EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT is made and entered into as of this 4th day of January,
2008, by and between CUSTOMER ACQUISITION NETWORK HOLDINGS, INC., a Delaware
corporation with offices at 000 X. Xxx Xxxx Xxxxxxxxx, Xxxxx 0000, Xxxx
Xxxxxxxxxx, Xxxxxxx 00000 (the “Corporation”), and
Xxxxx Xxxxxxxx, an individual residing at
211-189th Street,
Sunny Isles Beach, Fl. 33160 (the “Employee”), under the
following circumstances:
RECITALS:
A. The
Corporation desires to secure the services of the Employee upon the terms and
conditions hereinafter set forth; and
B. The
Employee desires to render services to Options Newsletter, inc. (or any
successor thereof) (“ONI”), a subsidiary
of the Corporation located at 000 Xxx Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxxxx
Beach, Fl.. 33009, upon the terms and conditions hereinafter set
forth.
C. The
Employee has been offered a position with the Company which is of the nature
that Employee will either generate or be entrusted with information, ideas and
materials pertaining to the Corporation.
NOW,
THEREFORE, the parties mutually agree as follows:
1. Employment. The
Corporation hereby employs the Employee and the Employee hereby accepts
employment as an employee of the Corporation, subject to the terms and
conditions set forth in this Agreement.
2. Duties. The Employee
shall serve as President of ONI, a subsidiary of the Corporation, and shall
devote substantially all of his time to perform his duties as President of ONI
and perform such other tasks, consistent with his position, as may be, from time
to time, assigned to him by the Chief Operating Officer of the Corporation. The
Employee shall report directly to the Chief Operating Officer of the
Corporation.
3. Term of Employment.
Subject to Section 5 below, the term of the
Employee’s employment hereunder, unless sooner terminated as provided herein
(the “Initial
Term”), shall be for a period of three (3) years commencing on the date
hereof. For purposes of this Agreement, the Initial Term and any term
in accordance with Section 5 below are
hereinafter collectively referred to as the “Term.”
4. Compensation of
Employee.
(a) The
Corporation shall pay the Employee as compensation for his services hereunder,
in equal semi-monthly or bi-weekly installments during the Term, the sum of
$250,000 per annum (the “Base Salary”), less
such deductions as shall be required to be withheld by applicable law and
regulations. The Corporation shall review the Base
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Salary
on an annual basis and has the right but not the obligation to increase it, but
has no right to decrease the Base Salary.
(b) In
addition to the Base Salary set forth in Section 4(a) above, the Employee shall
be entitled to receive an annual cash bonus in an amount to be determined by the
Board of Directors of the Corporation (the “Board”), to the
extent that for that year, objectives to be mutually agreed upon between the
Employee and the Chief Operating Officer (“Objectives”) are
achieved. To the extent these Objectives are achieved and the
Corporation achieves its profitability projections the targeted bonus shall be
50% of the Employee’s Base Salary.
(c) The
Corporation shall pay or reimburse the Employee for all reasonable out-of-pocket
expenses actually incurred or paid by the Employee in the course of his
employment, consistent with the Corporation’s policy for reimbursement of
expenses from time to time.
(d) The
Employee shall be entitled to participate in such pension, profit sharing, group
insurance, hospitalization, and group health and benefit plans and all other
benefits and plans, including perquisites, if any, as the Corporation provides
to its employees.
(e) In
addition to the Base Salary and the bonus compensation, the Employee shall
receive options to purchase 300,000 shares of the Corporation’s Common
Stock. The option agreement with respect to such options shall
provide for such options to vest thirty-three and one-third percent (331/3 %) on
each anniversary of the date hereof. The exercise price per share for
such options will be $1.00 per share, subject to adjustment for dividends,
splits, reclassifications and similar transactions.
5. Termination.
(a) This
Agreement and the Employee’s employment hereunder shall terminate upon the
happening of any of the following events:
(i) upon the
Employee’s death;
(ii) upon the
Employee’s “Total Disability” (as herein defined);
(iii) upon the
expiration of the Initial Term of this Agreement or any Renewal Term thereof, if
either party has provided a timely notice of non-renewal in accordance with
Section 3, above;
(iv) at the
Employee’s option, upon ninety (90) days prior written notice to the
Corporation;
(v) at the
Employee’s option, in the event of an act by the Corporation, defined in Section
5(c), below, as constituting “Good Reason” for termination by the Employee;
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(vi) at the
Corporation’s option, in the event of an act by the Employee, defined in Section
5(d), below, as constituting “Cause” for termination by the Corporation;
and
(vii) at the
Corporation’s option without “Cause” at any time by providing Employee with
written notice of such termination, which termination shall take effect 10 days
after such notice is provided.
(b) For
purposes of this Agreement, the Employee shall be deemed to be suffering from a
“Total
Disability” if the Employee has failed to perform his regular and
customary duties to the Corporation for a period of 180 days out of any 360-day
period and if before the Employee has become “Rehabilitated” (as herein defined)
a majority of the members of the Board, exclusive of the Employee, vote to
determine that the Employee is mentally or physically incapable or unable to
continue to perform such regular and customary duties of employment. As used
herein, the term “Rehabilitated” shall
mean such time as the Employee is willing, able and commences to devote his time
and energies to the affairs of the Corporation to the extent and in the manner
that he did so prior to his Total Disability.
(c) For
purposes of this Agreement, the term “Good Reason” shall
mean that the Employee has resigned due to (i) any diminution of duties
inconsistent with Employee’s title, authority, duties and responsibilities
(including, without limitation, a change in the chain of reporting) that is not
cured within fifteen (15) days; (ii) any reduction of or failure to pay Employee
compensation provided for herein, except to the extent Employee consents in
writing to any reduction, deferral or waiver of compensation, which non-payment
continues for a period of fifteen (15) days following written notice to the
Corporation by Employee of such non-payment; (iii) any relocation of the
principal location of Employee’s employment outside thirty (30) miles from
Hallandale, Florida without the Employee’s prior written consent; (iv) the
consummation of any Change in Control Transaction (as defined below); or (vi)
any material violation by the Corporation or Options of its obligations under
this Agreement that is not cured within sixty (60) days Agreement after receipt
of written notice thereof from the Employee. For purposes of this Agreement, the
term “Change in
Control Transaction” means the sale of the Corporation or Options to an
un-affiliated person or entity or group of un-affiliated persons or entities
pursuant to which such party or parties acquire (i) shares of capital stock of
the Corporation or Options representing at least fifty percent (50%) of
outstanding capital stock or sufficient to elect a majority of the Board or of
the board of directors of Options (whether by merger, consolidation, sale or
transfer of shares (other than a merger where the Corporation is the surviving
corporation and the shareholders and directors of the Corporation prior to the
merger constitute a majority of the shareholders and directors, respectively, of
the surviving corporation (or its parent)) (other the contemplated
reverse-merger going public transaction)) or (ii) all or substantially all of
the Corporation’s or Options’ assets determined on a consolidated
basis.
(d) For
purposes of this Agreement, the term “Cause” shall
mean:
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(i) the
willful or continued failure by Employee to substantially perform his duties,
including, but not limited to, acts of fraud, willful misconduct, gross
negligence or other act of dishonesty (provided that the Corporation shall have
delivered to Employee a notice of such failure, specifying the particulars
thereof and giving Employee a 15-day period to cure such conduct if such conduct
is capable of being cured);
(ii) a
material violation or material breach of this Agreement which is not cured
within 10 days written notice to Employee;
(iii) misappropriation
of funds, properties or assets of the Company by Employee or any action which
has a materially adverse effect on the Company or its business; or
(iv) the
conviction of, or plea of guilty or no contest to, a felony or any other crime
involving moral turpitude, fraud, theft, embezzlement or dishonesty;
or
(v) abuse of
drugs or alcohol which impairs Employee’s ability to perform his
duties.
6. Effects of
Termination.
(a) Upon
termination of the Employee’s employment by the Corporation for any reason other
than for “Cause” or by the Employee for “Good Reason”, the Employee shall be
entitled to six (6) months’ Base Salary at the then current rate, payable in a
lump sum, less withholding of applicable taxes or any other compensation or
benefits. The Employee shall not be entitled to any severance if he
resigns from the Corporation unless he resigns for Good Reason.
(b) In the
event that the Corporation shall terminate the Employee without “Cause” or in
the event that the Employee shall resign from the Corporation with “Good
Reason”, all unvested options shall immediately vest and become
exercisable. In the event that the Corporation shall terminate the
Employee for “Cause” or in the event that the employee shall resign without
“Good Reason” all unvested options shall be forfeited and all vested options
shall remain exercisable for the term of the option.
7. Vacation. The
Executive shall be entitled to a vacation of three (3) weeks per year, during
which period his salary shall be paid in full. The Executive shall take his
vacation at such time or times as the Executive and the Corporation shall
determine is mutually convenient. Any vacation not taken in one (1) year shall
not accrue, provided that if vacation is not taken due to the Corporation’s
business necessities, up to three (3) weeks’ vacation may carry over to the
subsequent year.
8. Disclosure of Confidential
Information. The Employee recognizes, acknowledges and agrees that he has
had and will continue to have access to secret and confidential information
regarding the Corporation, including but not limited to, its products, formulae,
patents, sources of supply, customer dealings, data, know-how and business
plans, provided such information is not in or does not hereafter become part of
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the
public domain, or become known to others through no fault of the Employee. The
Employee acknowledges that such information is of great value to the
Corporation, is the sole property of the Corporation, and has been and will be
acquired by him in confidence. In consideration of the obligations undertaken by
the Corporation herein, the Employee will not, at any time, during or after his
employment hereunder, reveal, divulge or make known to any person, any
information acquired by the Employee during the course of his employment, which
is treated as confidential by the Corporation, and not otherwise in the public
domain. The provisions of this Section 8 shall survive the termination of the
Employee’s employment hereunder.
9. Covenant Not To Compete or
Solicit. The Employee covenants and agrees that for a period
of twenty-four (24) months after the date of this Agreement (the “Restricted Period”),
he shall not:
(a) directly
or indirectly, own, manage, operate, control, finance or participate in the
ownership, management, operation, control or financing of, or be an officer,
director, employee, partner, principal, agent, representative, consultant or
otherwise with, or use or permit his name to be used in connection with, any
business or enterprise (the “Restricted Activities”) which is engaged in any
line of business in which Options Newsletter Inc. (“ONI”) or the Corporation was
engaged or had a present intent to engage, in each case, as of immediately prior
to the date hereof, including, without
limitation, the operation of an email
service provider (collectively, the
“Business”);
provided, however, that notwithstanding the foregoing, nothing herein shall
prohibit the Employee from (i) engaging in Restricted Activities with a person
or entity that is engaged in, or has a formal plan to engage in, the Business
provided that the Restricted Activities engaged in and compensation received by
the Employee, if any, are unrelated to the Business, or (iii) owning up to five
percent (5%) of any class of securities or equity interests of any corporation
or other business entity which is engaged in the Business having a class of
securities registered pursuant to the Securities Exchange Act of 1934, as
amended, but neither the Employee, nor any group of persons including the
Employee may in any way, either directly or indirectly, manage or exercise
control of any such corporation or entity, guarantee any of its financial
obligations, or otherwise take any part in its business other then exercising
its or his rights as a stockholder. The Employee acknowledges that
ONI and the Corporation conducts the Business on a national basis (in the United
States and Canada) and that this covenant cannot be limited to a service area in
which ONI (or a successor to the Business) or the Corporation conducts the
Business; or
(b) directly
or indirectly, either for himself or any other person (A) solicit or induce, or
attempt to induce, any employee of, or independent contractor providing services
to, ONI (or any successor to the Business) or the Corporation to leave the
employ of or to cease to provide services, in whole or in part to, ONI (or any
successor to the Business) or the Corporation, or (B) induce or attempt to
induce any customer or supplier of ONI (or any successor to the Business) or the
Corporation, to cease doing business with ONI (or any successor to the Business)
or the Corporation.
In the
event of a breach by the Employee of any of the covenants set forth above,
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the term
of such covenant shall be extended by the period of the duration of such
breach.
10. Miscellaneous.
(a) The
Employee acknowledges that the services to be rendered by him under the
provisions of this Agreement are of a special, unique and extraordinary
character and that it would be difficult or impossible to replace such services.
Accordingly, the Employee agrees that any breach or threatened breach by him of
Sections 8 or 9 of this Agreement shall entitle the Corporation, in addition to
all other legal remedies available to it, to apply to any court of competent
jurisdiction to seek to enjoin such breach or threatened breach. The parties
understand and intend that each restriction agreed to by the Employee
hereinabove shall be construed as separable and divisible from every other
restriction, that the unenforceability of any restriction shall not limit the
enforceability, in whole or in part, of any other restriction, and that one or
more or all of such restrictions may be enforced in whole or in part as the
circumstances warrant. In the event that any restriction in this Agreement is
more restrictive than permitted by law in the jurisdiction in which the
Corporation seeks enforcement thereof, such restriction shall be limited to the
extent permitted by law. The remedy of injunctive relief herein set forth shall
be in addition to, and not in lieu of, any other rights or remedies that the
Corporation may have at law or in equity.
(b) Neither
the Employee nor the Corporation may assign or delegate any of their rights or
duties under this Agreement without the express written consent of the other;
provided however that the Corporation shall have the right to delegate its
obligation of payment of all sums due to the Employee hereunder, provided that
such delegation shall not relieve the Corporation of any of its obligations
hereunder.
(c) This
Agreement constitutes and embodies the full and complete understanding and
agreement of the parties with respect to the Employee’s employment by the
Corporation, supersedes all prior understandings and agreements, whether oral or
written, between the Employee and the Corporation, and shall not be amended,
modified or changed except by an instrument in writing executed by the party to
be charged. The invalidity or partial invalidity of one or more provisions of
this Agreement shall not invalidate any other provision of this Agreement. No
waiver by either party of any provision or condition to be performed shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same
time or any prior or subsequent time.
(d) This
Agreement shall inure to the benefit of, be binding upon and enforceable
against, the parties hereto and their respective successors, heirs,
beneficiaries and permitted assigns.
(e) The
headings contained in this Agreement are for convenience of reference only and
shall not affect in any way the meaning or interpretation of this
Agreement.
(f) All
notices, requests, demands and other communications required or permitted to be
given hereunder shall be in writing and shall be deemed to have been
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duly
given when personally delivered, sent by registered or certified mail, return
receipt requested, postage prepaid, or by private overnight mail service (e.g.
Federal Express) to the party at the address set forth above or to such other
address as either party may hereafter give notice of in accordance with the
provisions hereof. Notices shall be deemed given on the sooner of the date
actually received or the third business day after sending.
(g) This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of Florida without reference to principles of conflicts of
laws and each of the parties hereto irrevocably consents to the jurisdiction and
venue of the federal and state courts located in the State of
Florida.
(h) This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one of the same instrument. The parties hereto have executed this Agreement as
of the date set forth above.
11. Post-Employment
Property. The parties agree that any work of authorship,
invention, design, discovery, development, technique, improvement, source code,
hardware, device, data, apparatus, practice, process, method or other work
product whatever (whether patentable or subject to copyright, or not, and
hereinafter collectively called “Discovery”) related to training or marketing
methods and techniques that Employee, either solely or in collaboration with
others, has made or may make, discover, invent, develop, perfect, or reduce to
practice during the term of his employment, whether or not during regular
business hours and created, conceived or prepared on the Corporation’s premises
or otherwise shall be the sole and complete property of the
Corporation. More particularly, and without limiting the foregoing,
Employee agrees that all of the foregoing and any (i) inventions (whether
patentable or not, and without regard to whether any patent therefore is ever
sought), (ii) marks, names, or logos (whether or not registrable as trade or
service marks, and without regard to whether registration therefore is ever
sought), (iii) works of authorship (without regard to whether any claim of
copyright therein is ever registered), and (iv) trade secrets, ideas, and
concepts ((i) - (iv) collectively, “Intellectual Property Products”) created,
conceived, or prepared during the term of his employment on the Corporation’s
premises or otherwise, whether or not during normal business hours, shall
perpetually and throughout the world be the exclusive property of the
Corporation, as shall all tangible media (including, but not limited to, papers,
computer media of all types, and models) in which such Intellectual Property
Products shall be recorded or otherwise fixed. Employee further
agrees promptly to disclose in writing and deliver to the Corporation all
Intellectual Property Products created during his engagement by the Corporation,
whether or not during normal business hours. Employee agrees that all
works of authorship created by Employee during his engagement by the Corporation
shall be works made for hire of which the Corporation is the author and owner of
copyright. To the extent that any competent decision-making authority
should ever determine that any work of authorship created by Employee during his
engagement by the Corporation is not a work made for hire, Employee hereby
assigns all right, title and interest in the copyright therein, in perpetuity
and throughout the world, to the Corporation. To the extent that this
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Agreement
does not otherwise serve to grant or otherwise vest in the Corporation all
rights in any Intellectual Property Product created by Employee during his
engagement by the Corporation, Employee hereby assigns all right,
title and interest therein, in perpetuity and throughout the world, to the
Corporation. Employee agrees to execute, immediately upon the
Corporation’s reasonable request and without charge, any further assignments,
applications, conveyances or other instruments, at any time after execution of
this Agreement, whether or not Employee is engaged by the Corporation at the
time such request is made, in order to permit the Corporation, or its assigns,
to protect, perfect, register, record, maintain, or enhance their rights in any
Intellectual Property Product; provided, that, the Corporation shall bear the
cost of any such assignments, applications or consequences. Upon
termination of Employee’s employment by the Corporation for any reason
whatsoever, and at any earlier time the Corporation so requests, Employee will
immediately deliver to the custody of the person designated by the Corporation
all originals and copies of any documents and other property of the Corporation
in Employee’s possession, under Employee’s control or to which he may have
access,
IN
WITNESS WHEREOF, this Employment Agreement has been executed on the date and
year first above written.
|
CORPORATION:
|
|
| CUSTOMER ACQUISITION | |
| NETWORK HOLDINGS, INC. | |
| By: /s/Xxxxx Xxxxx | |
| Name: Xxxxx Xxxxx | |
| Title: Chief Operating Officer | |
|
EMPLOYEE:
|
|
| /s/Xxxxx Xxxxxxxxx | |
| Xxxxx Xxxxxxxx |
