Exhibit 10.5
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT, made and entered into as of the 28th day of
January 2002, by and between Dtomi, Inc. (formerly Copper Valley Minerals Ltd).,
a Nevada, corporation (the "Corporation"), and Xx. Xxxx Xxxxxx, an individual
residing in Clearwater, Florida (the "Executive").
WITNESSETH THAT:
WHEREAS, the Corporation desires to employ the Executive in the capacity
hereinafter stated, and the Executive desires to enter into the employ of the
Corporation in such capacity for the period and on the terms and conditions set
forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth below, it is hereby covenanted and agreed by the Corporation and the
Executive as follows:
1. Employment Period. The Corporation hereby agrees to employ the Executive
as its President and Chief Executive Officer and the Executive, in such
capacities, agrees to provide services to the Corporation for the period
beginning on the date first above written (the "Commencement Date") and ending
on the third anniversary of the Commencement Date (the "Employment Period").
2. Performance of Duties. The Executive agrees that during the Employment
Period, while he is employed by the Corporation, he shall devote his best
efforts, energies and talents to serving in the capacities of President and
Chief Executive Officer of the Corporation in the best interests of the
Corporation, and to perform the duties assigned to him by the Board of Directors
faithfully, efficiently and in a professional manner; provided that the
Executive shall not, without his consent, be assigned duties that would be
inconsistent with those of the President and Chief Executive Officer of the
Corporation. It is understood and hereby acknowledged that Executive is holds
other executive positions in both public and private companies.
3. Compensation. Subject to the terms and conditions of this Agreement,
during the Employment Period, the Executive shall be compensated by the
Corporation for his services as follows:
(a) He shall receive, for each 12-consecutive month period beginning
on the Commencement Date and each anniversary thereof, a rate of salary that is
not less than $120,000 per year, payable in substantially equal monthly or more
frequent installments. The Corporation shall also provide an additional
$10,000.yearly for executive accountable expenses, payable at least monthly to
Executive. During the Employment Period the Executive's salary rate shall be
reviewed by the Board of Directors on or before each anniversary of the
Commencement Date to determine whether an increase in his rate of compensation
is appropriate. Executive agrees however for the first 12 months of employment
to accept the rate of salary of $75,000 which will be reviewed quarterly for an
increase by the Board of Directors.
(b) He shall receive, as of the date hereof, the amount equal to ten
percent of all issued and outstanding stock of the Corporation during this
agreement to be in the form of
exercisable options at the price of $0.01 (one cent), plus stock options which
shall be determined by the Board of Directors. The $0.01 (one cent) options
shall be effective immediately and shall have piggy back registration rights or
be registered within 90 days from the effective date of this contract.
(c) He shall be eligible to receive incentive compensation payments,
which, in the aggregate, are not less than the highest salaried payments
provided to any other senior executives of the Corporation. The Corporation
intends to establish an incentive compensation program pursuant to which such
incentive payments shall be paid to the Executive and, at the time such program
is established, payments there under shall be made to the Executive as if such
program was in effect as of the Commencement Date based on the Executive's
performance or other relevant factors from the Commencement Date.
(d) He shall be a participant in the following executive benefit plans
maintained by the Corporation on substantially the same terms and conditions as
other senior executives of the Corporation: group life insurance, group medical,
long-term disability, thrift, pension, vacation, sick days, educational
assistance, vehicle allowance, attendance awards and annual medical physical.
(e) He shall be entitled to receive the following perquisites which
shall not be less favorable to the Executive than the perquisites provided by
the Corporation immediately prior to the Employment Period: reimbursement of
family medical insurance of $600.00 per month, reimbursement of vehicle
allowance of $500.00 per month and reimbursement of $100.00 a month for cellular
phone expense. Executive acknowledges that company does not have a health
benefit plan at the current time, and will only be entitled to the $600.00 per
month reimbursement if he is left without health benefits elsewhere.
(f) He shall be reimbursed by the Company for all reasonable business,
promotional, travel and entertainment expenses incurred or paid by him during
the employment period in the performance of his services under this Agreement
provided that the Executive furnishes to the Company appropriate documentation
in a timely fashion required by the Internal Revenue Code in connection with
such expenses and shall furnish such other documentation and accounting as the
Company may from time to time reasonably request.
(e) It is acknowledged that the Corporation intends to utilize an
employee leasing or payroll company. This employment contract shall survive any
and all termination of any employee leasing and/or payroll company that
Corporation engages now or in the future. The Executive shall not give up any
rights or entitlements under any such employee leasing and/or payroll
agreements.
4. Compensation Due Upon Termination. Except as otherwise provided under
the executive benefit plans maintained by the Corporation in which the Executive
participates in accordance with subparagraph 3(d), the Executive's right to
compensation for periods after the date his employment with the Corporation
terminates shall be determined in accordance with the following:
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(a) Discharge Without Cause. In the event the Corporation terminates
the Executive's employment under this Agreement without cause, the Executive
shall be entitled to receive:
(i) all payment of his salary (as of the date of termination) in
accordance with the provisions of subparagraph 3(a) for the remainder
of the Employment Period; and
(ii) payment of any incentive compensation payments that
otherwise would have been payable to the Executive under subparagraph
3(c) through the date his employment with the Corporation terminates.
(b) Voluntary Resignation. The Corporation shall have no obligation to
make payments to the Executive in accordance with the provisions of paragraph 3
for periods after the date on which the Executive's employment with the
Corporation terminates due to the Executive's voluntary resignation.
(c) Discharge for Cause. The Corporation shall have no obligation to
make payments to the Executive in accordance with the provisions of paragraph 3
for periods after the Executive's employment with the Corporation is terminated
on account of the Executive's discharge for cause. For purposes of this Section
4, the Executive shall be considered discharged for "cause" if he is discharged
by the Corporation on account of the occurrence of one or more of the following
events:
. the Executive becomes habitually addicted to drugs or
alcohol;
. the Executive discloses confidential information in
violation of paragraph 5;
. the Corporation is directed by regulatory or governmental
authorities to terminate the employment of the Executive.
. the Executive flagrantly disregards his duties under this
Agreement after (A) notice has been given to the Executive
by the Board of Directors of the Corporation that it views
the Executive to be flagrantly disregarding his duties under
this Agreement and (B) the Executive has been given a period
of 10 days after such notice to cure such misconduct
(provided that no such notice or cure period shall be
required if Executive's disregard of his duties has
materially and adversely affected the Corporation);
. the Executive commits an act of fraud against the
Corporation or violates a duty of loyalty to the Corporation
or violates paragraph 2.
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(d) Disability. The Corporation shall have no obligation to make
payments to the Executive in accordance with the provisions of paragraph 3 for
periods after the date the Executive's employment with the Corporation
terminates on account of disability. For purposes of this subparagraph 4(d),
determination of whether the Executive is disabled shall be determined in
accordance with the Corporation's long term disability plan and applicable law,
except payments due and owing as of such date.
5. Confidential Information. Except as may be required by the lawful order
of a court or agency of competent jurisdiction, the Executive agrees to keep
secret and confidential indefinitely all non-public information concerning the
Corporation and its affiliates that was acquired by or disclosed to the
Executive during the course of his employment by the Corporation or any of its
affiliates, including information relating to customers (including, without
limitation, credit history, repayment history, financial information and
financial statements), costs, and operations, financial data and plans, whether
past, current or planned and not to disclose the same, either directly or
indirectly, to any other person, firm or business entity, or to use it in any
way; provided, however, that the provisions of this paragraph 5 shall not apply
to information that is in the public domain or that was disclosed to the
Executive by independent third parties who were not bound by an obligation of
confidentiality. The Executive further agrees that he shall not make any
statement or disclosure that (a) would be prohibited by applicable Federal or
state laws or (b) is intended or reasonably likely to be detrimental to the
Corporation or any of its subsidiaries or affiliates.
6. Successors. This Agreement shall be binding on, and inure to the benefit
of, the Corporation and its successors and assigns and any person acquiring,
whether by merger, consolidation, purchase of assets or otherwise, all or
substantially all of the Corporation's assets and business.
7. Nonalienation. The interests of the Executive under this Agreement are
not subject to the claims of his creditors, other than the Corporation, and may
not otherwise be voluntarily or involuntarily assigned, alienated or encumbered
except to the Executive's estate upon his death.
8. Remedies. The Executive acknowledges that the Corporation would be
irreparably injured by a violation of paragraphs 5, and agrees that the
Corporation shall be entitled to an injunction restraining the Executive from
any actual or threatened breach of paragraph 5, or to any other appropriate
equitable remedy without bond or other security being required.
9. Waiver of Breach. The waiver by either the Corporation or the Executive
of a breach of any provision of this Agreement shall not operate as or be deemed
a waiver of any subsequent breach by either the Corporation or the Executive.
10. Notice. Any notice to be given hereunder by a party hereto shall be in
writing and shall be deemed to have been given when received or, when deposited
in the U.S. mail, certified or registered mail, postage prepaid:
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(e) to the Executive addressed as follows:
Xx. Xxxx Xxxxxx
X.X. Xxx 0000
Xxxxxxxxxx, Xxxxxxx 00000
(f) to the Corporation addressed as follows:
Dtomi, Inc.
000 0xx Xxxxxx Xxxxx
Xxxxxx Xxxxxx, Xxxxxxx 00000
11. Amendment. This Agreement may be amended or cancelled by mutual
agreement of the parties in writing without the consent of any other person and
no person, other than the parties thereto (and the Executive's estate upon his
death), shall have any rights under or interest in this Agreement or the subject
matter hereof.
12. Applicable Law. The provisions of this Agreement shall be construed in
accordance with the internal laws of the State of Florida.
13. Termination. All of the provisions of this Agreement shall terminate
after the expiration of the Employment Period.
IN WITNESS WHEREOF, the Executive and the Corporation have executed
this Employment Agreement as of the day and year first above written.
/s/ Xxxx Xxxxxx
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Xxxx Xxxxxx, Executive
/s/ Xxxxx X. Xxxx
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By: Xxxxx Xxxx
Its: Chairman
Dtomi, Inc.
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