Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made
as of August 10, 2005, by and between Digital Lifestyle
Group, Inc., Inc., a Delaware corporation (the "Company"),
and Xxxx Xxxx, a resident of the City of Industry,
California ("Employee").
WHEREAS, the Company desires to obtain the services
of Employee, and Employee desires to provide services to the
Company, in accordance with the terms and conditions of this
Agreement;
NOW, THEREFORE, for good and valuable
consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and Employee agree as
follows:
1. Employment. Effective on the Effective Date
(as defined in Section 2) and subject to the terms and
conditions of this Agreement, the Company agrees to employ
Employee as the Company's Chief Executive Officer, and
Employee agrees to perform the duties associated with
that position diligently and to the reasonable
satisfaction of the Company. Employee shall devote his
full time and attention to the business of the Company.
Employee's principal place of employment will be City of
Industry, California.
2. Term and Termination. Employee will be employed
under this Agreement for an initial term of one year (the
"Initial Term"), beginning on the date of the Agreement (the
"Effective Date"). This Agreement will renew for successive
one year periods after the completion of the Initial Term,
unless either party gives prior written notice to the
contrary to the other party no less than 30 days prior to
the end of the Initial Term or renewal period, as the case
may be.
3. Compensation.
(a) Salary. Beginning on the Effective Date and
thereafter during the term of this Agreement, the Company
shall pay Employee a base salary of $6,000 per month
("Base Salary"), payable in accordance with the payroll
practices of the Company. In addition to the Base Salary,
Employee shall be entitled to receive $1,000 per month
as an expense allowance. Any additional expenses incurred
by Employee must be documented and will be subject to review
by the Company. All of Employee's compensation under
this Agreement will be subject to deduction and withholding
authorized or required by law.
(b) Stock Options. The Company will grant Employee a
stock option to purchase 3,000,000 shares of the Company's
common stock, par value $0.03 per share ("Common Stock"), on
a fully diluted basis, as of the Effective Date. The
exercise price per share of such option shall be $0.20 and
shall have a term of three (3) years, and will vest in
twelve (12) equal monthly installments ("Vesting Schedule"),
beginning with the first vesting exactly one (1) month after
the Effective Date and thereafter in eleven monthly
installments in accordance with the Vesting Schedule.
In addition, after six months from the date of this
Agreement, the Company will grant Employee, so long as
Employee remains an Employee pursuant to the terms of this
Agreement, a stock option to purchase 100,000 shares of the
Company's common stock each month beginning in the seventh
(7th) month following the Effective Date and continuing for
six (6) months thereafter, for a total of 600,000 shares of
the Company's common stock ("Performance Options"). The
exercise price per share of any of the Performance Options
shall be $0.50 and shall have term(s) of three (3) years.
If this Agreement is terminated for any reason in
accordance with Section 2 hereinabove, Employee shall have
six (6) months from the date of termination to exercise all
vested stock options, or such vested stock options shall be
forfeited.
4. Board Seat. The Company will appoint Employee
as the Chairman of the Board of Directors of the Company as
of the Effective Date, and Employee shall have the right to
immediately appoint one (1) additional director at his
discretion.
5. Employee Benefits. Beginning on the Effective
Date and thereafter during the term of this Agreement, the
Company will provide to Employee such fringe benefits,
perquisites, vacation and other benefits that the Company
generally provides to its executive employees.
6. Indemnification. The Company agrees that if
Employee is made a party or is threatened to be made a
party to any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a "Proceeding"),
by reason of the fact that Employee is or was a trustee,
director or officer of the Company or any affiliate of the
Company or is or was serving at the request of the Company
or any affiliate as a trustee, director, officer,
member, employee or agent of another corporation or a
partnership, joint venture, trust or other enterprise,
including, without limitation, service with respect to
employee benefit plans, whether or not the basis of such
Proceeding is alleged action in an official capacity as a
trustee, director, officer, member, employee or agent
while serving as a trustee, director, officer, member,
employee or agent, Employee shall be indemnified to the
fullest extent authorized by California law, as the
same exists or may hereafter be amended, against all
expenses incurred or suffered by Employee in connection
therewith. If the Company maintains a directors' and
officers' insurance policy, Employee shall be covered
to the same extent as other employees.
7. No Obligation to Third Party. Employee
represents and warrants that Employee is not under any
obligation to any person or other third party and does not
have any other interest that is inconsistent or in
conflict with this Agreement, or which would substantially
prevent, limit, or impair Employee's performance of any of
the covenants hereunder or Employee's duties as an
employee of the Company
8. Severability. If, at any time, any provision of
this Agreement shall be determined to be invalid or
unenforceable under any applicable law, by reason of being
vague or unreasonable as to area, duration or scope of
activity, this Agreement shall be considered divisible and
shall become and be immediately amended to only such area,
duration and scope of activity as shall be determined to be
reasonable and enforceable by the court or other body having
jurisdiction over the matter and Employee and the Company
agree that this Agreement as so amended shall be valid and
binding as though any invalid or unenforceable
provision had not been included herein.
9. Entire Agreement. This Agreement constitutes the
complete agreement of the parties with respect to the
subject matter hereof and supersedes any prior written, or
prior or contemporaneous oral, understandings or agreements
between the parties that relates in any way to the subject
matter hereof. This Agreement may be amended only in
writing executed by the Company and Employee.
10. Binding Effect. This Agreement shall be
binding upon and inure to the benefit of the respective
heirs, executors, administrators, legal
representatives and successors of the Company and Employee.
11. Notice. Any notice required or permitted under
this Agreement must be in writing and will be deemed to have
been given when delivered personally, by telecopy or by
overnight courier service or three days after being sent
by mail, postage prepaid, to (a) if to the Company, to
the Company's principal place of business, or (b) if to
Employee, to Employee's residence or to Employee's
latest address then contained in the Company's records (or
to such changed address as such person may subsequently
give notice of in accordance herewith).
12. Governing Law. This agreement will be governed
by and construed and interpreted in accordance with the
substantive laws of the State of California, without giving
effect to any conflicts of law, rule or principle that might
require the application of the laws of another jurisdiction.
EMPLOYEE AND COMPANY BOTH ACKNOWLEDGE THAT EACH HAS
CAREFULLY REVIEWED THE PROVISIONS CONTAINED IN THIS
AGREEMENT, EACH HAS HAD THE OPPORTUNITY TO REVIEW WITH
RESPECTIVE ADVISORS AND COUNSEL, AND EACH UNDERSTANDS THE
CONTENTS OF THIS AGREEMENT AND SIGNIFIES SUCH UNDERSTANDING
BY SIGNING HEREINBELOW.
IN WITNESS WHEREOF, the Company and Employee have executed
and delivered this Agreement as of the date first above
written.
DIGITAL LIFESTYLES GROUP, INC.
/s/ Xxx Xxxxxx
Name: Xxx Xxxxxx
Title: Director
/s/ Xxxx Xxxx
Xxxx Xxxx
