EMPLOYMENT AGREEMENT
Exhibit
10.7
This
Employment Agreement (this "Agreement"), entered into as of October 1, 2004,
between VEMICS, Inc. ("VEMICS") and Xxxxxxx X. Xxxxxxxxx
("Employee").
In
consideration of the mutual covenants contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Employment; Duties.
VEMICS
hereby employs Employee as the Vice-President Business Development of
VEMICS. The employee shall function with full authority to establish
explore and create new business opportunities, execute the business and
marketing plan as approved by the Board of Directors, recommend policy, set
corporate marketing and sales plans and manage VEMICS's strategic direction,
participate in investor relations, vendor relations, strategic alliances,
operations and strategic planning. Employee agrees to perform and
discharge such duties and responsibilities as are prescribed from time-to-time
by VEMICS's CEO and/or Board of Directors and as are appropriate for video
conference/distance learning executives of corporations with the financial,
personnel and other resources that are similar to that of VEMICS. Employee shall
devote his full business time to, and shall use his best efforts in, the
performance of such duties and responsibilities.
2.
Compensation and Withholding.
For his
services pursuant to this Agreement, VEMICS will pay Employee an interim salary
at the annual rate of $86,400. VEMICS will pay the Salary. semimonthly (as
calculated by dividing the gross salary by 26 equal payments) and may withhold
from the Salary, the Benefits and any other compensation provided to Employee
hereunder, all Federal, state and local income, employment and other taxes, as
and in such amounts as may be required to be withheld under applicable
law.
Employee's
salary will immediately be increased to $135,000 ("Salary") for the first year
either upon improved financial condition or full funding of the VEMICS business
plan (minimum of $3,000,000 in equity or debt financing or
sales). Partial funding will result in proportionate salary increases
to be determined by the compensation committee or through approval of the "Use
of Proceeds" report submitted to investors.
In the
second year of this contract following either improved financial condition or
full funding of the business plan Employee's salary shall be increased to
$170,000 annually. The Salary may be increased and cash or stock bonuses may be
awarded from time-to-time to Employee as the Board determines at its sole
discretion.
3.
Employment Term.
The term
of this Agreement will commence on the date of this agreement or Employee's
first date of employment, whichever is later, and, unless sooner terminated as
provided in Section 5, will end on December 31, 2007.
4.
Benefits and Incentive
Payments.
4.1
VEMICS will approve the grant to Employee of an option to purchase shares
of the Company's common stock, in accordance with the terms of the
Company's stock option plan, as the same may be amended from time to time, and a
nonqualified stock option agreement to be entered into by the Employee and the
Company. This option expires when Employee's employment terminates
for cause or without cause or when Employee resigns, or upon Employee's
death.
4.2
Employee will be entitled to a noncumulative paid vacation of three (3)
weeks,
plus the week between Christmas and New Year's Day for each full year of the
term hereof, each of which weeks may be taken separately or together, and sick
days in accordance with VEMICS' policy, during which Employee will be entitled
to the full compensation and Benefits (as defined in Section 4.3) otherwise
payable hereunder; provided, however, any allotted vacation time which has not
been used in any particular year of the term hereof shall not be carried over to
the next ensuing year without the express written consent of the
Employer.
1
4.3
Employee may participate, on the same basis and subject to the same qualifications
as other personnel of VEMICS, or as offered to key executives of the company, in
any pension, profit sharing, life insurance, health insurance, hospitalization,
dental, drug prescription, short and long term disability, accidental death or
dismemberment and other benefit plans and policies VEMICS provides with respect
to its personnel generally (collectively, the "Benefits"). In
addition, VEMICS shall provide a xxxxxxx'x compensation and disability coverage
equal to full salary in the event that the employee becomes permanently disabled
while employed at VEMICS while engaged in performing his duties, or not, during
work time or on personal time. In the event that the company shall
fail to provide this coverage and employee becomes disabled VEMICS shall fulfill
its obligation from corporate funds for the rest of employees life or for an
equal duration that would be covered by an executive level similar insurance
policy intended to provide an income for the employee and/or his family if
employee becomes disabled and can not perform his regular duties.
4.4
VEMICS will pay or promptly reimburse Employee, in accordance with VEMICS's
normal policies and procedures for its personnel, for all allowances and
expenses provided for hereunder and for all reasonable out-of-pocket business,
entertainment and travel expenses incurred by Employee in the performance of his
duties hereunder. Upon full funding or sufficiently improved financial
condition, VEMICS will provide employee with a monthly auto allowance of $800
which will cover all direct auto expense of auto payments (if any) gas, oil, and
insurance.
4.5
A guaranteed minimum year end bonus of $25,000 will also be paid to employee
on or before December 15th of each year following the first full year of
funding, providing the cash flow of the company warrants such
payments. In the event that a cash payment can not be executed due to
the cash flow situation at the time, as determined by the compensation
committee, bonus money can accrue or be taken in stock options at the current
best rate available.
5.
Termination and Severance
Benefits.
5.1
Death. The Employee's employment
shall terminate upon his death.
5.2
Termination by VEMICS and Resignation
by Employee. VEMICS's Board may
terminate Employee's employment with VEMICS, with or without Cause (as defined
in Section 5.6). Termination with Cause shall be effective immediately and
termination without Cause shall be effective upon 90 days prior written notice
to Employee. Employee may voluntarily resign his employment with
VEMICS, with Good Reason (as defined in Section 5.6), upon 60 days prior written
notice to VEMICS.
5.3
Compensation Upon Termination Without
Cause or Upon Resignation with Good Reason.
If
VEMICS's Board or its designee terminates Employee's employment
hereunderfor any
reason other than Cause or Employee's death or Permanent Disability (as defined
in Section 5.6), or Employee voluntarily resigns his employment with Good
Reasons, then (a) Employee shall be entitled to receive (i) the Salary and
Benefits accrued prior to the Termination Date and (ii) payment or reimbursement
of any expenses, provided for under Section 4.3, that were incurred by Employee
prior to the Termination Date and (b) after the Termination Date, VEMICS will
also continue to pay the full Salary, in equal semimonthly payments, to Employee
for one year from the date employment is terminated by the Board of Directors
without cause.
5.4
Compensation Upon Resignation Without
Good Reason or Upon Termination for Cause.
If
Employee breaches this Agreement by voluntarily resigning his employment
with
VEMICS without Good Reason, then Employee shall only be entitled to receive,
except as otherwise required by law, the Salary and Benefits accrued prior to
the effective date of the first to occur of his resignation plus 30 days and
reimbursement of any expenses, provided for under Section 4.3, that were
incurred by Employee prior to the effective date of his resignation or such
termination of his employment. Nothing in this Section 5.4 shall
create any implication that VEMICS is waiving any remedy VEMICS may have for
breach by Employee of this Agreement. If Employee's employment is terminated by
VEMICS's Board of Directors for Cause the Employee shall be entitled to six
months termination pay including all benefits.
5.5
Compensation Upon Death or Permanent
Disability.
If
Employee dies or suffers a Permanent Disability, then VEMICS will (i) pay
Employee
or his estate, six months Salary and bonus as described in sections 2 and 4,
according to the regular payroll and (ii) continue for Employee's spouse and
dependent children (if Employee has died) and for Employee and his spouse and
dependent children (if Employee suffers a Permanent Disability), all of the
Benefits that Employee was receiving at the time of his death or Permanent
Disability, for 12 months after Employee's death or permanent disability. This
clause is in addition to the disability key man insurance policy clause in
section 4.2.
2
5.6
Definitions.
(a)
"Cause." For purposes of this
Agreement, VEMICS may terminate the
Employee's employment for "cause", and the power to terminate the Employee shall
be in the Company's sole discretion. For purposes of this Agreement, "cause"
shall consist of the following, to be determined by the Company in its
discretion:
(i)
Employee's fraud, misappropriation, embezzlement, or willful
misconduct;
(ii)
Employee's material violation of any provision of this Agreement;
(iii)
Employee's conviction of a felony involving moral turpitude or any
crime or activity that would impair employee's ability to perform his duties or
impair the business reputation of the Company;
(iv)
Employee's gross negligence, the determination by VEMICS's
Board of Directors, in its sole discretion, that Employee has not been
performing his duties hereunder in an appropriate or sufficiently competent
manner (other than as a result of his incapacity due to physical or mental
incapacity), employee's willful and continued failure to substantially perform
assigned duties; or willful engaging in conduct materially injurious to the
Company, monetarily or otherwise; or;
(iv)
Other like acts or omissions, including non-compliance with all
Company policies, as they currently exist or may be amended, with the proviso
that the Employee shall have 30 days in which to attempt to correct such acts or
omissions.
For
purposes of this Paragraph, no act, or failure to act, on the Employee's part
shall be considered “willful” unless done, or omitted to be done, by him not in
good faith and without reasonable belief that his action or omission was in the
best interest of the Company. A termination for cause pursuant to this Paragraph
is subject to the arbitration provision (see Section 7) of this
Agreement.
(b)
“Good Reason” means (i) a breach by VEMICS of any of its material agreements
contained herein and the continuation of such breach for ten business days after
notice thereof is given to VEMICS.
(c)
“Permanent Disability” means the inability of Employee to perform his
duties
hereunder as a result of any physical or mental incapacity for 60 consecutive
days or 90 days during any twelve month period, as determined by the
Board.
6.
Covenant Regarding
Confidentiality.
6.1.
Employee acknowledges that he will have access to, and knowledge of,
VEMICS
Confidential Information, and that improper use or disclosure of VEMICS
Confidential Information by Employee, whether during or after the termination of
his employment by VEMICS, could cause serious injury to the business of
VEMICS. Accordingly, Employee agrees that he will forever keep secret
and inviolate all VEMICS Confidential Information which has or shall come into
his possession, and that he will not use the same for his own private benefit or
directly or indirectly for the benefit of others, and that he will not discuss
VEMICS Confidential Information with any other person or organization, all for
so long as VEMICS Confidential Information is not generally known by, or
accessible to, the public.
6.2.
Definition of Confidential
Information: "VEMICS Confidential Information"
as used in this Agreement shall mean any and all technical and non technical
information including patent, copyright, trade secret, and proprietary
information, techniques, sketches, drawings, models, inventions, know-how,
processes, apparatus, equipment, algorithms, software programs, software source
documents, and formulae related to the current, future, and proposed products
and services of VEMICS, and includes, without limitation, VEMICS information
concerning research, experimental work, development, design details and
specifications, engineering, financial information, procurement requirements,
purchasing, manufacturing, customer lists, business forecasts, sales and
merchandising, and marketing plans and information. "Confidential Information"
shall also include proprietary or confidential information of any third party
that may disclose such information to employee in the course of their employment
to VEMICS.
3
6.3
The Employee further agrees that he will, immediately after termination of his
employment with the Company, and in no event later than 24 hours after
termination, return to the Company all books, records, customer and pricing
lists, correspondences, contracts or orders, advertising or promotion material,
and other written, typed or printed materials, whether furnished by the Company
or prepared by the Employee, which contain any information relating to the
Company's business, and the Employee agrees that he will neither make nor retain
any copies of such materials.
6.4
Nondisclosure and Nonuse obligation: Employee hereby agrees that he will Not
make use of, disseminate, or in any way disclose any Confidential Information of
the VEMICS to any other party to any person, firm, or business, except to the
extent necessary for the performance of his duties as an employee of VEMICS and
any other purpose that VEMICS may hereafter authorize in writing. Employee
hereby agrees that it shall treat all Confidential Information of the VEMICS
with due care to protect its Confidentiality.
6.5
Exclusions from Nondisclosure and Nonuse obligations: VEMICS and Employee's
obligations under this section with respect to any portion of the VEMICS
Confidential Information shall terminate under this section when Employee can
document that:
i.
It was in the public domain at or subsequent to the time it was communicated to
Employee by VEMICS through no fault of Employee;
ii.
It was rightfully in Employee's possession free of any obligation of confidence
at or subsequent to the time it was communicated to Employee by VEMICS;
or
A
disclosure of Confidential Information:
a)
in response to a valid order by a court or other governmental body;
b)
otherwise required by law, or necessary to establish the rights of either party
under this Agreement, shall not be considered to be a breach of this Agreement
or a waiver of confidentiality for other purposes; provided, however, that
Recipient shall provide prompt written notice thereof to enable Discloser to
seek a protective order or otherwise prevent such disclosure.
6.6
Enforceability of this
Confidentiality Provision: A breach of any of the promises contained in
this section will result in irreparable and continuing damage to VEMICS for
which there will be no adequate remedy at law, Employee agrees that VEMICS shall
be entitled to injunctive relief and/or a decree for specific performance, and
such other relief as may Court may deem proper and just. (including monetary
damages if appropriate).
7.
Arbitration.
Any
dispute or controversy arising under or in connection with this Agreement or in
any manner associated with Employee's employment shall be settled exclusively by
arbitration in New York, in accordance with the Rules of the American
Arbitration Association then in effect, except for the terms under Section
6.6. The parties agree to execute and be bound by the mutual
agreement to arbitrate claims relating to Employee's employment, attached hereto
as Attachment A.
8.
General.
8.1
This Agreement will be construed, interpreted and governed by the laws of the
State of New York, without regard to the conflicts of law rules
thereof.
8.2
The provisions set forth in Sections 6 ,7 and 8 of this employment agreement
shall remain in full force and effect even in the event this agreement is
terminated, for whatever reason, by Employee or VEMICS. All reference
to VEMICS in Sections 6 ,7 and 8 include VEMICS's subsidiaries and other
affiliates, if any.
4
8.3
This Agreement will extend to and be binding upon Employee, his
legalrepresentatives,
heirs and distributees, and upon VEMICS, its successors and assigns regardless
of any change in the business structure of VEMICS, be it through spin-offs
merger, sale of stock, sale of assets or any other transaction. However, this
Agreement is a personal services contract and, as such, Employee may not assign
any of his duties or obligations hereunder.
8.4
In the event that VEMICS shall be sold or the current organizational structure
is altered or changed by a change in ownership then the stock vesting shall be
accelerated to the end of the current employment year plus twelve months and be
transferred to the employee's estate.
8.5
In the event of a future disposition of the properties and businesses of the
Company by merger, acquisition, consolidation, sale of assets or otherwise, then
the Company may elect to assign this Agreement and all of its rights and
obligations hereunder to the acquiring or surviving person or entity; provided
that such corporation, person or entity shall assume in-writing all of the
obligations of the Company hereunder; or in addition to the Company's other
rights of termination, to terminate this Agreement upon at least five days'
written notice by paying Employee the compensation owed him in accordance with
Section 5.3 (Termination Without Cause) of this Agreement.
8.6
This Agreement constitutes the entire agreement of the parties with
respectto the
subject matter hereof. No waiver, modification or change of any of the
provisions of this Agreement will be valid unless in writing and signed by both
parties. Any and all prior agreements between the parties written or
oral relating to Employee's employment by VEMICS are of no further force or
effect.
8.7
The waiver of any breach of any duty, term or condition of this Agreement shall
not be deemed to constitute a waiver of any preceding or succeeding breach of
the same or any other duty, term or condition of this Agreement. No waiver of
any provision of this Agreement shall be valid unless in writing and signed by
both the Employee and an authorized officer of the Company. If any provision of
this Agreement is unenforceable in any jurisdiction in accordance with its
terms, the provision shall be enforceable to the fullest extent permitted in
that jurisdiction and shall continue to be enforceable in accordance with its
terms in any other jurisdiction.
8.8
All notices pursuant to this Agreement shall be in writing and delivered
personally receipt acknowledged (which shall include Federal Express, Express
Mail or similar service) or sent by certified mail, return receipt requested,
addressed to the parties hereto and shall be deemed given upon receipt, if
delivered personally, and three days after mailing, if mailed, unless received
earlier. Notices shall be addressed and sent to VEMICS at its principal
executive office and to executive at this home address as it appears in VEMICS's
personnel records.
8.9
The parties agree that, in the event of any breach or violation of
thisAgreement,
such breach of violation will result in immediate and irreparable injury and
harm to the innocent party, who shall be entitled to the remedies of injunction
and specific performance or either of such remedies, if available, as well as
all other legal or equitable remedies, if available, plus reasonable attorneys
fees and costs incurred in obtaining any such relief.
8.9A
The Section headings contained in this Agreement are for convenience
ofreference
only and shall not be used in construing this Agreement.
8.9B
This Agreement may be executed in counterparts, each of which will
bedeemed an
original but all of which will together constitute one and the same
agreement
IN
WITNESS HEREOF, the parties have executed this Agreement as of the date first
above written.
By:
________________________________
Xxxx Xxxxx
Title: Chairman/CEO
By:
________________________________
Xxxxxxx X. Xxxxxxxxx
5
