EMPLOYMENT AGREEMENT
This
EMPLOYMENT AGREEMENT (the “Agreement”) dated December 4, 2006 by and between
Phantom Entertainment, Inc., a Delaware corporation (the “Company”), and
Xxxxxxxx Xxxxxx, an individual (the “Employee”).
The
Company desires to employ the Employee, and the Employee wishes to accept such
employment with the Company, upon the terms and conditions set forth in this
Agreement.
NOW
THEREFORE, in consideration of the foregoing facts and mutual agreements set
forth below, the parties, intending to be legally bound, agree as
follows:
1. Employment.
The
Company hereby agrees to employ Employee, and Employee hereby accepts such
employment and agrees to perform Employee’s duties and responsibilities in
accordance with the terms and conditions hereinafter set forth.
1.1 Duties
and Responsibilities.
Employee shall serve as Controller and Treasurer. During the Employment Term,
Employee shall perform all duties and accept all responsibilities incident
to
such positions and other appropriate duties as may be assigned to Employee
by
the Company’s Chief Executive Officers and Board of Directors from time to time.
The Company shall retain full direction and control of the manner, means and
methods by which Employee performs the services for which he is employed
hereunder and of the place or places at which such services shall be rendered.
1.2 Employment
Term.
The
term of Employee’s employment under this Agreement shall commence as of December
6, 2006 (the “Effective Date”) and shall continue for 12 months, unless earlier
terminated in accordance with Section 4 hereof. The term of Employee’s
employment shall be automatically renewed for successive one (1) year periods
until the Employee or the Company delivers to the other party a written notice
of their intent not to renew the “Employment Term,” such written notice to be
delivered at least sixty (60) days prior to the expiration of the then-effective
“Employment Term” as that term is defined below. The period commencing as of the
Effective Date and ending 12 months thereafter or such later date to which
the
term of Employee’s employment under the Agreement shall have been extended by
mutual written Agreement is referred to herein as the “Employment
Term.”
1.3 Extent
of Service.
During
the Employment Term, Employee agrees to use Employee’s best efforts to carry out
the duties and responsibilities under Section 1.1 hereof and to devote
substantially all Employee’s business time, attention and energy thereto.
Employee further agrees not to work either on a part-time or independent
contracting basis for any other business or enterprise during the Employment
Term without the prior written consent of the Company’s Board of Directors (the
“Board”), which consent shall not be unreasonably withheld.
1.4 Base
Salary.
The
Company shall pay Employee a base salary (the “Base Salary”) at the annual rate
of $150,000 (U.S.), payable at such times as the Company customarily pays its
other senior level Employees (but in any event no less often than monthly).
The
Base
Salary
shall be subject to all state, federal, and local payroll tax withholding and
any other withholdings required by law.
1.5 Incentive
Compensation.
Employee shall be eligible to earn a cash bonus of up to $37,500 (representing
three (3) months Base Salary) at the sole discretion of the Board of Directors,
to be based upon certain performance or operational-based milestones.
1.6 Signing
Bonus.
The
Company agrees to issue to Employee an aggregate five million (5,000,000) shares
of the Company’s common stock within five (5) business days from the date of
execution of this Agreement as a signing bonus.
1.7 Other
Benefits.
During
the Employment Term, Employee shall be entitled to participate in all employee
benefit plans and programs made available to the Company’s senior level
Employees as a group or to its employees generally, as such plans or programs
may be in effect from time to time (the “Benefit Coverages”), including, without
limitation, medical, dental, hospitalization, short-term and long-term
disability and life insurance plans, accidental death and dismemberment
protection and travel accident insurance. Employee shall be provided office
space adequate for the performance of his duties.
1.8 Reimbursement
of Expenses; Vacation; Sick Days and Personal Days.
Employee shall be provided with reimbursement of expenses related to Employee’s
employment by the Company on a basis no less favorable than that which may
be
authorized from time to time by the Board, in its sole discretion, for senior
level Employees as a group. Employee shall be entitled to vacation and holidays
in accordance with the Company’s normal personnel policies for senior level
Employees, but not less than two (2) weeks of vacation per calendar year,
provided Employee shall not utilize more than two (2) consecutive business
days
without the express consent of the Chief Executive Officer. Unused vacation
time
will be forfeited as of December 31 of each calendar year of the Employment
Term. Employee shall be entitled to no more than an aggregate of twelve (12)
sick days and personal days per calendar year.
1.9 No
Other Compensation.
Except
as expressly provided in Sections 1.4 through 1.7, Employee shall not be
entitled to any other compensation or benefits.
2. Confidential
Information.
Employee recognizes and acknowledges that by reason of Employee’s employment by
and service to the Company before, during and, if applicable, after the
Employment Term, Employee will have access to certain confidential and
proprietary information relating to the Company’s business, which may include,
but is not limited to, trade secrets, trade “know-how,” product development
techniques and plans, formulas, customer lists and addresses, financing
services, funding programs, cost and pricing information, marketing and sales
techniques, strategy and programs, computer programs and software and financial
information (collectively referred to as “Confidential Information”). Employee
acknowledges that such Confidential Information is a valuable and unique asset
of the Company and Employee covenants that he will not, unless expressly
authorized in writing by the Company, at any time during the course of
Employee’s employment use any Confidential Information or divulge or disclose
any Confidential Information to any person, firm or corporation except in
connection with the performance of Employee’s duties for the Company and in a
manner consistent with the
Company’s
policies regarding Confidential Information. Employee also covenants that at
any
time after the termination of such employment, directly or indirectly, he will
not use any Confidential Information or divulge or disclose any Confidential
Information to any person, firm or corporation, unless such information is
in
the public domain through no fault of Employee or except when required to do
so
by a court of law, by any governmental agency having supervisory authority
over
the business of the Company or by any administrative or legislative body
(including a committee thereof) with apparent jurisdiction to order Employee
to
divulge, disclose or make accessible such information. All written Confidential
Information (including, without limitation, in any computer or other electronic
format) which comes into Employee’s possession during the course of Employee’s
employment shall remain the property of the Company. Except as required in
the
performance of Employee’s duties for the Company, or unless expressly authorized
in writing by the Company, Employee shall not remove any written Confidential
Information from the Company’s premises, except in connection with the
performance of Employee’s duties for the Company and in a manner consistent with
the Company’s policies regarding Confidential Information. Upon termination of
Employee’s employment, the Employee agrees to return immediately to the Company
all written Confidential Information (including, without limitation, in any
computer or other electronic format) in Employee’s possession. As a condition of
Employee’s continued employment with the Company and in order to protect the
Company’s interest in such proprietary information, the Company may require
Employee’s execution of a Confidentiality Agreement.
3. Non-Solicitation.
3.1 Non-Solicitation.
The
Employee agrees that as long as the Agreement remains in effect and for a period
of one (1) year from its termination, the Employee will not divert any business
of the Company and/or its affiliates or any customers or suppliers of the
Company and/or the Company’s and/or its affiliates’ business to any other
person, entity or competitor, or induce or attempt to induce, directly or
indirectly, any person to leave his or her employment with the
Company.
3.2 Remedies.
The
Employee acknowledges and agrees that his obligations provided herein are
necessary and reasonable in order to protect the Company and its affiliates
and
their respective business and the Employee expressly agrees that monetary
damages would be inadequate to compensate the Company and/or its affiliates
for
any breach by the Employee of his covenants and agreements set forth herein.
Accordingly, the Employee agrees and acknowledges that any such violation or
threatened violation of this Section 3 will cause irreparable injury to the
Company and that, in addition to any other remedies that may be available,
in
law, in equity or otherwise, the Company and its affiliates shall be entitled
to
obtain injunctive relief against he threatened breach of this Section 3 or
the
continuation of any such breach by the Employee without the necessity of proving
actual damages.
4. Termination.
4.1 By
Company.
The
Company, by action of the Chief Executive Officer or acting by duly adopted
resolutions of the Board of Directors, may, in its discretion and at its option,
terminate the Employee’s employment with or without Cause, and without prejudice
to
any
other
right or remedy to which the Company or Employee may be entitled at law or
in
equity or under this Agreement. In the event the Company desires to terminate
the Employee’s employment without Cause, the Company shall give the Employee not
less than sixty (60) days advance written notice. Termination of Employee’s
employment hereunder shall be deemed to be “for Cause” in the event that
Employee violates any provisions of this Agreement, is guilty of any criminal
act other than minor traffic violations, is guilty of willful misconduct or
gross neglect, or gross dereliction of his duties hereunder or refuses to
perform his duties hereunder after notice of such refusal to perform such duties
or directions was given to Employee by the Chief Employee Officer or Board
of
Directors.
4.2 By
Employee’s Death or Disability.
This
Agreement shall also be terminated upon the Employee’s death and/or a finding of
permanent physical or mental disability, such disability expected to result
in
death or to be of a continuous duration of no less than twelve (12) months,
and
the Employee is unable to perform his usual and essential duties for the
Company.
4.3 Compensation
on Termination.
In the
event the Company terminates Employee’s employment, all payments under this
Agreement shall cease, except for Base Salary to the extent already accrued.
In
the event of termination by reason of Employee’s death and/or permanent
disability, Employee or his executors, legal representatives or administrators,
as applicable, shall be entitled to an amount equal to Employee’s Base Salary
accrued through the date of termination, plus a pro rata share of any annual
bonus to which Employee would otherwise be entitled for the year which death
or
permanent disability occurs. Upon termination of Employee, if Employee executes
a written release, substantially in the form attached hereto as Exhibit “B” (the
“Release”), of any and all claims against the Company and all related parties
with respect to all matters arising out of Employee’s employment by the Company
(other than Employee’s entitlement under any employee benefit plan or program
sponsored by the Company in which Employee participated), unless the Employment
Term expires or termination is for Cause, the Employee shall receive, in full
settlement of any claims Employee may have related to his employment by the
Company, Base Salary for 90 calendar days from the date of termination, provided
Employee is in full compliance with the provisions of Sections 2 and 3 of this
Agreement.
4.4 Voluntary
Termination.
Employee may voluntarily terminate the Employment Term upon thirty (30) days’
prior written notice for any reason; provided, however, that no further payments
shall be due under this Agreement in that event except that Employee shall
be
entitled to any benefits due under any compensation or benefit plan provided
by
the Company for Employees or otherwise outside of this Agreement.
5. General
Provisions.
5.1 Indemnification. The
Company agrees to indemnify, and hold the Employee harmless against any loss
or
damages incurred by the Company for any treasury issuances by the Employee,
so
long as such issuances are duly authorized by the Company’s Board of
Directors.
5.2 Modification:
No Waiver.
No
modification, amendment or discharge of this Agreement shall be valid unless
the
same is in writing and signed by all parties hereto. Failure of any party at
any
time to enforce any provisions of this Agreement or any rights or to exercise
any elections hall in no way be considered to be a waiver of such provisions,
rights or elections and shall in no way affect the validity of this Agreement.
The exercise by any party of any of its rights or any of the elections under
this Agreement shall not preclude or prejudice such party from exercising the
same or any other right it may have under this Agreement irrespective of any
previous action taken.
5.3 Notices.
All
notices and other communications required or permitted hereunder or necessary
or
convenient in connection herewith shall be in writing and shall be deemed to
have been given when hand delivered or mailed by registered or certified mail
as
follows (provided that notice of change of address shall be deemed given only
when received):
If
to the
Company, to:
If
to
Employee, to:
Xxxxxxxx
Xxxxxx
0000
Xxxxxxxxxx Xxxx.
Xx.
Xxxxx, XX 00000
Or
to
such other names or addresses as the Company or Employee, as the case may be,
shall designate by notice to each other person entitled to receive notices
in
the manner specified in this Section.
5.4 Governing
Law.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of Delaware.
5.5 Further
Assurances.
Each
party to this Agreement shall execute all instruments and documents and take
all
actions as may be reasonably required to effectuate this Agreement.
5.6 Severability.
Should
any one or more of the provisions of this Agreement or of any agreement entered
into pursuant to this Agreement be determined to be illegal or unenforceable,
then such illegal or unenforceable provision shall be modified by the proper
court or arbitrator to the extent necessary and possible to make such provision
enforceable, and such modified provision and all other provisions of this
Agreement and of each other agreement entered into pursuant to this Agreement
shall be given effect separately from the provisions or portion thereof
determined to be illegal or unenforceable and shall not be affected
thereby.
5.7 Successors
and Assigns.
Employee may not assign this Agreement without the prior written consent of
the
Company. The Company may assign its rights without the written consent of the
Employee, so long as the Company or its assignee complies with the other
material terms of this Agreement. The rights and obligations of the Company
under this Agreement shall inure to the benefit of and be binding upon the
successors and permitted assigns of the Company, and the Employee’s rights under
this Agreement shall inure to the benefit of
and
be
binding upon his heirs and executors. The Company’s subsidiaries and controlled
affiliates shall be express third party beneficiaries of this
Agreement.
5.8 Entire
Agreement.
This
Agreement supersedes all prior agreements and understandings between the
parties, oral or written. No modification, termination or attempted waiver
shall
be valid unless in writing, signed by the party against whom such modification,
termination or waiver is sought to be enforced.
5.9 Counterparts;
Facsimile.
This
Agreement may be executed in one or more counterparts, each of which shall
for
all purposes be deemed to be an original, and all of which taken together shall
constitute one and the same instrument. This Agreement may be executed by
facsimile with original signatures to follow.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
IN
WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed
this Agreement as of the date first written above.
By:
/s/
Xxxx
Xxxxx
Xxxx
Xxxxx
Chief
Executive Officer
/s/
Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxxxx
