PALMWORKS, INC.
COMPANY CO-FOUNDERS/OFFICER COMPENSATION AGREEMENT
This Compensation Agreement (this "Agreement") is dated and made
effective the 28th day of October, 1999 (the "Effective Date") between
PALMWORKS, INC., a Nevada corporation (and/or PALMWORKS, INC., a New York
corporation) (the "Company") and Xxxxx X. Xxxxxx, ("Officer").
1. Employment. Company employs and Officer accepts employment on the
terms and conditions in this Agreement.
2. Duties. Officer is employed in the capacity of Executive VP/CFO.
Officer shall perform the duties customarily performed by an Executive VP/CFO.
3. Intensity of Effort; Other Business. Officer shall devote Officer's
entire working time, attention and efforts to Company's business and affairs,
shall faithfully and diligently serve Company's interests and shall not engage
in any business or employment activity that is not on Company's behalf (whether
or not pursued for gain or profit) except for (a) activities approved in writing
in advance by the Board and (b) passive investments that do not involve Officer
providing any advice or services to the businesses in which the investments are
made.
4. Term. The term of this Agreement starts on the Effective Date and
expires one year later (the "Initial Term"). This Agreement shall automatically
be renewed for successive one-year terms (each referred to as an "Extended
Term") unless either party gives written notice of nonrenewal at least thirty
(30) days before the expiration of the term. Unless stated otherwise, the word
"year" as used in this Agreement refers to incremental periods of 365 days each
(366 days in the case of a leap year), not calendar years. This Agreement may
terminate before the expiration of any term as provided below.
5. Compensation. Officer's compensation shall be as follows:
a. Officer's gross salary initially shall be $8,000 per month
($96,000 per year on an annualized basis), which shall be computed and paid in
equal installments consistent with Company's normal payroll procedures. At the
end of each calendar year, Officer's salary shall be reviewed by the Board and
adjusted as determined by the Board in its sole discretion, provided that,
absent cause or Officer's consent, it may not be adjusted downward.
b. Furthermore, each Officer may purchase additional options
at each quarter end. Not to exceed 25% of the Officer's gross quarterly salary.
These options may be purchased at 15% below the lowest strike price in the
quarter of purchase. Notice of intent to purchase must be made within the first
week of the last month of the quarter of purchase.
c. In the event that the Company were to be acquired; any and
all Officer' stock and or stock options would automatically become fully vested;
unless; the Officer were to continue employment, then the Officer would be
subject to the continuation of employment terms of the acquisition.
d. Officer may receive annual bonuses, profit sharing and/or
incentive compensation based on Company's profitability as determined by the
Board in its sole discretion.
e. Officer shall be eligible for such other compensation as
may be provided by the Board in its sole discretion.
6. Benefit Plans. Officer shall be eligible for all benefit plans
(including retirement or pension plans, profit sharing plans and stock option
plans, as may be made available) that are provided generally to Company's
executive Officers.
7. Vacation and Sick Leave. Officer shall be entitled 3 weeks of
vacation the first year with an additional week for each continued year of
service (a prorated accrual method will be applied as necessary for begin and
end dates within a calendar year). Each calendar year end Officer may choose to
carry up to 50% of any pending (unused) vacation time into the next calendar
year (never to exceed 6 weeks of vacation credit), or Officer may choose to
request a cash out for any pending vacation time not used during that calendar
year. If the Officer's term begins or ends
8. Disability. Officer shall be entitled to such disability benefits as
may be provided in the Company's benefit plan set forth in the Company's Officer
Handbook.
9. Business Expenses. Officer is authorized to incur reasonable travel
and entertainment expenses to promote Company's business, as approved by the
Company Officers or Board of Directors. Company shall reimburse Officer for
those expenses. Officer shall provide to Company the itemized expense account
information, as well as, associated receipts; that Company reasonably requests.
10. Termination. Officer's employment may be terminated before the
expiration of this Agreement as follows, in which event Officer's compensation
and benefits shall terminate except as otherwise provided below.
a. By Company Without Cause. Company may terminate Officer's
employment at anytime, without cause or good reason or advance notice. If
Company terminates Officer's employment without cause, however, and provided
that Officer releases Company and its agents from any and all claims in a
signed, written release satisfactory in form and substance to Company, Company
shall pay to Officer termination payments/severance as follows:
1.) 3 months of regular Officer pay, providing the Officer has
completed a minimum of 6 months of service with the company.
All stock becomes automatically fully vested, and, 50% vesting
on any stock options.
2.) 6 months of regular Officer pay, providing the Officer has
completed a minimum of 12 months of service with the company.
All stock, as well as, any stock options become fully vested.
3.) 12 months of regular Officer pay, providing the Officer
has completed a minimum of 18 months of service with the
company. . All stock, as well as, any stock options become
fully vested.
4.) A maximum of 12 months of regular Officer pay, providing
the officer has completed a minimum of 18 months of service
with the company, unless otherwise setforth in a 'Continuation
as Consultant Agreement'. All stock, as well as, any stock
options become fully vested.
b. By Company for Cause. Company may terminate Officer's
employment for cause. If Company wishes to terminate Officer's employment for
cause it shall first give Officer 30 days' written notice of the circumstances
constituting cause and an opportunity to cure, unless the circumstances are not
subject to being cured. Following the notice and opportunity to cure (if cure is
not made), or immediately if notice and opportunity to cure are not required,
Company may terminate Officer's employment for cause by giving written notice of
termination. The notice may take effect immediately or at such later date as
Company may designate, provided that Officer may accelerate the termination date
by giving five business days' written notice of the acceleration. Any
termination of Officer's employment for cause must be approved by a majority of
the Board other than Officer. Officer must be given reasonable advance notice of
the meeting at which termination is to be considered, and a reasonable
opportunity to address the Board. Officer would no longer be eligible for
company benefits of any kind; any stock options not fully vested would be fully
surrendered to the company.
For purposes of this Agreement "cause" means and is limited to
dishonesty, fraud, commission of a felony or of a crime involving moral
turpitude, destruction or theft of Company property, physical attack to a fellow
Officer, intoxication at work, use of narcotics or alcohol to an extent that
materially impairs Officer's performance of his or her duties, willful
malfeasance or gross negligence in the performance of Officer's duties,
violation of law in the course of employment that has a material adverse impact
on Company or its Officers, misconduct materially injurious to Company, or any
material breach of Officer's duties or obligations to Company that results in
material harm to Company.
c. By Officer Without Good Reason. Officer may terminate
Officer's employment at any time, with or without good reason, by giving one
hundred and eighty (180) days' advance written notice of termination. Officer
would no longer be eligible for company benefits of any kind; any stock/options
not fully vested would be fully surrendered to the company.
d. By Officer for Good Reason. Officer may terminate Officer's
employment for good reason, in which event Officer shall be entitled to the same
rights under this Agreement as if Company had terminated Officer's employment
without cause. If Officer wishes to terminate employment for good reason Officer
shall first give Company 30 days' written notice of the circumstances
constituting good reason and an opportunity to cure, unless the circumstances
are not subject to being cured. Following the notice and opportunity to cure (if
cure is not made), or immediately if notice and opportunity to cure are not
required, Officer may terminate employment for good reason by giving written
notice of termination. The notice may take effect immediately or at such later
date as Officer may designate, provided that Company may accelerate the
termination date by giving five business days' written notice of the
acceleration. Officer would no longer be eligible for company benefits of any
kind; any stock options not fully vested would be fully surrendered to the
company; unless otherwise agreed upon and approved through the Board of
Directors of the Company.
For purposes of this Agreement, "good reason" means and is
limited to the occurrence without cause and without Officer's consent of a
material reduction in the character of Officer's duties, level of work
responsibility or working conditions, a reduction in Officer's salary and/or
benefits greater than 10% of the level initially established at the commencement
of this Agreement, Company requiring Officer to be based anywhere other than the
greater Houston area, except for reasonable travel on Company's business, or any
material breach by Company of its duties or obligations to Officer that results
in material harm to Officer.
e. Death. Officer's employment shall terminate automatically
upon Officer's death.
11. Indemnification. Company shall defend and indemnify Officer from
and against any and all claims that may be asserted against Officer by third
parties (including derivative claims asserted by third parties on behalf of
Company) that are connected with Officer's employment by Company, to the extent
permitted by applicable law. The foregoing notwithstanding, Company shall not be
required to defend or indemnify Officer (a) in criminal proceedings, (b) in
civil proceedings where Officer is the plaintiff or (c) to the extent it is
finally adjudicated that Officer did not act in good faith and in the reasonable
belief that Officer's actions were appropriate in the discharge of Officer's
duties for Company. Company may fulfill its duty of defense by providing
competent legal counsel of Company's choosing. The foregoing rights are in
addition to any other rights to which Officer may be entitled under any other
agreement, policy, bylaw, insurance policy, ordinance, statute or other
provision.
12. Invention, Confidentiality, Nonraiding and Noncompetition
Agreement. Officer shall execute an Invention, Confidentiality, Nonraiding and
Noncompetition Agreement in the form attached as Exhibit A, which is a part of
this Agreement.
13. Dispute Resolution. All disputes between Officer and Company that
otherwise would be resolved in court shall be resolved instead by the following
alternate dispute resolution process (the "Process" ).
a. Disputes Covered. This Process applies to all disputes
between Officer and Company, including those arising out of or related to this
Agreement or Officer's employment at Company. Disputes subject to this Process
include but are not limited to pay disputes, contract disputes, wrongful
termination disputes and discrimination, harassment or civil rights disputes.
This Process applies to disputes Officer may have with Company and also applies
to disputes Officer may have with any of Company's Officers or agents so long as
the Officer or agent with whom Officer has the dispute is also bound by or
consents to this Process. This Process applies regardless of when the dispute
arises and will remain in effect after Officer's employment with Company ends,
regardless of the reason it ends. This Process does not apply, however, to
workers' compensation or unemployment compensation claims.
b. Mediation. Before having an arbitration hearing, Officer
and Company agree to attempt to resolve all disputes by mediation using the
Employment Mediation Rules of the American Arbitration Association. Mediation is
a nonbinding process in which a neutral person helps the parties to try to reach
an agreement to resolve their disputes. If the mediation is done after one party
has started the arbitration process, the mediation shall not delay the
arbitration hearing date. Temporary or interim relief may be sought without
mediating first. Any failure to mediate shall not affect the validity of an
arbitration award or the obligation to arbitrate.
c. Arbitration. All disputes that are not resolved by
agreement (in mediation or otherwise) shall be determined by binding
arbitration. Arbitration is a process in which one or more neutral people decide
the case after hearing evidence presented by both sides. The arbitration shall
be governed by the rules of the American Arbitration Association.
d. Injunctive Relief. Either party may request a court to
issue such temporary or interim relief (including temporary restraining orders
and preliminary injunctions) as may be appropriate, either before or after
mediation or arbitration is commenced. The temporary or interim relief shall
remain in effect pending the outcome of mediation or arbitration. No such
request shall be a waiver of the right to submit any dispute to mediation or
arbitration.
e. Attorneys' Fees, Venue and Jurisdiction in Court. In any
lawsuit arising out of or related to this Agreement or Officer's employment at
Company, the prevailing party shall recover reasonable costs and attorneys'
fees, including on appeal. Venue and jurisdiction of any such lawsuit shall
exist exclusively in state and federal courts in Galveston County, Texas, unless
injunctive relief is sought by Company and, in Company's judgment, that relief
might not be effective unless obtained in some other venue. These provisions do
not give any party a right to proceed in court in violation of the agreement to
arbitrate described above.
f. Employment Status. This Dispute Resolution Process does not
guarantee continued employment, require discharge only for cause or require any
particular corrective action or discharge procedures.
14. Governing Law. This Agreement shall be governed by the internal
laws of the state of Texas without giving effect to provisions thereof related
to choice of laws or conflict of laws.
15. Saving Provision. If any part of this Agreement is held to be
unenforceable, it shall not affect any other part. If any part of this Agreement
is held to be unenforceable as written, it shall be enforced to the maximum
extent allowed by applicable law. The indemnification, confidentiality,
limitations on publicity, possession of materials, noncompetition, nonraiding
and dispute resolution provisions of this Agreement shall survive after
Officer's employment by Company ends, regardless of the reason it ends, and
shall be enforceable regardless of any claim Officer may have against Company.
16. Waiver. No waiver of any provision of this Agreement shall be valid
unless in writing, signed by the party against whom the waiver is sought to be
enforced. The waiver of any breach of this Agreement or failure to enforce any
provision of this Agreement shall not waive any later breach.
17. Assignment; Successors. Company may assign its rights and delegate
its duties under this Agreement. Officer may not assign Officer's rights or
delegate Officer's duties under this Agreement.
18. Binding Effect. This Agreement is binding upon the parties and
their personal representatives, heirs, successors and permitted assigns.
19. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original and all of which, taken
together, shall constitute a single agreement.
20. Legal Representation. In connection with this Agreement, the
Company's law firm has only represented Company and has not represented Officer.
Officer acknowledges that Officer has been advised to consult with independent
legal counsel before signing this Agreement and has had the opportunity to do
so.
21. Complete Agreement. This Agreement, together with the attached
Exhibits, is the final and complete expression of the parties' agreement
relating to Officer's employment, and supercedes any prior employment agreements
and/or understandings between the parties. This Agreement may be amended only by
a writing signed by both parties; it may not be amended orally or by course of
dealing. The parties are not entering into this Agreement relying on anything
not set out in this Agreement. This Agreement shall control over any
inconsistent policies or procedures of Company, whether in effect now or adopted
later, but Company's policies and procedures that are consistent with this
Agreement, whether in effect now or adopted later, shall apply to Officer
according to their terms.
DATED as of the date first written above.
OFFICER: /s/ Xxxxx X. Xxxxxx
---------------------
Xxxxx X. Xxxxxx
COMPANY: PALMWORKS, INC.
/s/ Xxxxx X. Xxxx
---------------------
Xxxxx X. Xxxx
Director
/s/ Xxxxx Xxxxxx
---------------------
Xxxxx Xxxxxx
Director
PALMWORKS, INC.
EXHIBIT A
OFFICER NONDISCLOSURE AGREEMENT
This Officer Nondisclosure Agreement (this "Agreement") is by and between the
undersigned officer ("Officer") and PALMWORKS INC. ("the Company"). For good and
valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties agree:
1. Confidentiality. Officer recognizes that during the course of
employment with, PALMWORKS INC, Officer will have access to certain Confidential
Information (as defined below) relating to the business of the PALMWORKS, INC.
Officer agrees that all Confidential Information shall remain the exclusive
property of PALMWORKS INC.
At all times during or following Officer's employment with PALMWORKS
INC., Officer agrees not to disclose to anyone outside PALMWORKS INC., nor to
use for any purpose other than Officer's work for PALMWORKS INC.; (i) any
Confidential Information or (ii) any information PALMWORKS INC. has received
from others which PALMWORKS INC. is obligated to treat as confidential or
proprietary.
If Officer has any questions as to what comprises such confidential or
proprietary information, or to whom, if anyone, it may be disclosed, Officer
will consult with his or her supervisor. In any dispute over whether information
is Confidential Information for purposes of enforcement of this Agreement, it
shall be the burden of Officer to show both that such contested information is
not Confidential Information within the meaning of the Agreement, and that it
does not constitute a trade secret under the laws of the State of Texas.
2. Definition of Confidential Information. "Confidential Information"
means any information or material in which PALMWORKS INC., whether or not owned
or developed by PALMWORKS INC., which is not generally known other than by
PALMWORKS INC., and of which Officer may obtain knowledge through or as a result
of the employment relationship established with PALMWORKS INC.
Without limiting the foregoing, Confidential Information means: (a) any
and all information relating to research, development, trade secrets, know how,
inventions, technical data, software, manufacture, and engineering; (b)
information entrusted to PALMWORKS INC., or its principal officers and/or
officers by third parties; and (c) any and all business plans, marketing
techniques and plans, financial materials, cost data, customer lists, pricing
policies and other proprietary business information relating to purchasing,
accounting, marketing, merchandising or selling. Proprietary information also
includes any non-public information obtained in the course of employment with
PALMWORKS INC.
Confidential Information will not include information that (i) Officer lawfully
obtains from any third party who has lawfully obtained such information; or (ii)
is generally available to the public or is later published or generally
disclosed to the public by PALMWORKS INC.
3. Return of Materials. At the time Officer leaves the employ of
PALMWORKS INC., Officer shall return all papers, drawings, notes, memoranda,
manuals, specifications, designs, devices, documents, diskettes and tapes, and
any other material on any media containing or disclosing any confidential or
proprietary technical or business information. Officer shall also return any
keys, pass cards, identification cards, or other property belonging to PALMWORKS
INC.
4. No Guarantee of Employment. Officer acknowledges and agrees that
Officer's employment with PALMWORKS INC., is of indefinite duration and that
either PALMWORKS INC. or Officer is free to terminate this employment
relationship at will and at any time with or without cause. Officer also
acknowledges that any representation to the contrary is unauthorized and void,
unless contained in a formal written employment contract signed by an officer of
PALMWORKS INC.
5. Injunctive Relief. Officer acknowledges that any violation of this
Agreement by Officer will cause irreparable injury to PALMWORKS INC. and
PALMWORKS INC. shall be entitled to extraordinary relief in court, including,
but not limited to, temporary restraining orders, preliminary injunctions, and
permanent injunctions, without the necessity of posting bond or security.
Officer consents to PALMWORKS INC. notifying anyone to whom Officer may provide
services of the existence and terms of this Agreement.
6. Miscellaneous. If court proceedings are required to enforce any
provision of this Agreement, the prevailing party shall be entitled to an award
of reasonable costs and expenses of litigation and any appeal, including
reasonable attorneys' fees. This Agreement shall be governed by the laws of the
State of Texas. Venue for any action arising out of this Agreement shall exist
exclusively in Galveston County, Texas, or in the Federal District Court for the
Southeastern District of Texas, unless injunctive relief is sought by PALMWORKS
INC. and, in PALMWORKS INC. judgment, may not be effective unless obtained in
some other venue. Officer's obligations under this Agreement supplement and do
not limit other obligations Officer has to PALMWORKS INC. including without
limitation under the law of trade secrets. This Agreement shall be enforceable
regardless of any claim Officer may have against PALMWORKS INC. If any provision
of this Agreement is held to be unenforceable as written, it shall be enforced
to the maximum extent allowed by applicable law. If any provision of this
Agreement is void or is so declared, such provision shall be severed from this
Agreement, which shall otherwise remain in full force and effect. This Agreement
shall survive termination of Officer's employment, however caused. This
Agreement shall be enforceable regardless of any claim Officer may have against
PALMWORKS INC. This Agreement is the final and complete expression of the
parties' agreement on these subjects, and may be amended only in a writing
signed by PALMWORKS INC. and Officer.
DATED this 28th day of October, 1999.
OFFICER: /s/ Xxxxx X. Xxxxxx
-------------------
Xxxxx X. Xxxxxx, Exec VP/CFO
