EXHIBIT 10.5
CASE FINANCIAL, INC.
Employment Agreement
Xxxxxx X. Xxxxxxxx
This agreement is entered into between and among Case Financial, Inc. (formerly
Asia Web Holdings, Inc.), a Delaware Corporation having its principal place of
business at 00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx Xxxx, Xxxxxxxxxx 00000
(the "Company") and Xxxxxx X. Xxxxxxxx an individual whose residence is 000 Xxx
Xxxxx Xxxxx, Xxxxxxxx Xxxx, Xxxxxxxxxx 00000 ("Executive") (collectively, the
"Parties").
WHEREAS, Executive has performed the duties of "Acting Chief Financial
Officer" of the Company on a part-time basis since April 16, 2002 (hereinafter
referred to as "Start Date"), and
WHEREAS, the Company desires to retain Executive as the Chief Financial
Officer/Senior VP Finance and Administration of the Company, and Executive
desires to perform such service for the Company, on the terms and conditions set
forth herein;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, it is mutually agreed by the
parties as follows:
1) DUTIES AND SCOPE OF EMPLOYMENT.
a. POSITION. Beginning August 12, 2002, Executive shall be
employed as Chief Financial Officer/Senior VP Finance and
Administration of the Company.
b. AT WILL EMPLOYMENT. Executive's employment may be terminated
at any time upon thirty (30) days written notice by either
party, with or without cause.
c. DUTIES. Executive shall be responsible for managing all
aspects of the Company's corporate finance, accounting,
financial reporting and regulatory compliance, investor
relations and administrative functions including human
resources, insurance, and employee benefits. Executive shall
faithfully, diligently and competently discharge his
responsibilities hereunder, and Executive shall use his best
efforts to further the business of the Company during his
employment.
d. PERMITTED OUTSIDE ACTIVITIES. Executive may engage in
providing business advisory services and board directorships
with outside parties on a limited basis subject to paragraph
2) c) below.
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e. REPORTING STRUCTURE. Executive shall report directly to the
CEO of the Company. All finance, accounting and administrative
functions will report directly to Executive.
2) COMPENSATION, FRINGE BENEFITS, STOCK OPTIONS AND SEVERANCE.
a) BASE SALARY. The Company shall pay the Executive as
compensation for his services a base salary at the annualized
rate of $144,000 (the "Base Salary") which amount shall be
reviewed not less than annually by the Board. Such salary
shall be paid periodically in accordance with normal Company
payroll practices and subject to the usual and applicable
required withholding.
b) BONUSES. Executive shall participate in discretionary annual
bonuses up to fifty percent (50%) of Base Salary. Such bonuses
shall be based upon achieving the financing and other
objectives established in advance by mutual consent of the
Executive and the Chief Executive Officer for such period and
may include the following performance objectives:
(1) Financing Objectives
(a) Successful closing of senior lender/bank
line of credit or other facility
(b) Successful closing of debt or equity
financing
(2) Other Objectives
(a) Timely regulatory filings
(b) Establishing and meeting cost budgets
(c) Achieving profitability
(d) Sustaining profitability
(e) Growing earnings
(f) Creation and maintenance of a successful
investor relations program
(g) Increase in the average daily trading volume
in the stock of the Company
(h) Attracting analyst coverage for the
Company's stock
(i) Increase in the market capitalization of the
company
(3) Assuming additional operating or administrative
responsibilities
c) PERMITTED OUTSIDE ACTIVITIES
Until such time as Executive's aggregate annual cash
compensation equals $180,000 (by way of increases in monthly
base salary and/or payment of discretionary bonuses),
Executive shall be permitted to provide business advisory
consulting services to outside clients on the following basis:
(1) Such outside clients do not compete directly or
indirectly with the business of the Company
(2) Such work is limited in hours and does not interfere
with the performance of Executive's full-time duties
hereunder.
(3) Within sixty (60) days of reaching the $180,000
compensation level, Executive shall terminate all
outside consulting engagements.
(4) Executive shall notify the Company of any outside
directorships and shall not undertake new director
positions without the approval of the Board of
Directors of the Company, which such approval shall
not be unreasonably withheld.
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d) EXECUTIVE BENEFITS. During his employment hereunder, Executive
shall be eligible to participate in the employee benefit plans
maintained by the Company of general applicability to other
senior executives of the Company. The Company reserves the
right to cancel or change the benefit plans and programs it
offers to its employees at any time.
e) VACATION. Executive shall be entitled to paid vacation
according to the following schedule:
1. 1st Year of employment: 3 weeks
2. 2nd and following years: 4 weeks
The vacation accrual shall be treated as having begun on the
Start Date and shall accrue ratably each month of employment
thereafter.
f) COMMON STOCK OPTIONS.
i) GRANT. Executive shall participate in the Stock
Option Plan of the Company. Company agrees to grant
Executive options to purchase 500,000 shares of the
Company's common stock at an exercise price of $0.45
per share. The Options shall vest ratably over 36
months from the Start Date, subject to Executive
continuing to render services to the Company during
such period.
ii) CHANGE IN CONTROL. Upon the occurrence of any change
in control of the company either through sale of a
majority of the assets or stock ownership,
seventy-five percent (75%) of Executive's unvested
shares at such date shall immediately vest. Such
provision shall not apply in the case of a financing
transaction occurring prior to June 30, 2003, but
only if none of the senior management employment
relationships are terminated in connection with, or
as a result of such financing transaction.
iii) OTHER TERMS AND CONDITIONS. All other terms and
conditions shall be as governed by the Stock Option
Plan of the Company as adopted.
g) SEVERANCE BENEFITS. Executive shall be earn a severance
benefit equal to one month of base pay for each six (6) months
of continuous employment up to a maximum of six (6) months of
base pay. For this purpose, employment shall be considered to
have begun on the Start Date. Severance benefits shall be
payable in equal monthly amounts as a post-employment salary
continuation. Severance benefits shall be payable if
employment is terminated by Company for any reason.
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h) TERMINATION WITHOUT CAUSE.
i) In the event Executive is terminated without Cause
(as defined below in subparagraph g) iii) below)
prior to January 1, 2003, then the Company shall make
continued payments of Base Salary to Executive for
three (3) months following the date of such
termination.
ii) Subsequent to December 31, 2002
(1) In the event Executive is terminated without
Cause (as defined in subparagraph g) iii)
below) subsequent to December 31, 2002, then
(a) the Company shall make continued
payments of Base Salary to
Executive for three (3) months
following the date of such
termination, and
(b) Fifty percent (50%) of all unvested
options of the Executive at such
date of termination shall then
immediately vest.
iii) For purposes of this paragraph, "Cause" shall mean
(i) Executive fails to or is unable to perform the
material duties assigned to him as a result of the
use of intoxicants or narcotics, or fails to pass a
drug test if such drug testing is required without
discrimination of all senior executives of the
Company, and is administered in compliance with the
conditions set forth in the Employee Manual, (ii)
Executive is guilty of gross and willful misconduct
in the conduct of his duties hereunder, (iii)
Executive is convicted of any felony, (iv) Executive
is in material breach of this Agreement, (v)
Executive fails to substantially perform his material
duties hereunder for any reason other than those set
forth in clauses (i) through (iv), or (vi) Executive
willfully fails to obey the reasonable instructions
of the Chief Executive Officer or the Board of
Directors of the Company. A reduction in salary not
exceeding twenty percent (20%) of Base Salary and
which is applied equally to all similarly situated
executives of the company shall not be considered a
Termination Without Cause under this subparagraph
(g).
iv) COORDINATION WITH SEVERANCE BENEFITS. In no event
shall the total of Severance Benefits in paragraph
2(f) and the continued payments of Base Salary in
this paragraph 2(g) exceed an aggregate of six (6)
month's base salary at the time of termination.
i) EXPENSES. The Company will pay or reimburse Executive for
reasonable travel, entertainment, cellular phone, wireless
email or other expenses incurred by Executive in the
furtherance of or in connection with the performance of
Executive's duties hereunder in accordance with the Company's
established policies. Without limiting the generality of the
foregoing, the Company shall reimburse Executive for all
continuing education, professional dues and other costs of
maintaining licensure as a California Certified Public
Accountant, and continued involvement in professional
societies relating thereto.
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3) CONFIDENTIAL INFORMATION. Executive agrees to continue to maintain the
confidentiality of all confidential and proprietary information of the
Company and agrees as set forth in the Confidentiality, Non-Disclosure
and Non-Competition Agreement executed April, 2002 between Executive
and the Company.
4) ASSIGNMENT. This Employment Agreement shall be binding upon and inure
to the benefit of (a) the heirs, executors and legal representatives of
Executive upon Executive's death and (b) any successor of the Company.
Any such successor of the Company shall be deemed substituted for the
Company under the terms of this Employment Agreement for all purposes.
As used herein, "successor" shall include any person, firm, corporation
or other business entity which at any time, whether by purchase, merger
or otherwise, directly or indirectly, acquires all or substantially all
of compensation payable pursuant to this Employment Agreement shall be
assignable or transferable except to a corporation furnishing
Executive's services reasonably approved by the Company or through a
testamentary disposition or by the laws of descent. Any attempted
assignment, transfer, conveyance or other disposition (other than as
aforesaid) of any interest in the rights of Executive to receive any
form of compensation hereunder shall be null and void.
5) NOTICES. All notices, requests, demands and other communications called
for hereunder shall be in writing and shall be deemed given if
delivered personally, one (1) day after mailing via Federal Express
overnight or a similar overnight delivery service, or three (3) days
after being mailed by registered or certified mail, return receipt
requested, prepaid and addressed to the parties or their successors in
interest at the following addresses, or at such other addresses as the
parties may designate by written notice in the manner aforesaid:
If to the Company:
Xxxx Xxxxx, CEO
Case Financial, Inc.
00000 Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxx Xxxx, XX 00000
Fax: 000-000-0000
If to Executive:
Xxxxxx X. Xxxxxxxx
000 Xxx Xxxxx Xxxxx
Xxxxxxxx Xxxx, XX 00000
Fax: 000-000-0000
6) SEVERABILITY. In the event that any provision hereof becomes or is
declared by a court of competent jurisdiction to be illegal,
unenforceable or void, this Employment Agreement shall continue in full
force and effect without said provision.
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7) ENTIRE AGREEMENT. This Employment Agreement, the Stock Option Plan,
Option Agreement, and the Confidentiality, Non-Disclosure and
Non-Competition Agreement represent the entire agreement and
understanding between the Company and Executive concerning Executive's
employment relationship with the Company, and supersede in their
entirety any and all prior agreements and understandings concerning
Executive's employment relationship with the Company. To the extent
this Employment Agreement is inconsistent or conflicts with any other
agreement entered into between Executive and the Company, including the
Option agreement, this Employment Agreement shall control.
8) NO ORAL MODIFICATION, CANCELLATION OR DISCHARGE. This Employment
Agreement may only be amended, canceled or discharged in writing signed
by Executive and the Company.
9) GOVERNING LAW. This Employment Agreement shall be governed by the laws
of the State of California.
10) CORPORATE ACTION. The Company represents and warrants to Executive that
all necessary corporate action has been taken by the Company to
execute, deliver and perform this Employment Agreement by the Company.
11) CONFIDENTIALITY. Executive agrees that the terms of this Employment
Agreement will remain confidential, and that he shall not disclose the
contents or terms of this Employment Agreement to any other person or
entity, except to accountants, financial advisors, attorneys and
governmental agencies on a need-to-know basis and in order to comply
with applicable tax laws.
12) NON-SOLICITATION; NON-DISPARAGEMENT. In consideration for the benefits
Executive and the Company are to receive herein, (a) Executive agrees
that he (i) will not, at any time during the one year following his
termination date, directly or indirectly solicit any individuals to
leave the Company's employ for any reason or interfere in any other
manner with the employment relationships at the time existing between
the Company and their current or prospective employees, and (ii) will
not disparage, criticize, defame or slander the Company or their
employees and (b) the Company agrees that it will not disparage,
criticize, defame or slander Executive.
13) FURTHER ASSURANCES. Each of the Company and Executive agrees to take
promptly all actions necessary, proper or advisable or as the other may
reasonably request to fully carry out the intent and purpose of this
Employment Agreement.
14) REPRESENTATION BY COUNSEL. Each of the Parties hereto acknowledge that
they have been represented by independent counsel of their choice
throughout all negotiations which preceded the execution of this
Employment Agreement, and that this Employment Agreement has been
executed with the consent and on the advice of such independent legal
counsel, or such advice has been explicitly waived.
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IN WITNESS WHEREOF, the undersigned have executed this Employment
Agreement this 19th day of August 2002,
CASE FINANCIAL, INC.
(formerly Asia Web Holdings, Inc.)
By: /S/ Xxxx Xxxxx
---------------------
Xxxx Xxxxx, CEO
EXECUTIVE
/S/ Xxxxxx X. Xxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxx
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