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EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "AGREEMENT") is made as of September
22, 1999, by and between, eVENTURES GROUP, INC., a Delaware corporation, with
its principal office at Xxx Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxxxxx Xxxx, Xxx Xxxxxx
00000, (the "COMPANY"), and XXXXXX X. XXXXXXXXX residing at 0000 Xxxxxx Xxxx,
Xxxxxx, Xxxxx 00000 ("EXECUTIVE").
WITNESSETH:
WHEREAS, effective September 22, 1999 (the "COMMENCEMENT DATE"), the
Company desires to employ Executive as a senior executive and Executive desires
to accept such employment; and
WHEREAS, the Company and Executive desire to enter into this agreement
(the "AGREEMENT") as to the terms of his employment by the Company.
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the parties
agree as follows:
1. Term of Employment: Except for earlier termination as provided in
Section 7 hereof, Executive's employment under this Agreement shall be for a
three (3) year term (the "EMPLOYMENT TERM") commencing on the Commencement Date
and ending on September 21, 2002. Subject to Section 7 hereof, the Employment
Term shall be automatically extended for additional terms of successive one (1)
year periods unless the Company or Executive gives written notice to the other
at least sixty (60) days prior to the expiration of the then current Employment
Term of the termination of Executive's employment hereunder at the end of such
current Employment Term.
2. Positions.
(a) Executive shall serve as a senior executive of the
Company, initially, as Vice President of Business Development, General
Counsel and Secretary of the Company, reporting directly to the Chief
Executive Officer or President of the Company (the "CHIEF EXECUTIVE
OFFICER"). If requested by the Board of Directors of the Company (the
"BOARD") or the Chief Executive Officer, Executive shall also serve on
the Board and committees thereof, as an executive, officer and director
of subsidiaries and/or as a director of associated companies of the
Company without additional compensation and subject to any policy of
the Compensation Committee of the Company's Board (the "COMPENSATION
COMMITTEE") with regard to retention or turnover of the director's
fees.
(b) Executive shall have such duties and authority, consistent
with his then position as shall be assigned to him from time to time by
the Chief Executive Officer or
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President. Executive and the Company currently anticipate creating a
job description for Executive consistent with Executive's titles
following the engagement by the Company of a permanent Chief Executive
Officer. In furtherance of the foregoing, Executive acknowledges that
the Company expects to engage division heads for its telecommunications
and Internet investment divisions (and possibly for additional
divisions which may be created in the future) and that, upon the
request of the Chief Executive Officer or President of the Company,
Executive will work in conjunction with (but not report to) such
division heads on business development opportunities for the Company.
Nothing herein shall prohibit Executive from being considered by the
Company for any division head position.
(c) During the Employment Term, Executive shall devote
substantially all of his business time and efforts to the performance
of his duties hereunder. Notwithstanding the foregoing, Executive shall
be entitled to perform services for HW Partners, L.P. pursuant to the
Incentive Compensation Agreement between Executive and HW Partners,
L.P. in existence after the date hereof, as the same may be modified
from time to time (the "HW Partners Agreement"). Further, nothing
contained herein shall be construed to prohibit Executive from (i)
owning less than ten percent (10%) of the outstanding securities of any
publicly traded entity and (ii) pursuing any business opportunity that
is not in Competition, as such term is defined in Section 10(b) below,
with the Company or its subsidiaries or any portfolio company in which
the Company or its subsidiaries hold securities (other than entities in
which the Company or its subsidiaries make a nominal investment)
(provided the time devoted by Executive to such personal investment
does not materially interfere with Executive's duties hereunder) (such
activities, together with the services provided to HW Partners, L.P.
being herein referred to as the "Allowed Activities"). For purposes
hereof, a "nominal investment" of the Company or its subsidiaries will
be determined in relation to the size of investments made from time to
time by the Company or its subsidiaries in its portfolio companies
(including, without limitation, investments made in exchange for cash,
securities or services rendered). If Executive desires to participate
in an investment opportunity that would violate Executive's covenants
contained in this Section 2(c), then Executive may request a written
consent from the Chief Executive Officer or President of the Company
authorizing Executive's participation in such investment opportunity.
3. Base Salary. During the Employment Term, the Company shall pay
Executive a Base Salary as follows: (a) for the period from September 22, 1999
to September 30, 1999, One Dollar ($1.00), (b) for the period October 1, 1999
through September 21, 2000 a Base Salary of $13,333.33 per calendar month
(prorated for the month of September 2000) (representing an annual Base Salary
of $160,000); (c) for the period from September 22, 2000, to September 21, 2001
the sum of $172,800; and (c) for the period from September 22, 2001, to
September 21, 2002 the sum of $186,624. Base Salary shall be payable in
accordance with the usual payroll practices of the Company. Executive's Base
Salary may be reviewed annually by the Board or the Compensation Committee and
may be increased, but not decreased, from time to time by the Board or the
Compensation Committee. The Base Salary as determined as aforesaid, from time
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to time for the applicable period shall constitute "BASE SALARY" for purposes of
this Agreement.
4. Incentive Compensation.
(a) Bonus. For each fiscal year or portion thereof during the
Employment Term, Executive shall be eligible for discretionary bonuses
payable by the Company on such terms and conditions, and subject to
such standards, as shall be determined from time to time in the sole
discretion, from time to time, of the Board or the Compensation
Committee.
(b) Stock Options. The Company hereby grants to Executive
stock options (the "STOCK OPTIONS") to purchase 500,000 shares of
Common Stock of the Company. Subject to ratification by the Board, the
Stock Options shall, if requested by Executive, to the maximum extent
permitted by the Internal Revenue Code, be classified as Incentive
Stock Options pursuant to the terms of the Stock Option Plan. Such
Stock Options shall be granted pursuant to the Company's Stock Option
Plan substantially in the form attached hereto as Exhibit "B", together
with the form of Stock Option Grants attached hereto as Exhibit "C".
The exercise price for such Stock Options shall be as follows:
(i) $2.50 per share for 166,666 shares;
(ii) $5.00 per share for 166,667 shares; and
(iii) $7.50 per share for 166,667 shares.
The Stock Options granted hereunder shall vest as follows: (xx) the
166,666 shares specified in clause (i) above shall vest on September
21, 2000, (yy) the 166,667 shares specified in clause (ii) above shall
vest on September 21, 2001; and (zz) the 166,667 shares specified in
clause (iii) above shall vest on September 21, 2002; provided, as
contemplated by the Stock Option Grants, the Stock Options shall fully
vest upon the occurrence of any (x) termination of Executive's
employment by Executive for Good Reason or by the Company without Cause
or (y) a Change of Control of the Company (as defined in Exhibit A).
Further, notwithstanding anything in the Stock Option Plan or Stock
Option Grants to the contrary, to the extent any provisions contained
therein are inconsistent with or differ from the explicit terms and
conditions of this Agreement, the terms and conditions of this
Agreement shall control. To the extent this Agreement does not
specifically address an issue or term set forth in the Stock Option
Plan or the Stock Option Grants, then the provisions and terms of the
Stock Option Plan or the Stock Option Grants shall apply.
(c) Adjustments. As more fully specified in the Stock Option
Plan, the number of stock options will be subject to adjustment for any
stock split, reclassification or combination of the Company's capital
stock.
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5. Employee Benefits and Vacation.
(a) During the Employment Term, Executive shall be entitled to
participate in all pension, profit sharing, long-term incentive
compensation, retirement, savings, welfare and other employee benefit
plans and arrangements and fringe benefits and perquisites generally
maintained by the Company from time to time for the benefit of senior
executive officers of the Company of a comparable level, in each case
in accordance with their respective terms as in effect from time to
time (other than any special arrangement entered into by contract with
an executive or that applies on a grandfathered basis). Without
limiting the foregoing, the Company shall pay all premiums for
Executive and his dependent family members under health,
hospitalization, disability, dental, life and other employee benefit
plans that the Company may have in effect from time to time. Executive
acknowledges that the Company does not currently provide a profit
sharing plan, and has no current intention of providing profit sharing
benefits to its employees. Notwithstanding the foregoing, the Company
shall not be required to provide such benefits to Executive until such
time as Executive no longer receives the benefits to which Executive is
entitled pursuant to the HW Partners Agreement (such coverage being
herein referred to as the "HW Partners Benefits Coverage"). To the
extent Executive chooses the HW Partners Benefits Coverage and the
Company maintains benefits (such as life insurance) for which Executive
is entitled to pay all applicable premiums and obtain coverage, then
nothing contained in this Section 5(a) shall prevent Executive from
paying such premiums and securing such life insurance (or related)
coverage. Furthermore, nothing contained in this Section 5(a) shall
prevent Executive from participating in the 401(k) plans of both the
Company and HW Partners, L.P. in accordance with the provisions of
Section 5(d) below.
(b) During the Employment Term, Executive shall be entitled to
at least three (3) weeks paid vacation each year in accordance with the
Company's policies in effect from time to time. Executive shall also be
entitled to such periods of sick leave as is customarily provided by
the Company to its senior executive employees.
(c) Executive understands that he may be requested by the
Board to relocate from his present residence in order to more
efficiently carry out his duties and responsibilities under this
Agreement or as part of a promotion or other increase in duties and
responsibilities. In the event that Executive is requested to relocate
and agrees to do so, the Company will pay all reasonable relocation
costs to move Executive, his immediate family and their personal
property and effects. Such costs may include, by way of example, but
are not limited to, pre-move visits to search for a new residence,
investigate schools or for other purposes; and temporary lodging and
living costs prior to moving into a new permanent residence.
(d) At such time as the HW Partners Benefits Coverage
terminates, the Company shall provide Executive with other executive
perquisites as may be available to or deemed appropriate for Executive
by the Board and participation in all other Company-wide employee
benefits as available from time to time. Executive shall, at his
discretion, be entitled to accept the HW Partners Benefits Coverage in
lieu of the benefits provided to Executive hereunder. Executive
understands and agrees, however, that Executive will be
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entitled to the HW Partners Benefits Coverage or the benefits provided
by the Company hereunder, but not both, and Executive shall not be able
to select individual features of the HW Partners Benefits Coverage and
the benefits provided by the Company hereunder; provided, however,
nothing herein shall prohibit Executive from participating, to the
extent allowable by law, in the 401(k) plans of both the Company and HW
Partners, L.P. contemplated under the HW Partners Agreement; provided,
further, however, Executive will be entitled to receive the employer's
matching portion of any 401(k) plan (including any profit sharing
component thereof) from either the Company or HW Partners, L.P., at
Executive's choice, but not both. Further, Executive acknowledges and
agrees that all vacation days, sick days, personal leave days, days
applicable to the definition of "Disability" set forth herein and
related items shall be calculated such that any day counts as a day of
Executive under both this Agreement and the HW Partners Agreement.
6. Business Expenses. The Company shall reimburse Executive for the
reasonable travel, entertainment and other business expenses incurred by
Executive in accordance with the Company's policies as in effect from time to
time.
7. Termination.
(a) The employment of Executive and the Employment Term shall
terminate as provided in Section 1 hereof or, if earlier, upon the
earliest to occur of any of the following events:
(i) the death of Executive;
(ii) the termination of Executive's employment by
the Company due to Executive's Disability
(as defined in Exhibit "A") pursuant to
Section 7(b) hereof;
(iii) the termination of Executive's employment by
Executive for Good Reason (as defined in
Exhibit "A") pursuant to Section 7(c)
hereof,
(iv) the termination of Executive's employment by
the Company without Cause (as defined in
Exhibit "A") pursuant to Section 7(e)
hereof;
(v) the termination of employment by Executive
without Good Reason upon thirty (30) days
prior written notice pursuant to Section
7(e) hereof; or
(vi) the termination of Executive's employment by
the Company for Cause pursuant to Section
7(d) hereof.
(b) Disability. If Executive is unable to perform his material
duties hereunder due to a physical or mental condition and the Company
desires to terminate Executive's employment for Disability (as defined
in Exhibit "A"), the Company shall deliver to
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Executive a written Notice of Disability Termination (herein so
called), effective upon the date (the "Disability Termination Date")
which is the later of (i) the date such condition becomes a Disability
or (ii) thirty (30) days following the delivery of the Notice of
Disability Termination; provided that the Disability Termination Date
shall be suspended so long as Executive returns to the full performance
of his duties by and following such date.
(c) Termination for Good Reason. A Termination for Good Reason
(herein so called) means a termination by Executive by written notice
given within thirty (30) days after the occurrence of the Good Reason
event, unless such circumstances are corrected prior to the date of
termination specified in the Notice of Termination for Good Reason. A
Notice of Termination for Good Reason shall mean a notice that shall
indicate the specific Good Reason event relied upon and shall set forth
in reasonable detail the facts and circumstances claimed to provide a
basis for Termination for Good Reason. The failure by Executive to set
forth in the Notice of Termination for Good Reason any facts or
circumstances which contribute to the showing of Good Reason shall not
waive any right of Executive hereunder or preclude Executive from
asserting such fact or circumstance in enforcing his rights hereunder.
The Notice of Termination for Good Reason shall provide for a date of
termination not less than ten (10) nor more than thirty (30) days after
the date such Notice of Termination for Good Reason is given.
(d) Cause. Subject to the notification provisions of this
Section 7(d), Executive's employment hereunder may be terminated by the
Company for Cause. A Notice of Termination for Cause (herein so called)
shall mean a notice that shall indicate the specific termination
provision in Section (a) of Exhibit "A" relied upon and shall set forth
in reasonable detail the facts and circumstances which provide for a
basis for Termination for Cause. The effective date of termination for
a Termination for Cause shall be the date indicated in the Notice of
Termination. Any purported Termination for Cause which is held by a
court by a non-appealable final judgment not to have been based on the
grounds set forth in this Agreement or not to have followed the
procedures set forth in this Agreement shall be deemed a termination by
the Company without Cause.
(e) Termination without Cause. Executive's employment by the
Company shall be at will. Accordingly, the Company may terminate
Executive at any time for reasons other than Cause at any time upon
thirty (30) days prior written notice.
(f) Voluntary Resignation. Executive may terminate his
employment with the Company at any time upon thirty (30) days prior
written notice.
8. Consequences of Termination of Employment. Executive shall be
entitled to the following compensation from the Company (in lieu of all other
sums owed or payable to Executive) upon the termination of employment as
described below:
(a) Death, Disability, Voluntary Resignation without Good
Reason or Cause.
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If Executive's employment and the Employment Term are terminated by
reason of (i) Executive's death or Disability, (ii) by Executive
without Good Reason or (iii) by the Company for Cause, the employment
period under this Agreement shall terminate without further obligations
to Executive or Executive's legal representatives under this Agreement
except for: (i) any Base Salary earned but unpaid, any accrued but
unused vacation pay payable pursuant to the Company's policies and any
unreimbursed business expenses payable pursuant to Section 6 (which
amounts, in the case of the death of Executive, shall be promptly paid
in a lump sum to Executive's estate), and (ii) except in the case of a
termination with Cause, any other amounts or benefits earned, accrued
and owing to Executive under the then applicable employee benefit
plans, long term incentive plans or equity plans and programs of the
Company which shall be paid in accordance with such plans and programs,
and any unpaid reimburseable business expenses (collectively, the
"Accrued Amounts").
(b) Termination by Executive for Good Reason or Termination by
Company without Cause. If Executive's employment and the Employment
Term are terminated (i) by Executive for Good Reason, or (ii) by the
Company without Cause (and other than for Disability or as a result of
expiration of the Employment Term following rejection by Executive of a
Qualifying Employment Offer, as such term is hereafter defined),
Executive shall be entitled to receive the Accrued Amounts and shall,
subject to Sections 9(b), 9(c) and 10 hereof, be entitled to receive
equal monthly payments of an amount equal to his then monthly rate of
Base Salary, payable at such times as such payments would have been
made had Executive's employment not terminated, for a period equal to
(i) if the termination occurs at any time after September 21, 2001, six
(6) months following the date of termination, or (ii) if the
termination occurs on or prior to September 21, 2001, the greater of
six (6) months or the remaining period of time from the date of
termination through September 22, 2001 (i.e., the second anniversary of
the initial Term of this Agreement).
(c) Termination as a Result of Nonextension of Employment
Term. If at least thirty (30) days prior to the expiration of the
Employment Term the Company fails to offer to extend the Employment
Term for a period of at least one (1) year on substantially identical
terms as set forth herein at an annual Base Salary equal to the greater
of (I) $214,151 and (II) the product of 108% and the annual Base Salary
applicable at the time of expiration of the Employment Term, but
without a requirement for the issuance of any additional Stock Options
to Executive (a "Qualifying Employment Offer"), then such failure to
make such Qualifying Employment Offer to Executive shall be deemed to
be a termination of Executive's employment as of the expiration of the
Employment Term by the Company without Cause, and, upon such
occurrence, Executive shall be entitled to receive the Accrued Amount
and shall, subject to Sections 9(b), 9(c) and 10 hereof, be entitled to
receive payments of an amount equal to his then monthly rate of Base
Salary, but off the employee payroll, for a period of six (6) months
following the date of his termination. In the event the Company makes a
Qualifying Employment Offer and Executive declines to accept the same
within fifteen (15) days of the receipt thereof, then
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nonextension of the Employment Term shall be considered a mutual
termination of the Employment Term by the Company and Executive, and
Executive shall be entitled solely to receive the Accrued Amounts.
9. No Mitigation: No Set-Off.
(a) In the event of any termination of employment under
Section 8, Executive shall be under no obligation to seek other
employment and there shall be no offset against any amounts due
Executive under this Agreement on account of any remuneration
attributable to any subsequent employment that Executive may obtain.
Any amounts due under Section 8 are in the nature of severance payments
and are not in the nature of a penalty. Such amounts are inclusive, and
in lieu of any amounts payable under any other salary continuation or
cash severance arrangement of the Company (unless specifically excluded
thereunder) and to the extent paid or provided under any other such
arrangement shall be offset from the amount due hereunder.
(b) Executive agrees that, as a condition to receiving the
payments and benefits provided under Section 8(b) hereunder he will
execute, deliver and not revoke (within the time period permitted by
applicable law) a release of all claims of any kind whatsoever against
the Company, its affiliates, officers, directors, employees, agents and
shareholders in the then standard form being used by the Company for
senior executives (but without release of the right of indemnification
hereunder or under the Company's By-laws or rights under benefit or
equity plans that by their terms are intended to survive termination of
his employment).
(c) Upon any termination of employment, Executive hereby
resigns as an officer and director of the Company, any subsidiary and
any affiliate and as a fiduciary of any benefit plan of any of the
foregoing. Executive shall promptly execute any further documentation
thereof as reasonably requested by the Company and, if Executive is to
receive any payments from the Company, execution of such further
documentation shall be a condition thereof.
10. Confidential Information, Non-Competition and Non-Solicitation of
the Company.
(a) (i) Executive acknowledges that as a result of his
employment by the Company, Executive will obtain secret and
confidential information as to the Company and its affiliates and
create relationships with customers, suppliers and other persons
dealing with the Company and its affiliates and the Company and its
affiliates will suffer substantial damage, which would be difficult to
ascertain, if Executive should use such confidential information or
take advantage of such relationship and that because of the nature of
the information that will be known to Executive and the relationships
created it is necessary for the Company and its affiliates to be
protected by the prohibition against Competition as set forth herein,
as well as the confidentiality restrictions set forth herein.
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(ii) Executive acknowledges that the retention of
nonclerical employees employed by the Company and its
affiliates in which the Company and its affiliates have
invested training and depends on for the operation of their
businesses is important to the businesses of the Company and
its affiliates, that Executive will obtain unique information
as to such employees as an executive of the Company and will
develop a unique relationship with such persons as a result of
being an executive of the Company and, therefore, it is
necessary for the Company and its affiliates to be protected
from Executive's Solicitation (defined below) of such
employees as set forth below.
(iii) Executive acknowledges that the provisions of
this Agreement are reasonable and necessary for the protection
of the businesses of the Company and its affiliates and that
part of the compensation paid under this Agreement and the
agreement to pay severance in certain instances is in
consideration for the agreements in this Section 10.
(b) COMPETITION shall mean: participating, directly or
indirectly, as an individual proprietor, partner, stockholder, officer,
employee, director, joint venturer, investor, lender, consultant or in
any capacity whatsoever (within the United States of America, or in any
country where the Company or its affiliates do business) in a Competing
Business; provided, however, that such participation shall not include
(i) the mere ownership of not more than ten percent (10%) of the total
outstanding stock of a publicly held company; (ii) the Allowed
Activities; or (iii) any activity engaged in with the prior written
approval of the Board. As used herein, "Competing Business" means any
business engaged in by the Company and/or its subsidiaries and/or any
entity in which the Company and/or its subsidiaries holds securities
(other than entities in which the Company or its subsidiaries make a
nominal investment) (I) from time to time (while Executive is employed
by the Company) or (II) at the time of termination (upon termination of
Executive's employment) (consisting, as of the date hereof, principally
of the services described in the Company's Disclosure Letter dated on
or about the date hereof, a copy of which is attached hereto as Exhibit
"D").
(c) SOLICITATION shall mean: recruiting, soliciting or
inducing, of any nonclerical employee or employees of the Company or
its affiliates to terminate their employment with, or otherwise cease
their relationship with, the Company or its affiliates or hiring or
assisting another person or entity to hire any nonclerical employee of
the Company or its affiliates or any person who within twelve (12)
months before had been a nonclerical employee of the Company or its
affiliates and were recruited or solicited for such employment or other
retention while an employee of the Company, provided, however, that
solicitation shall not include any of the foregoing activities engaged
in with the prior written approval of the Chief Executive Officer.
(d) If any restriction set forth with regard to Competition or
Solicitation is found by any court of competent jurisdiction, or in
arbitration, to be unenforceable because it extends for too long a
period of time or over too great a range of activities or in
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too broad a geographic area, it shall be interpreted to extend over the
maximum period of time, range of activities or geographic area as to
which it may be enforceable. If any provision of this Section 10 shall
be declared to be invalid or unenforceable, in whole or in part, as a
result of the foregoing, as a result of public policy or for any other
reason, such invalidity shall not affect the remaining provisions of
this Section which shall remain in full force and effect.
(e) During and after the Employment Term, Executive shall hold
in a fiduciary capacity for the benefit of the Company and its
affiliates all secret or confidential information, knowledge or data
relating to the Company and its affiliates, and their respective
businesses, including any confidential information as to customers of
the Company and its affiliates, (i) obtained by Executive during his
employment by the Company and its affiliates and (ii) not otherwise
public knowledge or known within the applicable industry. Executive
shall not, without prior written consent of the Company, unless
compelled pursuant to the order of a court or other governmental or
legal body having jurisdiction over such matter, communicate or divulge
any such information, knowledge or data to anyone other than the
Company and those designated by it. In the event Executive is compelled
by order of a court or other governmental or legal body to communicate
or divulge any such information, knowledge or data to anyone other than
the foregoing, he shall promptly notify the Company of any such order
and he shall cooperate fully with the Company in protecting such
information to the extent possible under applicable law.
(f) Upon termination of his employment with the Company and
its affiliates, or at any time as the Company may request, Executive
will promptly deliver to the Company, as requested, all documents
(whether prepared by the Company, an affiliate, Executive or a third
party) relating to the Company, an affiliate or any of their businesses
or property which he may possess or have under his direction or control
other than documents provided to Executive in his capacity as a
participant in any employee benefit plan, policy or program of the
Company or any agreement by and between Executive and the Company with
regard to Executive's employment or severance.
(g) During the Employment Term and for two (2) years following
a termination of Executive's employment for any reason whatsoever,
whether by the Company or by Executive and whether or not for Cause,
Good Reason or non-extension of the Employment Term, Executive will not
engage in Solicitation.
(h) During the Employment Term and for the Restricted Period
(as hereafter defined) following a termination of Executive's
employment, Executive will not enter into Competition with the Company.
The Restricted Period shall be (i) for a termination for Cause, two (2)
years following the date of termination, (ii) for termination without
Cause by the Company, or for Good Reason by Executive, the period in
which the Company is making payments to Executive as specified in
Section 8(b) above, (iii) for termination as a result of the voluntary
resignation of Executive without Good Reason or the failure of
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Executive to accept a Qualifying Employment Offer, one (1) year from
the date of termination, and (iv) for termination as a result of the
failure of the Company to make a Qualifying Employment Offer, six (6)
months following the date of termination.
(i) In the event of a breach or potential breach of this
Section 10, Executive acknowledges that the Company and its affiliates
will be caused irreparable injury and that money damages may not be an
adequate remedy and agree that the Company and its affiliates shall be
entitled to injunctive relief (in addition to its other remedies at
law) to have the provisions of this Section 10 enforced. It is hereby
acknowledged that the provisions of this Section 10 are for the benefit
of the Company and all of the affiliates of the Company and each such
entity may enforce the provisions of this Section 10 and only the
applicable entity can waive the rights hereunder with respect to its
confidential information and employees.
(j) Furthermore, in addition to and not in limitation of any
other remedies provided herein or at law or in equity, in the event of
breach of this Section 10 by Executive, while he is receiving amounts
under Section 8(b) or (c) hereof, Executive shall not be entitled to
receive any future amounts pursuant to Section 8(b) or (c) hereof and
shall reimburse the Company for any amounts previously paid to
Executive pursuant to Section 8(b) or (c) hereof.
11. Indemnification. The Company shall indemnify and hold harmless
Executive to the extent provided in the Certificate of Incorporation, the
By-Laws of the Company and the Delaware General Corporation Law as amended and
as applicable, for any action or inaction of Executive while serving as an
officer and director of the Company or, at the Company's request, as an officer
or director of any other subsidiary or affiliate of the Company or as a
fiduciary of any benefit plan. The Company shall cover Executive under directors
and officers liability insurance both during and, while potential liability
exists, after the Employment Term in the same amount and to the same extent as
the Company covers its other officers and directors.
12. Inventions and Trade Secrets.
(a) Executive shall disclose promptly to the Company any and
all significant conceptions and ideas for inventions, improvements and
valuable discoveries, whether patentable or not, which are conceived or
made by Executive, solely or jointly with another, during the period of
employment or within one (1) year thereafter, and which are
substantially related to the business or activities of the Company or
its subsidiaries which Executive conceived as a result of his
employment by the Company or any of its subsidiaries. Executive hereby
assigns and agrees to assign all of his interest therein to the Company
or its nominee. Whenever requested to do so by the Company, Executive
shall execute any and all applications, assignments or other
instruments that the Company shall deem necessary to apply for and
obtain Letters Patent of the United States or any foreign country or to
otherwise protect the Company's interest therein.
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(b) Executive agrees that he will not, during or after the
Employment Term, disclose the specific terms of the Company's
relationships or agreements with its significant vendors or customers
or any other significant material trade secrets of the Company, whether
in existence or proposed, to any person, firm, partnership, corporation
or business for any reason or purpose whatsoever, except as is
disclosed in the ordinary course of business, unless compelled by a
court order upon advice of counsel.
13. Legal and Other Fees and Expenses. In the event that a claim for
payment or benefits under this Agreement is disputed, the non-prevailing party
shall pay all reasonable attorney, accountant and other professional fees and
reasonable expenses incurred by the prevailing party associated with such claim.
14. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New Jersey
without reference to principles of conflict of laws.
(b) Entire Agreement/Amendments. This Agreement and the
instruments contemplated herein, contain the entire understanding of
the parties with respect to the employment of Executive by the Company
from and after the Commencement Date and supersedes any prior
agreements between the Company and Executive with respect thereto.
There are no restrictions, agreements, promises, warranties, covenants
or undertakings between the parties with respect to the subject matter
herein other than those expressly set forth herein and therein. This
Agreement may not be altered, modified, or amended except by written
instrument signed by the parties hereto.
(c) No Waiver. Any failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be
considered a waiver of such party's rights or deprive such party of the
right thereafter to insist upon strict adherence to that term or any
other term of this Agreement. Any such waiver must be in writing and
signed by Executive or an authorized officer of the Company, as the
case may be.
(d) Assignment. This Agreement shall not be assignable by
Executive. This Agreement shall be assignable by the Company only to an
entity which is owned, directly or indirectly, in whole or in part by
the Company or by any successor to the Company or an acquirer of all or
substantially all of the assets of the Company or all or substantially
all of the assets of a group of subsidiaries and divisions of the
Company, provided such entity or acquirer promptly assumes all of the
obligations hereunder of the Company in a writing delivered to
Executive and otherwise complies with the provisions hereof with regard
to such assumption. Upon such assignment and assumption, all references
to the Company herein shall be to such assignee.
(e) Successors; Binding Agreement; Third Party Beneficiaries.
This Agreement shall inure to the beneficiaries and permitted assignees
of the parties hereto. In
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EMPLOYMENT AGREEMENT - Page 12
13
the event of Executive's death while receiving amounts payable pursuant
to Section 8(b) hereof, any remaining amounts shall be paid to
Executive's estate.
(f) Communications. For the purpose of this Agreement, notices
and all other communications provided for in this Agreement shall be in
writing and shall be deemed to have been duly given (i) when faxed or
delivered, or (ii) two (2) business days after being mailed by United
States registered or certified mail, return receipt requested, postage
prepaid, addressed to the respective addresses set forth on the initial
page of this Agreement, provided that all notices to the Company shall
be directed to the attention of the General Counsel and Secretary of
the Company, or to such other address as any party may have furnished
to the other in writing in accordance herewith. Notice of change of
address shall be effective only upon receipt.
(g) Withholding Taxes. The Company may withhold from any and
all amounts payable under this Agreement such Federal, state and local
taxes as may be required to be withheld pursuant to any applicable law
or regulation.
(h) Survivorship. The respective rights and obligations of the
parties hereunder, including without limitation Section 11 hereof,
shall survive any termination of Executive's employment to the extent
necessary to the agreed preservation of such rights and obligations.
(i) Counterparts. This Agreement may be signed in
counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
(j) Headings. The headings of the sections contained in this
Agreement are for convenience only and shall not be deemed to control
or affect the meaning or construction of any provision of this
Agreement.
(k) Executive's Representation. Executive represents and
warrants to the Company that there is no legal impediment to him
entering into, or performing his obligations under this Agreement and
neither entering into this Agreement nor performing his contemplated
service hereunder will violate any agreement to which he is a party or
any other legal restrictions Executive further represents and warrants
that in performing his duties hereunder he will not use or disclose any
confidential information of any prior employer or other person or
entity.
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EMPLOYMENT AGREEMENT - Page 13
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
COMPANY:
eVENTURES GROUP, INC.,
a Delaware corporation
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
EXECUTIVE:
XXXXXX X. XXXXXXXXX
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EMPLOYMENT AGREEMENT - Page 14
15
EXHIBIT "A"
TO THE
EMPLOYMENT AGREEMENT
BETWEEN
eVENTURES GROUP, INC.
AND
XXXXXX X. XXXXXXXXX
(a) Cause. For purposes of this Agreement, the term "CAUSE"
shall be limited to the following:
(i) Executive's willful misconduct or gross
negligence with regard to the Company or its
affiliates or their business, assets or
employees (including, without limitation,
Executive's fraud, embezzlement or other act
of dishonesty with regard to the Company or
its affiliates) or Executive's willful
misconduct other than the foregoing which
has a material adverse impact on the Company
or its affiliates, whether economic, or
reputationwise or otherwise, as determined
by the Board;
(ii) Executive's conviction of, or pleading nolo
contendere to, a felony or other crime
involving fraud, dishonesty or moral
turpitude or which carries a minimum prison
sentence upon conviction of one (1) year or
longer;
(iii) Executive's refusal or willful failure to
follow the lawful written direction of the
Board, the Chief Executive Officer or his
designee which is not remedied within ten
(10) business days after receipt by
Executive of a written notice specifying the
details thereto;
(iv) Executive's breach of a fiduciary duty owed
to the Company or its affiliates, including,
but not limited to Section 10 hereof;
(v) the representations or warranties in Section
14(k) hereof prove false; or
(vi) any other breach by Executive of this
Agreement that remains uncured for thirty
(30) days after written notice is given to
Executive.
(b) Change in Control. For purposes of this Agreement, the
term "CHANGE IN CONTROL" shall mean the occurrence of any of the following:
(i) any "person" as such term is used in
Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934 ("Act") (other than (a)
Permitted Assignees, (b) the Company, (c)
any trustee or other fiduciary holding
securities under any employee benefit plan
of the Company,
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EMPLOYMENT AGREEMENT - Page A-1
16
(d) any company owned, directly or
indirectly, by the stockholders of the
Company in substantially the same
proportions as their ownership of Common
Stock of the Company, or (e) any entity
holding non-participating shares of an
entity which is a stockholder of the Company
or which owns or controls, directly or
indirectly, a stockholder of the Company) is
or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the
Company representing fifty percent (50%) or
more of the combined voting power of the
Company's then outstanding securities.
Permitted Assignees shall mean the holders
of the equity securities (whether or not
voting) of any shareholder of the Company
owning more than fifteen percent (15%) of
the Company on the date after the date of
execution of this Agreement;
(ii) during any period of two (2) consecutive
years, individuals who at the beginning of
such period constitute the Board, and any
new director (other than a director
designated by a person who has entered into
an agreement with the Company to effect a
transaction described in clause (i), (iii),
or (iv) of this paragraph) whose election by
the Board or nomination for election by the
Company's stockholders was approved by a
vote of at least two-thirds of the directors
then still in office who either were
directors at the beginning of the two-year
period or whose election or nomination for
election was previously so approved, cease
for any reason to constitute at least a
majority of the Board;
(iii) a merger or consolidation of the Company
with any other corporation, other than a
merger or consolidation which would result
in the voting securities of the Company
outstanding immediately prior thereto
continuing to represent (either by remaining
outstanding or by being converted into
voting securities of the surviving entity)
more than fifty percent (50%) of the
combined voting power of the voting
securities of the Company or such surviving
entity outstanding immediately after such
merger or consolidation; provided, however,
that a merger or consolidation effected to
implement a recapitalization of the Company
(or similar transaction) in which no person
acquires more than fifty percent (50%) of
the combined voting power of the Company's
then outstanding securities shall not
constitute a Change in Control of the
Company; and provided, further, a merger or
consolidation in which the Company is the
surviving entity (other than as a wholly
owned subsidiary or another entity) and in
which the Board of the Company after giving
effect to the merger or consolidation is
comprised of a majority of members who are
either (x) directors of the Company
immediately preceding the merger or
consolidation,
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EMPLOYMENT AGREEMENT - Page A-2
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or (y) appointed to the Board of the Company
by the Company (or its Board) as an integral
part of such merger or consolidation, shall
not constitute a Change in Control of the
Company; or
(iv) the stockholders of the Company approve a
plan of complete liquidation of the Company
or the sale or disposition by the Company of
all or substantially all of the Company's
assets other than (x) the sale or
disposition of all or substantially all of
the assets of the Company to a person or
persons who beneficially own, directly or
indirectly, at least fifty percent (50%) or
more of the combined voting power of the
outstanding voting securities of the Company
at the time of the sale or (y) pursuant to a
dividend in kind or spinoff type
transactions, directly or indirectly, of
such assets to the stockholders of the
Company.
(c) Disability. For purposes of this Agreement, "DISABILITY"
shall mean if Executive is unable to perform his material duties pursuant to
this Agreement because of mental or physical incapacity, including, without
limitation, alcoholism or drug abuse, which requires a leave of absence in
excess of ninety (90) consecutive days in any twelve (12) month period.
(d) Good Reason. For purposes of this Agreement, "GOOD REASON"
shall mean the occurrence, without Executive's express written consent, in the
case of (i), (ii) or (iii) of any of the following circumstances:
(i) (a) any material demotion of Executive from
his position as Vice President of Business
Development or (b) any assignment of duties
to Executive materially and adversely
inconsistent with Executive's positions as
Vice President of Business Development,
General Counsel and Secretary (except in
connection with the termination of
Executive's employment for Cause or due to
Disability or as a result of Executive's
death, or temporarily as a result of
Executive's illness or other absence). For
purposes hereof, Executive agrees that the
contemplated activities of the Company
specified in Section 2(b) of this Agreement
shall not constitute either a material
demotion of Executive or an assignment of
duties to Executive materially and adversely
inconsistent with Executive's positions as
Vice President of Business Development,
General Counsel and Secretary;
(ii) a failure by the Company to pay to Executive
any amounts due under this Agreement in
accordance with the terms hereof, which
failure is not cured within fifteen (15)
days following receipt by the Company of
notice from Executive of such failure;
(iii) any other material breach by the
Company of this Agreement that remains
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EMPLOYMENT AGREEMENT - Page A-3
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uncured for fifteen (15) days after written
notice thereof by Executive to the Company;
or
(iv) following a Change of Control, the Board
requires Executive to relocate to an area
other than (x) the New York, New York
greater metropolitan area, (y) the Dallas,
Texas greater metropolitan area, or (z) if
the Company's corporate headquarters are
located in an area other than the New York,
New York or Dallas, Texas greater
metropolitan areas, to an area more than
fifty (50) miles from the Company's
corporate headquarters, and Executive
declines to so relocate.
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