EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into as of September 15,
2005 to be effective as of the date services were first rendered, by IPN
Communications, Inc., a California corporation (the "Company") and Xxxx
Camping (the "Executive").
WHEREAS, the Company desires to retain the services of the Executive as
Executive Vice President of the Company and the Executive desires to render
such services on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual promises contained herein, the
receipt and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. Employment Term. The Company employs the Executive and the Executive
accepts employment by the Company for three years, upon the terms and subject
to the conditions set forth in this Agreement. Employment may be sooner
terminated under other terms of this Agreement.
2. Management of the Company. The Executive shall devote the Executive's
time, efforts, attention and skill to, and shall perform faithfully, loyally
and efficiently the Executive's duties as Executive Vice President of the
Company. The Executive shall report to Xxxxx Xxxxx, who is employed as CEO by
the Company's parent corporation, DataLogic International, Inc. Further, the
Executive will punctually and faithfully perform and observe all rules and
regulations which the Company may now or shall hereafter reasonably establish
governing the Executive's conduct and the conduct of the Company's business
which are consistent with this Agreement.
3. Compensation; Benefits. In consideration of the services rendered to
the Company by the Executive, the Company shall pay the Executive a salary at
the annual rate of $120,000 (the "Salary") consisting of $60,000 in annual
cash salary payable bi-weekly and $60,000 in annual unrestricted, non-legend,
freely tradable (S8) stock of Company ("Stock") payable $15,000 quarterly at
the end of each calendar quarter. The number of shares of Stock shall be
based on the ten (10) day average closing price on the last ten (10) days of
each quarter. Beginning January 1, 2006, the Company may elect, at its
reasonable discretion to pay the Salary at the rate of $10,000 cash per month.
The Salary, and all other forms of compensation paid to the Executive
hereunder, shall be subject to all applicable taxes required to be withheld by
the Company pursuant to federal, state or local law. The Executive shall be
solely responsible for income taxes imposed on the Executive by reasons of any
cash or non-cash compensation and benefits provided by this Agreement.
In addition to the Salary, during the Employment Term, the Executive shall be
entitled to participate with other Company employees in a bonus pool equal to
2.1% of the Net Sales. For the purpose of the bonus pool, "Net Sales" shall
mean the collected revenue from GPS hardware, software, airtime, engineering,
development, installation and support, net of sales returns. Executive shall
have the responsibility for recommending the participation of Company
employees in the bonus pool.
1
In addition to the Salary and bonus pool participation, the Executive shall be
entitled to a car allowance of $1,068 per month paid by the Company during the
Employment Term.
In addition to the Salary, during the Employment Term, the Executive shall be
entitled to the following time off from work with pay: (i) all legal and
religious holidays, and (ii) three (3) weeks vacation per annum. The
Executive shall arrange for vacations in advance at such time or times as
shall be mutually agreeable to the Executive and the Company's Board of
Directors. The Executive may not receive pay in lieu of vacation. The
Executive may participate in all employee benefit plans and/or arrangements
adopted by the Company relating to pensions, hospital, medical, dental,
disability and life insurance, deferred salary and savings plans, and other
similar employee benefit plans or arrangements to the extent that the
Executive meets the eligibility requirements for any such plan as in effect
from time to time. The Company shall pay, or the Executive will receive
reimbursement by the Company, for reasonable and customary business and
out-of-pocket expenses incurred by the Executive in connection with the
performance by the Executive of the Executive's duties under this Agreement in
accordance with the Company's policies and practices for reimbursement of such
expenses, as in effect from time to time, including, without limitation,
reasonable and necessary travel, lodging, entertainment and meals incurred by
the Executive in furtherance of the Company's business and at the Company's
request.
4. Termination of Employment. The Executive's employment hereunder shall
terminate upon the earliest to occur of any the following events, on the dates
and at the times specified below:
(i) the close of business on the date that is three (3) years after the
effective date of this Agreement, unless renewed in writing by the Company and
the Executive (the "Expiration Date");
(ii) the close of business on the date of the Executive's death
("Death");
(iii) the close of business on the Termination Date (as defined below)
specified in the Notice of Termination (as defined below) which the Company
shall have delivered to the Executive due to the Executive's Disability.
"Disability" shall mean if (i) the Executive is absent from work for 30
calendar days in any twelve-month period by reason of illness or incapacity
(whether physical or otherwise) or (ii) the Company reasonably determines that
the Executive is unable to perform his duties, services and responsibilities
by reason of illness or incapacity (whether physical or otherwise) for a total
of 30 calendar days in any twelve-month period during the Employment Term.
The Executive agrees, in the event of any dispute under this Section, and
after receipt by the Executive of such Notice of Termination from the Company,
to submit to a physical examination by a licensed physician selected by the
Company. The Executive may seek a second opinion from a licensed physician
acceptable to the Company. If the results of the first examination and the
second examination are different, a licensed physician selected by the
physicians who have performed the first and second examinations shall perform
a third physical examination of the Executive, the result of which shall be
determinative for purposes of this Section;
2
(iv) the close of business on the Termination Date specified in the
Notice of Termination which the Executive shall have delivered to the Company
to terminate his employment ("Voluntary Termination");
(v) the close of business on the Termination Date specified in the
Notice of Termination which the Company shall have delivered to the Executive
to terminate the Executive's employment for Cause. "Cause" as used herein
means termination based on (i) the Executive's material breach of this
Agreement, (ii) conviction of the Executive for (a) any crime constituting a
felony in the jurisdiction in which committed, (b) any crime involving moral
turpitude whether or not a felony), or (c) any other criminal act against the
Company involving dishonesty or willful misconduct intended to injure the
Company (whether or not a felony), (iii) substance abuse by the Executive,
(iv) the failure or refusal of the Executive to follow one or more lawful and
proper directives of the Board of Directors delivered to the Executive in
writing, or (v) willful malfeasance or gross misconduct by the Executive which
discredits or damages the Company.
Any purported termination by the Company or the Executive (other than by
reason of Death or on the Expiration Date) shall be communicated by written
Notice of Termination to the other. As used herein, the term "Notice of
Termination" shall mean a notice which indicates the specific termination
provision in this Agreement relied upon and sets forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated. After receipt of a
Notice of Termination related to a Voluntary Termination, the Executive shall
continue to be available to the Company on a part-time basis at reasonable and
customary hourly rates to assist in the necessary transition.
As used herein, the term "Termination Date" shall mean, (i) in the case
of Death, the date of the Executive's death, (ii) in the case of expiration of
the term hereof, the Expiration Date, or (iii) in all other cases, the date
specified in the Notice of Termination.
Upon the termination of Executive's employment, the Company shall pay to
the Executive within five (5) days all sums due hereunder earned prior to or
on the Termination Date.
5. Employee Covenants.
Trade Secrets and Proprietary Information. The Executive agrees and
understands that due to the Executive's position with the Company, the
Executive will be exposed to, and has received and will receive, confidential
and proprietary information of the Company or relating to the Company's
business or affairs collectively, the "Trade Secrets"), including but not
limited to technical information, product information and formulae, processes,
business and marketing plans, strategies, customer information, other
information concerning the Company's services or
3
products, promotions, development, financing, expansion plans, business
policies and practices and other forms of information considered by the
Company to be proprietary and confidential and in the nature of trade secrets.
Trade Secrets shall not include any such information which (A) was known to
the Executive prior to his employment by the Company or (B) was or becomes
generally available to the public other than disclosure by the Executive in
violation of the provisions of this Section. Except to the extent that the
proper performance of the Executive's duties, services and responsibilities
hereunder may require disclosure, the Executive agrees that during the
Employment Term and at all times thereafter the Executive will keep such Trade
Secrets confidential and will not disclose such information, either directly
or indirectly, to any third person or entity without the prior written consent
of the Company. This confidentiality covenant has no temporal, geographical
or territorial restriction. On the Termination Date unless the Executive
remains as an employee of the Company thereafter (in which case, on the date
which the Executive is no longer an employee of the Company), the Executive
will promptly supply to the Company all property, keys, notes, memoranda,
writings, lists, files, reports, customer lists, correspondence, tapes, disks,
cards, surveys, maps, logs, machines, technical data, formulae or any other
tangible product or document which has been produced by, received by or
otherwise submitted to and retained by the Executive in the course of his
employment with the Company. Any material breach of the terms of this
Paragraph shall be considered Cause.
Prohibited and Competitive Activities. The Executive and the Company
recognize that due to the nature of the Executive's engagement hereunder and
the relationship of the Executive to the Company, the Executive has had and
will have access to, has had and will acquire, and has assisted and may
continue to assist in, developing confidential and proprietary information
relating to the business and operations of the Company and its affiliates,
including, without limitation, Trade Secrets. The Executive acknowledges that
such information has been and will be of central importance to the business of
the Company and its affiliates and that disclosure of it to, or its use by,
others (including, without limitation, the Executive (other than with respect
to the Company's business and affairs)) could cause substantial loss to the
Company.
The Executive and the Company also recognize that an important part of
the Executive's duties will be to develop good will for the Company and its
affiliates through the Executive's personal contact with Clients (as defined
below), employees, and others having business relationships with the Company,
and that there is a danger that this good will, a proprietary asset of the
Company, may follow the Executive if and when the Executive's relationship
with the Company is terminated. The Executive accordingly agrees as follows:
(i) Prohibited Activities. The Executive agrees that the Executive
will not at any time during the Employment Term: (A) (other than in the course
of the Executive's employment) disclose or furnish to any other person or,
directly or indirectly, use for the Executive's own account or the account of
any other person, any Trade Secrets, no matter from where or in what manner he
may have acquired such Trade Secrets, and the Executive shall retain all such
Trade Secrets in trust for the benefit of the Company, its affiliates and the
successors and assigns of any of them, (B) directly or through one or more
intermediaries, solicit for employment or recommend to any subsequent employer
of the Executive the solicitation for employment of, any person who, at the
time of such solicitation, is employed by the Company or any affiliate, (C)
4
directly or indirectly, whether for the Executive's own account or for the
account of any other person, solicit, divert, or endeavor to entice away from
the Company or any entity controlled by the Company, or otherwise engage in
any activity intended to terminate, disrupt, or interfere with, the Company's
or any of its affiliates' relationships with, Clients, or otherwise adversely
affect the Company's or any of its affiliates' relationships with Clients or
other business relationships of the Company or any affiliate thereof, or (D)
publish or make any statement critical of the Company or any shareholder or
affiliate of the Company or in any way adversely affect or otherwise malign
the business or reputation of any of the foregoing persons (any activity
described in clause (A), (B), (C) or (D) of this Section being referred to as
a Prohibited Activity"); provided, however, that if in the written opinion of
counsel, the Executive is legally compelled to disclose Trade Secrets to any
tribunal or else stand liable for contempt or suffer other similar censure or
penalty, then the disclosure to such tribunal of only those Trade Secrets
which such counsel advises in writing are legally required to be disclosed
shall not constitute a Prohibited Activity provided that the Executive shall
give the Company as much advance notice of such disclosure as is reasonably
practicable. As used herein, the term "Clients" shall mean those persons who,
at any time during the Executive's course of employment with the Company
(including, without limitation, prior to the date of this Agreement) are or
were clients or customers of the Company or any affiliate thereof or any
predecessor of any of the foregoing.
(ii) Non-Competition. Company and Executive are parties to a
non-compete agreement as per EXHIBIT 1 of the AGREEMENT FOR NON-COMPETE AND
EARN OUT SCHEDULE dated September 15, 2005.
Remedies. The Executive agrees that any breach of the terms of this
Section would result in irreparable injury and damage to the Company for which
the Company would have no adequate remedy at law. The Executive therefore
agrees that in the event of said breach or any threat of breach, the Company
shall be entitled to an immediate injunction and restraining order to prevent
such breach and/or threatened breach and/or continued breach by the Executive
and/or any and all persons and/or entities acting for and/or with the
Executive, without having to prove damages. The terms of this Paragraph shall
not prevent the Company from pursuing any other available remedies to which
the Company may be entitled at law or in equity for any breach or threatened
breach hereof, including but not limited to the recovery of damages from the
Executive. The provisions of this Section 5 shall survive any termination of
this Agreement..
Proprietary Information and Inventions. The Executive agrees that any
and all inventions, discoveries, improvements, processes, formulae, business
application software, patents, copyrights and trademarks made, developed,
discovered or acquired by him prior to and during the Employment Term, solely
or jointly with others or otherwise, which relate to the business of the
Company, and all knowledge possessed by the Executive relating thereto
collectively, the "Inventions"), shall be fully and promptly disclosed to the
Board of Directors and to such person or persons as the Board of Directors
shall direct and the Executive irrevocably assigns to the Company all of the
Executive's right, title and interest in and to all Inventions of the Company
and all such Inventions shall be the sole and absolute property of the Company
and the Company shall be the sole and absolute owner thereof. The Executive
agrees that he will at all times keep all Inventions secret from everyone
except the Company and such persons as the Board of
5
Directors may from time to time direct. The Executive shall, as requested by
the Company at any time and from time to time, whether prior to or after the
expiration of the Employment Term, execute and deliver to the Company any
instruments deemed necessary by the Company to effect disclosure and
assignment of the Inventions to the Company or its designees and any patent
applications (United States or foreign) and renewals with respect thereto,
including any other instruments deemed necessary by the Company for the
prosecution of patent applications, the acquisition of letters patent and/or
the acquisition of patents or copyrights in any and all countries and to vest
title thereto in the Company or its nominee.
6. Representations and Warranties of the Executive. The Executive
represents and warrants to the Company that:
(i) The Executive's employment by the Company as contemplated will not
conflict with, and will not be constrained by, any prior or current
employment, consulting agreement or relationship, whether written or oral; and
(ii) The Executive does not possess confidential information arising
out of any employment, consulting agreement or relationship with any person or
entity other than the Company which could be utilized in connection with the
Executive's employment by the Company.
7. Binding Effect or Assignment. This Agreement shall inure to the benefit
of and be binding upon the parties and their respective heirs, executors,
representatives, estates, successors and assigns, including any successor or
assign to all or substantially all of the business and/or assets of the
Company, whether direct or indirect, by purchase, merger, consolidation,
acquisition of stock, or otherwise; provided, however, that no party hereto
shall assign all or any portion of the such party's rights or obligations
under this Agreement without the prior written consent of the other party.
8. Notices. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been duly given or made
as of the date delivered, mailed or transmitted, and shall be effective upon
receipt.
9. Amendment and Modification. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge
is agreed to in writing and signed by each of the Executive and the Company.
No such waiver or discharge by either party hereto at any time or any waiver
or discharge of any breach by the other party hereto of, or compliance with,
any condition or provision of this agreement to be performed by such other
party, shall be deemed a waiver or discharge of similar or dissimilar
provisions or conditions, or a waiver or discharge of any breach of any
provisions, at the same or at any prior or subsequent time.
10. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of Arizona without giving effect to the
conflict of law principles of that state.
6
11. Severability. In the event that any one or more of the provisions of
this Agreement shall be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other portion of this Agreement, and this Agreement shall be construed as if
such provision had never been contained herein.
12. Withholding Taxes. Notwithstanding anything contained herein to the
contrary, all payments required to be made hereunder by the Company to the
Executive, or his estate or beneficiaries, shall be subject to the withholding
of such amounts as the Company may reasonably determine it should withhold
pursuant to any applicable federal, state or local law or regulation.
13. Arbitration of Disputes. The parties hereto mutually consent to the
resolution by arbitration of all claims and controversies arising out of or
relating to this Agreement.
14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
15. Entire Agreement. This Agreement constitutes the entire agreement
between the parties and supersedes any and all prior agreements, written or
oral, understandings and arrangements, either oral or written, between the
parties with respect to the subject matter, and shall, as of the date hereof,
constitute the only employment agreement between the parties.
16. Further Assurances. Each party shall do and perform, or cause to be
done and performed, all further acts and things and shall execute and deliver
all other agreements, certificates, instruments, and documents as any other
party reasonably may request in order to carry out the intent and accomplish
the purposes of this Agreement and the consummation of the transactions
contemplated.
17. Construction. The headings in this Agreement are for reference purposes
only and shall not limit or otherwise affect the meaning or interpretation of
this Agreement.
[continued on following page]
7
IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed as of the date first above written.
"Company"
IPN Communications, Inc.
By: /s/ Xxxxx Xxxxx
-----------------------
Name: Xxxxx Xxxxx
Title: Director
"Executive"
Xxxx Camping
By: /s/ Xxxx Camping
-------------------------
Name: Xxxx Camping
8
