EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made by and between Reality
Wireless Networks, Inc., a corporation duly organized and existing under the
laws of the State of Nevada (the "Company"), and Xxxxx Xxxxx ("Executive").
RECITALS
WHEREAS, the Company desires to hire Executive and Executive desires to
become employed by the Company; and
WHEREAS, the Company and Executive have determined that it is in their
respective best interest to enter into this Agreement on the terms and
conditions as set forth herein; and
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and promises contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. Nature of Agreement.
1.1. Cancellation of Prior Offers. Any and all prior oral
understandings, offers, and/or representations (if any) with respect to the
employment of Executive are deemed by the parties to be either canceled and void
and/or are deemed to be superseded by this final written Agreement.
2. Employment Terms and Duties.
2.1. Term of Employment. The employment of Executive under this
Agreement shall be deemed to have commenced on January 5, 2004 (the "Effective
Date"), and shall continue for a period of one (1) year (the "Initial Term").
This Agreement shall be automatically renewed for additional consecutive one (1)
year periods (the "Renewal Term," and together with the Initial Term, the
"Employment Term") unless written notice of the intention to let this Agreement
expire is provided by the Company to Executive thirty (30) days prior to the
expiration of the Initial Term.
2.2. Location. Executive agrees that he shall carry out his duties and
obligations under the terms of this Agreement at his home office, or the
Company's principal office as required by the Company.
2.3. Position and Primary Responsibility. It is understood that
Executive shall serve as Vice President of Wireless Business Development.
2.4. Exclusivity. Executive agrees to devote his full time, attention,
energies, and use his "best efforts" solely and exclusively in the performance
of his duties under the terms of this Agreement. However, the expenditure of
reasonable amounts of time for educational, charitable, or professional
activities shall not be deemed a breach of this Agreement if those activities do
not materially interfere with the services required under this Agreement, and
shall not require the prior written consent of the Company's Board of Directors.
This Agreement shall not be interpreted to prohibit Executive from making
passive personal investments or conducting private business affairs, if those
activities do not materially interfere with the services required under this
Agreement and do not violate Sections 5, 9 and/or 11 of this Agreement. Further,
Executive shall not, directly or indirectly, acquire, hold, or retain any
interest in any business competing with or similar in nature to the business of
the Company.
3. Compensation.
3.1. Base Salary. In consideration for the services rendered to the
Company hereunder by Executive and Executive's covenants hereunder, the Company
shall, during the Employment Term, pay Executive a salary at the annual rate of
$125,000 (the "Base Salary"), less statutory deductions and withholdings. The
Base Salary shall consist of:
(a) 2,500,000 shares of "free-trading" common stock of the Company (the
"Stock Compensation"),1 which shall be issued to Executive no later than January
30, 2004; and
(b) $75,000, cash, which shall be payable to Executive on a bi-weekly
basis beginning February 15, 2004 (the "Cash Compensation").
3.2. Payment. All compensation payable to Executive hereunder shall be
subject to the Company's rules and regulations, and shall also be subject to all
applicable State and federal employment law(s); it being understood that
Executive shall be responsible for the payment of all taxes resulting from a
determination that any portion of the compensation and/or benefits paid/received
hereunder is a taxable event to Executive; it being further understood that
Executive shall hold the Company harmless from any governmental claim(s) for
Executive's personal tax liabilities, including interest or penalties, arising
from any failure by Executive to pay his individual taxes when due.
3.3. Compensation Review. It is understood and agreed that Executive's
performance will be reviewed by the Company's Board of Directors on the
anniversary date of each year this Agreement is in force for the purpose of
determining whether or not Executive's Base Salary and/or Cash Bonus should be
modified and/or adjusted; it being further understood that the decision to
increase Executive's compensation shall be at the sole and exclusive option of
the Board of Directors.
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(1) The Stock Compensation shall be registered on Form S-8 with the
United States Securities and Exchange Commission.
4. Benefits.
4.1. Medical Insurance. Executive shall be paid a $500 per month
stipend to cover medical benefits.
4.2. Vacation. Executive shall be entitled to ten (10) days paid
vacation per annum. Any unused vacation time may be carried forward to the
following year.
4.3. Reimbursement for Business Expenses. The Company shall reimburse
Executive for all reasonable business expense(s) actually incurred prior to and
after the Effective Date of this Agreement by Executive on behalf of the Company
in the performance of his duties hereunder upon presentation by Executive of
voucher(s), receipt(s) or other written evidence(s) in accordance with the
policies of the Company and the rules of the Internal Revenue Service.
4.4. Illness or Personal Leave.Executive shall be entitled to four (4)
days per year as sick leave or personal leave with full pay. Sick or personal
leave may not be accumulated from year to year.
4.5. Paid Holidays. Executive shall be entitled to a holiday on the
following days, with full pay: New Year's Day, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day, the Friday after Thanksgiving Day and Christmas
Day.
5. Confidential Information and Records.
5.1. Executive represents that his employment with the Company under
the terms of this Agreement will not conflict with any continuing duty(ies) or
obligation(s) Executive has with any other person(s), firm(s) and/or
entity(ies). Executive also represents that he has not brought to the Company
(during the period before or after the Effective Date of this Agreement) any
material(s) and/or document(s) of any former employer(s), or any confidential
information or property belonging to other(s).
5.2. Executive also represents to the Company that during the term of
this Agreement, he will not, directly or indirectly, without the express prior
written approval of the Board of Directors of the Company, engage or be
interested in any business that is in competition with the business of the
Company (whether as a principal, lender, employee, Officer, Director, partner,
venturer, consultant or otherwise).
5.3. Executive also represents that during the term of this Agreement,
he will promptly disclose to the Board of Directors of the Company, complete
information concerning any direct interest (greater than five percent (5%)) he
holds, if any, in any business which provides service(s) and/or product(s) to
the Company (whether as a principal, stockholder, lender, employee, Director,
Officer, partner, venturer, consultant or otherwise).
5.4. Executive also represents that he will not disclose to any
person(s) or entity(ies) (other than to the Company's Board of Directors, or to
others as required in the performance of his duties) any confidential or secret
information with respect to the business or affairs of the Company and/or its
product(s).
5.5. Executive agrees that he will not, without the prior written
consent of the Company's Board of Directors, for a period of eighteen (18)
months after the Termination Date, directly or indirectly disturb, entice or
hire away, or in any other manner persuade, any employee(s) or consultant(s) of
the Company to discontinue that person's or firm's relationship with the Company
if that the employee(s) or consultant(s) were employed by the Company at any
time during the twelve (12) month period prior to the Termination Date.
5.6. Records. All records, files, documents, and the like, or
abstracts, summaries, or copies thereof, relating to the business of the Company
which Executive shall prepare or use or come into contact with, shall remain the
sole property of the Company.
6. Termination. Executive's employment and this Agreement (except as
otherwise provided hereunder) shall terminate upon the occurrence of any of the
following, at the time set forth therefor (the "Termination Date"):
6.1. Death or Disability. Immediately upon the death of Executive or
six (6) months subsequent to a determination by the Company that Executive has
ceased to be able to perform the essential functions of his duties, with or
without reasonable accommodation (defined in Section 6.7 below), due to a mental
or physical illness or incapacity ("Disability") (termination pursuant to this
Section 6.1 being referred to herein as termination for "Death or Disability");
6.2 Voluntary Termination. Thirty (30) days following Executive's
written notice to the Company of voluntary termination of employment; provided,
however, that the Company may waive all or a portion of the thirty (30) days'
notice and accelerate the effective date of such termination (and the
Termination Date) (termination pursuant to this Section 6.2 being referred to
herein as "Voluntary" termination); or
6.3 Termination For Cause. Immediately following notice of termination
for "Cause" (as defined below), specifying such Cause, given by the Company
(termination pursuant to this Section 6.3 being referred to herein as
termination for "Cause"). As used herein, "Cause" means (i) termination based on
Executive's conviction or plea of "guilty" or "no contest" to any crime
constituting a felony in the jurisdiction in which committed, any crime
involving moral turpitude (whether or not a felony), or any other violation of
criminal law involving dishonesty or willful misconduct that materially injures
the Company (whether or not a felony); (ii) Executive's substance abuse that in
any manner interferes with the performance of his duties; (iii) Executive's
failure or refusal to perform his duties at all or in an acceptable manner, or
to follow the lawful and proper directives of the Board of Directors or
Executive's supervisor(s) that are within the scope of Executive's duties; (iv)
Executive's breach of this agreement; (v) Executive's breach of the Company's
Confidentiality, Proprietary Information and Inventions policies; (vi)
misconduct by Executive that has or could discredit or damage the Company; (vii)
Executive's indictment for a felony violation of the federal securities laws; or
(viii) Executive's chronic absence from work for reasons other than illness. Any
determination of For Cause termination shall be made by the Board of Directors
of the Company after having first given thirty (30) days written notice to
Executive of such determination, and afforded Executive the opportunity to be
heard by the full Board.
6.4 Termination Without Cause. Notwithstanding any other provisions
contained herein, the Company may terminate Executive's employment thirty (30)
days following notice of termination without Cause given by the Company;
provided, however, that during any such thirty (30) day notice period, the
Company may suspend, with no reduction in pay or benefits, Executive from his
duties as set forth herein (including, without limitation, Executive's position
as a representative and agent of the Company) (termination pursuant to this
Section 6.4 being referred to herein as termination "Without Cause").
6.5 Other Remedies. Termination pursuant to Section 6.3 above shall be
in addition to and without prejudice to any other right or remedy to which the
Company may be entitled at law, in equity, or under this Agreement.
7. Severance and Termination.
7.1. Voluntary Termination, Termination for Cause, Termination for
Death or Disability. In the case of a termination of Executive's employment
hereunder for Death in accordance with Section 6.1 above, or Executive's
Voluntary termination of employment hereunder in accordance with Section 6.2
above, or a termination of Executive's employment hereunder for Cause in
accordance with Section 6.3 above, (i) Executive shall not be entitled to
receive payment of, and the Company shall have no obligation to pay, any
severance or similar compensation attributable to such termination, other than
Base Salary earned but unpaid, accrued but unused vacation to the extent
required by the Company's policies and any non-reimbursed expenses pursuant to
Section 4.6 hereof incurred by Executive as of the termination date, and (ii)
the Company's obligations under this Agreement shall immediately cease.
7.2. Termination Without Cause. In the case of a termination of
Executive's employment hereunder Without Cause in accordance with Section 6.4
above, the Company shall pay Executive his Base Salary for the remainder of this
Agreement and Executive shall be entitled to any and all stock granted to
Executive during the course of his employment (the "Severance Payment").
Executive's right to receive the Severance Payment shall cease in the event of
Executive's breach of his obligations under the Company's Confidentiality,
Proprietary Information and Inventions policies.
8. Severance Conditioned on Release of Claims.
8.1. The Company's obligation to provide Executive with the Severance
Payment set forth in Section 7.2 is not contingent upon Executive's execution of
a satisfactory release of claims in favor of the Company.
9. Non-competition, Non-solicitation.
9.1. As a stipulated condition of employment and entitlement to any
Severance Payment, Executive agrees that he shall not, during the Employment
Term and for eighteen (18) months subsequent thereto, without both the
disclosure to and the written approval of the Board of Directors of the Company,
directly or indirectly, engage or be interested in (whether as a principal,
lender, employee, officer, director, partner, venturer, consultant or otherwise)
any business(es) that is competitive with the business of the Company, its
parent or affiliated companies, without the express written approval of the
Board.
9.2. During the term of this Agreement, Executive shall promptly
disclose to the Board of Directors of the Company all information concerning any
interests, direct or indirect, he holds (whether as a principal, stockholder,
lender, employee, officer, director, partner, venturer, consultant or otherwise)
in any business which Executive reasonably knows purchases goods or provides
services to the Company, its parent, or affiliates.
9.3. Executive agrees that he will not, for a period of eighteen (18)
months following the Termination Date, contact or solicit orders, sales or
business from any customer of the Company.
10. Inventions, Discoveries and Improvements.
10.1. Any and all invention(s), discovery(ies) and improvement(s),
whether protectible or unprotectible by Patent, trademark, copyright or trade
secret, made, devised, or discovered by Executive, whether by Executive alone or
jointly with others, from the time of entering the Company's employ until the
earlier of the Termination Date of this Agreement or the actual date of
termination of employment, relating or pertaining in any way to Executive's
employment with the Company, shall be promptly disclosed in writing to the Board
of Directors of the Company, and become and remain the sole and exclusive
property of the Company. Executive agrees to execute any assignments to the
Company, or its nominee, of the Company's entire right, title, and interest in
and to any such inventions, discoveries and improvements and to execute any
other instruments and documents requisite or desirable in applying for and
obtaining Patents, trademarks or copyrights at the cost of the Company, with
respect thereto in the United States and in all foreign countries, that may be
requested by the Company. Executive further agrees, whether or not then in the
employment of the Company, to cooperate to the fullest extent and in the manner
that may be reasonably requested by the Company in the prosecution and/or
defense of any suit(s) involving claim(s) of infringement and/or
misappropriation of proprietary rights relevant to Patent(s), trademark(s),
copyright(s), trade secret(s), processes, and/or discoveries involving the
Company's product(s); it being understood that all reasonable costs and expenses
thereof shall be paid by the Company. The Company shall have the sole right to
determine the treatment of disclosures received from Executive, including the
right to keep the same as a trade secret, to use and disclose the same without a
prior Patent Application, to file and prosecute United States and foreign Patent
Application(s) thereon, or to follow any other procedure which the Company may
deem appropriate.
11. Confidential Information and Trade Secrets.
11.1. Executive hereby acknowledges that all trade, engineering,
production, and technical data, information or "know-how" including, but not
limited to, customer lists, sales and marketing techniques, vendor names,
purchasing information, processes, methods, investigations, ideas, equipment,
tools, programs, costs, product profitability, plans, specifications, Patent
Application(s), drawings, blueprints, sketches, layouts, formulas, inventions,
processes and data, whether or not reduced to writing, used in the development
and manufacture of the Company's products and/or the performance of services, or
in research or development, are the exclusive secret and confidential property
of the Company, and shall be at all times, whether after the Effective Date or
after the Termination Date, be kept strictly confidential and secret by
Executive.
11.2. Return of Property. Executive agrees not to remove from the
Company's office or copy any of the Company's confidential information, trade
secrets, books, records, documents or customer or supplier lists, or any copies
of such documents, without the express written permission of the Board of
Directors of the Company. Executive agrees, at the Termination Date, to return
any property belonging to the Company, including, but not limited to, any and
all records, notes, drawings, specifications, programs, data and other materials
(or copies thereof) pertaining to the Company's businesses or its product(s) and
service(s), generated or received by Executive during the course of his
employment with the Company.
11.3. Non-Disclosure. Executive represents and agrees that during the
term of this Agreement, and after the Termination Date, he will not report,
publish, disclose, use, or transfer to any person(s) or entity(ies) any property
or information belonging to the Company without first having obtained the prior
express written consent of the Company to do so; it being understood, however,
that information which was publicly known, or which is in the public domain, or
which is generally known, shall not be subject to this restriction.
12. Information of Others.
12.1 Executive agrees that the Company does not desire to acquire from
Executive any secret or confidential information or "know-how" of others.
Executive, therefore, specifically represents to the Company that he will not
bring to the Company any materials, documents, or writings containing any such
information. Executive represents and warrants that from the Effective Date of
this Agreement he is free to divulge to the Company, without any obligation to,
or violation of the rights of others, information, practices and/or techniques
which Executive will describe, demonstrate or divulge or in any other manner
make known to the Company during Executive's performance of services. Executive
also agrees to indemnify and hold the Company harmless from and against any and
all liabilities, losses, costs, expenses, damages, claims or demands for any
violation of the rights of others as it relates to Executive's misappropriation
of secrets, confidential information, or "know-how" of others.
13. Notice.
13.1. Notices. All notices and other communications under this
Agreement shall be in writing and shall be delivered personally or mailed by
registered or certified mail, return receipt requested, and shall be deemed
given when so delivered or mailed, to a party at his or its address as follows
(or at such other address as a party may designate by notice given hereunder):
If to Executive: Xxxxx Xxxxx
0-00 Xxxxxxx Xxxxxxx
Xxxx Xxxx, XX 00000
If to the Company: Reality Wireless Networks, Inc.
000 X. Xxxxxxxx Xxx., Xxxxx X
Xxxxxxxx, Xxxxxxxxxx 00000
With a copy to: Xxxxx X. Xxxx
The Xxxx Law Group, PLLC
000 Xxxxxx Xxx., Xxxxx 0000
Xxxxxxx, XX 00000
14. Suit, Jurisdiction.
Any controversy between the Company and Executive arising out of or
relating to any of the terms, provisions or conditions of this Agreement shall
be submitted to arbitration in accordance with the American Arbitration
Association's National Arbitration Rules for the Resolution of Employment
Disputes. On the written request of either party for arbitration of such a claim
pursuant to this paragraph, the Company and Executive shall both be deemed to
have waived the right to litigate the claim in any federal or state court. To
the extent that any claim or controversy arising out of this Agreement cannot be
submitted to arbitration as set forth above, each party hereby agrees that any
suit, action or proceeding with respect to this Agreement, and any transactions
relating hereto, shall be brought in the State of Washington, and each of the
parties hereby irrevocably consents and submits to the jurisdiction of such
Court(s) for the purpose of any such suit, action or proceeding. Each of the
parties hereby waives and agrees not to assert, by way of motion, as a defense
or otherwise, in any such suit, action or proceeding; any claim that it (he) is
not personally subject to the jurisdiction of the above-named Court(s); and, to
the extent permitted by applicable law, any claim that such suit, action or
proceeding is brought in an inconvenient forum or that the venue of such suit,
action or proceeding is improper or that this Agreement or any replacements
hereof or thereof may not be enforced in or by such Court(s). The Company shall
pay any and all costs associated with arbitration.
15. Miscellaneous.
15.1. Post Termination Obligations. Notwithstanding the termination of
Executive's employment hereunder, the provision(s) of Section(s) "5," "9," "10,"
"11," and "14" shall survive the Termination Date.
15.2. Assignment. This Agreement shall be assigned to and inure to the
benefit of, and be binding upon, any successor to substantially all of the
assets and business of the Company as a going concern, whether by merger,
consolidation, liquidation or sale of substantially all of the assets of the
Company or otherwise. Executive understands and agrees, however, that this
Agreement is exclusive and personal to him only, and, as such, he will neither
assign nor subcontract all or part of his undertaking(s) or obligation(s) under
the terms of this Agreement.
15.3. Entire Agreement. Each party acknowledges that this Agreement
constitutes the entire understanding between them, and that there are no other
written or verbal agreement(s) or understanding(s) between them other than those
set forth herein; it being understood that no amendment(s) to this Agreement
shall be effective unless reduced to writing and signed by each party hereto.
15.4. Severability. In the event that any provision of this Agreement
shall be determined to be unenforceable or otherwise invalid, the balance of the
provision(s) shall be deemed to be enforceable and valid; it being understood
that all provision(s) of this Agreement are deemed to be severable, so that
unenforceability or invalidity of any single provision will not affect the
remaining provision(s).
15.5. Headings. The Section(s) and paragraph heading(s) in this
Agreement are deemed to be for convenience only, and shall not be deemed to
alter or affect any provision herein.
15.6. Interpretation of Agreement. This Agreement shall be interpreted
in accordance plain meaning of its terms and under the laws of the State of
Washington.
15.7. Variation. Any changes in the Sections relating to salary, bonus,
or other material condition(s) after the Effective Date of this Agreement shall
not be deemed to constitute a new Agreement. All unchanged terms are to remain
in force and effect.
15.8. Unenforceability. The unenforceability or invalidity of any
provision(s) of this Agreement shall not affect the enforceability and/or the
validity of the remaining provision(s).
15.9. Collateral Documents. Each party hereto shall make, execute and
deliver such other instrument(s) or document(s) as may be reasonably required in
order to effectuate the purposes of this Agreement.
15.10. Written Policies and Procedures. The Company's written policies
and procedures, as codified and contained in the Company "Handbook," is deemed
to be incorporated by reference into this Agreement.
15.11. Non-Impairment. This Agreement may not be amended or
supplemented at any time unless reduced to a writing executed by each party
hereto. No amendment, supplement or termination of this Agreement shall affect
or impair any of the rights or obligations which may have matured thereunder.
15.12. Execution. This Agreement may be executed in one or more
counterpart(s), and each executed counterpart(s) shall be considered by the
parties as an original.
15.13. Legal Counsel. Executive represents to the Company that he has
retained legal counsel of his own choosing, and was given sufficient opportunity
to obtain legal counsel prior to executing this Agreement. Executive also
represents that he has read each provision of this Agreement and understands its
meaning.
15.14. Effect of Merger, Transfer of Assets, Dissolution. This
Agreement may be terminated by any voluntary or involuntary dissolution of the
Company resulting from either a merger or consolidation in which the Company is
not the consolidated or surviving corporation, or a transfer of all or
substantially all of the assets of the Company. In the event of any such merger,
or consolidation or transfer of assets, the Company's rights, benefits, and
obligations hereunder may, at the Company's option, be assigned to the surviving
or resulting corporation or the transferee of the Company's assets.
15.15. Transition. In the event that Executive's employment with the
Company terminates, Executive shall, through the last day of employment, and at
the Company's request, use Executive's reasonable best efforts (at the Company's
expense) to assist the Company in transitioning Executive's duties and
responsibility responsibilities to Executive's successor and maintaining the
Company's professional relationship with all customers, suppliers, etc. Without
limiting the generality of the foregoing, Executive shall cooperate and assist
the Company, at the Company's direction and instruction, during the transition
period between any receipt of or giving of notice of the termination of
employment and the final day of employment.
15.16. Signing Bonus. On the Effective Date, Executive shall be
entitled to receive from the Company a laptop computer (the "Bonus"). Provided,
however, that in no event shall the price of the Bonus exceed $2,000.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals the day
and year first above written.
ATTEST: REALITY WIRELESS NETWORKS, INC.
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By: Xxxxx Xxxxx
Its: Director
ATTEST: EXECUTIVE
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Xxxxx Xxxxx
