("THE SECURITIES ACT"), AND ARE "RESTRICTED SECURITIES"
WITHIN THE MEANING OF RULE 144 PROMULGATED UNDER THE
SECURITIES ACT. THE SHARES MAY NOT BE OFFERED FOR SALE,
SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT,
THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE
SATISFACTION OF EMPLOYER."
5. Duties/Limitations. During the term of this Agreement,
Employee shall initially serve i) on the board of directors for
Employer ii) as president, secretary and treasurer of Employer.
Employee shall be responsible for providing a minimum of 20 hours
per week of service to Employer. Employee shall be responsible
for developing relationships with suppliers and customers; for
negotiating purchases of inventory; overseeing the development of
an operational Web Site allowing for purchase of jewelry product
over the Internet; marketing such Web Site; consulting with
customers and generating sales; full-filling product orders;
managing the company finances including purchases, sales,
payroll, accounts payable, accounts receivable, bank
reconciliation, inventory management; overseeing the preparation
of financial statements and SEC filings; filing of company taxes
in a timely fashion, including sales, income, payroll, franchise
and other necessary taxes; hiring employees; overseeing purchase
of office supplies and materials necessary for operation of the
Company's business; developing financing arrangements with
vendors, banks and investors as necessary; performing any other
tasks or obligations normally associated with Employee's position
within industry standards.
6. Extent of Services/Conduct. The Employee may perform
services for other organizations and volunteer for charitable
organizations. The Employee pledges his careful avoidance of all
personal acts, habits, usages, and statements which might injure,
in any way, directly or indirectly, affect the personal or
business reputation of the Employer.
8. Non-Disclosure of Information. In further consideration of
employment and the continuation of employment by Employer,
Employee will not, directly or indirectly, during or after the
term of employment disclose to any person not authorized by
Employer to receive or use such information, except, for the sole
benefit of Employer, any of Employer's confidential or
proprietary data, information, or techniques, or give to any
person 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," or
"Confidential," or similarly designated.
9. Expenses. The Employee may incur reasonable expenses for
promoting the Employer's business, including reasonable expenses
for office space, entertainment, travel, and similar items. The
Employer will reimburse the Employee for all such pre-approved
expenses upon the Employee's periodic presentation of an itemized
account of such expenditures. For the first 14.5 months of
Employee's Employment, reimbursement for the company use of
office space provided by Employee shall be included in the
issuance of the one million shares described in item (3).
10. Disability. If the Employee is unable to perform his
services by reason of illness or incapacity, the base salary
payable to him under Paragraph 3 of this Agreement shall continue
only in accordance with decisions unilaterally reached by the
Board of Directors or pursuant to any written policy of the
company.
11. Fringe Benefits. In addition to the compensation to the
Employee under Paragraph 3, the Employee shall be entitled to,
during the term this Agreement, participate in any benefit plans
adopted by the Employer, including, without limitation, health,
retirement, disability, and life insurance benefit plans, but
only to the extent that the Employee has satisfied the
eligibility requirements of the respective plans and the benefits
are offered to all other employees of Employer.
12. Termination for Cause. The Employer may terminate this
Agreement for cause at any time. For purposes of this Agreement,
the term "cause" includes, without limitation, the Employee's (a)
neglect or intentional disregard of duties, (b) unauthorized
disclosure of confidences of the Employer, (c) conviction of
felony or any crime involving moral turpitude by a court of
competent jurisdiction, (d) willful misconduct, (e) excessive use
of alcohol on repeated occasions or addiction to narcotics, (f)
breach of this Agreement, or (g) dishonesty.
13. Termination Upon Sale of Business. Employer may terminate
this Agreement upon thirty (30) days written notice to the
Employee upon the happening of any of the following events:
a) The sale, by the Employer, of substantially all of its
assets to a single purchaser or group of associated purchasers;
b) The sale, exchange, or other disposition to a single
entity or group of entities under common control in one
transaction or series of related transactions of greater than
fifty percent (50%) of the outstanding shares of the Employer's
common stock;
c) A decision by Employer to terminate its business and
liquidate its assets; or
d) The merger or consolidation of the Employer in a
transaction in which the shareholders of the Employer receive
less than fifty percent (50%) of the outstanding voting shares of
the new or continuing corporation.
14. Death During Employment. If the Employee dies during the
term of this Agreement, then the Employer shall pay to the
designated beneficiary of the Employee the compensation which
would otherwise be payable to the Employee up to the end of the
month in which such death occurs and this Agreement shall be
terminated. If no beneficiary designation has been made by the
Employee, then the compensation due hereunder shall be paid to
the Employee's estate.
15. Survival. The provisions of this Agreement shall survive
the termination of this Agreement.
16. Miscellaneous.
a) The execution and performance of this Agreement has been
duly authorized by all requisite individual or corporate actions
and approvals and is free of conflict or violation of any other
individual or corporate actions and approvals entered into
jointly and severally by the parties hereto. This Agreement
represents the entire Agreement between the parties hereto, and
supersedes any prior agreements with regards to the subject
matter hereof. This Agreement may be executed in any number of
facsimile counterparts with the aggregate of the counterparts
together constituting one and the same instrument. This
Agreement constitutes a valid and binding obligation of the
parties hereto and their successors, heirs and assigns and may
only be assigned or amended by written consent from the other
party.
b) No term of this Agreement shall be considered waived and
no breach excused by either party unless made in writing. In the
event that any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this
Agreement, and this Agreement shall be constructed as if it never
contained any such invalid, illegal or unenforceable provisions.
c) The validity, interpretation, and performance of this
Agreement shall be governed by the laws of the State of Utah and
any dispute arising out of this Agreement shall be brought in a
court of competent jurisdiction in Salt Lake County, Utah. If
any action is brought to enforce or interpret the provisions of
this Agreement, the prevailing party shall be entitled to recover
reasonable attorneys' fees, court costs, and other costs incurred
in proceeding with the action from the other party.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement the day and year first above written.
Xxxx & Co. Employee
Xxxxx Xxxx Xxxxx Xxxx
