EMPLOYMENT AGREEMENT
This
Employment Agreement is made as of September 29, 2008 by and between City Loan,
and its related businesses and affiliates (collectively the “Company”) and Xxxxx
Xxxxx (the “Employee”)(collectively “the parties”).
The
parties hereto agree as follows:
1.
Employment.
Subject
to the terms and conditions set forth in this Agreement, the Company agrees
to
employ the Employee, and the Employee accepts employment with the Company,
upon
the terms set forth in the Agreement.
2.
Term.
Subject
to earlier termination as hereafter provided, the Employee shall be employed
hereunder for an original term commencing as of September 29, 2008 (the
“Effective Date”) and ending on September 30, 2009. The term of this employment
may be renewed upon mutual agreement of the parties.
3.
Capacity
and Performance.
3.1
Title;
Reporting Relationship.
During
the term hereof, the Employee shall serve the Company in the position of Chief
Financial Officer (“CFO”), reporting directly to the Chief Executive Officer
(the “CEO”), or to such other person(s) as the CEO may choose to
designate.
3.2
Performance.
During
the term hereof, the Employee shall be employed by the Company on a full-time
basis and shall perform and discharge (faithfully, diligently and to the best
of
his ability) such duties and responsibilities on behalf of the Company as may
be
designated from time to time by the CEO. During the term hereof, the Employee
shall devote his full efforts exclusively to the advancement of the business
and
interests of the Company and to the discharge of his duties and responsibilities
hereunder. The Employee shall not engage in any other business activity except
as otherwise approved in writing and in advance by the CEO.
4.
Compensation
and Benefits.
As
compensation for all services performed by the Employee under this Agreement
and
subject to Section 5 hereof and performance of the Employee’s duties and of the
obligations of the Employee to the Company, pursuant to this Agreement or
otherwise, the Employee shall receive the following:
4.1
Base
Salary.
During
the term hereof, the Company shall pay the Employee a base salary at the rate
of
$12,500 per month, less applicable withholdings and deductions in accordance
with the usual payroll practices of the Company. Such base salary is hereafter
referred to as the “Base Salary.”
4.2
Signing
Bonus.
Upon
the Employee’s execution of this Agreement, the Company will grant the Employee
a signing bonus equal to one-half of one percent (.5%) of the outstanding shares
at that time, vesting after 90 days of employment and subject to a standard
lock-up and leak out agreement governing the sale of shares.
4.3
Cash
Bonus.
The
Employee may be entitled to receive a Cash Bonus based upon the Company’s
success in Fiscal Year 2009. The amount and the Employee’s entitlement to
receive such Cash Bonus shall be based upon the metric set forth in the
Management By Objective (“MBO”) plan provided to the Employee by the Company
within 60 days of the beginning of the Employee’s term of
employment.
4.4
Equity
Bonus.
The
Employee may be entitled to additional equity ownership in the Company based
upon the Employee’s performance with the Company. The Employee shall be eligible
to earn up to an additional two percent (2%) of the outstanding shares at that
time, vesting after 36 months of employment and subject to a standard lock-up
and leak out agreement governing the sale of shares. The Employee’s entitlement
to receive such Equity Bonus shall be based upon the metric set forth in the
Management By Objective (“MBO”) plan provided to the Employee by the Company
within 60 days of the beginning of the Employee’s term of
employment.
4.5
Vacation.
During
the term hereof, the Employee shall be entitled to two
(2)
weeks of vacation per annum, to be taken at such times and intervals as shall
be
approved by the Company, and such approval will not be unreasonably withheld.
The Employee may not accumulate or carry over from one calendar year to another
any unused, accrued vacation time. In each year, Employee shall also be entitled
to five (5) sick days, but no personal days.
4.6
Other
Benefits.
During
the term hereof and subject to any contribution generally required of Employees
of the Company, the Employee shall be entitled to participate in all employee
benefit plans and benefit policies from time to time adopted by the Company
and
in effect for all employees of the Company. Such participation shall be subject
to (i) the terms of the applicable plan; (ii) generally applicable Company
policies; and (iii) the discretion of the Company or any administrative or
other
committee provided for or contemplated by such plan. The Company may alter,
modify, add to or delete its employee benefit plans at any time as the Company,
in its sole judgment and discretion, determines to be appropriate.
5.
Termination
of Employment.
Notwithstanding the provisions of Section 2 hereof, the Employee’s employment
hereunder shall terminate prior to the expiration of the term of this Agreement
under the following circumstances:
5.1
Death.
In the
event of the Employee’s death during the term hereof, the Employee’s employment
hereunder shall immediately and automatically terminate. In the event of the
Employee’s death during the term hereof, the Company shall pay to the Employee’s
designated beneficiary or, if no beneficiary has been designated by the
Executive, to his estate: (i) any Base Salary earned but unpaid through the
date
of such death; and (ii) amounts legally required for accrued and unused
vacation.
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5.2
By
the
Company.
The
Company may terminate the Employee’s employment hereunder for any reason, at any
time, upon notice to the Employee. Upon the giving of notice of termination
of
the Employee’s employment, the Company shall have no further obligation or
liability to the Employee relating to the Employee’s employment hereunder, or
the termination thereof, other than for Base Salary earned but unpaid through
the date of termination and additional Base Salary for accrued and unused
vacation days. Without limiting the generality of the foregoing, the Company
shall have no further obligation to make any payments to the Employee under
this
Agreement.
5.3
By
Employee for any Reason.
Employee
may terminate his employment hereunder at any time upon notice to the Company.
In the event of such termination, the Company shall pay the Employee (i) Base
Salary earned but unpaid through the date of termination, and (ii) additional
Base Salary for accrued and unused vacation days.
6.
Effect
of Termination.
The
provisions of this Section 6 shall apply in the event of termination due to
the
expiration of the term, pursuant to Section 5 or otherwise.
6.1
Payment
in Full.
Payment
by the Company of any Base Salary or other amounts legally due to the Employee
under the applicable termination provision of Section 5 shall constitute the
entire obligation of the Company to the Employee. Acceptance by the Employee
of
performance by the Company shall constitute full settlement of any claim that
the Employee might otherwise assert against the Company or any of its respective
shareholders, directors, officers, employees or agents relating to such
termination.
6.2
Survival
of Certain Provisions.
Provisions of this Agreement shall survive any termination if so provided herein
or if necessary or desirable to accomplish the purposes of such provision,
including, without limitation, the obligations of the Employee under Section
7
hereof. The Employee recognizes that, except as expressly provided herein,
no
compensation is earned after termination of employment.
7.
Confidential
Information.
7.1
Confidentiality.
The
Employee acknowledges that the Company continually develops Confidential
Information, that the Employee may develop Confidential Information for the
Company and that the Employee may learn of Confidential Information during
the
course of employment. The Employee will protect the Confidential Information
of
the Company and shall never disclose to any Person (except as required by
applicable law or for the proper performance of his duties and responsibilities
to the Company) or use for his own benefit or gain or otherwise use in a manner
adverse to the interests of the Company any Confidential Information obtained
by
the Employee incident to his employment or other association with the Company.
The Employee understands that this restriction shall continue to apply after
his
employment terminates, regardless of the reason for such termination. The
Employee further acknowledges that the unauthorized use or disclosure of
Confidential Information may be highly prejudicial to the interests of Company
and its Clients, an invasion of privacy, or an improper disclosure of trade
secrets.
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7.2
Return
of Documents.
All
documents, records, disks, tapes, and other media of every kind and description
relating to the business, present or otherwise, of the Company and any copies,
in whole or in part, thereof (the “Documents”), whether or not prepared by the
Employee, shall be the sole and exclusive property of the Company. The Employee
shall safeguard all Documents and shall surrender to the Company at the time
his
employment terminates, or at such earlier time or times as the Company may
specify, all Documents then in the Employee’s possession or
control.
7.3
Definitions.
As used
in this Agreement, the following terms have the following
definitions:
(a)
Clients.
“Clients” means any customer, person or entity for whom Company performs
services, to which Company sells or licenses products, or from whom Company,
Employee, or both obtain information.
(b)
Confidential
Information.
“Confidential Information” means proprietary techniques and confidential
information that Company has or will develop, compile, or own, or that Company
receives under conditions of confidentiality. Confidential Information includes
not only information disclosed by Company (including its employees, agents,
and
independent contractors) or its Clients to Employee in the course of employment,
but also information developed or learned by Employee during the course of
employment with the Company. Confidential Information is to be broadly defined
and includes (i) all information that has or could have commercial value or
other utility in the business in which Company or Clients are engaged or in
which they contemplate engaging and (ii) all information that, if disclosed
without authorization, could be detrimental to the interest of Company or
Clients, whether or not such information is identified as Confidential
Information by Company or Clients. By example and without limitation,
Confidential Information includes all information on teaching techniques,
processes, formulas, trade secrets, improvements, specifications, data,
know-how, formats, marketing plans, business plans, strategies, forecasts,
unpublished financial information, budgets, projections, and customer and
supplier identities, characteristics, and agreements.
(c)
Person.
“Person” means an individual, a corporation, an association, a partnership, a
limited liability company, an estate, a trust and any other entity or
organization.
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8.
Noncompetition.
8.1.
Noncompetition
During Employment.
Except
with the express written consent of the Board, Employee will not, during the
period of employment with the Company, (i) engage in any employment or activity
other than for the Company in any business in which the Company is engaged
or
contemplates engaging, (ii) induce any other employee or consultant of the
Company to engage in any such employment or activity, or (iii) solicit any
Clients or potential Clients of the Company for services similar to those
performed by the Company, even if not directly competitive with such
services.
8.2.
Noncompetition
After Termination Of Employment.
For a
period of one year immediately after termination of Employee’s employment with
the Company, Employee will not interfere with Company’s business by soliciting
an employee to leave Company’s employ, by inducing a consultant to sever the
consultant’s relationship with the Company, or by soliciting business from any
of the Company’s Clients.
9. Enforcement
of Covenants.
The
Employee acknowledges that he has carefully read and considered all the terms
and conditions of this Agreement, including, without limitation, the restraints
imposed upon him pursuant to Sections 7 and 8 hereof and he has been advised
by
counsel of his choice regarding his rights and obligation hereunder. The
Employee agrees that said restraints are necessary for the reasonable and proper
protection of the Company’s Confidential Trade Secret Information and that each
and every one of the restraints is reasonable in respect to subject matter,
length of time and geographic area. The Employee further acknowledges that,
were
he to breach any of the covenants or agreements contained in Sections 7 and
8
hereof, the damage to the Company could be irreparable. The Employee therefore
agrees that the Company, in addition to any other remedies available to it,
shall be entitled to preliminary and permanent injunctive relief against any
breach or threatened breach by the Employee of any of said covenants or
agreements. The parties further agree that, in the event that any provision
of
Sections 7 and 8 hereof shall be determined by any court of competent
jurisdiction or an arbitrator to be unenforceable for any reason, such provision
shall be deemed to be modified to permit its enforcement to the maximum extent
permitted by law.
10. Conflicting
Agreements.
The
Employee hereby represents and warrants that his execution of this Agreement
and
the performance of his obligations hereunder will not breach or be in conflict
with any other written agreement to which or by which the Employee is a party
or
is bound and that the Employee is not now subject to any written covenants
against competition, solicitation, or similar restrictive covenants that would
affect or limit the performance of his obligations hereunder. The Employee
further agrees that he will not disclose to or use on behalf of the Company
any
proprietary information of a third party without such party’s written
consent.
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11.
Assignment.
The
Company may assign this Agreement or any interest herein, without the consent
of
Employee and without providing additional consideration to the Employee, in
the
event that the Company shall hereafter affect reorganization, consolidation
with, merger into, or be acquired by any other Person, in which event such
other
Person shall be deemed the “Company” hereunder for all purposes. This Agreement
shall inure to the benefit of and be binding upon the Company and the Employee,
and their respective successors, executors, administrators, heirs and permitted
assigns.
12. Severability.
If any
portion or provision of this Agreement shall to any extent be declared void,
illegal, or unenforceable by a court of competent jurisdiction, then the
application of such provision in such circumstances shall be deemed modified
to
permit its enforcement to the maximum extent permitted by law, and both the
application of such portion or provision in circumstances other than those
as to
which it is so declared illegal or unenforceable and the remainder of this
Agreement shall not be affected thereby, and each portion and provision of
this
Agreement shall be valid and enforceable to the fullest extent permitted by
law.
13. Waiver;
Amendment.
No
waiver of any provision hereof shall be effective unless made in writing and
signed by the waiving party. The failure of either party to require the
performance of any term or obligation of this Agreement, or the waiver by either
party of any breach of this Agreement, shall not prevent any subsequent
enforcement of such term or obligation or be deemed a waiver of any subsequent
breach. This Agreement may be amended or modified only by a written instrument
signed by the Employee and the Company.
14 Entire
Agreement.
This
Agreement constitutes the entire agreement between the parties with respect
to
the terms and conditions of the Employee’s employment and, except as otherwise
provided herein, supersedes all prior communications, agreements and
understandings, written or oral, with the Company or predecessors with respect
to the terms and conditions of the Employee’s employment.
15. Headings.
The
headings and captions in this Agreement are for convenience only and in no
way
define or describe the scope or content of any provision of this
Agreement.
16. Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
an original and all of which together shall constitute one and the same
instrument.
17. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the domestic
substantive laws of The State of California without giving effect to any choice
or conflict of laws provision or rule that would cause the application of the
domestic substantive laws of any other jurisdiction.
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18. Confidentiality.
Except
as required by law, the Employee will not discuss or disclose to any other
Employee of the Company or to any other Person (other than family members,
his
attorneys, accountants, or tax preparers) the terms of this Employment
Agreement.
IN
WITNESS WHEREOF, this Agreement has been executed by the Company, by its duly
authorized representative, and by the Employee, as of the date first above
written.
CITY
LOAN
/s/
Xxxxxxx X. Xxxxxxxx
By:
Xxxxxxx X. Xxxxxxxx,
Title:
CEO
XXXXX
XXXXX
/s/
Xxxxx Xxxxx
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