EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is entered into as of the
28th day of July, 2004 (the "Effective Date"), between Summus, Inc. (USA), a
Florida corporation (the "COMPANY"), and Xxxx X. Ban (the "EXECUTIVE").
RECITALS:
WHEREAS, the Company desires to employ Executive, and Executive desires
to be employed by the Company, on the terms and subject to the conditions set
forth herein.
NOW, THEREFOR, in consideration of the mutual premises herein contained,
the parties agree as follows:
1. EMPLOYMENT. The Company hereby employs Executive as Chief
Executive Officer and Executive hereby accepts such employment, on the terms and
subject to the conditions hereinafter set forth.
2. DUTIES OF EXECUTIVE.
2.1 Executive shall report directly to the Board of
Directors, and shall perform such duties consistent with his position as Chief
Executive Officer pursuant to the direction of the Board.
2.2 Executive shall be required to devote his full business
time, attention and effort to the Company's business and affairs except for
vacation time and reasonable periods of absence due to sickness, personal injury
or other disability and shall perform diligently such duties as are customarily
performed by executives in similar positions with companies similar in character
or size to the Company, all subject to the direction of the Board, together with
such other duties as may be reasonably requested from time to time by the Board,
which duties shall be consistent with his positions as set forth above.
Executive agrees to use all of his skills and business judgment and render
services to the best of his ability to serve the interests of the Company.
Subject to the terms of Section 8 hereof, this shall not preclude Executive from
serving on community and civic boards, participating in industry associations,
pursuing his personal financial and legal affairs or otherwise engaging in other
activities, so long as such activities do not unreasonably interfere with his
duties to the Company.
3. SUPPORT SERVICES. Executive shall be entitled to all the
administrative, operational and facility support customary to a similarly
situated executive. This support shall include, without limitation, a suitably
appointed private office, and payment of or reimbursement for reasonable
cellular telephone expenses, travel and entertainment expenses, reasonable
expenses of Executive maintaining his professional license and standing and any
and all other business expenses reasonably incurred on behalf of or in the
course of performing duties for the Company, all in accordance with the expense
reimbursement policies established from time to time by the Company. Executive
agrees to provide documentation of these expenses as may be reasonably required.
4. TERM. Unless earlier terminated as provided herein, the
Executive's employment shall be for a continuing term (the "Term") of one year
from the Effective Date of this Agreement which shall be automatically extended
(without further action of the Company, the Board of Directors or the
Compensation Committee) each day for an additional day so that the remaining
term shall continue to be one (1) year; provided that either party may at any
time, by written notice to the other party, fix the Term to a finite term of one
year, without automatic extension, commencing with the date of such notice.
5. COMPENSATION. Throughout the Term, the Company shall pay or
provide, as the case may be, to Executive the compensation and other benefits
and rights set forth in this Section 5.
5.1 BASE SALARY. The Company shall pay to Executive a base
salary ("Base Salary"), payable in accordance with the Company's usual pay
practices (and in any event no less frequently than monthly), of $175,000 per
annum (the "Initial Base Salary"). The Compensation Committee shall annually
review Executive's Base Salary in light of the base salaries paid to other
executive officers of the Company and the performance of Executive, and the
Compensation Committee may, in its discretion, increase such Base Salary by an
amount it determines is appropriate. If any other executive officer of the
Company is granted an increase in their Base Salary, Executive shall also be
entitled to a comparable increase in Base Salary. Notwithstanding any other
provisions in this Agreement, Executive's Base Salary shall automatically be
increased:
(a) to 1.5 times the Executive's Initial Base Salary
once the Company achieves a fiscal year gross revenue of $10,000,000 AND
has net income for such fiscal year period; such increase shall be
effective automatically upon the date of the attainment of the
milestones set forth in this Section 5.1(a); and
(b) to 2.0 times the Executive's Initial Base Salary
once the Company achieves a fiscal year gross revenue of $20,000,000 AND
has net income for such fiscal year period; such increase shall be
effective automatically upon the date of the attainment of the
milestones set forth in this Section 5.1(b).
Once Executive's Base Salary is increased, it shall not thereafter be
reduced for any reason.
5.2 PERFORMANCE BONUS.
(a) The Executive shall receive a cash bonus of 100%
of his then current Base Salary upon the achievement of the Company's
annual objectives, as set by the Board of Directors.
Any cash bonus earned by the Executive pursuant to the provisions of
this Section 5.2 or any other provision of this Agreement shall not be paid to
the Executive unless and until the Company has achieved a cash flow positive
position, which will be certified to the Board of Directors by an executive
officer of the Company.
(b) The Company may also consider the Executive for
a cash bonus for each fiscal year, or part thereof that he is employed
by the Company, in an amount to be determined at the discretion of the
Board, provided that such bonus shall be commensurate with other bonuses
paid to other executive officers of the Company.
5.3 OPTION GRANTS. The Company shall grant to the Executive
options to purchase 1,250,000 shares of the Company's common stock on the terms
as set forth in the Stock Option Agreement attached to this Agreement as
Appendix A, which is incorporated into this Agreement for all purposes.
The Executive shall also receive a grant to purchase an additional
250,000 shares of the Company's common stock if the Company achieves cash flow
positive at any time during the 2004 fiscal year. This grant of options, if
achieved, shall be priced as of the date of the achievement of such milestone,
as certified by an executive officer of the Company and shall be vested in full
as of such date.
All options and/or warrants previously granted to the Executive in lieu
of cash compensation forgone by the Executive shall be amended to have a life of
ten (10) years from the date of each such respective grant while Executive is
employed by the Company or a life of three years from the date of termination of
the Executive's employment.
5.4 INSURANCE. The Company shall provide medical, vision,
hospitalization, disability and dental insurance for Executive, his spouse and
eligible family members, subject to and in accordance with the Company's policy,
the proportion of the cost thereof to be borne by the Company and Executive to
be in accordance with such policy.
5.5 EMPLOYEE BENEFIT PLANS. Executive shall be eligible to
participate in all retirement and other benefit plans of the Company generally
available from time to time to employees of the Company and for which Executive
qualifies under the terms thereof (and nothing in this Agreement shall, or shall
be deemed to, in any way affect Executive's rights and benefits thereunder
except as expressly provided herein).
5.6 OTHER BENEFIT PLANS. Executive shall be entitled to
participate in any equity or other employee benefit plan that is generally
available to senior executive officers, as distinguished from general
management, of the Company, at the highest level provided for any employee.
Executive's participation in and benefits under any such plan shall be on the
terms and subject to the conditions specified in the governing document of the
particular plan.
5.7 VACATION. Executive shall be entitled to Twenty (20)
days of vacation allowance each year, which shall accrue at the rate of five (5)
days per calendar quarter, but may be used in advance of accrual. Vacation days
not used in one calendar year shall carry over to the following calendar year(s)
up to a maximum of ten days. Executive shall also be entitled to a sick leave
allowance as provided under the Company's vacation and sick leave policy for
executive officers. For purposes of this Agreement, the Executive's accrual of
vacation days shall be considered to have accrued since February 17, 2004.
6. PERMANENT DISABILITY.
6.1 For purposes of this Agreement, Executive's "Permanent
Disability" shall be deemed to have occurred one day after one hundred eighty
(180) days in the aggregate during any consecutive twelve (12) month period, or
one day after one hundred twenty consecutive days, during which the 180 or 120
day period, as the case may be, Executive, by reason of his physical or mental
disability or illness, shall have been unable to discharge fully his duties
under this Agreement.
6.2 If either the Company or Executive, after receipt of
notice of Executive's Permanent Disability from the other, disputes that
Executive's Permanent Disability shall have occurred, Executive shall promptly
submit to a physical examination by a physician at any major accredited hospital
and, unless such physician shall issue his written statement to the effect that,
in his opinion, based on his diagnosis, Executive is capable of resuming his
employment and devoting his full time and energy to discharging fully his duties
hereunder within thirty (30) days after the date of such statement, such
Permanent Disability shall be deemed to have occurred on the day above
specified.
7. TERMINATION.
7.1 BASES FOR TERMINATION. Executive's employment under this
Agreement and the Term shall be terminated immediately on the death of Executive
and may be terminated by the Board:
(a) at any time after the Permanent Disability of
Executive
(b) at any time without Cause prior to a Change of
Control;
(c) at any time without Cause upon a Change of
Control; or
(d) at any time for "Cause" (as defined in Section
7.8 hereof);
7.2 TERMINATION BY DEATH. If Executive's employment is
terminated by death, Executive's estate or designated beneficiaries shall be
entitled to receive:
(a) any accrued but unpaid salary;
(b) a cash lump sum payment in respect of accrued
but unused vacation days pursuant to the terms of this Agreement;
(c) life insurance benefits pursuant to any life
insurance policy purchased by the Company on the Executive;
(d) a pro rata portion of the bonus applicable to
the calendar year in which such termination occurs, payable when and as
such bonus is determined under Section 5.2;
(e) all stock option grants that have vested as of
the Executive's date of termination pursuant to this Section 7.2 for the
remainder of the term of such option grants; and
(f) reimbursement for all expenses incurred by
Executive pursuant to Section 3 hereof.
7.3 TERMINATION FOR PERMANENT DISABILITY. If Executive's
employment is terminated by the Company for Permanent Disability, Executive
shall be entitled to receive:
(a) severance compensation equal to what would have
been his Base Salary under Section 5.1 hereof, payable at such times as
his Base Salary would have been paid if his employment had not been
terminated for a period of six (6) months, minus any amounts payable
under any short-term disability insurance policy provided by the Company
or purchased by Executive.
(b) a pro rata portion of the bonus applicable to
the calendar year in which such termination occurs, payable when and as
such bonus is determined under Section 5.2;
(c) continuation of the insurance provided by the
Company pursuant to Section 5.4 for 12 months;
(d) all stock option grants that have vested as of
the Executive's date of termination pursuant to this Section 7.3 for the
remainder of the term of such option grants; and
(e) reimbursement for all expenses incurred by
Executive pursuant to Section 3 prior to his termination.
7.4 TERMINATION BY THE COMPANY WITHOUT CAUSE PRIOR TO A
CHANGE OF CONTROL. If Executive's employment is terminated by the Company
without Cause (as defined in Section 7.8(a)) prior to a Change of Control,
Executive shall be entitled to receive:
(a) accrued but unpaid Base Salary to the date of
such termination;
(b) a cash lump sum payment in respect of accrued
but unused vacation days pursuant to the terms of this Agreement;
(c) a pro rata portion of the bonus applicable to
the calendar year in which such termination occurs, payable when and as
such bonus is determined under Section 5.2;
(d) acceleration of the vesting of one hundred
percent (100%) of the unvested portion of Executive's stock options or
other stock-based awards, together with the right to exercise such stock
options or awards for a period equal to the remaining term for
exercising such options or awards under the applicable agreement and/or
plan;
(e) continuation of the insurance provided by the
Company pursuant to Section 5.4 for 12 months; and
(f) reimbursement for all expenses incurred by
Executive pursuant to Section 3 prior to his termination.
7.5 TERMINATION BY THE COMPANY WITHOUT CAUSE UPON A CHANGE
OF CONTROL OR BY EXECUTIVE FOR GOOD REASON AT ANY TIME. If Executive's
employment is terminated by the Company without Cause (as defined in Section
7.8(a)) upon a Change of Control (as defined in Section 7.8 (c)) or by Executive
for Good Reason (as defined in Section 7.8(e)) at any time, Executive shall be
entitled to receive:
(a) severance compensation equal to his then-current
Base Salary under Section 5.1 hereof, payable at such times as his Base
Salary would have been paid if his employment had not been terminated,
for the remaining Term of this Agreement; provided, however, that
Executive's severance compensation to be paid under this Section 7.5(a)
shall not be less than one (1) year of Executive's then-current Base
Salary
(b) a cash lump sum payment in respect of accrued
but unused vacation days;
(c) the full amount of any Bonus (es) applicable to
the calendar year in which such termination occurs, payable when and as
such bonus is determined under Section 5.2;
(d) acceleration of the vesting of one hundred
percent (100%) of the unvested portion of Executive's stock options or
other stock-based awards, together with the right to exercise such stock
options or awards for a period equal to the remaining term for
exercising such options or awards under the applicable agreement and/or
plan;
(e) continuation of the insurance provided by the
Company pursuant to Section 5.4 for 12 months; and
(f) reimbursement for all expenses incurred by
Executive pursuant to Section 3 prior to his termination.
7.6 TERMINATION BY THE COMPANY FOR CAUSE OR BY EXECUTIVE
WITHOUT GOOD REASON UPON A CHANGE OF CONTROL. If Executive's employment is
terminated by the Company for Cause or by Executive without Good Reason upon a
Change of Control (other than as a result of Executive's Permanent Disability or
Death), the Company shall not have any other or further obligations to Executive
under this Agreement, except
(a) as may be provided in accordance with the terms
of retirement and other benefit plans pursuant to Sections 5.5 and 5.6
hereof;
(b) as to that portion of any unpaid Base Salary and
other benefits accrued and earned under this Agreement through the date
of such termination;
(c) all stock option grants that have vested as of
the Executive's date of termination pursuant to this Section 7.6 for the
remainder of the term of such option grants;
(d) as to benefits, if any, provided by any
insurance policies in accordance with their terms; and
(e) reimbursement for all expenses incurred by
Executive pursuant to Section 3 prior to his termination).
In addition, if Executive's employment is terminated by the Company for
Cause at any time during the Term, Executive shall immediately forfeit any and
all unvested stock rights, stock options and other such unvested incentives or
awards previously granted to him by the Company and any Bonus(es) earned by him
but not paid pursuant to Section 5.2 of this Agreement. The foregoing sentence
shall be in addition to, and not in lieu of, any and all other rights and
remedies which may be available to the Company under the circumstances, whether
at law or in equity.
7.7 TERMINATION UPON CESSATION OF BUSINESS. The Company
shall have the right to immediately terminate Executive's employment under this
Agreement upon a Cessation of Business (as defined in Section 7.8(b)). Upon
termination in connection with a Cessation of Business, the Company shall pay to
Executive any accrued but unpaid Base Salary until the date of Cessation of
Business. The Company may make such payments in accordance with its regular
payroll schedule or in a single lump sum payment in its sole discretion.
7.8 DEFINITIONS. As used herein:
(a) "CAUSE" shall mean:
(1) active participation by Executive in
fraudulent conduct against the Company, conviction of or a plea
of guilty or NOLO CONTENDERE with respect to a felony involving
theft or moral turpitude, an act or series of deliberate acts
which were not taken in good faith by Executive and which, in
the reasonable judgment of the Board, results or will likely
result in material injury to the business, operations or
business reputation of the Company, or an act or series of acts
constituting willful malfeasance or gross misconduct;
(2) a substantial and continual refusal by
Executive in breach of this Agreement to perform the duties,
responsibilities or obligations assigned to Executive pursuant
to the terms hereof, which breach has not been cured (if it is
of a nature that can be cured) to the Board's reasonable
satisfaction within ten (10) days after the Company gives
written notice thereof to Executive; or
(3) excessive absenteeism by Executive;
provided that absenteeism (i) related to illness or otherwise
covered by Section 6 hereof, (ii) required to be permitted under
applicable federal or state laws, or (iii) permitted under
Company policy, shall not be deemed to be excessive.
Executive shall be permitted to respond and defend himself before the
Board within thirty (30) days after delivery to Executive of written
notification of any proposed termination for Cause which specifies in detail the
reasons for such termination. If the majority of the members of the Board
(excluding Executive) do not confirm that the Company had grounds for a "Cause"
termination, Executive shall have the option to treat his employment as not
having terminated or as having been terminated pursuant to a termination without
Cause.
(b) "CESSATION OF BUSINESS" shall mean the Company's
ceasing to operate in the ordinary course of business, whether by dissolution,
liquidation, or in connection with a good faith determination by the Board that
the continuing operation of the business in its ordinary course is reasonably
likely to render the Company unable to meet its liabilities as they mature.
(c) A "CHANGE IN CONTROL" shall occur if:
(1) there shall be consummated any
consolidation or merger of the Company in which the Company is
not the continuing or surviving corporation;
(2) any Person (as defined in Section
2(a)(2) of the Securities Act of 1933, as amended) other than
the Company, subsequently becomes the beneficial owner, directly
or indirectly (including by holding securities which are
exercisable for or convertible into shares of capital stock of
the Company) of forty
percent (40%) or more of the combined voting power of the then
outstanding shares of capital stock of the Company entitled to
vote generally in the election of directors;
(3) the Company sells, leases, exchanges or
otherwise transfers all or substantially all of its property and
assets (in a transaction or series of transactions contemplated
or arranged by any party as a single plan);
(4) Continuing Directors cease to constitute
at least a majority of the Board; or
(5) a majority of the Outside Directors
determine that a Change in Control has occurred.
(d) "CONTINUING DIRECTORS" shall mean the members of
the Board in office on July 16, 2004, and any successor to any such
director whose nomination or selection was approved by a majority of the
directors in office at the time of the director's nomination or
selection.
(e) "GOOD REASON" means a termination of Executive's
employment by Executive within ninety (90) days following:
(1) a reduction in Executive's Base Salary
or incentive compensation or equity participation opportunity;
(2) a material reduction in Executive's
position(s), duties and responsibilities or reporting lines from
those described in Section 2 hereof;
(3) a change in the location of the
Company's headquarters or of the office of Executive from the
Raleigh-Durham metropolitan area;
(4) a material breach of this Agreement by
the Company if such breach is not cured within 15 days of
written notice thereof by Executive to the Company; or
(5) any failure by the Company to obtain
from any successor to the Company an agreement reasonably
satisfactory to Executive to assume and perform this Agreement,
as contemplated by Section 11.3 hereof.
Notwithstanding the foregoing, a termination shall not be treated as a
termination for Good Reason (A) if Executive shall have consented in writing to
the occurrence of the event giving rise to the claim of termination for Good
Reason, or (B) unless Executive shall have delivered a written notice to the
Board within thirty (30) days of his having actual knowledge of the occurrence
of one of such events stating that he intends to terminate his employment for
Good Reason and specifying the factual basis for such
termination, and such event, if capable of being cured, shall not have been
cured within ten (10) days of the receipt of such notice.
(f) "OUTSIDE DIRECTOR" means a member of the Board
who is not, and who during the past six months was not, an employee of
officer of the Company.
(g) "TERMINATION UPON A CHANGE IN CONTROL" means:
(1) a termination by Executive for Good
Reason within one year following a Change in Control;
(2) declination by Executive of an offer of
employment from the Company or the Company's successor, for Good
Reason at or in anticipation of a Change in Control, if
Executive would not have been permitted to retain Executive's
existing position; or
(3) termination of Executive's employment by
the Company or the Company's successor within one year following
a Change in Control other than a termination for Cause or a
termination resulting from Executive's death or Permanent
Disability.
7.9 MITIGATION OF DAMAGES. Executive is not required to
mitigate the amount of any payments to be made by the Company pursuant to this
Agreement following his termination by seeking other employment or otherwise. In
addition, the amount of any post-termination payments provided for in this
Agreement shall, except as otherwise expressly provided herein, not be reduced
by any remuneration earned by Executive during the period following the
termination of his employment as a result of employment by another employer or
otherwise after the date of termination of his employment with the Company.
8. Covenants and Confidential Information.
8.1 RESTRICTIVE COVENANTS. Executive acknowledges the
Company's reliance on and expectation of Executive's continued commitment to
performance of his duties and responsibilities during the term. In light of such
reliance and expectation on the part of the Company, during the applicable
period hereafter specified in Section 8.2, Executive shall not
(a) directly or indirectly, do or suffer any of the
following;
(1) own, manage, control or participate in
the ownership, management or control of, or be employed or
engaged by or otherwise affiliated or associated as a
consultant, independent contractor or otherwise with, any other
corporation, partnership, proprietorship, firm, association or
other business entity engaged in the business of, or otherwise
engage in the business of, information processing of multimedia
over mobile and wireless networks within the United States in
competition with the Company; provided, however, that the
beneficial and/or record ownership of not more than 4.9% of any
class of publicly traded securities of any entity shall not be
deemed a violation of this covenant;
(2) solicit any business or contracts from
any customers of the Company or its affiliates, any past
customers of the Company or its affiliates, or any prospective
customers of the Company or its affiliates (i.e., potential
customers from which the Company or its affiliates has solicited
business at any time during the one year period preceding the
expiration or termination of the Term), except as necessitated
by Executive's position with the Company and then only in
furtherance of the business interests of the Company or its
affiliates;
(3) induce or attempt to induce any such
customer to alter its business relationship with the Company or
its affiliates except as necessitated by Executive's position
with the Company and then only in furtherance of the business
interests of the Company or its affiliates;
(4) solicit or induce or attempt to solicit
or induce any employee of the Company or its affiliates to leave
the employ of the Company or any of its affiliates for any
reason whatsoever or hire any employee or any person who was an
employee of the Company or its affiliates within the twelve (12)
month period prior to such hiring; or
(b) disclose, divulge, discuss, copy or otherwise
use or suffer to be used in any manner, other than in accordance with
Executive's duties hereunder, any confidential or proprietary
information relating to the Company's business, prospects, finances,
operations or properties or other trade secrets of the Company, it being
acknowledged by Executive that all such information regarding the
business of the Company compiled or obtained by, or furnished to,
Executive while Executive shall have been employed by or associated with
the Company is confidential and/or proprietary information and the
Company's exclusive property; provided, however, that the foregoing
restrictions shall not apply to the extent that such information: (A) is
clearly obtainable in the public domain; (B) becomes obtainable in the
public domain, except by reason of the breach by Executive of the terms
hereof or by another person barred by a similar duty of confidentiality;
or (C) is required to be disclosed by rule of law or by order of a court
or governmental body or agency.
8.2 APPLICABLE PERIODS. The applicable periods shall be:
(a) so long as Executive is an employee of the
Company;
(b) as to Section 8.1(b), at any time after
Executive is no longer an employee of the Company; and
(c) for a period of 6 months after termination of
employment.
8.3 INJUNCTIVE RELIEF. Executive agrees and understands that
the remedy at law for any breach by him of this Section 8 will be inadequate and
that the damages flowing from such breach are not readily susceptible to being
measured in monetary terms. Accordingly, it is acknowledged that the Company
shall be entitled to immediate injunctive relief and may obtain a temporary
order restraining any threatened or further breach. Nothing in this Section 8
shall be deemed to limit the Company's remedies at law or in equity for any
breach by Executive of any of the provisions of this Section 8 which may be
pursued or availed of by the Company.
8.4 ACKNOWLEDGMENT BY EXECUTIVE. Executive has carefully
considered the nature and extent of the restrictions upon him and the rights and
remedies conferred upon the Company under this Section 8, and hereby
acknowledges and agrees that the same are reasonable in time and territory, are
designed to eliminate competition which otherwise would be unfair to the
Company, do not stifle the inherent skill and experience of Executive, would not
operate as a bar to Executive's sole means of support, are fully required to
protect the legitimate interests of the Company, and do not confer a benefit
upon the Company disproportionate to the detriment of Executive.
8.5 SURVIVAL. Executive acknowledges that Executive's
obligations under this Section 8 shall survive in accordance with Section 8.2
hereof regardless of whether Executive's employment by the Company is
terminated, voluntarily or involuntarily, by the Company or Executive, with
Cause or without Cause, or the Executive with or without Good Reason.
9. PROPRIETARY RIGHTS.
9.1 At all times during the Term, all right, title and
interest in all copyrightable material which Executive shall conceive or
originate, either individually or jointly with others, and which arise out of
the performance of this Agreement, will be the property of the Company and are
by this Agreement assigned to the Company along with ownership of any and all
copyrights in the copyrightable material. At all times during the Term,
Executive agrees to execute all papers and perform all other acts necessary to
assist the Company to obtain and register copyrights on such materials in any
and all countries, and the Company agrees to pay expenses associated with such
copyright registration. Works of authorship created by Executive for the Company
in performing his responsibilities under this Agreement shall be considered
"works made for hire" as defined in the U.S. Copyright Act. In addition,
Executive hereby assignees to the Company all proprietary rights, including but
not limited to, all patents, copyrights, trade secrets and trademarks Executive
might otherwise have, by operation of law or otherwise, in all inventions,
discoveries, works, ideas, information, knowledge and data related to
Executive's access to confidential information of the Company during the Term.
9.2 All know-how and trade secret information conceived or
originated by Executive which arises out of the performance of his obligations
or responsibilities under this Agreement during the Term shall be the property
of the Company, and all rights therein are by this Agreement assigned to the
Company.
9.3 If, during the term, Executive is engaged in or
associated with the planning or implementing of any project, program or venture
involving the Company and a third party or parties, all rights in such project,
program or venture shall belong to the Company. Except as formally approved by
the Board, Executive shall not be entitled to any interest in such project,
program or venture or to any commission, finder's fee or other compensation in
connection therewith other than the compensation to be paid to Executive as
provided in this Agreement.
9.4 Upon termination of the Term, Executive shall deliver
promptly to the Company all records, manuals, books, documents, letters,
memoranda, notes, notebooks, reports, data, tables, calculations, customer and
prospective customer lists, and copies of all of the foregoing, which are the
property of the Company, and all other property, trade secrets and confidential
information of the Company, including, but not limited to, all documents which
in whole or in part contain any trade secrets or confidential information of the
Company, which in any of these cases are in his possession or under his control.
9.5 The obligations of Executive under this Section 9 shall
survive the termination or expiration of the Term.
10. INDEMNIFICATION. During the Term, the Company shall indemnify
Executive and hold Executive harmless from and against any claim, loss or cause
of action arising from or out of Executive's performance as an officer, director
or employee of the Company or any of its subsidiaries or in any other capacity,
including any fiduciary capacity, in which Executive serves at the request of
the Company to the maximum extent permitted by applicable law. If any claim is
asserted hereunder with respect to which Executive reasonably believes in good
faith he is entitled to indemnification, the Company shall pay Executive's legal
expenses (or cause such expenses to be paid), on a monthly basis, provided that
Executive shall reimburse the Company for such amounts if Executive shall be
found by a court of competent jurisdiction not to have been entitled to
indemnification. In addition, the Company agrees to provide Executive with
coverage under a directors and officers liability insurance policy.
11. MISCELLANEOUS.
11.1 REPRESENTATION AND WARRANTY BY EXECUTIVE. Executive
represents and warrants that he is not a party to any agreement, contract or
understanding, whether employment or otherwise, which would restrict or prohibit
him from undertaking or performing employment in accordance with the terms and
conditions of this Agreement.
11.2 SEVERABILITY. The provisions of this Agreement are
severable and if any one or more provisions may be determined to be illegal or
otherwise unenforceable, in whole or in part, the remaining provisions and any
partially unenforceable provision, to the extent enforceable in any
jurisdiction, nevertheless shall be binding and enforceable.
11.3 ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the heirs and representatives of Executive and the
assigns and successors of the Company, but neither this Agreement nor any rights
or obligations hereunder shall be assignable or otherwise subject to
hypothecation by Executive (except by will or by operation of the laws of
intestate succession) or by the Company, except that the Company may assign this
Agreement to any successor (whether by merger, purchase or otherwise) to all or
substantially all of the stock, assets or business of the Company, and the
Company shall require such successor to expressly agree to assume the
obligations of the Company hereunder.
11.4 DISPUTE RESOLUTION. Any controversy or claim arising out
of or relating to this Agreement, or the breach thereof, shall be settled by
mediation, and if not settled within 14 days of the submission to meditation, by
arbitration in accordance with the Voluntary Arbitration Rules of the American
Arbitration Association, and the arbitration shall be held in the Raleigh, North
Carolina area. The arbitrator shall be acceptable to both the Company and
Executive. If the parties cannot agree on an acceptable arbitrator, the dispute
shall be heard by a panel of three (3) arbitrators, one appointed by each of the
parties and the third appointed by the other two arbitrators. Judgment upon the
award rendered by the arbitrator or arbitrators may be entered in any court
having jurisdiction thereof. The arbitrator or arbitrators shall be deemed to
possess the power to issue mandatory orders and restraining orders in connection
with such arbitration; provided, however, that nothing in this Section 11.4
shall be construed so as to deny the Company the right and power to seek and
obtain injunctive relief in a court of equity for any breach or threatened
breach by Executive of his covenants contained in Section 8 hereof. All costs
and expenses of arbitration shall be paid one-half by the Company and one-half
by Executive.
11.5 NOTICES. All notices and other communications required
or permitted under this Agreement shall be in writing, and shall be deemed
properly given if delivered personally, mailed by registered or certified mail
in the United States mail, postage prepaid, return receipt requested, send by
facsimile or sent by Express Mail, Federal Express or other nationally
recognized express delivery service, as follows:
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If to Summus: If to Executive:
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000 Xxxxxxxxxxxx Xxxxxx
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Suite 600
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Xxxxxxx, Xxxxx Xxxxxxxx 00000
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Attn: General Counsel
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Notice given by hand, certified or registered mail, or by Express Mail,
Federal Express or other such express delivery service, shall be effective upon
receipt. Notice given by facsimile transmission shall be effective upon actual
receipt if received during the recipient's normal business hours, or at the
beginning of the recipient's next business day after receipt if not received
during the recipient's normal business hours. All notices
by facsimile transmission shall be confirmed promptly after transmission in
writing by certified mail or personal delivery.
Any party may change any address to which notice is to be given to it by
giving notice as provided above of such change of address.
11.6 AMENDMENT. This Agreement may only be amended by written
agreement of the parties hereto.
11.7 BENEFICIARIES; REFERENCES. Executive shall be entitled
to select (and change, to the extent permitted under applicable law) a
beneficiary or beneficiaries to receive any compensation or benefit payable
hereunder following Executive's death, and may change such election, in either
case by giving the Company written notice thereof. In the event of Executive's
death or a judicial determination of his incompetence, reference in this
Agreement to Executive shall be deemed, where appropriate, to refer to his
beneficiary, estate or other legal representative. Any reference to the
masculine gender in this Agreement shall include, where appropriate, the
feminine.
11.8 SURVIVORSHIP. The respective rights and obligations of
the parties hereunder shall survive any termination of this Agreement to the
extent necessary to the intended preservation of such rights and obligations.
The provisions of this Section are in addition to the survivorship provisions of
any other section of this Agreement.
11.9 GOVERNING LAW. This Agreement shall be construed,
interpreted and governed in accordance with the laws of the State of North
Carolina without reference to rules relating to conflicts of law. For purposes
of jurisdiction and venue, the Company hereby consents to jurisdiction and venue
in any suit, action or proceeding with respect to this Agreement in any court of
competent jurisdiction in the state in which Executive resides at the
commencement of such suit, action or proceeding and waives any objection,
challenge or dispute as to such jurisdiction or venue being proper.
11.10 EFFECT OF PRIOR AGREEMENTS. This Agreement contains the
entire understanding between the parties hereto with respect to the subject
matter hereof, and supersedes in all respects any prior or other agreement or
understanding between the Company or any affiliate of the Company and Executive
with respect to the subject matter hereof.
11.11 WITHHOLDING. The Company shall be entitled, to the
extent permitted or required by law, to withhold from any payment of any kind
due Executive under this Agreement to satisfy the tax withholding obligations of
the Company under applicable law.
11.12 COUNTERPARTS. This Agreement may be executed in two
counterparts, each of which shall be deemed an original.
IN WITNESS WHEREOF, the parties hereto, having duly been authorized, have
executed this Agreement as of the date first above written.
SUMMUS, INC. (USA) Xxxx X. Ban
By: /s/ Xxxxxx X. Xxxxx /s/ Xxxx X. Ban
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Name: Xxxxxx X. Xxxxx
Title: Chief Financial Officer and
General Counsel
