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EXHIBIT 20.05
EXHIBIT C-2 - FORM OF EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into effective as of
the 8th day of July, 2000, by and between EZConnect, Inc., a Nevada
corporation (the "Company"), and Xxx X. Xxxxxx (the "Executive").
PREMISES
A. The Company desires to employ Executive as its Executive Vice President
and General Counsel and the Executive desires to accept employment in such
position.
B. The parties desire to enter into this Employment Agreement to specify
each party's rights and obligations under the employment relationship.
AGREEMENT
NOW, THEREFORE, FOR AND IN CONSIDERATION of the mutual covenants contained
herein and of the mutual benefits to be derived hereunder, the parties agree
as follows:
1. Employment. Company hereby employs Executive as Executive Vice
President and General Counsel of the Company to perform those duties
customarily associated with such position and such other duties as may be
assigned to Executive by the Company's Board of Directors (the "Board") from
time to time, including attendance at meetings of the Board of Directors.
Executive accepts and agrees to such employment on the terms and conditions
set forth in this Agreement.
2. Term. The term of this Agreement shall commence on the date hereof and
expire at midnight on September 30, 2002, unless earlier terminated in
accordance with the provisions of this Agreement.
3. Probation Period. Notwithstanding any provision to the contrary
contained in this Agreement, the parties acknowledge and agree that during the
period commencing on the date of this Agreement and expiring on September 30,
2000 (the "Probation Period"), Executive shall be employed by the Company on
"at will" basis. During the Probation Period, the total compensation payable
to Executive shall be Two Thousand Dollars ($2,000) per month (as adjusted for
any fractional month at the beginning of the Probation Period) and the Company
shall not provide Executive with any medical insurance, vacation or other
benefits of any kind whatsoever. The Company may terminate Executive for any
reason or for no reason at any time during the Probation Period and any such
termination shall be effective immediately upon the Company providing the
Executive with written notice of such termination. In the event of
termination during the Probation Period, no Executive Options (as defined
herein) shall vest and Executive shall not be entitled to any payments from
the Company other than those described in this Section 3 and reimbursement for
reasonable expenses incurred by Executive in connection with the Company's
business and in accordance with its policies. In the event a "Change of
Control" occurs during the Probation Period, such Change of Control shall not
operate to vest any of the unvested Executive Options or to cause the payment
to Executive of any payment or benefit of any type or kind other than those
provided for in this Section 3.
4. Duties. Executive shall be employed by Company as its Executive Vice
President and General Counsel or in such other senior executive positions of
comparable status, dignity and responsibility as requested by the Board from
time to time. Executive shall also serve in such positions with the
subsidiaries of Company as shall, from time to time, be requested by the
Board. Executive shall not receive any additional compensation for service as
an officer of any subsidiaries of the Company unless otherwise directed by the
Board.
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Executive shall devote substantially all of his working time and efforts to
the business of Company and its subsidiaries and shall not during the term of
this Agreement be engaged in any other substantial business activities which
will significantly interfere or conflict with the reasonable performance of
his duties hereunder, except during the Probation Period and where approved by
the Board. Executive may serve or continue to serve as a member of the board
of directors of any companies or organizations which, in the Board's
reasonable judgment, will not present any conflict of interest with the
Company or any of its subsidiaries or materially adversely affect the
performance of Executive's duties under this Agreement.
The Company may change Executive's duties from time to time, but Executive
shall remain an officer of the Company, and the Company shall have Executive
perform duties of an executive nature that are equal to the office of
Executive Vice President in status, dignity and responsibility, and failure
to do so shall constitute a material breach of this Agreement.
5. Compensation.
(a) Base Salary. For all services rendered by Executive, Company shall pay
to Executive a base salary of $200,000 per year throughout the term of this
Agreement, payable in equal monthly installments on the last day of each
calendar month. All salary payments shall be subject to withholding and other
applicable taxes. The rate of salary may be increased (but not decreased) at
any time as the Board may determine, based on such factors as the Board may
deem appropriate. The Board shall review Executive's base salary on not less
than an annual basis.
(b) Quarterly Bonus. Executive will be entitled to a cash bonus of $12,500
per calendar quarter (the "Quarterly Bonus") payable within ten (10) days
after the end of each calendar quarter occurring during the term of this
Agreement, subject to the achievement during each of such quarters of the
management business objectives ("MBOs") pertaining to the Company's business
described in Exhibit A to this Agreement. If this Agreement should be
terminated prior to the expiration of its term, the Quarterly Bonus shall be
prorated through the date of termination and paid within ten (10) days after
such date of termination, subject to achievement of the MBOs applicable to the
quarter in which such termination takes place.
(c) Super Bonus. Executive shall be entitled to a super bonus (the "Super
Bonus") if during the one-year period from October 1, 2000 to September 30,
2001, the Company's wireless reselling business acquires 100,000 or more new
active mobile identification numbers ("MINS") on terms and conditions in
effect prior to October 1, 2000, subject to adjustment as required to respond
effectively to competitive changes in the industry. The Super Bonus shall be
$250,000 payable in cash within forty-five (45) days following the expiration
of the one-year measurement period described above.
(d) Non-qualified Stock Options. Immediately following the execution of
this Agreement, the Company shall grant to Executive non-qualified stock
options to purchase up to 750,000 shares of the Company's common stock (the
"Executive Options") at an exercise price equal to the closing price for the
Company's common stock as quoted in the over-the-counter market on the date of
this Agreement. The Executive Options shall be exercisable for a term of five
(5) years and shall be subject to the vesting requirements set forth below.
The Executive Options will be granted from an authorized option pool of
5,000,000 shares of the Company's common stock under The 2000 Stock Option and
Stock Award Plan. At the Executive's request, during the term of this
Agreement, the exercise price of the Executive Options may be reduced to the
then current market price twice during the exercise period, provided the
market price of the Company's common stock closes at a price at or below the
exercise price of the Executive Options for three consecutive trading days
prior to the repricing. Any such repricing shall take place effective as of
the date the Company receives written notice from Executive requesting such
repricing and the exercise price of all unexercised Executive Options shall be
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reset to the closing price for the Company's common stock in the over-the-
counter market (or any successor market) on such effective date. The Company
shall file such registration statements and take such additional actions as
may be required to provide Executive with registered shares upon his exercise
of the Executive Options. The registration rights with respect to the
Executive Options shall relate to a registration statement on Form S-8 or may
be "piggybacked" onto any other registration statement filed by the Company,
but in no event shall such registration rights be deemed "demand" registration
rights. Notwithstanding any provision to the contrary contained herein, the
Company shall not be required to register the sale of the shares upon the
exercise of the Executive Options if, the Company's outside legal counsel is
of the opinion that registration would be in violation of the applicable
securities laws relating thereto.
Vesting of the Executive Options shall be as follows:
(i) 234,383 Executive Options shall vest on December 31, 2001;
(ii) 15,625 Executive Options shall vest upon the completion of each of the
nine consecutive months commencing January 31, 2002 and continuing through and
including September 30, 2002, for a total vesting of 140,625 Executive Options
at the end of such period;
(iii) 23,437 Executive Options shall vest at the end of each of eight
calendar quarters commencing with the quarter ended December 31, 2000,
subject to the achievement of the management business objectives ("MBOs")
established with respect to each of such quarters by the Company's Board of
Directors, which MBO's shall pertain to the Company's wireless reselling
business and shall be based on economic or strategic goals similar to, and
shall not be significantly more difficult to achieve than, the MBOs previously
established for the President and Executive Vice President of Marketing with
respect to the business of the Company at the time such MBOs were established;
provided, that none of such options shall be deemed to be fully vested until
October 1, 2001, regardless of the achievement of quarterly MBOs prior to that
date; and
(iv) 23,437 Executive Options shall vest at the end of each of eight
calendar quarters commencing with the quarter ended December 31, 2000,
subject to the achievement of the management business objectives ("MBOs")
established with respect to each of such quarters by the Company's Board of
Directors, which MBO's shall pertain to the business of the Company considered
as whole and shall be based on economic or strategic goals similar to, and
shall not be significantly more difficult to achieve than, the MBOs previously
established for the President and Executive Vice President of Marketing with
respect to the business of the Company at the time such MBOs were established;
provided, that none of such options shall be deemed to be fully vested until
October 1, 2001, regardless of the achievement of quarterly MBOs prior to that
date.
Notwithstanding the foregoing, in the event of a Change in Control (as defined
in Section 14 of this Agreement), all unvested Executive Options shall vest
immediately. In the event the Agreement is terminated prior to its expiration
date by the Company or Executive, all unvested Executive Options shall
terminate and be of no further force or effect upon the date of termination
and all vested Executive options shall continue to be exercisable for a period
of two (2) years following the date of termination.
(e) Executive Benefits. The Company shall provide such health and medical
insurance for Executive in the form and program chosen by the Company for its
full-time employees. Executive shall be entitled to participate in any other
health, medical, retirement, pension, profit-sharing, disability, death and
dismemberment, life insurance, stock option, vacation and other benefit plans
and programs as in effect from time to time on the same basis as other members
of senior management.
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(f) Vacation. Executive shall be entitled to paid vacation in accordance
with the most favorable plans, policies, programs and practices of the Company
and its affiliated companies with respect to members of senior management.
Executive shall initially be entitled to three weeks paid vacation per
calendar year.
6. Reimbursement of Expenses. Company will promptly reimburse Executive
for expenses incurred in connection with Company's business, including
expenses for travel, lodging, meals, beverages, entertainment, and other items
on Executive's periodic presentation of an account of such expenses.
7. Working Facilities. Company shall provide to Executive offices and
facilities appropriate to Executive's position and suitable for the
performance of Executive's duties.
8. Nondisclosure of Confidential Information. For purposes of this
Agreement, the term "Confidential Information" means information (i) disclosed
to or known by Executive as a consequence of or through his/her employment
with the Company, (ii) not generally known outside the Company, and (iii)
which relates to the Company's business. Confidential Information includes,
but is not limited to, information of a technical nature, such as methods and
materials, trade secrets, inventions, processes, formulas, systems, computer
programs, and studies, and information of a business nature such as project
plans, market information, costs, customer lists, and so forth. Confidential
Information does not include information that (i) is or becomes generally
available to the public other than as a result of a disclosure by Executive in
violation of this Agreement, or (ii) is already in Executive's possession.
Recognizing that the Company is presently engaged, and may hereafter
continue to be engaged, in the research and development of processes and the
performance of services which involve experimental and inventive work, and
that the success of the Company's business may depend upon the protection of
its processes, products and services by patent, copyright or secrecy, and that
Executive has had, or during the course of his engagement may have, access to
Confidential Information, as herein defined, Executive agrees and acknowledges
that:
(a) The Company has exclusive right and title to all Confidential
Information and Executive hereby assigns all rights he might otherwise possess
in any Confidential Information to the Company. Except as required in the
performance of his duties to the Company, Executive will not at any time
during or after the term of his employment or engagement by the Company, which
term shall include any time in which Executive may be retained by the Company
as a consultant, directly or indirectly use, communicate, disclose or
disseminate any Confidential Information.
(b) All documents, records, notebooks, notes, memoranda and similar
repositories of, or containing Confidential Information or any other
information of a secret, proprietary, confidential or generally undisclosed
nature relating to the Company or its operations and activities made or
compiled by Executive at any time or made available to him during the term of
his employment or engagement by the Company, including any and all copies
thereof, shall be the property of the Company, shall be held by him in trust
solely for the benefit of the Company, and shall be delivered to the Company
by him on the termination of his engagement or at any other time on the
request of the Company.
(c) Executive will not assert any rights under any inventions, trademarks,
copyrights, discoveries, concepts or ideas, or improvements thereof, or know-
how related thereto, as having been made or acquired by him during the term of
his employment or engagement if based on or otherwise related to Confidential
Information.
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9. Assignment Of Inventions.
(a) All discoveries, concepts, and ideas, whether or not patentable or
subject to copyright protection, including but not limited to improvements,
know-how, data, processes, methods, formulae, and techniques, as well as
improvements thereof, or know-how related thereto, concerning any past,
present or prospective activities of the Company which Executive makes,
discovers or conceives (whether or not during the hours of his engagement or
with the use of the Company's facilities, materials or personnel), either
solely or jointly with others during his engagement by the Company or any
affiliate and, if based on or related to Confidential Information, at any time
after termination of such engagement (collectively, the "Inventions"), shall
be the sole property of the Company, and Executive agrees to perform the
provisions of this Section 8 with respect thereto without the payment by the
Company of any royalty or any consideration therefor other than the regular
compensation paid to Executive in his capacity as an executive or consultant.
(b) Any written notebooks maintained by Executive with respect to
Inventions and studies or research projects undertaken on the Company's behalf
shall at all times be the property of the Company and shall be surrendered to
the Company upon termination of Executive's engagement or, upon the request of
the Company, at any time prior thereto.
(c) Executive hereby assigns to the Company all of his rights to
Inventions.
(d) Executive shall sign, acknowledge and deliver promptly to the Company,
without charge to the Company, but at its expense, such written instruments
(including applications and assignments) and take such other acts, such as
giving testimony in support of Executive's inventorship, as may be necessary
in the reasonable opinion of the Company to obtain, maintain, extend, reissue
and enforce United States and/or foreign letters patent and copyrights
relating to Inventions invented by Executive and to vest the entire right and
title thereto in the Company or its nominee. Executive acknowledges and
agrees that any copyright developed or conceived of by Executive during the
term of his employment which is related to the business of the Company shall
be a "work for hire" under the copyright law of the United States and other
applicable jurisdictions.
(e) Executive represents that his performance of all the terms of this
Agreement and as an Executive of or consultant to the Company does not and
will not breach any trust or contract entered into prior to his employment by
the Company. Executive agrees not to enter into any agreement either written
or oral in conflict herewith and represents and agrees that he has not brought
and will not bring with him to the Company or use in the performance of his
responsibilities at the Company any materials or documents of a former
employer which are not generally available to the public, unless he has
obtained written authorization from the former employer for their possession
and use and provided a copy of such authorization to the Company.
(f) No provisions of this Paragraph shall be deemed to limit the
restrictions applicable to Executive under Sections 10 and 11.
10. Shop Rights. Unless waived by the Board, the Company shall also have
the royalty-free right to use in its business, and to make, use and sell
products, processes and/or services derived from any inventions, discoveries,
concepts and ideas, whether or not patentable, including but not limited to
processes, methods, formulas and techniques, as well as improvements thereof
or know-how related thereto, which are not within the scope of Inventions as
defined above but which are conceived of or made by Executive during the
period he is employed or engaged by the Company or with the use or assistance
of the Company's facilities, materials, or personnel.
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11. Non-Compete. Unless waived by the Board, Executive hereby agrees that
during the term of this Agreement and for the period of two years from the
expiration or earlier termination hereof, Executive will not:
(a) Own, manage, operate, or control any business that is directly
competitive with any business conducted or proposed to be conducted by the
Company or any subsidiary thereof during the term of this Agreement in any
geographic market in which the Company or any subsidiary thereof conducts
business or proposes to conduct business during the term of this Agreement.
For purposes of this paragraph, ownership of securities of not in excess of
five percent (5%) of any class of securities of a public company listed on the
OTC Bulletin Board, a national securities exchange or on the National
Association of Securities Dealers Automated Quotation System (NASDAQ) shall
not be considered to be competition with the Company or any subsidiary
thereof;
(b) Act as, or become employed as, an officer, director, executive,
consultant or agent of any business within the relocation industry which is
directly competitive with the Company or any subsidiary thereof during the
term of this Agreement in any geographic market within the relocation industry
in which the Company or any subsidiary thereof conducts business during the
term of this Agreement.
(c) Solicit any similar business to that of the Company's from, or sell any
products or services that are in direct competition with the Company's
products and services to, any company which was within one year prior to the
date of termination of Executive's employment, a customer or client of the
Company or any of its subsidiaries; or
(d) Solicit the employment of any full time Executive employed by the
Company or its subsidiaries as of the date of termination of this Agreement.
Provided, however, that this Section 11 shall be void and of no further
force or effect in the event this Agreement is terminated by the Company
without Cause or by Executive for Good Reason, as defined in Section 12 of
this Agreement.
12. Termination.
(a) Death. The Executive's employment shall terminate automatically upon
the Executive's death during the term of this Agreement.
(b) Disability. If Executive is absent from his full-time duties with the
Company as a result of incapacity due to mental or physical illness
("Disability") and such absence continues uninterrupted for a period of two
(2) consecutive months, the base salary and quarterly bonus payable to
Executive under this Agreement shall be reduced by 50% until such time as
Executive resumes the performance of his full-time duties with the Company or
this Agreement is terminated. If Executive's Disability continues for four
(4) consecutive months, the Company may terminate Executive's employment
effective on the 30th day after receipt of a notice to that effect by the
Executive (the "Disability Termination Date"), unless Executive returns to the
full-time performance of his duties prior to the Disability Termination Date.
(c) Cause. The Company may terminate Executive's employment during the term
of this Agreement for Cause. For purposes of this Agreement, "Cause" shall
mean: (i) Executive being convicted of a felony; (ii) a willful act of
personal dishonesty taken by Executive in connection with his responsibilities
as Executive and intended to result in substantial personal enrichment of
Executive; (iii) the willful and continued failure of the Executive to perform
substantially the Executive's duties with the Company or its affiliates (other
than any such failure resulting from Disability), after a written demand for
substantial performance is delivered to the Executive by the Board which
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specifically identifies the manner in which the Board believes Executive has
not substantially performed Executive's duties and Executive has not performed
such duties within 45 days of such notice, or (iv) the willful engaging by the
Executive in illegal conduct or gross misconduct which is materially and
demonstrably injurious to the Company. For purposes of this provision, no act
or failure to act, on the part of the Executive, shall be considered "willful"
unless it is done, or omitted to be done, by the Executive in bad faith or
without reasonable belief that the Executive's action or omission was in the
best interests of the Company. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board or based
upon the advice of counsel for the Company shall be conclusively presumed to
be done, or omitted to be done, by the Executive in good faith and in the best
interests of the Company. The cessation of employment of the Executive shall
not be deemed to be for Cause unless and until there shall have been delivered
to the Executive a copy of a resolution duly adopted by the affirmative vote
of not less than a majority of the entire membership of the Board at a meeting
of the Board called and held for such purpose (after reasonable notice is
provided to Executive and the Executive is given an opportunity, together with
counsel, to be heard before the Board), finding that, in the good faith
opinion of the Board, the Executive is guilty of the conduct described in
subparagraph (i), (ii) and (iii) above, and specifying the particulars thereof
in detail.
(d) Good Reason. The Executive's employment may be terminated by Executive
at any time within ninety (90) days after the occurrence of an event
constituting Good Reason. For purposes of this Agreement, "Good Reason" shall
mean:
(i) the assignment to Executive of any duties inconsistent in any respect
with the Executive's position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities, or any other action by
the Company which results in a diminution in such position, authority, duties
or responsibilities, excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by Executive;
(ii) the failure by the Company to comply with any of the material terms
of this Agreement, other than an isolated, insubstantial and inadvertent
failure not occurring in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by the Executive;
(iii) the relocation of Executive to any office or location more than 35
miles from the location of the offices of the Company's wireless reselling
subsidiary at the commencement of this Agreement;
(iv) the occurrence of a Change in Control as defined in Section 14 of
this Agreement; or
(v) removal from the Company's Board.
(e) Notice of Termination. Any termination by the Company for Cause, or by
the Executive for Good Reason, shall be communicated by Notice of Termination
to the other party hereto in accordance with Section 18 of this Agreement. Any
Notice of Termination by the Executive for any reason other than an event
constituting Good Reason, shall be provided to the Board at least thirty (30)
days prior to leaving the employment of the Company. Upon the end of the
thirty (30) days (or cessation of the Company's business, if sooner), all
compensation provisions of this Agreement shall cease. For purposes of this
Agreement, a "Notice of Termination" means a written notice which (i)
indicates the specific termination provision in this Agreement relied upon,
(ii) to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated and (iii) if the Date of
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Termination (as defined below) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than
thirty days after the giving of such notice). The failure by the Executive or
the Company to set forth in the Notice of Termination any fact or circumstance
which contributes to a showing of Good Reason or Cause shall not waive any
right of the Executive or the Company, respectively, or preclude the Executive
or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.
(f) Date of Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be, (ii) if the Executive's
employment is terminated by the Company other than for Cause or Disability,
the Date of Termination shall be thirty (30) days after the date on which the
Company notifies the Executive of such termination and (iii) if the
Executive's employment is terminated by reason of death or Disability, the
Date of Termination shall be the date of death of the Executive or the
Disability Termination Date.
13. Obligations of the Company upon Termination.
(a) Good Reason; Other Than for Cause, Death or Disability. If, during the
term of this Agreement, the Company shall terminate the Executive's employment
other than for Cause or Disability or the Executive shall terminate employment
for Good Reason:
(i) The Company shall pay to the Executive in a lump sum in cash within 30
days after the Date of Termination the aggregate of the following amounts:
A. The sum of (aa) the Executive's Annual Base Salary through the Date
of Termination to the extent not theretofore paid, (bb) the Executive's
Quarterly Bonus through the Date of Termination to the extent not theretofore
paid, (cc) reimbursement for any and all monies advanced in connection with
Executive's employment through the Date of Termination, and (dd) all other
payments and benefits to which Executive may be entitled under the terms of
any benefit plan of the Company (collectively, the "Accrued Obligations").
Where applicable, such payments shall be prorated based on a 360 day year and
the number of days elapsed during the year in question.
B. An amount equal to Executive's Annual Base Salary and Quarterly Bonus
for a period of twelve (12) months.
C. For twelve (12) months after the Executive's Date of Termination,
the Company shall at its expense provide health and medical insurance to
Executive and his family of the same type and scope as was provided during the
term of this Agreement.
D. To the extent not theretofore paid or provided, the Company shall
timely pay or provide to the Executive any other amounts or benefits required
to be paid or provided or which the Executive is eligible to receive under any
plan, program, policy or practice or contract or agreement of the Company and
its affiliated companies (such other amounts and benefits shall be hereinafter
referred to as the "Other Benefits").
(b) Death. If the Executive's employment is terminated by reason of the
Executive's death during the Employment Period, this Agreement shall terminate
without further obligations to the Executive's legal representatives under
this Agreement, other than for payment of Accrued Obligations and the timely
payment or provision of Other Benefits. Executive's estate, unless otherwise
directed by the Executive, shall receive all vested Options upon Executive's
Death.. Accrued Obligations shall be paid to the Executive's estate or
beneficiary, as applicable, in a lump sum in cash within 30 days of the Date
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of Termination and Other Benefits shall be paid as soon as practicable in
accordance with the most favorable practices, policies and procedures followed
by the Company with respect to members of senior management. On Executive's
Death, the Company shall uses its best efforts to file a registration
statements and take such additional actions as may be required to registered
all vested but, unregistered options. The registration rights with respect to
any vested, but unregistered options shall relate to a registration statement
on Form S-8 or may be "piggybacked" onto any other registration statement
filed by the Company, but in no event shall such registration rights be deemed
"demand" registration rights.
(c) Disability. If the Executive's employment is terminated by reason of
the Executive's Disability during the term of this Agreement, this Agreement
shall terminate without further obligations to the Executive, other than for
payment of Accrued Obligations and the timely payment or provision of Other
Benefits. Accrued Obligations shall be paid to the Executive in a lump sum in
cash within 30 days of the Date of Termination and Other Benefits shall be
paid as soon as practicable in accordance with the most favorable practices,
policies and procedures followed by the Company with respect to members of
senior management.
(d) Cause; Other than for Good Reason. If the Executive's employment shall
be terminated for Cause during the term of this Agreement, this Agreement
shall terminate without further obligations to the Executive other than for
payment of Accrued Obligations and the timely payment or provision of Other
Benefits. If the Executive voluntarily terminates employment during the
Employment Period, excluding a termination for Good Reason, this Agreement
shall terminate without further obligations to the Executive, other than for
Accrued Obligations and the timely payment or provision of Other Benefits. In
either event, all Accrued Obligations shall be paid to the Executive in a
lump sum in cash within 30 days of the Date of Termination.
14. Change of Control. Upon the occurrence of a Change of Control (as
defined below), Executive may for a period of ninety (90) days thereafter
voluntarily terminate this Agreement (which termination shall be deemed to be
for Good Reason as defined in Section 13 of this Agreement) and receive the
payments described in Section 13(a) above. Upon the occurrence of a Change of
Control, all Executive Options and other stock options which had not vested
prior to such date shall vest effective as of the date of the Change of
Control.
For purposes of this Agreement, "Change of Control" shall mean:
(i) The acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (aa) the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (bb) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally
in the election of directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this Agreement, the following
acquisitions shall not constitute a Change of Control: (aa) any acquisition
directly from the Company, (bb) any acquisition by the Company, (cc) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company or (dd)
any acquisition by any corporation pursuant to a transaction which complies
with clauses (aa), (bb) and (cc) of subsection (iii) below; or
(ii) (aa) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of
the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by
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the Company's shareholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with respect to
the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board or (bb) a majority of the members of the Board ceases to be comprised of
Directors whose most recent election to the Board was approved by at least a
majority of the Incumbent Board prior to such election; or
(iii) Consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the Company (a
"Business Combination"), in each case, unless, following such Business
Combination, (aa) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50%
of, respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through one or
more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be,
(bb) no Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the Company or
such corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership
existed prior to the Business Combination and (cc) at least a majority of the
members of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board, providing
for such Business Combination; or
(iv) Approval by the shareholders of the Company of a complete liquidation
or dissolution of the Company.
15. Nontransferability. Neither Executive, Executive's spouse, Executive's
designated contingent beneficiary, nor their estates shall have any right to
anticipate, encumber, or dispose of any payment due under this Agreement.
Such payments and other rights are expressly declared nonassignable and
nontransferable except as specifically provided herein.
16. Indemnification. Company shall indemnify Executive and hold Executive
harmless from liability for acts or decisions made by Executive while
performing services for Company to the greatest extent permitted by the Nevada
Revised Statutes and shall advance funds to Executive for the defense of any
action, suit or proceeding prior to the conclusion thereof to the maximum
extent permitted by the Nevada Revised Statutes. Commencing with the date of
execution of this Agreement, Company shall cause Executive to be insured under
a directors and officers liability insurance policy carried by the Company
with limits of not less than $10 Million which is issued by a recognized
insurer of national standing acceptable to Executive and which provides
coverages customarily contained director and officer liability insurance
policies carried by public companies engaged in business in the technology
sector of the economy.
11
17. Assignment. This Agreement may not be assigned by either party without
the prior written consent of the other party.
18. Notice. Any notices or other communications required or permitted
hereunder shall be sufficiently given if personally delivered, if sent by
facsimile or telecopy transmission or other electronic communication confirmed
by registered or certified mail, postage prepaid, or if sent by prepaid
overnight courier addressed as follows:
If to Executive, to: Xxx X. Xxxxxx
0000 Xxxxxxxxx Xxxx, Xxxxx 000
XxxxxxxxXxxxxxx, Xxxxxxxxxx 00000
Fax: (____) _________________
If to the Company, to: EZConnect, Inc.
Attn: Chief Executive Officer
0000 Xxxxx Xxxxxxx Xxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Fax: (000) 000-0000
19. Entire Agreement. This Agreement is and shall be considered to be the
only agreement or understanding between the parties hereto with respect to the
employment of Executive by Company. All negotiations, commitments, and
understandings acceptable to both parties have been incorporated herein. No
letter, telegram, or communication passing between the parties hereto covering
any matter during this contract period, or any plans or periods thereafter,
shall be deemed a part of this Agreement; nor shall it have the effect of
modifying or adding to this Agreement unless it is distinctly stated in such
letter, telegram, or communication that it is to constitute a part of this
Agreement and is attached as an amendment to this Agreement and is signed by
the parties to this Agreement.
20. Enforcement. Each of the parties to this Agreement shall be entitled
to any remedies available in equity or by statute with respect to the breach
of the terms of this Agreement by the other party. Executive hereby
specifically acknowledges and agrees that a breach of the agreements,
covenants and conditions contained in Sections 8, 9, 10 and 11 of this
Agreement may cause irreparable harm and damage to the Company, that the
remedy at law, for the breach or threatened breach of such provisions of this
Agreement may be inadequate, and that, in addition to all other remedies
available to the Company for such breach or threatened breach (including,
without limitation, the right to recover damages), the Company shall be
entitled to injunctive relief for any breach or threatened breach of such
sections of this Agreement.
21. Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Utah.
22. Severability. If and to the extent that any court of competent
jurisdiction holds any provision or any part thereof of this Agreement to be
invalid or unenforceable, such holding shall in no way affect the validity of
the remainder of this Agreement.
23. Waiver. No failure by any party to insist upon the strict performance
of any covenant, duty, agreement, or condition of this Agreement or to
exercise any right or remedy consequent upon a breach hereof shall constitute
a waiver of any such breach or of any covenant, agreement, term, or condition.
24. Litigation Expenses. In the event that it shall be necessary or
desirable for the Executive or Company to retain legal counsel and/or incur
other costs and expenses in connection with the enforcement of any or all of
the provisions of this Agreement, the prevailing party shall be entitled to
recover from the other party reasonable attorneys' fees, costs, and expenses
12
incurred by the prevailing party in connection with the enforcement of this
Agreement. Notwithstanding the foregoing, in the event that following a
Change of Control Executive engages legal counsel to enforce Executive's
rights or seek a determination under this Agreement, the Company shall pay the
expenses of such legal counsel regardless of the outcome of any legal
proceeding resulting therefrom.
25. Survivability. The provisions of sections 8, 9, 10, 11, 13, and 14
shall survive termination of this Agreement.
AGREED AND ENTERED INTO effective as of the date first above written.
Company:
EZConnect, Inc.
By__________________________________________
Its Duly Authorized Officer
Executive:
By__________________________________________
Xxx X. Xxxxxx
