taxmasters_10q-ex1001.htm


    
      
        

      

    

    EXHIBIT
10.1

     

    EMPLOYMENT
AGREEMENT

    


    THIS EMPLOYMENT AGREEMENT (this
“Agreement”), dated as of August 4, 2009, is made by and between:

    


    TaxMasters, Inc., a Nevada
corporation (formerly known as Crown Partners, Inc.) having its principal office
at 900 Town & Country Lane, Suite 400, Houston, Texas  77024
(hereinafter referred to as "EMPLOYER")

    


    AND

    


    Patrick R. Cox, an adult
individual residing at 247 Hedwig Road, Houston, Texas 77024 (hereinafter
referred to as "EMPLOYEE")

    


    WITNESSETH THAT:

    


    WHEREAS,
EMPLOYEE is a business executive with certain education, experience, background,
know-how and contacts which have been and will be useful and helpful to EMPLOYER
in its business and EMPLOYER is desirous of employing EMPLOYEE in order to
obtain the benefits of such education, experience, background, know-how and
contacts;

     

    WHEREAS,
EMPLOYEE has provided services to EMPLOYER’s subsidiary in connection with its
tax resolution business of assisting taxpayers with matters at the Internal
Revenue Service consistent with the duties to be performed hereunder, such
services having been provided under certain oral understandings;

     

    WHEREAS,
EMPLOYER will be merging its subsidiary with and into itself and desires to
retain the services of EMPLOYEE.

     

    WHEREAS,
EMPLOYEE is agreeable to being employed by EMPLOYER upon the terms and
conditions hereof and providing the benefits of his or her education,
experience, background and contacts to EMPLOYER;

     

    WHEREAS,
as the result of negotiations and discussions, EMPLOYER and EMPLOYEE have
finalized the terms of the employment of EMPLOYEE, and the parties having
concluded their negotiations now desire to have a document to formalize and
evidence their understandings and agreements, which document will supersede and
void all prior discussions and understandings;

     

    NOW,
THEREFORE, in consideration of the mutual promises, covenants and forbearances
contained herein, and intending to be legally bound, the parties have agreed as
follows:

     

    1.EMPLOYMENT.  (a)  For the
term provided in Paragraph 2 below, EMPLOYER hereby employs EMPLOYEE, and
EMPLOYEE hereby accepts that employment, upon the terms and conditions
hereinafter set forth.

    


    (b)  This
Agreement shall supersede and replace all prior discussions, negotiations,
memoranda, correspondence, understandings, and agreements pertaining to the
employment of EMPLOYEE by EMPLOYER and/or its subsidiary.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.  TERM.  (a)  This
Agreement shall be effective as of the date executed by the last signing
party.  

    


    (b)  This
Agreement, subject to the provisions of Paragraphs 15 and 16 below, shall
continue and exist for an initial period from such effective date until December
31, 2012 (initial term).  The term “employment year” as used in this
Agreement shall mean January 1 to December 31, which is the EMPLOYER’s fiscal
year. 

    


    (c)  If,
on November 30, 2012, neither party is then in default under this Agreement,
EMPLOYER shall have the option to extend the term of this Agreement for an
additional one (1) year period.  Such option shall be exercised by
EMPLOYER mailing notice to EMPLOYEE, on or before December 1, 2012, of its
intention to so extend the Agreement.  If EMPLOYER shall not exercise
its extension option on or before December 1, 2012 this Agreement shall
terminate as provided herein.

    


    (d)  This
Agreement shall be subject to a further one (1) year extension under the
procedure provided in subparagraph (c), provided that on November 30 of the then
existing extension year neither party is then in default under this Agreement
and notice of exercise of the extension option is given by EMPLOYER to EMPLOYEE
on or before December 1 of such extension year.

    


    (e)  Notwithstanding
the foregoing, the term of this Agreement is otherwise subject to the various
termination provisions contained hereafter.

    


    3.  COMPENSATION-BASE.  (a)
For all services rendered under this Agreement, EMPLOYEE shall be paid, as base
compensation, such annual salary as shall be determined by the EMPLOYER's Board
of Directors from time to time, but in no event shall such compensation be at a
rate of less than Nine Hundred Fifty Thousand Dollars
($950,000).  Such base compensation shall be in addition to such
incentive compensation, deferred compensation, fringe benefits and bonuses as
provided elsewhere herein.

    


    (b)  At
the end of each fiscal year, the EMPLOYER's Board of Directors shall review the
performance of EMPLOYEE for such year and, based upon such evaluation, establish
any increase in the base compensation payable to EMPLOYEE for the succeeding
fiscal year.  EMPLOYER shall not be obligated to provide any increase;
however, any increase shall supersede the “floor” in subparagraph
(a).

    


    4.  INTENTIONALLY LEFT
BLANK

    


    5.  INTENTIONALLLY LEFT
BLANK  

    


    6.  COMPENSATION-FRINGE
BENEFITS.  EMPLOYEE shall receive at least the following additional
benefits, which may be extended or increased, but not reduced, by
EMPLOYER:

     

    
      
        
        

      

      
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    (a)  Base
Personal Leave - During each year of this Agreement, EMPLOYEE shall receive
twenty (20) days paid personal leave, which shall not be accumulated from year
to year if unused. EMPLOYEE shall not be compensated for any unused personal
leave.  "Personal leave" shall include vacation, sick leave,
bereavement leave, so-called “personal days” and all other personal time off,
other than legal holidays in the State of Texas.

    


    (b)  Medical
Insurance - EMPLOYEE shall receive such medical, surgical, dental and/or
hospitalization insurance as EMPLOYER shall provide to its other
officers/employees/consultants.

    


    (c)  Other
- EMPLOYEE shall receive such other fringe benefits as are available to any
other officers/employees/consultants. Nothing contained in this Agreement shall
be in lieu of any rights, benefits and privileges to which EMPLOYEE may be
entitled under any stock option, 401(k), retirement, pension, profit-sharing,
insurance, ESOT/ESOP, hospitalization, medical, surgical, dental, legal or other
plans which may now be in effect or which may hereafter be adopted, either by
EMPLOYER or any subsidiary or affiliate of EMPLOYER.  EMPLOYEE shall
have the same rights and privileges to participate in such plans and benefits as
any other employee during his or her period of employment and EMPLOYEE shall be
entitled to participate on parity with executives of equal rank.

    


    (d)EMPLOYER shall reimburse EMPLOYEE up to
$60 per month for cell phone expenses upon presentation by EMPLOYEE, on a
monthly basis, of EMPLOYEE’s monthly bill for cell phone service.

    


    (e)EMPLOYER shall reimburse EMPLOYEE for
deductible, co-pay and/or co-insurance payments made by EMPLOYEE under any
medical, dental and/or vision insurance provided by EMPLOYER.

    


    7.  DUTIES.  (a)
EMPLOYEE is initially engaged as the Chief Executive Officer and President of
EMPLOYER.  EMPLOYEE shall perform all usual and customary services as
such executive, as outlined on Schedule A annexed
hereto and made a part hereof.

    


    (b)  EMPLOYEE'S
performance shall be subject to the supervision of EMPLOYER'S Board of
Directors.  The precise job description and the specific services to
be rendered by EMPLOYEE may be defined, interpreted, curtailed, or extended,
from time to time, by determination of the EMPLOYER' Board of Directors,
provided, however, that any definition, interpretation, curtailment, or
extension is consistent with the status of, and/or educational experience
required for, the responsibilities for which EMPLOYEE has been engaged
hereunder. It is the intent of this provision to provide EMPLOYER with
flexibility in assigning responsibilities to EMPLOYEE and/or promoting EMPLOYEE,
and this provision shall not be used to discipline, embarrass, humiliate or
harass EMPLOYEE.

     

    
      
        
        

      

      
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    8.EXTENT OF SERVICES.  EMPLOYEE agrees
that this employment constitutes his or her primary employment and understands
that his or her primary loyalty and responsibility is to EMPLOYER. Accordingly,
EMPLOYEE shall devote such adequate, reasonable, and proper time, attention, and
energies to the business of EMPLOYER as shall be necessary or consistent with
such understanding and EMPLOYEE shall not, during the term of this Agreement be
engaged in any other business activity (whether or not such business activity is
pursued for gain, profit, or other pecuniary advantage), which conflicts with
EMPLOYEE's employment responsibilities hereunder, without prior, written
authorization of EMPLOYER's Board of Directors.  Nothing contained
herein shall be construed as preventing EMPLOYEE from investing his or her
assets in such form or manner as EMPLOYEE may select, whether or not such
investment will require any services on EMPLOYEE'S part in the operation of the
affairs of the companies in which such investments are made.

     

    9.  WORKING
FACILITIES.  EMPLOYEE shall be furnished, at EMPLOYER's expense, with
all necessary working facilities, including but not limited to an equipped
office, clerical help, and telephone/facsimile/copying services, suitable to his
or her position and adequate for the performance of his or her
duties.

     

    10.  EXPENSES.  EMPLOYEE is
not authorized to incur expenses on behalf of, or chargeable to, EMPLOYER, with
respect to his or her business travel, including transportation, lodging, food,
entertainment, etc. except within such guidelines as may be established from
time to time by the EMPLOYER's management.  EMPLOYER shall reimburse
EMPLOYEE for authorized expenses within such guidelines upon presentation by
EMPLOYEE, from time to time, of an itemized account of such expenditures in such
form as EMPLOYER may require, together with receipts or other proofs of the
expenditures as may be required.

     

    11.  NON-DISCLOSURE OF
INFORMATION.  (a) EMPLOYEE recognizes and acknowledges that, during
the course of his or her employment, he or she will have access to valuable
"Proprietary Information" as limited in subparagraph (b) below, including, but
not limited to:  management plans for expansion, licensing,
franchising, marketing, sales, and advertising, etc.; financial data such as
revenues, costs, expenses, cash flow, working capital, etc.; customer data,
including names, contact persons and numbers, terms and conditions of
relationships, etc.; employee data including names, addresses telephone numbers,
personal data, compensation arrangements and employment terms, etc.; sales and
marketing arrangements, contracts, and relationships; shareholder and investor
names, addresses, amounts and types of investments and contact data; computer
systems, including hardware and software, etc.; and
EMPLOYER’s  costing and pricing methods and procedures and that such
information constitutes unique assets of the business of EMPLOYER and of which
EMPLOYER is the sole and exclusive owner.  EMPLOYEE will treat such
Proprietary Information on a confidential basis and will not, during or after
his or her employment, personally use or disclose all, or any part of, such
Proprietary Information to any person, firm, corporation, association, agency,
or other entity except as properly required in the conduct of the business of
EMPLOYER, or except as authorized in writing by EMPLOYER, publish, disclose or
authorize anyone else to publish or disclose, any Proprietary Information of
EMPLOYER with which EMPLOYEE's service may in any way acquaint
EMPLOYEE.  EMPLOYEE shall surrender possession of all Proprietary
Information, including especially all Trade Secrets (as defined in Paragraph
14(a)(iii) hereof), to EMPLOYER upon any suspension or termination of EMPLOYEE's
employment with the EMPLOYER.  In the event of a breach, or threatened
breach, by EMPLOYEE, of the provisions of this Paragraph 11, EMPLOYER shall be
entitled to a preliminary, temporary and permanent injunction restraining
EMPLOYEE from disclosing in whole or in part, any such Proprietary Information
and/or from rendering any services to any person, firm, corporation,
association, agency, or other entity to whom such information, in whole or in
part, has been disclosed or is threatened to be
disclosed.  Furthermore, nothing herein shall be construed as
prohibiting EMPLOYER from pursuing any other equitable or legal remedies
available to it for such breach or threatened breach, including the recovery of
damages from EMPLOYEE.

     

    
      
        
        

      

      
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(b)  For
purposes hereof, "Proprietary Information" shall not include information which
(i) is publicly available from a source other than EMPLOYEE or can be lawfully
obtained from a third party or parties in lawful possession thereof, or (ii) is
publicly released in writing by EMPLOYER, or (iii) is required to be disclosed
pursuant to the authority of any court or public agency.

    


    12.  RESTRICTIVE
COVENANT.  (a) During the term of this Agreement and for a period of
twelve (12) months after the termination of this Agreement and any extension
thereof, EMPLOYEE shall not, within the United States or any other area of the
world in which EMPLOYER is then operating, directly or indirectly, compete with,
own, manage, operate, control, be employed by, consult for, participate in,
perform services for, or be connected in any manner with the ownership,
management, operation or control of any business similar to the type of business
conducted by EMPLOYER (or any parent, subsidiary or affiliate) at the time of
the termination of this Agreement.  EMPLOYEE shall not, directly or
indirectly, compete with any products or services marketed or offered by
EMPLOYER at the time of termination, or engage in any activities which could be
deemed a conflict of interest.

    


    (b)  EMPLOYEE
agrees that the "time", "geographic area", and "Scope of Business" provisions of
this restrictive covenant are reasonable and proper and have been negotiated in
connection with his or her employment hereunder.

    


    (c)  EMPLOYER
and EMPLOYEE agree, that if any court of competent jurisdiction shall, for any
reason, conclude that any portion of this covenant shall be too restrictive, the
court shall determine and apply lesser restrictions, it being the intent of the
parties that some such restrictions shall be applicable for the protection of
EMPLOYER and its shareholders.

    


    13.  NONSOLICITATION
COVENANT.  (a)  For a period of thirty-six (36) months after
the termination of this Agreement (including any extension thereof) (the "Post
Termination Period") EMPLOYEE shall not, solicit, directly or indirectly, by any
means, any of the clients, customers, accounts, employees or "leads" of EMPLOYER
during the Post Termination Period.

    


    (b)  EMPLOYER
and EMPLOYEE agree, that if any court of competent jurisdiction shall, for any
reason conclude that any portion of this covenant shall be too restrictive, the
court shall determine and apply lesser restrictions, it being the intent of the
parties that some such restrictions shall be applicable for the protection of
EMPLOYER and its shareholders.

    


    (c)  This
covenant has been given to induce EMPLOYER to enter into this Agreement and
provide EMPLOYEE'S job responsibilities and compensation.

     

    
      
        
        

      

      
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    14.  OWNERSHIP OF INVENTIONS AND
DEVELOPMENTS.  (a)  For purposes of this Agreement, the
following definitions shall apply:

    


    (i) "Inventions" shall
mean:

    


    (A)  All inventions,
improvements, modifications, and enhancements, whether or not patentable, made
by EMPLOYEE during EMPLOYEE's employment by EMPLOYER; and

     

    (B)  All inventions,
improvements, modifications and enhancements made by EMPLOYEE, during a period
of one (1) year after any suspension or termination of EMPLOYEE's employment by
EMPLOYER, which relate, directly or indirectly, to the past, present or planned
future business of the EMPLOYER, determined as of the date of
termination.   

    


    (ii)
"Work Product" shall mean all documentation, software, creative works, programs,
systems, source codes, know-how and information created, in whole or in part, by
EMPLOYEE during EMPLOYEE's employment by EMPLOYER, whether or not copyrightable
or otherwise protectable, excluding Inventions.

    


    (iii)
"Trade Secrets" shall mean all documentation, software, know-how and information
relating to the past, present and future business of the EMPLOYER or any plans
therefor, or relating to the past, present or future business of a third party
or plans therefor that are disclosed to the EMPLOYER, which the EMPLOYER may not
or does not disclose to third parties without restrictions on use or further
disclosure.  In the case of EMPLOYEE, the term “Trade Secrets” shall
include all knowledge, information and know-how regarding the Internal Revenue
Service and its rules, procedures, practices, personnel and policies (whether or
not published).

    


    (b)  EMPLOYEE
shall promptly disclose to EMPLOYER all Inventions and keep accurate records
relating to the conception and reduction to practice of all
Inventions.  Such records shall be the sole and exclusive property of
EMPLOYER, and the EMPLOYEE shall surrender possession of such records to the
EMPLOYER upon any suspension or termination of EMPLOYEE's employment with the
EMPLOYER.

    


    (c)  EMPLOYEE
hereby assigns to the EMPLOYER, without further consideration to the EMPLOYEE,
the entire right, title and interest in and to the Inventions and Work Product
and in and to all proprietary rights therein or based
thereon.  EMPLOYEE agrees that the Work Product shall be deemed to be
a "work made for hire".  EMPLOYEE shall execute all such assignments,
oaths, declarations and other documents as may be prepared by EMPLOYER to effect
the foregoing.

     

    
      
        
        

      

      
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(d)  EMPLOYEE
shall provide EMPLOYER with all information, documentation, and assistance
EMPLOYER may request to perfect, enforce, or defend the proprietary rights in or
based on the Inventions, Work Product or Trade Secrets.  EMPLOYER, in
its sole discretion, shall determine the exact extent of the proprietary rights,
if any, to be protected in or based on the Inventions and Work
Product.  All such information, documentation and assistance shall be
provided at no additional expense or cost to the EMPLOYER, except for
out-of-pocket expenses which the EMPLOYEE incurs at the EMPLOYER's
request.

    


    (e)  In
the event of termination of this Agreement, EMPLOYER shall be entitled to advise
any new employer of EMPLOYEE of his or her rights and obligations
hereunder.

    


    15.DISABILITY.  (a)  If
EMPLOYEE is unable to perform his or her services by reason of illness or
incapacity for a period of more than twenty (20) consecutive work days, or more
than forty (40) work days in any three-month period whether or not consecutive,
the compensation otherwise payable to EMPLOYEE thereafter during the continued
period of such illness or incapacity may, at the option of EMPLOYER, be reduced
by fifty percent (50%).  If such illness or incapacity shall continue
for a period of thirty (30) consecutive work days or more than fifty percent of
any calendar quarter, payment of such compensation may, at the option of
EMPLOYER, be stopped altogether.  The full compensation shall be
reinstated upon EMPLOYEE's return to service and the discharge of his or her
full duties hereunder.  Notwithstanding anything herein to the
contrary, EMPLOYER may, at its option, terminate this Agreement at any time
after the EMPLOYEE shall be absent from his or her employment, for whatever
cause, for a continuous period of more than six (6) months, and all obligations
of EMPLOYER hereunder shall cease upon any such termination.

    


    (b)  EMPLOYER
may elect to continue the payment of full compensation notwithstanding the
foregoing.  Such payments shall be in the sole discretion of EMPLOYER,
may be discontinued at any time, and if initiated shall not thereby become a
duty or requirement.

    


    16.  TERMINATION OF
EMPLOYMENT.  (a)  EMPLOYER can terminate EMPLOYEE's
employment at any time for good cause. Without intending to limit the
definition of good cause hereby, good cause will include:

    


    (1)the EMPLOYEE'S death;

    


    (2)the occurrence of one of the following
events:

    


    (i)  EMPLOYEE
commits and/or is officially charged with a felony or any crime involving moral
turpitude or unethical conduct which in the good faith opinion of the EMPLOYER
could impair his or her ability to perform his or her duties or which impacts
the market price of the EMPLOYER’s Common Stock;

     

    
      
        
        

      

      
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    (ii)  EMPLOYEE
commits an act, or fails to take action in bad faith and to the detriment of the
EMPLOYER, or

    


    (iii)  in
the good faith opinion of the EMPLOYER's Board of Directors, the EMPLOYEE fails,
to a material extent, to fully and faithfully perform his or her obligations
under this  Agreement.

    


    (b)The termination of EMPLOYEE'S services
shall not constitute a termination of the restrictive obligations and duties
under Paragraphs 11, 12, 13 and 14.

    


    (c)In the event of the bankruptcy (Chapter
7), reorganization (Chapter 11) or other termination of the business of the
EMPLOYER, the provisions of Paragraph 12 shall continue in full force and effect
only so long as full base compensation by EMPLOYER shall continue.

    


    (d)If EMPLOYER terminates EMPLOYEE’s
employment hereunder without cause or EMPLOYEE terminates his or her employment
hereunder for any reason or no reason, then EMPLOYER shall (i) pay EMPLOYEE his
or her annual salary earned but not yet paid through the date that notice of
such termination was given, (ii) deliver to EMPLOYEE any annual stock bonus
earned under Paragraph 5 hereof but not yet paid, (iii) reimburse EMPLOYEE for
any expenses pursuant to Paragraph 10 hereof subject to EMPLOYEE’s compliance
with the provisions thereof and (iv) provide any other rights, compensation
and/or benefits as may be due to EMPLOYEE in accordance with the terms and
provisions of any agreements, plans or programs of EMPLOYER (excluding severance
plans or policies, if any).

    


    (e)  IF
EMPLOYER terminates EMPLOYEE’s employment for good cause, then EMPLOYER shall
(i) pay EMPLOYEE his or her annual salary earned but not yet paid through the
date that notice of such termination was given, (ii) reimburse EMPLOYEE for any
expenses pursuant to Paragraph 10 hereof subject to EMPLOYEE’s compliance with
the provisions thereof and (iii) provide any other rights, compensation and/or
benefits as may be due to EMPLOYEE in accordance with the terms and provisions
of any agreements, plans or programs of EMPLOYER (excluding severance plans or
policies, if any).

    


    17.  ARBITRATION.  Any
controversy or claim arising out of, or relating to this Agreement, or the
breach thereof, shall be settled by arbitration in Houston, Texas accordance
with the rules then pertaining of the American Arbitration Association, but with
all rights of discovery provided by the Texas Rules of Civil Procedure, and
judgment upon the award rendered may be entered in any court having jurisdiction
thereof, which award and judgment may include reasonable attorney’s fees and
costs.

     

    18.  WAIVER OF
BREACH.  The waiver by either party of a breach of any provision of
this Agreement by the other party shall not operate or be construed as a waiver
of any subsequent breach by such other party.  The failure of a party
to exercise any rights or privileges under this Agreement shall not be deemed to
be a waiver or extinguishment of such rights or privileges, all of which shall
continue to be exercisable.

     

    
      
        
        

      

      
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    19.  BENEFIT.  The
rights and obligations of EMPLOYER under this Agreement shall inure to the
benefit of, and shall be binding upon, its successors and
assigns.  The protections of Paragraphs 11, 12, 13 and 14 shall inure
to the benefit of EMPLOYER and any successors and assigns. The rights and
obligations of EMPLOYEE under this Agreement shall inure to the benefit of, and
shall be binding upon, his or her heirs, administrators, executors, successors
and assigns.

    


    20.NOTICES.  Any notice required or
permitted to be given under this Agreement shall be sufficient if in writing,
and if either personally delivered or sent by certified mail, to his or her
residence in the case of EMPLOYEE, or to its principal office in the case of
EMPLOYER.

    


    21.LIFE INSURANCE.  EMPLOYER
and/or one or more of its subsidiaries may, in its/their discretion at any time
after the execution of this Agreement, apply for and procure, as owner and for
its/their own benefit, insurance on the life of EMPLOYEE, in such amounts and in
such forms as EMPLOYER may choose.  EMPLOYER shall not be required to
give EMPLOYEE any interest whatsoever in any such policy or policies, (although
nothing contained herein shall be deemed to prohibit any such arrangement) but
EMPLOYEE shall, at the request of EMPLOYER, subject himself to such medical
examination, supply such information, and execute such information releases and
documents as may be required by the insurance company or companies to whom
EMPLOYER has applied for such insurance.

    


    22.ENTIRE AGREEMENT.  This instrument
contains the entire agreement of the parties and may be modified only by
agreement in writing signed by the party against whom enforcement of any waiver,
change, modification, extension or discharge is sought.

     

    23.APPLICABLE LAW.  This
Agreement shall be governed for all purposes by the laws of the State of Texas,
without reference to any “conflict of law” provisions.  If any
provision of this Agreement is declared void, such provision shall be deemed
severed from this Agreement, which shall otherwise remain in full force and
effect.

     

    24.  COUNTERPARTS. This
Agreement may be executed in two or more counterparts, including facsimile
counterparts, any one of which shall be deemed to be an original.

    


    


    


    [Signatures
appear on next page]

     

    
      
        
        

      

      
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    IN WITNESS WHEREOF, the parties hereto,
intending to be legally bound, have hereunto set their hands and seals as of the
day and year herein above written.

    


     

    
      	 	TAXMASTERS,
      INC. 
	 	 
	 	By:  /s/ Christopher
      Koscinski                    
      
	 	

              Name:
      Christopher Koscinski

              Title:
      Chief Financial Officer

            
	 	 
	 	 
	 	EMPLOYEE: 
	 	 
	 	 
	 	        
      /s/ Patrick R.
      Cox                                   
      
	 	Name:  Patrick
      R. Cox 


    

     

     

     

    
 

    
      
        
        

      

      
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    SCHEDULE A – EMPLOYEE
DUTIES

    


    Managing
day to day operations, planning of business direction and other executive
decision as required.

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
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