EXHIBIT 10.5
EMPLOYMENT AGREEMENT
This Agreement, entered in to this 27th day of September 2002, is by
and between eWorldMedia, Inc., a Nevada corporation (hereinafter referred
to as the "Company") and G. Xxxxxxx Xxxxxxx (hereinafter referred to as
"Employee") under the following terms and conditions:
RECITALS:
A. The Company and Employee desire to set forth the terms and
conditions on which (i) the Company shall employ Employee, (ii) Employee
shall render services to the Company or a subsidiary or parent of the
Company, and (iii) the Company shall compensate Employee for such services
to the Company; and
B. In connection with the employment of Employee by the Company, the
Company desires to restrict Employee's rights to disclose certain
confidential information and to compete with the business of the Company;
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements hereinafter set forth, the parties hereto agree as follows:
1. EMPLOYMENT
The Company hereby employs Employee and Employee hereby accepts
employment with the Company upon the terms and conditions hereinafter set
forth.
2. TERM
2.1 Initial Term. The term of this Agreement shall be for a
period commencing the date hereof through December 31, 2005, subject,
however, to prior termination as provided herein below, in Section 6.
2.2 Extending Term. For purposes of extending the term of the
relationship between the Company and Employee, the parties agree to enter
into good faith negotiations within sixty (60) days prior to the
termination of this Agreement. In the event that the parties are unable to
reach an agreement at such time as this Agreement terminates, this
Agreement shall be automatically terminated on December 31, 2005.
3. COMPENSATION
3.1 Basic Cash Compensation. For all services rendered by
Employee under this Agreement, except as provided in subsection 3.2, below,
the Company shall pay Employee during the term hereof, a Sales Commissions
on Corporate Sales (Commercial Accounts), as defined in section 4.2 below,
at a rate equal to 50% of commercial account sales revenue received for
those accounts deemed his own personal sales if he is the sole generator of
that sale. The Employee shall receive an amount equal to 15% of the
commercial accounts sales revenue received if he is not the sole generator
and split the remaining 35% amongst his commercial accounts sales team.
The Employee shall be provided a total amount of $4,000 per month to
retain the independent services of a corporate liaison and/or executive
assistant. However, this monthly amount shall not accrue or be paid until
the Corporate Sales (Commercial Accounts) division is generating a minimum
of $50,000 per month in gross sales revenue. Also employee shall have
150,000 shares available for him to offer to his corporate liaison/executive
assistant.
3.2 Signing Bonus. As a further inducement to Employee to enter
into this Agreement, and to provide a means of enhancing Employee's
proprietary interest in the Company, and to increase Employee's incentive,
the Company shall issue to Employee 330,000 shares of common stock upon
execution of this Agreement, which shares shall be deemed full-paid and
non-assessable. These shares shall also be deemed compensation to Employee
for services rendered. The shares shall be issued subject to the Employee
entering into a Representation Form, a Lockup Agreement and an Irrevocable
Proxy Agreement, as attached hereto.
3.3 Stock and Option Bonuses. In addition to any cash
commissions earned through his sales efforts, the company shall issue to
Xx. Xxxxxxx shares of its common stock based on the following table:
1. 100,000 shares when the Company has achieved its initial one
million dollar ($1,000,000) gross sales revenue month.
2. 100,000 shares when the Company has generated its initial one
million dollars ($1,000,000) per month in gross Corporate Sales
(Commercial Accounts) revenue.
3. 100,000 shares when the Company generates its initial two million
dollar ($2,000,000) gross sales revenue month.
4. 100,000 shares when the Company has generated its initial two
million dollars ($2,000,000) per month in gross Corporate Sales
(Commercial Accounts) revenue.
Total potential Stock Bonus: 400,000 shares.
The shares shall be issued subject to the Employee entering into a
Representation For, a Lockup Agreement and an Irrevocable Proxy Agreement,
as attached hereto.
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3.4 Withholding Taxes. All compensation shall be subject to
customary withholding tax and other employment taxes as are required with
respect to compensation paid by a corporation to an employee.
4. DUTIES AND RESPONSIBILITIES
4.1 Full-time Employment. Employee shall, during the term of
this Agreement, devote his attention and expend his best efforts, energies
and skills, on a regular weekly basis, to the business of the Company and
any corporation controlled by the Company any time during the term of this
Agreement (each a "Subsidiary") or any parent of the Company which owns at
least 90% of the outstanding stock of the company any time during the term
of this Agreement (hereinafter the "Parent"). For purposes of this
Agreement, the term "Company" shall mean the Company, all Subsidiaries, and
the Parent. However, the Employee shall be allowed to maintain all other
personal business involvements and contracts provided those involvements or
contracts do not interfere with the Company's plan of business or daily
operations or presents a conflict of interest between the Company, the
Employee or the personal contracts and business involvements.
4.2 Offices. During the term of this Agreement, Employee shall
serve as the Vice President of Corporate Sales of the Company or in such
other capacity as determined by the Board. In the performance of all of
his responsibilities hereunder, Employee shall be subject to all of the
Company's policies, rules, and regulations applicable to its employees of
comparable status and shall report directly to, and shall be subject to,
the direction and control of the CEO and shall perform such duties as shall
be assigned to him. In performing such duties, Employee will be subject to
and abide by, and will use his best efforts to cause other employees of the
Company to be subject to and abide by, all policies and procedures
developed by the Board or senior management of the Company.
The Corporate Sales Division shall be separate from other revenue
generating operations of the Company and shall include Commercial Business
Accounts. The sales commissions paid on Commercial Business Accounts shall
equal an amount not greater than fifty percent (50%) of gross sales
revenues generated through this division to be allocated to commissions.
The Vice President of Corporate Sales shall head this Corporate Sales
Division and all persons involved in Commercial Account sales shall report
to this Vice President, who in turn reports directly to the Company's CEO.
5. ADDITIONAL EMPLOYEE COVENANTS
5.1 Confidential Information. Employee recognizes and
acknowledges that certain information, including, but not limited to,
(i) information pertaining to the financial condition of the Company; (ii) its
systems and methods of doing business; (iii) its agreements with customers,
suppliers or selling or marketing agents, including lists of customers,
selling
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agents, and marketing agents; or (iv) other aspects of the business of the
Company which are sufficiently secret to derive economic value from not
being disclosed (hereinafter "Confidential Information") may be made
available or otherwise come into the possession of Employee by reason of
his employment with the Company. Accordingly, Employee agrees that he will
not (either during or after the term of his employment with the Company)
disclose any Confidential Information to any person, firm, corporation,
association, or other entity for any reason or purpose whatsoever or make
use to his personal advantage or to the advantage of any third party, of
any Confidential Information, without the prior written consent of the
Board. Employee shall, upon termination of employment, return to the
Company all documents that reflect Confidential Information (including
copies thereof). Notwithstanding anything heretofore stated in this
subsection 5.1, Employee's obligations under this subsection 5.1 shall not,
after termination of Employee's employment with the Company, apply to
information which has become generally available to the public without any
action or omission of Employee.
5.2 Records. All files, records, memoranda, and other documents
regarding former, existing, or prospective customers of the Company or
relating in any manner whatsoever to Confidential Information or the
business of the Company (collectively "Records"), whether prepared by
Employee or otherwise coming into his possession, shall be the exclusive
property of the Company. All Records shall be immediately placed in the
physical possession of the Company upon the termination of Employee's
employment with the Company, or at any other time specified by the Board.
The retention and use by the Employee of duplicates in any form of Records
after termination of Employee's employment with the Company is prohibited.
5.3 Remedies. Employee hereby recognizes and acknowledges that
irreparable injury or damage shall result to the Company in the event of a
breach or threatened breach by Employee of any of the terms or provisions
of this Section 5, and Employee therefore agrees that the Company shall be
entitled to an injunction restraining Employee from engaging in any
activity constituting such breach or threatened breach. Nothing contained
herein shall be construed as prohibiting the Company from pursuing any
other remedies available to the Company at law or in equity for such breach
or threatened breach, including, but not limited to, the recovery of
damages from Employee and, if Employee is an employee of the Company, the
termination of his employment with the Company in accordance with the terms
of this Agreement.
6. TERMINATION
6.1 Termination by Company. The Company has the right to
terminate Employee's employment under this Agreement, by notice to Employee
in writing at any time (i) for "Cause," as defined below; (ii) without
Cause for any or no reason, and (iii) due to the disability of the
Employee. Any such termination shall be effective upon the giving of
notice pursuant as provided herein. This Agreement shall terminate
automatically upon Employee's Death. For purposes of this Agreement
"Cause" shall exist if Employee (i) is adjudicated guilty of illegal
activities of consequence by a court of competent jurisdiction;
(ii) commits any act of fraud or intentional misrepresentation; (iii) has,
in the reasonable judgment of the Board, engaged in serious misconduct, which
conduct has, or would if generally known, materially
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adversely affect the good will or reputation of the Company and which
conduct the Employee has not cured or altered to the satisfaction of the
Board within ten (10) days following notice by the Board to the Employee
regarding such conduct; (iv) breaches any of the provisions of this
Agreement and which breach the Employee has not cured or altered to the
satisfaction of the Board within ten (10) days following notice by the
Board to the Employee regarding such breach; or (v) has made any material
misrepresentation to the Company.
6.2 Termination by Employee. Employee has the right to
terminate his employment under this Agreement for any reason, upon 45 days
prior written notice to the Company.
6.3 Compensation After Termination.
(a) If Employee's employment under this Agreement is
terminated (i) by the Company for Cause; (ii) by the Employee;
(iii) through expiration of the employment period set forth in this Agreement,
then the Company shall have no further obligation hereunder or otherwise
with respect to Employee's employment from and after the termination or
expiration date, except payment of Employee's salary accrued through the
date of termination or expiration.
(b) If Employee's employment with the Company is terminated
within the first year of employment due to the death or permanent
disability of Employee, the Employee shall continue to receive compensation
for one (1) month from the date of such termination (such payments by the
Company to be diminished, however, by the extent to which the Employee
receives compensation during such one (1) month period from a third party
employer) in an amount equal to the basic monthly cash compensation paid
Employee for the month prior to such termination. If Employee's employment
with the Company is terminated within the second or third years of
employment, or any extended term of this Agreement, due to the death or
permanent disability of Employee, the Employee shall continue to receive
compensation for three (3) months from the date of such termination (such
payments by the Company to be diminished, however, by the extent to which
the Employee receives compensation during such three (3) month period from
a third party employer) in an amount equal to the basic monthly cash
compensation paid Employee for the month prior to such termination.
Thereafter, the Employee shall not be entitled to receive any compensation
following the date of termination.
(c) If this Agreement is terminated by the Company without
Cause, and not due to the death or permanent disability of the Employee,
Employee shall be entitled to receive as severance pay (in addition to the
payment of the cash salary through the date of termination) an amount equal
to the lesser of (i) his cash salary for a period equal to six months, and
(ii) Employee's cash salary for the remainder of the initial period, such
amount to be payable in regular installments in accordance with the
Company's general payroll practices for salaried employees.
6.4 Return of Records. In the event of termination of
employment with the Company, Employee agrees to deliver promptly to the
Company all equipment, notebooks, documents, memoranda, reports, files,
samples, books, correspondence, lists, or other written or
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graphic records, and the like, relating to the Company's business, which
are or have been in his possession or under his control.
7. EXPENSES
7.1 Reimbursable Expenses. Employee shall be entitled to
reimbursement of all reasonable expenses actually incurred in the course of
his employment; provided that such expenses are approved by the Board prior
to incurring such expenses. Employee shall submit such expenses on the
Company's standardized expense report form, provided by the Company, and
shall attach thereto receipts for all expenditures.
7.2 Reimbursement. The Company shall reimburse Employee within
three (3) days after submission by Employee of his expense report.
8. THE COMPANY'S AUTHORITY
Employee agrees to observe and comply with the reasonable rules
and regulations of the Company as adopted by the Board either orally or in
writing respecting performance of his duties and to carry out and perform
orders, directions, and policies stated by the Board, to him from time to
time, either orally or in writing.
9. ASSIGNMENT
9.1 Personal Contract of Employee. This Agreement is a personal
contract, and the duties and obligations of the Employee hereunder may not
be transferred or assigned, except as otherwise expressly authorized in
writing by the Company.
9.2 Assignment by Company. The Company shall have the right to
assign this Agreement to any successor of substantially all of its business
or assets, and any such successor shall be bound by all of the provisions
hereof.
10. NONCOMPETITION
10.1 Noncompetition Provisions. During his employment, and for a
period of six months after the termination of his employment (the
"Noncompete Term"), Employee shall not, directly or indirectly, whether as
an employee, director, owner, 5% or greater stockholder, consultant, or
partner (limited or general):
(a) engage in or have any interest in, any business that
competes with the business of the Company during such period, including the
business of the Company or any of its subsidiaries, in any geographic
location(s) in which the Company is conducting business during the
Noncompete Term (the "Noncompete Area"). The Company may, in its sole
discretion, give Employee written approval(s) to personally engage in any
activity or render any services referred to in this Section 10 if the
Company secures written assurances (satisfactory to the Company and its
counsel) from Employee, or any prospective employer(s) of Employee, that
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the integrity of the Company's Confidential Information will not in any way
be jeopardized by such activities, provided that the burden of so
establishing the foregoing to the satisfaction of the Company and its
counsel shall be upon Employee;
(b) offer, within the Noncompete Area and during the
Noncompete Term, any of the products or services similar or in competition
with those offered by the Company; or
(c) otherwise compete or interfere with the activities of
the Company within the Noncompete Area and during the Noncompete Term.
10.2 Remedies. Employee hereby recognizes and acknowledges that
irreparable injury or damage shall result to the Company in the event of a
breach or threatened breach by Employee of any of the terms or provisions
of this Section 11, and Employee therefore agrees that the Company shall be
entitled to an injunction restraining Employee from engaging in any
activity constituting such breach or threatened breach. Nothing contained
herein shall be construed as prohibiting the Company from pursuing any
other remedies available to the Company at law or in equity for such breach
or threatened breach, including, but not limited to, the recovery of
damages from Employee and, if Employee is an employee of the Company, the
termination of his employment with the Company in accordance with the terms
of this Agreement.
11. MISCELLANEOUS
11.1 Notices. All notices, requests, demands, and other
communications required to or permitted to be given under this Agreement
shall be in writing addressed to the other party at the address set forth
below and shall be conclusively deemed to have been duly given when:
(a) Hand-delivered to the other party;
(b) Received when sent by telex or facsimile at the address
and number set forth below;
(c) The next business day after same have been deposited
with a national overnight delivery service, shipping prepaid, addressed to
the parties as set forth below with next-business day delivery guaranteed,
provided that the sending party receives a confirmation of delivery from
the delivery service provider; or
(d) Three business days after mailing if mailed from within
the continental United States by registered or certified mail, return
receipt requested, addressed to the parties as set forth below.
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Company: 000 Xxxxxxx Xxxxxx Xx.
00xx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Facsimile Number (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, President
With Copy to Xxxxxx X. Xxxxx
Attorney at Law
00 Xxxx 000 Xxxxx
Xxxxx 000
Xxxx Xxxx Xxxx, XX 00000
Facsimile Number (000) 000-0000
Employee: G. Xxxxxxx Xxxxxxx
c/o Pelican Development
0000 XxXxxx
Xxxxx 0
Xxx Xxxxx, XX 00000
(000) 000-0000
11.2 Attorneys' Fees. If any legal action or other proceeding is
brought for the enforcement of this Agreement, or because of an alleged
dispute, breach, default, or misrepresentation in connection with any of
the provisions of this Agreement, the successful or prevailing party or
parties will be entitled to recover reasonable attorneys' fees and other
costs incurred in that action or proceeding, in addition to any other
relief to which it or they may be entitled.
11.3 Entire Agreement; Modification; Waiver. This Agreement
constitutes the entire agreement between or among the parties pertaining to
the subject matter contained in it and supercedes all prior and
contemporaneous agreements, representations, and understandings of the
parties. No supplement, modification, or amendment of this Agreement will
be binding unless executed in writing by all the parties or the applicable
parties to be bound by such amendment. No waiver of any of the provisions
of this Agreement will constitute a waiver of any other provision, whether
or not similar, nor will any waiver constitute a continuing waiver. No
waiver will be binding unless executed in writing by the party making the
waiver.
11.4 Governing Law. This Agreement and the rights and duties of
the parties hereto shall be construed and determined in accordance with the
laws of the State of California, and any and all actions to enforce the
provisions of this Agreement shall be brought in a court of competent
jurisdiction in Orange County, in the State of California, and in no other
place.
11.5 Severability. If any provision of this Agreement is held
invalid or unenforceable by any court of final jurisdiction, it is the
intent of the parties that all other provisions of this Agreement be
construed to remain fully valid, enforceable, and binding on the parties.
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11.6 Effect of Headings. The subject headings of the sections
and subsections of this Agreement are included for convenience only and
will not affect the construction of any of its provisions.
11.7 Counterparts; Facsimile Execution. This Agreement may be
executed in any number of counterparts and all such counterparts taken
together shall be deemed to constitute one instrument. Delivery of an
executed counterpart of this Agreement by facsimile shall be equally as
effective as delivery of a manually executed counterpart of this Agreement.
Any party delivering an executed counterpart of this Agreement by facsimile
also shall deliver a manually executed counterpart of this Agreement, but
the failure to deliver a manually executed counterpart shall not affect the
validity, enforceability, or binding effect of this Agreement.
11.8 Survival of Covenants, Etc. All covenants, representations
and warranties made herein shall survive the making of this Agreement and
shall continue in full force and effect until the obligations of this
Agreement have been fully satisfied.
11.9 Full Knowledge. By their signatures, the parties
acknowledge that they have carefully read and fully understand the terms
and conditions of this Agreement, that each party has had the benefit of
counsel, or has been advised to obtain counsel, and that each party has
freely agreed to be bound by the terms and conditions of this Agreement.
12. CORPORATE APPROVALS
The Company represents and warrants that the execution of this
Agreement by its corporate officer named below has been duly authorized by
the Board, is not in conflict with any Bylaw or other agreement, and will
be a binding obligation of the Company, enforceable in accordance with its
terms.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date above written.
THE COMPANY: eWorldMedia, Inc.
By /s/ Xxxxxx X. Xxxxxxxx
Xxxxxx X. Xxxxxxxx, President
EMPLOYEE: /s/ G. Xxxxxxx Xxxxxxx
G. Xxxxxxx Xxxxxxx
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ADDENDUM
This Addendum (the "Addendum") is entered into this December 24, 2002,
by and between eWorldMedia, Inc., a Nevada corporation, (the "Company",
"EWM") and the undersigned (G. Xxxxxxx Xxxxxxx).
RECITALS:
A. The Company and G. Xxxxxxx Xxxxxxx entered into an Employment
Agreement dated September 27th, 2002, (the "Agreement") whereby the Company
agreed to employ Xx. Xxxxxxx as its Vice President of Corporate Sales.
B. Based upon recent changes in the corporate sales program between the
Company and Avalon Digital (the Company's technology provider), the Company
shall receive 45% of the gross corporate sales revenue and Avalon Digital
shall retain the balance.
NOW, THEREFORE, the parties hereto mutually agree to amend the
Employment Agreement as follows:
The Compensation section 3.1 shall be amended as follows.
1. Of the 45% of the gross corporate sales revenue retained by EWM,
the Company shall retain 33.3% of this amount (15% of the gross),
2. The sales person responsible for the lead and sale will receive
22.4% of the Company's portion (10% of the gross),
3. The binary position that the sales person holds will receive 11%
of the Company's portion (5% of the gross), and
4. Xx. Xxxxxxx shall receive 33.3% of the Company's portion (15% of
the gross). Xx. Xxxxxxx'x compensation pursuant to this section
shall be residual (permanent) and inheritable, accept if Xx.
Xxxxxxx is terminated for cause as provided in section 6.1 of the
Agreement. Furthermore, Xx. Xxxxxxx'x residual income shall be
limited to only those recurring corporate sales clients that were
signed, in place, and generating revenue during Xx. Xxxxxxx'x
employment with the Company.
5. Xx. Xxxxxxx shall be paid on a weekly basis upon receipt of
payment from the corresponding corporate sales.
IN WITNESS WHEREOF, the undersigned have executed this Addendum this
24th day of December 2002.
eWorldMedia, Inc.
By /s/ Xxxxxx Xxxxxxxx
Xxxxxx Xxxxxxxx, President
/s/ G. Xxxxxxx Xxxxxxx
G. Xxxxxxx Xxxxxxx
G. Xxxxxxx Xxxxxxx
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