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EXHIBIT 10.4
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of the 16th day of September, 1999, by and among G-Link Corporation, a Tennessee
corporation (the "Company"), and Xxxxxxxxxx X. Xxxxxxx (the "Executive").
WHEREAS, the Company desires to provide Executive with compensation and
other benefits on the terms and conditions set forth in this Agreement in order
to induce Executive to serve as the Chief Executive Officer and President of the
Company; and
WHEREAS, Executive is willing to accept such employment and perform
services for the Company, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises hereof and of the
mutual promises and agreements contained herein, the parties hereto, intending
to be legally bound, hereby agree as follows:
1. Employment and Term of Employment. The Company hereby agrees to
employ the Executive as its Chief Executive Officer and President, and the
Executive hereby agrees to serve the Company, on the terms and conditions set
forth herein, for the period commencing as of the date set forth above and
continuing for three years thereafter (the "Initial Term"), unless sooner
terminated as hereinafter set forth. This Agreement will be renewed
automatically on each anniversary of the date hereof for additional one year
terms (the "Renewal Term(s)" and, together with the Initial Term, the
"Employment Period"), unless the Company or the Executive gives written notice
to the other at least 30 days prior to any such anniversary of its decision not
to renew this Agreement. Executive shall perform the duties normally performed
by a Chief Executive Officer and President. During the Employment Period,
Executive shall serve as a director of the Company; provided, however, that upon
termination of employment for any reason, Executive shall immediately resign as
a director.
2. Extent of Services. The Executive shall devote substantially all
his working time and efforts to the business and affairs of the Company, shall
use his best efforts to advance the best interests of the Company, and shall not
engage in outside business activities that interfere with the performance of his
duties hereunder. Nothing in this Agreement shall preclude executive from
serving on Boards of Directors or making investments in other companies and
participating in charitable or community activities that do not substantially
interfere with his duties and responsibilities hereunder or conflict with the
interest of the Company.
3. Compensation.
a. Base Salary. The Executive shall receive a base salary at the
rate of $225,000 per year ("Base Salary") payable in equal periodic payments,
which payments shall be made no less frequently than monthly during the period
of the Executive's employment hereunder.
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b. Annual Bonus. In addition to Base Salary, the Executive will
be entitled to receive, as additional compensation, an annual bonus at the
discretion of the Compensation Committee of the Board of Directors. The annual
bonus to which the Executive is entitled shall be based upon the extent to which
the Executive meets the performance criteria established for each year by the
Compensation Committee in its sole discretion, but to be established prior to or
within the first 90 days of each performance period. These performance criteria
are as initially set forth on Exhibit A hereto and may be amended on an annual
basis by the Compensation Committee.
c. Expenses. During the term of his employment hereunder, the
Executive shall be entitled to be reimbursed (in accordance with the policies
and procedures established by the Board of Directors of the Company) for all
reasonable expenses incurred by him in performing services hereunder, provided
that the Executive properly accounts therefor in accordance with the Company's
policy. In addition, during the Employment Period, the Executive shall (i) be
reimbursed for monthly dues for membership in one country club of his choosing
and (ii) be entitled to a reasonable monthly vehicle allowance.
d. Participation in Benefit Plans. Executive shall be entitled to
participate in or receive benefits under the Company's executive benefit plans
and arrangements, including life and disability insurance, in effect on the date
hereof that are generally made available to all senior executives of the Company
on terms at least as favorable as those offered to other senior executives of
the Company. In addition, the Company may elect to obtain key-man life insurance
coverage on the Executive, and the Executive agrees to submit to any medical
examination that is reasonably required for underwriting purposes. At a minimum,
the Company shall obtain for the Executive (i) disability coverage to replace
Executive's Base Salary for the entire period of his disability and (ii) life
insurance of $500,000.
4. Termination.
a. Disability. If, as a result of the Executive's incapacity due
to physical or mental illness, the Executive shall have been absent from his
duties hereunder on a full time basis for 90 consecutive business days, the
Company may terminate its obligations hereunder, except for those obligations
set forth in Section 5(b) hereof. The determination of whether the Executive is
disabled due to physical or mental illness shall be made by a licensed physician
satisfactory to the Executive and to the Company.
b. Termination Upon Death. If the Executive should die during the
term of this Agreement, the Company's obligations under this Agreement shall
cease, except for those obligations set forth in Section 5(c) hereof, and the
Executive's employment shall be terminated.
c. Termination by the Company. The Company may terminate the
Executive's employment hereunder at any time with or without Cause. For the
purposes of this Agreement, "Cause" shall mean any act that has a material
adverse effect upon the Company, and that constitutes on the part of the
Executive personal dishonesty, willful misconduct, repeated and intentional
failure to perform his duties hereunder, willful violation of any law,
governmental rule or regulation (other
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than traffic violations or misdemeanors that do not adversely impact Executive's
ability to perform his duties hereunder), or final cease and desist order, or
material breach of this Agreement and failureto cure such violation or breach
(if such violation or breach is curable) within fifteen days of receipt by
Executive of written notice thereof by the Company, in each case as reasonably
determined by the Company's Board of Directors after a diligent and good faith
inquiry.
d. Termination by Executive. Executive may terminate this
Agreement on two weeks' notice, and the Company shall have no obligations to
Executive except as set forth in Section 5(d) hereof; provided, however, if
Executive terminates this Agreement for Good Reason (as defined in Section
6(a)(i)(A),(B) or (C) below), but whether or not a Change of Control (as
hereinafter defined in Section 6) has occurred, Executive shall receive the
payments and benefits as set forth in Section 5(a) below.
e. Notice of Termination. Any termination by the Company pursuant
to Section 4(a) or termination without Cause pursuant to Section 4(c) shall be
communicated by written notice of termination to Executive at least 60 days
prior to the termination date. Notice of termination with Cause shall be
effective upon delivery.
5. Compensation on Termination of Employment (Except Within Six
Months Prior to or Two Years Following a Change of Control). This Section 5
shall apply to termination of the Executive's employment more than six months
prior to a Change of Control and to termination of the Executive's Employment
after more than two years following a Change of Control. This Section 5 shall
not apply to termination of Executive's employment during the Change of Control
Period (as hereinafter defined in Section 6):
a. If Executive's employment is terminated by the Company other
than for disability, death or Cause (as such term is defined in Section 4(c)
hereof), Executive shall receive such payments, if any, under applicable plans
or programs, including but not limited to those referred to in Sections 3(c) and
(d) hereof, to which he is entitled pursuant to the terms of such plans or
programs, and any unpaid payments of Base Salary previously earned, bonus
awarded and expense incurred for which Executive is entitled to reimbursement
hereunder. If Executive is terminated under this Section 5(a), Executive shall
also be entitled to receive (i) an amount (the "Termination Amount") in lieu of
any other cash compensation beyond that provided in the immediately preceding
sentence, which Termination Amount shall be equal to the greater of (x) two
times Executive's annual Base Salary and bonuses paid or owed Executive during
the twelve-month period preceding the date of termination and (y) Base Salary
payable over the then remaining balance of the employment term, in either case,
payable in installments as normal payroll over the 24 months following such
termination of employment (or, if longer, the remaining balance of the
employment term); and (ii) continued coverage for the same period that the
Termination Amount is payable under any employee medical, disability and life
insurance plans in accordance with the respective terms thereof (other than the
requirement of continued employment).
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b. If the Executive's employment is terminated in accordance with
Section 4(a) as a result of disability due to physical or mental illness, the
Executive shall receive or commence receiving, as soon as practicable:
(i) the actual bonus, if any, he would have received in
respect of the fiscal year in which his termination occurs, prorated by
a fraction, the numerator of which is the number of days of the fiscal
year until termination and the denominator of which is 365, payable at
the same time as bonuses are paid to other executives; and
(ii) accrued but unpaid Base Salary and such payments
under applicable plans or programs, including but not limited to those
referred to in Sections 3(c) and (d) hereof, to which he is entitled
pursuant to the terms of such plans or programs.
(iii) continued payment of periodic Base Salary until the
date that Executive becomes eligible for long-term disability benefits
described in Section 3(d) hereof unless the Executive is otherwise
eligible to receive benefits under a short-term disability program
maintained by the Company.
c. If the Executive's employment shall be terminated because of
the Executive's death, Executive's estate or designated beneficiaries shall
receive or commence receiving, as soon as practicable:
(i) the actual bonus, if any, he would have received in
respect of the fiscal year in which his death occurs, prorated by a
fraction, the numerator of which is the number of days of the fiscal
year until his death and the denominator of which is 365, payable at the
same time as bonuses are paid to other executives; and
(ii) accrued but unpaid Base Salary and such payments
under applicable plans or programs, including but not limited to those
referred to in Sections 3(c) and (d) hereof, to which Executive's estate
or designated beneficiaries are entitled pursuant to the terms of such
plans or programs.
d. If the Executive's employment shall be terminated with Cause
or if the Executive voluntarily terminates his employment for any reason, other
than Good Reason as described in Section 6(a)(i)(A), (B) or (C), the Company
shall pay the Executive his Base Salary earned through the date on which his
employment is terminated and the Company shall not have any further obligations
to the Executive under this Agreement except those required to be provided by
law.
6. Compensation on Termination of Employment Within Six Months Prior
to or Two Years Following A Change of Control. This Section 6 shall apply to
termination of Executive's
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employment during the "Change of Control Period" (as defined in this Section 6).
This Section 6 shall not apply to termination of Executive's employment more
than six months prior to a Change of Control or more than two years following a
Change of Control:
a. Definition of Certain Terms.
(i) "Good Reason" shall mean the occurrence or
continuation, without consent of Executive, after a Change of Control, of any of
the following events within the Change of Control Period:
(A) the assignment to Executive of any duties
inconsistent with the customary powers of Chief Executive Officer,
President and Director, or an adverse change in the status, position or
conditions of Executive's employment or the nature of Executive's
responsibilities in effect immediately prior to such Change of Control,
or any removal of Executive from, or any failure to re-elect Executive
to, any of such positions;
(B) a reduction by the Company in Executive's
Base Salary as in effect immediately prior to such Change of Control or
a material reduction in the benefits provided in Section 3(c) and
Section 3(d) of this Agreement;
(C) the relocation of Executive's principal
office to a location outside a 35 mile radius from Executive's
principal office immediately prior to such Change of Control, except
for required travel on the Company's business to an extent
substantially consistent with Executive's business travel obligations
immediately prior to such Change of Control;
(D) the failure by the Company to continue in
effect any benefit or compensation plan in which Executive participates
immediately prior to the Change of Control which is material to
Executive's total compensation, including but not limited to any stock
option, employee stock ownership, bonus, insurance, disability and
vacation plans which the Company currently has or any substitute or
additional plans adopted prior to the Change of Control, unless an
equitable arrangement (embodied in an ongoing substitute or alternative
plan or plans) has been made with respect to such plan, or the failure
by the Company to continue Executive's participation therein (or in
such substitute or alternative plan) on a basis not materially less
favorable, both in terms of the amount of benefits provided and the
level of Executive's participation relative to other participants, as
in existence immediately prior to such Change of Control; or
(E) the failure of the Company to obtain an
agreement from any successor to assume and agree to perform this
Agreement as contemplated herein.
(ii) A "Change of Control" shall be
deemed to have taken place if (A) any person or entity,
including a "group" as defined in Section 13(d)(3) of the
Securities and Exchange Act of 1934, other than Company or a
wholly-owned
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subsidiary thereof or any employee benefit plan of Company or
any of its it subsidiaries, becomes the beneficial owner of
the Company securities having 50% or more of the combined
voting power of the then outstanding securities of the Company
that may be cast for the election of directors of the Company
(other than as a result of an in issuance of securities
initiated by the Company in the ordinary course of business);
or (B) as the result of, or in connection with, any cash
tender or exchange offer, merger or other business
combination, sale of assets or contested election, or any
combination of the foregoing transactions less than a majority
of the combined voting power of the then outstanding
securities of the Company or any successor corporation or
entity entitled to vote generally in the election of the
directors of the Company or such other corporation or entity
after such transaction are held in the aggregate by the
holders of the Company's securities entitled to vote generally
in the election of directors of the Company immediately prior
to such transaction; or (C) during any period of two
consecutive years, individuals who at the beginning of any
such period constitute the Board of Directors of the Company
cease for any reason to constitute at least a majority
thereof, unless the election, or the nomination for election
by the Company's shareholders, of each director of the Company
first elected during such period was approved by a vote of at
least two-thirds of the directors of the Company then still in
office who were directors of the Company at the beginning of
any such period.
(iii) "Change of Control Period" shall
mean the six month period before or the two year period
following a Change of Control.
(iv) "Change of Control Severance
Benefits" shall mean all of the following payments:
(A) any installments of Executive's
Base Salary through the date of termination of
employment at the rate in effect at the time the
Notice of Termination is given; and
(B) the Special Termination Payment.
(v) "Change of Control Date" shall mean
the date on which a Change of Control occurs.
(vi) "Notice of Termination" shall refer
to written notice described in Section 2(d) indicating the
specific termination provision of this Agreement relied upon,
setting forth in reasonable detail the facts and circumstances
claimed to provide the basis for termination of Executive's
employment under the provision so indicated and stating the
date of termination.
(vii) "Special Termination Payment" shall
mean an amount payable in a single lump sum equal to the
product of (x) the sum of the Executive's
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maximum annual salary paid during the five year period
preceding the date of termination (inclusive of bonuses paid
or owed to Executive during the 12-month period preceding the
date of termination, but excluding unearned bonuses negotiated
by Executive at the time of Executive's employment with the
Company), multiplied by (y) the number three.
b. Termination Not Giving Rise To Special Termination
Payments or Medical Benefits. If Executive's employment is terminated
during the Change of Control Period for Cause (as defined in Section
4(c), or on account of disability (as determined in accordance with
Section 4(a)), or if Executive dies during the Change of Control
Period, or if Executive terminates Executive's employment during the
Change of Control Period without Good Reason, the Company shall pay to
Executive any installments of Executive's Base Salary as then in effect
that would otherwise be due through the date on which Executive's
employment is terminated. The Company shall then have no further
obligations to the Executive under this Agreement (unless accrued under
the Company's benefit plans) except that in the event of termination by
death, the Executive's estate or beneficiaries, as the case may be,
shall be paid such amounts as may be payable to the Executive under
Section 5(c), and except that in the event of termination by
disability, the Executive shall be paid such amounts as Executive is
entitled to receive under Section 5(b) and except for payment of such
amounts as may be required pursuant to Sections 7 and 12 hereof.
c. Termination Giving Rise to Change of Control Severance
Benefits. If the Executive's employment is terminated by the Company
during the Change of Control Period for any reason other than Cause,
death of the Executive or disability, or if the Executive terminates his
employment during the Change of Control Period for Good Reason, then
Executive shall be entitled to receive the Change of Control Severance
Benefits, all of which shall be paid to Executive within ten days
following the date of termination.
d. Notice of Termination. Any termination of Executive's
employment by the Company or by Executive pursuant to this Section 6
shall be communicated by written notice of termination (the "Notice of
Termination") to the other party hereto 90 days in advance of any such
termination, which shall indicate the specific termination provision in
the Agreement relied upon, shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of
Executive's employment and shall state the date of termination.
e. Special Rule Applicable to Termination Within Six
Months Prior to a Change of Control. Upon any termination of Executive's
employment prior to a Change of Control, Executive shall be entitled to
receive amounts as specified in Section 5 of this Agreement. If,
subsequent to such termination, a Change of Control occurs within six
months following the date of such termination, then the Executive shall
be entitled to receive amounts as specified in this Section 6, subject
to a reduction for any amounts previously paid by the Company to
Executive pursuant to Section 5 hereof.
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7. Tax Reimbursement Payment.
a. Definition of Certain Terms.
(i) The "Tax Firm" shall refer to the independent
accounting firm which is advising the Company
immediately prior to the change in control which
gives rise to payments under this Section 7, or
legal or tax counsel which, in all cases, is
acceptable to the Company and the Executive.
(ii) The "Additional Amount" shall mean an amount
payable to the Executive under the conditions
specified in Section 7(b) and determined as
provided in Section 7(b).
(iii) The "Change of Control Year" shall mean the
calendar year during which occurs the change in
control.
(iv) The "Code" shall mean the Internal Revenue Code of
1986, as amended.
(v) An "Excess Parachute Payment" shall mean any
payment, benefit or any portion thereof, whether
under this Agreement or as a result of Executive's
participation in any of the Company's stock option
or employee incentive plans, which would be an
"excess parachute payment" within the meaning of
Section 280G(b) of the Code, and which would
result in the imposition of an excise tax on the
Executive under Section 4999 of the Code.
b. Payment of Additional Amount. Notwithstanding anything to the
contrary contained in this Agreement, in any plan of the Company, or in any
other agreement or understanding, following a "change in control" (as defined in
Section 280G of the Code) will pay to the Executive, at the times herein
specified, an amount (the "Additional Amount") equal to the excise tax under
Section 4999 of the Code, if any, incurred or to be incurred by the Executive by
reason of the payments under this Agreement, acceleration of vesting of stock
options, stock appreciation rights or restricted stock granted under the
Company's various stock option, stock appreciation or other employee incentive
plans, or payments under any other plan, agreement or understanding between the
Executive and the Company, constituting Excess Parachute Payments, plus all
excise taxes and federal, state and local income taxes incurred or to be
incurred by the Executive with respect to receipt of the Additional Amount.
Attached hereto as Exhibit B is an example illustrating the computation of the
Additional Amount.
c. Opinion of Tax Firm. All determinations required to be made
regarding the Additional Amount, including whether payment of any Additional
Amount is required and the amount of any Additional Amount, shall be made by the
Tax Firm, which shall provide detailed
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support calculations to the Company and the Executive on or before the last day
of the Change of Control Year. In computing taxes, the Tax Firm shall use the
highest marginal federal, state and local income tax rates applicable to single
taxpayers for the year in which the Additional Amount is to be paid (unless,
within 30 days after the occurrence of the change in control the Executive
specifies in writing to the Company his marginal tax rate) and shall assume the
full deductibility of state and local income taxes for purposes of computing
federal income tax liability.
d. Time of Payment of Additional Amount. The portion of the
Additional Amount based on the excise tax as determined by the Tax Firm to be
due for the Change of Control Year shall be paid to the Executive no later than
March 1 immediately following the end of the Change of Control Year. The portion
of the Additional Amount based on the excise tax as determined by the Tax Firm
to be Due for each calendar year following the Change of Control Year shall be
paid to the Executive on or before March 1 immediately following the end of each
such calendar year. If the Company determines that the excise tax for any year
will be different from the amount originally calculated in the report of the Tax
Firm delivered at the end of the Change of Control Year, then the Company shall
provide to the Executive detailed support calculations by the Tax Firm
specifying the basis for the change in the Additional Amount.
8. Binding Agreement. This Agreement and all obligations of the
Company hereunder shall be binding upon the successors and assigns of the
Company. This Agreement and all rights of the Executive hereunder shall inure to
the benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees, and legatees. The Company may assign its rights and delegate its
duties under this Agreement at any time, without the consent of Executive, to
one or more affiliates of the Company.
9. Non-Competition; Non-Solicitation. For a period of three years
following Executive's termination of employment, the Executive will not,
directly or indirectly, within the territorial limits of the United States of
America, without the prior written consent of the Company (i) directly or
indirectly, either as principal, manager, agent, consultant, officer,
shareholder, partner, investor, lender or employee or in any other capacity,
carry on, be engaged in or have any financial interest in, any business in
competition with the business of providing transaction outsourcing services to
government entities in which the Company participated on the date of termination
of employment; or (ii) recruit or hire or solicit for business any person who,
during the 12-month period preceding the date of recruitment or hiring or
solicitation, was an executive, customer, or client of the Company or any of its
subsidiaries or affiliates. Nothing herein shall prohibit the Executive from
acquiring a passive investment in a publicly-held company of up to 1% of the
outstanding common shares thereof.
10. Unauthorized Disclosure.
a. During the period of his employment hereunder, the Executive
shall not, without the prior written consent of the Company, disclose to any
person, other than a person to whom disclosure is necessary or appropriate in
connection with the performance by the Executive of his duties as an executive
of the Company, or any of its subsidiaries or affiliates (including any
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attorney, accountant, or financial advisor to Executive), any confidential
information obtained by him while in the employ of the Company, or its
subsidiaries or affiliates, with respect to any of the Company's (or any
subsidiary's) products, services, improvements, designs, methodologies,
processes, customers, methods of marketing or distribution, systems, procedures,
plans, proposals, or policies, the disclosure of which he knows, or should have
reason to know, could be damaging to the Company or its subsidiaries or
affiliates. Following the termination of employment hereunder, the Executive
shall not disclose any confidential information of the type described above
except as may be required by order of court in connection with any judicial or
administrative proceeding or inquiry; provided, however, nothing contained in
this Section 10 shall apply to any knowledge or information that (1) is
generally available to the public or becomes generally available to the public
other than as a result of a disclosure in violation hereof by Executive, (2)
prior to its disclosure, was available to Executive prior to his association
with the Company or (3) becomes available to Executive from a source other than
the Company or any of its Representatives, provided that such source is not, to
Executive's knowledge, bound by a confidentiality agreement with respect to such
information. For purposes of this Agreement, the term "Representatives" shall
mean the Company's directors, officers, employees, attorneys, accountants and
others engaged by the Company or intended to be engaged by the Company to advise
it.
b. The foregoing provision of this Section 10 shall be binding
upon the Executive's heirs, successors, and legal representatives.
11. Injunction. The Executive acknowledges and agrees that, in the
event of a breach of Section 9 or Section 10 hereof by the Executive, the
Company would be irreparably harmed and that monetary damages would be an
inadequate remedy in favor of the Company. Accordingly, the parties agree that
in the event of such a breach, the Company shall be entitled to injunctive
relief against the Executive, in addition to any other remedies or damages
available to it.
12. Indemnification.
a. In the event that an excise tax is ever assessed by the
Internal Revenue Service against the Executive (or if the Company and
the Executive mutually agree that an excise tax is payable) by reason of
any payment under this Agreement, acceleration of vesting of stock
options, stock appreciation rights or restricted stock granted under the
Company's stock option, stock appreciation or other employee incentive
plans, or payments under any other plan, agreement or understanding
between the Executive and the Company, constituting Excess Parachute
Payments, and if such excise tax was not included in the determination
by the Tax Firm of the Additional Amount that has been actually paid to
the Executive, the Company agrees to indemnify the Executive by paying
to the Executive the amount of such excise tax, together with any
interest and penalties, including reasonable legal and accounting fees
and other out-of-pocket expenses incurred by the Executive, attributable
to the failure to pay such excise tax by the date it was originally due,
plus all federal, state and local income taxes incurred with respect to
payment of the excise tax calculated in a manner analogous to Exhibit B.
Upon Executive's receipt from the Internal Revenue Service ("IRS") of
any deficiency notice, notice of assessment or any other written
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communication relating to the excise tax on an Excess Parachute Payment,
Executive shall give notice thereof to the Company within ten business
days of Executive's actual receipt thereof. In the event of any dispute
concerning the potential excise tax (including any administrative
proceedings within the IRS or court proceedings), the Company, as the
indemnifying party. shall be entitled to assume the defense of such a
dispute or proceeding, no compromise or settlement of such claim may be
effected without the Company's and Executive's mutual consent (which
consents shall not be unreasonably withheld) and the Company shall have
no liability with respect to any compromise or settlement of such claims
effected without its consent, unless such consent has been unreasonably
withheld. In addition, in the event the Company assumes defense of any
proceeding, the Executive shall not be entitled to indemnification for
outside legal fees and expenses independently incurred by Executive
after the date on which the Company assumed such defense. This
indemnification obligation shall survive the termination of the
Agreement and shall apply to all such excise taxes on Excess Parachute
Payments, whether due before or after termination of employment.
b. If the excise tax for any year which is actually imposed on
the Executive is finally determined to be less than the amount taken
into accounting the calculation of the Additional Amount that was paid
to the Executive pursuant to Section 7, then the Executive shall repay
to the Company, at the time that the amount of such reduction in excise
tax is finally determined, the portion of the Additional Amount
attributable to such reduction (including the portion of the Additional
Amount attributable to the excise tax and federal and state income taxes
imposed on the Additional Amount being repaid by the Executive, to the
extent that such repayment results in a reduction in such excise tax,
federal or state income tax).
13. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or, if mailed by United States
registered mail, return receipt requested, postage prepaid, three days following
the date of mailing addressed as follows:
If to the Executive:
Xxxxxxxxxx X. Xxxxxxx
____________________________
____________________________
with a copy to:
Xxxxxx Xxxxxxx Xxxxxx & Xxxxx, PLLC
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx
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If to the Company:
G-Link Corporation
0000 Xxxxx Xxxxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx Xxxxxx
with a copy to:
Bass, Xxxxx & Xxxx PLC
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: F. Xxxxxxxx Xxxxxx, Xx.
or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
14. Withholding of Taxes. The Company may withhold from any amounts
payable under this Agreement all federal, state, city, and other taxes as shall
be required pursuant to any law or government regulation or ruling.
15. Severability. If any provision of this Agreement is declared or
found to be illegal, unenforceable, or void, in whole or in part, then both
parties shall be relieved of all obligations arising under such provision, but
only to the extent such provision is illegal, unenforceable, or void, it being
the intent and agreement of the parties that this Agreement shall be deemed
amended by modifying such provision to the extent necessary to make it legal and
enforceable while preserving its intent or, if such is not possible, by
substituting therefor another provision that is legal and enforceable and
achieves the same objectives. The foregoing notwithstanding, if the remainder of
this Agreement shall not be affected by such declaration or finding and is
capable of substantial performance, then each provision not so affected shall be
enforced to the extent permitted by law.
16. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Tennessee, without giving effect to
the choice of laws principles thereof.
17. Amendment; Modification; Waiver. This Agreement may be amended only
by the written agreement of the parties hereto. No provisions of this Agreement
may be modified, waived, or discharged unless such waiver, modification, or
discharge is agreed to in writing signed by Executive and the Company. No waiver
by either party hereto at any time of any breach by the other party hereto or
compliance with any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.
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18. Binding Effect. This Agreement is personal in nature and neither of
the parties hereto shall, without the consent of the other, assign, transfer, or
delegate this Agreement or any rights or obligations hereunder except as
expressly provided for herein. Without limiting the generality of the foregoing,
Executive's right to receive payments hereunder shall not be assignable,
transferable, or delegable, whether by pledge, creation of a security interest,
or otherwise, other than by a transfer by his will or by the laws of descent and
distribution and, in the event of any attempted assignment or transfer contrary
to this Section 18, the Company shall not have any liability to pay any amount
so attempted to be assigned, transferred, or delegated.
19. Entire Contract. Except as otherwise set forth herein, this
Agreement constitutes the entire agreement and supersedes all other prior or
contemporaneous agreements, employment contracts, and understandings, both
written and oral, express or implied, with respect to the subject matter of this
Agreement.
20. Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original.
[Remainder of page left intentionally blank; signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first above written.
G-LINK CORPORATION
By: /s/ Xxxx XxXxxxxx
-------------------------------
Title: /s/ Chairman
----------------------------
/s/ Xxxxxxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxxxxxx X. Xxxxxxx
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EXHIBIT A
BONUS CRITERIA
1. Conduct bi-weekly management meetings with Chairman and senior executive
staff.
2. Assemble management team.
3. Complete financings as directed by the Board of Directors.
4. Position Company to achieve strategic alternatives, including an initial
public offering, strategic transaction or strategic alliances.
5. Maintain financial stability of Company.
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EXHIBIT B
COMPUTATION OF ADDITIONAL AMOUNT
1. Excess Parachute Payment Subject to Excise Tax $ 50,000
2. Excise Tax on Item 1 @ 20% $ 10,000
3. Additional Amount Under Agreement* $ 24,752
4. Verification of Additional Amount:
A) Excise Tax on additional $24,752 @ 20% $ 4,950
B) Federal Income Tax on $24,752:
i) Additional Income $ 24,752
ii) State Income Tax Deduction 0
---------
iii) Net Additional Federal
Taxable Income 24,752
iv) Federal Income Tax @ 39.6% $ 9,802
C) Total Taxes on Additional Amount (Line 4A + Line 4B (iv)) $ 14,752
D) Net amount Available to Key Employee to
Pay Excise Tax in line 2 ($24,752 - $14,752) $ 10,000
-------------------
* The formula used to compute the Additional Amount is to divide the
initial excise tax amount (line 2) by a percentage equal to 100% less the sum of
the excise tax percentage plus the state income tax percentage, plus the federal
tax percentage less a percentage determined by multiplying the federal tax
percentage times the state tax percentage. Thus, in the example above, the
following percentages should be subtracted from 100%.
1) Excise Tax Percentage 20.00%
2) Assumed State Tax Percentage - Tennessee 0.00%
3) Federal Income Tax Percentage - 39.60%
------
Total 59.60%
Less 39.6% Times 0% (Deduction for state income
tax = 0 in Tennessee) 0.00%
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59.60%
The resulting percentage of 100% - 59.60% = 40.40% is divided into $10,000.
$10,000/.4040 = $24,752.
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