EXHIBIT 10.7
EMPLOYMENT AGREEMENT
The Effective Date of this Agreement: JUNE 1, 2004
This Agreement is by and between GRIDLINE COMMUNICATIONS CORP. (COMPANY)
a Delaware Corporation located at 00000 Xxxxxx Xxxxx Xxxx., Xxxxx 000
Xxxxxxx, XX 00000
AND XXXXXX X. XXXXXX, (EXECUTIVE)
an individual residing at 000 Xxxxxxxxx Xxxxx,
Xxxxxxxxx, XX 00000.
PURPOSE OF THIS AGREEMENT
a. The Executive has acquired outstanding and special skills and
abilities and an extensive background in and knowledge of Technology, Finance,
Marketing and Administration.
b. The Company desires the services of the Executive, and is therefore
willing to engage his services on the terms and conditions stated below.
c. The Executive desires to be employed by the Company and is willing
to do so on those terms and conditions.
Now, therefore, in consideration of the above recitals and of the mutual
promises and conditions in this Agreement, it is agreed as follows:
1. EMPLOYEE'S DUTIES & AUTHORITY
a. Gridline shall employ the Executive as PRESIDENT/CHIEF EXECUTIVE
OFFICER ("CEO") in a full-time capacity for an indefinite period, effective June
1, 2004. At all times, the Executive shall serve under the direction of the
Board of Directors, and shall perform such services as the Board may from time
to time prescribe, and per the policies and procedures as may be described in
Gridline Communications Corporate Employee Policy Manual, whenever such a manual
is made available.
b. The CEO will help to formulate and device policies that will ensure
that corporate objectives are met, in collaboration with the Board Members, and
other key and top Executives of the Company. The CEO retains overall
accountability; confer with subordinate Executives who oversee the activities of
various other departments.
2. OTHER BUSINESS ACTIVITIES
During his employment, Executive shall such devote such time, interest and
effort as is reasonably required for the discharge of his duties and
responsibilities hereunder.
3. NON-COMPETITION DURING EMPLOYMENT
During the employment term, the Executive shall not, in any fashion participate
or engage in any activity or other business competitive with the Company's
business. In addition, the Executive, while employed, shall not take any action
without the Company's prior written consent to establish, form, or become
employed by a competing business on termination of employment by the Company.
The Executive's failure to comply with the provisions of the preceding sentence
shall give the Company the right (in addition to all other remedies the Company
may have) to terminate any benefits or compensation that the Executive may be
otherwise entitled to following termination of this Agreement.
4. TERM OF EMPLOYMENT
The Executive shall be employed for an indefinite period, unless the Executive
is terminated as provided in this Agreement or the Executive resigns his
position with the company, in either case, after written notice delivered not
less than thirty (30) days prior to the date of termination, or resignation.
5. PLACE OF EMPLOYMENT
During the employment term the Executive shall perform the services required at
the Company's offices, located in Greater Houston, Texas, and from any other
location deemed feasible and appropriate for the performance of his duty. The
Executive acknowledges that the Company may from time to time or frequently,
require the Executive to travel temporarily to other locations (domestically or
internationally) to seek out, confer with, or provide service to customers of
the Company, to arrange financing for the benefit of the Company, and such other
purposes in the interest of the Company as determined from time to time by the
Board of Directors.
6. SALARY
a. For the first six (6) months (June 1, 2004 to December 31, 2004),
the company shall pay a basic salary to the Executive at the rate of $10,000 per
month, payable in equal biweekly installments, subject to the availability of
funds, or else, the Executive draws an allowance of $7,500 per month, and salary
owed will be adjusted accordingly when funds are available to accommodate the
$10,000 monthly rate. Beginning January 1, 2005, the salary of the President/CEO
will increase to a monthly base rate of $12,500.
b. The basic salary payable to the Executive shall be subject to review
for performance, and if performance is deemed satisfactory, basic salary may be
at a minimum increased annually (subject to the availability of funds), by an
inflation adjustment, based on the Consumer Price Index as reported in The Wall
Street Journal or a nationally recognized newspaper.
7. FOUNDER'S STOCK INCENTIVE GRANT
a. As an incentive the company shall grant the Executive fully vested
founder's shares of 21,000,000 (twenty one million) of Company common stock, to
be purchased by the Executive at par ($0.0001 per share).
8. STOCK OPTIONS
Executive will be granted options to purchase shares of Company stock according
to the provisions of Gridline's Incentive Stock Option Plan, if and when such a
Plan is put in place and made available by the board of Directors, in the
foreseeable future.
9. ADDITIONAL BENEFITS
a. Pending the availability of funds, and when such funds are deemed
available from a budgetary stand-point, the Executive shall receive all other
benefits of employment generally available to the Company's other Executive and
Managerial Employees.
b. The Company shall pay a lump sum of three (6) months severance
payments to the Executive (at his then current salary) if his employment is
terminated by the Company without cause.
10. EXPENSES
The Company shall reimburse the Executive for reasonable expenses incurred in
connection with the Executive's performance of his duties including travel
expenses, food, and lodging while away from home.
11. EMPLOYEE'S RIGHT OF OWNERSHIP
All inventions conceived or developed by the Executive during the term of this
Agreement shall remain the property of the Company.
12. INDEMNIFICATION BY COMPANY
The Company shall, to the maximum extent permitted by law, indemnify and hold
the Executive harmless against, and shall purchase indemnity insurance, if
available, and pending the availability of funds, on behalf of the Executive in
the amount of $1,000,000 for expenses, including reasonable attorney fees,
judgments, fines, settlements, and other amounts actually and reasonably
incurred in connection with any proceeding arising by reason of the Executive's
employment by the Company. The Company shall advance to the Executive any
expense incurred in defending any such proceeding to the maximum extent
permitted by law.
Further, if the Company registers and trades its shares publicly, the Company
will acquire and maintain the appropriate Directors and Officers insurance at
the Company's expense.
13. TERMINATION OF EMPLOYMENT
The Company and Executive agree that Executive's employment hereunder may be
terminated by the Executive resigning or by the Company's declaration of
termination with or without "Cause" at any time, subject to the terms of this
SECTION 13. Such termination shall be effective upon delivery of written notice
from the acting party to the other of its election to terminate employment
pursuant to this SECTION 13.
a. DEFINITION OF "CAUSE". When used in connection with the termination
of employment with the Company, "CAUSE" shall mean: (i) Executive's material
breach of his obligations under this Agreement; (ii) the Executive's failure to
adhere to any written Company policy after the Executive has been given a
reasonable opportunity to comply with such policy or cure his failure to comply;
(iii) the conviction of, or the indictment for (or its procedural equivalent),
or the entering of a guilty plea or plea of no contest with respect to, a
felony, the equivalent thereof, or any other crime with respect to which
imprisonment is a possible punishment; (iv) the commission by the Executive of
an act of fraud upon the Company or any of its affiliates; (v) the
misappropriation (or attempted misappropriation) of any funds or property of the
Company or any of its affiliates by the Executive; (vi) the failure by the
Executive to perform duties assigned to him after reasonable notice and
opportunity to cure such performance; (vii) the engagement by the Executive in
any direct, material conflict of interest with the Company without compliance
with the Company's conflict of interest policy, if any, then in effect; (viii)
the engagement by the Executive, without the written approval of the Board of
Directors, in any activity that competes with the business of the Company or any
of its affiliates or that would result in a material injury to the Company or
any of its affiliates; (ix) the engagement by the Executive in any activity that
would constitute a material violation of the provisions of the Company's Xxxxxxx
Xxxxxxx Policy or Business Ethics Policy, if any, then in effect, or (x) the
failure by the Executive to sign any lock-up letters, standstill agreements, or
other similar documentation required by an underwriter in connection with a
public offering of securities by the Company or to take other actions reasonably
related thereto as requested by the Board of Directors.
b. TERMINATION FOR CAUSE OR RESIGNATION. If the Company terminates the
Executive's employment for Cause or the Executive voluntarily resigns, the
Company shall pay the Executive's base salary earned through the date of
termination, but all rights to any other compensation or benefits arising
hereunder, shall be canceled and terminated in all respects concurrently with
such termination of employment; provided that the Executive may elect to
continue to participate, at Executive's own expense, in such health insurance
and other benefits as to which the opportunity for continuing participation is
mandated by applicable law. Executive may terminate employment under this
Agreement at any time by giving the Company 30 days' prior written notice of his
intention to terminate employment.
c. TERMINATION WITHOUT CAUSE. In the event that the Executive's
employment is terminated by the Company without Cause, subject to the terms of
this Agreement, an amount equal to Executive's then current base salary which
would be payable during a six month employment period, in each case, together
with any earned and unpaid compensation and accrued vacation time prior to
termination, in periodic payments in accordance with the Company's customary
payroll practices, and (ii) the stock granted to the Executive pursuant to
SECTION 7 hereof shall immediately vest. If the Executive is terminated by the
Company without Cause, the Company shall also continue to provide benefits, in
the kind and amounts provided to its employees generally, for six months
following the date of termination, including continuation of any Company-paid
benefits provided pursuant hereto, for the Executive and Executive's spouse and
minor children, provided such benefits are available at the time, and will be
subject to immediate termination to the extent Executive receives benefits under
another similar benefit plan; provided that the Executive may elect to continue
to participate, at Executive's own expense, in such health insurance (if
available) and other benefits as to which the opportunity for continuing
participation is mandated by applicable law, if such benefits are available and
being offered and enjoyed by Executive at the time. If such termination is
effective on or after two years on the job as President/CEO, the Company is
obligated to pay severance and premiums for twelve months.
d. TERMINATION UPON DEATH; DISABILITY. If the Executive becomes
disabled because of sickness, physical or mental disability, or any other
reason, so that it reasonably appears that he will be unable to complete his
duties under this Agreement, the Company shall have the option to immediately
terminate this Agreement by giving written notice of termination to the
Executive. Such termination shall be without prejudice to any right or remedy to
which the Company may be entitled either at law, in equity, or under this
Agreement. If the Company terminates this Agreement as provided in this
paragraph, the Company will pay the Executive as severance pay an amount equal
to three months of Executive's then current base salary plus a portion of the
Executive's cash bonus proportional to the number of months of Executive's
employment with the Company during the calendar year in which termination
occurs. If Executive should die during the term of this Agreement, Executive's
employment will terminate immediately and the Company will pay the Executive's
estate an amount equal to three months compensation at Executive's then current
base salary.
e. TERMINATION OR ASSIGNMENT ON MERGER. In the event of a merger where
the Company is not the surviving entity, or of a sale of all or substantially
all of the Company's assets, the Company may, at its sole option (1) assign this
Agreement and all rights and obligations under it to any business entity that
succeeds to all or substantially all of the Company's business through that
merger or sale of assets, or (2) on at least 30 days' prior written notice to
the Executive, terminate this Agreement effective on the date of the merger or
sale of assets with the immediate payments of all compensation due under this
contract without regard to vesting, or length of employment or additional
performance of duties. This paragraph does not preclude other compensation
arrangements to be negotiated with respect to such change of ownership.
14. NON-DISCLOSURE AFTER TERMINATION
Because of his employment by the Company, the Executive will have access to
trade secrets and confidential information about the Company, its products, its
customers, and its methods of doing business. In consideration of his access to
this information, the Executive agrees that for a period of not less than two
years after termination of his employment, he will not disclose such trade
secrets or confidential information.
15. DISPUTE MEDIATION; JURISDICTION AND VENUE; INJUNCTIVE RELIEF; CHOICE OF
LAW
a. Should any dispute arise regarding any matter related to Executive's
employment or the termination of such employment, including without limitation
the performance of or interpretation of this Agreement or any of its terms, and
prior to the institution of any legal proceeding, the parties shall first submit
the dispute to a one day session of voluntary, nonbinding mediation
(non-minitrial), in which the parties will participate in good faith, pursuant
to the dispute resolution rules of the Texas Civil Practice and Remedies Code.
The mediation shall be conducted in Houston, Texas. In the event the parties are
unable to agree on a single mediator, then each party shall select a mediator
and such mediators will conduct a joint mediation. Each party shall bear
one-half of the cost of a single mediator and, in the event of a joint
mediation, each party shall bear the cost of the mediator selected by that
party.
b. Exclusive venue for any dispute between any of the parties hereto or
any claim by a party against another party arising out of or relating to this
Agreement or relating to any alleged breach thereof shall be the courts of
competent jurisdiction situated in Xxxxxx County, Texas.
c. Executive understands and agrees that the Company shall suffer
irreparable harm in the event that Executive breaches any of Executive's
obligations under this Agreement and that monetary damages shall be inadequate
to compensate the Company for such breach. Accordingly, Executive agrees that,
in the event of a breach or threatened breach by Executive of any of the
provisions of this Agreement, the Company, in addition to and not in limitation
of any other rights, remedies or damages available to the Company at law or in
equity, shall be entitled to a temporary restraining order, preliminary
injunction and permanent injunction in order to prevent or to restrain any such
breach by Executive, or by any or all of Executive's partners, co-venturers,
employers, employees, servants, agents, representatives and any and all persons
directly or indirectly acting for, on behalf of or with Executive.
D. THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS, EXCLUDING ANY LAW, RULE
OR PRINCIPLE WHICH MIGHT REFER TO THE SUBSTANTIVE LAW OF ANOTHER JURISDICTION,
WILL GOVERN THE INTERPRETATION, VALIDITY AND EFFECT OF THIS AGREEMENT WITHOUT
REGARD TO THE PLACE OF EXECUTION OR THE PLACE FOR PERFORMANCE THEREOF.
16. ENTIRE AGREEMENT
This Agreement contains the entire Agreement between the parties and supersedes
all prior oral and written Agreements, understandings, commitments, and
practices between the parties. No amendments to this Agreement may be made
except by a writing signed by both parties.
18. NOTICES
Any notice to the Company required or permitted under this Agreement shall be
given in writing to the Company, either by personal service or by registered or
certified mail, postage prepaid, addressed to Duncan E. WINE ( Chairman, Board
of Directors))] at its then principal place of business. Any such notice to the
Executive shall be given in a like manner and, if mailed, shall be addressed to
the Executive at his home address then shown in the Company's files. For the
purpose of determining compliance with any time limit in this Agreement, a
notice shall be deemed to have been duly given (1) on the date of service, if
served personally on the party to whom notice is to be given, or (2) on the
second business day after mailing, if mailed to the party to whom the notice is
to be given in the manner provided in this section.
19. SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable, the
remainder of this Agreement shall nevertheless remain in full force and effect.
If any provision is held invalid or unenforceable with respect to particular
circumstances, it shall nevertheless remain in full force and effect in all
other circumstances.
UNDERSTOOD, AGREED & APPROVED
Executed by the parties as of the Effective Date first written above.
Company: Gridline Communications Corp.
/s/ Duncan E. Wine
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By
Chairman
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Title
Executive: Xxxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxxx
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Executive
Xxxxxx X. Xxxxxx
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Printed Name
