EXHIBIT 10.5
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made as of April 2, 2001
between Sonicport, Inc. (the "Company"), and Xxxx X. Xxxxxx ("Xx. Xxxxxx"). In
consideration of the terms and conditions herein, the parties agree as follows:
ARTICLE 1
GENERAL PROVISIONS
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Section 1.01. TERM. Xx. Xxxxxx'x employment pursuant to this Agreement
shall commence on April 2, 2001 and continue for a period of three (3) years
ending April 2, 2004.
Section 1.02. PROBATIONARY PERIOD. Xx. Xxxxxx shall be subject to a
90-day probationary period, during which time the Company shall carefully
evaluate his performance and potential to determine whether his qualifications
are commensurate with his duties.
Section 1.03. TERMINATION AT WILL. Xx. Xxxxxx'x employment pursuant to
this Agreement shall constitute employment which is terminable at will by either
Xx. Xxxxxx or the Company, with or without cause or reason, and without advance
notice or any pay in lieu of advance notice. Notwithstanding the foregoing, if
Xx. Xxxxxx'x employment is terminated in months 1-12 of the Agreement, he shall
be entitled to 12 months of salary at the rate of pay in effect at that time; if
employment is terminated in months 13-18 of the Agreement, he shall be entitled
to 18 months of salary at the rate of pay in effect at that time; if employment
is terminated after month 18 of the Agreement, he shall be entitled to the
remainder of compensation under the Agreement at time of termination, as a
severance bonus, payable in four (4) equal monthly installments following the
effective date of termination, unless the termination is due to the following:
1.03.1 Xx. Xxxxxx breaches or neglects the duties that he is required
to perform or otherwise fails to use ordinary and reasonable care in
the performance of his duties under the terms of this Agreement;
1.03.2 Xx. Xxxxxx becomes mentally or physically incapacitated or
disabled so that he will not be able to perform his duties under this
Agreement for a period of three (3) months from the commencement of
such incapacity;
1.03.3 Xx. Xxxxxx dies;
1.03.4 During Xx. Xxxxxx'x employment with the Company, be is convicted
of a felony involving moral turpitude;
1.03.5 The company becomes insolvent, makes an assignment for the
benefit of
creditors, files for or has filed against it a petition in bankruptcy,
or otherwise ceases to operate.
Section 1.04. TERMINATION OBLIGATIONS: RETURN OF COMPANY PROPERTY. Upon
termination of this Agreement, Xx. Xxxxxx shall promptly return all Company
property in his possession.
ARTICLE 2
POSITION AND DUTIES; OTHER BUSINESS ACTIVITIES
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Section 2.01. POSITION. Xx. Xxxxxx'x position shall be the President &
Chief Executive Officer for the Company. Xx. Xxxxxx hereby agrees to perform
such services and accepts such employment upon the terms and conditions herein
set forth.
Section 2.02. DUTIES. Xx. Xxxxxx shall perform such services for the
Company as may be assigned by the Company or its Board of Directors which
reasonably serve the purpose of this Agreement and/or meet the needs of Company.
Section 2.03. FULL ATTENTION TO BUSINESS. With the exception of
performing limited duties for Allstate Communications, Inc. or its affiliates,
during said employment, Xx. Xxxxxx shall devote his full business time,
energies, interest, abilities and productive efforts to the business of the
Company and its affiliates or subsidiaries. Xx. Xxxxxx shall not engage in any
activity which conflicts or interferes with his performance of duties hereunder.
Section 2.04. COVENANT NOT TO COMPETE DURING TERM. During said
employment, Xx. Xxxxxx shall comply in all respects with the Company's policies
with respect to conflicts of interest. Xx. Xxxxxx shall not, without the prior
written consent of the Board of Directors of the Company, engage in or be
interested, directly or indirectly, in any business or operation competitive
with the Company or any of Company's related or affiliated companies. For the
purpose of this paragraph, Xx. Xxxxxx shall be deemed to be interested in a
business or operation which is competitive with the Company if Xx. Xxxxxx is
interested in such business or operation as a stockholder, director, officer,
employee, agent, partner, individual proprietor, lender, consultant, or
independent contractor, excluding publicly traded companies.
Section 2.05. NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. Xx. Xxxxxx
acknowledges that in connection with this Agreement and his performance
hereunder, he may acquire or learn "Confidential Information" of the Company by
virtue of a relationship of trust and confidence between Xx. Xxxxxx and the
Company. Xx.
Xxxxxx warrants and agrees that during his said employment he shall not disclose
to anyone (other than to officers of Company or to such other persons as such
officers may designate), or use, except in the course of his employment, any
Confidential Information acquired by his in the course of or in connection with
his employment. As used herein, the term "Confidential Information" shall
include, but not be limited to: all information of any type or kind, whether or
not reduced to a writing and whether or not conceived, originated, discovered or
developed in whole or in part by Xx. Xxxxxx, which is directly related to
Company, its operations, policies, agreements with third parties, its financial
affairs and related matters, including business plans, strategic planning
information, product information, purchase and sales information and terms,
supplier negotiation points, styles and strategies, contents and terms of
contracts between the Company and suppliers, advertisers, vendors, contact
persons, terms of supplier and/or vendor contracts or particular transactions,
potential suppliers and/or vendors, or other related data; marketing information
such as but not limited to, prior, ongoing or proposed marketing programs,
presentations, or agreements by or on behalf of the Company, pricing
information, customer bonus programs, marketing tests and/or results of
marketing efforts, computer files, lists and reports, manuals and memos
pertaining to the business of the Company, lists or compilations of vendor
and/or supplier names, addresses, phone numbers, requirements and descriptions,
contract information sheets, compensation requirements or terms, benefits,
policies, and any other financial information whether about the Company,
entities related or affiliated with the Company or other key information
pertaining to the business of the Company, including but not limited to all
information which is not generally available to or known in the information
services industry (or is available only as a result of an unauthorized
disclosure) and is treated by the Company as "Confidential Information" during
the term of this Agreement, regardless of whether or not such Information is a
"trade secret" as otherwise defined by applicable law.
Section 2.06. NO SOLICITATION OF EMPLOYEES. Xx. Xxxxxx specifically
agrees that during his said employment, and for a period of two (2) years after
his termination of employment with the Company, Xx. Xxxxxx shall not, directly
or indirectly, either for himself or for any other person, firm, corporation or
legal entity, solicit any individual then employed by the Company to leave the
employment of the Company.
Section 2.07. OWNERSHIP OF WORK PRODUCT AND IDEAS. During Xx. Xxxxxx'x
said employment, any discoveries, inventions, patents, materials, licenses and
ideas relating to Xx. Xxxxxx'x services hereunder, whether or not patentable or
copyrightable and whether created by Employee during the term of this Agreement
or owned by the Company prior to or after the execution of this Agreement ("Work
Product") and all business opportunities within the industry ("Opportunities")
introduced to Xx. Xxxxxx by Company will be owned by the Company, and Xx. Xxxxxx
will have no personal interest in such, except to the extent that Xx. Xxxxxx
invests in the same or the Company allows Xx. Xxxxxx to participate in or have
other rights to such Work Product or Opportunities during the term hereof or
upon the termination of this
Agreement. Xx. Xxxxxx will, in such connection, promptly disclose any such Work
Product and Opportunities to the Company and, upon request of the Company, will
assign to the Company all right in such Work Product and Opportunities.
ARTICLE 3
COMPENSATION; BENEFITS
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Section 3.01. SALARY. The Company shall pay Xx. Xxxxxx, an annual base
salary of One Hundred Eighty Thousand Dollars ($180,000.00). Xx. Xxxxxx shall be
eligible for cost of living and merit increases.
Section 3.02. BONUS. Xx. Xxxxxx shall be eligible for a discretionary
performance bonus.
Section 3.03. STOCK OPTION PLAN ELIGIBILITY. Xx. Xxxxxx shall be
granted options, in accordance with the Company's Stock Option Agreement, on a
total of Nine Hundred Thousand (900,000) common shares of the company (AMEX:
SPO) according to the following vesting schedule:
300,000 shares Issued 120 days after employment begins at the April
10, 2001 closing bid.
The following options will be issued at an exercise price equal to the
April 10, 2001 closing bid:
300.000 shares Issued 18 months after employment begins; and
300,000 shares Issued 30 months after employment begins.
In addition, Xx. Xxxxxx shall be eligible to receive options on
additional common shares of the Company on an annual basis, pursuant to the
Company's Incentive Stock Option Plan.
Section 3.04. OTHER BENEFITS. During the term of this Agreement, and
subject to the terms and provisions of such plans or policies regarding
continuation rights, if any, Xx. Xxxxxx shall be entitled to participate in
present and future employee benefit plans which are available to the Company's
employees of similar rank and title, subject to eligibility requirements
thereunder; provided, however, the Company reserves the right to modify or
terminate such benefits at any time, without notice, and without further
recourse by Xx. Xxxxxx.
Section 3.05. EXPENSES. Xx. Xxxxxx shall be reimbursed for all normal
business expenses incurred, including business class air travel, for travel and
entertainment during the course of employment.
ARTICLE 4
MISCELLANEOUS PROVISIONS
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Section 4.01. ENTIRE AGREEMENT. This Agreement contains the entire
Agreement between the Parties and supersedes all prior oral and written
Agreements, understandings, commitments, or practices between the Parties. Other
than as expressly set forth herein, Xx. Xxxxxx and the Company acknowledge and
represent that there are no other promises, terms, conditions or representations
(verbal or written) regarding any matter relevant hereto. No supplement,
modification, or amendment of any term, provision or condition of this Agreement
shall be binding or enforceable unless evidenced in writing and executed by the
Parties.
Section 4.02. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, and the venue
of any litigation commenced hereunder shall be Los Angeles, California.
Section 4.03. INJUNCTIVE RELIEF. Xx. Xxxxxx acknowledges that his
services are of a special, unique, unusual, extraordinary and intellectual
character, which gives them a peculiar value, the loss of which cannot be
reasonably or adequately compensated in damages in an action at law. If he
should breach this Agreement in addition to its rights and remedies under
general law, the Company shall be entitled to seek equitable relief by way of
injunction or otherwise.
Section 4.04. PARTIAL INVALIDITY. If the application of any provision
of this Agreement, or any section, subsection, subdivision, sentence, clause,
phrase, word or portion of this Agreement should be held invalid or
unenforceable, the remaining provisions thereof shall not be affected thereby,
but shall continue to be given full force and effect as if the invalid or
unenforceable provision had not been included herein.
Section 4.05. NOTICES. Notices given under this Agreement may be given
by registered or certified mail, return receipt requested, or by personal
delivery to the respective addresses of the Parties. For Xx. Xxxxxx that address
shall be 00000 Xxxxxxxx Xx., Xxxxxxxxxx, Xx. 00000. For the Company, it shall be
addressed to Xx. Xxxxxxx Xxxxxx, Sonicport, Inc., 00000 Xxxxxxxx Xx.,
Xxxxxxxxxx, Xx. 00000. A mailed notice shall be deemed given two (2) business
day after mailing.
Section 4.06. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument.
Section 4.07. ASSIGNMENT. This Agreement may not be assigned or
encumbered in any way by Xx. Xxxxxx. The Company may assign this Agreement to
any successor (whether by merger, consolidation, or purchase of the Company's
stock) to all or a controlling interest in the Company's business, in which case
this Agreement shall be binding upon and inure to the benefit of such
successor(s) and assign(s).
Section 4.08. LIMITATION ON WAIVER. A waiver of any term, provision or
condition of this Agreement shall not be deemed to be, or constitute a waiver of
any other term, provision or condition herein, whether or not similar. No waiver
shall be binding unless in writing and signed by the waiving party.
Section 4.09. ATTORNEYS' FEES. In the event that any proceeding is
commenced involving the interpretation or enforcement of the provisions of this
Agreement, the Party prevailing in such proceeding shall be entitled to recover
its reasonable costs and attorneys' fees.
Section 4.10. ARBITRATION. If a dispute or claim shall arise with
respect to any of the terms or provisions of this Agreement, or with respect to
the performance by either of the parties under this Agreement, then either party
may, by notice as herein provided, require that the dispute be submitted under
the Commercial Arbitration Rules of the American Arbitration Association to an
arbitrator in good standing with the American Arbitration Association within
fifteen (15) days after such notice is given. The written decision of the single
arbitrator ultimately appointed by or for both parties shall be binding and
conclusive on the parties. Judgment may be entered on such written decision by
the single arbitrator in any court having jurisdiction and the parties consent
to the jurisdiction of the courts of the state of California for this purpose.
Any arbitration undertaken pursuant to the terms of this section shall occur in
the state of California.
Section 4.11. TAXES. Any income taxes required to be paid in connection
with the payments due hereunder shall be borne by the party required to make
such payment. Any withholding taxes in the nature of a tax on income shall be
deducted from payments due, and the party required to withhold such tax shall
furnish to the party receiving such payment all documentation necessary to prove
the proper amount
to withhold of such taxes and to prove payment to the tax authority of such
required withholding.
Section 4.12. NOT FOR THE BENEFIT OF CREDITORS OR THIRD PARTIES. The
provisions of this Agreement are intended only for the regulation of relations
among the parties. This Agreement is not intended for the benefit of creditors
of the parties or other third parties and no rights are granted to creditors of
the parties or other third parties under this Agreement.
IN WITNESS WHEREOF, this Agreement is executed in Chatsworth,
California, on the dates set forth below.
Dated: 6/7/2001 /S/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
SONICPORT, INC.
Dated: 6/7/2001 /S/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
Chairman of the Board
