EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT ("Agreement") made and entered as of July 1, 2003,
by and among eContent Inc. (the "Company"), a Delaware corporation, and Xxxxxxx
X. Xxxxxxxx (the "Executive").
BACKGROUND
The parties desire to enter into an employment agreement and to set
forth herein the terms and conditions of the Executive's employment by the
Company. Accordingly, in consideration of the mutual covenants and agreements
set forth herein and the mutual benefits to be derived here from, and intending
to be legally bound hereby, the Company and the Executive agree as follows:
1. Employment.
(a) Duties. The Company shall employ the Executive, on the
terms set forth in this Agreement, as Chief Operating Officer /
Corporate Secretary and Director. The Executive accepts such employment
with the Company and shall perform and fulfill such duties as are
reasonable and necessary for such position, subject to the Board of
Directors of the Company (the "Board"), for the Company and its
subsidiaries, devoting his best efforts to the performance and
fulfillment of his duties and to the advancement of the interests of
the Company, subject only to the direction, approval, control and
directives of the Board.
(b) Place of Performance. In connection with his employment by
the Company, the Executive shall be based in the West Palm Beach, FL
metropolitan area, except for required travel on Company business.
2. Term.
The Executive's employment under this Agreement shall be for a
three-year term (the "Term") commencing as of July 1, 2003 (the
"Commencement Date") and shall continue uninterrupted for the Term.
Each year, on the anniversary date of the Commencement Date, the Term
shall be extended for an additional year, the effect of which is
intended by the parties to be that there shall always be a full
three-year Term outstanding under this Agreement.
3. Compensation.
(a) Base Salary, During the Term, the Executive shall be
entitled to receive an annual salary as follows:
(1) for the year ending July 1, 2004, $165,000
(2) for the year ending July 1, 2005, $181,500
(3) for the year ending July 1, 2006, $199,650 which shall be
the base salary (the "Base Salary") for the remaining Term,
payable in installments at such times as the Company
customarily pays its other Senior Executive employees (but in
any event no less often than monthly).
(b) Each year thereafter, for the Term, the Executive shall
receive an increase in Base Salary of at least ten percent (10%) (but
which may be greater in the determination of the Compensation
Committee) of the current Base Salary, which increase shall be added to
the then-current Base Salary to become the new Base Salary for the
purposes of this Agreement.
(c) In the event of a change in control such as would require
the Company to file a Form 8-K with the Securities and Exchange
Commission if the Company was a reporting company, the Executive shall
be entitled to a lump sum payment equal to the Base Salary, with
minimum ten percent (10%) increases each year, for the remaining Term,
plus a lump sum bonus equal to three times the largest bonus paid to
Executive under this Agreement.
(d) Bonus. Executive shall receive an annual bonus in
accordance with a Company Bonus Plan adopted by the Compensation
Committee of the Board.
4. Health Insurance and Other Benefits.
During the Term, the Executive shall be entitled to all
employee benefits offered by the Company to its Senior Executives and
key management employees, including, without limitation, all pension,
profit sharing, retirement, stock option, salary continuation, deferred
compensation, disability insurance, hospitalization insurance, major
medical insurance, medical reimbursement, survivor income, life
insurance or any other benefit plan or arrangement established and
maintained by the Company, subject to the rules and regulations then in
effect regarding participation therein. In addition, the Company shall
procure and fund for Executive a life insurance policy in the amount of
One Million ($1,000,000.00) Dollars with the beneficiary to be named by
Executive.
5. Reimbursement of Expenses.
The Executive shall be reimbursed for all items of travel,
entertainment and miscellaneous expenses which the Executive reasonably
incurs in connection with the performance of his duties hereunder,
provided that the Executive submit to the Company such statements and
other evidence supporting said expenses as the Company may reasonably
require.
6. Automobile Allowance.
The Company shall pay Executive a monthly automobile allowance
of Six Hundred ($600.00) Dollars for the first year of this Agreement,
Seven Hundred Fifty ($750.00) Dollars per month for the second year and
Nine Hundred ($900.00) Dollars per month thereafter, subject to
increase by the Board.
7. Options: Grant of Shares.
(a) Upon the execution of this Agreement, the Company will
issue to Executive options to purchase at least Three Hundred Thousand
(300,000) shares (the "Shares") of the Company's common stock $0.08 par
value, exercisable at the price of $0.25 per share. These options shall
expire Seven years from the date hereof and shall vest as follows:
(i) One Hundred Thousand (100,000) shares as of July 1, 2003;
(ii) One Hundred Thousand (100,000) shares as of July 1, 2004;
(iii) One Hundred Thousand (100,000) shares as of July 1, 2005..
Options will be exercisable upon vesting. In the event of a
change in control such that would require the Company to file a Form
8-K with the Securities and Exchange Commission if the Company was a
reporting company, all unvested options will be immediately
exercisable. Options may be exercised by the Executive giving the
Company a note equal to the exercise price of the options exercised,
which shall bear interest at a floating rate equal to the Federal Funds
Rate published in the Wall Street Journal as adjusted from time to
time.
(b) The Executive will also be eligible to participate in the
2003 Stock Option Plan when, as and if approved by the Board.
Eligibility in no way creates an obligation on the part of the
Company to issue options to the Executive, which shall be in
the sole and absolute discretion of the Compensation Committee
of the Board.
8. Vacations.
The Executive shall be entitled to the number of paid vacation
days in each calendar year determined by the Company from time to time
for its Senior Executive Officers, but not less than four (4) weeks in
any calendar year (prorated in any calendar year during which the
Executive is employed hereunder for less than the entire year in
accordance with the number of days in such calendar year during which
he is so employed). The Executive shall also be entitled to all paid
holidays given by the Company to its Senior Executive Officers.
9. Termination of Employment.
(a) Death or Total Disability. In the event of the death of
the Executive during the Term, this Agreement shall terminate as of the
date of the Executive's death. Salary for the remaining Term shall be
paid to Executive's beneficiary or estate, and all health insurance
benefits for Executive's family shall be continued for at least two (2)
years following the Executive's death. In the event of the Total
Disability (as that term is defined below) of the Executive for any
consecutive twelve (12) months during the Term, the Company shall have
the right to terminate this Agreement by giving the Executive thirty
(30) days' prior written notice thereof, and upon the expiration of
such thirty (30) day period, the Executive's employment under this
Agreement shall terminate. In the event of such termination, the salary
for the remaining Term shall be paid to Executive. If the Executive
shall resume his duties within thirty (30) days after receipt of such a
notice of termination, this Agreement shall continue in full force and
effect. Upon termination of this Agreement under this Section 9)a), the
Company shall have no further obligations or liabilities under this
Agreement, except to pay to the Executive's estate or the Executive, as
the case may be, the portion of salary that remains unpaid for the
Term, including minimum increases and continuation of benefits,
The term "Total Disability," as used herein, shall mean a
mental or physical condition which in the reasonable opinion of an
independent medical doctor selected by the Company renders the
Executive unable or incompetent to carry out the material duties and
responsibilities of the Executive under this Agreement at the time the
disabling condition was incurred. If the Executive is covered under any
policy of disability insurance under paragraph 4, the definition of
Total Disability hereunder shall be the definition of that term in such
policy.
10. No Mitigation.
The Executive shall not be required to mitigate the amount of
any payment or benefit provided for in this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment provided
for in this Agreement be reduced by any compensation earned by the
Executive as the result of his employment by another employer.
11. Restrictive Covenant.
(a) Competition. Executive undertakes and agrees that until
one (1) years after termination of this Agreement, he will not compete,
directly or indirectly, or participate as a director, officer,
employee, consultant agent, consultant, representative or otherwise, or
as a stockholder, partner or joint venturer, or have any direct or
indirect financial interest, including, without limitation, the
interest of a creditor, in any business competing directly or
indirectly with the business of the Company or any of its subsidiaries.
(b) Trade Secrets. During the Term hereof and after
termination for any reason, Executive shall not disclose, divulge, copy
or otherwise use any trade secret of the Company or its subsidiaries,
it being acknowledged that all such information and materials complied
or obtained by or disclosed to Executive while employed by the Company
or its subsidiaries hereunder or otherwise are confidential and the
exclusive property of the Company and its subsidiaries.
(c) Injunctive Relief. The parties hereto agree that the
remedy at law for any breach of the provisions of this paragraph 11
will be inadequate and that the Company or any of its subsidiaries or
other successors or assigns shall be entitled to injunctive relief
without bond. Such injunctive relief shall not be exclusive, but shall
be in addition to any other rights and remedies Company or any of its
subsidiaries or their successors or assigns might have for such breach.
(d) Scope of Covenant. Should the duration, geographical area
or range or proscribed activities contained in subparagraph (a) above
be held unreasonable by any court of competent jurisdiction, then such
duration, geographical area or range of proscribed activities shall be
modified to such degree as to make it or them reasonable and
enforceable.
12. Indemnity.
The Company shall indemnify and hold the Executive harmless to
the maximum extent permitted by law against any claim, action, demand,
loss, damage, cost, expense, liability or penalty arising out of any
act, failure to act, omission or decision by him while performing
services as an officer, director or employee of the Company, other than
as act, omission or decision by the Executive which is not in good
faith and is without his reasonable belief that same is, or was, in the
best interests of the Company. To the extent permitted by law, the
Company shall pay all attorney's fees, expenses and costs actually
incurred by the Executive in connection with the defense of any of the
claims referenced herein.
13. Miscellaneous.
(a) Notices. Any notice, demand or communication required or
permitted under this Agreement shall be in writing and shall either be
hand-delivered to the other party or mailed to the addresses set forth
below by registered or certified mail, return receipt requested, or
sent by overnight express mail or courier or facsimile to such address,
if a party has a facsimile machine. Notice shall be deemed to have been
given and received when so hand-delivered or after three (3) business
days when so deposited in the U.S. Mail, or when transmitted and
received by facsimile or sent by express mail properly addressed to the
other party. The addresses are:
To the Company:
eContent Inc.
000 Xxxxx Xxxxxx Xxxxxx; Xxxx Xxxx Xxxxx, XX 00000
To the Executive:
Xx. Xxxxxxx X. Xxxxxxxx
2760 Appaloosa Trail; Xxxxxxxxxx, XX 00000
The foregoing addresses may be changed at any time by written notice
given in the manner herein provided.
(b) Integration; Modification. This Agreement constitutes the
entire understanding and agreement between the Company and the
Executive regarding its subject matter and supersedes all prior
negotiations and agreements, whether oral or written, between them with
respect to its subject matter. This Agreement may not be modified
except by a written agreement signed by the Executive and a duly
authorized officer of the Company,
(c) Enforceability. If any provision of this Agreement shall
be invalid or unenforceable, in whole or in part, such provision shall
be deemed to be modified or restricted to the extent and in the manner
necessary to render the same valid and enforceable, or shall be deemed
excises from this Agreement, as the case may require, and this
Agreement shall be construed and enforced to the maximum extent
permitted by law as if such provision had been originally incorporated
herein as so modified or restricted, or as if such provision had not
been originally incorporated herein, as the case may be.
(d) Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties, including and their respective
heirs, executors, successors and assigns, except that this Agreement
may not be assigned by the Executive.
(e) Waiver of Breach. No waiver by either party of any
condition or of the breach by the other of any term or covenant
contained in this Agreement, whether by conduct or otherwise, in any
one or more instances shall be deemed or construed as a further or
continuing waiver of any such condition or breach or a waiver of any
other condition, or the breach of any other term or covenant set forth
in this Agreement. Moreover, the failure of either party to exercise
any right hereunder shall not bar the later exercise thereof.
(f) Governing Law and Interpretation. This Agreement shall be
governed by the internal laws of the Delaware. Each of the parties
agrees that he or it, as the case may be, shall deal fairly and in good
faith with the other party in performing, observing and complying with
the covenants, promises, duties, obligations, terms and conditions to
be performed, observed or complied with by him or it, as the case may
be, hereunder; and that this Agreement shall be interpreted, construed
and enforced in accordance with the foregoing covenant notwithstanding
any law to the contrary.
(g) Headings. The headings of the various sections and
paragraphs have been included herein for convenience only and shall not
be considered in interpreting this Agreement.
(h) Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all
of which together will constitute one and the same instrument.
IN WITNESS WHEREOF, this Agreement has been executed by the
Executive and on behalf of the Company by its duly authorized
officer(s) on the date first above written.
eContent Inc.
By: ________________________________________
Xxxxx Xxxxx
By: ________________________________________
Xxxx X. Xxxxxxx
Executive:
By: ________________________________________
Xxxxxxx X. Xxxxxxxx
