EMPLOYMENT AGREEMENT
EXHIBIT
10.1
THIS
EMPLOYMENT AGREEMENT is made and entered into as of this 13th day
of October, 2008, by and between So Act Network, Inc., a Delaware corporation
with offices at 0000 Xxxx Xxxxxxx Xxxxxxx, #0000, Xxxxxx, XX 00000 (the “Corporation”), and
Xxxx Xxxxxxx, an individual residing at 0000 Xxxx Xxxxxxx Xxxxxxx, #0000,
Xxxxxx, XX 00000 (the “Executive”), under
the following circumstances:
RECITALS:
A. The
Corporation desires to secure the services of the Executive upon the terms and
conditions hereinafter set forth; and
B. The
Executive desires to render services to the Corporation upon the terms and
conditions hereinafter set forth.
NOW,
THEREFORE, the parties mutually agree as follows:
1. Employment. The
Corporation hereby employs the Executive and the Executive hereby accepts
employment as an executive of the Corporation, subject to the terms and
conditions set forth in this Agreement.
2. Duties. The Executive
shall serve as President, Chief Executive Officer and Chief Financial Officer of
the Corporation with such duties, responsibilities and authority as are
commensurate and consistent with his position, as may be, from time to time,
assigned to him by the Board of Directors of the Corporation. The Executive
shall report directly to the Board of Directors of the Corporation. During the
term of this Agreement, the Executive shall devote his full business time and
efforts to the performance of his duties hereunder unless otherwise authorized
by the Board of Directors. Notwithstanding the foregoing, the expenditure of
reasonable amounts of time by the Executive for the making of passive personal
investments, the conduct of private business affairs and charitable and
professional activities shall be allowed, provided such activities do not
materially interfere with the services required to be rendered to the
Corporation hereunder and do not violate the restrictive covenants set forth in
Section 9
below.
3. Term of Employment.
The term of the Executive’s employment hereunder, unless sooner terminated as
provided herein (the “Initial Term”), shall
be for a period of ten (10) years commencing on the date hereof (the “Commencement Date”).
The term of this Agreement shall automatically be extended for additional terms
of one year each (each a “Renewal Term”) unless
either party gives prior written notice of non-renewal to the other party no
later than sixty (60) days prior to the expiration of the Initial Term (“Non-Renewal Notice”),
or the then current Renewal Term, as the case may be. For purposes of this
Agreement, the Initial Term and any Renewal Term are hereinafter collectively
referred to as the “Term.”
4. Compensation of
Executive.
(a) The
Corporation shall pay the Executive as compensation for his services hereunder,
eighteen thousand dollars ($18,000) per month (the “Base
Salary”).
(b) In
addition to the Base Salary set forth in Section 4(a) above, the Executive shall
be entitled to a monthly commission equal to 10% of all sales of The Corporation
(in cash or capital stock or any combination of both).
(c) The
Corporation shall pay or reimburse the Executive for all reasonable
out-of-pocket expenses actually incurred or paid by the Executive in the course
of his employment, consistent with the Corporation’s policy for reimbursement of
expenses from time to time.
(d) The
Executive shall be entitled to participate in such pension, profit sharing,
group insurance, hospitalization, and group health and benefit plans and all
other benefits and plans as the Corporation provides to its senior executives
(the “Benefit
Plans”).
5. Termination.
(a) This
Agreement and the Executive’s employment hereunder shall terminate upon the
happening of any of the following events:
(i) upon the
Executive’s death;
(ii) upon the
Executive’s “Total Disability” (as herein defined);
(iii) upon the
expiration of the Initial Term of this Agreement or any Renewal Term thereof, if
either party has provided a timely notice of non-renewal in accordance with
Section 3, above;
(iv) at the
Corporation’s option, upon sixty (60) days prior written notice to the Executive
if without cause;
(v) at the
Executive’s option, upon thirty (30) days prior written notice to the
Corporation;
(vi) at the
Executive’s option, in the event of an act by the Corporation, defined in
Section 5(c), below, as constituting “Good Reason” for termination by the
Executive; and
(vii) at the
Corporation’s option, in the event of an act by the Executive, defined in
Section 5(d), below, as constituting “Cause” for termination by the
Corporation.
(b) For
purposes of this Agreement, the Executive shall be deemed to be suffering from a
“Total
Disability” if the Executive has failed to perform his regular and
customary duties to the Corporation for a period of 180 days out of any 360-day
period and if before the Executive has become “Rehabilitated” (as herein
defined) a majority of the members of the Board of Directors of the Corporation,
exclusive of the Executive, vote to determine that the Executive is mentally or
physically incapable or unable to continue to perform such regular and customary
duties of employment. As used herein, the term “Rehabilitated” shall
mean such time as the Executive is willing, able and commences to devote his
time and energies to the affairs of the Corporation to the extent and in the
manner that he did so prior to his Disability.
(c) For
purposes of this Agreement, the term “Good Reason” shall
mean that the Executive has resigned due to the failure of the Corporation to
meet any of its obligations to the Executive under this or any other agreement
between the Corporation and the Executive, and failure to cure the same within
thirty (30) days following Executive’s delivery of notice specifying the
breach(es) by the Corporation.
(d) For
purposes of this Agreement, the term “Cause” shall mean
material, gross and willful misconduct on the part of the Executive in
connection with his employment duties hereunder or commission of a felony or act
of dishonesty resulting in material harm to the Corporation by the
Executive.
6. Effects of
Termination.
(a) Upon
termination of the Executive’s employment pursuant to Section 5(a)(i), the
Executive’s estate or beneficiaries shall be entitled to the following severance
benefits: (i) three (3) months’ Base Salary at the then current rate, payable in
a lump sum, less withholding of applicable taxes; and (ii) continued provision
for a period of one (1) year following the Executive’s death of benefits under
Benefit Plans extended from time to time by the Corporation to its senior
executives.
(b) Upon
termination of the Executive’s employment pursuant to Section 5(a)(ii), the
Executive shall be entitled to the following severance benefits: (i) eighteen
(18) months’ Base Salary at the then current rate, to be paid from the date of
termination until paid in full in accordance with the Corporation’s usual
practices, including the withholding of all applicable taxes; (ii) continued
provision during said eighteen (18) month period of the benefits under Benefit
Plans extended from time to time by the Corporation to its senior executives;
and (iii) payment on a prorated basis of any bonus or other payments earned in
connection with the Corporation’s then-existing bonus plan in place at the time
of termination. The Corporation may credit against such amounts any proceeds
paid to Executive with respect to any disability policy maintained for his
benefit.
(c) Upon
termination of the Executive’s employment pursuant to Section 5(a)(iii), where
the Corporation has offered to renew the term of the Executive’s employment for
an additional one (1) year period and the Executive chooses not to continue in
the employ of the Corporation, the Executive shall be entitled to receive only
the accrued but unpaid compensation and vacation pay through the date of
termination and any other benefits accrued to him under any Benefit Plans
outstanding at such time. In the event the Corporation tenders Non-Renewal
Notice to the Executive, then the Executive shall be entitled to the same
severance benefits as if the Executive’s employment were terminated pursuant to
Section 5(a)(iv) or Section 5(a)(vi); provided, however, if such
Non-Renewal Notice was triggered due to the Corporation’s statement that the
Executive’s employment was terminated due to Section 5(a)(v) (for “Cause”), then
payment of severance benefits will be contingent upon a determination as to
whether termination was properly for “Cause.”
(d) Upon
termination of the Executive’s employment pursuant to Section 5(a)(iv) or (vi),
the Executive shall be entitled to the following severance benefits: (i)
eighteen (18) months’ Base Salary at the then current rate, to be paid upon the
date of termination of employment in monthly installments, less withholding of
all applicable taxes; (ii) continued provision for a period of eighteen (18)
months after the date of termination of the benefits under Benefit Plans
extended from time to time by the Corporation to its senior executives; and
(iii) payment on a prorated basis of any bonus or other payments earned in
connection with any bonus plan to which the Executive was a participant as of
the date of the Executive’s termination of employment.
(e) Upon
termination of the Executive’s employment pursuant to Section 5(a)(v) or (vii),
the Executive shall be entitled to the following severance benefits: (i) accrued
and unpaid Base Salary and vacation pay through the date of termination, less
withholding of applicable taxes; and (ii) continued provision, for a period of
one (1) month after the date of the Executive’s termination of employment, of
benefits under Benefit Plans extended to the Executive at the time of
termination.
7. Vacations. The
Executive shall be entitled to a vacation of four (4) weeks per year, during
which period his salary shall be paid in full. The Executive shall take his
vacation at such time or times as the Executive and the Corporation shall
determine is mutually convenient. Any vacation not taken in one (1) year shall
not accrue, provided that if vacation is not taken due to the Corporation’s
business necessities, up to two (2) weeks’ vacation may carry over to the
subsequent year.
8. Disclosure of Confidential
Information. The Executive recognizes, acknowledges and agrees that he
has had and will continue to have access to secret and confidential information
regarding the Corporation, including but not limited to, its products, formulae,
patents, sources of supply, customer dealings, data, know-how and business
plans, provided such information is not in or does not hereafter become part of
the public domain, or become known to others through no fault of the Executive.
The Executive acknowledges that such information is of great value to the
Corporation, is the sole property of the Corporation, and has been and will be
acquired by him in confidence. In consideration of the obligations undertaken by
the Corporation herein, the Executive will not, at any time, during or after his
employment hereunder, reveal, divulge or make known to any person, any
information acquired by the Executive during the course of his employment, which
is treated as confidential by the Corporation, and not otherwise in the public
domain. The provisions of this Section 8 shall survive the Executive’s
employment hereunder except in the event of a termination of this Agreement
pursuant to Section 5(a)(iv) or (vi), hereof, or as detailed in the provision
above. All references to the Corporation in Section 8 and Section 9 hereof shall
include any subsidiary or parent of the Corporation.
9. Covenant Not To Compete or
Solicit.
(a) The
Executive recognizes that the services to be performed by him hereunder are
special, unique and extraordinary. The parties confirm that it is reasonably
necessary for the protection of the Corporation that the Executive agree, and
accordingly, the Executive does hereby agree, that he shall not, directly or
indirectly, at any time during the “Restricted Period” within the “Restricted
Area” (as those terms are defined in Section 9(e) below):
(i) except as
provided in Subsection (c) below, engage in any line of business in which the
Corporation was engaged or had a formal plan to enter during the period of
Executive’s employment with the Corporation, either on his own behalf or as an
officer, director, stockholder, partner, consultant, associate, employee, owner,
agent, creditor, independent contractor, or co-venturer of any third party;
or
(ii) solicit
to employ or engage, for or on behalf of himself or any third party, any
employee or agent of the Corporation.
(b) The
Executive hereby agrees that he will not, directly or indirectly, for or on
behalf of himself or any third party, at any time during the Term and during the
Restricted Period solicit any customers of the Corporation with respect to
products competitive with products then being sold by the
Corporation.
(c) If any of
the restrictions contained in this Section 9 shall be deemed to be unenforceable
by reason of the extent, duration or geographical scope thereof, or otherwise,
then the court making such determination shall have the right to reduce such
extent, duration, geographical scope, or other provisions hereof, and in its
reduced form this Section shall then be enforceable in the manner contemplated
hereby.
(d) This
Section 9 shall not be construed to prevent the Executive from owning, directly
or indirectly, in the aggregate, an amount not exceeding five percent (5%) of
the issued and outstanding voting securities of any class of any corporation
whose voting capital stock is traded or listed on a national securities exchange
or in the over-the-counter market.
(e) The term
“Restricted
Period,” as used in this Section 9, shall mean the period of the
Executive’s actual employment hereunder, plus twelve (12) months after the date
the Executive is actually no longer employed by the Corporation. The term “Restricted Area” as
used in this Section 9 shall mean the continental United States.
(f) The
provisions of this Section 9 shall survive the termination of the Executive’s
employment hereunder and until the end of the Restricted Period as provided in
Section 9(e) hereof except in the event that this Agreement is terminated
pursuant to Section 5(a)(iv) or (vi), hereof, in which case such provisions
shall not survive termination of this Agreement. In no event shall the terms of
Section 9 be enforceable, should the Corporation be in default of any of its
obligations to the Executive at the time of his termination of employment by the
Corporation.
10. Miscellaneous.
(a) The
Executive acknowledges that the services to be rendered by him under the
provisions of this Agreement are of a special, unique and extraordinary
character and that it would be difficult or impossible to replace such services.
Accordingly, the Executive agrees that any breach or threatened breach by him of
Sections 8 or 9 of this Agreement shall entitle the Corporation, in addition to
all other legal remedies available to it, to apply to any court of competent
jurisdiction to seek to enjoin such breach or threatened breach. The parties
understand and intend that each restriction agreed to by the Executive
hereinabove shall be construed as separable and divisible from every other
restriction, that the unenforceability of any restriction shall not limit the
enforceability, in whole or in part, of any other restriction, and that one or
more or all of such restrictions may be enforced in whole or in part as the
circumstances warrant. In the event that any restriction in this Agreement is
more restrictive than permitted by law in the jurisdiction in which the
Corporation seeks enforcement thereof, such restriction shall be limited to the
extent permitted by law. The remedy of injunctive relief herein set forth shall
be in addition to, and not in lieu of, any other rights or remedies that the
Corporation may have at law or in equity.
(b) Neither
the Executive nor the Corporation may assign or delegate any of their rights or
duties under this Agreement without the express written consent of the other;
provided however that the Corporation shall have the right to delegate its
obligation of payment of all sums due to the Executive hereunder, provided that
such delegation shall not relieve the Corporation of any of its obligations
hereunder.
(c) This
Agreement constitutes and embodies the full and complete understanding and
agreement of the parties with respect to the Executive’s employment by the
Corporation, supersedes all prior understandings and agreements, whether oral or
written, between the Executive and the Corporation, and shall not be amended,
modified or changed except by an instrument in writing executed by the party to
be charged. The invalidity or partial invalidity of one or more provisions of
this Agreement shall not invalidate any other provision of this Agreement. No
waiver by either party of any provision or condition to be performed shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same
time or any prior or subsequent time.
(d) This
Agreement shall inure to the benefit of, be binding upon and enforceable
against, the parties hereto and their respective successors, heirs,
beneficiaries and permitted assigns.
(e) The
headings contained in this Agreement are for convenience of reference only and
shall not affect in any way the meaning or interpretation of this
Agreement.
(f) All
notices, requests, demands and other communications required or permitted to be
given hereunder shall be in writing and shall be deemed to have been duly given
when personally delivered, sent by registered or certified mail, return receipt
requested, postage prepaid, or by private overnight mail service (e.g. Federal
Express) to the party at the address set forth above or to such other address as
either party may hereafter give notice of in accordance with the provisions
hereof. Notices shall be deemed given on the sooner of the date actually
received or the third business day after sending.
(g) This
Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware without giving effect to such State’s conflicts of laws
provisions and each of the parties hereto irrevocably consents to the
jurisdiction and venue of the federal and state courts located in the State of
Delaware.
(h) This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one of the same instrument. The parties hereto have executed this Agreement as
of the date set forth above.
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IN WITNESS WHEREOF, the
Parties have executed this Agreement as of the date first written
above.
Xxxx Xxxxxxx
By: /s/ Xxxx
Xxxxxxx
Title:
President
EXECUTIVE
/s/
Xxxx Xxxxxxx
Xxxx Xxxxxxx
