EXHIBIT 10.8
CORPORATE OFFICER EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made between THE PATHWAYS GROUP,
INC., as Employer, and XXXX XXXXXX ("Xxxxxx," or the "Executive"), as an officer
of THE PATHWAYS GROUP, INC., a corporation organized under the laws of the State
of Washington ("Pathways" or the "Corporation"), effective November 1, 1996. The
terms and conditions of this Agreement are stated below.
I. EMPLOYMENT PROVISION.
1. Employment Positions, Responsibility, Duties and Authority.
This Corporate Officer Employment Agreement is made and
entered into between PATHWAYS and XXXX XXXXXX, its Chief
Financial Officer. The Corporation and Xxxxxx each agree that
the Corporation shall employ Xxxxxx as the Chief Financial
Officer of the Corporation at its corporate headquarters in
Woodinville, Washington, and Xxxxxx shall perform the
responsibilities and duties of, and shall have the full
authority of the officer position of Chief Financial Officer
of the Corporation for the term stated in Section II. of this
Agreement, unless sooner terminated pursuant to the provisions
of Section VIII. of this Agreement.
2. Responsibilities, Duties and Authority of Xxxxxx. Xxxxxx shall
have the full responsibilities and duties and authority of the
Chief Financial Officer of the Corporation as provided in the
Bylaws of the Corporation, as approved at a meeting of the
Board of Directors of the Corporation on October 26, 1996, and
the applicable Washington State Corporation statutes
pertaining, to business corporations.
II. TERM OF THIS AGREEMENT.
This Agreement shall have a term of three (3) years beginning November
1, 1996, and shall end October 31, 1999, unless sooner terminated
pursuant to the provisions of Section VIII. of this Agreement.
III. LIMITATION ON OUTSIDE ACTIVITIES.
Xxxxxx shall devote his full employment energies and abilities to
performance of his responsibilities and duties described in Section
1.2. of this Agreement and shall not, without the consent of the
Corporation based on a resolution of the Board of Directors of the
Corporation perform service of any kind for compensation for the
benefit of other corporations, except as described below, or except
those corporations which are related to, or are a part of or become a
part of the Pathways family of companies. It is understood and agreed
to that Pathways consents to allow Xxxxxx to continue as a board member
of Pizza Blends Inc. and shall continue
his duties as long as it does not interfere with his duties at
Pathways, or until Pathways notifies Xxxxxx that Pathways no longer
consents to Xxxxxx'x outside board duties.
IV. COMPENSATION.
1. Basic Salary. As consideration for all services to be rendered
by Xxxxxx to Pathways, Xxxxxx shall be paid $100,000 per year,
subject to annual merit increase to be determined by the Chief
Executive Officer and/or Board of Directors, but in no case to
be lower than a percentage amount equal to the most recent
annual increase, if any, in the consumer price index, as
published in the Wall Street Journal.
Xxxxxx shall also be paid an annual discretionary bonus as
determined by the Chief Executive Officer and/or Board of
Directors if such a bonus is paid to any other Pathways
executive.
2. Payment of Salary.
A. Salary. The annual salary provided for in Section
IV.1. shall be due and payable in installments by the
Corporation semi-monthly on the fifteenth (15th) day
and the first business day after the last day of each
month, which shall be established by this Agreement
as the regular payday, unless such day is a weekend
or holiday, in which event, the salary shall be due
and payable on the next business day after the
regular payday.
B. Accruals of Unpaid Salary.
(1) Salaries. Any salary payments and bonus
payments not paid by the Corporation when
due shall accrue as a corporate debt payable
to Xxxxxx, and shall be paid as soon as
possible by the Corporation and in any
event, accrued salary shall be paid to the
fullest extent possible whenever a payroll
is disbursed to other employees of Pathways.
(2) Deductions from Compensation. The
Corporation shall have the right and
responsibility to deduct all federal, state
and local government taxes and other charges
as are now in effect, if any, or which may
hereafter be enacted or required by
applicable government laws and regulations,
if any, required as deductions from
compensation of Xxxxxx as an employee.
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3. Stock Options; Vesting; Forfeiture; Acceleration.
In consideration of Xxxxxx entering into this agreement, the
Corporation agrees to issue options to purchase 20,000 shares
of common stock. The options will have an exercise price of
$1.00 per share and will vest equally over three (3) years.
The options will be issued under a stockholders plan intended
to be qualified pursuant to Section 422 of the Internal
Revenue Code of 1986 and the regulations related thereto. The
plan will expire November 1, 2001. Unexercised options awarded
to Xxxxxx hereunder shall be subject to (i) forfeiture in the
event of termination for cause pursuant to Section VIII.1. of
this Agreement, and (ii) acceleration of vesting in the event
of termination of this Agreement other than pursuant to
Section VIII.1. hereof.
V. EMPLOYMENT BENEFITS IN ADDITION TO CASH COMPENSATION.
1. Participation in Existing Company Benefit Programs.
A. Medical and Health Care Benefit Program. Xxxxxx, as
an employee, shall be entitled to receive and shall
receive all medical and health care benefits provided
by Employer to its employees, or as agreed to by
Xxxxxx and Pathways. Such benefits shall be paid for
by the Employer for Xxxxxx and for Xxxxxx'x
dependents, if any, on the terms and provisions
provided in the medical and health care benefit plan;
however, if for any reason Xxxxxx cannot qualify for
the current medical and health care benefits, the
Xxxxxx shall be entitled to obtain medical and health
care benefits coverage from whatever source is
available and the Employer shall pay the premium
charges for that coverage as an executive employee
benefit for Xxxxxx.
B. Vacation and Holiday Benefits. Xxxxxx shall be
entitled to have a paid vacation for twenty-one (21)
days each calendar year; plus all paid holidays
observed by the Corporation. Xxxxxx shall use
reasonable care in scheduling the vacation time so as
to not interfere unreasonably with Employer's
business, and Xxxxxx'x performance of his
responsibilities and duties. Notwithstanding the
aforementioned provision, Xxxxxx may, during any
annual period and with the prior approval of the
Corporation utilize forty (40) hours during normal
business hours in order to pursue continuing,
professional education. The cost of continuing
professional education courses is to be covered by
Pathways.
2. Participation in Other Employment Benefits. Xxxxxx shall be
entitled to receive all other benefits and conditions of
employment which may become available to all other executives
of the Corporation, including by way of illustration, but not
limited to, any life insurance benefits, any disability
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income continuation and any profit sharing and any retirement
income plans of any kind, whether qualified or non-qualified,
whether pre-funded or not, if any are established after the
inception date of this Agreement, and before it expires
pursuant to Section II. or sooner terminated pursuant to
Section VIII. of this Agreement.
VI. EXPENSE REIMBURSEMENT.
Expense Reimbursement Generally. Xxxxxx will be reimbursed in
accordance with the Employees' company policies for traveling,
entertainment and any other expenses reasonably incurred and related to
the performance of Xxxxxx'x duties and responsibilities on behalf of
Employer.
VII. DISABILITY COMPENSATION.
1. If Xxxxxx becomes disabled at any time, and for any number of
times, due to any cause so that he is physically unable to
perform his ordinary duties and responsibilities of the Chief
Financial Officer, pursuant to this Agreement, then Xxxxxx
shall be entitled to receive, in lieu of salary, an amount
equal to his salary, payable at the same time and in the same
manner as Xxxxxx'x salary is paid provided however, that this
benefit shall be limited to not more than a total of twelve
(12) months during the term of the Agreement.
2. Xxxxxx'x entitlement to disability income pursuant to this
Section VII. shall begin and end as determined by a
certificate issued by a qualified M.D. or D.O. licensed by the
State of Washington to practice in this state. The certificate
shall state in substance that Xxxx Xxxxxx was determined to be
disabled and unable to perform the ordinary and usual duties
of Chief Financial Officer of Pathways beginning with [date]
and Xxxxxx'x disability continues as of this [date] . Such a
certificate shall be submitted every three (3) months
beginning with the date of disability and continuing
thereafter until Xxxxxx'x disability ends and he is able to
return to work full time or his disability compensation
benefit has been fully used, which ever occurs first.
VIII. TERMINATION OF EMPLOYMENT.
1. Termination by the Corporation.
(a) Subject to clause (b) below, this Agreement may be
terminated by the Corporation in the event:
(i) the Executive has been convicted of a felony
in the jurisdiction involved; or
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(ii) the Executive willfully breaches a
substantial provision of this Agreement;
(iii) any gross negligence or intentional fraud on
the part of the Executive (which shall
exclude acts of employees or agents not
within the scope of their employment or
agency and not in response to, or subject to
supervision by, the Executive) that
materially adversely affects the business of
the Corporation;
(iv) any act by the Executive involving any
material and impermissible conflict of
interest or self dealing; or
(v) willful and continued failure by the
Executive to perform in accordance with the
direction of the Corporation's Board
(provided such direction is not unlawful).
(b) In the event of a termination pursuant to
subparagraph VIII.1(a) above, the Corporation shall
deliver to the Executive a notice setting forth a
reasonably detailed description of the breached
provision or unauthorized conduct constituting the
basis for termination, and this Agreement shall not
terminate unless the Executive fails to cure same
within 20 working days after receipt of notice. In
the event of a termination pursuant to subparagraph
VIII.1.(a)(i), (iii), (iv), or (v) above, the
Corporation shall deliver to the Executive a notice
stating which of the ground(s) it alleges for
termination of this Agreement, together with a
reasonably detailed description of such ground(s).
2. The Corporation may, at its discretion, terminate the
Executive's employment hereunder without cause. In such event,
options granted pursuant to Section IV.3. hereof shall be
deemed immediately and fully vested upon notice of termination
without cause. The Executive will continue to receive
compensation under Section IV. for up to six (6) months or
until such time as Executive secures employment elsewhere,
whichever occurs first. While Executive is receiving
compensation under Section IV., he may be called upon by the
Corporation to render services.
3. Terms and Provisions of Termination of Xxxxxx'x Employment.
Regardless of the reasons or purpose of the termination of
Xxxxxx'x Employment, the Corporation shall not and may not
terminate Xxxxxx'x employment as Chief Financial Officer
unless and until the Corporation has fully arranged for an
commenced performance of the following:
A. Payment by the Corporation of all sums then due and
owing, if any, as compensation, pursuant to Section
IV. Compensation, and/or Section VII. Disability
Compensation of this Employment Acreement.
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B. Payment by the Corporation of all sums then due and
owing, if any, pursuant to Section VI. Expense
Reimbursement of the Employment Agreement.
4. Effective Date of Xxxxxx'x Employment Termination. The
effective date of Xxxxxx'x employment termination pursuant to
this Agreement shall be as determined by the Corporation.
IX. PROPERTY RIGHTS.
1. Intellectual Property Rights. All rights, title and interest
of every kind and nature whatsoever, in and to any
intellectual property, including any inventions, patents,
trademarks, copyrights, films, scripts, ideas, creations and
properties invented, created, written, developed, furnished,
produced or disclosed by Xxxxxx in the course of rendering his
services to the Corporation under this Aorreement shall, as
between the parties hereto, be and remain the sole and
exclusive property of the Corporation for any and all purposes
and uses whatsoever, and Xxxxxx shall have no right, title or
interest of any kind or nature therein or thereto, or in and
to any results and proceeds therefrom.
2. Return of all of the Corporation's Property. Upon termination
of this Agreement, regardless of how termination may be
effected or whenever requested by the Corporation, Xxxxxx
shall immediately turn over to the Corporation all of the
Corporation's property, including all items used by Xxxxxx in
rendering services hereunder or otherwise, that may be in
Xxxxxx'x possession or under his control.
X. CONFIDENTIALITY AND NON-DISCLOSURE OF INFORMATION.
1. During Employment. The Executive agrees that during the
entire term of his employment as an employee of this
Corporation, he will not disclose to any other person,
partnership, company or corporation any confidential
information about this Corporation or its related
corporations, or the business activities or interests of this
Corporation or its related corporations, including, but not
limited to, the following, which is agreed as between the
parties to be confidential information: customer data,
customer lists, sales figures, sales projections, estimates of
any kind, sales proposals, price lists, accounting procedures,
any and all accounting records, any technology and
applications of technology developed by the Corporation before
or during his employment, EXCEPT such disclosure as is for the
benefit of or for the furthering the intent of the
Corporation, or is expressly disclosed as part of the
performance of his duties and responsibilities as Chief
Financial Officer of the Corporation.
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2. Surrender of All Confidential Information on Termination of
Employment. The Executive agrees at the time his employment
with the Corporation terminates, to tun over to the
Corporation any and all confidential information which may be
in possession, including any and all copies thereof.
3. Following Termination of Employment. The Executive agrees that
following the termination of his employment with the
Corporation, he will not disclose any confidential
information, as described in Section X.1. above, which he
obtained about the Corporation of its related corporations to
any other person, partnership, company or corporation at any
time or for any purpose.
4. Injunctive Protection of Confidential Information. The parties
recognize and agree that if Xxxxxx were to make any
unauthorized disclosure of any confidential information of the
kind described in Section X.1. above, whether during
employment or following termination of employment, whether
directly or indirectly, and whether voluntarily or under
compulsion by subpoena or other legal process, that the
disclosure would cause irreparable harm to the Corporation and
or its related corporations. Therefore, Xxxxxx and the
Corporation agree that if the Corporation believes in good
faith that Xxxxxx may be making an unauthorized disclosure or
about to make an unauthorized disclosure of confidential
information as described in Section X.1. above, whether during
his employment or after termination of his employment, and
whether voluntarily or involuntarily, then the Corporation
shall be entitled to obtain a temporary restraining order
without delay, and proceed to obtain a preliminary injunction
and permanent injunction to prevent such unauthorized
disclosure.
XI. NON-COMPETITION AFTER TERMINATION OF EMPLOYMENT.
1. Non-Competition Period -- Duration and Geographic Scope.
Xxxxxx and the Corporation recognize and acknowledge that in
his employment as Chief Financial Officer, he will become
familiar with all of the Corporation's technology,
intellectual property, intellectual property under
development, products and all of the geographic areas
throughout the world in which the Corporation already has made
marketing, efforts and sales of products and services, and he
will become knowledgeable about present and future marketing
proposals and plans for those products and services. Xxxxxx
agrees, as part of the consideration for this Employment
Agreement, that Xxxxxx will not engage directly or indirectly
in the business of manufacture or sale of any products or
services which compete with the products or services provided
by the Corporation or its related corporations for a period of
two (2) years. The parties agree that the phrase "engage
directly or indirectly in the business of manufacture or sale
of any products or services which compete with the products or
services provided by the Corporation or its related
corporations" shall include any situation or circumstance in
which Xxxxxx shall be owner, partner, officer, director or
shareholder of a
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corporation, or agent or employee or consultant of any
business entity engaged or about to become engaged in
competition with the Corporation.
2. Injunctive Relief from Competition by Xxxxxx. The parties
agree that if Xxxxxx were to violate the provisions of Section
XI.1. above, the use by Xxxxxx of the information he learned
while employed by the Corporation could enable him to engage
in basically unfair competition with the Corporation and its
related corporations, and that such competition in violation
of Section XI.1. above, probably would cause irreparable harm
to the marketing and sales success of the Corporation and its
related corporations. Therefore, if Xxxxxx violates Section
XI.1. above, the Corporation shall be entitled to obtain a
temporary restraining order without delay, and proceed to
obtain a preliminary injunction and permanent injunction
against such violations by Xxxxxx and any person, partnership,
company or corporation through which or for which he acts,
directly or indirectly, to violate Section XI.1. above.
XII. NOTICES.
1. How Sent or Delivered. Any notices sent by any party which is
intended to give written notice required by this Employment
Agreement shall be sent or delivered by sender to the intended
recipient by one or more of the following methods:
A. By certified mail, return receipt requested, postage
prepaid, to the last known address of the intended
recipient; or
B. By delivery personally to the intended recipient.
2. Effective Date of Notice. If a written notice is sent or
delivered by either of the above methods, then the effective
date of the notice for purposes of considering it to have been
received by the intended recipient shall be the earliest of
the following:
A. If by certified mail, return receipt requested, which
is delivered, then or on the date the recipient or
anyone signing for the recipient, signed the return
receipt;
B. If by certified mail, return receipt requested, which
is not delivered, then on the date five (5) business
days after the date the notice was sent.
C. If by personal delivery to the intended recipient,
then on the date the written notice was delivered
personally to the recipient.
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3. Proof of Delivery of Notice.
A. Certified Mail, Return Receipt Requested. If the
written notice was sent by certified mail, return
receipt requested, proof of sending may be shown by
the U. S. Post Office receipt for the certified mail,
return receipt requested and proof of delivery may be
shown by the signed returned receipt and proof of
attempted delivery sufficient for effective date of
notice without delivery may be shown by the returned
envelope with U. S. Post Office notations showing
attempted delivery dates and notices to the intended
recipient.
B. Personal Delivery. Personal delivery of a written
notice may be shown by a signature of the intended
recipient on a copy of the notice, together with the
legend on the copy of the notice which will read,
"Received," with the date received noted thereafter.
Personal delivery may also be shown by a sworn
statement of the person who delivered the notice,
stated that the notice was delivered to the recipient
or representative of recipient on the date of
delivery, and attaching a copy of the notice, with
reference in the sown statement to the attached copy
of the notice.
XIII. REMEDIES AVAILABLE IN EVENT OF BREACH OF AGREEMENT: VENUE.
In the event that any party breaches this Employment Agreement, the
other party shall have the right to pursue any remedies available to
the party claiming breach, including, but not limited to damages,
injunction relief and declaratory judgment, which may be available
under the laws of the State of Washington. The parties agree that any
claims shall be brought in the appropriate court(s) located in King
County, Washington, which may have jurisdiction pursuant to Washington
law.
XIV. APPLICABLE LAW.
This Employment Agreement shall be construed and interpreted and
enforceable pursuant to the laws of the State of Washington.
XV. ENTIRE AGREEMENT.
This Employment Agreement states the entire agreement between the
parties with respect to the employment of Xxxxxx by the Corporation.
This Agreement cannot be modified by any oral agreement or course of
conduct by either or both parties and any attempt at such modification
shall be null and void. This Agreement may be modified only by a
written document signed by each party.
Dated this ____ day of November, 1996.
EMPLOYEE:
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/s/ Xxxx X. Xxxxxx
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XXXX XXXXXX
THE CORPORATION:
THE PATHWAYS GROUP, INC.
By /s/ Xxxxx X. Xxxx XX
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Name:
Title:
