EXHIBIT 10.8
EMPLOYMENT AGREEMENT
AGREEMENT, made as of January 7, 2005, between TERRA INSIGHT
CORPORATION, a Delaware corporation ("Employer"), and Xxx Xxxxxxx, an individual
("Employee").
WITNESSETH:
WHEREAS, Employer desires to retain the services of Employee and
Employee desires to be employed by Employer upon the terms and conditions
hereinafter set forth;
WHEREAS, Employer contemplates an initial round of funding through
private investors and an acquisition by, or other transaction with, a
publicly-held entity, and the parties understand and agree that all references
herein below to "Employee" include and are intended to bind and benefit such
publicly-held entity;
NOW THEREFORE, in consideration of the agreements herein contained, the
parties hereto agree as follows:
1. EMPLOYMENT. Employer hereby employs Employee, and Employee hereby
agrees to serve, as Secretary of Employer, for the Term of Employment (as
defined in Section 2). Employee agrees to perform such services as are customary
for such office. Employee further agrees to use Employee's best efforts to
promote the interest of Employer and to devote such of Employee's business time
and energies as are reasonably required during normal business hours to the
business and affairs of Employer during the Term of Employment, it specifically
being recognized and agreed by Employer that Employer is a practicing attorney
with a law practice with three associate attorneys, with a busy corporate and
litigation practice that precludes substantial travel, as there are frequent
periods in which Employee is actually engaged in hearings, trials and other
legal matters the scheduling of which are beyond his control. During his
employment by Employer, Employee may engage in substantial and unrelated
activities for his own benefit, with no payment or benefit to the Employer in
regard to such activities.
2. TERM OF EMPLOYMENT. The employment hereunder shall commence as of
the date of this Agreement and shall continue for a term of three (3) years (the
"Term of Employment"), unless earlier terminated: (a) upon death of Employee;
(b) at the option of Employer upon 30 days' prior written notice to Employee, in
the event Employee, by reason of physical injury or illness, is unable to
materially perform his duties hereunder for a continuous period of 120 days and
has no expectation of returning to work within a reasonable time thereafter; or
(c) upon the discharge of Employee by the Board of Directors of Employer for
"cause" (as defined in Section 10 hereof).
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3. COMPENSATION.
A. Base Salary. As compensation for the services to be
provided hereunder and in consideration of Employee's agreement not to compete
as set forth in Section 4, during the Term of Employment, Employer shall pay
Employee an annual salary of sixty thousand dollars ($60,000) with adjustments
of not less than the change in the Consumer Price Index, or such greater annual
salary as may be established by Employer's Board of Directors, which shall be
payable in appropriate installments to conform with the regular payroll dates
for salaried personnel of Employer.
Employee's Base Salary shall be increased to one
hundred fifty thousand dollars ($150,000) when Employer (i) achieves revenue
totalling at least $5,000,000 or (ii) obtains financing of at least $5,000,000,
based upon financing completed after May 1, 2005. Such increased Base Salary
shall be deemed effective as of the first day of the subsequent month after the
event triggering the effectiveness of the increases in Base Salary.
Employee's Base Salary shall be increased to two
hundred fifty thousand dollars ($250,000) following the first month in which (i)
Employer achieves market capitalization of $100 million or more for at least
four consecutive trading days, or for at least ten of the last thirty trading
days; or (ii) subsidiaries of Employer, in total, achieve revenues totalling at
least $6 million or valuation of $25 million or more, based on private or public
financing, sale, merger or similar transaction; (iii) Employer achieves revenues
of $10 million or more; or (iv) Employer, including any subsidiary, obtains
financing of at least $8 million, based upon financing completed after May 1,
2005. Such increased Base Salary shall be deemed effective as of the first day
of the subsequent month.
B. Incentive Earnings Bonus. In addition to any bonus to be
determined by the Board of Directors, Employee is eligible for certain incentive
bonuses contingent upon certain corporate milestones. Employee is hereby granted
five year options to purchase a total of two and one-half percent (2.5%) of the
shares of Employer's common stock that are outstanding as of completion of
Employer's initial raise of a minimum of $2.5 million and a maximum of $5
million of capital on a fully-diluted basis (the "Options"). These Options will
vest upon the achievement of certain corporate milestones as set forth herein.
One-half of the Options shall vest following the first fiscal year end in which
Employer's EBITDA exceeds $2,000,000 or its gross revenues exceed $6,000,000;
the remaining Options shall vest following the first fiscal year end in which
Employer's EBITDA exceeds $4,000,000 or its gross revenues exceed $10,000,000.
These Options are exercisable at a $33 million market capitalization value of
the Employer's common stock. These Options are cumulative and are subject to
anti-dilution rights.
C. Other Benefits. Employee shall be entitled to the following
fringe benefits, perquisites, and other benefits of employment during the Term
of Employment at the maximum levels made available to executive employees of
Employer, and, to the extent that the Board of Directors determines such
benefits are to be made available to the Company's employees in general: (i)
medical and dental insurance under such group medical and dental insurance
policies as Employer may provide to its employees; (ii) sick days in accordance
with Employer's policy regarding officers; (iii) up to four (4) weeks vacation
in each year fully worked, (iv) participation
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in Employer's 401(k) plan or such other plan as Employer may adopt; (v)
participation in Employer's employee stock option plan when and if established;
(vi) any other benefits that Employer may make available from time to time to
other employees of substantially the same level in Employer's organization,
including subsidiaries.
D. Payment Upon Early Termination.
(1) In the event of early termination of employment
for any reason specified in Section 2 or Section 10 hereof, Employer shall no
longer be obligated to make any payments of compensation to Employee or
Employee's estate under this Agreement. However, any salary or bonus earned
and/or vested for prior periods, but not yet paid, shall be paid by Employer to
Employee or Employee's estate.
(2) If Employer terminates Employee's employment
during the Term of Employment for any reason other than those specified in
Section 2 or Section 10, Employer shall pay Employee, by lump sum payment,
twelve months of Employee's Base Salary in effect at the time of termination and
the vesting schedule of all of the Options described in Section 3.B shall
accelerate and be deemed immediately vested as of the termination date. In
addition, all fringe benefits provided for herein, shall continue for twelve
months after any termination of the employment of Employee.
4. COVENANT NOT TO COMPETE; INTELLECTUAL PROPERTY; CONFIDENTIALITY.
A. Covenant Not to Compete and Solicit. During the Term of
Employment, Employee will not, within any jurisdiction in which Employer or any
affiliate conducts its business operations, or in any way materially competing
with Employer, directly or indirectly, own, manage, operate, control, be
employed by or participate in the ownership, management, operation or control
of, or be connected in any manner with, any business of the type or character
engaged in or competitive with that conducted by Employer. The decision of
Employer's Board of Directors as to what constitutes a competing business shall
be final and binding upon Employee, and such decision shall be made in good
faith, or as adjudicated in a court of law. Employee confirms that the Employer
presently conducts business operations based on interpreting of various
modalities used in analyzing, reporting on and recommending sties for
exploration and recovery of natural resources. For these purposes, ownership by
Employee or any affiliate of Employee of securities of a public company not in
excess of one percent (1%) of any class of such securities shall not be
considered to be competition with Employer.
For a period of three (3) years after termination of
Employee's employment with Employer, except with Employer's specific written
permission, which shall not be unreasonably withheld, Employee further agrees to
refrain from interfering with the employment relationship between Employer and
its other employees by soliciting any of such individuals to participate in
independent business ventures and agrees to refrain from soliciting business
from any client or prospective client (as disclosed in a list to be provided to
Employee by Employer at the time he ceases to be employed, which list shall be
binding upon Employee)
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of Employer's for Employee's benefit or for any other entity, if such
solicitation shall be in direct competition with the Employer or materially
harmful to the business of Employer.
It is the desire and intent of the parties that if
any provisions of this Section 4(A) shall be adjudicated to be invalid or
unenforceable, this Section 4(A) shall be deemed amended to delete therefrom
such provisions or portion adjudicated to be invalid or unenforceable, such
amendment to apply only with respect to the operation of this paragraph in the
particular jurisdiction in which such adjudication is made.
B. Intellectual Property. During the Term of Employment,
Employee will disclose to Employer, all ideas, inventions and business plans
developed by Employee during such period which directly relate to the business
of Employer, including without limitation any such process, operation, product
or improvement which may be patentable or copyrightable. Employee agrees that
such will be the property of Employer, and that Employee will, at Employer's
request and cost, do whatever is necessary to secure the rights thereto by
patent, copyright or otherwise to Employer.
C. Confidentiality. Employee agrees to not divulge to anyone
(other than Employer or any other persons employed or designated by Employer)
any knowledge or information of any type whatsoever of a confidential nature
relating to the business of Employer or any of its subsidiaries or affiliates,
including without limitation all types of trade secrets (unless readily
ascertainable from public or published information or trade sources). Employee
further agrees not to disclose, publish or make use of any such knowledge or
information of a confidential nature without prior written consent of Employer.
5. CHANGE OF CONTROL. Employee shall have the right to terminate the
employment agreement in the event of a "change in control" of Employer. "Change
of control" is defined to be any of the following: (i) a change in the ownership
or management of Employer that would be required to be reported in response to
certain provisions of the Securities Exchange Act of 1934; (ii) an acquisition
(other than directly from Employer) by a person or entity (excluding Employer)
of thirty five percent (35%) or more of the Employer's common stock or the
Employer's then outstanding voting securities; (iii) a change in a majority of
the current Board of Directors (the "Incumbent Board") (excluding any persons
approved by a vote of at least a majority of the Incumbent Board other than in
connection with an actual or threatened proxy contest); (iv) consummation of a
reorganization, merger, consolidation or sale of all or substantially all of the
Company's assets (collectively, a "Transaction") other than a Transaction in
which all or substantially all of the shareholders of Employer prior to such
transaction own, in the same proportion, more than fifty percent (50%) of the
voting power of the entity resulting from the Transaction, at least a majority
of the board of directors of the resulting entity were members of the Incumbent
Board, and after which no person (other than the resulting entity and certain
affiliates) beneficially owns twenty five percent (25%) or more of the voting
power of the resulting entity, except to the extent such ownership existed prior
to the Transaction; or (v) the approval by the Employer's stockholders of a
complete liquidation or dissolution of Employer.
Upon a change in control, Employee shall be entitled to: (i) a
lump sum payment, payable within one month of termination, equal to two hundred
and ninety percent (290%) of
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Employee's "base amount", as defined in ss. 28OG(3) of the Code. In addition,
upon a change in control, the vesting schedule of all of the Options set forth
in Section 3.B shall be accelerated and all of the Options set forth in Section
3.B become immediately exercisable as of the date establishing the change in
control event.
6. REIMBURSEMENT OF EXPENSES. Employee shall be entitled to be
reimbursed for reasonable travel and other business related expenses incurred in
connection with Employee's services to Employer pursuant to and during the Term
of Employment upon a basis consistent with the policies established or announced
by Employer.
7. OTHER PRIVILEGES.
A. Automobile. During the term hereof, Employer agrees to
provide Employee with an automobile, equal or equivalent to an Acura or
comparable full size, fully equipped model, including related maintenance,
repairs, parking, insurance, and other costs, for the exclusive use of Employee.
Employer agrees to lease, make all necessary payments and related expenses to
said automobile, and prior to the expiration of the lease, if such lease has an
option, Employer shall exercise the option to purchase said automobile and sell
such automobile to Employee for the sum of $5,000. In the event that Employee's
employment with Employer shall be terminated by Employer other than for cause,
Employer shall immediately exercise the option to purchase such automobile and
shall sell the automobile to Employee for the sum of $5,000.
B. Communication Devices. During the term hereof, Employer
agrees to provide Employee with a cellular phone, Palm Pilot, Blackberry, and/or
such other portable communication device(s) and/or service(s) as Employee shall
reasonably request, for the exclusive use of Employee. Employer agrees to bear
all costs, expenses and payments in connection with the purchase or lease, and
the business use of the phone and such other communication equipment as is
supplied to Employee hereunder.
C. Credit Card. During the term hereof, Employer agrees to
provide Employee with an Employer credit card for business use with a credit
line no less than $25,000. Employer shall be responsible for all charges to such
account and shall make all annual payments for the use of such credit card.
Employee shall reimburse Employer for any non-business use of the credit card.
Employee will also be reimbursed for reasonable business expenses incurred by
him during the term of his employment in connection with the performance of his
duties hereunder that are not charged to Employee's corporate credit card,
provided Employee properly accounts therefore and provided that such expenses
are incurred in accordance with Employer's policies and procedures.
8. DEATH BENEFITS. If Employee dies during the Term of Employment,
Employer shall pay to Employee's estate the compensation that would otherwise be
payable to Employee for six months following the month in which his death
occurs. In addition, Employer shall pay $70,000, in a lump sum, to the
Employee's widow, or, if he is not then survived by his widow, to the Employee's
surviving children in equal shares, or, if there are no surviving
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children, to the Employee's estate. These benefits are in addition to any
insurance, or other benefits, Employee or his Estate has or may have.
9. BREACH BY EMPLOYEE. Both parties recognize that the services to be
rendered under this Agreement by Employee are special, unique and extraordinary
in character, and that in the event of a breach by Employee of the terms and
conditions of this Agreement to be performed by Employee, or in the event
Employee performs services during the Term of Employment for any person, firm,
corporation or other entity engaged in a competing line of business with
Employer, or otherwise breaches this Agreement, Employer shall be entitled, if
it so elects, to institute proceedings and to prosecute them in any court of
competent jurisdiction, either in law or in equity, to obtain damages for any
breach of this Agreement, or to enforce the specific performance thereof by
Employee, or to enjoin Employee from performing services for any such other
person, firm, corporation or other entity. This provision is specifically
subject to the provisions of Section 4 above.
10. TERMINATION FOR CAUSE. Employer may terminate Employee for cause
upon thirty days' prior written notice to Employee. For purposes of this
Agreement, an event or occurrence constituting "cause" shall mean:
A. Employee's willful failure or refusal after notice thereof,
to perform specific directives of Employer's Board of Directors, when such
directives are consistent with the scope and nature of Employee's duties and
responsibilities as set forth in Section 1 and elsewhere herein and such failure
or refusal is: (i) not corrected within a reasonable time after receipt of
written notice is sent by Employer's Board of Directors after resolution
authorizing such notice; (ii) the direct material cause of material damages to
the Employer; and (iii) within the ability and power of Employee to materially
perform such directive as to render such failure or refusal willful;
B. Employee's conviction of a felony or of any crime involving
moral turpitude, fraud or misrepresentation and final resolution of all appeals
therefrom;
C. Any final court determination of gross or wilful conduct of
Employee resulting in substantial loss to Employer, substantial damage to
Employer's reputation or any material theft from Employer;
D. Other than by reason of physical injury or illness, a final
court determination of Employee's material failure to perform the duties and
responsibilities under this Agreement causing material damage to Employer; or
E. Any final court determination of any material breach (not
covered by any of the clauses (A) through (D)) of any of the provisions of this
Agreement, causing material damage to Employer, and such breach was not cured
within ten days, or such other greater amount of time as is reasonable under the
circumstances, after written notice thereof is delivered to Employee by
Employer.
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11. ASSIGNMENT. This Agreement is a personal contract and, except as
specifically set forth herein, the rights and interests of Employee herein may
not be sold, transferred, assigned, pledged or hypothecated by Employee. The
rights and obligations of Employer hereunder shall be binding upon and run in
favor of the successors and assigns of Employer. Employee specifically consents
to assignment of this Agreement by Employer pursuant to any reorganization or
business combination that Employer may effect hereafter, except as limited or
otherwise provided elsewhere in this Agreement, and subject to such other
provisions.
12. GOVERNING LAW; CAPTIONS. This Agreement contains the entire
agreement between the parties and shall be governed by the laws of the State of
New York. It may not be changed orally, but only by agreement in writing signed
by the party against whom enforcement of any waiver, change, modification or
discharge is sought, and consented to in writing by the Board of Directors of
Employer. Any dispute shall be resolved in the courts of the County, City and
State of New York. Section headings are for convenience or reference only and
shall not be considered a part of this Agreement.
13. NOTICES. Any notice or other communication required or permitted
hereunder shall be sufficiently given if delivered in person to Employer by
delivery to its Chairman of the Board of Directors or sent by telex, telecopy or
by registered or certified mail, postage prepaid, addressed as follows:
if to Employee, to:
Xxx Xxxxxxx
x/x 00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: 000-000-0000
if to Employer, to:
Attn.: Xxxxx Xxxxxxxxx
Terra Insight Corporation.
c/o Law Offices of Xxx Xxxxxxx
00 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: 000-000-0000
14. PRIOR AGREEMENTS. This Agreement supersedes and terminates all
prior agreements between Employer and Employee relating to the subject matter
herein addressed.
[signature page follows]
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IN WITNESS WHEREOF, Employer has by its appropriate officer signed this
Agreement and Employee has signed this Agreement, on and as of the date and year
first above written.
TERRA INSIGHT CORPORATION
By the Board of Directors
By: /s/ Xxxx Railyan
--------------------------------
Name: Xxxx Railyan
Title: President and Chairman
EMPLOYEE
/s/ Xxx Xxxxxxx
-----------------------------------
Xxx Xxxxxxx
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