EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT is entered into as of January
1 ,
2007 between IElement Corporation, a Nevada corporation (the “Company”) and Xxxx
Xxxxx (“Executive”).
RECITAL
The
Company and Executive desire to enter into this Agreement to insure the Company
of the services of Executive, to provide for compensation and other benefits
to
be paid and provided by the Company to Executive in connection therewith,
and to
set forth the rights and duties of the parties in connection therewith;
NOW,
THEREFORE, in consideration of the mutual promises herein contained, the
parties
hereby agree as follows:
1. Title;
Directorship.
a. Title.
The Company hereby employs Executive as Chairman and Chief Executive Officer,
and Executive hereby accepts such employment, on the terms and conditions
set
forth herein. During the term of this Agreement, Executive shall be and have
the
title, duties and authority of Chairman and Chief Executive Officer of the
Company (and all of the Company’s subsidiary corporations) and shall devote his
entire business time and all reasonable efforts to his employment and shall
perform diligently such duties as are customarily performed by the Chairman
and
Chief Executive Officer of companies the size and structure of the Company,
together with such other duties as may be reasonably required from time to
time
by the Board of Directors of the Company. Without limiting the generality
of any
of the foregoing, except as hereafter expressly agreed in writing by Executive,
Executive shall report to the Board of Directors.
b. Directorship.
Management of the Company will, at every election for the Board of Directors
while Executive is employed by the Company as Chairman and Chief Executive
Officer, use its best efforts to have Executive nominated for a seat on the
Board as a member of the management slate. Executive’s nomination and
continuation as a director shall be subject to the will of the Board of
Directors and the Company’s stockholders, as provided in the Company’s charter
and bylaws. Removal of Executive from, or non-election of Executive to, the
Board of Directors as provided in the Company’s charter and bylaws shall in no
event be deemed a breach of this Agreement by the Company.
2. Term.
Subject to the provisions for termination hereinafter provided, the term
of this
Agreement shall begin on January 1, 2007 and shall terminate on the earlier
of:
(i) December 31, 2011 or (ii) the termination of Executive’s employment in
accordance with the provisions of Paragraph 6 below; provided, however, that
the
term of this Agreement shall automatically renew for successive one year
terms,
unless Executive or the Company gives written notice to the other, not less
than
ninety (90) days prior to December 31, 2011 or the expiration of any such
one-year term, of their election not to so extend the term of this Agreement
(the “Employment Period”).
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3. Compensation.
a. Base
Salary. For all services Executive may render to the Company during the term
of
this Agreement, the Company shall pay to Executive the annual base salary
of
$36,000 in those installments customarily used in payment of salaries to
the
Company’s senior executives (but in no event less frequently than monthly).
b. Bonuses.
Executive shall be entitled to participate in any bonus program implemented
by
the Compensation Committee of the Board of Directors for the Company’s senior
executives generally, with pertinent terms and goals to be established annually
or otherwise by the Compensation Committee in its sole discretion.
c. Benefits.
Executive shall be entitled to four (4) weeks of vacation per fiscal year.
Executive shall be entitled, subject to the terms and conditions of the
appropriate plans, to all benefits provided by the Company to senior executives
generally from time to time during the term of this Agreement.
d. Business
Expenses. Upon delivery of proper documentation therefor Executive shall
be
reimbursed for all reasonable travel, hotel and business expenses when incurred
on Company business during the term of this Agreement.
e. Perquisites.
Executive shall be entitled to such perquisites, including use of an automobile,
as are provided by the Company to senior executives generally from time to
time
during the term hereof.
4. Executive
Stock Awards Plan. During the term of this Agreement, Executive shall
participate in any executive stock award plan the Company’s may
adopt.
5. Payment
in the Event of Death or Disability.
a. In
the
event of Executive’s death or Disability during the term of this Agreement, for
a period equal to the lesser of (i) twelve (12) months following the
date of such death or Disability or (ii) the balance of the term that would
have remained hereunder at such date had Executive’s death or disability not
occurred, the Company shall continue to pay to Executive (or his estate)
Executive’s then effective per annum rate of salary, as determined under
Paragraph 3(a), and provide to Executive (or to his family members covered
under his family medical coverage) the same family medical coverage as provided
to Executive on the date of such death or Disability.
b. In
the
event of Executive’s death or Disability Executive’s employment hereunder shall
terminate and Executive shall be entitled to no further compensation or other
payments or benefits under this Agreement, except as to any unpaid salary,
bonus, or benefits accrued and earned by him up to and including the date
of
such death or Disability.
c. For
purposes of this Agreement, Executive’s Disability shall be deemed to have
occurred after one hundred fifty (150) days in the aggregate during any
consecutive twelve (12) month period, or after ninety (90) consecutive
days, during which one hundred fifty (150) or ninety (90) days, as the
case may be, Executive, by reason of his physical or mental disability or
illness, shall have been unable to discharge his duties hereunder. The date
of
Disability shall be such one hundred fiftieth (150th) or ninetieth (90th)
day,
as the case may be. If the Company or Executive, after receipt of notice
of
Executive’s Disability from the other, dispute that Executive’s Disability shall
have occurred, Executive shall promptly submit to a physical examination
by the
chief of medicine of any major accredited hospital in Texas selected by the
Company and, unless such physician shall issue his written statement to the
effect that in his or her opinion, based on his or her diagnosis, Executive
is
capable of resuming his employment and devoting his full time and energy
to
discharging his duties within thirty (30) days after the date of such
statement, such Disability shall be deemed to have occurred.
d. The
payments to be made by the Company to Executive hereunder shall be offset
and
reduced by the amount of any insurance proceeds (on a tax-effected basis)
paid
to Executive (or his estate) from insurance policies obtained by the Company
other than insurance policies provided under Company-wide employee benefit
and
welfare plans.
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6. Termination.
a. The
employment of Executive under this Agreement:
i. shall
be
terminated automatically upon the death or Disability of Executive;
ii. may
be
terminated for Cause, as herein defined, at any time by the Company, with
any
such termination not being in limitation of any other right or remedy the
Company may have under this Agreement or otherwise;
iii. may
be
terminated at any time by the Company without Cause with ninety (90) days
advance notice to Executive;
iv. may
be
terminated at any time by Executive if the Company materially breaches this
Agreement and fails to cure such breach within thirty (30) days of written
notice of such breach from Executive, provided that Executive has given notice
of such breach within ninety (90) days after he has knowledge thereof and
the Company did not have Cause to terminate Executive at the time such breach
occurred.
b. Upon
any
termination hereunder, Executive shall be deemed automatically to have resigned
from all offices and any directorship held by him in the Company, unless
the
Company informs Executive otherwise.
c. Executive’s
employment with the Company for all purposes shall be deemed to have terminated
as of the effective date of such termination hereunder (the “Date of
Termination”), irrespective of whether the Company has a continuing obligation
under this Agreement to make payments or provide benefits to Executive after
such date.
7. Certain
Termination Payments.
If
Executive’s employment with the Company is terminated by the Company without
Cause or by Executive pursuant to Paragraph 6(a)(iv), the Company shall
(i) pay Executive on or before the thirtieth day after the Date of
Termination an amount equal to the per annum rate of salary then in effect
under
Paragraph 3(a) and (ii) for remainder of the term of the Agreement had it
not been terminated, provide him and his family with the benefits described
in
Paragraph 3(c) then in effect (unless the terms of the applicable plans
expressly prohibit the continuation of such benefits after such termination
and
cannot be amended, with applicability of such amendment limited to Executive,
to
provide for such continuation, in which case the Company shall procure and
pay
for substantially similar substitute benefits except for any pension or 401(k)
Plan benefit) for the balance of the term that would have remained hereunder
had
such termination not occurred, and (iii) pay Executive on or before the
thirtieth day after the Date of Termination an amount equal to any Bonus
earned
by Executive prior to date of xxxxxxxxxxx.Xx addition, all debt, loans and
notes
due and owing to Executive are to be paid in full by Company upon
termination.
8. Definitions.
a. “Beneficial
Owner” shall have the meaning provided in Rule 13d-3 promulgated under the
Exchange Act.
b. “Cause”
means:
i. Executive’s
conviction of, or plea of “no contest” to, a felony;
ii. Executive’s
willfully engaging in an act or series of acts of willful and gross misconduct
that result in demonstrable and material injury to the Company. In no case
can
the exercise of executive’s business judgment, whether in agreement with the
Board of Directors or otherwise, be considered cause; or
c. “Retirement”
shall mean voluntary, late, normal or early retirement under a pension plan
sponsored by the Company, as defined in such plan, or as otherwise defined
or
determined by the Compensation Committee of the Board of Directors of the
Company with respect to senior executives of the Company generally.
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9. Certain
Covenants
a. Noncompete
and Nonsolicitation. Executive acknowledges the Company’s reliance on and
expectation of Executive’s continued commitment to performance of his duties and
responsibilities during the term of this Agreement. In light of such reliance
and expectation, during the term hereof and for one (1) years after termination
of Executive’s employment and this Agreement under Paragraph 6 hereof, other
than termination by the Company without Cause, Executive shall not, directly
or
indirectly, do or suffer any of the following:
i. 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 corporation, partnership,
proprietorship, firm, association or other business entity, or otherwise
engage
in any business, which is in competition with the business of the Company
as and
where conducted by it at the time of such termination; provided, however,
that
the ownership of not more than five percent (5%) of any class of publicly
traded
securities of any entity shall not be deemed a violation of this covenant;
ii. Solicit
the employment of, assist in the soliciting the employment of, or otherwise
solicit the association in business with any person or entity of, any employee,
consultant or agent of the Company; or
iii. Induce
any person who is a customer of the Company to terminate said relationship.
b. Nondisclosure;
Return of Materials. During the term of his employment by the Company and
following termination of such employment, Executive will not disclose (except
as
required by his duties to the Company), any concept, design, process,
technology, trade secret, customer list, plan, embodiment or invention, any
other intellectual property (“Intellectual Property”) or any other confidential
information, whether patentable or not, of Company of which Executive becomes
informed or aware during his employment, whether or not developed by Executive.
In the event of the termination of his employment with the Company or the
expiration of this Agreement, Executive will return to the Company all
documents, data and other materials of whatever nature, including, without
limitation, drawings, specifications, research, reports, embodiments, software
and manuals that pertain to his employment with the Company or to any
Intellectual Property and shall not retain or cause or allow any third party
to
retain photocopies or other reproductions of the foregoing.
c. Executive
expressly agrees and understands that the remedy at law for any breach by
him of
this Paragraph 9 may be inadequate and that the damages flowing from such
breach are not easily measured in monetary terms. Accordingly, it is
acknowledged that, upon adequate proof of Executive’s violation of any provision
of this Paragraph 9, the Company shall be entitled to immediate injunctive
relief and may obtain a temporary order restraining any threatened or further
breach and may withhold any amounts owed to Executive pursuant to this
Agreement. Nothing in this Paragraph 9 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 Paragraph 9 that may be pursued by the Company.
d. If
Executive shall violate any legally enforceable provision of this
Paragraph 9 as to which there is a specific time period during which he is
prohibited from taking certain actions or from engaging in certain activities,
as set forth in such provision, then, in such event, such violation shall
toll
the running of such time period from the date of such violation until such
violation shall cease.
e. Executive
has carefully considered the nature and extent of the restrictions upon him
and
the rights and remedies conferred upon the Company under this Paragraph 9,
and hereby acknowledges and agrees that the same are reasonable in time and
territory, are designed to eliminate competition that 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 to Executive.
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10. Withholding
Taxes. All payments to Executive hereunder shall be subject to withholding
on
account of federal, state and local taxes as required by law.
11. No
Conflicting Agreements. Executive represents and warrants that he is not
a party
to any agreement, contract or understanding, whether an employment contract
or
otherwise, that would restrict or prohibit him from undertaking or performing
employment in accordance with the terms and conditions of this Agreement.
12. Severable
Provisions. The provisions of this Agreement are severable and if any one
or
more of its provisions is 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.
13. Binding
Agreement. The rights and obligations of the Company under this Agreement
shall
inure to the benefit of, and shall be binding on, the Company and its successors
and assigns, and the rights and obligations (other than obligations to perform
services) of Executive under this Agreement shall inure to the benefit of,
and
shall be binding upon, Executive and his heirs, personal and legal
representatives, executors, successors and administrators. The Company may
assign this Agreement to a purchaser (or an affiliate of a purchaser) of
all or
substantially all the assets of the Company. As used in this Agreement, the
“Company” shall mean the Company as hereinbefore defined and any successor or
assign to its assets as aforesaid that becomes bound by all the terms and
provisions of this Agreement. If the Executive should die while any amounts
are
still payable to him, all such amounts, unless otherwise provided herein,
shall
be paid in accordance with the terms of this Agreement to the Executive’s
devisee, legatee, or other designee or, if there be no such designee, to
the
Executive’s estate.
14. Notices.
All notices required or permitted to be given hereunder shall be in writing
and
shall be personally delivered by courier, sent by registered or certified
mail,
return receipt requested or sent by confirmed facsimile transmission addressed
as set forth herein. Notices personally delivered, sent by facsimile or sent
by
overnight courier shall be deemed given on the date of delivery and notices
mailed in accordance with the foregoing shall be deemed given upon the earlier
of receipt by the addressee, as evidenced by the return receipt thereof,
or
three (3) days after deposit in the U.S. mail. Notice shall be sent (i) if
to
the Company, addressed to IElement Corporation, Attention: Corporate Secretary
and (ii) if to the Executive, to his address as reflected on the payroll
records
of the Company or Subsidiary, or to such other address as either party shall
request by notice to the other in accordance with this provision.
15. Consent
to Jurisdiction. Executive and the Company each irrevocably: (i) submits to
the exclusive jurisdiction of the Texas court(s) for the purpose of any
proceedings arising out of this Agreement or any transaction contemplated
by
this Agreement; (ii) agrees not to commence such proceeding except in these
courts; (iii) agrees that service of any process, summons, notice or
document by U.S. registered mail to a party’s address as provided herein shall
be effective service of process for any such proceeding; and (iv) waives
any objection to the laying of venue of any such proceeding in these
courts.
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16. Waiver
of
Jury Trial. Each party waives, to the fullest extent permitted by law, any
right
he or it may have to a trial by jury in respect of any suit, action or
proceeding arising out of this Agreement or any transaction contemplated
by this
Agreement. Each party certifies that no representative, agent or attorney
of any
other party has represented, expressly or otherwise, that such other party
would
not, in the event of litigation, seek to enforce this waiver; and acknowledges
that he or it and the other party have been induced to enter into this Agreement
by, among other things, the mutual waivers and certifications in this
Paragraph 17.
17. Waiver.
The failure of either party to enforce any provision of this Agreement shall
not
in any way be construed as a waiver of any such provision as to any future
violation thereof, or prevent that party thereafter from enforcing each and
every other provision of this Agreement. The rights granted the parties herein
are cumulative and the waiver of any single remedy shall not constitute a
waiver
of such party’s right to assert all other legal remedies available to it under
the circumstances.
18. Miscellaneous.
This Agreement supersedes all prior agreements and understandings between
the
parties. This Agreement may not be modified or terminated orally. All
obligations and liabilities of each party hereto in favor of the other party
hereto relating to matters arising prior to the date hereof have been fully
satisfied, paid and discharge. No modification, termination or attempted
waiver
shall be valid unless in writing and signed by the party against whom the
same
is sought to be enforced.
19. Governing
Law. This Agreement shall be governed by and construed according to the laws
of
the State of Texas.
20. Captions
and Paragraph Headings. Captions and paragraph headings used herein are for
convenience and are not a part of this Agreement and shall not be used in
construing it.
21. Enforcement
Costs. 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 provision of this Agreement, the
successful or prevailing party or parties shall be entitled to recover
reasonable attorneys' fees, court costs and all expenses even if not taxable
as
court costs (including, without limitation, all such fees, costs and expenses
incident to arbitration, appellate, bankruptcy and post-judgment proceedings),
incurred in that action or proceeding, in addition to any other relief to
which
such party or parties may be entitled.
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IN
WITNESS WHEREOF, the parties have executed this Agreement on the day and
year
first set forth above
IElement
Corporation:
By:
Xxxx
Xxxxx
Name:
Xxxx Xxxxx
Title:
CEO
/s/Xxxx
Xxxxx
By:
Xxxxx
Xxxxxxx
Name:
Xxxxx Xxxxxxx
Title:
COO
/s/Xxxxx
Xxxxxxx
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