EXHIBIT 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") made and entered into this 1st day
of March, 2008 (the "Effective Date"), by and between CHINA WI MAX
Communications, INC., a Nevada corporation (the "Company") and Xxxxx Xxxxxxxx
(the "Executive").
W I T N E S S E T H:
WHEREAS, the Company wishes to secure the services of the Executive subject
to the contractual terms and conditions set forth herein; and
WHEREAS, the Executive is willing to enter into this Agreement upon the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and agreements set
forth herein, the parties hereto agree as follows:
1. EMPLOYMENT. The Company hereby agrees to employ the Executive, and the
Executive hereby agrees to accept such employment with the Company, all upon the
terms and conditions set forth herein.
2. TERM OF EMPLOYMENT. Subject to the terms and conditions of this Agreement,
the Executive shall be employed for a term commencing on the Effective Date and
ending on the third (3nd) anniversary of the Effective Date (the "Term") unless
sooner terminated as provided for herein. The Term shall renew automatically for
additional one (1) year terms, unless either party gives written notice no less
than ninety (90) days prior to the expiration of the Term that it does not
intend to extend the Term.
3. DUTIES AND RESPONSIBILITIES
A. CAPACITY. During the Term, the Executive shall serve in the capacity of
Executive Director - China Business Development.
B. FULL-TIME DUTIES. During the Term, and excluding any periods of
disability, vacation or sick leave to which the Executive is entitled, the
Executive shall devote substantially all of his business time, attention and
energies to the business of the Company. During the Term, it shall not be a
violation of this Agreement for the Executive to (i) serve on corporate,
university, civic, or charitable boards or committees, (ii) deliver lectures or
fulfill speaking engagements and (iii) manage personal investments, so long as
such activities do not materially interfere with the performance of the
Executive's responsibilities as an employee of the Company in accordance with
this Agreement.
C. STANDARD OF PERFORMANCE. The Executive will perform his duties under
this Agreement with fidelity and loyalty, to the best of his ability, experience
and talent and in a manner consistent with his duties and responsibilities.
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4. COMPENSATION. A. BASE SALARY
A. During the Term, the Company shall pay the Executive a salary (the "Base
Salary") of $10,000 per month The Base Salary shall be payable in accordance
with the general payroll practices of the Company in effect from time to time.
Notwithstanding the foregoing, upon the Company's closing of additional
financing in the aggregate amount of at least $4 million, but in no event later
than December 31, 2008, the Board of Directors (the "Board") shall increase the
Executive's Base Salary to $15,000 per month. During the remainder of the Term,
the Base Salary shall be reviewed at least annually by the Board after
consultation with the Executive and may from time to time be increased (but not
decreased) as solely determined by the Board. Effective as of the date of any
such increase, the Base Salary as so increased shall be considered the new Base
Salary for all purposes of this Agreement and may not thereafter be reduced. Any
increase in Base Salary shall not limit or reduce any other obligation of the
Company to the Executive under this Agreement.
B. ANNUAL PERFORMANCE BONUS. The Executive shall be eligible for annual
discretionary bonus awards payable in cash or common stock of the Company, as so
determined solely by the Board, based on performance objectives submitted
annually by senior management and approved by the Board.
C. LONG-TERM INCENTIVES. Upon the execution of this Agreement, the Company
agrees to issue the Executive the initial option award set forth on the term
sheet attached hereto as Exhibit A. Following the initial option award, the
Executive shall be eligible for grants of stock options, restricted stock and/or
other long-term incentives in the discretion of the Board on the same basis as
other similarly situated senior executives of the Company.
D. Benefits. (1) If and to the extent that the Company maintains employee
benefit plans (including, but not limited to, pension, profit-sharing,
disability, accident, medical, life insurance, and hospitalization plans) (it
being understood that the Company may but shall not be obligated to do so);
(1) The Executive shall be entitled to participate therein in accordance
with the Company's regular practices with respect to similarly
situated senior executives. Prior to the establishment of an at least
comparable benefit program, the Company will reimburse 100% of the
Executive's family monthly medical premium upon proof of payment. The
maximum monthly payment by the Company for a family's medical
insurance, either reimbursed or Company provided will be $1200.
(2) The Executive shall be entitled to prompt, normally 15 days or less
from receipt of approved expense report, reimbursement from the
Company for reasonable out-of-pocket expenses incurred by him in the
course of the performance of his duties hereunder, upon the submission
of appropriate documentation in accordance with the practices,
policies and procedures applicable to other senior executives of the
Company.
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(3) The Executive shall be entitled to such vacation, holidays and other
paid or unpaid leaves of absence as are consistent with the Company's
normal policies available to other senior executives of the Company or
as are otherwise approved by the Board. Notwithstanding the foregoing,
vacation will be a minimum of three weeks per year, accrued monthly
beginning on January 01, 2008.
5. TERMINATION OF EMPLOYMENT. Notwithstanding the provisions of Section 2
hereof, the Executive's employment hereunder shall terminate under any of the
following conditions:
A. DEATH. The Executive's employment under this Agreement shall terminate
automatically upon his death.
B. TOTAL DISABILITY. The Company shall have the right to terminate this
Agreement if the Executive becomes Totally Disabled. For purposes of this
Agreement, "Totally Disabled" means that the Executive is not working and is
currently unable to perform the substantial and material duties of his position
hereunder as a result of sickness, accident or bodily injury for a period of
three months. Prior to a determination that Executive is Totally Disabled, but
after Executive has exhausted all sick leave and vacation benefits provided by
the Company, Executive shall continue to receive his Base Salary, offset by any
disability benefits he may be eligible to receive.
C. TERMINATION BY COMPANY FOR CAUSE. The Executive's employment hereunder
may be terminated for Cause upon written notice by the Company. For purposes of
this Agreement, "Cause" shall mean:
(1) conviction of the Executive by a court of competent jurisdiction of
any felony or a crime involving moral turpitude;
(2) the Executive's willful and intentional failure or willful and
intentional refusal to follow reasonable and lawful instructions of
the Board;
(3) the Executive's material breach or default in the performance of his
obligations under this Agreement; or
(4) the Executive's act of misappropriation, embezzlement, intentional
fraud or similar conduct involving the Company.
Executive may not be terminated for Cause pursuant to subsections (2) and (3)
above unless Executive is given written notice of the circumstances constituting
"Cause" and a reasonable period to cure such circumstances, which period shall
be thirty (30) days.
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D. TERMINATION FOR GOOD REASON. The Executive's employment hereunder may be
terminated by the Executive for Good Reason on written notice by Executive to
the Company. For purposes of this Agreement, "Good Reason" means the occurrence
of any of the following circumstances without the Executive's consent:
(1) a material reduction in the Executive's salary or benefits excluding
the substitution of substantially equivalent compensation and benefits
provided that a reduction in the level of compensation payable to a
substantial portion of the Company's employees or to substantially all
of the Company's officers as part of a unilateral cost-cutting program
of the Company will not be taken into account for acceleration or
vesting;
(2) a material diminution of the Executive's duties, authority or
responsibilities as in effect immediately prior to such diminution.
6. PAYMENTS UPON TERMINATION
A. Upon termination of Executive's employment hereunder for any reason as
so provided for in Section 5 hereof, the Company shall be obligated to pay and
the Executive shall be entitled to receive, within ten (10) days of termination,
Base Salary which has accrued for services performed to the date of termination
and which has not yet been paid. In addition, the Executive shall be entitled to
any vested benefits to which he is entitled under the terms of any applicable
Executive benefit plan or program, vested restricted stock plan and stock option
plan of the Company, and, to the extent applicable, short-term or long-term
disability plan or program with respect to any disability, or any life insurance
policies and the benefits provided by such plan, program or policies, or
applicable law as duly adopted from time to time by the Board.
B. Upon termination of Executive's employment by the Company without Cause
or by the Executive for Good Reason, the Company shall be obligated to pay and
the Executive shall be entitled to receive:
(1) all of the amounts and benefits described in Section 6.A. hereof; and
(2) a lump sum payment, within 10 days of termination, equal to three (3)
months of the Executive's Base Salary; and
(3) continued participation in all Executive welfare benefit programs of
the Company for the remainder of the Term or, if longer, until the
first anniversary of the Executive's termination of employment, as if
there had been no termination of employment.
Payments under Section 6.B., with the exception of amounts due pursuant to
Section 6.B(1), are conditioned on the execution by the Executive of a release
of all employment-related claims; provided, however, that such release shall be
contingent upon the Company's satisfaction of all terms and conditions of this
Section.
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C. Upon termination of the Executive's employment upon the death of
Executive pursuant to Section 5.A., the Company shall be obligated to pay, and
the Executive shall be entitled to receive:
(1) all of the amounts and vested benefits described in Section 6.A.;
(2) any death benefit payable under a plan or policy provided by the
Company; and
(3) continued participation by the Executive's dependents in the welfare
benefit programs of the Company for the remainder of the Term or, if
longer, until the first anniversary of the Executive's termination of
employment, as if there had been no termination of employment.
D. Upon termination of the Executive's employment upon the Disability of
the Executive pursuant to Section 5.B., the Company shall be obligated to pay,
and the Executive shall be entitled to receive:
(1) all of the amounts and vested benefits described in Section 6.A.;
(2) the Base Salary, at the rate in effect immediately prior to the date
of his termination of employment due to Disability, for the remainder
of the Term, offset by any payments the Executive receives under the
Company's long-term disability plan and any supplements thereto,
whether funded or unfunded, which is adopted by the Company for the
Executive's benefit and not attributable to the Executive's own
contributions; and
(3) continued participation by the Executive and his dependents in the
welfare benefit programs of the Company for the remainder of the Term
or, if longer, until the first anniversary of the Executive's
termination of employment, as if there had been no termination of
employment.
Payments under Section 6.D., with the exception of amounts due pursuant to
Section 6.D(1), are conditioned on the execution by the Executive or the
Executive's representative of a release of all employment-related claims;
provided, however, that such release shall be contingent upon the Company's
satisfaction of all terms and conditions of this Section.
E. Upon voluntary termination of employment by the Executive for any reason
whatsoever (other than for Good Reason as described in Section 6.B.) or
termination by the Company for Cause, the Company shall have no further
liability under or in connection with this Agreement, except to provide the
amounts set forth in Section 6.A.
F. Upon voluntary or involuntary termination of employment of the Executive
for any reason whatsoever or expiration of the Term, the Executive shall
continue to be subject to the provisions of Section 7, hereof (it being
understood and agreed that such provisions shall survive any termination or
expiration of the Executive's employment hereunder for any reason whatsoever).
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8. CONFIDENTIALITY, RETURN OF PROPERTY, AND COVENANT NOT TO COMPETE.A.
CONFIDENTIAL INFORMATION.
(1) COMPANY INFORMATION. The Company agrees that it will provide the
Executive with Confidential Information, as defined below that will
enable the Executive to optimize the performance of the Executive's
duties to the Company. In exchange, the Executive agrees to use such
Confidential Information solely for the Company's benefit. The Company
and the Executive agree and acknowledge that its provision of such
Confidential Information is not contingent on the Executive's
continued employment with the Company. Notwithstanding the preceding
sentence, upon the termination of the Executive's employment for any
reason, the Company shall have no obligation to provide the Executive
with its Confidential Information. "Confidential Information" means
any Company proprietary information, technical data, trade secrets or
know-how, including, but not limited to, research, product plans,
products services, customer lists and customers (including, but not
limited to, customers of the Company on whom the Executive called or
with whom the Executive became acquainted during the term of the
Executive's employment), markets, software, developments, inventions,
processes, formulas, technology, designs, drawings, engineering,
hardware configuration information, marketing finances or other
business information disclosed to the Executive by the Company either
directly or indirectly in writing, orally or by drawings or
observation of parts or equipment. Confidential Information does not
include any of the foregoing items which has become publicly known and
made generally available through no wrongful act of the Executive or
of others who were under confidentiality obligations as to the item or
items involved or improvements or new versions.
The Executive agrees at all times during the Term and thereafter, to
hold in strictest confidence, and not to use, except for the exclusive
benefit of the Company, or to disclose to any person or entity without
written authorization of the Board of Directors of the Company, any
Confidential Information of the Company.
(2) FORMER EMPLOYER INFORMATION. The Executive agrees that he will not,
during his employment with the Company, improperly use or disclose any
proprietary information or trade secrets of any former employer or
other person or entity and that the Executive will not bring onto the
premises of the Company any unpublished document or proprietary
information belonging to any such employer, person or entity unless
consented to in writing by such employer, person or entity.
(3) THIRD PARTY INFORMATION. The Executive recognizes that the Company has
received and in the future will receive from third parties their
confidential or proprietary information subject to a duty on the
Company's part to maintain the confidentiality of such information and
to use it only for certain limited purposes. The Executive shall hold
all such confidential or proprietary information in the strictest
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confidence and not disclose it to any person or entity or use it
except as necessary in carrying out the Executive's work for the
Company consistent with the Company's agreement with such third party.
B. RETURNING COMPANY DOCUMENTS. At the time of leaving the employ of the
Company, the Executive will deliver to the Company (and will not keep in the
Executive's possession) specifications, drawings blueprints, sketches,
materials, equipment, other documents or property, or reproductions of any
aforementioned items developed by the Executive pursuant to the Executive's
employment with the Company or otherwise belonging to the Company, its
successors or assigns.
C. NOTIFICATION OF NEW EMPLOYER. In the event that the Executive leaves the
employ of the Company, the Executive hereby grants consent to notification by
the Company to the Executive's new employer about the Executive's rights and
obligations under this Agreement.
D. SOLICITATION OF EMPLOYEES. The Executive agrees that for a period of
twenty-four (24) months immediately following the termination of the Executive's
relationship with the Company for any reason, the Executive shall not either
directly or indirectly solicit, induce or recruit any of the Company's employees
to leave their employment, or take away such employees, or attempt to solicit,
induce, recruit, encourage or take away employees of the Company, either for
himself or for any other person or entity.
E. COVENANT NOT TO COMPETE.
(1) The Executive agrees that during the course of his employment and for
twenty-four (24) months following the termination of the Executive's
relationship with the Company for any reason, the Executive will not
compete, without the prior written consent of the Company, as a
partner, employee, consultant, officer, director, manager, agent,
associate, investor, or otherwise, directly or indirectly, own,
purchase, organize or take preparatory steps for the organization of,
build, design, finance, acquire, lease, operate, manage, invest in,
work or consult for or otherwise affiliate with any business, in
competition with the Company's Chinese communications business ;
provided, however, that the beneficial ownership by Executive of up to
5% of the voting stock of any corporation subject to the periodic
reporting requirements of the Securities and Securities Exchange Act
of 1934 shall not violate this Section 7. The foregoing covenant shall
cover the Executive's activities in every part of the Territory in
which the Executive may conduct business during the term of such
covenant as set forth above. "Territory" shall mean the Peoples
Republic of China.
(2) The Executive acknowledges that he will derive significant value from
the Company's agreement in Section 7.A(1) to provide the Executive
with that Confidential Information to enable the Executive to optimize
the performance of the Executive's duties to the Company. The
Executive further acknowledges that his fulfillment of the obligations
contained in this Agreement, including, but not limited to, the
Executive's obligation neither to disclose nor to use the Company's
Confidential Information other than for the Company's exclusive
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benefit and the Executive's obligation not to compete contained in
subsection (1) above, is necessary to protect the Company's
Confidential Information and, consequently, to preserve the value and
goodwill of the Company. The Executive further acknowledge the time,
geographic and scope limitations of the Executive's obligations under
subsection (1) above are reasonable, especially in light of the
Company's desire to protect its Confidential Information, and that the
Executive will not be precluded from gainful employment if the
Executive is obligated not to compete with the Company during the
period and within the Territory as described above.
(3) The covenants contained in subsection (1) above shall be construed as
a series of separate covenants, one for each city, county and state of
any geographic area in the Territory. Except for geographic coverage,
each such separate covenant shall be deemed identical in terms to the
covenant contained in subsection (1) above. If, in any judicial
proceeding, a court refuses to enforce any of such separate covenants
(or any part thereof), then such unenforceable covenant (or such part)
shall be eliminated from this Agreement to the extent necessary to
permit the remaining separate covenants (or portions thereof) to be
enforced. In the event the provisions of subsection (1) above are
deemed to exceed the time, geographic or scope limitations permitted
by Nevada law, then such provisions shall be reformed to the maximum
time, geographic or scope limitations, as the case may be, then
permitted by such law.
F. REPRESENTATIONS. The Executive agrees to execute any proper oath or
verify any proper document required to carry out the terms of this Agreement.
The Executive represents that his performance of all the terms of this Agreement
will not breach any agreement to keep in confidence proprietary information
acquired by the Executive in confidence or in trust prior to the Executive's
employment by the Company. The Executive has not entered into, and the Executive
agrees that he will not enter into, any oral or written agreement in conflict
herewith.
9. ARBITRATION. Any dispute or controversy arising under or in connection with
this Agreement (other than any dispute or controversy arising from a violation
or alleged violation by the Executive of the provisions of Section 7) shall be
settled exclusively by final and binding arbitration in Denver, Colorado, in
accordance with the Employment Arbitration Rules of the American Arbitration
Association ("AAA"). The arbitrator shall be selected by mutual agreement of the
parties, if possible. If the parties fail to reach agreement upon appointment of
an arbitrator within thirty days following receipt by one party of the other
party's notice of desire to arbitrate, the arbitrator shall be selected from a
panel or panels of persons submitted by the AAA. The selection process shall be
that which is set forth in the AAA Employment Arbitration Rules then prevailing,
except that, if the parties fail to select an arbitrator from one or more
panels, AAA shall not have the power to make an appointment but shall continue
to submit additional panels until an arbitrator has been selected. This
agreement to arbitrate shall not preclude the parties from engaging in
voluntary, non-binding settlement efforts including mediation. 10. NOTICES All
notices and other communications hereunder shall be in writing and shall be
given (and shall be deemed to have been duly given upon receipt) by delivery in
person, by registered or certified mail (return receipt requested and with
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postage prepaid thereon) or by facsimile transmission to the respective parties.
CHINA WI MAX Communications, INC.
Xx. Xxxxx Xxxxxxxx
00000 X. Xxxx Xxxxxxxxxx Xx.
Mequon, WI. 53092
Xxxxx Xxxxxxxx: Chairman of the Board
if to the Executive:
Xxxxx Xxxxxxxx
000 Xxxxxxx Xx. Xxx. 0,
Xxxxxxxxxxx, XX 00000
11. AMENDMENT; WAIVER. The terms and provisions of this Agreement may be
modified or amended only by a written instrument executed by each of the parties
hereto, and compliance with the terms and provisions hereof may be waived only
by a written instrument executed by each party entitled to the benefits thereof.
No failure or delay on the part of any party in exercising any right, power or
privilege granted hereunder shall constitute a waiver thereof, nor shall any
single or partial exercise of any such right, power or privilege preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege granted hereunder.
12. ENTIRE AGREEMENT. This Agreement and all Exhibits attached hereto constitute
the entire agreement between the parties with respect to the subject matter
hereof and supersede all prior written or oral agreements or understandings
between the parties relating thereto.
13. SEVERABILITY. In the event that any term or provision of this Agreement is
found to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining terms and provisions hereof shall not be in any
way affected or impaired thereby, and this Agreement shall be construed as if
such invalid, illegal or unenforceable provision had never been contained
therein.
14. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors and assigns (it
being understood and agreed that, except as expressly provided herein, nothing
contained in this Agreement is intended to confer upon any other person or
entity any rights, benefits or remedies of any kind or character whatsoever).
The Executive may not assign this Agreement without the prior written consent of
the Company. Except as otherwise provided in this Agreement, the Company may
assign this Agreement to any of its affiliates or to any successor (whether by
operation of law or otherwise) to all or substantially all of its business and
assets without the consent of the Executive. For purposes of this Agreement,
"affiliate" means any entity in which the Company owns shares or other measure
of ownership representing at least 40% of the voting power or equivalent measure
of control of such entity.
15. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado (except that no effect shall
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be given to any conflicts of law principles thereof that would require the
application of the laws of another jurisdiction).
16. HEADINGS. The headings of the sections contained in this Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
17. COUNTERPARTS. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
IN WITNESS THEREOF, the Company has caused this Agreement to
be executed by its duly authorized officer and the Executive has signed this
Agreement as of the Effective Date.
CHINA WI MAX COMMUNICATIONS, INC.
-------------------------------------------
By:
EXECUTIVE
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Xxxxx Xxxxxxxx
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EXHIBIT A
TERM SHEET -- INITIAL OPTION AWARD
I. OPTIONS. Company will grant Executive an option to purchase 600,000 shares
of Company common stock, based on the fair market value as of the grant
date, which shall be the date of execution of this Agreement.
A. Fair market value shall be $0.25 per share, the price set forth in the
private placement.
B. Vested and exercisable with respect to 75,000 shares as the Company
acquires both the fiber assets and spectrum license in each of the
remaining 8 targeted cities (Hangzhou and Beijing already completed.
Vesting and exercisability will be accelerated on a Change in Control,
a termination without Cause, or a termination for Good Reason.
C. Options will have a term of 5 years.
D. Company will register the shares subject to the option on Form S-8 or
such other form as may be available, and shall provide a cashless
exercise procedure.
II. CHANGE IN CONTROL.
A. In the event of a Change in Control, Company will pay Executive a
gross-up payment to cover the excise tax, if any, imposed under
Section 4999 of the Internal Revenue Code in connection with excess
parachute payments as defined in Section 280G of the Internal Revenue
Code.
B. For purpose of the options, "Change in Control" means: (a) the
consummation of a merger or consolidation of the Company with or into
another entity or any other transaction, where the stockholders of the
Company immediately prior to such merger, consolidation or other
transaction own or beneficially own immediately after such merger,
consolidation or other transaction less than 50% of the voting power
of the outstanding securities of each of (i) the continuing or
surviving entity and (ii) any direct or indirect parent entity of such
continuing or surviving entity; (b) the sale, transfer or other
disposition of all or substantially all of the Company's assets to a
Person which is not owned or controlled by the Company or its
stockholders immediately prior to such sale, transfer or other
disposition; (c) individuals who, 30 days following the effective date
of this Agreement, constitute the Board (the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director thereafter
whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board; or (d)
any transaction as a result of which any Person is the "Beneficial
Owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing at least 50% of
the total voting power represented by the Company's then outstanding
voting securities. For purposes of this definition of Change in
Control, the term "Persons" means, acting individually or as a group,
an individual or a corporation, limited liability company,
partnership, joint venture, trust, unincorporated organization,
association, government agency or political subdivision thereof or
other entity.
