EXHIBIT 10.16
EXECUTIVE EMPLOYMENT AGREEMENT
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This Employment Agreement (the "Agreement") is entered into by and between
Cumetrix Data Systems Corp. (the "Company") and Max Toghraie ("Executive"), as
of the 1st day of January, 2000.
I. EMPLOYMENT.
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The Company hereby employs Executive and Executive hereby accepts such
employment, upon the terms and conditions hereinafter set forth, from January 1,
2000, to and including January 1, 2004. This Agreement is subject to renewal
only as set forth in Section VI below.
II. DUTIES.
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A. Executive shall, during course of his employment, serve as Chief
Executive Officer and a director of the Board of Directors of the Company, and
shall have such other duties and responsibilities as the Board of Directors of
the Company shall determine from time to time.
B. Executive agrees to devote substantially all of his time, energy and
ability to the business of the Company. Nothing herein shall prevent Executive,
upon approval of the Board of Directors of the Company, from serving as a
director or trustee of other corporations or businesses which are not in
competition with the business of the Company as set forth in Section IV hereof
or in competition with any present or future affiliate of the Company. Nothing
herein shall prevent Executive from investing in real estate for his own account
or from becoming a partner or a stockholder in any corporation, partnership or
other venture not in competition with the business of the Company as set forth
in Section IV hereof or in competition with any present or future affiliate of
the Company.
C. During the term of this Agreement, Executive shall be the most senior
executive officer in the Company and shall report to the Board of Directors of
the Company.
III. COMPENSATION.
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A. The Company will pay to Executive a base salary at the annual rate of
$192,000.00. Such salary shall be earned monthly and shall be payable in
periodic installments no less frequently than monthly in accordance with the
Company's customary practices. Amounts payable shall be reduced by standard
withholding and other authorized deductions. The Company may in its discretion
increase Executive's salary but it may not reduce it during the term of this
Agreement.
B. Stock Options. The Company shall grant to Executive, concurrent
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with the execution of this Agreement, options to purchase one hundred and fifty
thousand (150,000) shares of the Company's Common Stock (the "Options"),
exercisable at a per share exercise price of $1.125 per share, subject to the
vesting requirements set forth in the Option Certificate to be signed by
Executive, a copy of which is attached hereto and made a part hereof.
C. Welfare Benefit Plans. Executive and/or his family, as the case may
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be, shall be eligible for participation in and shall receive all benefits under
welfare benefit plans, practices, policies and programs provided by the Company
(including, without limitation, medical, prescription, dental, disability,
salary continuance, employee life, group life, accidental death and travel
accident insurance plans and programs) to the extent applicable generally to
other peer executives of the Company. Executive will be compensated for up to
ten sick days per year.
D. Expenses. Executive shall have access to an expense account in the
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sum of $24,000.00 per year. Executive shall be entitled to withdraw from the
expense account to pay for all reasonable employment expenses incurred by him in
accordance with the policies, practices and procedures as in effect generally
with respect to other peer executives of the Company.
E. Fringe Benefits. Executive shall be entitled to fringe benefits in
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accordance with the plans, practices, programs and policies as in effect
generally with respect to other peer executives of the Company.
F. Vacation. Executive shall be entitled to two weeks paid vacation
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per year, in accordance with the plans, policies, programs and practices as in
effect generally with respect to other peer executives of the Company.
G. Car Allowance. The Company will provide Executive a car for his
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exclusive use. The Company's contribution to this program shall not exceed
$1,000 per month. This amount excludes regular fuel, Insurance, repair and
maintenance charges, which will be additionally paid by the company. The
Executive shall have exclusive use of the company owned car for the greater of
five years (5) or duration of his employment contract with the company.
H. The Company reserves the right to modify, suspend or discontinue any
and all of the above plans, practices, policies and programs at any time without
recourse by Executive so long as such action is taken generally with respect to
other similarly situated peer executives and does not single out Executive.
IV. TERMINATION.
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A. Death or Disability. Executive's employment shall terminate
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automatically upon Executive's death. If the Company determines in good faith
that the Disability of Executive has occurred (pursuant to the definition of
Disability set forth below), it may give to Executive written notice in
accordance with Section XVIII of its intention to terminate, effective on the
30th day after receipt of such notice by Executive, provided that, within the 30
days after such receipt, Executive shall not have returned to full-time
performance of his duties. For purposes of this Agreement, "disability" shall
mean a physical or mental impairment which substantially limits a
to the Employee pursuant to section (II) of this agreement and the Company shall
continue to provide Executive benefits pursuant to Section III(C) of this
Agreement for the remainder of the term of the employment contract or until
comparable benefits are obtained by Executive from another employer.
4. Exclusive Remedy. Executive agrees that the payments
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contemplated by this Agreement shall constitute the exclusive and sole remedy
for any termination of his employment and Executive covenants not to assert or
pursue any other remedies, at law or in equity, with respect to any termination
of employment.
V. ARBITRATION.
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Any controversy or claim arising out of or relating to this Agreement, its
enforcement or interpretation, or because of an alleged breach, default or
misrepresentation in connection with any of its provisions, shall be submitted
to arbitration, to be held in Los Angeles County, California in accordance
with California Civil Procedures Code SS 1282-1284.2. In the event either party
institutes arbitration under this Agreement, the party prevailing in any such
litigation shall be entitled, in addition to all other relief, to reasonable
attorneys' fees relating to such arbitration. The non prevailing party shall be
responsible for all costs of the arbitration, including but not limited to, the
arbitration fees, court reporter fees,etc.
VI. RENEWAL
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This Agreement shall be automatically renewed for consecutive periods of
one year each, after the expiration of the stated term, unless one party or the
other gives notice, in writing, at least (30) days prior to the expiration of
this Agreement (or any renewal) of their desire to terminate the Agreement or
modify its terms.
VII. ANTI-SOLICITATION
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Executive promises and agrees that during the term of this Agreement or
renewal in accordance with Section VI above, he will not influence or attempt to
influence customers of the Company or any of its present or future subsidiaries
or affiliates, either directly or indirectly to divert their business to any
individual, partnership, firm, corporation or other entity then in competition
with the business of the Company, or any subsidiary or affiliate of the Company.
VIII. JOINING FORMER COMPANY EMPLOYEES.
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Executive promises and agrees that for one year following his termination
of employment other than pursuant to Section IV(C) above or Disability above or
expiration of this Agreement, he will not enter business or work with any person
who was employed with the Company, and who earned annually $25,0000 or more as a
Company employee during the last six months of his or her own employment, in any
business, partnership, firm, corporation or other entity then in competition
with the business of the Company or any subsidiary or affiliate of the Company.
IX. SOLICITING EMPLOYEES.
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Executive promises and agrees that he will not, for a period of one year
following termination of his accordance with Section VI above, directly
or indirectly solicit any of the Company employees who earned annually $25,000
or more as a Company employee during the last six months of his or her own
employment to work for any business, individual, partnership, firm, corporation,
or other entity then in competition with the business of the Company or any
subsidiary or affiliate of the Company.
X. CONFIDENTIAL INFORMATION.
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A. Executive, in the performance of Executive's duties on behalf of the
Company,shall have access to, receive and be entrusted with confidential
information, including but in no way limited to development,
marketing,organizational, financial, management, administrative,
production,distribution and sales information, data, specifications,and
processes presently owned or at any time in the future developed, by the Company
or its agents or consultants, or used presently or at any time in the future in
the course of its business that is not otherwise part of the public domain
(collectively, the "Confidential Material"). All such Confidential Material is
considered secret and will be available to Executive in confidence. Except in
the performance of duties on behalf of the Company, Executive shall disclose or
use any such Confidential Material, unless such Confidential Material ceases
(through no fault of Executive's) to be confidential because it has become part
of the public domain. All records, files, drawings, documents, equipment and
other tangible items, wherever located, relating in any way to the Confidential
Material or otherwise to the Company's business, which Executive prepares, uses
or encounters, shall be and remain the Company's sole and exclusive property and
shall be included in the Confidential Material. Upon termination of this
Agreement by any means, or whenever requested by the Company, Executive shall
promptly deliver to the Company any and all of the Confidential Material, not
previously delivered to the Company, that may be or at any previous time has
been in Executive's possession or under Executive's control.
B. Executive hereby acknowledges that the sale or unauthorized use or
disclosure of any of the Company's Confidential Material by any means whatsoever
and any time before, during or after Executive's employment with the Company
shall constitute unfair Competition. Executive agrees that Executive shall not
engage in Unfair Competition either during the time employed by the Company or
any time thereafter.
XI. SUCCESSORS.
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A. This Agreement is personal to Executive and shall not, without the
prior written consent of the Company, be assignable by Executive.
B. This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns and any such successor or assignee shall
be deemed substituted for the Company under the terms of this Agreement for all
purposes. As used herein, "successor" and
major life activity of Executive and which renders Executive unable to perform
the essential functions of his position, even with reasonable accommodation
which does not impose an undue hardship on the Company. The Company reserves the
right, in good faith, to make the determination of disability under this
Agreement based upon information supplied by Executive and/or his medical
personnel, as well as information from medical personnel (or others) selected by
the Company or its insurers. "Incapacity" as used herein shall be limited only
to such Disability which substantially prevents the Company from availing itself
on the services of Executive.
B. Cause. The Company may at any time terminate Executive's employment
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for "cause," which shall be based solely upon a good-faith determination by a
majority vote of the Company's Board of Directors that such termination of such
employment is necessary for the welfare of, and in the best interests of, the
Company by reason of (i) acts of dishonesty, theft, misappropriation of
corporate assets; (ii) willful and repeated failure to follow explicit
instructions of the Company's Board of Directors; (iii) willful malfeasance;
(iv) willful nonfeasance; and (v) breach of any material term of this Agreement.
C. Other than Cause or Death or Disability. The Company may terminate
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Executive's employment other than for the reasons set forth in Sections IV (A)
and (B) above upon written notice.
D. Obligations of the Company Upon Termination.
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1. Death or Disability. If Executive's employment is terminated by
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reason of Executive's Death or Disability, this Agreement shall terminate
without further obligations to Executive or his/her legal representatives under
this Agreement, other than for (a) payment of the sum of (i) employees annual
base salary through the date of termination to the extent not heretofore paid
and (ii) any compensation previously deferred by Executive (together with any
accrued interest or earnings thereon) and any accrued vacation pay, in each case
to the extent not theretofore paid (the sum of the amounts described in clauses
(i) and (ii) shall be hereinafter referred to as the "Accrued Obligations"),
which shall be paid to Executive or his estate or beneficiary, as applicable, in
a lump sum in cash within 30 days of the date of termination; and (b) payment to
Executive or his estate or beneficiary, as applicable, any amounts due pursuant
to the terms of any applicable welfare benefit plans.
2. Cause. If Executive's employment is terminated by the Company for
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Cause, this Agreement shall terminate without further obligations to Executive
other than for the timely payment of Accrued Obligations. If it is subsequently
determined that the Company did not have Cause for termination under this
Section IV (D)(2), then the Company's decision to terminate shall be deemed to
have been made under Section IV (D)(3) and the amounts payable thereunder shall
be the only amounts Executive may receive for his termination.
3. Other than Cause or Death or Disability. If the Company terminates
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Executive's employment for other than Cause or Death or Disability, it shall pay
the employee a lump sum payment equivalent to the compensation for the remainder
of the employment term due
"assignee" shall include any person, firm, corporation or other business entity
which at any time, whether by purchase, merger or otherwise, directly or
indirectly acquires the stock of the Company or to which the Company assigns
this Agreement by operation of law or otherwise.
XII. WAIVER.
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No waiver of any breach of any term or provision of this Agreement shall
be construed to be, nor shall be, a waiver of any other breach of this
Agreement. No waiver shall be binding unless in writing and signed by
the party waiving the breach.
XIII. MODIFICATION.
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This Agreement may not be amended or modified other than by a written
agreement executed by Executive and an officer of the Company following
authorization by the Board of Directors of the Company.
XIV. SAVING CLAUSE.
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If any provision of this Agreement or the application thereof is hold
invalid, the invalidity shall not effect other provisions or applications of the
Agreement which can be given effect without invalid provisions or application
and to this end the provisions of this Agreement are declared to be severable.
XV. COMPLETE AGREEMENT.
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This Agreement constitutes and contains the entire agreement and final
understanding concerning Executive's employment with the Company and the other
subject matters addressed herein between the parties. It is extended by the
parties as a complete and exclusive statement of the terms of their agreement.
It supersedes and replaces all prior negotiations and all agreements proposed or
otherwise, whether written or oral, concerning the subject matter hereof. Any
representation, promise or agreement, not specifically included in this
Agreement shall not be binding upon or enforceable against either party. This is
a fully integrated agreement.
XVI. GOVERNING LAW.
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This Agreement shall be deemed to have been executed and delivered
within the State of California, and the rights and obligations of the parties
hereunder shall be construed and enforced in accordance with and governed by, by
the laws of the State of California without regard to principles of conflict of
laws.
XVII. CONSTRUCTION.
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Each party has cooperated in the drafting and preparation of this
Agreement. Hence, in any construction to be made of this Agreement, the same
shall not be construed against any party on the basis that the party was the
drafter. The captions of this Agreement are not part of the provisions hereof
and shall have no force or effect.
XVIII. NOTICES.
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All notices, requests, demands and other communications hereunder shall
be in writing and shall be deemed to have been duly given if delivered or if
mailed by registered or certified mail, postage prepaid, addressed as follows:
If to Executive: Max Toghraie
0000 Xxxxx Xxxxxx.
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
If to Company: Cumetrix Data Systems Corp.
000 Xxxxxx Xxxxxx.
Xxxx xx Xxxxxxxx, XX 00000
Either party may change the address at which notice shall be given by written
notice given in the above manner.
XIX. EXECUTION.
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This Agreement is being executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Photographic copies of such signed counterparts may
be used in lieu of the original for any purpose.
XX. LEGAL COUNSEL.
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Executive and the Company recognize that this is a legally binding
contract and acknowledge and agree that they have had the opportunity to consult
with legal counsel of their choice.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
Cumetrix Data Systems Corp.
By: /s/ XXXXX XXXXX /s/ MAX TOGHRAIE
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Xxxxx Xxxxx Executive
Max Toghraie
By: /s/ XXXX XXXXXXXX
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Xxxx Xxxxxxxx
