EXHIBIT 10.6
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("the Agreement") entered into this 28th day
of October 2003 (the "Effective Date"), is by and between Caneum, Inc., a
corporation formed under the laws of the State of Nevada with its principal
place of business at 000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxxx Xxxxx, XX
00000 ("Caneum"), and Xxxxxxx Xxxxx Mudan ("the Employee").
RECITALS:
WHEREAS, Caneum desires to engage the services of the Employee as
President, and the Employee is willing to render such services to Caneum in
consideration of the terms and conditions agreed to by the parties; and
WHEREAS, the Board of Directors of Caneum (the "Board") has approved
the employment of the Employee on the terms and conditions set forth in
this Agreement;
NOW THEREFORE, in consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged by the parties hereto,
Caneum agrees to employ the Employee, and the Employee agrees to perform
services for Caneum as an employee, upon the terms and conditions set forth
herein.
1. TERM.
The initial term of this Agreement shall be for a period of three (3)
years, unless it is terminated earlier as provided herein. Beginning on
that date, and on each anniversary thereafter, unless it is terminated
earlier as provided herein or Caneum delivers written notice to the
Employee of its intention not to extend the Agreement at least ninety (90)
days before such anniversary date, the term of this Agreement shall
automatically be extended for one additional year. The restrictive
covenants in Section 9 hereof shall survive the termination of this
Agreement.
2. TITLE AND DUTIES.
The Employee shall be employed as President of Caneum. The Employee
shall perform such services consistent with his position as might be
assigned to him from time to time and are consistent with the bylaws of
Caneum. The Board has appointed the Employee to serve as the President and
Employee shall have such responsibilities and authority as is commensurate
with such offices and as may be prescribed by the Board and bylaws of
Caneum. The Board shall have the right to review and change the
responsibilities of Employee from time to time as it may deem necessary or
appropriate,
provided, however, that such responsibilities shall not be inconsistent
with the Employee's position as President.
3. LOCATION.
The Employee's place of employment shall be the offices of Caneum
described above, or at such other location as mutually agreed between
Caneum and the Board, but in no event outside Orange or San Diego counties.
4. EXTENT OF SERVICES.
a. DUTY TO PERFORM SERVICES.
The Employee agrees not to engage in any business activities
during the term of this Agreement except those that are for the benefit of
Caneum and its subsidiaries, and to devote not less than 75% of his entire
business time, attention, skill, and effort to the performance of his
duties under this Agreement for Caneum and any corporation controlled by
Caneum now or during the term of this Agreement. Notwithstanding the
foregoing, the Employee may engage in charitable, professional and civic
activities that do not impair the performance of his duties to Caneum, as
the same may be changed from time to time. In addition, Employee may serve
on the board of directors of up to two companies not engaged in business
reasonably similar to, or which may reasonably compete with, the business
of Caneum, provided that Employee shall not be required to render any
material services with respect to the operations or affairs of any such
company. Nothing contained herein shall prevent the Employee from managing
his own personal investments and affairs, including, but not limited to,
investing his assets in the securities of publicly traded companies;
provided, however, that the Employee's activities do not constitute a
conflict of interest, violate securities laws, or otherwise interfere with
the performance of his duties and responsibilities as described herein.
The Employee agrees to adhere to Caneum's published policies and
procedures, as adopted from time to time, affecting directors, officers,
employees, and agents and shall use his best efforts to promote Caneum's
interest, reputation, business and welfare.
b. CORPORATE OPPORTUNITIES.
The Employee agrees that he will not take personal advantage of
any Caneum business opportunities that arise during his employment with
Caneum and that might be of benefit to Caneum. All material facts
regarding such opportunities must be promptly reported to the Board for
consideration by Caneum.
5. COMPENSATION AND BENEFITS.
a. BASE SALARY.
The Employee's annual base salary shall be $120,000. The base
salary shall be payable in equal installments in accordance with Caneum's
standard payroll
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practices. The Employee's annual base salary shall be further reviewed no
less frequently than annually for increases in the discretion of the Caneum
Compensation Committee and/or Board, taking into account the compensation
level for employees with similar skills and responsibilities at companies
comparable to Caneum, the financial condition of Caneum, and the Employee's
value to Caneum relative to other members of the executive management of
Caneum; provided, however, that at no time during the term of this
Agreement shall the Employee's base salary be decreased from the base
salary then in effect except as part of an general program of salary
adjustment by Caneum applicable to all vice presidents and above.
b. COMPENSATION FOR ACCEPTING EMPLOYMENT
The option granted to Employee at the August 14, 2003 meeting of
the Board (the "Option") shall continue in effect and the Grant of Stock
Option (and the exhibits thereto) attached hereto as Exhibit B (the "Option
Agreement") shall have been, or shall be as soon as administratively
practicable following the Effective Date executed and delivered by Employee
to Caneum. The Option will be subject to the terms, definitions and
provisions of Caneum's 2002 Stock Option/Stock Issuances Plan (the "Option
Plan") and the Option Agreement, both of which documents are incorporated
herein by reference.
c. PERFORMANCE COMPENSATION.
Employee will be eligible to receive an annual bonus of a minimum
of 25% and a maximum of 100% of the then applicable Base Salary, less
applicable withholding taxes, upon achievement of annual performance
objectives to be determined by the Board and Employee, which such
objectives for the first year of this Agreement will be established within
thirty (30) days of the Effective Date. Objectives for subsequent years
will be determined as set forth herein within thirty (30) days of each
anniversary of this Agreement.
d. OTHER BENEFITS.
During the Employment Term, Employee will be entitled to
participate in the employee benefit plans currently and hereafter
maintained by Caneum of general applicability to other senior executives of
Caneum, including, without limitation, Caneum's group medical, dental,
vision, disability, life insurance, flexible-spending account, 401(k) and
other plans. Failure to provide full medical, dental and vision coverage
under a PPO or equivalent plan to Employee that will fully cover Employee,
Employee's spouse and all Employee's dependents, during the Employment
Term, will constitute a material breach of this Agreement.
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e. VACATION
Employee will be entitled to paid vacation of four (4) weeks per
year in accordance with Caneum's vacation policy, with the timing and
duration of specific vacations mutually and reasonably agreed to by the
parties hereto.
f. REIMBURSEMENT OF BUSINESS EXPENSES.
Caneum shall promptly reimburse the Employee for all reasonable
travel, entertainment and other expenses incurred or paid by the Employee
in connection with, or related to, the performance of his duties,
responsibilities or services under this Agreement, upon presentation by the
Employee of such supporting information and documentation as Caneum may
reasonably request in accordance with company policy and the requirements
of the Internal Revenue Code.
6. TERMINATION OF EMPLOYMENT.
a. TERMINATION DUE TO DEATH.
The Employee's employment and this Agreement shall terminate
immediately upon his death. If the Employee's employment is terminated due
to his death, his estate or his beneficiaries, as the case may be, shall be
entitled to:
(i) payment of any unpaid portion of his base salary
through the date of such termination;
(ii) reimbursement for any outstanding reasonable business
expenses he incurred in performing his duties hereunder;
(iii) the right to elect continuation coverage of
insurance benefits to the extent required by law;
(iv) full and immediate vesting of any unexercised stock
options;
(v) any pension survivor benefits that may become due
pursuant to any employee benefit plan or program of Caneum; and
(vi) payment of any accrued but unpaid benefits, and any
other rights, as required by the terms of any employee benefit
plan or program of Caneum, this Agreement, or any other agreement
between Caneum and the Employee.
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b. TERMINATION DUE TO DISABILITY.
Caneum may terminate the Employee's employment at any time if the
Employee becomes disabled, upon written notice by Caneum to the Employee.
For all purposes under this Agreement, "Disability" shall mean that the
Employee, at the time the notice is given, has been unable to perform his
duties under this Agreement for a period of not less than ninety (90) days
during any 180-day period as a result of the Employee's incapacity due to
physical or mental illness. If the Employee's employment is terminated due
to his disability, he shall be entitled to:
(i) payment of any unpaid portion of his base salary
through the date of such termination;
(ii) reimbursement for any outstanding reasonable business
expenses he has incurred in performing his duties hereunder;
(iii) the right to elect continuation coverage of
insurance benefits to the extent required by law;
(iv) full and immediate vesting of any unexercised stock
options; and
(v) payment of any accrued but unpaid benefits, and any
other rights, as required by the terms of any employee benefit
plan or program of Caneum, this Agreement, or any other agreement
between Caneum and the Employee.
As soon as administratively possible following the Effective
Date, Caneum shall make available to the Employee, and other similarly-
situated employees, a disability benefit plan, paid by Caneum, that
provides monthly payments to Employee equal to at least two thirds (2/3) of
the highest monthly base salary Employee receives pursuant to this
Agreement, which payment will continue for as long as Employee remains
disabled.
c. TERMINATION FOR CAUSE.
Caneum may terminate the Employee's employment at any time for
Cause, provided that it gives written notice of termination to the Employee
as set forth below. If the Employee's employment is terminated for Cause,
as defined below, he shall be entitled to:
(i) payment of any unpaid portion of his base salary
through the date of such termination;
(ii) reimbursement for any outstanding reasonable business
expenses he incurred in performing his duties hereunder;
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(iii) the right to elect continuation coverage of
insurance benefits to the extent required by law; and
(iv) payment of any accrued but unpaid benefits, and any
other rights, as required by the terms of any employee benefit
plan or program of Caneum, this Agreement, or any other agreement
between Caneum and the Employee.
For purposes of this Agreement, a termination for "Cause" shall
mean: (i) the final conviction of Employee of, or Employee's plea of
guilty or nolo contendere to, any felony involving moral turpitude,
(ii) fraud, misappropriation or embezzlement by Employee in connection with
Employee's duties to Caneum, or (iii) Employee's willful failure or gross
misconduct in the performance of his duties to Caneum.
If Caneum exercises its right to terminate the Employee for
Cause, Caneum shall: (1) give the Employee written notice of termination at
least twenty (20) days before the date of such termination specifying in
detail the conduct constituting such Cause, and (2) deliver to the Employee
a copy of a resolution duly adopted by a majority of the entire membership
of the Board, excluding interested directors, after reasonable notice to
the Employee and an opportunity for the Employee to be heard in person by
members of the Board, finding that the Employee has engaged in such
conduct.
d. TERMINATION WITHOUT CAUSE OR CONSTRUCTIVE TERMINATION WITHOUT
CAUSE.
Caneum may terminate the Employee's employment at any time
without Cause, provided that it gives written notice of termination at
least ninety (90) days before the date of such termination. If the
Employee's employment is terminated without Cause, or if there is a
constructive termination without Cause, as defined below, the Employee
shall be entitled to receive from Caneum the following:
(i) payment of any unpaid portion of his base salary
through the date of such termination;
(ii) reimbursement for any outstanding reasonable business
expenses he incurred in performing his duties hereunder;
(iii) the right to elect continuation coverage of
insurance benefits to the extent required by law;
(iv) full and immediate vesting of any unexercised stock
options;
(v) payment of any accrued but unpaid benefits, and any
other rights, as required by the terms of any employee benefit
plan or program
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of Caneum, this Agreement, or any other agreement between Caneum
and the Employee;
(vi) payment of amounts equal to any premiums for health
insurance continuation coverage under any Caneum health plans
that is elected by the Employee or his beneficiaries pursuant to
Section 4980B of the Internal Revenue Code, at a time or times
mutually agreed to by the parties, but only so long as the
Employee is not eligible for coverage under a health plan of
another employer (whether or not he elects to receive coverage
under that plan); and
(vii) subject to limitations set forth below, a
severance benefit in an amount equal to two and one half (2.5)
times the largest annual base salary received by Employee under
the Agreement if such termination occurs on or before July 31,
2004, and one (1) time the largest annual base salary received by
Employee under the Agreement if such termination occurs after
July 31, 2004, but only if (x) Employee executes an agreement
releasing Caneum from any further liability under this Agreement,
(y) the period for revoking such release has expired, and
(z) Employee has not materially breached the Confidential
Information Agreement.
The Employee shall be deemed to have earned and Caneum shall pay
to Employee 75% of the total severance benefit in Section 6(d)(vii) above
within thirty (30) days after all of the applicable conditions are
satisfied. The remaining 25% of the severance benefit will be deemed
earned by Employee, and Caneum shall pay to Employee such remaining 25% of
the severance benefit within thirty (30) days following the first
anniversary of the Employee's termination date unless the Employee
materially breaches the Confidential Information Agreement during the one
year period following the Employee's termination date, in which case such
remaining 25% of the severance benefit will be deemed unearned and will not
be paid. All severance benefits paid to the Employee shall be paid subject
to all legally required payroll deductions and withholdings for sums owed
by Caneum to the Employee.
For purposes of this Agreement, constructive termination without
Cause shall mean a termination of the Employee at his own initiative
following the occurrence, without the Employee's prior written consent, of
one or more of the following events not on account of Cause:
(1) a reduction in the Employee's then current base salary, or a
significant reduction by Caneum in Employee's opportunities for
earnings under any incentive compensation plans or bonus opportunity,
or the termination or significant reduction of any benefit or
perquisite enjoyed by Employee;
(2) any relocation of Caneum's office more than 10 miles from
its location as of the Effective Date;
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(3) the failure of Caneum to obtain an assumption in writing of
its obligation to perform under this Agreement by any successor to all
or substantially all of the assets of Caneum in connection with any
merger, consolidation, sale or similar transaction; or
(4) any material breach of this Agreement by Caneum.
In the event the Employee is terminated without Cause or there is
a constructive termination without Cause, each party shall provide the
other with written notice not less than thirty (30) days before the
effective date of the termination of employment.
e. VOLUNTARY TERMINATION.
If the Employee voluntarily terminates his employment on his own
initiative for reasons other than his death, disability, or constructive
termination without Cause, he shall be entitled to:
(i) payment of any unpaid portion of his base salary
through the effective date of such termination;
(ii) reimbursement for any outstanding reasonable business
expenses he has incurred in performing his duties hereunder;
(iii) the right to elect continuation coverage of
insurance benefits to the extent required by law; and
(iv) payment of any accrued but unpaid benefits, and any
other rights, as required by the terms of any employee benefit
plan or program of Caneum, this Agreement, or any other agreement
between Caneum and the Employee.
A voluntary termination under this paragraph shall be effective
upon fifteen (15) days' prior written notice to Caneum unless the parties
mutually agree to extend the effective date.
7. MITIGATION AND OFFSET.
If the Employee's employment is terminated during the term of this
Agreement pursuant to the provisions of paragraph 6(d), above, the Employee
shall be under no duty or obligation to seek or accept other employment,
and no payment or benefits of any kind due him under this Agreement shall
be reduced, suspended or in any way offset by any subsequent employment.
The obligation of Caneum to make the payments provided for in this
Agreement shall not be affected by any circumstance including, by way of
example rather than limitation, any set-off, counterclaim, recoupment,
defense, or other
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right that Caneum may assert, or due to any other employment or source of
income obtained by the Employee.
8. ENTITLEMENT TO OTHER BENEFITS.
Except as expressly provided herein, this Agreement shall not be
construed as limiting in any way any rights or benefits the Employee, his
spouse, dependents or beneficiaries may have pursuant to any other employee
benefits plans or programs.
9. CONFIDENTIALITY.
Employee agrees to enter into the form of Confidential Information and
Invention Assignment Agreement attached hereto as Exhibit A (the
"Confidential Information Agreement") upon commencing employment hereunder.
10. ARBITRATION.
Any dispute or controversy arising under or in connection with this
Agreement shall, if Caneum or the Employee so elects, be settled by
arbitration, in accordance with the Commercial Arbitration Rules procedures
of the American Arbitration Association. Arbitration shall occur before a
single arbitrator, provided, however, that if the parties cannot agree on
the selection of such arbitrator within thirty (30) days after the matter
is referred to arbitration, each party shall select one arbitrator and
those arbitrators shall jointly designate a third arbitrator to comprise a
panel of three arbitrators. The decision of the arbitrator shall be
rendered in writing, shall be final, and may be entered as a judgment in
any court in the State of California. Caneum and the Employee each
irrevocably consent to the jurisdiction of the federal and state courts
located in State of California for this purpose. The arbitrator shall be
authorized to allocate the costs of arbitration between the parties.
Notwithstanding the foregoing, Caneum, in its sole discretion, may bring an
action in any court of competent jurisdiction to seek injunctive relief in
order to avoid irreparable harm and such other relief as Caneum shall elect
to enforce the Employee's covenants in Section 9.
11. LEGAL EXPENSES.
Except as provided in Section 10 hereof, if any legal action or other
proceeding is brought for the enforcement of this Agreement, or because of
an alleged dispute, breach, default, or misrepresentation in connection
with any of the provisions of this Agreement, the successful or prevailing
party or parties will be entitled to recover reasonable attorneys' fees and
other costs incurred in that action or proceeding, in addition to any other
relief to which it or they may be entitled.
12. INDEMNIFICATION.
Caneum agrees that if the Employee is made a party, or is threatened
to be made a party, to any action, suit or proceeding, whether civil,
criminal, administrative, or
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investigative (a "Proceeding"), by reason of the fact that he is or was a
director, officer or employee or Caneum, or is or was serving at the
request of Caneum as a director, officer, member, employee or agent of
another corporation, partnership, limited liability company, joint venture,
trust or other enterprise, including service with respect to employee
benefit plans, whether or not the basis of such Proceeding is the
Employee's alleged action in an official capacity while serving as a
director, officer, member, employee or agent, the Employee shall be
Indemnified and held harmless by Caneum to the fullest extent permitted or
authorized by Caneum's articles of incorporation and bylaws. To the extent
consistent with the foregoing, this obligation to indemnify the Employee
and hold him harmless shall continue even if he has ceased to be a
director, officer, member, employee or agent of Caneum or other such entity
described above, and shall inure to the benefit of the Employee's heirs,
executors and administrators. Caneum shall advance to the Employee all
reasonable costs and expenses incurred by him in connection with a
Proceeding within twenty (20) days after receipt by Caneum of a written
request for such advance. Such request shall include an undertaking by the
Employee to repay the amount of such advance if it shall ultimately be
determined that the Employee is not entitled to be indemnified against such
costs and expenses.
Neither the failure of Caneum (including its Board, independent legal
counsel or stockholders) to have made a determination before such
Proceeding concerning payment of amounts claimed by the Employee under the
paragraph above that indemnification of the Employee is proper because he
has met the applicable standards of conduct, nor a determination by Caneum
(including its Board, independent legal counsel or stockholders) that the
Employee has not met such applicable standards of conduct, shall create a
presumption that the Employee has not met the applicable standards of
conduct.
Employee understands and acknowledges that Caneum may be required in
the future to undertake with the Securities and Exchange Commission to
submit in certain circumstances the question of indemnification to a court
for a determination of Caneum's right under public policy to indemnify
Employee.
13. ASSIGNABILITY AND BINDING NATURE.
This Agreement shall be binding upon and inure to the benefit of the
parties and their respective successors, heirs (in the case of the
Employee) and assigns. No rights or obligations may be assigned or
transferred by Caneum except that such rights or obligations may be
assigned or transferred pursuant to a merger or consolidation in which
Caneum is not the continuing entity, or the sale or liquidation of all or
substantially all of the assets of Caneum, provided that the assignee or
transferee is the successor to all or substantially all of the assets of
Caneum and such assignee or transferee assumes the liabilities,
obligations, and duties of Caneum, as contained in this Agreement, either
contractually or as a matter of law. Caneum further agrees, that in the
event of a sale of assets or liquidation as described in the foregoing
sentence, it shall take whatever action it is legally entitled to take in
order to Cause the assignee or transferee to expressly assume the
liabilities, obligations, and duties of Caneum under this Agreement.
Notwithstanding any such assignment, Caneum shall not be relieved from
liability under
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this Agreement. No rights or obligations of the Employee under this
Agreement may be assigned or transferred by the Employee other than his
right to receive compensation and benefits, provided such assignment or
transfer is otherwise permitted by law.
14. NOTICES.
All notices required or permitted hereunder shall be in writing and
shall be deemed effective: (1) upon personal delivery; (2) upon deposit
with the United States Postal Service, by registered or certified mail,
postage prepaid; or (3) in the case of delivery by nationally recognized
overnight delivery service, when received, addressed as follows:
If to Caneum to:
000 Xxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
With a copy (which shall not constitute notice) to:
Xxxxxx X. Xxxxx
Attorney at Law
00 Xxxx 000 Xxxxx
Xxxxx 000
Xxxx Xxxx Xxxx, XX 00000
If to the Employee, to:
00000 Xxxxxxxx Xxxxxx
Xxx Xxx, XX 00000
or to such other address or addresses as either party shall designate to
the other in writing from time to time by like notice.
15. AMENDMENT.
This agreement may be amended or modified only by a written instrument
executed by both Caneum and the Employee.
16. PRONOUNS.
Whenever the context might require, any pronouns used herein shall
include the corresponding masculine, feminine or neuter forms, and the
singular forms of nouns and pronouns shall include the plural, and vice
versa.
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17. CAPTIONS.
The captions appearing herein are for convenience of reference only
and in no way define, limit or affect the scope or substance of any section
hereof.
18. TIME.
All reference herein to periods of days are to calendar days, unless
expressly provided otherwise. Where the time period specified herein would
end on a weekend or holiday, the time period shall be deemed to end on the
next business day.
19. ENTIRE AGREEMENT.
This Agreement constitutes the entire agreement between Caneum and the
Employee and supersedes all prior agreements and understandings, whether
written or oral relating to the subject matter hereof.
20. SEVERABILITY.
In case any provision hereof shall be held by a court or arbitrator
with jurisdiction over Caneum or the Employee to be invalid, illegal, or
otherwise unenforceable, such provision shall be restated to reflect as
nearly as possible the original intentions of Caneum and the Employee in
accordance with applicable law, and the validity, legality, and
enforceability of the remaining provisions shall in not way be affected or
impaired thereby.
21. WAIVER.
No delays or omission by Caneum or the Employee in exercising any
right hereunder shall operate as a waiver of that or any other right. A
waiver or consent given by Caneum or the Employee or any one occasion shall
be effective only in that instance and shall not be construed as a bar or
waiver of any right on any other occasion.
22. GOVERNING LAW.
This Agreement shall be construed, interpreted, and enforced in
accordance with the laws of the State of California, without regard to its
conflicts of laws principles.
23. SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit of both
Caneum and the Employee and their respective successors and assigns,
including any entity with which or into which Caneum might be merged or
that might succeed to its assets or business or any entity to which Caneum
might assign its rights and obligations hereunder; provided, however, that
the obligations of the Employee are personal and shall not be assigned or
delegated by him.
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24. WITHHOLDING.
Caneum may make any appropriate arrangements to deduct from all
benefits provided hereunder any taxes reasonably determined to be required
to be withheld by any government or government agency. The Employee shall
bear all taxes on benefits provided hereunder to the extent that no taxes
are withheld, irrespective of whether withholding is required.
25. COUNTERPARTS.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall
constitute one and the same instrument.
26. FULL KNOWLEDGE.
By their signatures, the parties acknowledge that they have carefully
read and fully understand the terms and conditions of this Agreement, that
each party has had the benefit of separate counsel, or has been advised to
obtain separate counsel, and that each party has freely agreed to be bound
by the terms and conditions of this Agreement.
IN WITNESS WHEREOF, Caneum and the Employee have executed this
Agreement effective as of the day and year first written above.
CANEUM: Caneum, Inc.
Date: November 5, 2003 By: /s/ Xxxxx Xxxxxxx
Xxxxx Xxxxxxx,
Chairman Compensation Committee
EMPLOYEE:
Date: November 5, 2003 /s/ Xxxxxxx Xxxxx Mudan
Xxxxxxx Xxxxx Mudan
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