EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Agreement, dated as of June 1, 2002, is between NANNACO,
INC. ("Employer" or the "Company"), and XXXXXX XXXXXXX, III ("Employee").
Employer and Employee agree to the following terms and conditions of employment.
1. Period of Employment.
Employer shall employ Employee to render services to Employer
in the position and with the duties and responsibilities described in Section 2
for the period (the "Period of Employment") commencing on the date of this
Agreement and ending on June 1, 2005.
2. Position and Responsibilities.
(a) Position.
Employee shall be employed with the company as President and
Chief Executive Officer and shall perform all services appropriate to that
position, as well as such other duties and services as may be assigned by
Employer. Employee shall devote his best efforts to the performance of his
duties. Employee shall be subject to the direction of Employer, which shall
retain full control of the means and methods by which he performs the above
services and of the place(s) at which all services are rendered.
(b) Other Activity.
Employee (during the Period of Employment) shall not be
prohibited from accepting other employment or engaging in other business,
commercial or professional activity provided that Employee shall not engage,
directly or indirectly, in any other business, commercial, or professional
activity (whether or not pursued for pecuniary advantage) that is or may be
competitive with Employer, that might create a conflict of interest with
Employer, or that otherwise might interfere with the business of Employer, or
any Related Company. A "Related Company" shall mean any person or entity that
directly or indirectly controls, is controlled by, or is under common control
with Employer provided this control is disclosed to or otherwise known by
Employee. So that Employer may be aware of the extent of any other demands upon
Employee's time and attention, Employee shall disclose in confidence to Employer
the general nature and scope of any other business activity in which he is or
becomes engaged during the Period of Employment.
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(c) Representations and Warranties.
Employee represents and warrants that (i) he is fully
qualified and competent to perform the responsibilities for which he is being
hired pursuant to the terms of this Agreement, and (ii) his execution of this
Agreement, his employment with Employers, and the performance of his proposed
duties under this Agreement shall not violate any obligations he may have to any
former employer (or other person or entity), including any obligations with
respect to proprietary or confidential information of any other person or
entity. Employee agrees that he will not use for the benefit of, or disclose to,
Employer any confidential information belonging to any former employer or other
entity unless he has written permission from the employer or entity to do so (or
unless Employer has been granted such permission).
3. Compensation and Benefits.
(a) Compensation.
(1) In consideration of the services to be rendered
under this Agreement, Employee
shall receive a minimum salary in the total amount of Two Hundred Thousand
Dollars ($200,000) per year, payable semi-monthly, pursuant to the procedures
regularly established and as they may be amended by Employer during the Period
of Employment. This compensation may be deferred at the option of Employee, and
in such case, the salary shall accrue interest at prime plus 1%. The Employee
has the option to convert any or all salary with accrued interest to Nannaco,
Inc. stock restricted under Rule 144 at a conversion rate thirty percent (30%)
off the average closing bid during the month prior to the month being
compensated.
(4) All compensation and comparable payments to be
paid to Employee under this
Agreement shall be less withholdings required by law.
(b) Benefits.
Employee shall be entitled to fringe benefits comparable to
similarly situated executives, officers or directors, including paid annual tax
preparation assistance. As Employee becomes eligible, he shall have the right to
participate in and to receive benefits from all present and future benefit plans
generally made available to similarly situated employees of Employer. The amount
and extent of benefits to which Employee is entitled shall be governed by the
specific benefit plans, as amended. Employee shall also be entitled to any
benefits or compensation tied to termination as described in Section 4. No oral
statement concerning benefits or compensation to which Employee is entitled
shall alter in any way the term of this Agreement or its termination.
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(c) Insurance and Indemnity.
Employer shall obtain for the benefit of Employee director's and
officer's liability insurance coverage to protect Employee from
personal liability to the fullest extent allowed by law for acts
undertaken as an officer or director of Employer or an Affiliate.
Furthermore, to the fullest extent allowed by law, Employer shall
indemnify Employee for and hold Employee harmless from any and all
claims or causes of action arising out of Employee's exercise of his
duties as an employee, officer or director of Employer or an Affiliate.
4. Termination of Employment.
(a) By Notice.
Employer or Employee may terminate Employee's employment
without Cause (as defined below) by providing the other with sixty (60) day's
advance written notice.
(1) In the event Employer exercises its right to
terminate under this subsection,
Employee shall have the option, in his complete discretion, to terminate
Employee's employment at any time prior to the end of such notice period,
however, Employer shall nevertheless pay to Employee all compensation due and
owing through the last day actually worked, plus an amount equal to the base
salary Employee would have earned through the balance of the above notice
period, plus $1,000. In addition, Employer shall pay to Employee a Severance
Payment, as described in Paragraph 4(e) below, which payment shall be in lieu of
any damages under this Agreement for any alleged breach.
(2) In the event Employee exercises his right to
terminate this agreement under
this subsection, Employer shall have the option, in its complete discretion, to
terminate Employee's employment at any time prior to the end of such notice
period, however, Employer shall nevertheless pay to Employee all compensation
due and owing through the last day actually worked, plus an amount equal to the
base salary Employee would have earned through the balance of the above notice
period, plus $1,000.
(b) By Death.
The Period of Employment shall terminate automatically upon
the death of Employee. Employer shall pay to Employee's beneficiaries or estate,
as appropriate, any compensation then due and owing, including payment for
accrued unused vacation, if any. Thereafter, all obligations of Employer under
this Agreement shall cease. Nothing in this Section shall affect any entitlement
of Employee's heirs to the benefits of any life insurance plan or other
applicable benefits.
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(c) By Employer For Cause.
At any time, and without prior notice, Employer may terminate
Employee for Cause. Employer shall pay Employee all compensation then due and
owing; thereafter, all of Employer's obligations under this Agreement shall
cease. Termination shall be for "Cause" if Employee: (i) acts in bad faith and
to the detriment of Employer; (ii) refuses or fails to act in accordance with
any specific direction or lawful order of Employer; (iii) exhibits in regard to
his employment unfitness or unavailability for service, misconduct, dishonesty,
habitual neglect, or incompetence; (iv) is convicted of a crime involving
dishonesty, breach of trust, or physical or emotional harm to any person; (v)
breaches any material term of this Agreement.
(d) Change in Employer Status.
Notwithstanding anything above, Employee may terminate the Period of
Employment (in which case all of Employer's obligations under this
Agreement shall cease after payment of all compensation due and owing)
upon any formal action of Employer's management to terminate Employer's
existence or otherwise wind up its affairs, to sell all or
substantially all of its assets, or to merge with or into another
entity. In the event Employee terminates the Period of Employment under
this subsection, Employer shall pay Employee all compensation due and
owing through the last day actually worked plus a Severance Payment as
described in subsection 4(e) below, which payment shall be in lieu of
any damages under this Agreement for any alleged breach. Employee shall
be entitled to compensation under this subsection 4(d) only if, within
ninety (90) days after the change in employer status becomes effective,
Employee gives Employer, or its successor or assigns, sixty (60) day's
notice of Employee's intent to terminate the Period of Employment. Upon
receiving this notice, Employer shall have the option, in its complete
discretion, to make Employee's termination effective at any time prior
to the end of the notice period, provided that Employer pays Employee
all compensation due and owing through the balance of the notice period
(not to exceed sixty (60) days), in addition to all other compensation
due and owing, including without limitation, the Severance Payment.
(e) Severance Payment
(1) Employee terminates the Period of Employment pursuant to
subsection 4(d) above or Employer terminates the Period of Employment pursuant
to subsection 4(a) above, Employer shall pay Employee all compensation due and
owing, plus a lump sum equal to twelve (12) month's base salary plus an amount
equal to any bonus paid in cash or stock in the prior twelve (12) months, which
payment shall be in lieu of any damages under this Agreement for any alleged
breach.
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(f) Termination Obligations
(1) Employee agrees that all property, including,
without limitation, all equipment, tangible proprietary information, documents,
books, records, reports, notes, contracts, lists, computer disks (and other
computer-generated files and data), and copies thereof, created on any medium
and furnished to, obtained by, or prepared by Employee in the course of or
incident to his employment, belongs to Employer and shall be returned promptly
to Employer upon termination of the Period of Employment.
(2) All benefits to which Employee is otherwise
entitled shall cease upon Employee's termination, unless explicitly continued
either under this Agreement or under any specific written policy or benefit plan
of Employer.
(3) Upon termination of the Period of Employment,
Employee shall be deemed to have resigned from all offices and directorships
then held with Employer or any Affiliate.
(4) The representations and warranties contained in
this Agreement and Employee's obligations under this subsection 4(f) on
Termination Obligations shall survive the termination of the Period of
Employment and the expiration of this Agreement.
(5) Following any termination of the Period of
Employment, Employee shall fully cooperate with Employer in all matters relating
to the winding up of pending work on behalf of Employer and the orderly transfer
of work to other employees of Employer. Employee shall also cooperate in the
defense of any action brought by any third party against Employer that relates
in any way to Employee's acts or omissions while employed by Employer.
5. Notices.
Any notice or other communication under this Agreement must be
in writing and shall be effective upon delivery by hand or three (3) business
days after deposit in the United States mail, postage prepaid, certified or
registered, and addressed to Employers or to Employee at the corresponding
addresses below. Employee shall be obligated to notify Employers in writing of
any change in his address. Notice of change of address shall be effective only
when done in accordance with this Section.
Employer's Notice Addresses:
Nannaco, Inc.
0000 Xxxxxxxx Xxxx #000
Xxx Xxxxxxx, XX 00000
Employee's Notice Address:
Xxxxxx XxXxxxx, III
3670 Menger
Xxx Xxxxxxx, XX 00000
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6. Action by Employers.
All actions required or permitted to be taken under this
Agreement by Employer, including, without limitation, exercise of discretion,
consents, waivers, and amendments to this Agreement, shall be made and
authorized only by the President, by his or his designated representative, or
another representative specifically authorized by the Board of Directors to
fulfill the obligations under this Agreement.
7. Integration and Other Policies.
This Agreement supersedes all other prior and contemporaneous
representations, agreements and statements, whether written or oral, express or
implied, and it may not be contradicted by evidence of any prior or
contemporaneous representations, statements or agreements. Except as
specifically restricted by an express provision of this Agreement, Employer
retains and may exercise all management rights and prerogatives in its
discretion. However, to the extent that the practices, policies, or procedures
of Employer, now or in the future, apply to Employee and are inconsistent with
the terms of this Agreement, the provisions of this Agreement shall control.
8. Amendments; Waivers.
This Agreement may not be amended except by an instrument in
writing, signed by each of the parties. No failure to exercise and no delay in
exercising any right, remedy, or power under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, remedy,
or power under this Agreement preclude any other or further exercise thereof, or
the exercise of any other right, remedy, or power provided herein or by law or
in equity.
9. Assignment; Successors and Assigns.
Employee agrees that he will not assign, sell, transfer,
delegate, or otherwise dispose of, whether voluntarily or involuntarily, or by
operation of law, any rights or obligations under this Agreement. Any such
purported assignment, transfer, or delegation shall be null and void. Nothing in
this Agreement shall prevent the consolidation of Employer with, or its merger
into, any other entity, or the sale by Employer of all or substantially all of
its assets, or the otherwise lawful assignment by Employer of any rights or
obligations under this Agreement. Subject to the foregoing, this Agreement shall
be binding upon and shall inure to the benefit of the parties and their
respective heirs, legal representatives, successors, and permitted assigns, and
shall not benefit any person or entity other than those specifically enumerated
in this Agreement.
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10. Severability.
If any provision of this Agreement, or its application to any
person, place, or circumstance, is held by an arbitrator or a court of competent
jurisdiction to be invalid, unenforceable, or void, such provision shall be
enforced to the greatest extent permitted by law, and the remainder of this
Agreement and such provision as applied to other persons, places, and
circumstances shall remain in full force and effect.
11. Attorneys' Fees.
In any legal action, arbitration, or other proceeding brought
to enforce or interpret the terms of this Agreement, the prevailing party shall
be entitled to recover reasonable attorneys' fees and costs.
12. Interpretation.
This Agreement shall be construed as a whole, according to its
fair meaning, and not in favor of or against any party. By way of example and
not in limitation, this Agreement shall not be construed in favor of the party
receiving a benefit nor against the party responsible for any particular
language in this Agreement. Captions are used for reference purposes only and
should be ignored in the interpretation of the Agreement.
13. Proprietary Information.
Employee represents and warrants that Employer has consistently made
Employee's willingness to protect Employer's confidential and proprietary
information from any unauthorized use and disclosure, and Employee's willingness
to comply with the terms of Employer's confidentiality policies, procedures, and
agreements, conditions of (1) Employer's agreement to disclose confidential and
proprietary information to Employee, (2) Employee's employment, and (3)
Employee's continued employment. Employee agrees that Employer's requirement of
satisfactory confidentiality agreements is reasonable and necessary to protect
Employer's confidential and proprietary information and to effectuate the
purposes of, and is ancillary to, Employee's employment agreement.
14. Acknowledgment.
The parties acknowledge that they have had the opportunity to consult
legal counsel in regard to this Agreement, that they have read and understand
this Agreement, that they are fully aware of its legal effect, and that they
have entered into it freely and voluntarily and based on their own judgment and
not on any representations or promises other than those contained in this
Agreement.
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The parties have duly executed this Agreement as of the date first written
above.
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Xxxxxx XxXxxxx, III
NANNACO, INC.
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