EXHIBIT 10.1
------------
EMPLOYMENT AGREEMENT
--------------------
This Employment Agreement (this "Agreement") is made as of August 14,
2000, between Orange County Professional Services, Inc., a California
corporation, (the "Company"), and Xxxx Xxxxxxxx ("Executive").
1. Employment. The Company shall employ Executive, and Executive hereby
----------
accepts employment with the Company, upon the terms and conditions set forth in
this Agreement for the period beginning on the date hereof and ending as
provided in paragraph 4 hereof (the "Employment Period").
2. Position and Duties.
-------------------
(a) The Company hereby engages Executive as President of the Company.
During the Employment Period, Executive shall render services to the Company and
its Affiliates (as defined below) as the Company's board of directors (the
"Board"), or a person designated by the Board, may from time to time direct. The
Board shall assign Executive to a position or office commensurate with his
experience and prior positions and having such authority and duties as the Board
may prescribe.
(b) During the Employment Period, Executive shall report to the Board, or
a person designated by the Board, and shall devote his best efforts and his full
business time and attention (except for permitted vacation periods and
reasonable periods of illness or other incapacity) to the business and affairs
of the Company and its Affiliates. Executive shall perform his duties,
responsibilities and functions to the Company and its Affiliates hereunder to
the best of his abilities in a diligent, trustworthy, businesslike and efficient
manner.
3. Compensation and Benefits.
-------------------------
(a) During the Employment Period, Executive's base salary shall be
$200,000.00 per annum or such other rate as the Board may determine from time to
time (as adjusted from time to time, the "Base Salary"), which salary shall be
payable by the Company in regular installments in accordance with the Company's
general payroll practices. In addition, during the Employment Period, Executive
shall be entitled to participate in all of the Company's employee welfare
benefit programs for which senior executive employees of the Company and its
Affiliates are generally eligible, and Executive shall be entitled to four weeks
of paid vacation each year, which if not taken during any year may not be
carried forward to any subsequent year.
(b) In addition to the Base Salary, the Board may, in its sole discretion,
award a bonus to Executive following the end of each fiscal year during the
Employment Period based upon Executive's performance and the Company's operating
results during such year.
(c) Executive shall be entitled to payment of up to $750.00 per month to
reimburse Executive for use of an automobile.
(d) Executive shall be entitled to such fringe benefits and perquisites as
are generally made available to executive officers of the Company, and such
other fringe benefits as may be approved by the Board for executive officers of
the Company during the term hereof.
(e) During the Employment Period, the Company shall reimburse Executive
for all reasonable expenses incurred by him in the course of performing his
duties and responsibilities under this Agreement which are consistent with the
Company's policies in effect from time to time with respect to travel,
entertainment and other business expenses, subject to the Company's requirements
with respect to reporting and documentation of such expenses.
(f) Executive may receive such grants of equity-based compensation (e.g.,
option grants for Company common stock), if any, as shall be determined within
the sole discretion of the Board (or any committee of the Board which is
appointed to consider matters relative to equity-based compensation).
(g) All amounts payable to Executive as compensation hereunder shall be
subject to all required withholding by the Company.
4. Term.
----
(a) Subject to prior termination of this Agreement as hereinafter
provided, the Employment Period shall end on July 31, 2003 and shall
automatically be renewed on the same terms and conditions set forth herein as
modified from time to time by the parties hereto for additional one-year periods
beginning on August 1, 2003, unless the Company or Executive gives the other
party written notice of the election not to renew the Employment Period at least
60 days prior to any such renewal date; provided that (i) the Employment Period
shall terminate prior to such date immediately upon Executive's resignation,
death or inability to perform the essential duties, responsibilities and
functions of Executive's position with the Company and its Affiliates as a
result of any mental or physical disability or incapacity even with reasonable
accommodations of such disability or incapacity provided by the Company and its
Affiliates or if providing such accommodations would be unreasonable (as
determined by the Board in its good faith judgment), (ii) the Employment Period
may be terminated by the Executive at any time prior to such date upon at least
ninety (90) days prior notice to the Company, and (iii) the Employment Period
may be terminated by the Company at any time prior to such date, with or without
Cause (as defined herein) upon at least ninety (90) days prior notice to the
Executive. The Company may elect to accelerate the effective date of
termination, but Executive shall still be entitled to receive the compensation
and benefits payable hereunder until the ninety (90) day notice period has
expired.
(b) For purposes of this Agreement, "Cause" shall mean (i) commission of a
felony or other crime involving moral turpitude or the commission of any other
act or omission involving dishonesty, disloyalty or fraud with respect to the
Company or any of its Affiliates or any of their customers, (ii) reporting to
work under the influence of alcohol or illegal drugs, the use of illegal drugs
(whether or not at the workplace) or other repeated conduct causing the Company
or any of its Affiliates substantial public disgrace or disrepute or economic
harm, (iii) substantial and repeated failure to perform duties as reasonably
directed by the Board, (iv) gross
negligence or willful misconduct with respect to the Company or any of its
Affiliates or (v) any material breach of this Agreement.
5. Confidential Information. Executive acknowledges that the
------------------------
information, observations and data (including trade secrets) obtained by him
while employed by the Company and its Affiliates concerning the business or
affairs of the Company and any of its Affiliates ("Confidential Information")
are the property of the Company or such Affiliate. Therefore, Executive agrees
that he shall not disclose to any unauthorized person or use for his own
purposes any Confidential Information without the prior written consent of the
Board, unless and to the extent that the Confidential Information becomes
generally known to and available for use by the public other than as a result of
Executive's acts or omissions. Executive shall deliver to the Company at the
termination or expiration of the Employment Period, or at any other time the
Company may request, all memoranda, notes, plans, records, reports, computer
tapes, printouts and software and other documents and data (and copies thereof)
embodying or relating to the Confidential Information, Work Product (as defined
below) or the business of the Company and its Affiliates which he may then
possess or have under his control.
6. Inventions and Patents. Executive acknowledges that all inventions,
----------------------
innovations, improvements, developments, methods, designs, analyses, drawings,
reports and all similar or related information (whether or not patentable) which
relate to the Company's or any of its Affiliates' actual or anticipated
business, research and development or existing or future products or services
and which are conceived, developed or made by Executive while employed by the
Company and its Affiliates ("Work Product") belong to the Company or such
Affiliate. Executive shall promptly disclose such Work Product to the Board and,
at the Company's expense, perform all actions reasonably requested by the Board
(whether during or after the Employment Period) to establish and confirm such
ownership (including, without limitation, assignments, consents, powers of
attorney and other instruments). If applicable, this Agreement does not apply to
inventions which qualify fully for protection under Section 2870 of the
California Labor Code (which, if applicable, could apply to ideas or inventions
for which no equipment, supplies, facility or trade secret information of the
Company or its Affiliates were used and which were developed entirely on
Executive's own time, and (i) which do not relate at the time of conception or
reduction to practice of the invention (A) to the actual business of the Company
or its Affiliates, or (B) to the Company or its Affiliates actual or
demonstrably anticipated research or development or (ii) which do not result
from any work performed by Executive for the Company or its Affiliates.
Notwithstanding the foregoing, Executive shall disclose in confidence to the
Company any invention in order to permit the Company to make a determination as
to compliance by Executive with the terms and conditions of this Agreement.
7. Enforcement. If, at the time of enforcement of paragraph 5 or 6 of
-----------
this Agreement, a court holds that the restrictions stated herein are
unreasonable under circumstances then existing, the parties hereto agree that
the maximum period, scope or geographical area reasonable under such
circumstances shall be substituted for the stated period, scope or area. Because
Executive's services are unique and because Executive has access to Confidential
Information and Work Product, the parties hereto agree that money damages would
not be an adequate remedy for any breach of this Agreement. Therefore, in the
event a breach or threatened breach of this Agreement, the Company or its
successors or assigns, in addition to other rights and remedies existing in
their favor, shall be entitled to specific performance and/or
injunctive or other equitable relief from a court of competent jurisdiction in
order to enforce, or prevent any violations of, the provisions hereof (without
posting a bond or other security).
8. Executive's Representations. Executive hereby represents and
---------------------------
warrants to the Company that (a) the execution, delivery and performance of this
Agreement by Executive do not and shall not conflict with, breach, violate or
cause a default under any contract, agreement, instrument, order, judgment or
decree to which Executive is a party or by which he is bound, (b) Executive is
not a party to or bound by any employment agreement, noncompete agreement or
confidentiality agreement with any other person or entity except the Non-
Competition Agreement between Executive and the Company of even date herewith,
and (c) upon the execution and delivery of this Agreement by the Company, this
Agreement shall be the valid and binding obligation of Executive, enforceable in
accordance with its terms. Executive hereby acknowledges and represents that he
has had an opportunity to consult with independent legal counsel regarding his
rights and obligations under this Agreement and that he fully understands the
terms and conditions contained herein.
9. Survival. Paragraphs 5 through 18 shall survive and continue
--------
in full force in accordance with their terms notwithstanding the expiration or
termination of the Employment Period.
10. Notices. Any notice provided for in this Agreement shall be in
-------
shall be in writing and shall be either personally delivered, sent by reputable
overnight courier service or mailed by first class mail, return receipt
requested, to the recipient at the address below indicated:
Notices to Executive:
Xxxx Xxxxxxxx
0000 Xxxxxx Xxxxx Xxxxxx
Xxxxx Xxxx, XX 00000-0000
With a copy to:
Xxxxxx X. Xxxxxx, Esq.
Attorney at Law
000 X. Xxxxx Xxxxxxx Xxxx., Xxxxx 0000
Xxxxxx, XX 00000
Notices to the Company:
Orange County Professional Services, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
attn: Chief Financial Officer
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party. Any
notice under this Agreement shall be deemed to have been given when so
delivered, sent or mailed.
11. Severability. Whenever possible, each provision of this Agreement
------------
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any action in any other jurisdiction, but this Agreement
shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.
12. Complete Agreement. This Agreement embodies the complete agreement
------------------
agreement and understanding among the parties and supersedes and preempts any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way,
including, without limitation, any prior understandings, agreements or
representations between Executive and Orange County Professional Services, Inc.
13. 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.
14. Counterparts. This Agreement may be executed in separate
------------
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
15. Successors and Assigns. This Agreement is intended to bind and inure
----------------------
to the benefit of and be enforceable by Executive, the Company and their
respective heirs, successors and assigns, except that Executive may not assign
his rights or delegate his duties or obligations hereunder without the prior
written consent of the Company.
16. Choice of Law. All issues and questions concerning the construction,
-------------
validity, enforcement and interpretation of this Agreement and the exhibits and
schedules State of California, without giving effect to any choice of law or
conflict of law rules or provisions (whether of the State of California or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of California.
17. Amendment and Waiver. The provisions of this Agreement may be amended
--------------------
or waived only with the prior written consent of the Company (as approved by the
Board) and Executive, and no course of conduct or course of dealing or failure
or delay by any party hereto in enforcing or exercising any of the provisions of
this Agreement (including, without limitation, the Company's right to terminate
the Employment Period for Cause) shall affect the validity, binding effect or
enforceability of this Agreement or be deemed to be an implied waiver of any
provision of this Agreement.
18. Arbitration. Except with respect to disputes or claims under
-----------
paragraphs 5 and 6 hereof (which may be pursued in any court of competent
jurisdiction as specified below and with
respect to which each party shall bear the cost of its own attorney's fees and
expenses except as otherwise required by applicable law), each party hereto
agrees that the arbitration procedure set forth in Exhibit A hereto shall be the
sole and exclusive method for resolving any claim or dispute ("Claim") arising
out of or relating to the rights and obligations acknowledged and agreed to in
this Agreement and the employment of Executive by the Company and its Affiliates
(including, without limitation, disputes and claims regarding employment
discrimination, sexual harassment, termination and discharge), whether such
Claim arose or the facts on which such Claim is based occurred prior to or after
the execution and delivery of adoption of this Agreement. The parties agree that
the result of any arbitration hereunder shall be final, conclusive and binding
on all of the parties. Nothing in this paragraph shall prohibit a party hereto
from instituting litigation to enforce any "Final Determination" (as defined in
Exhibit B hereto). Each party hereto hereby irrevocably submits to the
jurisdiction of any United States District Court or California state court of
competent jurisdiction sitting in Orange County, California, and agrees that
such court shall be the exclusive forum with respect to disputes and claims
under paragraphs 5 and 6 and for the enforcement of any Final Determination.
Each party hereto irrevocably consents to service of process by registered mail
or personal service and waives any objection on the grounds of personal
jurisdiction, venue or inconvenience of the forum. Each party hereto further
agrees that each other party hereto may initiate litigation in any court of
competent jurisdiction to execute any judicial judgment enforcing a Final
Determination.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
ORANGE COUNTY PROFESSIONAL
SERVICES, INC.
By: /s/ Xxxxxx Xxxxxxx
____________________________________
Name: Xxxxxx Xxxxxxx
__________________________________
Title: President
_________________________________
/s/ Xxxx Xxxxxxxx
________________________________________
XXXX XXXXXXXX
Exhibit A
---------
ARBITRATION PROCEDURE
1. Notice of Claim. A party asserting a Claim (the "Claimant") shall
---------------
deliver written notice to each party against whom the Claim is asserted
(collectively, the "Opposing Party"), with a copy to the persons required to
receive copies of notices under the Agreement (the "Additional Notice Parties"),
specifying the nature of the Claim and requesting a meeting to resolve same. The
Additional Notice Parties shall be given reasonable notice of and invited and
permitted to attend any such meeting. If no resolution is reached within 10
business days after delivery of such notice, the Claimant or the Opposing Party
may, within 45 days after giving such notice, invoke the arbitration procedure
provided herein by delivering to each Opposing Party and the Additional Notice
Parties a Notice of Arbitration, which shall specify the Claim as to which
arbitration is sought, the nature of the Claim, the basis for the Claim, and the
nature and amount of any damages or other compensation or relief sought (a
"Notice of Arbitration"). Each party agrees that no punitive damages may be
sought or recovered in any arbitration, judicial proceeding or otherwise.
Failure to file a Notice of Arbitration within 45 days shall constitute a waiver
of any right to relief for the matters asserted in the notice of claim. Any
Claim shall be forever barred, and no relief may be sought therefor, if written
notice of such Claim is not made as provided above within one year of the date
such claim accrues.
2. Selection of Arbitrator. Within 20 business days after receipt of
-----------------------
the Notice of Arbitration, the Executive and the Board shall meet and attempt to
agree on an arbitrator to hear and decide the Claim. If the Executive and the
Board cannot agree on an arbitrator within ten business days, then they shall
request the Judicial Arbitration and Mediation Service ("JAMS") in Orange
County, California to appoint an arbitrator experienced in the area of dispute
who does not have an ongoing business relationship with any of the parties to
the dispute. If the arbitrator selected informs the parties he cannot hear and
resolve the Claim within the time-frame specified below, the Executive and the
Board shall request the appointment of another arbitrator by the JAMS subject to
the same requirements.
3. Arbitration Procedure. The following procedures shall govern the
---------------------
conduct of any arbitration under this section. All procedural matters relating
to the conduct of the arbitration other than those specified below shall be
discussed among counsel for the parties and the arbitrator. Subject to any
agreement of the parties, the arbitrator shall determine all procedural matters
not specified herein.
(a) Within 30 days after the delivery of a Notice of Arbitration, each
party shall afford the other, or its counsel, with reasonable access to
documents relating directly to the issues raised in the Notice of Arbitration.
All documents produced and all copies thereof shall be maintained as strictly
confidential, shall be used for no purpose other than the arbitration hereunder,
and shall be returned to the producing party upon completion of the arbitration.
There shall be no other discovery except that, if a reasonable need is shown,
limited depositions may be allowed in the discretion of the arbitrator, it being
the expressed intention and agreement of each party to have the arbitration
proceedings conducted and resolved as expeditiously, economically and fairly as
reasonably practicable, and with the maximum degree of confidentiality.
(b) All written communications regarding the proceeding sent to the
arbitrator shall be sent simultaneously to each party or its counsel, with a
copy to the Additional Notice Parties. Oral communications between any of the
parties or their counsel and the arbitrator shall be conducted only when all
parties or their counsel are present and participating in the conversation.
(c) Within 20 days after selection of the arbitrator, the Claimant shall
submit to the arbitrator a copy of the Notice of Arbitration, along with a
supporting memorandum and any exhibits or other documents supporting the Claim.
(d) Within 20 days after receipt of the Claimant's submission, the
Opposing Party shall submit to the arbitrator a memorandum supporting its
position and any exhibits or other supporting documents. If the Opposing Party
fails to respond to any of the issues raised by the Claimant within 20 days of
receipt of the Claimant's submission, then the arbitrator may find for the
Claimant on any such issue and bar any subsequent consideration of the matter.
(e) Within 20 days after receipt of the Opposing Party's response, the
Claimant may submit to the arbitrator a reply to the Opposing Party's response,
or notification that no reply is forthcoming.
(f) Within 10 days after the last submission as provided above, the
arbitrator shall notify the parties and the Additional Notice Parties of the
date of the hearing on the issues raised by the Claim. Scheduling of the hearing
shall be within the sole discretion of the arbitrator, but in no event more than
30 days after the last submission by the parties, and shall take place within 50
miles of the corporate headquarters of the Company at a place selected by the
arbitrator or such other place as is mutually agreed. Both parties shall be
granted substantially equal time to present evidence at the hearing. The hearing
shall not exceed one business day, except for good cause shown.
(g) Within 30 days after the conclusion of the hearing, the arbitrator
shall issue a written decision to be delivered to both parties and the
Additional Notice Parties (the "Final Determination"). The Final Determination
shall address each issue disputed by the parties, state the arbitrator's
findings and reasons therefor, and state the nature and amount of any damages,
compensation or other relief awarded.
(h) The award rendered by the arbitrator shall be final and non-
appealable, except as otherwise provided under applicable law, and judgment may
be entered upon it in accordance with applicable law in such court as has
jurisdiction thereof.
4. Costs of Arbitration. As part of the Final Determination, the
--------------------
arbitrator shall determine the allocation of the costs and expenses of the
arbitration, including the arbitrator's fee and both parties' attorneys' fees
and expenses, based upon the extent to which each party prevailed in the
arbitration. In the event that any relief which is awarded is non-monetary, then
such costs and expenses shall be allocated in any manner as may be determined by
the arbitrators.
5. Confidentiality of Proceedings. The parties hereto agree that all of
------------------------------
the arbitration proceedings provided for herein, including any notice of claim,
the Notice of Arbitration, the submissions of the parties, and the Final
Determination issued by the arbitrator, shall be
confidential and shall not be disclosed at any time to any person other than the
parties, their representatives, the arbitrator and the Additional Notice
Parties; provided, however, that this provision shall not prevent the party
prevailing in the arbitration from submitting the Final Determination to a court
for the purpose of enforcing the award, subject to comparable confidentiality
protections if the court agrees; and further provided that the foregoing shall
not prohibit disclosure to the minimum extent reasonably necessary to comply
with (i) applicable law (or requirement having the force of law), court order,
judgment or decree, including, without limitation, disclosures which may be
required pursuant to applicable securities laws, and (ii) the terms of
contractual arrangements (such as financing arrangements) to which the Company
or any Additional Notice Party may be subject so long as such contractual
arrangements were not entered into for the primary purpose of permitting
disclosure which would otherwise be prohibited hereunder.
