Exhibit 10.8
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of March 1, 2001, by and between LEARNCOM,
INC., a Nevada corporation (the "Company"), and XXXXX X. XXXXXX, an individual
residing at 0 Xxxxxxx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxx (the "Employee").
W I T N E S S E T H:
WHEREAS, the Company desires to employ the Employee as its Chief Executive
Officer and President and wishes to acquire and be assured of Employee's
services on the terms and conditions hereinafter set forth; and
WHEREAS, the Employee desires to be employed by the Company as the Chief
Executive Officer and President, and to perform and to serve the Company on the
terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual terms, covenants,
agreements and conditions hereinafter set forth, the Company and the Employee
hereby agree as follows:
1. EMPLOYMENT. (a) The Company hereby employs the Employee to serve as
a full time employee of the Company, and the Employee hereby accepts such
employment with the Company, for the period set forth in Section 2 hereof. The
Employee's principal place of employment shall be at the Company's current
offices in Bensenville, Illinois. The employee's principal place of employment
is subject to change but shall not be relocated to an office more than twenty
(20) miles from the Company's current office without the prior written consent
of the Employee.
(b) The Employee affirms and represents that (i) the Employee is
under no obligation to any former employer or other party that is in any way
inconsistent with, or that imposes any restriction upon, the Employee's
acceptance of employment hereunder with the Company, the employment of the
Employee by the Company, or the Employee's undertakings under this Agreement and
(ii) his performance of all the terms of this Agreement and his employment by
the Company does not and will not breach any agreement to keep in confidence
proprietary information acquired by him in confidence or in trust prior to his
employment by the Company.
2. TERM. Unless earlier terminated as provided in this Agreement, the
term of the Employee's employment under this Agreement shall be for a period of
three (3) years beginning on the date hereof and ending on February 28, 2004
(such period or, if the Employee's
employment hereunder is earlier terminated, such shorter period, being
hereinafter called the "Employment Term").
3. DUTIES.
(a) The Employee shall be employed as the Chief Executive Officer
of the Company. The Employee shall faithfully and competently perform such
duties at such times and places and in such manner as the Company may from time
to time reasonably direct or such other duties appropriate to a senior executive
managerial position as the Board of Directors of the Company shall from time to
time determine. Employee's title and duties shall be subject to change at the
sole discretion of the Board of Directors of the Company. Employee shall be
appointed as a director of the Company during the Employment Term, and shall
serve in such capacity without additional compensation.
(b) Except as may otherwise be approved in writing by the Board of
Directors of the Company, and except during vacation periods and reasonable
periods of absence due to sickness, personal injury or other disability, the
Employee shall devote his full time throughout the Employment Term to the
services required of Employee hereunder. The Employee shall render his services
exclusively to the Company during the Employment Term and shall use his best
efforts, judgment and energy to improve and advance the business and interests
of the Company in a manner consistent with the duties of Employee's position.
4. SALARY AND BONUS.
(a) BASE SALARY. In consideration for the services of the Employee
rendered to the Company hereunder (including any services the Employee may
render as a director of the Company), the Company shall pay the Employee a base
salary at an annual rate of One Hundred Twenty-Five Thousand Dollars
($125,000.00) during the Employment Term, payable in regular intervals in
accordance with the Company's payroll practices (the "Base Salary"). The Base
Salary may be increased from time to time as the Board of Directors, in its sole
discretion, deems appropriate.
(b) BONUSES. In addition to the Base Salary, the Company shall pay
the Employee such other bonuses and compensation as the Board of Directors, in
its sole discretion, deems appropriate.
(c) WITHHOLDING, ETC. The payment of any salary or bonuses
hereunder shall be subject to income tax, social security and other applicable
withholdings, as well as such deductions as may be required under the Company's
employee benefit plans.
2
5. BENEFITS. (a) During the Employment Term, the Employee shall be:
(i) eligible to participate in all employee fringe benefits
and any pension and/or profit sharing plans that may be provided by the Company
for its key executive employees in accordance with the provisions of any such
plans, as the same may be in effect on and after the date hereof;
(ii) eligible to participate in any medical and health plans
or other employee welfare benefit plans that may be provided by the Company for
its key executive employees in accordance with the provisions of any such plans,
as the same may be in effect on and after the date hereof;
(iii) entitled to paid time off each year in accordance with
the Company's standard employee vacation policy, which shall be taken at such
time or times as will not unreasonably hinder or interfere with the Company's
business or operations; and
(iv) entitled to reimbursement for all reasonable and
necessary out-of-pocket business expenses incurred by the Employee in the
performance of the Employee's duties hereunder in accordance with the Company's
policies applicable (on and after the date hereof) thereto.
(b) During the Employment Term, the Company shall maintain in
effect for the benefit of the Employee or his designee the life insurance policy
currently maintained by the Company on the life of the Employee; PROVIDED,
HOWEVER, that the Company shall not be required to pay premiums on such policy
in excess of $20,000 per year.
(c) Employee shall cooperate with the Company in the event the
Company wishes to obtain key-man insurance on the Employee. Such cooperation
shall include, but not be limited to, taking any physical examinations that may
be requested by the insurance company.
6. INVENTIONS AND CONFIDENTIAL INFORMATION. The Employee hereby
covenants, agrees and acknowledges as follows:
(a) The Company is engaged in a continuous program of research,
design, development, production, marketing and servicing with respect to its
businesses.
(b) The Employee's employment hereunder creates a relationship of
confidence and trust between the Employee and the Company with respect to
certain information pertaining to the business of the Company and its Affiliates
(as hereinafter defined) or pertaining to the business of any client or customer
of the Company or its Affiliates which may be made known to the Employee by the
Company or any of its Affiliates or by any client or customer of the Company or
any of its Affiliates or learned by the Employee during the period of Employee's
employment by the Company.
3
(c) The Company possesses and will continue to possess information
that has been created, discovered or developed by, or otherwise become known to
it (including, without limitation, information created, discovered or developed
by, or made known to, the Employee during the period of Employee's employment or
arising out of Employee's employment) or in which property rights have been or
may be assigned or otherwise conveyed to the Company, which information has
commercial value in the business in which the Company is engaged and is treated
by the Company as confidential.
(d) Any and all inventions, products, discoveries, improvements,
processes, manufacturing, marketing and services methods or techniques,
formulae, designs, styles, specifications, data bases, computer programs
(whether in source code or object code), know-how, strategies and data, whether
or not patentable or registrable under copyright or similar statutes, made,
developed or created by the Employee (whether at the request or suggestion of
the Company, any of its Affiliates, or otherwise, whether alone or in
conjunction with others, and whether during regular hours of work or otherwise)
during the period of Employee's employment by the Company which may pertain to
the business, products, or processes of the Company or any of its Affiliates
(collectively hereinafter referred to as "Inventions"), will be promptly and
fully disclosed by the Employee to an appropriate executive officer of the
Company (other than the Employee) without any additional compensation therefor,
all papers, drawings, models, data, documents and other material pertaining to
or in any way relating to any Inventions made, developed or created by Employee
as aforesaid. For the purposes of this Agreement, the term "Affiliate" or
"Affiliates" shall mean any person, corporation or other entity directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company. For the purposes of this definition, "control" when
used with respect to any person, corporation or other entity means the power to
direct the management and policies of such person or entity, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
(e) The Employee will keep confidential and will hold for the
Company's sole benefit any Invention which is to be the exclusive property of
the Company under this Section 6 for which no patent, copyright, trademark or
other right or protection is issued.
(f) The Employee also agrees that the Employee will not without
the prior written consent of the Board of Directors of the Company (i) use for
Employee's benefit or disclose at any time during Employee's employment by the
Company, or thereafter, except to the extent required by the performance by the
Employee of the Employee's duties as an employee of the Company, any information
obtained or developed by Employee while in the employ of the Company with
respect to any Inventions or with respect to any customers, clients, suppliers,
products, employees, financial affairs, or methods of design, distribution,
marketing, service, procurement or manufacture of the Company or any of its
Affiliates, or any confidential matter, except information which at the time is
generally known to the public other than as a result of
4
disclosure by the Employee not permitted hereunder, or (ii) take with the
Employee upon leaving the employ of the Company any document or paper relating
to any of the foregoing or any physical property of the Company or any of its
Affiliates.
(g) The Employee acknowledges and agrees that a remedy at law for
any breach or threatened breach of the provisions of this Section 6 would be
inadequate and, therefore, agrees that the Company and its Affiliates shall be
entitled to injunctive relief in addition to any other available rights and
remedies in case of any such breach or threatened breach; PROVIDED, HOWEVER,
that nothing contained herein shall be construed as prohibiting the Company or
any of its Affiliates from pursuing any other rights and remedies available for
any such breach or threatened breach.
(h) The Employee agrees that upon termination of Employee's
employment by the Company for any reason, the Employee shall immediately return
to the Company all documents and other property in Employee's possession
belonging to the Company or any of its Affiliates.
(i) Without limiting the generality of Section 9 hereof, the
Employee hereby expressly agrees that the foregoing provisions of this Section 6
shall be binding upon the Employee's heirs, successors and legal
representatives.
7. TERMINATION. (a) The Employee's employment hereunder shall be
terminated upon the occurrence of any of the following:
(i) death of the Employee;
(ii) termination of the Employee's employment hereunder by
the Employee at any time for any reason whatsoever (including, without
limitation, resignation or retirement) other than for "good reason" as
contemplated by clause (v)(B) below;
(iii) termination of the Employee's employment hereunder by
the Company because of the Employee's inability to perform Employee's duties on
account of disability or incapacity for a period of ninety (90) or more days,
whether or not consecutive, occurring within any period of twelve (12)
consecutive months;
(iv) termination of the Employee's employment hereunder by
the Company at any time for "cause" (as hereinafter defined), such termination
to take effect immediately upon written notice from the Company to the Employee;
and
(v) termination of the Employee's employment hereunder (A)
by the Company at any time, other than termination by reason of disability or
incapacity as contemplated by clause (iii) above or termination by the Company
for "cause" as contemplated by clause (iv) above and (B) by the Employee for
"good reason" (as hereinafter defined).
5
The following actions, failures or events shall constitute "cause"
for termination within the meaning of clause (iv) above: (i) the Employee's
conviction of, admission of guilt to or plea of NOLO CONTENDERE or similar plea
(which, through lapse of time or otherwise, is not subject to appeal) with
respect to any crime or offense that constitutes a felony in the jurisdiction
involved; (2) acts of dishonesty or moral turpitude which are materially
detrimental to the Company and/or its Affiliates, (3) failure by the Employee to
obey the reasonable and lawful orders of the Board of Directors of the Company,
(4) any act by the Employee in violation of Section 8 hereof, any statement or
disclosure by the Employee in violation of Section 6 hereof, or any material
breach by the Employee of a representation or warranty contained in Section 1(b)
hereof; (5) following written notice from the Board of Directors of the Company
of prior similar actions by Employee, excessive absenteeism (other than by
reason of disability); (6) following written notice from the Board of Directors
of the Company of prior similar actions by Employee, excessive alcoholism or
addiction to drugs not prescribed by a qualified physician or (7) gross
negligence by the Employee in the performance of, or willful disregard by the
Employee of, the Employee's obligations hereunder.
The following actions, failures or events shall constitute "good
reason" within the meaning of clause (V)(B) above: (1) a material breach by the
Company of its obligations under this Agreement or (2) a material diminution of
the Employee's responsibilities or authority hereunder.
(b) In the event that the Employee's employment is terminated by
the Company prior to February 28, 2004 for any reason other than "cause" or by
Employee for "good reason," then the Company shall pay to the Employee, as
severance pay or liquidated damages or both, the amount of Base Salary, if any,
which the Employee would have otherwise been entitled to receive pursuant to
Section 4(a) hereof from the date of termination had the Employee's employment
not been so terminated until February 28, 2004 (such amount being herein
referred to as the "Severance Payments" and such period being herein referred to
as the "Severance Period"); PROVIDED, HOWEVER, that the Severance Payments shall
be reduced by any salary, bonus or other compensation received by the Employee
in respect of such Severance Period or received by the Employee in respect of
any other employment or consulting arrangement secured by the Employee
subsequent to the termination of the Employee's employment hereunder.
(c) Notwithstanding anything to the contrary expressed or implied
herein, except as required by applicable law and except as set forth in
paragraph (b) above, the Company (and its Affiliates) shall not be obligated to
make any payments to the Employee or on Employee's behalf of whatever kind or
nature by reason of the Employee's cessation of employment (including, without
limitation, by reason of termination of the Employee's employment by the Company
for "cause"), other than (i) such amounts, if any, of Employee's salary and
bonus as shall have accrued and remained unpaid as of the date of said cessation
and (ii) such other amounts which may be then otherwise payable to the Employee
from the Company's benefits plans or reimbursement policies, if any.
6
(d) No interest shall accrue on or be paid with respect to any
portion of any payments hereunder.
8. NON-COMPETITION. (a) The term "Non-Compete Term" shall mean the
period during which Employee is employed hereunder and (x) in the event
Employee's employment is terminated by the Company for any reason other than
"cause" or by Employee for "good reason," the one-year period following such
termination, (y) in the event Employee's employment is terminated by the Company
for "cause" or by Employee for any reason other than "good reason," the two-year
period following such termination.
During the Non-Compete Term:
(i) the Employee will not make any statement or perform any
act intended to advance an interest of any existing or prospective competitor of
the Company or any of its Affiliates in any way that will or may injure an
interest of the Company or any of its Affiliates in its relationship and
dealings with existing or potential customers or clients, or solicit or
encourage any other employee of the Company or any of its Affiliates to do any
act that is disloyal to the Company or any of its Affiliates or inconsistent
with the interest of the Company or any of its Affiliate's interests or in
violation of any provision of this Agreement;
(ii) the Employee will not discuss with any existing or
potential customers or clients of the Company or any of its Affiliates the
present or future availability of services or products of a business, if the
Employee has or expects to acquire a proprietary interest in such business or is
or expects to be an employee, officer or director of such business, where such
services or products are competitive with services or products which the Company
or any of its Affiliates provides;
(iii) the Employee will not make any statement or do any act
intended to cause any existing or potential customers or clients of the Company
or any of its Affiliates to make use of the services or purchase the products of
any competitive business in which the Employee has or expects to acquire a
proprietary interest or in which the Employee is or expects to be made an
employee, officer or director, if such services or products in any way compete
with the services or products sold or provided or expected to be sold or
provided by the Company or any of its Affiliates to any existing or potential
customer or client; and
(iv) the Employee will not directly or indirectly (as a
director, officer, employee, manager, consultant, independent contractor,
advisor or otherwise) engage in competition with, or own any interest in,
perform any services for, participate in or be connected with (i) any business
or organization which engages in competition with the Company or any of its
Affiliates in any geographical area where any business is presently carried on
by the Company or any of its Affiliates, or (ii) any business or organization
which engages in competition with the Company or any of its Affiliates in any
geographical area where any business shall be hereafter,
7
during the period of the Employee's employment by the Company, carried on by the
Company or any of its Affiliates, if such business is then being carried on by
the Company or any of its Affiliates in such geographical area; PROVIDED,
HOWEVER, that the provisions of this Section 8(a) shall not be deemed to
prohibit the Employee's ownership of not more than one percent (1%) of the total
shares of all classes of stock outstanding of any publicly held company.
(b) During the Non-Compete Term, the Employee will not directly or
indirectly hire, engage, send any work to, place orders with, or in any manner
be associated with any supplier, contractor, subcontractor or other person or
firm which rendered manufacturing or other services, or sold any products, to
the Company or any of its Affiliates if such action by Employee would have a
material adverse effect on the business, assets or financial condition of the
Company or any of its Affiliates.
(c) In connection with the foregoing provisions of this Section 8,
the Employee represents that Employee's experience, capabilities and
circumstances are such that such provisions will not prevent Employee from
earning a livelihood. The Employee further agrees that the limitations set forth
in this Section 8 (including, without limitation, any time or territorial
limitations) are reasonable and properly required for the adequate protection of
the businesses of the Company and its Affiliates. It is understood and agreed
that the covenants made by the Employee in this Section 8 (and in Section 6
hereof) shall survive the expiration or termination of this Agreement.
(d) For purposes of this Section 8, proprietary interest in a
business is ownership, whether through direct or indirect stock holdings or
otherwise, of one percent (1%) or more of such business. The Employee shall be
deemed to expect to acquire a proprietary interest in a business or to be made
an officer or director of such business if such possibility has been discussed
with any officer, director, employee, agent, or promoter of such business.
(e) The Employee acknowledges and agrees that a remedy at law for
any breach or threatened breach of the provisions of this Section 8 would be
inadequate and, therefore, agrees that the Company and any of its Affiliates
shall be entitled to injunctive relief in addition to any other available rights
and remedies in cases of any such breach or threatened breach; PROVIDED,
HOWEVER, that nothing contained herein shall be construed as prohibiting the
Company or any of its Affiliates from pursuing any other rights and remedies
available for any such breach or threatened breach.
9. NON-ASSIGNABILITY. (a) Neither this Agreement nor any right or
interest hereunder shall be assignable by the Employee, Employee's
beneficiaries, or legal representatives without the Company's prior written
consent; PROVIDED, HOWEVER, that nothing in this Section 9(a) shall preclude the
Employee from designating a beneficiary to receive any benefit payable hereunder
upon Employee's death or incapacity.
8
(b) Except as required by law, no right to receive payments under
this Agreement shall be subject to anticipation, commutation, alienation, sale,
assignment, encumbrance, charge, pledge, or hypothecation or to exclusion,
attachment, levy or similar process or assignment by operation of law, and any
attempt, voluntary or involuntary, to effect any such action shall be null, void
and of no effect.
10. BINDING EFFECT. Without limiting or diminishing the effect of
Section 9 hereof, this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, successors, legal
representatives and assigns.
11. NOTICE. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and either delivered in person or
sent by first class certified or registered mail, postage prepaid, if to the
Company, at the Company's principal place of business, attention: Treasurer
(with a copy to Pryor, Cashman, Xxxxxxx & Xxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Xxxx X. Xxxxxxx, Esq.), and if to the Employee, at
Employee's home address set forth above, or to such other address or addresses
as either party shall have designated in writing to the other party hereto.
12. SEVERABILITY. The Employee agrees that in the event that any court
of competent jurisdiction shall finally hold that any provision of Section 6 or
8 hereof is void or constitutes an unreasonable restriction against the
Employee, such provision shall not be rendered void but shall apply with respect
to such extent as such court may judicially determine constitutes a reasonable
restriction under the circumstances. If any part of this Agreement other than
Section 6 or 8 is held by a court of competent jurisdiction to be invalid,
illegible or incapable of being enforced in whole or in part by reason of any
rule of law or public policy, such part shall be deemed to be severed from the
remainder of this Agreement for the purpose only of the particular legal
proceedings in question and all other covenants and provisions of this Agreement
shall in every other respect continue in full force and effect and no covenant
or provision shall be deemed dependent upon any other covenant or provision.
13. WAIVER. Failure to insist upon strict compliance with any of the
terms, covenants or conditions hereof shall not be deemed a waiver of such term,
covenant or condition, nor shall any waiver or relinquishment of any right or
power hereunder at any one or more times be deemed a waiver or relinquishment of
such right or power at any other time or times.
14. ENTIRE AGREEMENT; MODIFICATIONS. This Agreement constitutes the
entire and final expression of the agreement of the parties with respect to the
subject matter hereof and supersedes all prior agreements, oral and written,
between the parties hereto with respect to the subject matter hereof. This
Agreement may be modified or amended only by an instrument in writing signed by
both parties hereto.
9
15. RELEVANT LAW. This Agreement shall be construed and enforced in
accordance with the internal laws of the State of Illinois without regard to the
conflicts of law principles thereof.
16. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
17. SURVIVAL. The termination of Employee's employment hereunder shall
not affect the enforceability of Sections 6 or 8.
18. FURTHER ASSURANCES. The parties agree to execute and deliver all
such further instruments and take such other and further action as may be
reasonably necessary or appropriate to carry out the provisions of this
Agreement.
19. HEADINGS. The Section headings appearing in this Agreement are for
purposes of easy reference and shall not be considered a part of this Agreement
or in any way modify, amend or affect its provisions.
10
IN WITNESS WHEREOF, the Company and the Employee have duly executed and
delivered this Agreement as of the day and year first above written.
LEARNCOM, INC.
By: /s/ XXXXX XXXXXX XXXX
---------------------------------
Name:
Title: Chairman
/s/ XXXXX X. XXXXXX
---------------------------------
XXXXX X. XXXXXX
11
