EMPLOYMENT AGREEMENT
EXHIBIT
10.19
THIS
EXECUTIVE EMPLOYMENT AGREEMENT
(this
“Agreement”) is made
and
entered into as of this 19th day of January, 2006 by and between Xxxxxxx
Technologies Corporation, a
Delaware corporation, having its principal
offices at 0000 X. 000xx
Xxxxxx,
Xxxxx, XX 00000 (hereinafter referred to as the “Company”),
and Xxxxxx
X. Xxxxxxx, an individual
residing at 00000 Xxxxxxx Xxxx, Xxxxxxx, XX 00000 (hereinafter
referred to as the “Executive”). This Agreement shall be effective as of January
19, 2006 (“Effective Date”).
WITNESSETH:
WHEREAS,
the Executive has demonstrated unique qualifications to act in an executive
capacity for the. Company, and the Company expects that Executive’s contribution
will be substantial and meritorious; and
NOW
THEREFORE, in consideration of the foregoing, the mutual covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:
1. Employment.
The Company
agrees to employ the Executive, and the Executive agrees to accept such
employment, all in accordance with the terms of this Agreement.
2. Capacity
and Duties. The
Executive shall serve as President
of Resilent, LLC
and
serve in such other offices as he may be appointed or elected to from time
to
time. The Executive shall perform the duties assigned to him by the Chairman
of
the board of directors of the Company (the “Board”) and the President of the
Company to the best of his ability in a diligent, trustworthy, businesslike,
and
efficient manner for the purposes of advancing
the business of the Company and, to this end, will devote his full time and
attention to the business of the Company. Furthermore, Executive shall comply
with the Company’s rules and regulations as may be set forth in the Company’s
Employee Handbook, or similar document. In the event Executive observes unlawful
acts or practices by the Company, he shall promptly notify the President of
the
Company or the Chairman of the Board of Directors, as he may deem appropriate.
Executive shall serve as a director of the Company and as a director of Resilent
LLC and may in the future serve as a director of any of the Company’s other
affiliates or subsidiaries. Executive will fulfill his duties as such director
without any additional compensation.
3. Term.
The
term
of Executive’s employment hereunder (the “Employment Period”) shall commence on
the Effective Date and continue on an indefinite basis, unless earlier
terminated hereunder.
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4. Compensation.
(a) Base
Salary.
For all services rendered by the Executive under this Agreement, the Company
shall pay the Executive an annual salary of $175,000.00
dollars,
payable in monthly installments beginning on the Effective Date (“Salary”).
Executive shall not draw a salary from Resilent LLC after the Effective
Date.
(b) Expenses.
To the
extent not otherwise paid for by the Company, the Company will reimburse the
Executive for reasonable and necessary expenses incurred in promoting the
Company’s business, including expenses for travel and entertainment, such
reimbursement to be made periodically upon presentation of appropriate receipts
or other substantiation.
(c) Plans.
The
Executive will be permitted to participate in such pension, profit sharing,
bonus, life insurance, hospitalization, major medical, vacation and other
employee benefit plans of the Company that may be in effect from time to time,
to the extent that the Executive is eligible under the terms of those plans.
Unless stated otherwise in this Agreement, Executive’s benefits under any such
plans shall be the same as those extended to other employees of the Company
and
as may be published by the Company from time to time.
(d) Taxes,
Etc.
All
compensation payable to Executive hereunder is stated in gross amount and shall
be subject to all applicable withholding taxes and other normal payroll
deductions and any other amounts required by law to be withheld.
5. Stock
Incentives.
(a) The
Company hereby grants Executive options to purchase 500,000
shares
of the Company’s common stock (the “Performance Options”) at an exercise price
of
$1.00
per
share. The Performance Options shall vest and become exercisable on April 1,
2007 as follows: 100% of the Performance Options in the event the audited
financial statements of Resilent LLC for the twelve (12) calendar months
following its initial shipment of products (“Performance Period”) report actual
pre-tax income to have met or exceeded $1,000,000.00 (“Target”). In the event
Company’s actual revenue for the Performance Period is less than the Target, the
Performance Options shall be reduced by the same percentage by which actual
pre-tax income for fiscal 2006 was less than the Annual Target.
(b) The
Company shall include the shares underlying the Options issued to Executive
in
any registration statement filed with the Securities and Exchange Commission
hereafter if such shares are not already registered. The term “registration” for
the purposes of this Section 5(b) refers to a registration effected by preparing
and filing a registration statement in compliance with the Securities Act of
1933, as amended, and the declaration or ordering of effectiveness of such
registration statement.
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(c) Notwithstanding
any provision to the contrary contained herein, Executive acknowledges and
agrees that by signing this Agreement he agrees not to sell any of the Company’s
Equity Securities (whether acquired pursuant to this agreement or otherwise)
at
a time when applicable laws, Company policies or an agreement between the
Company and its underwriters prohibit such sale. Executive further acknowledges
and agrees that this restriction will apply, to any position that he may now,
or
in the future hold with the Company, whether as an employee, consultant or
director of the Company or any subsidiary of the Company. Company policies
restricting such sale shall no longer apply upon termination of Executive’s
employment with the Company.
6. Voting
Proxy.
The
Company and Executive acknowledge that Company granted Executive an Irrevocable
Proxy (“Proxy”) to vote the membership interest units (“Units”) in Resilent LLC,
owned and held by the Company, at any meeting of the members of Resilent LLC,
specifically excluding any votes related to the issuance of additional Units
or
other securities as described in the Proxy. The Company and Executive agree
that
this Agreement hereby requires the appointment of Executive as holder of said
Proxy pursuant to the terms of said Proxy and said Proxy is, accordingly,
coupled with an interest. The Company and Executive agree that upon termination
of Executive’s employment caused by Executive’s resignation or termination of
Executive’s employment for “good cause”, as defined in Section 7.1 below, at any
time, whether during the Initial Period as defined in Section 7.1 below, or
after said Initial Period, the Proxy shall be cancelled and be deemed null
and
void. Any termination of Executive’s employment hereunder at any time, whether
during the Initial Period or after said Initial Period, for any reason other
than his resignation from employment or his termination from employment for
“good cause”, shall not result in the cancellation of said Proxy and said Proxy
shall not be deemed null and void, but instead said Proxy shall remain in full
force and effect.
7. Termination
by Company.
7.1 Termination
for Cause. The
Company shall not terminate
Executive’s employment hereunder for any reason during the first twenty
four (24)
calendar
months following the Effective Date of this Agreement (“Initial Period”), except
for “good cause”. For purposes of this Section 7.1, and at any time following
the Initial Period, the term “good cause” shall mean (i) willful misconduct;
(ii) dishonesty; (iii) conviction of a felony; (iv) theft; (v) unethical
business conduct; (vi) illegal substance abuse; (vii) the failure of Executive,
for any reason, within thirty (30) days after receipt by Executive of written
notice thereof from the Company, to correct, cease, or otherwise alter any
bona
fide and documented insubordination, failure to comply with instructions,
violation of any rule set forth in the Company’s Employee Handbook or other
action or omission to act that materially or adversely affect its business
or
operations. During the Initial Period and after the Initial Period, the
Executive’s employment may only be terminated for “good cause” if the boards of
directors of both the Company and Resilent, LLC shall have ratified, by a
resolution approved by both of said boards of directors, that Executive’s
actions warrant termination for “good cause”. In such event, Executive shall not
participate in the discussion or vote on the ratification of his
termination.
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7.2 Employment
at Will.
Executive acknowledges that except
during
the Initial Period, he is an employee-at-will. At any time following the Initial
Period, the Company shall have the right, at any time, for any reason or for
no
reason at all, to terminate Executive’s employment upon 30 days written notice
to Executive.
8. Termination
By Executive.
Executive has the right to terminate his employment under this Agreement for
any
reason or without reason upon thirty (30) days prior written notice to the
Company.
9. Effect
of Resignation.
Upon the
termination of Executive’s employment with the Company for any reason, Executive
shall be deemed to have automatically resigned from any position he may hold
with the Company, including any offices or board memberships with the Company
and/or its affiliates or subsidiaries. Such resignation shall be deemed
effective immediately without the requirement that a written resignation be
delivered. The Executive shall execute any agreements to further effectuate
such
resignations that are reasonably requested by the Company.
10. Compensation
After Termination. Executive
shall be paid his
full
Salary for the entire Initial Period, regardless of whether Executive’s
employment with the Company is terminated by the Company or Executive terminates
his employment with the Company at any time during the Initial Period. In the
event Executive’s employment with the Company is terminated, for any reason,
after the Initial Period, he shall be entitled to his pro-rata annual
compensation following his date of termination up to extent of the notice
period, plus any accrued but unused vacation time up to the date of termination.
In addition, he shall be entitled to those stock options which have vested
or
will vest up to the extent of the notice period
11. Confidential
Information. The
Executive acknowledges that
he
has had and will have access to certain information related to the business,
operations, future plan and customers of the Company, the disclosure or use
of
which could cause the Company substantial losses and damages. Accordingly,
during the term of this Agreement and for one (1) calendar year thereafter,
Executive shall keep secret and retain in the strictest confidence, and shall
not, without the prior written consent of the Board, furnish, make available,
or
disclose to any third party or use for the benefit of himself or for the benefit
of any third party, any Confidential Information. “Confidential Information”
shall mean files, trade secrets or other confidential information concerning
the
business, supplier, customers, computer software or its applications, financial
data, methods, procedures, systems, practices, policies, operations, financing,
or services of the Company and, in addition, such other information not
generally known in the business that is disclosed to Executive or known by
him
as a consequence of his employment by the Company, whether or not pursuant
to
this Agreement; provided, however, that Confidential Information shall not
include any information which is in the public domain or becomes known in the
industry through no wrongful act on the part of Executive. Furthermore,
Confidential Information, for purposes of this Agreement, shall not include
any
information which is the personal knowledge of Executive based on his
experience.
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12. Inventions.
Each
Invention shall belong exclusively to the Company. The Executive acknowledges
that all of the Inventions are works made for hire and the property of the
Company, including any copyrights, patents, or other intellectual property
rights pertaining thereto. If it is determined that any such works are not
works
made for hire, the Executive hereby assigns to the Company all of the
Executive’s right, title, and interest, including all rights of copyright,
patent, and other intellectual property rights, to or in such Inventions. The
term “Invention” shall mean any idea, invention, technique, modification,
process, or improvement (whether patentable or not), any industrial design
(whether registerable or not), any mask work, however fixed or encoded, that
is
suitable to be fixed, embedded or programmed in a semiconductor product (whether
recordable or not), and any work of authorship (whether or not copyright
protection may be obtained for it) created, conceived, or developed by the
Executive, either solely or in conjunction with others, during the Employment
Period, or a period that includes a portion of the Employment Period, that
relates in any way to, or is useful in any manner in, the business then being
conducted or proposed to be conducted by the Company, and any such item created
by the Executive, either solely or in conjunction with others, following
termination of the Executive’s employment with the Company, that is based upon
or uses Confidential Information. Furthermore, the Executive covenants that
he
will promptly:
(a) disclose
to the Company in writing any Invention;
(b)
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assign
to the Company
or to a party designated by the Company, at the Company’s request and
without additional compensation, all of the Executive’s right to the
Invention for the United States and all foreign
jurisdictions;
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(c)
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execute
and deliver to the Company such applications, assignments, and other
documents as the Company may request in order to apply for and obtain
patents or other registrations with respect to any Invention in the
United
States and any foreign
jurisdictions;
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(d)
|
sign
all other papers necessary to carry out the above obligations;
and
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(e)
|
give
testimony and render any other assistance in support of the Company’s
rights to any Invention.
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13. Return
of Company Materials Upon Termination. Executive
acknowledges that all price lists, manuals, catalogs, binders, customer lists
and other customer information, supplier lists, financial information, and
other
records or documents containing Confidential Information prepared by Executive
or coming into Executive’s possession by virtue of Executive’s employment by the
Company is and shall remain the property of the Company upon termination of
Executive’s employment hereunder. Executive shall immediately return all such
items in his possession to the Company, together with all copies
thereof.
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14. Right
to Injunctive Relief. The
Executive agrees
and acknowledges that a
violation
of the covenants contained in Sections 9,
11,
12
and 13 of this Agreement will cause irreparable damage to the Company, and
that
it is and will be impossible to estimate or determine the damage that will
be
suffered by the Company in the event of a breach by the Executive of any such
covenant. Therefore, the Executive further agrees that in the event of any
violation or threatened violation of such covenants, the Company shall be
entitled as a matter of course to an injunction out of any court of competent
jurisdiction restraining such violation or threatened violation by the
Executive, such right to an injunction to be cumulative and in addition to
whatever other remedies the Company may have.
15. Representation
by the Executive. The
Executive hereby represents and
warrants that the execution of this Agreement and the performance of his duties
and obligations hereunder will not breach or be in conflict with any other
agreement to which he is a party or by which he is bound, and that he is not
now
subject to any covenant against competition or similar covenant which would
affect the performance of his duties hereunder.
16. Covenant
of Non-Competition. Executive agrees
that he shall not, during the Employment Period and for a period of six (6)
months thereafter, engage in any business or activities, whether directly or
indirectly, which is competitive with the products and services offered by
the
Company to its customers.
17. Assignment.
This
Agreement is personal and shall in no way be subject to assignment by the
Executive or the Company without the permission of the other provided, however,
that the Company shall have the right to assign all or any part of its rights
or
obligations under this Agreement to (i) any affiliate or subsidiary of the
Company, or (ii) the purchaser of all or substantially all of the assets of
the
Company.
18. Enforceability.
If
any
portion or provision of this Agreement shall to any extent be declared illegal
or unenforceable by a duly authorized court of competent jurisdiction, then
the
remainder of this Agreement, or the application of such portion or provision
in
circumstances other than those as to which it is so declared illegal or
unenforceable, shall not be affected thereby, and each portion and provision
of
this Agreement shall be valid and enforceable to the fullest extent permitted
by
law.
19. Notices.
All
notices and communications required or permitted to be given hereunder shall
be
given by delivering the same in hand or by mailing the same by certified or
registered mail, return receipt requested, postage prepaid, as
follows:
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If
sent
to the Company, to:
Xxxxxxx
Technologies Corporation
Attn:
Xxxxx Xxxxxxxxx, President
0000
X.
000xx
Xxxxxx
Xxxxx,
Xxxxxxxx 00000
Facsimile
No.: (000) 000-0000
If
to the
Executive:
Xxxxxx
X.
Xxxxxxx
00000
Xxxxxxx Xxxx
Xxxxxxx,
XX 00000
or
such
other address as either party shall have furnished to the other by like notice.
Notices shall be effective as of the date of such delivery or
mailing.
20. Entire
Agreement. This
Agreement constitutes the entire agreement and understanding between the parties
in relation to the subject matter hereof and there are no
promises, representations, conditions, provisions or terms related thereto
other
than those set forth in this Agreement. This Agreement supersedes all previous
understandings, agreements and representations between the Company and the
Executive regarding the Executive’s employment by the Company, written or
oral.
21. Governing
Law; Jurisdiction. This
Agreement shall be construed under and be governed in all respects by the
internal laws, and not the laws pertaining to choice or conflicts of law, of
the
State of Nebraska. Any actions or proceedings seeking to enforce any provision
of this Agreement shall be brought only in the federal or state courts situated
in Xxxxxxx County, Nebraska and each of the Parties hereby consents to the
exclusive jurisdiction of such courts and waives any objection to venue or
personal jurisdiction.
22. Waiver;
Amendment. No
waiver
in any
instance by any party of any provision of this Agreement shall be deemed a
waiver by such party of such provision in any other instance or a waiver of
any
other provision hereunder in any instance. This Agreement cannot be modified
except by written amendment to this Agreement duly executed by both parties.
Any
oral agreements or understandings between Executive and the Company intended
to
modify the terms of this Agreement shall be null and void.
23. Counterparts.
This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original, but all of which taken together shall constitute one in
the
same Agreement.
24. Headings.
Interpretation. The
descriptive headings in this
Agreement are inserted for convenience of reference only and are not intended
to
be part of or affect the meaning or interpretation of this Agreement. The use
of
the word “including” in this Agreement shall be by way of example rather than by
limitation.
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25. Survival.
Sections
9, 11, 12, 13, 14, 15 and 16 shall survive and continue in full force and effect
in accordance with their terms and conditions notwithstanding any termination
of
the Executive’s employment hereunder.
IN
WITNESS WHEREOF, Company
has caused its duly authorized officers to execute this Agreement, and Executive
has executed this Agreement as of the day and year first above
written.
Xxxxxxx
Technologies Corporation
/s/
Xxxxx X.
Xxxxxxxxx
Xxxxx
Xxxxxxxxx, President and CEO
EXECUTIVE:
/s/
Xxxxxx X.
Xxxxxxx
Xxxxxx
X.
Xxxxxxx
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