EMPLOYMENT AGREEMENT
The Effective Date of this Agreement: FEBRUARY 1, 2006
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This Agreement is by and between GRIDLINE COMMUNICATIONS CORP. (COMPANY)
a Delaware Corporation located at 00000 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
AND Xxxxxxx Xxxxxx, (EMPLOYEE)
an individual residing at 0000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
PURPOSE OF THIS AGREEMENT
a. The Employee has acquired outstanding and special skills and abilities
and an extensive background in and knowledge of technical product sales and
distribution, New Business Development, and Sales Management and Administration.
b. The Company desires the services of the Employee, and is therefore
willing to engage his services on the terms and conditions stated below.
c. The Employee desires to be employed by the Company and is willing to do
so on those terms and conditions.
Now, therefore, in consideration of the above recitals and of the mutual
promises and conditions in this Agreement, it is agreed as follows:
1. EMPLOYEE'S DUTIES & AUTHORITY
a. Gridline shall employ the Employee as VICE PRESIDENT OF SALES, effective
February 1, 2006. At all times, the Employee shall serve under the direction of
the President, COO and shall perform such services as the President may from
time to time prescribe, and per the policies and procedures as may be described
in Gridline Communications Corporate Employee Policy Manual, whenever such a
manual is made available.
b. The Vice President of Sales shall report directly to the President, COO
and shall be responsible for managing all current sales prospects and developing
new client prospects within the scope of the Gridline Business Plan. In
addition, the Vice President of Sales shall closely communicate with the other
senior staff members to insure that what is happening within the marketplace is
consistent with the direction and activities within the Company from a
strategic, marketing, and technical perspective. The Vice President of Sales
shall provide to the President, COO a weekly status update and forecast on all
sales activities.
2. OTHER BUSINESS ACTIVITIES
During his employment, Employee shall such devote such time, interest and effort
as is reasonably required for the discharge of his duties and responsibilities
hereunder.
3. NON-COMPETITION DURING EMPLOYMENT
During the employment term, the Employee shall not, in any fashion participate
or engage in any activity or other business competitive with the Company's
business. In addition, the Employee, while employed, shall not take any action
without the Company's prior written consent to establish, form, or become
employed by a competing business on termination of employment by the Company.
The Employee's failure to comply with the provisions of the preceding sentence
shall give the Company the right (in addition to all other remedies the Company
may have) to terminate any benefits or compensation that the Employee may be
otherwise entitled to following termination of this Agreement.
4. TERM OF EMPLOYMENT
The Employee shall be employed in full time capacity for a period of Four (4)
years, effective February 16, 2006. At all times, the Employee shall serve under
the direction of the President, COO, and shall perform such services as may from
time to time be prescribed, and per the policies and procedures as may be
described in Gridline Communications Corporate Employee Policy Manual, whenever
such a manual is made available..
5. PLACE OF EMPLOYMENT
During the employment term the Employee shall perform the services required at
the Company's offices, to be located in Albuquerque, New Mexico, and from any
other location deemed feasible and appropriate for the performance of his duty.
The Employee acknowledges that the Company may from time to time or frequently,
require the Employee to travel temporarily to other locations (domestically or
internationally) to seek out, confer with, or provide service to customers of
the Company, to complete sales agreements for the benefit of the Company, and
such other purposes in the interest of the Company as determined from time to
time by the President, COO.
As the Company is asking the employee to re-locate, the Company will provide a
Re-location and temporary Housing payment, for a maximum period of six (6)
months from February 1, 2006, in an amount not to exceed $35,000 total. Such
Re-location and temporary housing expense shall be disbursed to employee in
advance of each expense, upon presentation of firm quotes from suppliers of
re-location services and housing expenses. In no event shall total
reimbursements exceed $35,000.
6. SALARY
a. The company shall pay a basic salary to the Employee at the rate of
$8,000 per month, payable in equal semi-monthly installments.
b. The basic salary payable to the Employee shall be subject to review for
performance, and if performance is deemed satisfactory, basic salary may be, at
a minimum, increased annually (subject to the availability of funds), by a
performance based adjustment, and/or an inflation
based adjustment, utilizing traditional salary structures for equivalent
positions within the Company's industry and the Consumer Price Index as reported
in The Wall Street Journal or a nationally recognized newspaper.
c. Employee shall be eligible to earn an annual Performance Bonus in an
amount up to 25% of the annual base salary. Such bonus shall be weighted 50% on
corporate performance and 50% on personal performance. The bonus program and
evaluation process shall be clearly defined in a separate Annual Bonus Program
document to be available no later than the end of the current quarter.
7. STOCK OPTIONS
Employee will be granted 1,000,000 options to purchase shares of Company stock
according to the provisions of Gridline's Incentive Stock Option Plan, Such
Options shall vest in three (3) increments of 1 year with the first vesting of
50% to occur simultaneously with the acceptance and execution of this Agreement.
The balance of the share options shall vest on each of the next two (2)
anniversary dates of this Agreement. The Option strike price shall be at $0.10
per share.
8. ADDITIONAL BENEFITS
a. The Company shall provide health and term life insurance at no cost to
the Employee as soon as the Company is financially able to afford to provide
such health/life insurance benefits. Such health and life Insurance shall be at
least equal to that provided to other Employees of the Company.
b. The Company shall pay a lump sum of three (3) months severance payments
to the Employee (at his then current salary) if his employment is terminated
without cause by the Company within the first twenty-four (24) months of this
Agreement. The Company shall pay a lump sum of six (6) months severance payments
to the Employee (at his then current salary) if his employment is terminated
without cause by the Company after twenty-four (24) months of this Agreement.
9. EXPENSES
The Company shall reimburse the Employee for reasonable expenses incurred in
connection with the Employee's performance of his duties including travel
expenses, food, and lodging while away from home.
10. EMPLOYEE'S RIGHT OF OWNERSHIP
All inventions conceived or developed by the Employee during the term of this
Agreement shall remain the property of the Company.
11. INDEMNIFICATION BY COMPANY
The Company shall, to the maximum extent permitted by law, indemnify and hold
the Employee harmless against, and shall purchase indemnity insurance, if
available, and pending the
availability of funds, on behalf of the Employee in the amount of $1,000,000 for
expenses, including reasonable attorney fees, judgments, fines, settlements, and
other amounts actually and reasonably incurred in connection with any proceeding
arising by reason of the Employee's employment by the Company. The Company shall
advance to the Employee any expense incurred in defending any such proceeding to
the maximum extent permitted by law.
Further, the Company will acquire and maintain the appropriate Directors and
Officers insurance at the Company's expense.
12. TERMINATION OF EMPLOYMENT
The Company and Employee agree that Employee's employment hereunder may be
terminated by the Employee resigning or by the Company's declaration of
termination with or without "Cause" at any time, subject to the terms of this
SECTION 12. Such termination shall be effective upon delivery of written notice
from the acting party to the other of its election to terminate employment
pursuant to this SECTION 12.
a. DEFINITION OF "CAUSE". When used in connection with the termination of
employment with the Company, "CAUSE" shall mean: (i) Employee's material breach
of his obligations under this Agreement; (ii) the Employee's failure to adhere
to any written Company policy after the Employee has been given a reasonable
opportunity to comply with such policy or cure his failure to comply; (iii) the
conviction of, or the indictment for (or its procedural equivalent), or the
entering of a guilty plea or plea of no contest with respect to, a felony, the
equivalent thereof, or any other crime with respect to which imprisonment is a
possible punishment; (iv) the commission by the Employee of an act of fraud upon
the Company or any of its affiliates; (v) the misappropriation (or attempted
misappropriation) of any funds or property of the Company or any of its
affiliates by the Employee; (vi) the failure by the Employee to perform duties
assigned to him after reasonable notice and opportunity to cure such
performance; (vii) the engagement by the Employee in any direct, material
conflict of interest with the Company without compliance with the Company's
conflict of interest policy, if any, then in effect; (viii) the engagement by
the Employee, without the written approval of the Board of Directors, in any
activity that competes with the business of the Company or any of its affiliates
or that would result in a material injury to the Company or any of its
affiliates; (ix) the engagement by the Employee in any activity that would
constitute a material violation of the provisions of the Company's Xxxxxxx
Xxxxxxx Policy or Business Ethics Policy, if any, then in effect, or (x) the
failure by the Employee to sign any lock-up letters, standstill agreements, or
other similar documentation required by an underwriter in connection with a
public offering of securities by the Company or to take other actions reasonably
related thereto as requested by the Board of Directors.
b. TERMINATION FOR CAUSE OR RESIGNATION. If the Company terminates the
Employee's employment for Cause or the Employee voluntarily resigns, the Company
shall pay the Employee's base salary earned through the date of termination, but
all rights to any other compensation or benefits arising hereunder, shall be
canceled and terminated in all respects concurrently with such termination of
employment; provided that the Employee may elect to continue to participate, at
Employee's own expense, in such health insurance and other benefits as to which
the opportunity for continuing participation is mandated by applicable law.
Employee may terminate employment under this Agreement at any time by giving the
Company 30 days' prior written notice of his intention to terminate employment.
c. TERMINATION WITHOUT CAUSE. In the event that the Employee's employment
is terminated by the Company without Cause, subject to the terms of this
Agreement, the Company will pay to the Employee that amount as defined in
Section 8. b. above together with any earned and unpaid compensation and accrued
vacation time prior to termination, in periodic payments in accordance with the
Company's customary payroll practices, and (ii) the stock options granted to the
Employee pursuant to SECTION 7 hereof shall immediately vest. If the Employee is
terminated by the Company without Cause, the Company shall also continue to
provide benefits, in the kind and amounts provided to its employees generally,
for the same period as is specified in Section 8.b. above, following the date of
termination, including continuation of any Company-paid benefits provided
pursuant hereto, for the Employee and Employee's spouse, but will be subject to
immediate termination to the extent Employee receives benefits under another
similar benefit plan; provided that the Employee may elect to continue to
participate, at Employee's own expense, in such health insurance and other
benefits as to which the opportunity for continuing participation is mandated by
applicable law.
d. TERMINATION UPON DEATH; DISABILITY. If the Employee becomes disabled
because of sickness, physical or mental disability, or any other reason, so that
it reasonably appears that he will be unable to complete his duties under this
Agreement, the Company shall have the option to immediately terminate this
Agreement by giving written notice of termination to the Employee. Such
termination shall be without prejudice to any right or remedy to which the
Company may be entitled either at law, in equity, or under this Agreement. If
the Company terminates this Agreement as provided in this paragraph, the Company
will pay the Employee as severance pay an amount equal to three months of
Employee's then current base salary plus a portion of the Employee's cash bonus,
proportional to the number of months of Employee's employment with the Company
during the calendar year in which termination occurs. If Employee should die
during the term of this Agreement, Employee's employment will terminate
immediately and the Company will pay the Employee's estate an amount equal to
three months compensation at Employee's then current base salary.
e. TERMINATION OR ASSIGNMENT ON MERGER. In the event of a merger where the
Company is not the surviving entity, or of a sale of all or substantially all of
the Company's assets, the Company may, at its sole option (1) assign this
Agreement and all rights and obligations under it to any business entity that
succeeds to all or substantially all of the Company's business through that
merger or sale of assets, or (2) on at least 30 days' prior written notice to
the Employee, terminate this Agreement effective on the date of the merger or
sale of assets with the immediate payments of all compensation due under this
contract without regard to vesting, or length of employment, or additional
performance of duties. This paragraph does not preclude other compensation
arrangements that may be negotiated with respect to such change of ownership.
13. NON-DISCLOSURE AFTER TERMINATION
Because of his employment by the Company, the Employee will have access to trade
secrets and confidential information about the Company, its products, its
customers, and its methods of doing business. In consideration of his access to
this information, the Employee agrees that for a period of not less than two
years after termination of his employment, he will not disclose such trade
secrets or confidential information.
14. DISPUTE MEDIATION; JURISDICTION AND VENUE; INJUNCTIVE RELIEF; CHOICE OF LAW
a. Should any dispute arise regarding any matter related to Employee's
employment or the termination of such employment, including without limitation
the performance of or interpretation of this Agreement or any of its terms, and
prior to the institution of any legal proceeding, the parties shall first submit
the dispute to a one day session of voluntary, nonbinding mediation
(non-minitrial), in which the parties will participate in good faith, pursuant
to the dispute resolution rules of the Texas Civil Practice and Remedies Code.
The mediation shall be conducted in Houston, Texas. In the event the parties are
unable to agree on a single mediator, then each party shall select a mediator
and such mediators will conduct a joint mediation. Each party shall bear
one-half of the cost of a single mediator and, in the event of a joint
mediation, each party shall bear the cost of the mediator selected by that
party.
b. Exclusive venue for any dispute between any of the parties hereto or
any claim by a party against another party arising out of or relating to this
Agreement or relating to any alleged breach thereof shall be the courts of
competent jurisdiction situated in Xxxxxx County, Texas.
c. Employee understands and agrees that the Company shall suffer
irreparable harm in the event that Employee breaches any of Employee's
obligations under this Agreement and that monetary damages shall be inadequate
to compensate the Company for such breach. Accordingly, Employee agrees that, in
the event of a breach or threatened breach by Employee of any of the provisions
of this Agreement, the Company, in addition to and not in limitation of any
other rights, remedies or damages available to the Company at law or in equity,
shall be entitled to a temporary restraining order, preliminary injunction and
permanent injunction in order to prevent or to restrain any such breach by
Employee, or by any or all of Employee's partners, co-venturers, employers,
employees, servants, agents, representatives and any and all persons directly or
indirectly acting for, on behalf of or with Employee.
d. THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS, EXCLUDING ANY LAW, RULE OR
PRINCIPLE WHICH MIGHT REFER TO THE SUBSTANTIVE LAW OF ANOTHER JURISDICTION, WILL
GOVERN THE INTERPRETATION, VALIDITY AND EFFECT OF THIS AGREEMENT WITHOUT REGARD
TO THE PLACE OF EXECUTION OR THE PLACE FOR PERFORMANCE THEREOF.
15. ENTIRE AGREEMENT
This Agreement contains the entire Agreement between the parties and supersedes
all prior oral and written Agreements, understandings, commitments, and
practices between the parties. No amendments to this Agreement may be made
except by a writing signed by both parties.
16. NOTICES
Any notice to the Company required or permitted under this Agreement shall be
given in writing to the Company, either by personal service or by registered or
certified mail, postage prepaid, addressed to President, COO, Gridline
Communications holdings, Inc., at its then principal place of business. Any such
notice to the Employee shall be given in a like manner and, if mailed, shall be
addressed to the Employee at his home address then shown in the Company's files.
For the purpose of determining compliance with any time limit in this Agreement,
a notice shall be deemed to have been duly given (1) on the date of service, if
served personally on the party to
whom notice is to be given, or (2) on the second business day after mailing, if
mailed to the party to whom the notice is to be given in the manner provided in
this section.
17. SEVERABILITY
If any provision of this Agreement is held invalid or unenforceable, the
remainder of this Agreement shall nevertheless remain in full force and effect.
If any provision is held invalid or unenforceable with respect to particular
circumstances, it shall nevertheless remain in full force and effect in all
other circumstances.
UNDERSTOOD, AGREED & APPROVED
Executed by the parties as of the Effective Date first written above.
Company: Gridline Communications Corp. Employee: Xxxxxxx Xxxxxx
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/s/ Xxxxx Xxxxxx
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By Employee Signature
President, COO/CTO
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