EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "AGREEMENT") is made effective as of
January 11, 2007 (the "EFFECTIVE DATE"), and is entered into by and between
NEOLINK WIRELESS CONTENT, INC., a Nevada corporation ("COMPANY"), whose address
for notice purposes is 0000 Xxxxxx Xxxxxxx Xx., Xxxxxxxxx, XX 00000, and XXXXXX
X. XXXX, an individual ("EXECUTIVE"), whose address for notice purposes is in
care of Xxxxxxx Xxxx, Esq., at Wolf, Rifkin, Xxxxxxx & Xxxxxxxx, LLP, 00000 X.
Xxxxxxx Xxxx., Xxxxx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000.
WHEREAS, Executive possesses valuable knowledge and skills which are
relevant to the operation of Company's business;
WHEREAS, Company desires to provide for the employment of Executive, and
Executive is willing serve as an executive of Company, on the terms and
conditions herein provided;
WHEREAS, concurrently with the execution and delivery of this Agreement,
Strategic Gaming Investments, Inc., a Delaware corporation ("SGI"), and
Company, which shall be a wholly-owned subsidiary of SGI, on the one hand, and
the Company, on the other hand, of which Executive is the principal
shareholder, are entering into that certain Merger and Share Exchange Agreement
(the "MERGER AGREEMENT");
WHEREAS, SGI is acquiring 100% of the issued and outstanding capital
stock of the Company, which SGI will continue to operate in the same manner as
previously operated by Executive;
WHEREAS, pursuant to the Merger Agreement, Company shall become a wholly-
owned subsidiary of SGI; and
WHEREAS, Company desires to hire Executive, and Executive wishes to
accept such employment, upon the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, Company and Executive agree as follows:
1. EMPLOYMENT PERIOD. Executive shall be employed by Company, in
accordance with the terms and provisions of this Agreement, commencing on the
Effective Date and ending at midnight on the second anniversary of this
Agreement, unless sooner terminated in accordance with the provisions of
Section 3 or Section 4 below or extended by mutual agreement of the parties
(the "EMPLOYMENT PERIOD").
1. TERMS OF EMPLOYMENT.
A. POSITION AND DUTIES. During the Employment Period, Executive
shall be employed by Company as its President and Chief Executive Officer, and
Executive accepts and agrees to such employment. During the Employment Period,
Executive shall perform all services and acts necessary and advisable to
fulfill the duties and responsibilities as are commensurate and consistent with
Executive's position and shall render such services on the terms set forth
herein. Executive shall have such powers and duties with respect to his
position as President and Chief Executive Officer as may reasonably be assigned
to Executive, to the extent consistent with Executive's position and status,
and to the extent consistent with those powers and duties which Executive
customarily previously exercised in connection with Company's business.
Executive shall have day-to-day control over Company. Executive shall devote
sufficient time and attention to the affairs and business of Company sufficient
to execute Company's operational plan (the "OPERATING PLAN"), as such Plan is
mutually determined by the Executive and Company's Board of Directors. During
the Employment Period, it shall not be a violation of this Agreement for
Executive to: (a) serve on corporate, civic, charitable, and professional
association boards or committees; (b) deliver lectures or fulfill speaking
engagements; and (c) manage personal investments, so long as such activities
are not competitive with Company or SGI, do not create a conflict of interest
and do not unreasonably prevent or hinder Executive from performing the
services required hereunder; provided, however, that this Subpart (c) of
Section 2(A) shall not be deemed violated in the event that Executive passively
invests in a publicly traded entity that is competitive with Company or SGI, so
long as such investment represents less then 5% of the outstanding equity of
such company on a fully diluted basis. Executive's employment with Company
under this Agreement shall be Executive's exclusive employment during the
Employment Period.
B. COMPENSATION.
(i) ISSUANCE OF SHARES. In consideration of Executive's
services on Company's behalf, Company shall cause SGI to issue to Executive
120,000 shares of SGI common stock for the term of the Employment Period
(collectively, the "SHARES"). The Shares shall accrue during each year of the
Employment Period and shall be issued to Executive on two issuance dates, the
first of which to occur on January 15, 2008, for 60,000 shares of SGI common
stock, and the second of which to occur on January 15, 2009, for 60,000 shares
of SGI common stock. Immediately upon the issuance of the Shares to Executive
on each issuance date, the Shares so issued shall become subject to that
certain Registration Rights Agreement attached as Exhibit B to the Merger
Agreement
(ii) EXPENSES. Company shall reimburse Executive for all
reasonable employment-related expenses incurred by Executive during the
Employment Period in accordance with the policies, practices and procedures of
Company as in effect generally from time to time after the Effective Date.
(iii) VACATION AND SICK LEAVE. During each calendar year of
the Employment Period, Executive shall receive four (4) weeks of paid vacation
and sick leave in accordance with Company policy, each pro rated for any
partial year.
(iv) OTHER BENEFITS. During the Employment Period,
Executive shall be eligible to receive such other benefits as Company provides
to other Company executives of similar rank to Executive, on such terms as
Company provides such benefits to such other executives.
(v) STOCK OPTIONS. Company shall ensure that, during the
Employment Period, Executive be eligible to participate in such stock option
plans of SGI that may be made available from time to time to SGI executives of
similar rank to Executive; provided, however, the level, terms and conditions
of such participation shall be determined solely by the board of directors and
compensation committee of SGI.
(vi) WITHHOLDINGS. All payments made to Executive hereunder
shall be subject to all applicable state and federal tax-related withholding
obligations, as required by applicable law.
3. EARLY TERMINATION OF EMPLOYMENT BY COMPANY. Company may terminate
this Agreement and Executive's employment hereunder during the Employment
Period for Cause (as defined below) or immediately upon Executive's death or
Permanent Disability (as defined below), subject to applicable state or federal
law.
A. FOR CAUSE. For purposes of this Agreement, "CAUSE" means (i)
the conviction of Executive for committing an act of fraud, embezzlement, theft
or other act constituting a crime or the guilty or nolo contendre plea of
Executive to any such crime; (ii) fraudulent conduct or a breach of trust on
the part of Executive in connection with the business of Company or any of its
affiliates or subsidiaries; (iii) violation of any Company policy of which
Executive is aware and is given a period of ten (10) business days' prior
written notice and opportunity to cure the same during such period; (iv)
failure, neglect, or refusal by Executive to engage in diligent efforts to
properly discharge, perform or observe any or all of Executive's job duties for
any reason other than Company's material breach of this Agreement, which
failure, neglect, or refusal continues after ten (10) business days' prior
written notice from Company; or (v) any material breach or failure by Executive
to comply with any of the provisions of this Agreement applicable to him and
which is not remedied within ten (10) business days after written notice
thereof from Company.
A. PERMANENT DISABILITY. For purposes of this Agreement, "PERMANENT
DISABILITY" means that Executive is unable to perform the essential functions
of his job, with or without reasonable accommodation, for a total of ninety
(90) days out of any six (6) month period.
4. EARLY TERMINATION OF EMPLOYMENT BY EXECUTIVE. Executive may
terminate this Agreement and Executive's employment hereunder for Good Reason
(as hereinafter defined). For purposes of this Agreement, "GOOD REASON" means,
in the absence of the advance written consent of Executive, that any of the
following has occurred:
A. The assignment to Executive of duties materially inconsistent
with Executive's position (including titles and reporting requirements,
authority, duties or responsibilities as contemplated by Section 2(A) of this
Agreement), or any other action by Company which results in a material
diminution in such position, authority, duties or responsibilities, excluding
for this purpose an isolated and insubstantial action not taken in bad faith
and which is remedied by Company promptly after receipt of written notice
thereof;
B. Any failure by Company to comply with any of the provisions of
this Agreement or any provisions of any other agreement or contract to which
Executive and Company are parties (including any document that is being
executed in connection with the Merger Agreement), other than any isolated and
insubstantial failure not occurring in bad faith and which is remedied promptly
after receipt of written notice thereof, which failure to comply is not
remedied within ten (10) business days after written notice thereof from
Executive;
C. Any action taken by SGI which action has a materially adverse
effect on the ability of Company or Executive to execute the Operating Plan or
to perform their respective obligations under this Agreement; and
D. Company's failure to obtain a written agreement from any
successor or assignee of Company to assume and perform Company's obligations
under this Agreement.
Upon the occurrence of any of the events described in Sections
4(A), 4(B), 4(C) and 4(D) above, Executive shall be deemed to have waived any
right to receive post termination benefits if he does not notify Company of his
intention to resign within ninety (90) days after the occurrence of such event.
5. OBLIGATIONS OF COMPANY UPON EARLY TERMINATION.
A. ISSUANCE OF SHARES; PAYMENT OF ACCRUED OBLIGATIONS. Immediately
upon early termination of this Agreement for any reason other than a
termination by Company for Cause, Company shall cause SGI to issue to Executive
(or Executive's legal representative, if applicable) a certain number of the
Shares calculated by multiplying 5,000 by the number of calendar months that
this Agreement had remained in effect prior to such termination, then
subtracting therefrom the number of the Shares previously issued to Executive
hereunder. In addition, immediately upon early termination of this Agreement
for any reason other than for Cause, Company shall cause SGI to issue to
Executive (or Executive's legal representative, if applicable) the remaining
number of the Shares that have not previously been issued to Executive. In
addition to the foregoing, Company shall pay to Executive (or Executive's legal
representative, if applicable) any and all amounts payable to Executive
pursuant to Section 2(B) above which have accrued but are unpaid as of the date
of such termination. Business expenses reimbursable under Company policy will
be paid within thirty (30) days after the final submittal of outstanding
business expenses, provided that Executive submit any outstanding business
expenses within thirty (30) days after such date of termination. Vesting of
any stock option under any applicable Stock Option Plan shall cease as of the
date of such termination.
B. NO OBLIGATION TO MITIGATE. Executive shall not be obligated
to seek other employment by way of mitigation of damages or other amounts
payable hereunder, nor shall any amounts that Executive may earn after the
termination of Executive's employment constitute a reduction of, or offset
against, the amounts required to be paid to Executive pursuant to this Section
5.
6. NOTICE AND DATE OF TERMINATION. Any termination (whether or not
for Cause or whether or not for Good Reason) shall be communicated by a written
notice of termination to the other party, and may be sent via registered or
certified mail, return receipt requested, postage prepaid or by facsimile
transmission, or by electronic mail or by hand delivery. The date of such
termination shall be either: (i) the date of transmission of such notice of
termination by facsimile, e-mail or personal delivery; (ii) three (3) calendar
days after the date of mailing by first class mail; or (iii) if Executive's
employment is terminated by reason of Executive's death or Permanent
Disability, the date of Executive's death or determination of Executive's
Permanent Disability. Copies of all notices sent hereunder shall be forwarded
to the following: to Executive, c/o Xxxxxxx Xxxx, Esq., Wolf, Rifkin, Xxxxxxx &
Xxxxxxxx, LLP, 00000 X. Xxxxxxx Xxxx, Xxxxx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx
00000; to the Company, c/o Xxxxxxx X. Xxxxxx, Esq., 0000 Xxxxxxxxxxx Xxx.,
Xxxxxx, Xxxxxxxxxx 00000, with a copy to Xxxxxxxx X. Xxxxxxxxx, Strategic
Gaming Investments, Inc., 0000 Xxxxxx Xxxxxxx Xx., Xxxxxxxxx, Xxxxxx 00000.
1. NON-COMPETITION. During the term of this Agreement, Executive
shall not on his own behalf or the behalf of another:
(i) own, manage, control, participate in, provide consulting
services to, or be connected with the ownership, management, operation or
control of, any business that is in competition with Company or SGI; provided,
however, that Executive shall not be prohibited from owning less then 5% of the
equity (on a fully diluted basis) of any publicly traded entity;
(ii) solicit, or take any action to cause the solicitation of, any
supplier, client, customer, contractor, vendor, agent or consultant of Company
or SGI, or cause any of the same to discontinue business or cease such
relationship; and
(i) solicit for employment, or employ or hire as an
independent contractor, any person who is an employee of Company or SGI, or
encourage such employee to terminate its employment with Company or SGI.
1. RIGHTS RELATING TO THE SHARES.
A. TAG ALONG RIGHTS.
(i) If certain of SGI's shareholders propose to enter into
one transaction or multiple, related transactions to sell shares of SGI's
common stock representing more than 50% of all of the issued and outstanding
shares of SGI's common stock (a "MAJORITY STOCK SALE"), Executive shall have
the right, but not the obligation, to include his Shares in the Majority Stock
Sale, and if such right is exercised as set forth below, Company shall cause
SGI to honor such right. The maximum number of Shares that Executive may
include in the Majority Stock Sale shall be determined by multiplying the total
number of shares of SGI's common stock proposed to be included in the Majority
Stock Sale, by a fraction the numerator of which is the total number of Shares
owned (which shares shall consist solely of vested shares as determined by
Section 2(B)(i) above) by Executive that Executive elects, in writing pursuant
to Section 8(A)(ii) below, to include in the Majority Stock Sale and the
denominator of which is the total number of shares of SGI's common stock
proposed to be included in the Majority Stock Sale plus the total number of
Shares owned (which shares shall consist solely of vested shares as determined
by Section 2(B)(i) above) by Executive that Executive elects, in writing
pursuant to Section 8(A)(ii) below, to include in the Majority Stock Sale
pursuant to Section 8(A)(ii) below.
(ii) Company shall notify Executive in writing (the
"MAJORITY STOCK SALE NOTICE") of a Majority Stock Sale at least 20 days prior
to the proposed date of the consummation of the Majority Stock Sale. Each
Majority Stock Sale Notice shall describe the material terms of the Majority
Stock Sale and the number of Shares that Executive may include in the Majority
Stock Sale. If Executive elects to participate in the Majority Stock Sale,
then Executive shall notify Company in writing of such election within 10 days
after Company has delivered the Majority Stock Sale Notice, which notice shall
set forth the number (not to exceed the amount calculated pursuant to Section
8(A)(i) above) of the Shares that Executive elects to include in the Majority
Stock Sale. If Executive does not provide such notice within such time, then
Executive shall be deemed to have waived his right to participate in the
Majority Stock Sale.
A. PIGGYBACK RIGHTS. If SGI proposes to register shares of common
stock in accordance with the Securities Act of 1933, as amended (the "ACT"),
and sell such shares in a bona fide underwritten offering of shares of SGI's
common stock pursuant to an effective registration statement under Section 5 of
the Act (the "OFFERING"), Company shall promptly give Executive written notice
of such proposal. Upon Executive's written request given within ten days after
Company notifies Executive of the Offering, Company shall include in the
Offering a number of Executive's Shares determined by multiplying the total
number of shares of SGI's common stock proposed to be included in the Offering,
by a fraction the numerator of which is the total number of Shares owned (which
shares shall consist solely of vested shares as determined by Section 2(B)(i)
above) by Executive, and the denominator of which is the total number of
outstanding shares of SGI's common stock.
1. SPECIAL TAX ELECTION. THE GRANT OF THE SHARES TO EXECUTIVE
PURSUANT TO THIS AGREEMENT MAY RESULT IN ADVERSE TAX
CONSEQUENCES TO EXECUTIVE, WHICH CONSEQUENCES MAY BE MITIGATED
BY FILING AN ELECTION UNDER SECTION 83(B) OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED. SUCH ELECTION MUST BE FILED
WITHIN 30 DAYS AFTER THE DATE OF GRANT. EXECUTIVE SHOULD
CONSULT WITH HIS OWN TAX ADVISOR IN ORDER TO DETERMINE THE TAX
CONSEQUENCES OF ACQUIRING THE SHARES AND THE EFFECT OF MAKING
SUCH AN ELECTION. EXECUTIVE ACKNOWLEDGES THAT IT IS HIS OWN
RESPONSIBILITY TO DETERMINE SUCH TAX CONSEQUENCES AND TO FILE A
TIMELY ELECTION UNDER SECTION 83(B) OF THE CODE.
2. ARBITRATION. To the fullest extent permitted by law, any
controversy or claim past, present, or future, arising out of or
relating to the hiring of Executive, Executive's employment, the
termination of Executive's employment, this Agreement and/or the
breach or termination of this Agreement that Company may have
against Executive or that Executive may have against Company or
against its officers, directors, employees or agents in their
capacity as such or the breach hereof, shall be settled by a
single arbitrator in arbitration conducted in Los Angeles
County, California, in accordance with the National Employment
Arbitration Rules of the American Arbitration Association
("AAA"). These rules are posted on the AAA's website,
MACROBUTTON HtmlResAnchor xxx.xxx.xxx. The arbitrators shall
prepare a written award and judgment upon the award may be
entered in any court having jurisdiction thereof. The
arbitrator's decision shall be final and binding. The arbitrator
shall have the authority to settle such controversy or claim by
finding that a party should be enjoined from certain actions or
be compelled to undertake certain actions, and in such event
such court may enter an order enjoining and/or compelling such
actions as found by that arbitrator. Each party shall pay its
own legal and other professional fees and costs in connection
with the arbitration and Company shall pay the arbitrator's
fees; however, to the extent permitted by law, the arbitrator
may require the other party to pay the costs of the arbitration
and/or the legal and other professional fees and costs incurred
by the prevailing party in connection with such arbitration
proceeding and any necessary court action.
The claims covered by this arbitration provision include, but are not
limited to, claims arising out of contract law, tort law, common law,
defamation law, fraud law (including, without limitation, fraud in the
inducement of contract), wrongful discharge law, privacy rights, statutory
protections, constitutional protections, wage and hour law, California Labor
Code protections, the California Fair Employment and Housing Act (which
includes claims for discrimination or harassment on the basis of age, race,
color, ancestry, national origin, disability, medical condition, marital
status, religious creed, sexual orientation, pregnancy, and sex), any similar
state discrimination law, the Federal Civil Rights Act of 1964 and 1991, as
amended, the Age Discrimination in Employment Act, the Older Workers' Benefit
Protection Act, the Americans With Disabilities Act; claims for benefits
(except claims under an employee benefit plan that either (1) specifies that
its claims procedure shall culminate in an arbitration procedure different from
this one, or (2) is underwritten by a commercial insurer which decides claims);
and claims for violation of any federal, state, or other governmental law,
statute, regulation, or ordinance, except claims excluded in the following
section.
Notwithstanding the foregoing, the parties expressly agree that claims
Executive may have for workers' compensation, state unemployment compensation
benefits, and state disability insurance are not covered by this Agreement.
The parties also agree that a court of competent jurisdiction may enter a
temporary restraining order or an order enjoining a breach of this Agreement,
pending a final award or further order by the arbitrator. Such remedy,
however, shall be cumulative and nonexclusive, and shall be in addition to any
other remedy to which the parties may be entitled. The parties further
expressly agree that this provision does not apply to any matter in which the
amount in controversy falls within the jurisdiction of the Small Claims
Division of the Municipal Courts of the State of California. Should such
matter fall within the jurisdiction of the Small Claims Division of the
Municipal Court of the State of California, then such matter shall be, and may
only be, submitted to a Small Claims Division of the Courts of the State of
California for Los Angeles County for determination.
3. INDEMNITY. Company shall defend, protect, indemnify and hold
harmless Executive and his heirs, beneficiaries, trustees,
employees, contractors, agents, representatives, successors and
assigns from and against any and all claims, liabilities,
demands, lawsuits, litigation, losses, damages (including
consequential damages and penalties), fees, costs and expenses
(including settlement costs, and costs and expenses of counsel
and other professional fees, including those incurred in
investigating, bringing and defending any claim or action or
threatened claim or action), obligations, liens, executions,
fines, awards, defenses and causes of action, of every and
whatever type, kind, nature, description or character, that
Executive or any of his heirs, beneficiaries, trustees,
employees, contractors, agents, representatives, successors or
assigns may suffer or incur relating to this Agreement or in
connection with Executive carrying out his duties or other
obligations under this Agreement.
4. SUCCESSORS. This Agreement is personal to Executive and shall
not be assignable by Executive. This Agreement shall inure to
the benefit of Company and its successors and assigns. Company
may assign this Agreement to any successor or affiliated entity,
subsidiary or parent company, provided that such assignee agrees
to be bound by the terms of this Agreement applicable to Company
as if such assignee were an original party to this Agreement.
5. MISCELLANEOUS.
A. MODIFICATION/WAIVER. This Agreement may not be amended,
modified, superseded, canceled, renewed or expanded, or any terms or covenants
hereof waived, except by a writing executed by each of the parties hereto or,
in the case of a waiver, by the party waiving compliance. Failure of any party
at any time or times to require performance of any provision hereof shall in no
manner affect his or its right at a later time to enforce the same. No waiver
by a party of a breach of any term or covenant contained in this Agreement,
whether by conduct or otherwise, in any one or more instances shall be deemed
to be or construed as a further or continuing waiver of agreement contained in
the Agreement.
B. TAXES. Executive agrees to be responsible for the payment of
any taxes due on any and all compensation, stock option, or benefit provided by
Company pursuant to this Agreement. Executive agrees to indemnify Company and
hold Company harmless from any and all claims or penalties asserted against
Company for any failure by Executive to pay taxes due on any compensation,
stock option, or benefit provided by Company pursuant to this Agreement.
C. GOVERNING LAW; PERSONAL JURISDICTION. This Agreement and all
disputes relating to this Agreement shall be governed in all respects by the
laws of the State of California as such laws are applied to agreements between
California residents entered into and performed entirely in California. The
parties acknowledge that this Agreement constitutes the minimum contacts to
establish personal jurisdiction in California. The captions of this Agreement
are not part of the provisions hereof and shall have no force or effect.
D. NOTICES. All notices and other communications hereunder
shall be in writing and shall be given by hand delivery to the other party or
by registered or certified mail, return receipt requested, postage prepaid, or
by facsimile, or by email, or by hand delivery to such address as either party
shall have furnished to the other in writing in accordance herewith. Copies of
all notices sent hereunder shall be forwarded to the following: to Executive,
c/o Xxxxxxx Xxxx, Esq., Wolf, Rifkin, Xxxxxxx & Xxxxxxxx, LLP, 11400 Xxxx
Xxxxxxx Xxxxxxxxx, Xxxxx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000; to the Company,
c/o Xxxxxxx X. Xxxxxx, Esq., 0000 Xxxxxxxxxxx Xxx., Xxxxxx, Xxxxxxxxxx 00000,
with a copy to Xxxxxxxx X. Xxxxxxxxx, Strategic Gaming Investments, Inc., 0000
Xxxxxx Xxxxxxx Xx., Xxxxxxxxx, Xxxxxx 00000.
E. SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
F. WITHHOLDINGS. Company may withhold from any amounts payable
under this Agreement such federal, state or local taxes as shall be required to
be withheld pursuant to any applicable law or regulation.
G. ENTIRE AGREEMENT. This Agreement sets forth the entire
agreement and understanding of the parties hereto with regard to the employment
of the Executive by Company and supersede any and all prior agreements,
arrangements and understandings, written or oral, pertaining to the subject
matter hereof. No representation, promise or inducement relating to the
subject matter hereof has been made to a party that is not embodied in these
Agreements, and no party shall be bound by or liable for any alleged
representation, promise or inducement not so set forth. Notwithstanding this
Section 13(G), nothing contained in this Agreement shall alter, amend or effect
in any way the terms and conditions of the Merger Agreement.
H. WAIVER. The failure of either party to insist upon strict
compliance with any provision of this Agreement, or the failure to assert any
right either party may have hereunder, shall not be deemed to be a waiver of
such provision or right or any other provision or right of this Agreement.
IN WITNESS WHEREOF, Executive has hereunto set Executive's hand, and
Company has caused these presents to be executed in its name on its behalf, all
as of the day and year first above written.
COMPANY:
EXECUTIVE:
NEOLINK WIRELESS CONTENT, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxxx
/s/ Xxxxxx X. Xxxx
Name: Xxxxxxxx X. Xxxxxxxxx XXXXXX X. XXXX
Its: Director
