EMPLOYMENT AGREEMENT
This Agreement was entered on 10/31/97 by and between:
1.The Hartcourt Companies, a Utah corporation, NASDAQ BB Symbol: HRCT,
located at 00000 X.
Xxxxxxx XX, Xxxxxxx, XX. 00000 XXX, herein after referred to as
"HARTCOURT"; and
0.Xx. Alan V. Phan , an individual, US citizen, resides at 0000 Xxxx Xxxx
# 000 Xxxxxxx, XX. 00000 XXX,
herein after referred to as "XXXX".
WHEREAS:
Hartcourt agreed to employ Xxxx; and Xxxx accepted employment with
Hartcourt, under the following terms and conditions:
1.Term: The term of this Agreement is five (5) years, starting on January
1, 1997 through December 31, 2001. The term will be automatically
extended for an additional term of three (3) years, unless Hartcourt or
Xxxx gives written notice to the other party at least 90 days before
expiration of the term.
2.Position: Hartcourt shall employ Xxxx as the company's President and
Chief Executive Officer, to perform when and where necessary such duties
related to the overall operation of Hartcourt, and as assigned by the
Board of Directors. Xxxx will devote his best efforts in and to the
faithful performance of his duties to the exclusion of all other
employment.
3.Compensation:
a. In consideration of the services to be rendered by Xxxx
and for his duties as assigned by the
Board of Directors, Hartcourt shall pay Xxxx a annual
base salary as follows:
-For the year ending 12/31/1997 $175,000.
-For the year ending 12/31/1998 $200,000.
-For the year ending 12/31/1999 $225,000.
-For the year ending 12/31/2000 $250,000.
-For the year ending 12/31/2001 $250,000.
Payments will be made in equal monthly installments. In
the event Hartcourt does not have sufficient cash flow to
make above payments, Xxxx will accept Hartcourt's common
restricted shares for the same amount. Share price will
be calculated at 50% of market trading bid price on
January 1st of the year of the employment.
x. Xxxx will be entitled to reimbursement for all reasonable
expenses incurred by him in connection
with the performance of his duties, upon presentation of
expense reports per Hartcourt's usual
procedure. Such expenses shall not exceed $1,000. per
month without the authorization of the
Board.
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x. Xxxx will be entitled to participate and receive standard
benefits as other Hartcourt employees in similar
position, and in accordance with the benefit plans or
programs set forth by the Board, now or in the future.
These plans will include a medical insurance plan.
d. An automotive allowance up to $600. per month will be
granted to Xxxx.
4.Termination: Hartcourt may terminate this Agreement upon the occurrence
of any of the following
events;
a. Subject to Section 5(a) below, Hartcourt may terminate
such employment at any time without
good cause upon written notice to Xxxx;
b. Such employment shall terminate automatically on the
death of Xxxx;
c. Hartcourt may terminate such employment immediately upon
written notice to Xxxx for good cause. In such event,
Hartcourt shall pay to Xxxx an amount, equal to three
months Base Salary. For purpose of this Agreement, "good
cause" shall include the following circumstances:
i. If Xxxx is convicted of a felony offense;
ii. If there is a repeated and demonstrable failure
on the part of Xxxx to perform material duties
in a competent manner, and where Xxxx fails to
substantially remedy the failure within a
reasonable period of time after receiving
written notice of such failure from Hartcourt
(three written notices shall be sufficient to
establish "repeated and demonstrable failure');
iii. If Xxxx or any member of his family makes any
personal profit at Hartcourt's expense
without prior written consent of Hartcourt;
iv. If Xxxx disobeys reasonable instructions given
by the Board that are not inconsistent
with his management position.
x. Xxxx may terminate his employment hereunder upon two
months prior written notice to
Hartcourt.
5.Payments on Termination; Change of Control:
a. Upon termination of Xxxx'x employment for any reason,
Hartcourt shall pay to Xxxx, or his estate in case of his
death, any accrued unpaid Base Compensation prorated to
the effective date of termination.
b. In addition to above, in the event of termination without
good cause; or in case of Xxxx'x death; Hartcourt shall
make severance payments equal to and in the same manner
as Xxxx'x Base Compensation in effect at such time for
the remaining term of this Agreement;
c. In the event of termination with good cause, Hartcourt
shall make a severance payment equal to three months of
Base Compensation in effect at such time.
6.Covenant Not To Compete:
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Xxxx agrees that during the term of his employment, he will not,
directly or indirectly, have any ownership interest of five
percent or more in a corporation, firm, trust, association or
other entity which is in competition with Hartcourt.
7. Proprietary Information.
a. For purposes of this Agreement, "proprietary information"
shall mean any information relating to Hartcourt's
business that has not previously been publicly released
by Hartcourt; and shall include, but not limited to,
inventions, computer code, software, notes, written
concepts, drawings, designs, plans, proposals, marketing
and sales plans, financial information, customer
information, and other data, methods concepts, ideas
reasonably related to Hartcourt's business.
x. Xxxx agrees to regard and preserve as confidential all
proprietary information obtained; during
or prior to his employment term. Xxxx will not use these
information for his benefit or purpose,
nor disclose to others.
x. Xxxx agrees not to remove from Hartcourt's premises,
except in pursuing his employment duties or by written
consent of the Board, any document or object containing
proprietary information. Xxxx recognizes that all such
documents or objects, whether developed by him or others,
are the exclusive property of Hartcourt. A breach of this
provision shall be considered good cause for
8. Notices: Any notice required or permitted to be given hereunder
shall be in writing and shall be delivered
by prepaid registered or certified mail, return receipt requested.
The address for mail notices shall be
same as per first paragraph of this Agreement.
9. Governing Law; Entire Agreement:
This Agreement shall be construed according to the laws of the
State of California; and constitutes the entire understanding
between the parties, superseding and replacing all prior
understandings and agreements. This Agreement cannot be changed,
amended or terminated except by written agreement signed by both
parties.. If any of the provision of this Agreement is invalid or
unenforceable, the remainder of this Agreement shall nevertheless
remain in full force and effect.
In witness whereof, the undersigned have duly executed and
delivered this Agreement as of the date first written above.
THE HARTCOURT COMPANIES, INC.
By: /s/ Xxxxxxxx Xxxx
Corporate Secretary
XXXX X. XXXX
/s/ Xxxx X. Xxxx
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