EXHIBIT 10.4
EMPLOYMENT AGREEMENT
This Agreement, entered in to this 22nd day of April 2002, is by and
between eWorldMedia, Inc., a Nevada corporation (hereinafter referred to as
the "Company") and Xxxxx Xxxxxx (hereinafter referred to as "Employee")
under the following terms and conditions:
RECITALS:
A. The Company and Employee desire to set forth the terms and
conditions on which (i) the Company shall employ Employee, (ii) Employee
shall render services to the Company or a subsidiary or parent of the
Company, and (iii) the Company shall compensate Employee for such services
to the Company; and
B. In connection with the employment of Employee by the Company, the
Company desires to restrict Employee's rights to disclose certain
confidential information and to compete with the business of the Company;
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements hereinafter set forth, the parties hereto agree as follows:
1. EMPLOYMENT
The Company hereby employs Employee and Employee hereby accepts
employment with the Company upon the terms and conditions hereinafter set
forth.
2. TERM
2.1 Initial Term. The term of this Agreement shall be for a
period commencing the date hereof through December 31, 2004, subject,
however, to prior termination as provided herein below, in Section 6.
2.2 Extending Term. For purposes of extending the term of the
relationship between the Company and Employee, the parties agree to enter
into good faith negotiations within sixty (60) days prior to the
termination of this Agreement. In the event that the parties are unable to
reach an agreement at such time as this Agreement terminates, this
Agreement shall be automatically terminated on December 31, 2004.
3. COMPENSATION
3.1 Basic Cash Compensation. For all services rendered by
Employee under this Agreement, except as provided in subsection 3.2, below,
the Company shall pay Employee during the term hereof a salary at the rate
of $96,000 per year, payable in accordance with the Company's existing
payroll schedule; provided, however, that the cash salary shall not
commence (i) until the Company shall have raised a minimum of $500,000 in
cash proceeds from the sale of its common stock, or (ii) has generated
revenues sufficient to support the Company's general and administrative
expenses.
3.2 Signing Bonus and Initial Compensation. As a further
inducement to Employee to enter into this Agreement, and to provide a means
of enhancing Employee's proprietary interest in the Company, and to
increase Employee's incentive, the Company shall issue to Employee 250,000
shares of common stock upon execution of this Agreement, which shares shall
be deemed full-paid and non-assessable and an additional 250,000 shares
upon successful filing of the Company's merger registration statement with
the SEC. These shares shall also be deemed compensation to Employee for
services rendered. The shares shall be issued subject to the Employee
entering into a Representation Form, a Lockup Agreement and an Irrevocable
Proxy Agreement, as attached hereto.
3.3 Stock and Option Bonuses. Employee shall be eligible for
stock or stock option bonuses on an annual basis, as determined by the
Board of Directors (hereinafter the "Board"). The Board, at its first
meeting following the fiscal year-end, shall consider issuance of
additional shares of stock or the granting of stock options to Employee
consistent with industry practices.
3.4 Withholding Taxes. All compensation shall be subject to
customary withholding tax and other employment taxes as are required with
respect to compensation paid by a corporation to an employee.
4. DUTIES AND RESPONSIBILITIES
4.1 Full-time Employment. Employee shall, during the term of
this Agreement, devote his full attention and expend his best efforts,
energies and skills, on a full-time basis, to the business of the Company
and any corporation controlled by the Company any time during the term of
this Agreement (each a "Subsidiary") or any parent of the Company which
owns at least 90% of the outstanding stock of the company any time during
the term of this Agreement (hereinafter the "Parent"). For purposes of
this Agreement, the term "Company" shall mean the Company, all
Subsidiaries, and the Parent.
4.2 Offices. During the term of this Agreement, Employee shall
serve as the Chief Financial Officer of the Company or in such other
capacity as determined by the Board. In the performance of all of his
responsibilities hereunder, Employee shall be subject to all of the
Company's policies, rules, and regulations applicable to its employees of
comparable status and shall report directly to, and shall be subject to,
the direction and control of Board and shall
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perform such duties as shall be assigned to him. In performing such duties,
Employee will be subject to and abide by, and will use his best efforts to
cause other employees of the Company to be subject to and abide by, all
policies and procedures developed by the Board or senior management of the
Company.
5. ADDITIONAL EMPLOYEE COVENANTS
5.1 Confidential Information. Employee recognizes and
acknowledges that certain information, including, but not limited to,
(i) information pertaining to the financial condition of the Company;
(ii) its systems and methods of doing business; (iii) its agreements with
customers, suppliers or selling or marketing agents, including lists of
customers, selling agents, and marketing agents; or (iv) other aspects of
the business of the Company which are sufficiently secret to derive economic
value from not being disclosed (hereinafter "Confidential Information") may
be made available or otherwise come into the possession of Employee by
reason of his employment with the Company. Accordingly, Employee agrees
that he will not (either during or after the term of his employment with
the Company) disclose any Confidential Information to any person, firm,
corporation, association, or other entity for any reason or purpose
whatsoever or make use to his personal advantage or to the advantage of
any third party, of any Confidential Information, without the prior
written consent of the Board. Employee shall, upon termination of
employment, return to the Company all documents which reflect Confidential
Information (including copies thereof). Notwithstanding anything
heretofore stated in this subsection 5.1, Employee's obligations under
this subsection 5.1 shall not, after termination of Employee's employment
with the Company, apply to information which has become generally
available to the public without any action or omission of Employee.
5.2 Records. All files, records, memoranda, and other documents
regarding former, existing, or prospective customers of the Company or
relating in any manner whatsoever to Confidential Information or the
business of the Company (collectively "Records"), whether prepared by
Employee or otherwise coming into his possession, shall be the exclusive
property of the Company. All Records shall be immediately placed in the
physical possession of the Company upon the termination of Employee's
employment with the Company, or at any other time specified by the Board.
The retention and use by the Employee of duplicates in any form of Records
after termination of Employee's employment with the Company is prohibited.
5.3 Remedies. Employee hereby recognizes and acknowledges that
irreparable injury or damage shall result to the Company in the event of a
breach or threatened breach by Employee of any of the terms or provisions
of this Section 5, and Employee therefore agrees that the Company shall be
entitled to an injunction restraining Employee from engaging in any
activity constituting such breach or threatened breach. Nothing contained
herein shall be construed as prohibiting the Company from pursuing any
other remedies available to the Company at law or in equity for such breach
or threatened breach, including, but not limited to, the recovery of
damages from Employee and, if Employee is an employee of the Company, the
termination of his employment with the Company in accordance with the terms
of this Agreement.
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6. TERMINATION
6.1 Termination by Company. The Company has the right to
terminate Employee's employment under this Agreement, by notice to Employee
in writing at any time (i) for "Cause," as defined below; (ii) without
Cause for any or no reason, and (iii) due to the disability of the
Employee. Any such termination shall be effective upon the giving of
notice pursuant as provided herein. This Agreement shall terminate
automatically upon Employee's Death. For purposes of this Agreement
"Cause" shall exist if Employee (i) is adjudicated guilty of illegal
activities of consequence by a court of competent jurisdiction;
(ii) commits any act of fraud or intentional misrepresentation; (iii) has,
in the reasonable judgment of the Board, engaged in serious misconduct,
which conduct has, or would if generally known, materially adversely affect
the good will or reputation of the Company and which conduct the Employee
has not cured or altered to the satisfaction of the Board within ten (10)
days following notice by the Board to the Employee regarding such conduct;
(iv) breaches any of the provisions of this Agreement and which breach the
Employee has not cured or altered to the satisfaction of the Board within
ten (10) days following notice by the Board to the Employee regarding such
breach; or (v) has made any material misrepresentation to the Company.
6.2 Termination by Employee. Employee has the right to
terminate his employment under this Agreement for any reason, upon 45 days
prior written notice to the Company.
6.3 Compensation After Termination.
(a) If Employee's employment under this Agreement is
terminated (i) by the Company for Cause; (ii) by the Employee;
(iii) through expiration of the employment period set forth in this
Agreement, then the Company shall have no further obligation hereunder or
otherwise with respect to Employee's employment from and after the
termination or expiration date, except payment of Employee's salary
accrued through the date of termination or expiration.
(b) If Employee's employment with the Company is terminated
within the first year of employment due to the death or permanent
disability of Employee, the Employee shall continue to receive compensation
for one (1) month from the date of such termination (such payments by the
Company to be diminished, however, by the extent to which the Employee
receives compensation during such one (1) month period from a third party
employer) in an amount equal to the basic monthly cash compensation paid
Employee for the month prior to such termination. If Employee's employment
with the Company is terminated within the second or third years of
employment, or any extended term of this Agreement, due to the death or
permanent disability of Employee, the Employee shall continue to receive
compensation for three (3) months from the date of such termination (such
payments by the Company to be diminished, however, by the extent to which
the Employee receives compensation during such three (3) month period from
a third party employer) in an amount equal to the basic monthly cash
compensation paid Employee for the month prior to such termination.
Thereafter, the Employee shall not be entitled to receive any compensation
following the date of termination.
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(c) If this Agreement is terminated by the Company without
Cause, and not due to the death or permanent disability of the Employee,
Employee shall be entitled to receive as severance pay (in addition to the
payment of the cash salary through the date of termination) an amount equal
to the lesser of (i) his cash salary for a period equal to six months, and
(ii) Employee's cash salary for the remainder of the initial period, such
amount to be payable in regular installments in accordance with the
Company's general payroll practices for salaried employees.
6.4 Return of Records. In the event of termination of
employment with the Company, Employee agrees to deliver promptly to the
Company all equipment, notebooks, documents, memoranda, reports, files,
samples, books, correspondence, lists, or other written or graphic records,
and the like, relating to the Company's business, which are or have been in
his possession or under his control.
7. EXPENSES
7.1 Reimbursable Expenses. Employee shall be entitled to
reimbursement of all reasonable expenses actually incurred in the course of
his employment; provided that such expenses are approved by the Board
either prior to incurring such expenses. Employee shall submit such
expenses on the Company's standardized expense report form, provided by the
Company, and shall attach thereto receipts for all expenditures.
7.2 Reimbursement. The Company shall reimburse Employee within
three (3) days after submission by Employee of his expense report.
8. THE COMPANY'S AUTHORITY
Employee agrees to observe and comply with the reasonable rules
and regulations of the Company as adopted by the Board either orally or in
writing respecting performance of his duties and to carry out and perform
orders, directions, and policies stated by the Board, to him from time to
time, either orally or in writing.
9. PAID VACATION; SICK LEAVE; MEDICAL INSURANCE
9.1 Paid Vacation. Employee shall be entitled to a paid
vacation of three weeks each year.
9.2 Sick Leave. The Employee shall be entitled to reasonable
periods of paid sick leave during the term of this Agreement as determined
by the Board or pursuant to written policies established by the Board.
9.3 Medical Insurance. The Company shall provide Employee, at
the Company's expense, participation in group medical, accident and health
insurance plans of the Company as may be provided by the Company from time
to time to Company employees of
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comparable status, subject to, and to the extent that, the Employee is
eligible under such benefit plans in accordance with their respective terms.
10. ASSIGNMENT
10.1 Personal Contract of Employee. This Agreement is a personal
contract, and the duties and obligations of the Employee hereunder may not
be transferred or assigned, except as otherwise expressly authorized in
writing by the Company.
10.2 Assignment by Company. The Company shall have the right to
assign this Agreement to any successor of substantially all of its business
or assets, and any such successor shall be bound by all of the provisions
hereof.
11. NONCOMPETITION
11.1 Noncompetition Provisions. During his employment, and for a
period of six months after the termination of his employment (the
"Noncompete Term"), Employee shall not, directly or indirectly, whether as
an employee, director, owner, 5% or greater stockholder, consultant, or
partner (limited or general):
(a) engage in or have any interest in, any business that
competes with the business of the Company during such period, including the
business of the Company or any of its subsidiaries, in any geographic
location(s) in which the Company is conducting business during the
Noncompete Term (the "Noncompete Area"). The Company may, in its sole
discretion, give Employee written approval(s) to personally engage in any
activity or render any services referred to in this Section 11 if the
Company secures written assurances (satisfactory to the Company and its
counsel) from Employee, or any prospective employer(s) of Employee, that
the integrity of the Company's Confidential Information will not in any way
be jeopardized by such activities, provided that the burden of so
establishing the foregoing to the satisfaction of the Company and its
counsel shall be upon Employee;
(b) offer, within the Noncompete Area and during the
Noncompete Term, any of the products or services similar or in competition
with those offered by the Company; or
(c) otherwise compete or interfere with the activities of
the Company within the Noncompete Area and during the Noncompete Term.
11.2 Remedies. Employee hereby recognizes and acknowledges that
irreparable injury or damage shall result to the Company in the event of a
breach or threatened breach by Employee of any of the terms or provisions
of this Section 11, and Employee therefore agrees that the Company shall be
entitled to an injunction restraining Employee from engaging in any
activity constituting such breach or threatened breach. Nothing contained
herein shall be construed as prohibiting the Company from pursuing any
other remedies available to the Company at law or in equity for such breach
or threatened breach, including, but not limited to,
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the recovery of damages from Employee and, if Employee is an employee of
the Company, the termination of his employment with the Company in accordance
with the terms of this Agreement.
12. MISCELLANEOUS
12.1 Notices. All notices, requests, demands, and other
communications required to or permitted to be given under this Agreement
shall be in writing addressed to the other party at the address set forth
below and shall be conclusively deemed to have been duly given when:
(a) Hand-delivered to the other party;
(b) Received when sent by telex or facsimile at the address
and number set forth below;
(c) The next business day after same have been deposited
with a national overnight delivery service, shipping prepaid, addressed to
the parties as set forth below with next-business day delivery guaranteed,
provided that the sending party receives a confirmation of delivery from
the delivery service provider; or
(d) Three business days after mailing if mailed from within
the continental United States by registered or certified mail, return
receipt requested, addressed to the parties as set forth below.
Company: 000 Xxxxxxx Xxxxxx Xx.
00xx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Facsimile Number (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, President
With Copy to Xxxxxx X. Xxxxx
Attorney at Law
00 Xxxx 000 Xxxxx
Xxxxx 000
Xxxx Xxxx Xxxx, XX 00000
Facsimile Number (000) 000-0000
Employee: 00 Xxxxxxx Xxxxxx
Xxxxxxxx Xxxxx, XX 00000
Facsimile Number (000) 000-0000
12.2 Attorneys' Fees. If any legal action or other proceeding is
brought for the enforcement of this Agreement, or because of an alleged
dispute, breach, default, or misrepresentation in connection with any of
the provisions of this Agreement, the successful or
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prevailing party or parties will be entitled to recover reasonable attorneys'
fees and other costs incurred in that action or proceeding, in addition to
any other relief to which it or they may be entitled.
12.3 Entire Agreement; Modification; Waiver. This Agreement
constitutes the entire agreement between or among the parties pertaining to
the subject matter contained in it and supercedes all prior and
contemporaneous agreements, representations, and understandings of the
parties. No supplement, modification, or amendment of this Agreement will
be binding unless executed in writing by all the parties or the applicable
parties to be bound by such amendment. No waiver of any of the provisions
of this Agreement will constitute a waiver of any other provision, whether
or not similar, nor will any waiver constitute a continuing waiver. No
waiver will be binding unless executed in writing by the party making the
waiver.
12.4 Governing Law. This Agreement and the rights and duties of
the parties hereto shall be construed and determined in accordance with the
laws of the State of California, and any and all actions to enforce the
provisions of this Agreement shall be brought in a court of competent
jurisdiction in Orange County, in the State of California, and in no other
place.
12.5 Severability. If any provision of this Agreement is held
invalid or unenforceable by any court of final jurisdiction, it is the
intent of the parties that all other provisions of this Agreement be
construed to remain fully valid, enforceable, and binding on the parties.
12.6 Effect of Headings. The subject headings of the sections
and subsections of this Agreement are included for convenience only and
will not affect the construction of any of its provisions.
12.7 Counterparts; Facsimile Execution. This Agreement may be
executed in any number of counterparts and all such counterparts taken
together shall be deemed to constitute one instrument. Delivery of an
executed counterpart of this Agreement by facsimile shall be equally as
effective as delivery of a manually executed counterpart of this Agreement.
Any party delivering an executed counterpart of this Agreement by facsimile
also shall deliver a manually executed counterpart of this Agreement, but
the failure to deliver a manually executed counterpart shall not affect the
validity, enforceability, or binding effect of this Agreement.
12.8 Survival of Covenants, Etc. All covenants, representations
and warranties made herein shall survive the making of this Agreement and
shall continue in full force and effect until the obligations of this
Agreement have been fully satisfied.
12.9 Full Knowledge. By their signatures, the parties
acknowledge that they have carefully read and fully understand the terms
and conditions of this Agreement, that each party has had the benefit of
counsel, or has been advised to obtain counsel, and that each party has
freely agreed to be bound by the terms and conditions of this Agreement.
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13. CORPORATE APPROVALS
The Company represents and warrants that the execution of this
Agreement by its corporate officer named below has been duly authorized by
the Board, is not in conflict with any Bylaw or other agreement, and will
be a binding obligation of the Company, enforceable in accordance with its
terms.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date above written.
THE COMPANY: eWorldMedia, Inc.
By /s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx, President
EMPLOYEE: /s/ Xxxxx Xxxxxx
Xxxxx Xxxxxx
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