EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT dated as of January 12, 2001 is by and between
EarthNetMedia, Incorporated a Nevada corporation, 000 Xxxxxx Xxxxx, Xxxxx
Xxxxxx, XX 00000 (the "Company") and Xxxxxx X. Xxxxxx, an individual presently
residing at xxxxx (the "Employee").
RECITALS:
A. The Employee is critical to the long-term viability and success of the
Company.
B. The Employee desires to be employed by the Company and the Company
desires to retain the Employee on the terms and conditions set forth herein.
AGREEMENTS:
The parties hereto, in consideration of the covenants and agreements set
forth herein and other good and valuable consideration, agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following terms
shall have the meaning indicated:
1.1 Board means the Board of Directors of the Company or any successor
thereof.
1.2 Company means EarthNetMedia, Incorporated or any successor entity.
1.3 Effective Date means the date of execution of this Agreement,
namely, January 12, 2001.
1.4 Proprietary Information means all information used by the Company
in the conduct of its business, including patented and unpatented information,
processes, plans, procedures, trade secrets, specifications, computer software
programs, pricing information, drawings, sketches, customer lists, statistical
information and any and all other materials, tangible or intangible which
contain information used by or useful to the Company, and includes any
information developed by the Employee (i) at the direction of the Company, (ii)
out of or as an extension of existing Proprietary Information, or (iii) using
resources, such as materials or tools, existing technology, patents and licenses
belonging to the Company.
1.5 Termination For Cause means the termination of employment of the
Employee by the Board because of the Employee's personal dishonesty, willful
misconduct, breach of fiduciary duty involving personal profit, unintentional
failure to perform stated duties which failure is not cured within ten (10) days
after receipt of written notice from the Company specifying the failure to
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perform, willful violation of any material law, rule or regulation resulting in
the Company's detriment or reflecting upon the Company's integrity (other than
traffic infractions or similar minor offenses) or a material breach by the
Employee of the terms of this Agreement and failure to cure such breach within
ten (10) days after receipt of written notice from the Company specifying the
nature of such breach or to pay compensation to the Company deemed reasonable by
the Company if the breach cannot be cured.
1.6 Total and Permanent Disability means any condition affecting the
Employee that prevents the performance of the essential job functions and which
is expected to be of long continued and indefinite duration which has caused the
Employee's absence from service for not less than sixty (60) days, whether the
Employee is given or not given reasonable accommodation to perform the
requirements of the job.
2. EMPLOYMENT. The Company hereby retains and employs the Employee
to serve in the capacity that the Company deems best suited to the Employee's
skills and abilities. The Employee accepts such employment on the terms and
conditions set forth herein.
2.1 TERM. The Term of this Agreement shall commence on the Effective
Date and shall end on the close of business on January 11, 2002. On and after
the anniversary of the Effective Date, the Term hereof shall be extended
automatically for an additional one (1) year on each anniversary date hereof,
unless prior to thirty (30) days of each such anniversary date the Board decides
to modify the term of or to terminate this Agreement.
2.2 DUTIES AND RESPONSIBILITIES. The Employee's initial corporate
title shall be Executive Vice President and Chief Financial Officer and the
Employee's duties shall include, but not be limited to the responsibility for
the overall management and financial health of the organization.. The Employee
shall serve in such other capacities and have such additional titles and
authorities with respect to the Company as the Company may from time to time
reasonably prescribe. During the Term of this Agreement, the Employee shall
devote substantially his entire work time, attention, and energies to the
business of the Company. However, nothing in this Section 2.2 and subject to the
covenants recited in Section 4.1 precludes the Employee owning other businesses,
including business already owned by the Employee, so long as the ownership of
those businesses does not unreasonably interfere with the Employee's performance
of his duties under this Agreement.
2.3 LOCATION. The Employee primarily will perform the Employee's job
duties at the following location: 000 Xxxxxx Xxxxx, Xxxxx Xxxxxx, XX.
2.4 COMPENSATION.
2.4.1 Base Salary. Subject to the further provisions of this
Agreement, the Company agrees to pay to the Employee a monthly salary eight
thousand ($8,000) dollars payable no less frequently than on a bi-monthly basis,
with such increases as shall be made from time to time in
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accordance with the Company's regular salary administrative practices as applied
to the Company's key employees. The base salary of the Employee shall not be
decreased at any time during the term of this Agreement from the amount in
effect from time to time.
2.4.2 STOCK OPTION. Upon execution of this Agreement, the Company
will issue to the Employee stock options for twenty-four thousand shares
(24,000) shares of its common stock to be vested at one thousand shares (1,000)
shares each month. The Options may be exercised only by delivery to the Company
of a written notice of exercise signed by the Employee together with payment in
full for which the Option is exercised. The payment price will be a 15% discount
from the fair market value of the stock. The fair market value of the stock will
be the mean of the market value the prior thirty days period.
2.4.3 FRINGE BENEFITS. The Employee shall be entitled to
participate in any fringe benefits which are now or may hereafter become
applicable to the Company's employees and any other benefits which are
commensurate with the duties and responsibilities to be performed by the
Employee under this Agreement; including, but not limited to, reimbursement for
reasonable business expenses accounted for in accordance with applicable
governmental regulations; life, long term disability and accident insurance
plans; employee saving and investment plans, stock option or purchase plans; and
medical, dental and hospitalization insurance plans; and such other
prerequisites as the Company may, from time to time and in its sole discretion,
make available generally to employees of similar rank without any material
reduction in such fringe benefits as in effect on the Effective Date hereof. The
Employee shall be entitled to ten (10) personal time off days (vacation) during
the first year of employment and fifteen (15) personal timer off days (vacation)
thereafter for each year of employment, which he shall earn in arrears.
2.4.4 PARTICIPATION IN RETIREMENT AND BENEFIT PLANS. the
Employee shall be entitled to participate in any retirement, pension, thrift or
other retirement plan that the Company has adopted or may adopt for the benefit
of its key employees.
3. TERMINATION. The Employee's employment under this Agreement shall
terminate upon the occurrence of any one of the following events:
3.1 TOTAL AND PERMANENT DISABILITY. In the event the Employee suffers
Total and Permanent Disability, the Company may terminate the Employee's
employment. Upon termination by reason of Total and Permanent Disability the
Company shall pay to the Employee such benefits as may be provided to key
employees of the Company under any Company provided disability insurance or
similar policy or under any Company adopted disability plan and in the absence
of any such policy or plan shall continue to pay to the Employee for a period of
not less than two (2) months the Compensation then in effect as of the effective
date of the Employee's termination. The Employee agrees, in the event of any
dispute under this Section 3 as to the existence of Total and Permanent
Disability to submit to a physical examination by a licensed physician selected
by the Company, the cost of such examination to be paid by the Company, and the
decision as to the Employee's disability shall be conclusive and binding upon
the Company and the Employee.
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Nothing contained herein shall be construed to affect the Employee's rights
under any disability insurance or similar policy, whether maintained by the
Company. The Employee or another party.
3.2 DEATH. In the event of the death of the Employee this Agreement
shall terminate and, all obligations of the Company hereunder shall be
extinguished as of the date of the Employee's death. Nothing contained herein
shall be construed to affect any rights of the Employee's estate under any life
insurance or similar policy, whether owned by the Company, the Employee or any
third party.
3.3 TERMINATION FOR CAUSE. The Company may effect a Termination
For Cause of the Employee. The Company shall have no further obligation to pay
Compensation hereunder after the date of Termination for Cause.
3.4 TERMINATION WITHOUT CAUSE. If the Company terminates the Employee
without cause, at the time of termination the Employee shall receive a payment
equal to 50% of the compensation that would be paid to the Employee under the
remaining Term of this Agreement.
3.5 TERMINATION BY THE EMPLOYEE. The Employee may terminate his
employment hereunder at any time. The Company shall have no further obligation
to pay Compensation after termination by the Employee, provided, however, that
the Employee shall be entitled to payments for periods or partial periods that
occurred prior to the date of termination and for which the Employee has not yet
been paid.
4. COVENANT NOT TO COMPETE AND CONFIDENTIALITY.
4.1 COVENANT NOT TO COMPETE. The Employee agrees that during the term
of his employment hereunder, he shall not perform services anywhere within the
United States or China in any business which sells or otherwise deals with
products or services similar to or competitive with those developed by or
offered by or in the process of development by or sold by the Company during the
term of his employment hereunder. However, in the event, the Employee leaves his
employment prior to twenty four (24) months after the date of execution of this
Agreement, the prohibition enunciated in the first sentence of this Section 4.1
is applicable. This non-competition covenant shall include all forms of
competition, direct or indirect, including competition as an employee,
proprietor, shareholder, member, officer, director, consultant, trustee,
independent contractor or in any other capacity. The parties acknowledge that
the geographic area of this covenant is reasonable in view of the highly
specialized and narrow scope of the present and proposed business of the Company
and the consequent ability of the Employee to work in non-competitive areas.
However, this Covenant Not to Compete shall not apply if the Employee's
employment is terminated by the Company without cause. Nothing in this Section
4.1 shall be deemed to prohibit the Employee from purchasing less than five
percent (5%) of the outstanding shares of any company whose shares are traded on
a national exchange and which, at the time of purchase, is not engaged in
competition with the Company or any of its affiliates or subsidiaries.
4.2 CONFIDENTIAL INFORMATION. The Employee agrees that all Proprietary
Information is the sole
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and exclusive property of the Company and that he will not, during the term of
his employment or any time after the termination of his employment, disclose any
Proprietary Information to any third party or use any Proprietary Information in
any way to compete with or to act in any way adverse to the Company, except with
the prior written consent of the Company. The Employee acknowledges that he has
and will have access to Proprietary Information of the Company throughout the
term of this Agreement and that part of his work assignment may involve the
development of Proprietary Information. Any such Proprietary Information,
regardless of whether the Employee alone or with others developed any such
Proprietary Information, shall be and shall remain the property of the Company.
During the term of this Agreement and after termination of employment, the
Employee shall not, either voluntarily or involuntarily, on either his own
account, as a member of a firm, or on behalf of another employer or otherwise,
directly or indirectly use or reveal to any person, partnership, corporation or
association any trade secret or confidential information of the Company. Such
trade secrets shall include, but shall not be limited to, software formulas,
programs, procedures, patents, codes, algorithms, devices, secret inventions,
processes, business plans, marketing plans or programs, any non-public financial
information, including but not limited to financial information, forecasts and
statistics, contacts, customer lists, compensation arrangements and business
opportunities. The Employee will not make available to any person, partnership,
corporation or association, or retain after termination of employment, any
Company policy manuals, statistical information or other data related to
nonprofit corporations, printed materials, programs, formulas, algorithms,
files, records, drawings or computer disc containing information related to the
Company or to any subsidiaries or affiliate of the Company.
4.2.1 INVENTION RIGHTS. The Employee hereby agrees to assign any
and all rights to any Proprietary Information, discovery, idea, computer
program, invention or inventive improvement (whether patentable or not), design,
drawing, sketch, specification, or other things conceived of or reduced to
practice during employment with the Company which relate to the Company's
business, or which are conceived of or reduced to practice after termination of
employment which make use of any of the foregoing. The Employee further agrees
to execute (without further consideration) any documents in furtherance of
perfecting the Company's rights in the foregoing, including documents
transferring patent, copyright, trademark, trade secret or other rights. In
instances where any doubt exists in the Employee's mind as to whether anything
developed by the Employee falls within the foregoing categories, the Employee
agrees to request a written statement from the Company regarding the same.
4.2.2 DISCLOSURE OF INFORMATION. The Employee agrees to promptly
disclose in writing to the Company any discovery, idea, computer program,
invention or inventive improvement (whether patentable or not), design, drawing,
sketch, specification or other things conceived of or reduced to practice during
employment with the Company which relate to the Company's business or which are
conceived of or reduced to practice after termination of employment which make
use of any of the foregoing. In instances where any doubt exists in the
Employee's mind as to whether anything developed by the Employee falls within
the foregoing categories, the Employee agrees to request a written statement
from the Company regarding the same. The Employee agrees to safeguard all the
foregoing information from public disclosure, including taking any such measures
as the Company may require to prevent divulgence to third parties.
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4.3 INJUNCTIVE RELIEF. The Employee acknowledges that the restrictions
contained in this Section 4 are a reasonable and necessary protection of the
immediate interests of the Company and that any violation of these restrictions
would cause substantial injury to the Company. In the event of a breach or
threatened breach by the Employee of these restrictions, the Company shall be
entitled to apply to any court of competent jurisdiction for an injunction
restraining the Employee from such breach or threatened beach; provided however,
that the right to apply for an injunction shall not be construed as prohibiting
the Company from pursuing any other available remedies for such breach or
threatened breach.
5. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the Employee, the Company and their respective heirs,
executors, administrators, successors and assigns; provided, however, that the
Employee may not assign his rights hereunder without the prior written consent
of the Company and may not assign his obligations hereunder. The Company may
assign either its rights or obligations hereunder to any of its subsidiaries or
affiliated corporation or to any successor to substantially all of the assets or
business of the Company.
6. MODIFICATION, WAIVER OR AMENDMENT. The provisions of this Agreement
may not be modified amended or waived except by a written instrument executed by
the Company and the Employee. The waiver of any provision of this Agreement by
either party shall not constitute a waiver of any subsequent occurrences or
transactions unless the waiver, by its terms, constitutes a continuing waiver.
7. ARBITRATION. If the Employee so elects, any dispute or controversy
arising under or in connection with this Agreement, its application or
interpretation, other than disputes related to the covenants contained in
Section 4, shall be finally settled by one or more arbitrators in accordance
with the rules of the American Arbitration Association in Los Angeles County,
California. Judgment may be entered on the arbitrator's award in any court
having jurisdiction over this Agreement. This Agreement shall be construed and
interpreted in accordance with the laws of the State of California. The
prevailing part shall be entitled to recover its fees and expenses (including
reasonable attorney's fees) of the arbitration proceeding from the
non-prevailing party in that proceeding.
8. MISCELLANEOUS.
8.1 ENTIRE AGREEMENT. This Agreement including the documents and
instruments referred to herein, rescinds and supersedes any other agreement and
contains the entire agreement and understanding between the parties relative to
the employment of the Employee, there being no terms, conditions, warranties, or
representations other than those contained or referred to herein, and no
amendment hereto shall be valid unless made in writing and signed by both of the
parties hereto.
8.2 GOVERNING LAW. This Agreement shall be governed by, enforced,
interpreted and construed in accordance with the internal substantive laws of
the State of California as applied to
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residents of California without regard to conflicts or choice of law principles.
8.3 SEVERABILITY. In the event that any provisions herein shall be
legally unenforceable, the remaining provisions nevertheless shall be carried
into effect.
8.4 ATTORNEYS' FEES. In the event of any litigation between the
parties hereto, (as permitted by Section 7 hereof) arising out of the terms,
conditions and obligations expressed in this Agreement, the prevailing party in
such litigation shall be entitled to recover reasonable attorneys' fees incurred
in connection therewith.
8.5 NOTICES. All notices required or permitted to be given hereunder
shall be deemed given if in writing and delivered personally or sent by telex,
telegram, telecopy, or forwarded by prepaid registered or certified mail (return
receipt requested) to the party or parties at the following addresses (are at
such other addresses as shall be specified by like notices), and any notice,
however given, shall be effective when received:
TO THE EMPLOYEE: Xxxxxx X. Xxxxxx
xxxxx
xxxxx
TO THE COMPANY: Xx. Xxxx Xxxxx, President and Chief Executive Officer
EarthNetMedia, Inc.
000 Xxxxxx Xxxxx
Xxxxx Xxxxxx, XX 00000
8.6 WAIVER. The waiver by any party of a breach of any provision of
this agreement by the other shall not operate or be construed as a waiver of any
subsequent breach of the same provision or any other provision of this
Agreement.
8.7 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.8 HEADINGS. The subject headings to the sections in this Agreement
are included for purposes of convenience only and shall not affect the
construction or interpretation of any of its provisions.
8.9 SURVIVORSHIP. The provisions of Sections 3.1, 4.1, 4.2, 4.2.1,
4.2.2, 4.3, and 7 shall continue and shall survive the termination of the
Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first hereinabove written.
EARTHNETMEDIA, INCORPORATED
A Nevada corporation
/s/ XXXX XXXXX
___________________________
Xxxx Xxxxx, President & CEO
EMPLOYEE
/s/ XXXXXX X. XXXXXX
________________
Xxxxxx X. Xxxxxx
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