Exhibit 10.50
Agreement
This Agreement ("Agreement"), dated as of July 29, 2003, is between
Ventures-National Incorporated, a Utah Corporation ("VNI" or the "Company"),
Irrevocable Children's Trust ("Trust") and Xxxxxx Xxxx ("Executive").
WHEREAS, VNI desires to engage Executive as its Chief Executive Officer
(referred to herein as "CEO"), for the period, and upon the other terms and
conditions, herein provided; and
WHEREAS, Executive is willing to be employed by the Company as its
President pursuant to the terms and conditions of this Agreement effective July
24, 2003; and
WHEREAS, Trust is willing to assist the Company in compensating its
CEO;
NOW, THEREFORE, in consideration of the promises, the mutual covenants
and obligations herein contained, and for other good and valuable consideration,
the receipt, adequacy, and sufficiency of which are hereby acknowledged, the
parties hereto do hereby covenant and agree as follows:
1. EMPLOYMENT
1.1 Position. The Company hereby confirms Executive's employment as its
CEO. Executive shall report directly to the Company's Board of Directors (the
"Board of Directors") and shall perform the duties described in Section 1.2
hereof, subject to such limitations of authority as may be established from time
to time by the Company's Board of Directors and applicable law.
1.2 Duties. Executive's duties will include all those duties
customarily associated with the position of CEO in an emerging growth company,
subject to a reasonable agreement with the Company's Board of Directors.
Executive agrees to devote substantially his entire business time and attention
to the performance of his duties hereunder and to serve the Company diligently
and to the best of his abilities. Notwithstanding the foregoing, Executive shall
have the continuing right:
(a) to make passive investments in the securities of any
publicly-owned corporation;
(b) to make any other passive investments with respect to which he
is not obligated or required to, and does not in fact, devote any substantial
managerial efforts that interfere with the fulfillment of his duties to the
Company; and
(c) subject to the prior written approval of the Company's Board
of Directors, to serve as a director of or consultant to other companies and
entities Executive represents that he is under no actual or alleged restriction,
limitation, or other prohibition (whether as a result of prior employment or
otherwise) to perform his duties as described herein.
2. COMPENSATION AND BENEFITS
2.1 Base Annual Salary. The Company shall pay Executive a base annual
salary of $1.00 (the "Base Annual Salary"), subject to all payroll and
withholding deductions required by applicable law.
2.2 Warrants. On or before July 31, 2003, the Trust shall issue
Executive fully vested warrants to purchase up to 1 million shares of the common
stock par value $0.001 of the Company (the "Common Stock") substantially on the
terms of the warrant attached hereto as Exhibit A (the "Warrants"), which such
terms include among other things, an exercise price of $0.50 with an expiration
date of three years from the date of issuance and a provision for cashless
exercise. The shares of Common Stock underlying the Warrants shall be registered
on Form SB-2 (or other appropriate form if Form SB-2 should be unavailable) as
soon as practicable, but in no case later than December 31, 2003.
2.3 Bonus Payment. On July 31, 2004, unless this Agreement has been
terminated at an earlier date in accordance with Section 3 hereof, the Company
shall pay the Executive $50,000 in cash as a cash bonus and the Trust shall
issue 50,000 shares of Common Stock to Executive (the "Bonus Payment");
2.4 Expense Reimbursement. The Company will reimburse Executive for all
personal and business expenses, including Company's standard car allowance, and
reimbursement for telecommunication and other expenses associated with remote
area employment; and
2.5 Executive shall be entitled to other benefits and perquisites no
less favorable than those provided to the Company's employees generally, as such
benefits and perquisites may be modified from time to time in the Company's
discretion. Such benefits shall in all events include, but not be limited to,
health insurance, life insurance, director and officer insurance and a 401(k)
plan and two (2) weeks of vacation annually. Such perquisites shall be further
defined in Company's employee manual.
3. TERMINATION AND SEVERANCE PAY
3.1 At Will. Executive and the Company acknowledge and agree that
Executive's employment with the Company is "at will" during the term of this
Agreement. Accordingly, either party may terminate Executive's employment by the
Company, with or without cause, in which case Executive shall have no claim for
lost wages, although termination of Executive's employment shall be subject to
the terms and conditions of this Agreement regarding severance pay, benefits and
other obligations. Executive and the Company are not party to any oral agreement
relating to the Executive's employment by the Company.
3.2 Resignation without Good Reason. In the event that Executive's
employment with the Company terminates as a result of his resignation without
Good Reason, Executive shall be entitled to no severance pay or benefits.
3.3 Resignation with Good Reason.
(a) Severance Pay. In the event that Executive's employment with
the Company terminates as a result of his resignation with Good Reason, (as
defined in Section 3.3 (c) hereof), Executive shall be entitled to severance pay
in the amount of $50,000 to be paid within 30 days of termination.
(b) Additional Benefits. In the event that Executive's employment
with the Company terminates as a result of his resignation with Good Reason,
Executive shall be entitled to continue to participate in the Company's employee
benefits program in accordance with the Company's employment policies then in
effect including customary co-payment obligation for health insurance. Such
benefits shall continue for the benefit of Executive for the entire period of
his severance pay continuation as provided in section 3.3 (a) above, in the same
manner and at the same level as in effect immediately prior to Executive's
resignation. In addition, upon any resignation by Executive for Good Reason, any
and all bonuses that would be payable to Executive at the end of a period
pursuant to section 2.3 but for his earlier resignation shall be payable to him
immediately and pro rata (in accordance with the percentage of completion of the
period in question and with reference to the best available financial
information proximate to the time of resignation).
(c) Good Reason. For purposes of this Agreement, the term "Good
Reason" shall mean that Executive resigns his employment with the Company for
one or more of the following reasons:
(i) a material reduction in Executive's position,
compensation, authority or responsibilities;
(ii) any obstruction by the Company or the Board of
Directors of the Company in the performance of the
Executive's duties by the Executive;
(iii) any material breach by the Company of its
obligations under this Agreement.
3.4 Involuntary Termination.
(a) Severance Pay. In the event that Company terminates
Executive's employment For Just Cause (as defined in Section 3.4 (c) hereof),
Executive shall not be entitled to severance pay or benefits. Excepting
termination by the Company For Just Case, in the event that Executive's
employment with the Company is terminated, Executive shall be entitled to
severance pay in the amount of $50,000 to be paid within 30 days of the
termination.
(b) Additional Benefits. In the event that Company terminates
Executive's employment other than For Just Cause, Executive shall be entitled to
continue to participate in the Company's employee benefit programs as and to the
extent theretofore made available to him pursuant to Section 2.3 above. Such
benefits shall be continued in accordance with the Company's employment policies
then in effect including customary co-payment obligation for
health insurance. Such benefits shall continue for the benefit of Executive for
the entire period of his severance pay continuation as provided in section 3.4
(a) above, in the same manner and at the same level as in effect immediately
prior to Executive's termination. In addition, upon any termination of Executive
by the Company other than For Just Cause, any and all cash bonuses that would be
payable to Executive at the end of a period but for is earlier termination shall
be payable to him immediately and pro rata (in accordance with the percentage of
completion of the period in question and with reference to the best available
financial information proximate to the time of termination).
(c) For Just Cause. For purposes of this Agreement, the term
"For Just Cause" shall mean any termination of employment of Executive for one
or more of the following reasons:
(i) the conviction of such person for a felony
involving an act of moral turpitude, which conviction
has become final and non-appealable;
(ii) recklessness in the performance of such person's
duties to the Company causing material harm to the
Company; or
(iii) material dishonesty, material breach of
fiduciary duty or material breach by Executive of any
representation, covenant or other agreement contained
in this Agreement.
3.5 Death. In the event of Executive's death, this Agreement shall
automatically terminate and shall be of no further force or effect; provided,
however, the Company shall be obligated to make all the payments and to provide
all the benefits due to Executive hereunder to the time of his death.
3.6 Disability. In the event of Executive's Disability (as defined
below) during the term of this Agreement for any period of at least three (3)
consecutive months, the Company shall have the right, exercisable in its
discretion, to terminate this Agreement. In the event that the Company does
elect to terminate this Agreement, Executive shall receive the Severance Pay set
forth in Section 3.3(a) above, and shall be entitled to normal disability
benefits in accordance with such policies of the Company as may then be in
effect. For purposes of this Agreement, "Disability" shall mean the inability of
Executive to perform the essential functions of his employment hereunder by
reason of physical or mental illness or incapacity as determined by a physician
chosen by the Company and reasonably satisfactorily to Executive or his legal
representative.
4. TERM
This Agreement shall become effective as of the date hereof and shall
terminate on the date that is one (1) year after the date hereof (the "Term"),
unless earlier terminated pursuant to Article 3 hereof. On expiration of the
Term the Executive will be paid his Bonus Payment in accordance with Section
2.3. The obligation to provide Directors and Officers insurance shall survive
termination of this Agreement in all circumstances.
5. NON-SOLICITATION, NON-DISCLOSURE, RESTRICTIVE COVENANTS, AND
NON-DISPARAGEMENT
5.1 Non-Disclosure. Except as is reasonably necessary in the
performance of his duties hereunder, Executive shall not disclose to any person
or entity, or use for his own direct or indirect benefit, any Confidential
Information (as defined below) pertaining to the Company obtained by him in
connection with his employment with the Company. For purposes of this Agreement,
the term "Confidential Information" shall include information with respect to
the Company's products, services, processes, suppliers, customers, customers'
account executives, suppliers and distribution information, price lists,
identity and list of actual and potential customers, trade secrets, technical
information, business plans, and strategies and financial records or condition;
provided, however, that such information shall not be treated as Confidential
Information to the extent that it (a) is already known to Executive, without
restriction, prior to disclosure by the Company, (b) is publicly available at
the time of disclosure through no fault of the Executive or (c) becomes publicly
available after disclosure (other than by Executive through a breach of this
Section 5.1).
5.2 The Company agrees that is shall not disclose to any person or
entity any information that the Executive marks as confidential, or informs the
Company is confidential on transferring that information to the Company, or
disclose any personal information about the Executive without the consent of the
Executive to such disclosure.
5.3 Restrictive Covenants. Executive agrees that during the term of
this Agreement and for a period of one month after the termination or expiry of
this Agreement, provided the Company is not in default of any obligation to
Executive under this Agreement or otherwise, he shall not:
(a) directly or indirectly, alone or as a partner, joint venturer,
officer, director, employee, consultant, agent, independent contractor or
stockholder of any company or business, engage in any business activity in the
States of California, Utah, Massachusetts or New Hampshire ("Restricted
Territory"), and which is directly or indirectly in competition with the
business conducted by the Company as of the date of the termination of
Executive's employment; provided however, that, the beneficial ownership of less
than 5% of the shares of stock of any corporation having a class of equity
securities actively traded on a national securities exchange or over-the-counter
market shall not be deemed, in and of itself, to violate the prohibitions of
this Section.
(b) directly or indirectly:
(i) induce any customer to patronize any business directly or
indirectly in competition with the business conducted by Company;
(ii) canvass, solicit or accept from any entity any such
competitive business; or
(iii) request or advise any customer to withdraw, curtail, or
cancel any such customer's business with Company;
(c) employ any person who was employed by Company at or within
twelve (12) months prior to the termination of Executive's employment or in any
manner seek to induce any such person to leave his or her employment with the
company; or
(d) directly or indirectly, in any way utilize, disclose, copy,
reproduce, or retain in his possession's any of Company's proprietary rights or
records, including, but not limited to, any of its customer lists.
(e) If Executive is terminated for any reason other than 3.4 (c)
(iii) above, to the extent Company enforces these rights on Executive, while
these restrictions are enforced by Company, Company shall continue to pay
Executive the equivalent of his base monthly salary.
Executive agrees and acknowledges that the restrictions contained
in this Section 5.3are reasonable in scope and duration and are necessary to
protect Company after the termination of Executive's employment. If a court
adjudges any provision of this Section as applied to any party or to any
circumstance to be invalid or unenforceable, same will in no way affect any
other circumstance or the validity or enforceability of any other provision of
this Agreement. If any such provision, or any part, thereof, is held to be
unenforceable because of the duration of such provision or the area covered
thereby, the parties agree that the court making such determination shall have
the power to reduce the duration and/or area of such provision, and/or to delete
specific words or phrases, and in its reduced form, such provision shall then be
enforceable and shall be enforced. The parties agree and acknowledge that the
breach of this Section will cause irreparable damage to Company and upon breach
of any provision of this Section, Company shall be entitled to injunctive
relief, specific performance or other equitable relief; provided, however, that
this shall in no way limit any other remedies which Company may have including,
without limitation, the right to seek monetary damages.
5.4 Defamatory Statement. Each party agrees from the date hereof that
they shall not make any written or oral statements that are slanderous, libelous
or defamatory concerning the other party or any of his or its affiliates,
including without limitation, any or all of the Company's or affiliate's
executive officers and directors.
6. MISCELLANEOUS
6.1 No Waiver. The waiver by either party of a breach of any provision
of this Agreement shall not operate as or be construed as a waiver of any
subsequent breach thereof.
6.2 Notices. Any and all notices referred to herein shall be furnished
in writing and shall be delivered by hand or sent by registered or certified
mail, postage prepaid, to the respective parties at the following addresses) or
at such other address as either party may from time to time designate to the
other by like notice):
To the Company: President
Ventures-National Incorporated
00000 Xxx Xxxx Xxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
To Executive: Xxxxxx Xxxx
XX Xxx 000
Xxxx, XX 00000
6.3 Assignment. This Agreement may not be assigned by Executive and may
not be assigned by the Company otherwise than by operation of law. This
Agreement shall be binding upon the Company's successors and assigns.
6.4 Entire Agreement. This Agreement supersedes any and all prior
written or oral agreements between Executive and the Company and evidences the
entire understanding of the parties hereto with respect to the terms and
conditions of Executive's employment with the Company.
6.5 Governing Law. This Agreement shall be enforced in accordance with
the laws of the State of New York and shall be construed in accordance
therewith. The parties hereto agree that all actions or proceedings arising in
connection with this Agreement shall be tried and litigated exclusively in the
State and Federal courts located in the County of New York, State of New York.
The aforementioned choice of venue is intended by the parties to be mandatory
and not permissive in nature thereby precluding in the possibility of litigation
between the parties with respect to or arising out of this Agreement in any
jurisdiction other than that specified in this paragraph. Each party hereby
waives any right it may have to assert the doctrine of forum non conveniens or
similar doctrine or to object to venue with respect to any proceeding brought in
accordance with this paragraph, and stipulates that the State and Federal courts
located in the County of New York, State of New York shall have in personam
jurisdiction and venue over each of them for the purpose of litigating any
dispute, controversy, or proceeding arising out of or related to this Agreement.
Each party hereby authorizes and accepts service of process sufficient for
personal mail, return receipt requested, postage prepaid, to its address for the
giving of notices as set forth in this Agreement. Any final judgment rendered
against a party in any action of proceeding shall be conclusive as to the
subject of such final judgment and may be enforced in other jurisdictions in any
manner provided by law.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the day and year first above written.
Ventures-National Incorporated
By: /s/ Xxxx Xxxx
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Xxxx Xxxx, Director and Authorized Signatory
/s/ Xxxxxx Xxxx
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Xxxxxx Xxxx
Irrevocable Children's Trust
By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx, Trustee
