Employment Agreement
Exhibit
10.1
This
Employment Agreement ("Agreement") is dated as of January 1, 2008 and is entered
into by and between Xxxx X. Xxxxxxx ("Executive") and eDOORWAYS Corporation, a
Delaware corporation ("EDOORWAYS") located at 0000 Xxxxxxxx Xxxxx, Xxxxxxx,
Xxxxx 00000.
RECITALS
WHEREAS,
Executive desires to continue to perform services on behalf of the Corporation
as President and Chief Executive Officer ("CEO") and Chairman of the EDOORWAYS
Board of Directors, all as an employee of EDOORWAYS, including the performance
personally of such services as Executive and EDOORWAYS' Board of Directors deem
necessary; and
WHEREAS,
the Board of Directors wish to continue the employment of Executive in such
capacities under the terms of this Agreement; and
WHEREAS,
the Corporation is now implementing a new business plan focused on implementing
the eDOORWAYS web portal and has recently restructured its financials and has
undertaken a name change;
THEREFORE,
EDOORWAYS considers it essential to the best interest of EDOORWAYS and its
shareholders that Executive be encouraged to remain with EDOORWAYS and continue
to devote full attention to EDOORWAYS' business notwithstanding the possibility,
threat or occurrence of a change in Control (as defined below) of EDOORWAYS.
EDOORWAYS believes that it is the best interest of EDOORWAYS and its
shareholders to reinforce and encourage the continued attention and dedication
of Executive and to diminish inevitable distractions arising from the
possibility of a Change in Control of EDOORWAYS. Accordingly, to assure
EDOORWAYS that it will have Executive's undivided attention and services
notwithstanding the possibility, threat or occurrence of a Change in Control of
EDOORWAYS, and for other good and valuable consideration, the Board of Directors
of EDOORWAYS has caused EDOORWAYS to enter into this Agreement.
THEREFORE,
the parties mutually agree as follows:
ARTICLE
1.
EMPLOYMENT
1.1
Conditions of Employment. EDOORWAYS hereby continues the employment of Executive
and Executive accepts such continued employment as President and CEO and
Chairman of the Board of Directors, continuing to render professional services
on behalf of EDOORWAYS, subject to the supervision and direction of the
Corporation's Board of Directors, and subject to the law of the Corporation as
given in the Articles of Incorporation and the Bylaws.
1.2 Term
of Employment. This Agreement shall be effective as of the date first indicated
above and shall expire on the third anniversary of such date; provided however
that on such third anniversary and on the anniversary of such date in each year
thereafter, such expiration date shall be extended for one additional year,
unless, at least sixty (60) days prior to such expiration date, EDOORWAYS
shall have delivered to Executive or Executive shall have delivered to EDOORWAYS
written notice that such expiration date shall not be so
extended.
ARTICLE
2.
EFFECTIVE
DATE
2.1 The
"Effective Date" shall mean the first date during the term of this Agreement on
which a Change of Control (as defined in Article 3) occurs; provided, however,
that if a Change of Control occurs and if Executive's employment with EDOORWAYS
is terminated prior to the date on which the Change of Control occurs, and if it
is reasonably demonstrated by Executive that such termination of employment (a)
was at the request of a third party who has taken steps reasonably calculated to
effect a Change of Control or (b) otherwise arose in connection with or
anticipation of a Change of Control, then for all purposes of this Agreement the
"Effective Date" shall mean the date immediately prior to the date of such
termination of employment.
ARTICLE
3.
CHANGE OF
CONTROL
3.1 For
the purpose of this Agreement, a "Change of Control" of EDOORWAYS shall mean and
shall be deemed to have occurred if:
3.1.1 Any
"person" as such term is used in Sections 13(d) and 14(d) of the Exchange Act
(other than EDOORWAYS, its founder, Xxxx X. Xxxxxxx, any trustee or other
fiduciary holding securities under any employee benefit plan of EDOORWAYS, or
any company owned, directly or indirectly, by the stockholders of EDOORWAYS in
substantially the same proportions as their ownership of Stock in EDOORWAYS), is
or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of EDOORWAYS representing thirty
percent (30%) or more of the combined voting power of EDOORWAYS' then
outstanding securities, or the beneficial ownership, including voting rights of
non-owned shares, of EDOORWAYS' founder, Xxxx X. Xxxxxxx, is reduced to less
than thirty percent (30%) of the combined voting power of EDOORWAYS' then
outstanding securities;
3.1.2
During any period of two consecutive years, individuals who at the beginning of
such period constitute the Board of Directors, and any new director (other than
a director designated by a person who has entered into an agreement with
EDOORWAYS to effect a transaction described in clause 3.1.1, 3.1.3 or 3.1.4 of
this Article) whose election by the Board of Directors or nomination for
election by EDOORWAYS' stockholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of the two year period or whose election or nomination for
election was previously so approved, cease for any reason to constitute at least
a majority of the Board of Directors;
3.1.3 The
stockholders of the Company approve a merger or consolidation of EDOORWAYS with
any other corporation, other than a merger or consolidation which would result
in voting securities of EDOORWAYS outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than fifty percent (50%) of
the combined voting power of the voting securities of EDOORWAYS or such
surviving entity outstanding immediately after such merger or consolidation;
provided, however, that a merger or consolidation effected to implement a
re-capitalization of EDOORWAYS (or similar transaction) in which no person
acquires more than thirty percent (30%) of the combined voting power of
EDOORWAYS' then outstanding securities shall not constitute a Change in Control
of EDOORWAYS; or,
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3.1.4 The
stockholders of EDOORWAYS approve a plan of complete liquidation of EDOORWAYS or
an agreement for the sale or disposition of EDOORWAYS of all or substantially
all of EDOORWAYS' assets.
ARTICLE
4.
EMPLOYMENT
PERIOD
4.1
EDOORWAYS hereby agrees to continue Executive in its employ, and Executive
hereby agrees to remain in the employ of EDOORWAYS subject to the terms and
conditions of this Agreement, for the period commencing on the Effective Date
and ending on the date which is the latest of the following:
4.1.1 The
date which is fifteen (15) days after the first anniversary of a Change in
Control;
4.1.2 The
date which is fifteen (15) days after the first anniversary of the effective
date of any merger, the approval of which constituted a Change in
Control;
4.1.3
December 31, 2010;
Such
period shall hereinafter be referred to as the "Employment Period."
ARTICLE
5.
TERMS OF
EMPLOYMENT
5.1
Description of Duties. Executive shall act as CEO and President of the
Corporation. During the Employment Period, (a) Executive's position (including
status, offices, titles, and reporting requirements), authority, duties and
responsibilities shall be at least commensurate in all material respects with
the most significant of those held, exercised and assigned at any time during
the one hundred twenty (120) day waiting period immediately preceding the
Effective Date; and (b) Executive's services shall be performed at the location
where Executive was employed immediately preceding the Effective Date or any
office or location which is less than thirty five (35) miles further away from
Executive's place of residence.
5.2
Devotion of Effort. Executive agrees to devote sufficient time, attention, and
skill to the performance of his duties as an employee of EDOORWAYS as set out
and authorized by the Board of Directors. During the term of this Agreement, he
shall not render services on his own or on behalf of any party other than
EDOORWAYS unless otherwise authorized by the Board of
Directors.
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5.3
Compensation and Benefits. As set out and authorized by the Board of Directors,
EDOORWAYS agrees to compensate Executive for services rendered in the following
manner:
5.3.1
Monthly Salary. As compensation for the services to be rendered hereunder,
EDOORWAYS will continue to pay Executive a monthly salary in an amount equal to
Twenty Five Thousand Dollars ($25,000.00). The monthly salary shall be paid in
semi-monthly payments of one-half of the monthly amount each on the first and
fifteenth day of each month with respect to the immediately preceding month,
continuing at this or a greater amount as set by the Board until this Agreement
is terminated.
5.3.2
Annual Base Salary. During the Employment Period, EDOORWAYS shall pay Executive
an annual base salary ("Annual Base Salary"), payable in semi-monthly
installments, which shall initially be at least equal to twelve times the
highest monthly salary paid or payable, including any base salary which has been
earned but deferred, to Executive by EDOORWAYS during the twelve-month period
immediately preceding the month in which the Effective Date occurs. EDOORWAYS
may, in its discretion, periodically increase Executive's base salary. The term
"Annual Base Salary" as used in this Agreement shall refer to Annual Base Salary
as so increased. EDOORWAYS may not, however, reduce Executive's base salary
during the Employment Period.
5.3.2
Cash Bonus. In addition to the monthly salary specified in 5.3.1 above,
EDOORWAYS will pay Executive a cash bonus of sixty thousand dollars ($60,000)
representing 20% of Executive's annual base salary. Executive may elect to
receive payment in the form of common stock of eDOORWAYS Corporation or its
successor(s) rather than in a cash payment. In the event that Executive elects
to receive common stock, the issuance of said shares shall be registered with
the U.S. Securities and Exchange Commission on its Form S-8 or similar
registration within five days of delivery of such stock to Executive. The number
of shares to be received by Executive shall be calculated by taking the average
closing price of EDWY stock for the five business days prior to the date payment
is made. Should Executive elect to receive cash, the timing of the cash payment
shall be determined by EDOORWAYS' Board of Directors.
5.3.3 Shares
of eDOORWAYS Corporation Common Stock. In addition to the monthly salary and any
other benefits available to all employees, including standard incentive
qualified stock options, EDOORWAYS will grant to Executive the following: (i)
thirty million (30,000,000) shares of EDOORWAYS restricted common stock (par
value $0.001 per share) to be issued in the name of the Xxxxxxx Family
Partnership, Ltd., as an incentive for signing a new employment agreement for
2008 and (ii) seven hundred fifty thousand (750,000) shares of EDOORWAYS
restricted Series "C" convertible preferred stock to be issued in the name of
The Xxxxxxx Family Partnership, Ltd. as a signing bonus to be given to Executive
at the time that this agreement is executed.
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5.3.4
Employee Benefit Plans. Executive shall be entitled to participate in all
employee benefit plans to be established by the Board of Directors on the same
terms and conditions as all other employees similarly situated. Executive shall
be provided with benefits and fringe benefits no less favorable in the aggregate
than those in effect for Executive at any time during the one hundred twenty
(120) day waiting period immediately preceding the Effective Date, except for
any reductions in benefits which apply generally to all executives of
EDOORWAYS.
5.3.5
Inability to Perform Duties. If Executive is unable to perform his duties
hereunder by reason of illness or incapacity of any kind for a period of more
than six (6)months, his salary payments may be reduced or terminated by
EDOORWAYS at its absolute discretion. Executive's full salary shall be
reinstated by upon his return to full-time employment and the full discharge of
his duties hereunder. This Article shall in no way limit the rights of EDOORWAYS
under Article 6 hereof.
5.3.6
Paid Leave. Leaves of absence with full payment of salary may be granted to
Executive for attendance at professional conventions, continuing education
institutes in his profession and other professional or business activities, as
approved by EDOORWAYS, with full or partial payment of expenses at its sole
discretion.
5.3.7
Unpaid Leave. Unpaid leave of absence may be granted at the sole discretion of
EDOORWAYS for any other reasons upon request of Executive.
5.3.8
Paid Vacation. Executive shall be entitled to a vacation, the length of which as
determined by the Board of Directors or the President of EDOORWAYS, during which
time his salary shall be paid in full. Executive shall take his vacation at such
time or times as shall be approved by EDOORWAYS.
5.3.9
Expenses Reimbursed. During the period of his employment, Executive will be
reimbursed for his reasonable expenses in accordance with general policy of
EDOORWAYS as adopted by the Board of Directors from time to time. In addition to
such reimbursement expenses, Executive shall incur and pay in the course of his
employment by EDOORWAYS certain other necessary expenses as Chief Executive
Officer, for which he will be required personally to pay but for which EDOORWAYS
shall reimburse or otherwise compensate him, including, but not limited to the
following: automobile, and transportation expenses; educational expenses
incurred for the purpose of maintaining or improving Executive's professional
skills; club dues, and the expenses of membership in civic clubs; professional
societies; fraternal organizations; and all other items of reasonable and
necessary professional expenses incurred by Executive in the performance of the
services in which Executive has been engaged on behalf of
EDOORWAYS.
ARTICLE
6.
TERMINATION
OF EMPLOYMENT
6.1 Death
or Disability. Executive's employment shall terminate automatically upon
Executive's death during the Employment Period. If EDOORWAYS determines in good
faith that the Disability of Executive has occurred during the Employment Period
(pursuant to the definition of Disability set forth below), it may give to
Executive written notice in accordance with Article 19 of this Agreement of its
intention to terminate Executive's employment with EDOORWAYS. Executive's
employment with EDOORWAYS shall terminate effective on the 30th day after
receipt of such notice by Executive (the "Disability Effective Date"), provided
that, within the thirty (30) days after such receipt, Executive shall not have
returned to full-time performance of Executive's duties. For purposes of this
Agreement, "Disability" shall mean the absence of Executive from Executive's
duties with EDOORWAYS on a full-time basis for one hundred and eighty (180)
consecutive business days as a result of incapacity due to mental or physical
illness which is determined to be total and permanent by a physician selected by
EDOORWAYS or its insurers and acceptable to Executive or Executive's legal
representative.
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6.2
Cause. EDOORWAYS may terminate Executive's employment during the Employment
Period for cause. For purposes of this Agreement, "Cause" shall
mean:
6.2.1
Executive's conviction of a felony or any other criminal act involving moral
turpitude;
6.2.2
Executive's deliberate and intentional continuing refusal to substantially
perform his duties and obligations under this Agreement (except by reason of
incapacity due to illness or accident) if Executive:
6.2.2.1
Shall have either failed to remedy such alleged breach within fifteen days from
the date written notice is given by the Chairman of the Company demanding that
he remedy such alleged breach, or
6.2.2.2
Shall have failed during such fifteen (15) day period, provided, with respect to
(a) that, after the end of such fifteen (15) day period, there shall have been
delivered to Executive a certified copy of a resolution of the Board of
Directors of the Company, adopted by the affirmative vote of not less than
two-thirds (2/3) of the members of the Board of Directors who are not employees
of the Company taken at a meeting of the Board of Directors at which Executive
is given an opportunity to be heard (with counsel), finding that Executive was
guilty of conduct set forth in clause 6.2.1 and 6.2.2 and specifying the
particulars thereof in detail, and that Executive has failed to take reasonable
steps in good faith to remedy such alleged breach, or (b) upon a finding by the
affirmative vote of not less than two-thirds (2/3) of the members of the Board
of Directors who are not employees of the Company taken at a meeting of the
Board of Directors at which Executive is given an opportunity to be heard (with
counsel) that Executive had engaged in willful fraud or defalcation either of
which involved material funds or other assets of the Company.
6.3 Good
Reason. Executive's employment may be terminated by Executive for Good Reason.
For purposes of this Agreement, "Good Reason" shall mean:
6.3.1 The
assignment to Executive of any duties inconsistent in any respect with
Executive's position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as contemplated by Article
5.1 of this Agreement, or any other action by EDOORWAYS 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 EDOORWAYS after receipt of notice thereof
given by Executive;
6.3.2 Any
failure by EDOORWAYS to comply with any of the provisions of Article 5.3 of this
Agreement, other than an isolated, insubstantial and inadvertent failure not
occurring in bad faith and which is remedied by EDOORWAYS promptly after receipt
of notice thereof given by Executive;
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6.3.3
EDOORWAYS' requiring Executive to be based at any office or location other than
as provided in Article 5.1 hereof;
6.3.4 Any
purported termination by EDOORWAYS of Executive's employment otherwise than as
expressly permitted by this Agreement; or
6.3.5 Any
failure by EDOORWAYS to comply with and satisfy Article 14.3 of this
Agreement.
For the
purposes of this Section 6.3, any good faith determination of "Good Reason" made
by Executive shall be conclusive. Anything in this Agreement to the contrary
notwithstanding, a termination by Executive for any reason pursuant to a Notice
of Termination delivered during the fifteen (15) day period immediately
following the latest of (a) the first anniversary of a Change in Control, (b)
the first anniversary of the effective date of any merger the approval of which
constituted a Change in Control, or (c) December 31, 2010 shall be deemed to be
a termination for Good Reason for all purposes of this Agreement, provided that
Executive has given notice to EDOORWAYS pursuant to Article 19 hereof at least
thirty (30) days prior to such termination.
6.4.
Notice of Termination. Any termination by EDOORWAYS for Cause, or by Executive
for Good Reason, shall be communicated by Notice of Termination to the other
party hereto given in accordance with Article 19 of this Agreement. For purposes
of this Agreement, a "Notice of Termination" means a written notice which (a)
indicates the specific termination provision in this Agreement relied upon, (b)
to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive's
employment under the provision so indicated and (c) subject to Section 6.3.3 and
the last sentence of Section 6.3, if the Date of 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 (30) days after the giving of such
notice). The failure by Executive or EDOORWAYS 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 Executive or EDOORWAYS,
respectively, hereunder or preclude Executive or EDOORWAYS, respectively, from
asserting such fact or circumstance in enforcing Executive's or EDOORWAYS'
rights hereunder.
6.5. Date
of Termination. "Date of Termination" means (a) if Executive's employment is
terminated by EDOORWAYS for Cause, or by Executive for Good Reason, the date of
receipt of the Notice of Termination or any later date specified therein, as the
case may be, (b) if Executive's employment is terminated by EDOORWAYS other than
for Cause or Disability, the Date of Termination shall be the date on which
EDOORWAYS notifies Executive of such termination and (c) if Executive's
employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of Executive or the Disability Effective
Date, as the case may be.
ARTICLE
7.
OBLIGATIONS
OF EDOORWAYS UPON TERMINATION
7.1 Good
Reason; Other Than for Cause or Disability. If EDOORWAYS shall terminate
Executive's employment other than for Cause or Disability during the Employment
Period or Executive shall terminate employment for Good Reason pursuant to a
Notice of Termination delivered during the Employment Period, EDOORWAYS agrees
to make the payments and provide the benefits described below:
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7.1.1
EDOORWAYS shall pay to Executive in a lump sum in cash within ten (10) days
after the Date of Termination an amount equal to (A) multiplied by (B), where
(A) is the number three (3) and (B) is the sum of Executive's Annual Base Salary
and the average of the last three (3) annual incentive bonuses actually paid to
Executive by EDOORWAYS for any calendar year before the Date of Termination (the
"Average Annual Bonus"); and
7.1.2
Upon Executive's Date of Termination, Executive shall be vested in the amounts
credited to any Qualified Plan in which he is a participant;
7.1.3
Upon Executive's Date of Termination, Executive's awards under any stock-based
plan under which the Executive has been granted stock or options to purchase
shall be accelerated as follows:
7.1.3.1
Each option and each related stock appreciation right shall become immediately
exercisable to the extent theretofore not exercisable;
7.1.3.2
Restricted stock shall immediately vest free of restrictions, and
7.1.3.3
The number of shares covered by each performance share award shall be issued to
Executive; provided, however, that acceleration of awards shall comply with
applicable regulatory requirements, including without limitation, Section 422 of
the Code and Rule 16b-3 promulgated by the Securities and Exchange Act of
1934.
7.1.4 For
one (1) year after Executive's Date of Termination, or such longer period as may
be provided by the terms of the appropriate plan, program, practice or policy,
EDOORWAYS shall continue to provide welfare benefits and fringe benefits and
other perquisites to Executive and / or Executive's family at least equal to
those which would have been provided to them if Executive's employment had not
been terminated in accordance with the most favorable plans, practices, programs
or policies of EDOORWAYS and its affiliated companies applicable generally to
other peer executives and their families immediately preceding the Date of
Termination; provided, however that if Executive becomes reemployed with another
employer and is eligible to receive medical or other welfare benefits under
another employer-provided plan, the medical and other welfare benefits described
herein shall be secondary to those provided under such other plan during such
applicable period of eligibility. For purposes of determining eligibility (but
not the time of commencement of benefits) of Executive for retiree benefits
pursuant to such plans, practices, programs and policies, Executive shall be
considered to have remained employed until one (1) year after the Date of
Termination and to have retired on the last day of such period.
7.1.5 The
sum of (a) the Executive's Annual Base Salary through the Date of Termination to
the extent due for services rendered but not theretofore paid, (b) with respect
to any Performance Period under the GK Intelligent Systems, Inc. Long-Term
Incentive Plan which has not been completed as of the Date of Termination, an
amount equal to (X) multiplied by (Y), where (X) is one hundred and fifty
percent (150%) of the Value (as defined in such plan) of the Participant's
accrued benefits on the Participant's Date of Termination, and (Y) is a
fraction, the numerator of which is the number of full months between the
beginning of such Performance Period and the Participant's Date of Termination
and the denominator of which is the total number of months in the Performance
Period, and (c) any compensation previously deferred by the Executive (together
with any accrued earnings or interest theron) and any accrued vacation pay, in
each case to the extent not theretofore paid (the amount referred to in clauses
(a), (b) and (c) above being referred to as "Accrued
Obligations").
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7.1.6 To
the extent not theretofore paid or provided, EDOORWAYS shall timely pay or
provide Executive any other amounts or benefits required to be paid or provided
or which Executive is eligible to receive under any plan, program, policy,
practice, contract or agreement of EDOORWAYS and its affiliated companies (such
other amounts and benefits being hereinafter referred to as "Other Benefits") in
accordance with the terms of such plan, program, policy, practice, contract or
agreement.
7.2
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. Accrued Obligations shall be paid to the
Executive's estate or beneficiary, as applicable, in a lump sum in cash within
ten (10) days of the Date of Termination.
7.3
Disability. If the Executives' employment is terminated by reason of the
Executives' Disability during the Employment Period, 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
thirty (30) days of the Date of Termination.
7.4
Cause; Other than for Good Reason. If Executive's employment shall be terminated
for Cause during the Employment Period or, if Executive voluntarily terminates
employment during the Employment Period, excluding a termination for Good
Reason, this Agreement shall terminate without further obligations to Executive
(other than the obligation to pay to Executive his Annual Base Salary earned
through the date of Termination and any benefits payable to Executive under a
plan policy, practice, etc., referred to in Article 8 below).
ARTICLE
8.
NON-EXCLUSIVITY
OF RIGHTS
8.1.
Nothing in this Agreement shall prevent or limit Executive's continuing or
future participation in any plan, program, policy or practice provided by
EDOORWAYS or any of its affiliated companies and for which Executive may
qualify, nor, subject to Article 23, shall anything herein limit or otherwise
affect such rights as Executive may have under any contract or agreement with
EDOORWAYS or any of its affiliated companies. Amounts which are vested benefits
or which Executive is otherwise entitled to receive under any plan, policy,
practice or program of or any contract or agreement with EDOORWAYS or any of its
affiliated companies at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy, practice or program or contract or
agreement except as explicitly modified by this Agreement.
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ARTICLE
9.
FULL
SETTLEMENT
9.1
EDOORWAYS' obligation to make the payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any
set-off, counterclaim, recoupment, defense or other claim, right or action which
EDOORWAYS may have against Executive or others. In no event shall Executive be
obligated to seek other employment or take any other action by way of litigation
of the amount payable to Executive under any of the provisions of this Agreement
and, except as provided in Article 7.1.5, such amounts shall not be reduced
whether or not Executive obtains other employment. EDOORWAYS agrees to pay, to
the full extent permitted by law, all legal fees and expenses which Executive
may reasonably incur as a result of any contest (regardless of the outcome
thereof) by EDOORWAYS, Executive or others of the validity or enforceability of,
or liability under, any provision of this Agreement or any guarantee of
performance thereof(including as a result of any contest by Executive about the
amount of any payment pursuant to this Agreement), plus in each case interest on
any delayed payment at the applicable Federal rate provided for in Section 7872
(f) (2) (A) of the Internal Revenue Code of 1986, as amended (the "Code").
Notwithstanding the foregoing, EDOORWAYS shall not be obligated to pay any legal
fees or expenses of Executive in any contest by Executive about the amount of
any payment under this Agreement if it is determined that EDOORWAYS did not
breach this Agreement and Executive's claim was not made in good
faith.
ARTICLE
10.
CERTAIN
ADDITIONAL PAYMENTS BY EDOORWAYS
10.1 In
the event that any payment or distribution by EDOORWAYS to or for the benefit of
Executive (whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise, but determined without regard to any
additional payments required under this Article 10.1) ("Payment") is determined
to be subject to the excise tax imposed by Section 4999 of the Code or any
interest or penalties are incurred by Executive with respect to such excise tax
(such excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then, EDOORWAYS shall pay to
Executive an additional payment (a "Gross-Up Payment") in an amount such that
after payment by Executive of all taxes (including any interest or penalties
imposed with respect to such taxes), including, without limitation, any income
taxes and Excise Tax (including any interest and penalties imposed with respect
thereto) imposed upon the Payments, Executive shall be restored to his position
prior to the imposition of the Excise Tax.
10.2
Subject to the provisions of Article 10.3, all determinations required to be
made under this Article 10, including whether and when a Gross-Up payment is
required and the amount of such Gross-Up payment and the assumptions to be
utilized in arriving at such determination, shall be made by EDOORWAYS'
Certified Public Accountant or such other certified public accounting firm as
may be designated by Executive and which is satisfactory to EDOORWAYS (the
"Accounting Firm"), which shall provide detailed supporting calculations both to
EDOORWAYS and Executive within fifteen (15) business days of the receipt of
request from Executive or EDOORWAYS. All fees and expenses of the Accounting
Firm shall be borne solely by EDOORWAYS. Any Gross-Up Payment, as determined
pursuant to this Article 10.2, shall be paid by EDOORWAYS to Executive within
five (5) days of the receipt of the Accounting Firm's determination. No such
determination that a Gross-Up Payment is required shall be made unless the
Accounting Firm furnishes EDOORWAYS with a written opinion that there is no
reasonable basis for not paying the Excise Tax. As a result of the uncertainty
in the application of Section 4999 of the code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by EDOORWAYS should have been made
("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that EDOORWAYS exhausts its remedies pursuant to Section
10.3 and Executive thereafter is required to make a payment of any Excise Tax,
the Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by EDOORWAYS to or for
the benefit of Executive.
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10.3
Executive shall notify EDOORWAYS in writing of any claim by the Internal Revenue
Service that, if successful, would require the payment by EDOORWAYS of the
Gross-Up Payment. Such notification shall be given as soon as practicable but no
later than ten business days after Executive is informed in writing of such
claim and shall apprise EDOORWAYS of the nature of such claim and the date on
which such claim is requested to be paid. Executive shall not pay such claim
prior to the expiration of the thirty (30) day period following the date on
which notice is given to EDOORWAYS (or such shorter period ending on the date
that any payment of taxes with respect to such claim is due). If EDOORWAYS
notifies Executive in writing prior to the expiration of such period that it
desires to contest such claim, Executive shall:
10.3.1
Give EDOORWAYS any information reasonably requested by EDOORWAYS relating to
such claim;
10.3.2
Take such action in connection with contesting such claim as EDOORWAYS shall
reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney
reasonably selected by EDOORWAYS;
10.3.3
Cooperate with EDOORWAYS in good faith in order to contest such claim
effectively, and;
10.3.4
Permit EDOORWAYS to participate in any proceedings relating to such claim;
provided, however, that EDOORWAYS shall bear and pay directly all costs and
expenses(including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Article 10.3, EDOORWAYS shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
Executive to pay the tax claimed and xxx for a refund or contest the claim in
any permissible manner, and Executive agrees to prosecute such contest to a
determination before any administration tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as EDOORWAYS shall determine;
provided, however, that if EDOORWAYS directs Executive to pay such claim and xxx
for a refund, EDOORWAYS shall advance the amount of such payment to Executive,
on an interest-free basis and shall indemnify and hold Executive harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and further provided
that any extension of the statute of limitations relating to payment of taxes
for the taxable year of Executive with respect to which such contested amount is
claimed to be due is limited solely to such contested amount. Furthermore,
EDOORWAYS' control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.
11
10.4 If,
after the receipt by Executive of an amount advanced by EDOORWAYS pursuant to
Article 10.3, Executive becomes entitled to receive any refund with respect to
such claim, Executive shall (subject to EDOORWAYS' complying with the
requirements of Article 10.3) promptly pay to EDOORWAYS the amount of such
refund (together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by Executive of an amount advanced by
EDOORWAYS pursuant to Article 10.3, a determination is made that Executive shall
not be entitled to any refund with respect to such claim and EDOORWAYS does not
notify Executive in writing of its intent to contest such denial of refund prior
to the expiration of thirty (30) days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and the amount
of such advance shall offset, to the extent thereof, the amount of Gross-Up
Payment required to be paid.
ARTICLE
11.
PROPERTY
RIGHTS OF PARTIES
11.1
Trade Secrets. During the term of employment, Executive will have access to
and become familiar with various trade secrets consisting of formulas, devices,
secret inventions, processes, and compilations of information, records, and
specifications owned by EDOORWAYS and regularly used in the operation of the
business of EDOORWAYS. Executive shall not disclose any such trade secrets,
directly or indirectly, nor use them in any way, either during the term of this
Agreement or at any time thereafter, except as required in the course of his
employment. All files, records, documents, drawings, specifications, equipment,
and similar items relating to the business of EDOORWAYS, whether or not prepared
by Executive shall remain the exclusive property of EDOORWAYS and shall not be
removed from the premises of EDOORWAYS under any circumstances without the prior
written consent of EDOORWAYS.
11.2
Return of EDOORWAYS' Property. On the termination of employment or whenever
requested by EDOORWAYS, Executive shall immediately deliver to EDOORWAYS all
EDOORWAYS property in Executive's possession or under Executive's control in
good condition, ordinary wear and tear excepted.
11.3
Ownership of Work Product. The parties agree as follows:
11.3.1
Property of EDOORWAYS. Executive agrees that all intellectual property including
but not limited to all ideas and concepts contained in computer programs and
software, documentation or other literature or illustrations that are conceived,
developed, written, or contributed by Executive pursuant to this Agreement,
either individually or in collaboration with others, shall belong to and be the
sole property of EDOORWAYS.
12
11.3.2
Works Made for Hire. Executive agrees that all rights in all works prepared or
performed by Executive pursuant to this Agreement, including patent rights and
copyrights applicable to any of the intellectual property described in Article
11.3.1 above, shall belong exclusively to EDOORWAYS and shall constitute "works
made for hire" for purposes of copyright law.
11.3.3
Property of Executive. The provisions of this Article 11 shall not be construed
to assign to EDOORWAYS any of Executive's rights in any invention for which no
equipment, supplies, facilities, or trade secret information of EDOORWAYS was
used, or that was developed entirely prior to this Agreement, or that does not
result from any work performed by Executive for EDOORWAYS.
ARTICLE
12.
NO
COMPETITION BY PROFESSIONAL
12.1 No
Competing Activities. During the term of this Agreement and for a period of two
(2) years (six (6) months if following termination by EDOORWAYS for any cause
other than as set out in Article 6.2 above) following termination of same,
Executive shall not, directly or indirectly, either as an employee, employer,
consultant, agent, Principal, Partner, Stockholder, corporate officer, director,
or in any other individual or representative capacity, engage or participate in
any business whatsoever that is in direct competition in any manner with the
core products and technologies of EDOORWAYS within North America, unless a Court
of competent Jurisdiction shall determine that the scope and/or time of this
Agreement renders it unenforceable, in which case the scope and/or time shall be
reduced to that which the Court deems reasonable and enforceable. This provision
shall not be construed to prevent Executive from accepting employment in the
areas of industry standard programming, operating systems or computer
manufacturing and sales, standard corporate training systems and administration
or other information technology functions considered generic to the computer or
training industry, and which do not utilize any of EDOORWAYS' core technologies
or products.
ARTICLE
13.
CONFIDENTIAL
INFORMATION
13.1
Executive shall hold in fiduciary capacity for the benefit of EDOORWAYS all
secret or confidential information, knowledge or data relating to EDOORWAYS or
any of its affiliated companies, and their respective businesses, which shall
have been obtained by Executive during Executive's employment by EDOORWAYS or
any of its affiliated companies and which shall not be or become public
knowledge (other than by acts by Executive or representatives of Executive in
violation of this Agreement). After termination of Executive's employment with
EDOORWAYS, Executive shall not, without the prior written consent of EDOORWAYS
or as may otherwise be required by law or legal process, communicate or divulge
any such information, knowledge or data to anyone other than EDOORWAYS and those
designated by it. In no event shall an asserted violation of the provisions of
this Article 13 constitute a basis for deferring or withholding any amounts
otherwise payable to Executive under this Agreement.
13
ARTICLE
14.
SUCCESSORS
14.1 This
Agreement is personal to Executive and without the prior written consent of
EDOORWAYS shall not be assignable by Executive otherwise than by will or the
laws of descent and distribution. This Agreement shall inure to the benefit of
and be enforceable by Executive`s legal representatives. 14.2 This Agreement
shall inure to the benefit of and be binding upon EDOORWAYS and its successors
and assigns. 14.3 EDOORWAYS will require any successor (whether direct or
indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all of the business and/or assets of EDOORWAYS to assume expressly
and agree to perform this Agreement in the same manner and to the same extent
that EDOORWAYS would be required to perform it if no such succession had taken
place. As used in this Agreement,"EDOORWAYS" shall mean EDOORWAYS as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
ARTICLE
15.
ARBITRATION
15.1 The
Executive Officers Compensation and Development Committee of the Board of
Directors of EDOORWAYS (the "Administrator") shall administer this Agreement.
The Administrator (either directly or through its designees) will have power and
authority to interpret, construe, and administer this Agreement; provided that
the Administrator's authority to interpret this Agreement shall not cause the
Administrator's decisions in this regard to be entitled to a deferential
standard of review in the event that Executive seeks review of the
Administrator's decision as described below.
15.2
Neither the Administrator nor its designee, shall be liable to any person for
any action taken or omitted in connection with the interpretation and
administration of this Agreement.
15.3
Because it is agreed that time will be of the essence in determining whether any
payments are due to Executive under this Agreement, Executive may, if he
desires, submit any claim for payment under this Agreement or dispute regarding
the interpretation of this Agreement to arbitration. This right to select
arbitration shall be solely that of Executive, and Executive may decide whether
or not to arbitrate in his discretion. The "right to select arbitration" is not
mandatory on Executive, and Executive may choose in lieu thereof to bring an
action in an appropriate civil court. Once arbitration is commenced, however, it
may not be discontinued without the mutual consent of both parties to the
arbitration procedure set forth in this Article.
15.3 Any
claim for arbitration may be submitted as follows: If Executive disagrees with
the Administrator regarding the interpretation of this Agreement and the claim
is finally denied by the Administrator in whole or in part, such claim may be
filed in writing with an arbitrator of Executive's choice who is selected by the
method described in the next three (3) sentences. The first step of the
selection shall consist of Executive's submitting a list of five (5) potential
arbitrators to the Administrator. Each of the arbitrators must be either (i) a
member of the National Academy of Arbitrators located in the State of Texas or
(ii) a retired Texas District Court or Appellate Court Judge. Within one week
after receipt of the list, the Administrator shall select one of the five (5)
arbitrators as the arbitrator for the dispute in question. If the Administrator
fails to select an arbitrator in a timely manner, Executive shall then designate
one (1) of the five (5) arbitrators as the arbitrator for the dispute in
question.
14
15.4 The
arbitration hearing shall be held within seven (7) days (or as soon thereafter
as possible) after the picking of the arbitrator. No continuance of said hearing
shall be allowed without the mutual consent of Executive and Administrator.
Absence from or nonparticipation at the hearing by either party shall not
prevent the issuance of an award. Hearing procedures which will expedite the
hearing may be ordered at the arbitrator's discretion, and the arbitrator may
close the hearing in his or her sole discretion when he or she decides he or she
has heard sufficient evidence to satisfy issuance of an award.
15.5 The
arbitrator's award shall be rendered as expeditiously as possible and in no
event later than one week after the close of the hearing. In the event the
arbitrator finds that EDOORWAYS has breached this Agreement, he or she shall
order EDOORWAYS to immediately take the necessary steps to remedy the breach. In
addition, he or she shall order EDOORWAYS to pay Executive an additional amount
equal to ten percent (10%) of the amount actually in dispute. This additional
amount shall constitute damages and not a penalty. The award of the arbitrator
shall be final and binding upon the parties. The award may be enforced in any
appropriate court as soon as possible after its rendition. If an action is
brought to confirm the award, both EDOORWAYS and Executive agree that no appeal
shall be taken by either party from any decision rendered in such
action.
15.6 The
Administrator will be considered the prevailing party in a dispute if the
arbitrator determines (1) that EDOORWAYS has not breached this Agreement and (2)
the claim by Executive was not made in good faith. Otherwise, Executive will be
considered the prevailing party. In the event that EDOORWAYS is the prevailing
party, the fee of the arbitrator and all necessary expenses of the hearing
(excluding any attorney's fees incurred by EDOORWAYS) including stenographic
reporter, if employed, shall be paid by the Executive. In the event that
Executive is the prevailing party, the fee of the arbitrator and all necessary
expenses of the hearing (including all attorneys' fees incurred by the Executive
in pursuing his claim), including the fees of a stenographic reporter if
employed, shall be paid by EDOORWAYS.
ARTICLE
16.
GOVERNING
LAW
16.1 The
laws of Texas shall govern the validity and interpretation of this Agreement,
with regard to conflicts of laws.
15
ARTICLE
17.
CAPTIONS
17.1 The
captions of this Agreement are not part of the provisions hereof and shall have
no force or effect.
ARTICLE
18.
AMENDMENT
18.1 This
Agreement may not be amended or modified otherwise than by a written agreement
executed by the parties hereto or their respective successors and legal
representatives.
ARTICLE
19.
NOTICES
19.1 All
notices and other communications hereunder shall be in writing and shall be
given by hand delivery to the other party or by registered or certified
mail,
return receipt requested, postage prepaid, addressed as follows:
|
If
to Executive:
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||
|
Xxxx
X. Xxxxxxx
|
||
|
000
Xxxx 0xx Xxxxxx Xx. 0000
|
||
|
Xxxxxx,
Xxxxx 00000
|
||
|
If
to EDOORWAYS:
|
||
|
eDOORWAYS
Corporation
|
||
|
0000
Xxxxxxxx Xxxxx
|
||
|
Xxxxxxx,
Xxxxx 00000
|
||
|
Attention:
General Counsel
|
or to
such other address as either party shall have furnished to the other in
writing
in accordance herewith. Notice and communications shall be effective
when
actually received by the addressee.
ARTICLE
20.
SEVERABILITY
20.1 The
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this
Agreement.
16
ARTICLE
21.
WITHHOLDING
TAXES
21.1
EDOORWAYS may withhold from any amounts payable under this Agreement such
Federal, state, local or foreign taxes as shall be required to be withheld
pursuant to any applicable law or regulation.
ARTICLE
22.
NO
WAIVER
22.1
Executive's or EDOORWAYS' failure to insist upon strict compliance with any
provision of this Agreement or the failure to assert any right Executive or
EDOORWAYS may have hereunder, including, without limitation, the right of
Executive to terminate employment for Good Reason pursuant to Section 6.3 of
this Agreement, shall not be deemed to be a waiver of such provision or right of
this Agreement.
ARTICLE
23.
AT-WILL
EMPLOYMENT
23.1
Executive and EDOORWAYS acknowledge that, except as may otherwise be provided
under any other written agreement between Executive and EDOORWAYS prior to the
Effective Date is "at will" and, prior to the Effective Date, Executive's
employment may be terminated by either Executive or EDOORWAYS at any time, in
which case Executive shall have no further rights under this Agreement. From and
after the Effective Date of this Agreement, it shall supersede any other
agreement between the parties with respect to the subject matter thereof, unless
such other agreement contains provisions more favorable to Executive than this
Agreement, in which event such favorable provisions, at Executive's sole option,
shall apply.
ARTICLE
24.
COUNTERPARTS
24.1 This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which shall together constitute
one and the same Agreement.
ARTICLE
25.
NO
PROHIBITED PAYMENTS
25.1
Notwithstanding anything contained in this Agreement to the contrary, EDOORWAYS
shall not make any payment to Executive which, according to the opinion of
EDOORWAYS' outside counsel, would violate Section 2523 (k) of the Comprehensive
Thrift and Bank Fraud Prosecution and Taxpayer Recovery Act of 1990 (codified at
12 U.S.C. 1828 (k)), or any rules or regulations promulgated
thereunder.
17
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first written above
in
Houston,
Texas.
|
EDOORWAYS
CORPORATION
|
|||
|
EXECUTED:
|
January
1, 2008
|
||
|
By:
|
Xxxxxxx
Xxxxxxx
|
||
|
Its:
|
Secretary
and Director
|
||
|
EXECUTED:
|
January
1, 2008
|
||
|
|
|||
|
By:
|
Xxxxx
Xxxxxxx
|
||
|
Its:
|
Director
|
||
|
EXECUTED:
|
January
1, 2008
|
||
| Xxxx X. Xxxxxxx | |||
|
Its:
|
Chairman,
CEO
|
||
18
