Exhibit 10.2
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of the 1st day of March, 2002, among iLive, Inc. a
Nevada corporation, having a principal place of business at 0000 Xxxxxxxx Xxxxxx
Xxxxx, Xxxxxx, XX 00000 (the "Company"), and Xxxxxx Xxxxxx, an individual
residing in Xxxxxx Xxxxxx, XX 00000 (the "Executive").
WHEREAS, the Company desires to employ the Executive as its Chief
Executive Officer; and
WHEREAS, Executive is willing to accept such employment by the Company,
all in accordance with provisions hereinafter set forth.
NOW, THEREFORE, in consideration of the promises and mutual
representations, covenants, and agreements set forth herein, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree effective upon the Acquisition as
follows:
1. TERM: The term of this Agreement shall be for a period of one (1)
year commencing on the effective date of the Offering (the "Effective Date") and
terminating on the third anniversary date of the Effective Date, subject to
earlier termination as provided herein or unless extended by mutual consent of
the parties.
2. EMPLOYMENT: (A) Subject to the terms and conditions and for the
compensation hereinafter set forth, the Company hereby agrees to employ
Executive for and during the term of this Agreement. Executive is hereby
employed by the Company as its Chief Executive Officer responsible for the
direction and leadership of the entire corporation, including Corporate
direction, strategic focus, acquisitions and the planning and execution of the
strategic and tactical operational growth plans for the company. The Chief
Executive Officer reports to the Board of Directors and may appoint officers,
agents or employees other than those appointed by the Board of Directors. The
Executive will be an ex-officio member of all standing committees, including the
Executive Committee, and shall have the general powers and duties of management
normally vested in the office of Chief Executive Officer of a public company.
The Executive may sign, execute and deliver in the name of the Corporation
powers of attorney, contracts, bonds and other obligations, and shall perform
such other duties as may be prescribed from time to time by the Board of
Directors or by the Bylaws of the Corporation.
The Executive will have full management responsibility for the overall
growth and profitability of the Company, requiring his expertise in marketing,
finance and strategic management. The Executive is directly responsible for
recruiting, developing and motivating the senior management team. The
development of strategic plans, implementation of operational plans, building
and growing of organizational infrastructures and instilling professional
management disciplines that will facilitate the Company achieving stated
objectives will be a primary responsibility. The Executive will also be as a
facilitator for and key participant in strategic financing initiatives,
supporting as may be required the Chairman and other Executive team members in
negotiations with Investment Banks, industry analysts, major financial
institutions and brokerage houses and investment funds.
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3. COMPENSATION:
(A) SALARY: During the term of this Agreement, the Company agrees to
pay Executive, and Executive agrees to accept, an annual salary of not less than
$120,000 per year, payable in accordance with the Company's policies, for
services rendered by Executive hereunder.
(B) PERFORMANCE BONUS: As additional compensation, the Company may pay
Executive a periodic bonus. The Board of Directors will fix the bonus payable to
the Executive at the end of each year.
(C) INCREASES: The annual salary is subject to periodic increases at
the discretion of the Board of Directors with such increases to take effect no
later than on each anniversary date of this Agreement.
(D) SIGNING BONUS: There is no signing bonus.
(E) STOCK OPTIONS: The Company will grant to Executive up to stock
options to purchase shares of common stock of the Company, over the term of this
employment agreement the terms of which will be presented to the Company's Board
of Directors at a later date.
4. EXPENSES: The Company shall reimburse Executive for all reasonable
and actual business expenses incurred by him in connection with his service to
the Company, upon submission by him of appropriate vouchers and expense account
reports.
5. BENEFITS:
(A) INSURANCE: In addition to the salary and bonus to be paid to
Executive hereunder, Executive and his dependents shall be entitled to
participate in such other benefits as are extended to active executive employees
of the Company and their dependents.
(B) VACATION: Executive shall be entitled to take up to five (5) weeks
of paid vacation annually at a time mutually convenient to the Company and
Executive. Any such vacation time not used by Executive in any one year shall
accumulate to his benefit in the succeeding years.
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6. RESTRICTIVE COVENANTS: (A) Executive recognizes and acknowledges
that the Company, through the expenditure of considerable time and money, has
developed and will continue to develop in the future information concerning
customers, clients, marketing, business and operational methods of the Company
and its customers or clients, contracts, financial or other data, technical data
or any other confidential or proprietary information possessed, owned or used by
the Company, and that the same are confidential and proprietary, and are
"confidential information" of the Company. In consideration of his employment by
the Company hereunder, Executive agrees that he will not, without the consent of
the Board, make any disclosure of confidential information now or hereafter
possessed by the Company to any person, partnership, corporation or entity
either during or after the term hereunder, except to employees of the Company or
its subsidiaries or affiliates and to others within or without the Company, as
the Executive may deem necessary in order to conduct the Company's business and
except as may be required pursuant to any court order, judgment or decision from
any court of competent jurisdiction. The foregoing shall not apply to
information which is in the public domain on the date hereof; which, after it is
disclosed to Executive by the Company, is published or becomes part of the
public domain through no fault of Executive; which is known to Executive prior
to disclosure thereof to him by the Company as evidenced by his written records;
or, after Executive is no longer employed by the Company, which is thereafter
disclosed to Executive in good faith by a third party which is not under any
obligation of confidence or secrecy to the Company with respect to such
information at the time of disclosure to him. The provisions of this Section
shall continue in full force and effect notwithstanding any lawful termination
of Executive's employment under this Agreement for a period of one (1) year
following said termination of employment.
(B) Except in the ordinary course of his duties as President and Chief
Financial Officer or in the furtherance of the business of the Company, during
the period from the date of this Agreement until one (1) year following the date
on which his employment with the Company is lawfully and properly terminated,
Executive will not, directly or indirectly:
(i) persuade or attempt to persuade any person or entity which
is or was a customer, client or supplier of the Company on the date on
which Executive's employment with the Company is terminated to cease
doing business with the Company, or to reduce the amount of business it
does with the Company;
(ii) solicit for himself or any other person or entity other
than the Company the business of any person or entity which is a
customer or client of the Company, or was its customer or client within
six (6) months prior to the termination of his employment by the
Company, with respect to distribution of roofing supplies and related
products; or
(iii) persuade or attempt to persuade any employee of the
Company, or any individual who was an employee of Company during the
six (6) month period prior to the lawful and proper termination of this
Agreement, to leave Company's employ, or to become employed by any
person or entity other than the Company.
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(C) Executive acknowledges that the restrictive covenants (the
"Restrictive Covenants") contained in this section 6 are a condition of his
employment and are reasonable and valid in geographical and temporal scope and
in all other respects. If any court determines that any of the Restrictive
Covenants, or any part of any of the Restrictive Covenants, is invalid or
unenforceable, the remainder of the Restrictive Covenants and parts thereof
shall not thereby be affected and shall be given full effect, without regard to
the invalid portion. If any court determines that any of the Restrictive
Covenants, or any part thereof, is invalid or enforceable because of the
geographic or temporal scope of such provision, such court shall have the power
to reduce the geographic or temporal scope of such provision, as the case may
be, and, in its reduced form, such provision shall then be enforceable.
(D) If Executive breaches, or threatens to breach, any of the
Restrictive Covenants, the Company, in addition to and not in lieu of any other
rights and remedies it may have at law or in equity, shall have the right to
injunctive relief; it being acknowledged and agreed to by Executive that any
such breach or threatened breach would cause irreparable and continuing injury
to the Company and that money damages would not provide an adequate remedy to
the Company.
7. TERMINATION:
(A) DEATH: In the event of Executive's death ("Death") during the term
of his employment, Executive's designated beneficiary, or in the absence of such
beneficiary designation, his estate shall be entitled to payment of Executive's
salary from date of death to the expiration of one (1) year thereafter. In
addition, Executive's beneficiary and/or dependents shall be entitled, for the
same one year period to continuation, at the Company's expense, of such benefits
as are then being provided to them under Section 5(A) hereof, and any additional
benefits as may be provided to dependents of the Company's executive officers in
accordance with the terms of the Company's policies and practices. In addition,
any options granted to Executive which have not, by the terms of the options,
vested shall be deemed to have vested as of the date of his death and shall
thereafter be exercisable by Executive's beneficiary or estate for the maximum
period of time allowed for exercise thereof under the terms of the option.
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(B) DISABILITY:
(a) In the event Executive, by reason of physical or mental incapacity,
shall be disabled ("Disability") for a period of at least six (6) consecutive
months, the Company shall have the option at any time thereafter to terminate
Employee's employment hereunder for disability. Such termination will be
effective thirty (30) days after the Board gives written notice of such
termination to Executive, unless Executive shall have returned to the
performance of his duties prior to the effective date of the notice. All
obligations of the Company hereunder shall cease upon the effectiveness of such
termination, provided that such termination shall not affect or impair any
rights Executive may have under any policy of long term disability insurance or
benefits then maintained on his behalf by the Company. In addition, for a period
of one (1) year following termination of Executive's employment for disability,
Executive and his dependents, as the case may be, shall continue to receive the
benefits set forth under subparagraph 5(A) hereof, as well as such benefits as
are extended to the Company's active executive employees and their dependents
during such period. Any options granted to the Executive which have not, by the
terms of the options, vested shall be deemed to have vested at the termination
and shall thereafter be exercisable by the Employee, his beneficiary,
conservator or estate, as applicable, for the maximum period of time allowed for
exercise thereof under the terms of the option.
(b) "Incapacity" as used herein shall mean the inability of the
Executive due to physical or mental illness, injury or disease substantially to
perform his normal duties as President and Chief Financial Officer. Executive's
salary as provided for hereunder shall continue to be paid during any period of
incapacity prior to and including the date on which Executive's employment is
terminated for disability.
(C) BY THE COMPANY FOR CAUSE:
(a) The Company shall have the right, before the expiration of the term
of this Agreement, to terminate this Agreement and to discharge Executive for
cause (hereinafter "Cause"), and all compensation to Executive shall cease to
accrue upon discharge of Executive for Cause. For the purposes of this
Agreement, the term "Cause" shall mean (i) Executive's conviction of a felony;
(ii) the alcoholism or drug addiction of Executive; (iii) gross negligence or
willful misconduct of Executive in connection with his duties hereunder; (iv)
the determination by any regulatory or judicial authority (including any
securities self-regulatory organization) that Executive directly violated,
before or after the date hereof, any federal or state securities law, any rule
or regulation adopted thereunder; or (v) the continued and willful failure by
Executive to substantially and materially perform his material duties hereunder.
(b) If the Company elects to terminate Executive employment for Cause
under (C)(a) above, such termination shall be effective fifteen (15) days after
the Company gives written notice of such termination to Executive. In the event
of a termination of Executive's employment for Cause in accordance with the
provisions of 7(C)(a), the Company shall have no further obligation to the
Executive, except for the payment of all compensation and other vested benefits
which have accrued through the date of such termination and not paid and any
other benefits to which he or his dependents may be entitled by law.
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(D) BY EXECUTIVE FOR REASON:
Executive shall have the right to terminate his employment at any time
for "good reason" (herein designated and referred to as "Reason"). The term
Reason shall mean (i) the failure to elect or appoint, or re-elect or
re-appoint, Executive to, or removal or improperly attempted removal of
Executive from, his positions as President or Chief Financial Officer or
superior positions with the Company, except in connection with the proper
termination of Executive's employment by reason of Cause, Death or Disability;
(ii) a reduction in Executive's overall compensation other than his
discretionary bonus under Section 3(B) above or an adverse change in the nature
or scope of the authorities, powers, functions or duties normally attached to
the Executive's position with the Company; (iii) the Company's failure or
refusal to perform any obligations required to be performed in accordance with
this Agreement after a reasonable notice and an opportunity to cure same; and
(iv) a Change in Control of the Company, as defined herein, occurs.
(E) SEVERANCE: (a) In the event Executive's employment hereunder shall
be terminated by the Executive for Reason or by the Company for other than
Cause, Death or Disability: (1) the Executive shall thereupon receive as
severance pay in a lump sum the amount of salary and bonuses which the Executive
would have received for the remaining term of this Agreement had there been no
termination, provided however, that in no event shall such lump sum payment be
less than one year's salary and bonus; and (2) the Executive's (and his
dependents') participation in any and all life, disability, medical and dental
insurance plans shall be continued, or equivalent benefits provided to him or
them by the Company, at no cost to him or them, for a period of two years from
the termination; and (3) any options granted to Executive which have not, by the
terms of the options, vested shall be deemed to have vested at the termination,
and shall thereafter be exercisable for the maximum period of time allowed for
exercise thereof under the terms of the option; and new paragraph (b) an
election by Executive to terminate his employment under the provisions of this
paragraph shall not be deemed a voluntary termination of employment of Executive
for the purpose of interrupting the provisions of any of the Company's employee
benefit plans, programs or policies.
(F) RESIGNATION: In the event Executive resigns without Reason prior to
the expiration hereof, he shall receive any unpaid fixed salary through such
resignation date and such benefits to which he is entitled by law.
(G) EXTENSION OF BENEFITS: Any extension of benefits following the
termination of employment provided for herein shall be deemed to be in addition
to, and not in lieu of, any period for the continuation of benefits provided for
by law, either at the Company's, Executive or his dependents' expense.
(H) CHANGE IN CONTROL: For purposes hereof, a Change in Control shall
be deemed to have occurred (i) if there has occurred a "change in control" as
such term is used in Item 1 (a) of Form 8-K promulgated under the Securities
Exchange Act of 1934, as amended, at the date hereof ("Exchange Act") or (ii) if
there has occurred a change in control as the term "control" is defined in Rule
12b-2 promulgated under the Exchange Act.
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8. INDEMNIFICATION: Company hereby indemnifies and holds Executive
harmless to the extent of any and all claims, suits, proceedings, damages,
losses or liabilities incurred by Executive and arising out of any acts or
decisions done or made in the authorized scope of his employment hereunder.
Company hereby agrees to pay all expenses, including reasonable attorney's fees,
actually incurred by Executive in connection with the investigation of any such
matter, the defense of any such action, suit or proceeding and in connection
with any appeal thereon including the cost of settlements. Nothing contained
herein shall entitle Executive to indemnification by Company in excess of that
permitted under applicable law.
9. WAIVER: No delay or omission to exercise any right, power or remedy
accruing to either party hereto shall impair any such right, power or remedy or
shall be construed to be a waiver of or an acquiescence to any breach hereof. No
waiver of any breach hereof shall be deemed to be a waiver of any other breach
hereof theretofore or thereafter occurring. Any waiver of any provision hereof
shall be effective only to the extent specifically set forth in the applicable
writing. All remedies afforded to either party under this Agreement, by law or
otherwise, shall be cumulative and not alternative and shall not preclude
assertion by either party of any other rights or the seeking of any other rights
or remedies against the other party.
10. GOVERNING LAW: The validity of this Agreement or of any of the
provisions hereof shall be determined under and according to the laws of the
State of California, and this Agreement and its provisions shall be construed
according to the laws of the State of California, without regard to the
principles of conflicts of law and the actual domiciles of the parties hereto.
11. NOTICES: All notices, demands or other communications required or
permitted to be given in connection with this Agreement shall be given in
writing, shall be transmitted to the appropriate party by hand delivery, by
certified mail, return receipt requested, postage prepaid or by overnight
carrier and shall be addressed to a party at such party's address shown on the
first page hereof. A party may designate by written notice given to the other
parties a new address to which any notice, demand or other communication
hereunder shall thereafter be given. Each notice, demand or other communication
transmitted in the manner described in this Section 11 shall be deemed to have
been given and received for all purposes at the time it shall have been (i)
delivered to the addressee as indicated by the return receipt (if transmitted by
mail), the affidavit of the messenger (if transmitted by hand delivery or
overnight carrier) or (ii) presented for delivery during normal business hours,
if such delivery shall not have been accepted for any reason.
12. ASSIGNMENTS: This Agreement shall be binding upon and inure to the
benefit of the parties and each of their respective successors, assigns, heirs
and legal representatives; provided, however, that Executive may not assign or
delegate his obligations, responsibilities and duties hereunder except as
permitted by the Company's by-laws, custom, practice, policies or the Board of
Directors. Company may not assign this Agreement without the prior written
consent of Executive.
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13. MISCELLANEOUS: This Agreement contains the entire understanding
between the parties hereto and supersedes all other oral and written agreements
or understandings between them with respect to the subject matter hereof. No
modification or addition hereto or waiver or cancellation of any provision shall
be valid except by a writing signed by the party to be charged therewith.
14. OBLIGATIONS OF A CONTINUING NATURE: It is expressly understood and
agreed that the covenants, agreements and restrictions undertaken by or imposed
on Executive and, the Company hereunder, which are stated to exist or continue
after termination of Executive's employment with the Company, shall exist and
continue irrespective of the method or circumstances of such termination for the
respective periods of time set forth herein.
15. SEVERABILITY: The parties agree that if any of the covenants,
agreements or restrictions contained herein are held to be invalid by any court
of competent jurisdiction, the remainder of the other covenants, agreements
restrictions and parts thereof herein contained shall be severable so not to
invalidate any others and such other covenants, agreements, restrictions and
parts thereof shall be given full effect without regard to the invalid portion.
16. VENUE: JURISDICTION: The Company and the Executive hereby agree
that any action, proceeding or claim against either of them arising out of, or
relating in any way to this Agreement shall be brought and enforced in any of
the courts of the State of California in California County, California, or the
United States District Court for the Southern District of California, and
irrevocably submit to such jurisdiction. The Company and the Executive hereby
waive any objection to such jurisdiction and that such courts represent an
inconvenient forum. Any process or summons to be served upon the Company or the
Executive may be served by transmitting a copy thereof by registered or
certified mail, return receipt requested, postage prepaid, addressed to their
respective addresses set forth in the initial paragraph of this agreement or
such other address as a party may so notify the other parties hereto in the
manner provided by Section II hereof. Such mailing shall be deemed personal
service and shall be legal and binding upon the Company and the Executive in any
action, proceeding or claim.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
By: _____________________________
Agreed and Accepted
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