Exhibit 10.3
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is entered into effective as of January 9,
2002 (the "Effective Date"), by and between Xxxxx Xxxx ("Employee") and
MediaBus Networks (the "Company").
For and in consideration of the agreement to employ Employee described below,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. Employment.
The Company agrees to employ Employee and Employee agrees to accept such
employment, upon the following terms and conditions.
2. Duties and Obligations.
Employee shall assume and perform the duties of Vice President (Engineering) ,
Consumer Appliance Division, as described in Exhibit A (the "Duties"). Subject
to the terms hereof, such Duties may be revised from time to time by the Board
of Directors of the Company. Employee agrees to devote his full business
efforts and time to the Company's business. Employee shall not render services
to any other for-profit corporation or entity without the prior written consent
of the Company's Board of Directors, with the exception of Cavaco Sales, Inc.
This Section 2 shall not preclude Employee from (i) engaging in appropriate
professional, educational, civic, charitable or religious activities or (ii)
devoting a reasonable amount of time to private investments or board positions
that do not interfere or conflict with his responsibilities to the Company.
3. Compensation and Benefits.
During the term of this Agreement, the Company agrees to pay Employee the
salary and additional compensation and benefits as set forth in Exhibit B as
compensation for all the services to be rendered by Employee.
4. Term and Termination.
The term of this Agreement shall be two (2) years from the Effective Date, with
consecutive 2 years rolling from the date of review. Notwithstanding the
immediately preceding sentence, during the term of this Agreement, the parties
agree that Employee's employment may be terminated by the Employee for
"Employee Cause" (as defined in Section 5 below) upon thirty (30) days prior
written notice by the Employee to the Company, and such termination shall have
the consequences set forth in the provisions of this Agreement. Furthermore,
notwithstanding the first sentence of this Section 4, the parties agree that
Employee's employment may be terminated by the Company for "Cause" (as defined
in Section 5 below) at any time upon written notice by the Company to Employee,
and such termination shall have the consequences set forth in the provisions of
this Agreement. Finally, notwithstanding the first sentence of this Section 4,
this Agreement also shall terminate immediately upon the death of Employee and
shall terminate upon written notice by the Company to Employee in the event of
Employee's "Disability" (as defined below). Upon termination of employment for
any reason, Employee shall return immediately to the Company all documents,
property, and other records of the Company, and all copies thereof, within
Employee's possession, custody or control, including but not limited to any
materials containing any Work Product, Trade Secrets or Confidential
Information (as defined in Section 5 below) or any portion thereof. For
purposes of this Agreement, the term "Disability" shall mean that Employee, at
the time notice takes effect, has become eligible to receive immediately long-
term disability benefits under the Company's long-term disability insurance
plan or, if no such plan exists, under the federal Social Security program. In
the event that Employee resumes the performance of substantially all of his
Duties hereunder before the termination of his active employment under this
Section 4 has become effective, the notice of termination shall automatically
be deemed to have been revoked.
5. Cause and Employee Cause.
As used under this Agreement, "Cause" means: (a) willful dishonesty toward, or
deliberate injury or attempted injury to, the Company by the Employee; (b) the
gross negligence, willful misconduct, or willful inattention of an Employee to
the business of the Company which injures the reputation or conduct of the
business of the Company; (c) gross insubordination; (d) repeated absences from
work without a reasonable excuse; (e) repeated intoxication with alcohol or
drugs while on the Company's premises during regular business hours; and (f)
consistent failure of the Employee to carry out the duties and responsibilities
(but excluding any such failure resulting from Employee's Disability) set forth
in this Employment Agreement and as established from time to time by the Board
of Directors of the Company or the Employee's manager. For these purposes, such
consistent failure of the Employee to carry out his or her duties and
responsibilities shall not be considered to have occurred if the Employee
successfully remedies the Company's performance expectation deficiencies within
a 60-day curative period following the Employee's receipt of written
notification as to the Employee's deficiencies and if the Employee thereafter
continues to perform without such performance expectation deficiencies for a
period of at least one year from the expiration of the 60-day curative period.
As used under this Agreement, "Employee Cause" means the occurrence of any of
the following events: (i) the Employee is no longer serving as the Vice
President, Consumer Appliance Division of the Company, (ii) the Employee is
directed to report to other than the Board of Directors or Chief Executive
Officer of the Company, (iii) the Employee is not timely paid his compensation
under this Agreement, (iv) the assignment to the Employee of any duties or
responsibilities which are inconsistent with the status, title, position or
responsibilities of Vice President, Consumer Appliance Division, (v) the
Company materially breaches the terms of this Agreement, or (vi) a "Change of
Control" (as defined below); provided however, that the aforementioned
situations will not be deemed to constitute Employee Cause hereunder until such
time as Employee has given written notice to the Board of Directors of the
Company of the situation constituting Employee Cause and the Board of Directors
of the Company has failed to cure such situation within thirty (30) days
following receipt of such written notice.
6. Change of Control.
As used in this Agreement, "Change of Control" means (a) any consolidation or
merger of the Company in which the Company is not the continuing or surviving
corporation, or pursuant to which the Company's Common Stock is converted to
cash, other securities or other property, other than a consolidation or merger
of the Company in which the holders of the Company's Common Stock immediately
prior to the consolidation or merger have substantially the same percentage
ownership of the interests of the continuing or surviving entity immediately
after the consolidation or merger, or (b) any sale, lease, exchange or other
transfer (in one transaction or in a series of transactions and not in the
ordinary course of business) of all or substantially all of the assets of the
Company, or (c) a sale of fifty percent (50%) or more of the then outstanding
Common Stock of the Company to one party (other than a then-existing
stockholder or option holder who is the holder of at least ten percent (10%) or
more of such voting securities of the Company (or who, upon exercise of options
would be the holder of at least ten percent (10%) of the voting securities of
the Company)), or (d) any other event, which the majority of the members of the
Board of Directors who were elected prior to the occurrence of any event or
transaction determine to be a Change in Control (such determination to be
conclusive). Notwithstanding the above, the following shall not constitute a
Change of Control as used herein: (a) an "IPO Event"; or (b) any conveyance,
transfer or grant of security title to or a security interest in any goods,
accounts, inventory, general intangibles or other assets of the Company or any
of its subsidiaries to secure the obligations of the Company or any of its
subsidiaries to such entity, or the exercise of any rights or remedies by such
entity after a default of corporate indebtedness.
7. Payments Upon Termination.
In the event this Agreement is terminated by Employee at any time for Employee
Cause, the Company shall pay Employee an amount equal to his annual base salary
described in Exhibit B at such time. The Company may elect in its sole
discretion to pay the above amounts to Employee in a lump sum or in accordance
with its payroll practices in effect from time to time. In the event this
Agreement is terminated by the Company for Cause, or upon Employee's death or
Disability, Employee shall only be entitled to the unpaid portion of Employee's
salary described in Exhibit B which corresponds to the period of time prior to
the date of termination of this Agreement.
8. Ownership.
For purposes of this Agreement, "Work Product" shall mean the data, materials,
documentation, computer programs, inventions (whether or not patentable),
pictures, audio, video, artistic works, and all works of authorship, including
all worldwide rights therein under patent, copyright, trade secret,
confidential information, or other property right, created or developed in
whole or in part by Employee with the use of Company property (which for these
purposes shall include any software or other property with respect to which the
Company is a lessee or licensee) or at the direction of or pursuant to the
employment duties of the Employee, whether prior to the date of this Agreement
or in the future, while employed by the Company. The Company shall own all
rights to the Work Product, including (but not limited to) copyright, patent
rights, and trade secret rights. All copyrightable Work Product shall be
considered work made for hire by the Employee and owned by the Company. If any
of the Work Product may not, by operation of law, be considered copyrightable
work made for hire by Employee for the Company, or if ownership of all right,
title, and interest of the intellectual property rights therein shall not
otherwise vest exclusively in the Company, Employee hereby assigns to the
Company, and upon the future creation thereof automatically assigns to the
Company, without further consideration, the ownership of all Work Product,
including all intellectual property rights therein. The Company shall have the
right to obtain and hold in its own name copyrights, registrations, and any
other protection available in the Work Product. Employee agrees to perform,
during or after Employee's employment, such further acts as may be necessary or
desirable to transfer, perfect, and defend the Company's ownership of the Work
Product that are reasonably requested by the Company.
9. Assignment or License.
To the extent that any preexisting materials which are not Work Product are
contained in the materials Employee delivers to Company or Company's customers,
Employee hereby assigns all of his right, title and interest in such materials
to the Company or, if Employee only has the right to license such materials,
Employee hereby grants to Company an irrevocable, nonexclusive, worldwide,
royalty-free license to: (i) use and distribute (internally or externally)
copies of, and prepare derivative works based upon, such preexisting materials
and derivative works thereof, and (ii) authorize others to do any of the
foregoing.
10. Trade Secrets and Confidential Information.
The Company may disclose to Employee certain "Confidential Information"
(defined below), including but not limited to "Trade Secrets" (defined below).
Employee acknowledges and agrees that the Confidential Information is the sole
and exclusive property of the Company (or a third party providing such
information to the Company) and that the Company or such third party owns all
worldwide rights therein under patent, copyright, trade secret, confidential
information, or other property right. Employee acknowledges and agrees that
the disclosure of the Confidential Information to Employee does not confer upon
Employee any license, interest or rights of any kind in or to the Confidential
Information. Employee may use the Confidential Information solely for the
benefit of the Company while Employee is employed or retained by the Company.
Except in the performance of services for the Company, Employee will hold in
confidence and will not use, reproduce, distribute, transmit, reverse engineer,
decompile, disassemble, or transfer, directly or indirectly, in any form, by
any means, or for any purpose, the Confidential Information or any portion
thereof. Employee agrees to return to the Company, upon request by the
Company, the Confidential Information and all materials relating thereto.
Employee's obligations under this Agreement with regard to the Trade Secrets
shall remain in effect for as long as such information shall remain a trade
secret under applicable law. Employee acknowledges that its obligations with
regard to the Confidential Information (other than Trade Secrets) shall remain
in effect while Employee is employed or retained by the Company and for two
(2) years thereafter. As used herein, unless otherwise defined under
applicable law, "Trade Secrets" means information of the Company, its
licensors, suppliers, customers, or prospective licensors or customers,
including, but not limited to, technical or nontechnical data, formulas,
patterns, compilations, programs, devices, methods, techniques, drawings,
processes, financial data, financial plans, product plans, or a list of actual
or potential customers or suppliers, which (a) derives economic value, actual
or potential, from not being generally known to, and not being readily
ascertainable by proper means by, other persons who can obtain economic value
from its disclosure or use, and (b) is the subject of efforts that are
reasonable under the circumstances to maintain its secrecy. As used herein,
"Confidential Information" means information, including Trade Secrets, that is
of value to its owner and is treated as confidential, including, but not
limited to, future business plans, licensing strategies, advertising campaigns,
information regarding executives and employees, and the terms and conditions of
this Agreement. Employee acknowledges that existing or prospective customers of
the Company may be companies the stock of which is publicly traded and subject
to various rules and regulations of the Securities and Exchange Commission.
Employee acknowledges that the Company has a policy that no one associated with
the Company may trade in securities of any customer of the Company based on
material, nonpublic information concerning the customer. Additionally, the
Company expressly forbids the unauthorized disclosure of any nonpublic
information acquired by anyone associated with the Company relating to a
customer of the Company. Employee shall notify the Company prior to trading
the securities of any customer of the Company.
11. Customer Non-Solicitation.
During the Term of this Agreement and for a period of twenty-four (24) months
immediately following termination of Employee's employment with the Company for
any reason, including, without limitation, voluntary resignation from
employment by Employee ("Restricted Period"), Employee shall not, on Employee's
own behalf or on behalf of any person, firm, partnership, association,
corporation or business organization, entity or enterprise, with the exception
of Cavaco Sales, Inc for non-competitive product, solicit, contact, or call
upon, any customer or prospect of the Company, or any representative of any
customer or prospect of the Company, with a view to selling or providing any
deliverable or service competitive with the "Business of the Company" (as
hereinafter defined), provided that the restrictions set forth in this
paragraph shall apply only to identifiable customers or prospects of the
Company, or identifiable representatives of customers or prospects of the
Company, with which Employee had direct professional contact during the two (2)
year period immediately preceding cessation of Employee's employment with the
Company. For purposes of this Agreement, the "Business of the Company" means
the design, production, licensing, and sale of technologies to enable consumers
and businesses (i) to download audio, video and other interactive content from
the Internet or private network and (ii) to replay such content on business or
home or personal portable and/or automobile entertainment systems, as well as
future wireless systems.
12. Employee Non-Solicitation.
During the Term of this Agreement and the Restricted Period, Employee agrees
that Employee shall not, directly or indirectly, call upon, solicit, recruit,
or assist others in calling upon, recruiting or soliciting any person who is or
was an employee of the Company, except for Xxxxxxx Xxxxxxxx (Steve's brother),
or who is or was a consultant or independent contractor to the Company with
access to Confidential Information, for the purpose of having such person work
in or for any other corporation, association, entity, or business competing
with the Business of the Company. However, this cause does not apply to
independent contractor of Cavaco Sales, Inc who may have other non-competiting
relationships with the Company.
13. Noncompetition.
During the Term of this Agreement and the Restricted Period, Employee agrees
that, without the prior written consent of the Company, Employee shall not,
directly or indirectly, perform duties identical or substantially similar to
the Duties specified in Exhibit A, which Employee performed for the Company,
anywhere within the geographic area identified on Exhibit A for any person or
entity the predominant business of which is competing with the Business of the
Company. Nothing herein shall be construed to prohibit Employee from
performing any activities, which he does not perform for the Company. The
parties agree and acknowledge that (i) the Restricted Period and the territory
of restriction contained in this Agreement are fair and reasonable in that they
are required for the protection of the Company; and (ii) by having access to
information concerning employees and actual or prospective customers of the
Company, Employee shall obtain a competitive advantage as to such parties. If,
however, for any reason, any court determines that the restrictions in Section
12 through this Section 14 are not reasonable or that consideration is
inadequate, then such restrictions shall be interpreted, modified or re-written
to include as much of the duration, scope and geographic area as will render
such restrictions valid and enforceable.
14. Modification of Restricted Period Definition.
If the Employee is employed by the Company as of the date that there is a
Change of Control of the Company, then the Restricted Period, as used in
Sections 12 through 14 above, shall terminate on the later of (i) the date on
which the Employee terminates employment with the Company, or (ii) the date on
which the Employee no longer owns any Shares in the Company; provided, however,
that in no event shall the Restricted Period terminate later than the date the
Restricted Period otherwise would have terminated.
15. Equitable Relief.
The parties to this Agreement acknowledge that a breach by Employee of any of
the terms or conditions of this Agreement will result in irrevocable harm to
the Company and that the remedies at law for such breach may not adequately
compensate the Company for damages suffered thereby. Accordingly, Employee
agrees that in the event of such breach, the Company shall be entitled to
injunctive relief or such other equitable remedy as a court of competent
jurisdiction may provide. Nothing contained herein will be construed to limit
the Company's right to any remedies at law, including the recovery of damages
for breach of this Agreement.
16. Mutual Independence.
The parties hereto agree that the covenants and obligations contained in this
Agreement are severable and divisible, that none of such covenants or
obligations depend on any other covenant or obligation for their
enforceability, that each such covenant and obligation constitutes an
enforceable obligation between the Company and the Employee, that each such
covenant and obligation shall be construed as an agreement independent of any
other provision of this Agreement, and that the existence of any claim or cause
of action by one party to this Agreement against another party to this
Agreement, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by any party to this Agreement of any
such covenants or obligations.
17. Severability.
If any provision or part of any provision of this Agreement is held invalid or
unenforceable by a court of competent jurisdiction, such holding shall not
affect the enforceability of any other provisions or parts thereof, and all
other provisions and parts thereof shall continue in full force and effect.
18. Mediation/Arbitration.
Any dispute, controversy, or claim arising out of or in connection with, or
relating to, this Agreement or any breach or alleged breach hereof shall, upon
the request of any party involved, be submitted to mediation as a course to
resolve the dispute. Such mediation shall comply with the Center for Public
Resources most current Model ADR Procedures for Mediation of Business Disputes.
If such mediation procedures fail to resolve the matter within thirty (30) days
of mediation procedure commencement (which either party may extend by agreement
of the other), or if either party will not participate in mediation, then any
such dispute, controversy, or claim shall be submitted to, and settled by,
arbitration in the State of Florida, pursuant to the commercial arbitration
rules then in effect of the American Arbitration Association (or at any time or
at any other place or under any other form of arbitration mutually acceptable
to the parties so involved). Any award rendered shall be final and conclusive
upon the parties and a judgment thereon may be entered in the highest court of
the forum, state or federal, having jurisdiction. The expenses of the
mediation and/or arbitration shall be borne equally by the parties to the
mediation or arbitration, provided that each party shall pay for and bear the
cost of its own experts, evidence and counsel's fees; provided however, that in
the discretion of the arbitrator, any award may include the cost of a party's
counsel if the arbitrator expressly determines that the party against whom such
award is entered has caused the dispute, controversy or claim to be submitted
to arbitration as a dilatory tactic. Notwithstanding the foregoing provisions
of this Section 19, the parties hereto acknowledge and agree that the Company
shall have the right to pursue any claim for specific performance, injunction,
or other equitable relief in a court of competent jurisdiction (during the
pendency of the mediation or arbitration, or otherwise) in the event of any
breach or attempted breach of any restrictive covenants regarding competition,
solicitation, or confidentiality to which the Company is beneficiary.
19. Miscellaneous.
This Agreement shall not be amended or modified except by a writing executed by
both parties. This Agreement shall be binding upon and inure to the benefit of
the Company and its successors and assigns. Due to the personal nature of this
Agreement, Employee shall not have the right to assign Employee's rights or
obligations under this Agreement without the prior written consent of Company.
This Agreement shall be governed by the laws of the State of Florida without
regard to its rules governing conflicts of law. This Agreement and the
attached Exhibits represent the entire understanding of the parties concerning
the subject matter hereof and supersede all prior communications, agreements
and understandings, whether oral or written, relating to the subject matter
hereof. Sections 9 through this Section 20 shall survive termination of this
Agreement. All communications required or otherwise provided under this
Agreement shall be in writing and shall be deemed given when delivered to the
address provided below such party's signature (as may be amended by notice from
time to time), by hand, by courier or express mail, or by registered or
certified United States mail, return receipt requested, postage prepaid.
Exhibit A and Exhibit B, attached hereto, are incorporated herein by this
reference. IN WITNESS WHEREOF, the Employee and the Company, by its duly
authorized officer, have executed this Agreement effective as of the day and
year first above written.
EMPLOYEE:
/s/Xxxxx Xxxx
Signature
Xxxxx Xxxx
Printed Name
COMPANY:
MediaBus Networks
By:/s/Xxxxxxx X. Xxxxxxxx
EXHIBIT A
DUTIES
The Employee will perform such duties as commonly associated with the position
of Vice President (Engineering), Consumer Appliance Division of the Company,
including providing leadership for the Engineering Team of the Consumer
Appliance Division in the areas of information/internet/ web technology (IT),
network technology, hardware engineering and software engineering. The
Employee will also interface with Sales, Operations and manufacturing partners
for all engineering matters. Geographic area in which such Duties generally
will be performed: A twenty five (25) mile radius centered around the
Company's principal business address located in Boca Raton, FL.
EXHIBIT B
COMPENSATION 1. Base Salary.
Effective beginning January 8, 2002, Employee shall receive from the Company an
annual base salary of $105,000. Employee's base salary shall be payable in
accordance with the Company's payroll policies as in effect from time to time.
Employee's base salary shall be prorated on a daily basis for the years or
months, as the case may be, in which Employee commences and terminates his
employment relationship with the Company. Employee's salary shall be reviewed
at least annually by the Board of Directors of the Company and may be increased
(but not decreased) to correspond with base salaries of individuals serving in
like capacities as employees of companies similar to the Company. Such review
and modification, if any, shall be based on characteristics including, but not
limited to, types of businesses and product lines, revenue amounts,
profitability, and geographic areas, and in any event, shall be determined in
the sole discretion of the Board of Directors of the Company.
2. Benefits.
Subject to the eligibility provisions thereof, Employee shall be entitled to
participate in such health, life, disability and other insurance programs,
pension, profit sharing, stock options plan and other savings plans, if any,
that the Company may offer to other executive employees of the Company (and, if
applicable, to their respective families) from time to time. Nothing herein
shall preclude the Company from modifying or terminating any such benefits or
benefit plans.
3. Performance Commission.
A share of the commission generated by the Consumer Appliance Division shall be
distributed to the Employee as determined by the Executive Vice President,
Consumer Appliance Division.
4. Provision of Car Allowance.
Employee shall be given allowance towards the provision of a car or the leasing
of a car and its related insurance and fees.
5. Business, Travel, and Entertaining Expenses.
The Company shall pay or reimburse employee for all reasonable and customary
business, travel, and entertainment expenses incurred by Employee in connection
with the performance of Employee's duties and responsibilities under this
Agreement upon Employee's submission to the Company of such documentation and
substantiation as shall be reasonably required by the Company. Employee agrees
to be bound by all regulations and limitations on travel and entertainment
reimbursement adopted, from time to time, by the Company.
6. Vacation.
Employee shall be entitled to 20 vacation days in each year for which he will
be compensated in accordance with the terms of this Agreement.
7. (Intentionally Left Blank)
8. Provision of Housing.
The Employee will be provided with expatriate housing and utility allowance of
$1,000 per month.
9. Right of First Refusal.
Among other provisions of the Stockholder Agreement to which the Shares are
subject, any contemplated sale, transfer, or assignment for valuable
consideration of the Shares shall be subject to the right of first refusal
provisions contained in Article IV of the Stockholder Agreement.
10. Repurchase of Shares Upon Termination of Employment for Cause.
Upon termination of employment for Cause, the Company shall have the
irrevocable option, exercisable for 6 months from the date of termination of
employment with the Company, to purchase all Shares then owned by the
terminating Employee for only cash consideration, provided however, that the
purchase price for the Shares shall be equal to the "Fair Market Value" (as
defined below) of the Shares on the date of termination. For purposes of this
Agreement, the "Fair Market Value" of the Shares shall be determined by the
Board of Directors by determining the amount that would be distributed to the
holder of such Shares (in such holder's capacity as a shareholder and not as a
creditor) as if all the assets of the Company were sold for an amount of cash
equal to the Fair Market Value of the Company and the proceeds were distributed
in liquidation of the Company. The "Fair Market Value of the Company" at any
time and from time to time means the net fair market value of the Company as of
the date immediately prior to the relevant event requiring a determination of
Fair Market Value, as determined in good faith by the Board of Directors of the
Company. In making the determination of Fair Market Value pursuant to this
section, the Board of Directors shall assume that the net fair market value of
the Company is equal to the amount which would be paid in cash for the Company,
as a going concern, by an unaffiliated third party financial buyer, after
taking into account liabilities of the Company, and the Board of Directors may
take into account such additional factors as may be relevant to such valuation,
including, without limitation, the event requiring the determination of Fair
Market Value, and such other facts and circumstances as may be material. The
Board of Directors may, but shall not be obligated to, engage the services of a
reputable, experienced investment banking firm to assist it in the
determination of Fair Market Value. The cost of determining Fair Market Value
shall be borne by the Company. Unless otherwise agreed by the Company and the
Employee, the closing for the purchase of the Shares shall be held at the
Company's principal place of business not later than 60 days after written
notice that the Company is exercising its repurchase option. If the Employee
refuses to deliver the Shares to the Company at the closing, the Company may,
in addition to all other remedies it may have, tender to the Employee, at the
address set forth in the Share transfer records of the Company, the purchase
price for such Shares as is herein specified, and cancel such Shares on its
books and records whereupon all of the Employee's right, title, and interest in
and to such Shares shall terminate.
11. Minimum Consideration for Repurchase.
Notwithstanding the foregoing or the Stockholder Agreement, the Company shall
be obligated to pay not less than Ten Dollars ($10.00) to the Employee to
exercise its option to repurchase all of the Employee's Shares.
