EMPLOYMENT AGREEMENT
This Employment Agreement is effective as of April 16, 1999 by and
between XXXX.XXX, a Nevada corporation of 0000 X. Xxxxxxxx Xxxx, Xxxxx
000X, Xxx Xxxxx, Xxxxxx 00000 ("Employer"), and Xxxx Xxxxx, ("Executive").
Recitals
WHEREAS, Employer is a developer of portable software components and
frameworks for the transportation and management of information over
computer networks, and is desirous of acquiring the special skills and
abilities and background in and knowledge of Executive as it relates to
Employer's business and the industry.
WHEREAS, Employer seeks assurance of the association and services of
Executive in order to retain his experience, skills, abilities, background,
and knowledge, and is therefore willing to engage his services on the terms
and conditions set forth below.
WHEREAS, Executive desires to commence working with Employer and is
willing to do so on those terms and conditions.
NOW THEREFORE, in consideration of the above recitals and the mutual
promises and conditions in this Agreement, and other good and valuable
considerations, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. EMPLOYMENT. Employer shall employ Executive as President and Chief
Executive Officer ("CEO").
2. EXECUTIVE'S DUTIES.
2.1. Duties at Employer: Executive shall represent the Employer as
President and CEO of Employer. Executive shall possess the power and
authority to hire and fire all employees of Employer. Executive shall
assist in managing and conducting the business of Employer by setting and
implementing procedures and policies of Employer. Executive's duties shall
include, but not be limited to the following:
2.1.1 Directing the use and control of finances;
2.1.2 Appointing and dismissing all employees of Employer;
2.1.3 Implementing long-term strategies and policies by
defining and implementing short, medium, and long-term objectives;
2.1.4 Communicating the intentions and results of management to
Employer's Board on a regular basis.
2.1.5 Borrowing or obtaining credit in any amount or executing
any guaranty, upon;
2.1.6 Approving a budget and any amendments thereto;
2.1.7 Determining and approving long-term policies and
strategies.
3. DEVOTION OF TIME. During the period of his employment hereunder,
Executive shall devote the majority of his business time, interest
attention, and effort to the faithful performance of his duties hereunder.
However, Executive may continue to serve on the boards of directors of, and
hold any other offices or positions in, companies or organizations which,
in the judgment of Employer's Board of Directors (the "Board" as expressed
in a written Board Resolution), will not present any conflict of interest
with Employer or adversely affect the performance of Executive's duties
pursuant to this Agreement.
4. NON COMPETITION DURING TERM OF EMPLOYMENT. During the employment term,
Executive shall not, directly or indirectly, whether as a partner,
employee, creditor, shareholder, or otherwise, promote, participate, or
engage in any activity or other business directly competitive with
Employer's business, except with express permission of the Board. In
addition, Executive, while employed, shall not take any action without
Employer's prior written consent to establish, form, or become employed by
a competing business on termination of employment by Employer, Executive's
failure to comply with the provisions of the preceding sentence shall give
Employer the right (in addition to all other remedies Employer may have) to
terminate any benefits or compensation to which Executive may be otherwise
entitled following termination of this Agreement.
5. VARIATION OF DUTIES. During the term hereof, Executive shall not vary
the terms of his employment with Employer, without the specific written
authorization from the Board of Directors.
6. TERM OF AGREEMENT. Subject to earlier termination as provided in this
Agreement, Executive shall be employed for a five (5) year term beginning
on the date first written above, and ending May 1, 2004.
6.1 TERM EXTENSION. At any time prior to the expiration of the Term,
as stated in section 6, Employer and Executive may, by mutual written
agreement, extend Executive's employment under the terms of this Agreement
for such additional periods as they may agree.
7. LOCATION OF EMPLOYMENT. Unless the parties agree otherwise in writing,
during the employment term Executive shall perform the services he is
required to perform under this Agreement at Employer's offices to be
located in Las Vegas, Nevada; provided, however, that Employer may from
time to time require Executive to travel temporarily to other locations on
Employer's business.
8. COMPENSATION. Employer shall pay compensation to Executive in the
following amounts and on the following terms:
8.1 Salary. For all services rendered by Executive in any capacity
during the term of this Agreement, Employer shall pay Executive annual
compensation as follows, in equal, bi-monthly installments payable on the
1st and 16th day of each month, or in such other manner as is the general
practice of Employer:
8.1.1 First Year of Employment - $120,000
8.1.2 Second Year of Employment - $120,000
8.1.3 Third Year of Employment - $120,000
8.1.4 Fourth Year of Employment - $120,000
8.1.5 Fifth Year of Employment - $120,000
8.1.A Executive shall be paid a portion of their salary,
$5,000 per month, for the period between the signing of this Agreement and
the date of; either, Employer releases its first two products; or as
sufficient funds are available to Employer, with the additional amount to
accrue and be paid pursuant to above.
8.2 Salary Accrual. If for any reason Executive shall accrue any
portion of his salary beyond the time frame stated in section 8.1.A,
Executive may demand payment, at any time, by means of registered S-8 stock
of the Company. Employer shall pay for all costs of such registration.
Valuation of such stock will be based upon 85% of the 5 day average of the
Closing price of the Company's common stock as quoted on the Over the
Counter Bulletin Board or other stock exchange.
8.3 Stock Options. In addition to the basic salary provided for above,
Employer hereby grants to executive the right, privilege and option (the
"Stock Option") to purchase five hundred thousand (500,000) shares of the
common stock, $.001 par value. The "Option Shares" are to be fully vested
and become exercisable immediately. The exercise price of the Option Shares
shall be twenty cents ($.20) per share.
The option rights granted hereby shall be cumulative. Upon becoming
exercisable, the option rights shall be exercisable at any time and from
time to time, in whole or in part; provided, however, that options may be
exercised for no longer than five (5) years from the date of this
Agreement. The options shall be exercised by written notice directed to
Employer, accompanied by a check payable to Employer for the Option shares
being purchased. Employer shall make immediate delivery of such purchased
shares, fully paid and non-assessable, registered in the name of Executive.
The certificates evidencing such shares shall bear the following
restrictive legend, unless and until such shares have been registered in
accordance with the Securities and Exchange Act of 1933, as amended (the
"Act"):
THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, (THE "ACT"), OR
THE SECURITIES LAWS OF ANY OTHER JURISDICTION, AND MAY NOT BE SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF IN ANY MANNER
UNLESS THEY ARE REGISTERED UNDER SUCH ACT AND THE SECURITIES LAWS OR ANY
APPLICABLE JURISDICTIONS OR UNLESS PURSUANT TO ANY EXEMPTION THEREFROM.
Employer shall use its best efforts to register the Option Shares under the
Act at the earlier of such time as it registers shares issuable pursuant to
a qualified employee stock option plan or such time as it registers shares
beneficially owned by or issued to either or all of the following
individuals:
If, and to the extent that the number of shares of common stock of Employer
shall be increased or reduced by whatever action, including but not limited
to change of par value, split, reclassification, distribution or a dividend
payable in stock, or the like, the number of shares subject to the Stock
Option and the option price per share shall be proportionately adjusted. If
Employer is reorganized or consolidated or merged with another corporation,
Executive shall be entitled to receive options covering shares of such
reorganized, consolidated, or merged company in the same proportion, at an
equivalent price, and subject to the same conditions. For purposes of the
preceding sentence, the excess of the aggregate fair market value of the
shares subject to the option immediately after any such reorganization,
consolidation, or merger over the aggregate option price of such shares
shall not be more than the excess of the aggregate fair market value of all
shares subject to the Stock Option immediately before such reorganization,
consolidation, or merger over the aggregate option price of such shares,
and the new option or assumption of the old Stock Option shall not give
Executive additional benefits which he did not have under the old Stock
Option, or deprive him of benefits which he had under the old Stock Option.
Executive shall have no rights as a stockholder with respect to the Option
Shares until exercise of the Stock Option and payment of the Option Price
as herein provided.
9. BENEFITS. During the employment term, Executive shall be entitled to
receive all other benefits of employment generally available to Employer's
other executive and managerial employees when and as he becomes eligible
for them, including group health and life insurance benefits and an annual
vacation.
9.1 Vacation. Executive shall be entitled to a paid annual vacation of
three (3) weeks during the first year of employment, and four (4) weeks
during any subsequent years; provided however, that vacation time may not
be accumulated and must be taken by the end of the year in which it has
accrued.
9.2 Personal Leave. Executive shall be entitled, without any
adjustment in his compensation, to fifteen (15) days personal leave in each
fiscal year of employment. Personal leave may not be carried over from one
fiscal year to the next.
9.3 Medical and Disability Coverage. Executive shall have the right to
all medical coverage and long term disability coverage on the same terms
and conditions as provided to other employees of Employer holding
management positions. It is agreed and understood that Employer shall
obtain reasonable medical, dental, and liability insurance for the benefit
of Executive and other members of management as soon hereafter as is
practical, and it shall use its best efforts to maintain such policies at
all time during the employment term.
9.4 Plans. Executive shall be entitled to participate in any and all
plans, arrangements, or distributions by Employer pertaining to or in
connection with any pension, bonus, profit sharing, stock options, and/or
similar benefits for its employees and/or executives, as determined by the
Board of Directors of committees thereof pursuant to the governing
instruments which establish and/or determine eligibility and other rights
of the participants and beneficiaries under such plans or other benefit
programs.
9.5 Automobile. For the term of this agreement and any extensions
thereof, Employer shall provide Executive with an automobile allowance, not
to exceed $600 per month. Such automobile shall be chosen and, if need be,
financed by Executive with monthly payments to be paid by Employer.
10. EXPENSE REIMBURSEMENT. During the employment term, Employer shall
reimburse Executive for reasonable out-of-pocket expenses incurred in
connection with Employer's business, including travel expenses, food, and
lodging when away from home, subject to such policies as Employer may from
time to time reasonably establish for its employees.
11. INTELLECTUAL PROPERTY. All processes, inventions, patents, copyrights,
trademarks, and other intangible rights that may be conceived or developed
by Executive, either alone or with others, during the term of Executive's
employment, whether or not conceived or developed during Executive's
working hours, and with respect to which the equipment, supplies,
facilities, or trade secret information of Employer was used, or that
relate at the time of conception or reduction to practice of the invention
to the business of the Employer or to Employer's actual or demonstrably
anticipated research and development, or that result from any work
performed by Executive for Employer, shall be the sole property of
Employer. Executive shall disclose to Employer all inventions conceived
during the term of employment, whether or not the property of Employer
under the terms of the preceding sentence, provided that such disclosure
shall be received by Employer in confidence. Executive shall execute all
documents, including patent applications and assignments, required by
Employer to establish Employer's rights under this Section.
12. INDEMNIFICATION OF EXECUTIVE. Employer shall, to the maximum extent
permitted by law, indemnify and hold Executive harmless against expenses,
including reasonable attorney's fees judgements, fines, settlement, and
other amounts actually and reasonably incurred in connection with any
proceeding arising by reason of Executive's employment by Employer.
Employer shall advance to Executive any expense incurred in defending such
proceeding to the maximum extent permitted by law.
13. TERMINATION BY EMPLOYER. Employer may terminate this Agreement at any
time, if termination is "For Cause", as hereinafter defined. "For Cause"
shall mean Employer's termination of Executive due to an adjudication of
Executive's fraud, theft, dishonesty to Employer regarding Executive's
duties or material breach of this Agreement, if Executive fails to cure
such breach within ten (10) days after written notice is given by the Board
of Directors to Executive and Executive fails with ten (10) days of such
notification to commence such cure and thereafter diligently prosecute such
cure to completion.
14. TERMINATION BY EXECUTIVE. Executive may terminate this Agreement by
giving Employer thirty (30) days prior written notice of resignation.
15. DEATH OF EXECUTIVE. If Executive dies during the initial term or during
any renewal term of this Agreement, this Agreement shall be terminated on
the last day of the calendar month of his death. Employer shall then pay to
Executive's estate any salary accrued but unpaid as of the last day of the
calendar month in which Executive dies. Employer shall have no further
financial obligations to Executive or his estate hereunder. Any and all
unexercised Stock Option shall survive Executive's death and shall be
exercisable by Executive's estate or its beneficiaries to whom such Stock
Options may be distributed in accordance with the original terms and
conditions of any such Stock Options.
16. AGREEMENT ON BUSINESS COMBINATION OR DISSOLUTION. This Agreement shall
not be terminated by Employer's voluntary or involuntary dissolution or by
any merger in which Employer is not the surviving or resulting corporation,
or on any transfer of all or substantially all of Employer's assets. In the
event any such merger or transfer of assets, the provisions of this
Agreement shall be binding on and inure to the benefit of the surviving
business entity or the business entity to which such assets shall be
transferred.
17. TRADE SECRETS AND CONFIDENTIAL INFORMATION:
17.1 Nondisclosure. Without the prior written consent of Employer,
Executive shall not, at any time, either during or after the term of this
Agreement, directly or indirectly, divulge or disclose to any person, firm,
association, or corporation, or use for Executive's own benefit, gain, or
otherwise, any customer lists, plans, products, data, results of tests and
data, or any other trade secrets or confidential materials or like
information (collectively referred to as the "Confidential Information") of
Employer and/or its Affiliates, as hereinafter defined, it being the intent
of Employer, with which intent Executive hereby agrees, to restrict
Executive from disseminating or using any like information that is
unpublished or not readily available to the general public.
17.1.1 Definition of Affiliate. For purposes of this Agreement,
the term "Affiliate" shall mean any entity, individual, firm, or
corporation, directly or indirectly, through one or more intermediaries,
controlling, controlled by, or under common control with Employer.
17.2 Return of Property. Upon the termination of this Agreement,
Executive shall deliver to Employer all lists, books, records, data, and
other information (including all copies thereof in whatever form or media)
of every kind relating to or connected with Employer or its Affiliates and
their activities, business and customers.
17.3 Notice of Compelled Disclosure. If, at any time, Executive
becomes legally compelled (by deposition, interrogatory, request for
documents, subpoena, civil investigative demand, or similar process or
otherwise) to disclose any of the Confidential Information, Executive shall
provide Employer with prompt, prior written notice of such requirement so
that Employer may seek a protective order or other appropriate remedy
and/or waive compliance with the terms of this Agreement. In the event that
such protective order or other remedy is not obtained, that Employer waives
compliance with the provisions hereof, Executive agrees to furnish only
that portion of the Confidential Information which Executive is advised by
written opinion of counsel is legally required and exercise Executive's
best efforts to obtain assurance that confidential treatment will be
accorded such Confidential Information. In any event, Executive shall not
oppose action by Employer to obtain an appropriate protective order or
other reliable assurance that confidential treatment will be accorded the
Confidential Information.
17.4 Assurance of Compliance. Executive agrees to represent to
Employer, in writing, at any time that Employer so request, that Executive
has complied with the provisions of this section, or any other section of
this Agreement.
18. NON-COMPETITION. For a period of three (3) months after the termination
of this Agreement, Executive expressly covenants and agrees that Executive
will not and will not attempt to, without the prior written consent of the
Board of Directors, directly or indirectly, (except as to those entities
set forth in Paragraph 4, above):
18.1 Own, manage, operate, finance, join, control, or participate in
the ownership, management, operation, financing, or control of, or be
associated as an officer, director, employee, agent, partner, principal,
representative, consultant, or otherwise with, or use or permit his name to
be used in connection with, any line of business or enterprise that
competes with Employer or its Affiliates (as defined herein) in any
business of Employer or its Affiliates, existing or proposed, wherever
located, provided that Executive shall not be prohibited from owning,
directly or indirectly, less than one percent (1%) of the outstanding
shares of any Corporation, the shares of which are traded on a National
Securities Exchange or in the over-the-counter markets;
18.2 Interfere with or disrupt or attempt to interfere with or disrupt
or take any action that could be reasonably expected to interfere with or
disrupt any past or present or prospective relationship, contractual or
otherwise, between Employer and/or any of its Affiliates, and any customer,
insurance company, supplier, sales representative, or agent or employee of
Employer or any such affiliate of Employer.
18.3 Directly or indirectly solicit for employment or attempt to
employ or assist any other entity in employing or soliciting or attempting
to employ or solicit for employment, either on a full-time, part-time, or
consulting basis, any employee, agent, representative, or executive
(whether salaried or otherwise, union or non-union) who within three (3)
years of the time that Executive ceased to perform services hereunder has
been employed by Employer or its Affiliates.
19. VIOLATION OF COVENANTS:
19.1 Injunctive Relief. Executive acknowledges and agrees that the
services to be rendered by Executive hereunder are of a special unique, and
personal character that gives them peculiar value; that the provisions of
this section are, in view of the nature of the business of Employer,
reasonable and necessary to protect the legitimate business interests of
Employer; that violation of any of the covenants or Agreements hereof would
cause irreparable injury to Employer, that the remedy at law for any
violation or threatened violation thereof would be inadequate; and that,
therefore, Employer shall be entitled to temporary and permanent injunctive
or other equitable relief as it may deem appropriate without the necessity
of proving actual damages and to an equitable accounting of all earnings,
profits, and other benefits arising, from any such violation, or attempted
violation, which rights shall be cumulative and in addition to all other
rights or remedies available to Employer.
19.2 Executive and Employer recognize that the laws and public
policies of the various states of the United States may differ as to the
validity and enforceability of certain of the provisions contained in this
section. It is the intention of Executive and Employer that the provisions
of this section shall be enforced to the fullest extent permissible under
the laws and public policies of each jurisdiction in which such enforcement
is sought, but that the invalidation (or modification to conform with such
laws or public policies) of any provision hereof shall not render
unenforceable or impair the remainder of this section. Accordingly, if any
provision of this section shall be determined to be invalid or
unenforceable, either in whole or in part this section shall be deemed to
delete or modify, as necessary, the offending provision and to alter the
balance of this section in order to render it valid and enforceable to the
fullest extent permissible as provided herein.
20. LIQUIDATED DAMAGES, EMPLOYER'S BREACH. In the event of any material
breach of this Agreement on the part of Employer, Executive at his sole
option, may terminate his employment under this Agreement and, at his sole
option, shall be entitled to receive as liquidated damages the amounts set
forth in the following subsection. The liquidated damages so received by
Executive shall not be limited or reduced by amounts that Executive might
otherwise earn or be able to earn during the period between termination of
his employment under this Agreement and payment of those liquidated
damages. The provisions of this Section 20 shall be in addition to any and
all rights Executive may have in equity or at law to require Employer to
comply with or to prevent the breach of this Agreement.
20.1 The present value on the payment date (as defined in this
section) of the full amount of his basic salary as provided for in this
Agreement for three (3) years following the payment due, discounted to the
payment date at a rate for quarterly periods based on prime interest rate
charged by Bank of America, for short term commercial loans on the payment
date. The amount payable to Executive under this subsection shall be due
and payable in full on the date of notification of Employer by Executive of
the exercise of his option to terminate his employment under this Agreement
(the "payment date").
21. MISCELLANEOUS:
21.1 Authority to Execute. The parties herein represent that they
have the authority to execute this Agreement.
21.2 Severability. If any term, provision, covenant, or condition of
this Agreement is held by a court of competent jurisdiction to be invalid,
void, or unenforceable, the rest of this Agreement shall remain in full
force and effect.
21.3 Successors. This Agreement shall be binding on and inure to
the benefit of the respective successors, assigns, and personal
representatives of the parties, except to the extent of any contrary
provision in this Agreement.
21.4 Assignment. This Agreement may not be assigned by either party
without the written consent of the other party.
21.5 Singular, Plural and Gender Interpretation. Whenever used
herein, the singular number shall include the plural, and the plural number
shall include the singular. Also, as used herein, the masculine, feminine
or neuter gender shall each include the others whenever the context so
indicates.
21.6 Captions. The subject headings of the paragraphs of this
Agreement are included for purposes of convenience only, and shall not
effect the construction or interpretation of any of its provisions.
21.7 Entire Agreement. This Agreement contains the entire agreement
of the parties relating to the rights granted and the obligations assumed
in this instrument and supersedes any oral or prior written agreements
between the parties. Any oral representations or modifications concerning
this instrument shall be of no force or effect unless contained in a
subsequent written modification signed by the party to be charged.
21.8 Arbitration. Any controversy or claim arising out of, or
relating to, this Agreement, or the making, performance, or interpretation
thereof, shall be submitted to a panel of three (3) arbitrators. The
arbitration shall comply with and be governed by the provisions of the
American Arbitration Association. The panel of arbitrators shall be
composed of two (2) members chosen by Executive and Employer respectively
and one (1) member chosen by the arbitrators previously selected. The
findings of such arbitrators shall be conclusive and binding on the parties
hereto. The cost of arbitration shall be borne by the losing party or in
such proportions as the arbitrator shall conclusively decide.
21.9 No Waiver. No failure by either Executive or Employer to insist
upon the strict performance by the other of any covenant, agreement, term
or condition of this Agreement or to exercise the right or remedy
consequent upon a breach thereof shall constitute a waiver of any such
breach or of any such covenant, agreement, term or condition. No waiver of
any breach shall affect or alter this Agreement, but each and every
covenant, condition, agreement and term of this Agreement shall continue in
full force and effect with respect to any other then existing or subsequent
breach.
21.10 Time of the Essence. Time is of the essence of this
Agreement, and each provision hereof.
21.11 Counterparts. The parties may execute this Agreement in two
(2) or more counterparts, which shall, in the aggregate, be signed by both
parties, and each counterpart shall be deemed an original instrument as to
each party who has signed by it.
21.12 Attorney's Fees and Costs. In the event that suit be
brought hereon, or an attorney be employed or expenses be incurred to
compel performance the parties agree that the prevailing party therein be
entitled to reasonable attorney's fees.
21.13 Governing Law. The formation, construction, and performance
of this Agreement shall be construed in accordance with the laws of Nevada.
21.14 Notice. Any notice, request, demand or other communication
required or permitted hereunder or required by law shall be in writing and
shall be effective upon delivery of the same in person to the intended
addressee, or upon deposit of the same with an overnight courier service
(such as Federal Express) for delivery to the intended addressee at its
address shown herein, or upon deposit of the same in the United States
mail, postage prepaid, certified or registered mail, return receipt
requested, sent to the intended addressee at its address shown herein. The
address of any party to this Agreement may be changed by written notice of
such other address given in accordance herewith and actually received by
the other parties at least ten (10) days in advance of the date upon which
such change of address shall be effective.
IN WITNESS WHEREOF, the parties have entered into this Agreement on
the date first above written.
EXECUTIVE:
DATE:4/16/99 By:/s/Xxxx Xxxxx
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Xxxx Xxxxx
EMPLOYER:
XXXX.XXX
DATE:4/16/99 By:/s/ Xxxxxxx Xxxxxxx
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