Smart Kids Group Inc. Employment Agreement
Employment
Agreement made effective as of the date of signing, by and between Smart Kids
Group Inc. a Florida corporation, with principal offices in Ft Lauderdale,
Florida, USA ("Company"), and Xxxxxxx Xxxxxxxx, Genuine Publishing, residing
in
Edmonton, Alberta, Canada ("Employee").
In
consideration of the promises and mutual covenants herein set forth, the Company
and the Employee agree as follows:
ARTICLE
1: EMPLOYMENT TERMS
Section
1.1. Employment and Term.
The
Company hereby employs the Employee, and the Employee accepts such employment,
upon the terms and conditions hereinafter set forth, for the period ("Employment
Term") commencing on and as of the date of this contract signing hereunder
and
terminating as provided in Section 1.7 hereof.
Section
1.2. Employment Services.
The
Employee shall devote appropriate working time and effort to promote the
business and affairs of the Company and its Affiliates as necessary in order
to
enable them to achieve their business objectives. The Employee's principal
assignment shall be to serve as Chief Creative Officer (CCO), reporting to
the
Board of Directors of Smart Kids Group Inc. In this capacity as an executive
of
the company, the Employee shall be responsible for and shall also perform other
duties and assignments, which are consistent with his responsibilities, which
may be reasonably assigned to him from time to time by the Board of Directors.
Nothing in this Section (1.2) shall be deemed to prevent the Employee from:
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A.
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Investing
his assets in a manner not prohibited by Section 2.5 hereof, and
in such
form or manner as shall not require any material services on his
part in
the operations or affairs of the companies or other entities in which
such
investments are made;
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B.
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Serving
on the board of directors of any other company, subject to the
prohibitions set forth in Section 2.5 hereof, provided the Board
of
Directors of the Company shall have approved such service in writing,
or;
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C.
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Engaging
in religious, charitable or other community or non-profit activities,
which do not impair his ability to fulfill his duties and responsibilities
under this Agreement.
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Section
1.3. Employment Compensation.
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A.
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Base
Salary - For
services rendered by the Employee under this Agreement, the Company
shall
pay the Employee an initial annual salary of $100,000.00 (US) per
annum,
payable in equal monthly installments (the "Base Salary") escalating
to
$120,000.00 (US) per annum when business cash flow permits and with
the
approval of the Board of Directors. Base Salary will be subject to
annual
review by the Board of Directors of the Company on or about each
January 1 thereafter for so long as this Agreement is in
effect.
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B.
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Incentive
Bonus Compensation - For
services rendered by the Employee under this Agreement, the Company,
by
action of the Board of Directors, shall establish an annual executive
incentive bonus plan in which the Employee shall participate in
recognition of the Employee's contribution to the overall performance
of
the Company (“Bonus”). Such Bonus shall be granted within ninety (90) days
following the conclusion of each calendar year commencing December
31,
2005, after assessment of the Employee’s and Company’s performance
pursuant to the criteria, terms and conditions of the bonus plan.
The
amount of any Bonus, which the Company may grant to the Employee
from time
to time shall be in addition to his Base Salary and shall, under
no
circumstances, be included in the Employee's Base
Salary.
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Section
1.4. Other Compensation: Benefits.
The
Employee will participate in stock option plans or employee benefit programs
provided by the Company and its Subsidiaries, if any.
Section
1.5. Withholding.
The
amount of payments to be made by the Company to the Employee are set forth
herein prior to the deduction of any taxes or other amounts, and all such
payments shall be made by the Company to the Employee under this Agreement
net
of any tax or other amounts required to be withheld by the Company under
applicable law.
Section
1.6. Vacation.
The
Employee shall be entitled to vacation and holiday plans under the same terms
and considerations, as they are available to all Company employees, in
accordance with Company policy.
Section
1.7. Employment Term; Termination The
Employment Term shall run indefinitely, unless terminated pursuant to the
following provisions of this Section 1.7.
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A.
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“The
Employment Term”
shall terminate:
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1.
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At
the death or 60 days after the Permanent Disability (as hereinafter
defined) of the Employee
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2.
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Immediately
at the election of the Company, for Cause (as hereinafter defined),
or;
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3.
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At
the election of the Company for Cause or the Employee upon thirty
(30)
days' prior written notice to the
other.
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“Permanent
Disability”,
for purposes of this Section 1.7, shall mean any physical or mental
incapacitation which would materially hinder the Employee from performing
the responsibilities of his assigned duties, as determined by a medical
professional of the company’s
choosing.
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“Cause",
for purposes of this Section 1.7, shall mean any of the following,
as
determined by the management of The Company:
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1.
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Refusal
of the Employee to perform his duties hereunder or other material
breach
by the Employee of the terms of this Agreement;
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2.
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Any
substantial dishonesty by the Employee in connection with the performance
of his duties hereunder; or
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3.
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Any
conviction of, or plea of guilty by, the Employee with respect to
any
crime, which conviction or plea is likely in the reasonable judgment
of
the management of the Company to adversely affect the Employee's
professional reputation, the reputation of the Company or of any
other
member of the Group or the ability of the Employee to perform his
duties
satisfactorily hereunder.
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4.
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Any
detrimental business conduct that negatively affects the Company’s
business or the work of peers.
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5.
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The
Company's right of termination pursuant to this Section 1.7 shall
be in
addition to, and shall not affect, its rights and remedies under
any other
provisions of this Agreement or under applicable law, and all such
rights
and remedies shall survive termination of this Agreement and the
employment of the Employee hereunder. Nothing herein shall be deemed
to
constitute a waiver by the Employee of any rights he may have under
applicable laws.
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6.
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In
the event of termination of employment pursuant to the terms of this
Section 1.7, the Employee shall have no right to receive any compensation
or fees for any period subsequent to the date of such termination;
except
that:
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a)
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In
the event such termination is due to death or Permanent Disability
pursuant to Section 1.7 the Company shall pay the Employee or his
estate,
as the case may be, a pro tanto portion of the Bonus, if any, for
the year
in which such termination occurs, a special 90 ninety day bonus severance,
and vesting of the current year’s stock options, if
any;
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b)
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In
the event that such termination is made by the Company pursuant to
Section
1.7 hereof, the Company agrees that during the Severance Period (as
such
term is defined below) it will continue to pay the Employee his then
current Base Salary.
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c)
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In
the event that such termination is made by the Company pursuant to
Section
1.7 hereof, the Company agrees to grant all stock options that are
vested.
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D.
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“Severance
Period”,
for purposes of this Section 1.7, shall mean the period commencing
on the
date of such termination and ending: thirty (30) calendar days
thereafter.
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E.
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“The
Obligations”
of
the Employee pursuant to Sections 2.3 and 2.4 of this Agreement shall
survive the termination for any reason of the Employment Term. The
obligations of the Employee pursuant to Section 2.5 hereof shall
survive
the termination of this Agreement as provided for in Section
2.5.
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ARTICLE
2: GENERAL PROVISIONS
Section
2.1. Expense Account and Allowance.
The
Company agrees to provide the Employee a monthly advance expense payment of
$1,000 (US) to cover general personal operating expenses such as communications
services, internet services, office supplies, shipping, etc. The Company agrees
to reimburse the Employee for all reasonable travel, entertainment and other
documented, itemized business expenses in excess of the $above $1,000 monthly
payment, incurred by him in connection with the performance of his duties under
this Agreement; provided, however, that the amount available for such travel,
entertainment, and other business expenses shall be consistent with expense
reimbursement policies adopted by the Company as in effect at the time of the
incidence of such expenses by the Employee or as may be fixed in advance by
the
Company’s Board of Directors.
Section
2.2. Location.
The
Employee shall perform services under this Agreement at the Employee’s private
office and at such other location or locations reasonably specified by the
Company. The Employee shall also make himself available to make reasonable
business trips at the Company's expense for purposes of consulting with
customers, agents, representatives and suppliers of the Company and its
Affiliates, as well as with other members of the Company's
management.
Section
2.3. Confidential Information Sensitive
Company data and information is the property of the Company, and must be
protected:
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A.
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The
Employee hereby agrees to hold and maintain confidential and private
all
papers, plans, drawings, specifications, methods, processes, techniques,
shop practices, formulae, customer lists, personnel and financial
data,
plans, trade secrets and all proprietary information belonging to
the
Company or any Affiliate thereof of which the Employee may have knowledge
or acquire knowledge whether prior to, during or after the termination
of
the Employment Term, and to maintain as confidential and secret any
new
processes, formulations, designs, devices, research data, machines
or
compositions of matter of the Company or of any of its Affiliates
or of
any persons granting rights to the Company or any of its Affiliates
revealed to the Employee or discovered, originated, made or conceived
by
the Employee in connection with the furnishing of employment and
consulting services to the Company or any of its Affiliates.
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B.
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The
Employee hereby agrees that he shall not at any time, either during
or
subsequent to the Employment Term, disclose or divulge to any person,
other than to the Company's or any of its Affiliates' officers and
other
employees as required by the Employee's duties under this Agreement
and to
third parties when required in the ordinary course of business of
the
Company, any of the information specified in Section 2.4(a) above
or any
trade or business secrets or any other confidential information belonging
to the Company or any of its Affiliates of which the Employee may
have or
acquire knowledge. Notwithstanding anything to the contrary set forth
above, the confidentiality and nondisclosure provisions contained
in this
Section 2.4 shall not apply to any information or data, if and when
such
information or data becomes a matter of public knowledge through
no act or
omission of the Employee or to any information or data which was
already
known by the Employee or the other party in question other than as
a
result of a breach of this Agreement.
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C.
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Immediately
upon the Company's request or promptly upon termination for any reason
or
expiration of this Agreement, the Employee shall deliver to the Company
all memoranda, notes, records, reports, photographs, drawings, plans,
papers or other documents made or compiled by the Employee in the
course
of his services to the Company or any of its Affiliates or made available
to the Employee during the course of his services to the Company
or any of
its Affiliates which are in the possession of or under the control
of the
Employee, and any copies or abstracts thereof, whether or not of
a secret
or confidential nature, and all of such memoranda or other documents
shall, during and after the termination of the Employment Term, be
deemed
to be and shall be the property of the
Company.
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Section
2.4. Intellectual Property.
Intellectual property is the property of the Company, and must be
protected:
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A.
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Any
and all inventions, improvements, ideas and innovations, whether
or not
patentable, which the Employee may invent, discover, originate, make
or
conceive during his services to the Company or any of its Affiliates,
whether prior to or during the Employment Term, either solely or
jointly
with others, and which in any way relate to or are or may be used
in
connection with the business of the Company or any of its Affiliates
shall
be, to the extent of the Employee's interest therein, the sole and
exclusive property of the Company or such Affiliate and the Employee's
interest therein shall be assigned by the Employee to the Company
or such
Affiliate, as the case may be, or to the Company's or such Affiliate's
nominee(s). The Employee, upon the request and at the expense of
the
Company, shall and shall use his best efforts to cause any such other
person(s) to promptly and fully disclose each and all such discoveries,
inventions, improvements, ideas or innovations to the Company, the
applicable Affiliate or any nominee(s) thereof. Further, the Employee,
upon the request and at the expense of the Company, shall and shall
use
his best efforts to cause any such other person(s) to, assign to
the
Company or the applicable Affiliate, without further compensation
therefore, all right, title and interest in and to each and all such
discoveries, inventions, improvements, ideas or innovations which
are
reduced to writings, drawings or practice within two (2) years after
the
termination of the Employment Term.
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B.
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The
Employee further agrees to execute at any time, upon the request
and at
the expense of the Company, for the benefit of the Company, any of
its
Affiliates or any nominee(s) thereof, any and all appropriate
applications, instruments, assignments and other documents, which
the
Company shall deem necessary or desirable to protect its (or any
of its
Affiliate's) entire right, title and interest in and to any of the
discoveries, inventions, improvements, ideas and innovations described
in
Section 2.5(a) hereof:
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C.
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The
Employee agrees, upon the request and at the expense of the Company
or any
person to whom the Company or any of its Affiliates may have granted
or
grants rights, to execute any and all appropriate applications,
assignments, instruments and papers, which the Company shall deem
necessary for the procurement in the United States of America and
foreign
countries of patent protection for the discoveries, inventions,
improvements, ideas or innovations to be so assigned, including the
execution of new, provisional, continuing and reissue applications,
to
make all rightful oaths, to testify in any proceeding before any
governmental authority authorized to grant or administer patent protection
or before any court, and generally to do everything lawfully possible
to
aid the Company, its Affiliates and its and their successors, assigns
and
nominees to obtain, enjoy and enforce proper patent protection for
the
discoveries, inventions, improvements, ideas or innovations conceived
or
made by him during the course of his services to the Company or any
of its
Affiliates for a period of two (2) years after the termination of
the
Employment Term.
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Section
2.5. Non-competition.
The
Company and the Employee acknowledge that the Company and its Affiliates conduct
business throughout the world and the engagement by the Employee in directly
Competitive Industries anywhere in the United States of America or Canada could
cause the Company irreparable harm. For the period commencing on the date hereof
and ending two (2) years after the termination of the Employment Term (the
"Restricted Period"), the Employee shall not:
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A.
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Except
as an officer and director of the Company and its Affiliates, utilize
intellectual property or trade secrets, gained from the Company,
which is
an asset of the Company, to engage at any place within the United
States
of America or Canada in any business substantially similar to the
business
then being conducted by the Company or its Affiliates (the "Designated
Industry"), whether directly or indirectly, for his own account or
as an
employee, partner, officer, director, consultant or holder of more
than
five percent (5%) of the equity interest in any other person, firm,
partnership or corporation
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B.
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Divert
to any competitor of the Company or its Affiliates any customer of
the
Company or its Affiliates, or
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C.
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Solicit
or encourage any officer, key employee or consultant of the Company
or its
Affiliates to leave its or their employ for alternative employment
in the
Designated Industry, or hire or offer for employment to any person
to whom
the Company or any of its Affiliates has offered employment within
the
three (3) years preceding the termination of the Employment Term.
The
Employee will continue to be bound by the terms of this Section 2.5
until
their expiration and shall not be entitled to any compensation with
respect thereto.
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Section
2.6. Severability.
If any
provision of this Agreement shall, in whole or in part, prove to be invalid
for
any reason, such invalidity shall affect only the portion of such provision
which shall be invalid, and in all other respects this Agreement shall stand
as
if such invalid provision, or other invalid portion thereof, had not been a
part
hereof. Without limiting the generality of the preceding sentence, if any
provision of Section 2.6 hereof shall be held to be invalid or unenforceable
under any applicable law, as unreasonably restrictive in duration or
geographical area or otherwise, it is the intention of the parties hereto that
such provision shall be deemed to be immediately amended to provide for such
maximum restriction as shall be determined to be reasonable and enforceable
by
the court or other body having jurisdiction; and the Company and the Employee
expressly agree that such provision, as so amended, shall be valid and
binding.
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Section
2.7. Equitable Remedies.
Each of
the parties hereto acknowledges and agrees that upon any breach by the Employee
of his obligations under Section 2.3, 2.4 or 2.5 hereof, the Company will have
no adequate remedy at law, and accordingly will be entitled to specific
performance and other appropriate injunctive and equitable relief.
Section
2.8. Assignment.
The
rights and obligations of the Company under this Agreement shall inure to the
benefit of and shall be binding upon the successors and assigns of the Company,
provided that neither this Agreement nor the rights and obligations of the
Company under this Agreement may be assigned by the Company other than to an
Affiliate of the Company. The Employee may not assign to any other person his
rights and/or obligations under this Agreement.
Section
2.9. Amendment.
This
Agreement and any term, covenant, condition or other provision hereof may be
changed, waived, discharged or terminated solely by an instrument in writing
signed by the parties hereto.
Section
2.10.
Waiver
of Breach.
The
waiver by the Company of a breach of any provision of this Agreement by the
Employee shall not operate or be construed as a waiver of any other breach
by
the Employee.
Section
2.11. Notices.
All
notices, requests, demands, consents and other communications in connection
with
this Agreement shall be in writing or by written telecommunication and shall
be
delivered personally or mailed as follows: by registered or certified mail
or by
overnight courier, postage prepaid, or sent by written telecommunication to
the
addresses of record, or, at such other address as the parties hereto may from
time to time designate in writing.
Section
2.12. Governing Law.
This
Agreement shall be governed by and construed in accordance with the laws of
Florida, US.
Section
2.13. Arbitration of Disputes.
Any
controversy or claim arising out of or relating to this Agreement or the breach
thereof shall be settled by arbitration in accordance with the laws of Florida
by two arbitrators, one of whom shall be appointed by the Company, one of whom
shall be appointed by the Employee and if agreement cannot be reached, by a
third arbitrator which shall be appointed by agreement of the first two
arbitrators. Such arbitration shall be conducted in Florida in accordance with
the rules of the prevailing Arbitration Association, except with respect to
the
selection of arbitrators which shall be as provided in this Section 2.13.
Judgment upon the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof. All fees and expenses of the arbitration process
shall be borne equally by the parties hereto regardless of the final outcome,
unless and to the extent the arbitrators shall determine that under the
circumstances the sharing of all or a part of any such fees and expenses would
be unjust.
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Section
2.14. Entire Agreement.
This
Agreement embodies the entire agreement between the Company and the Employee
relating to the subject matter hereof, and, except as otherwise expressly
provided herein, this Agreement shall not be affected by reference to any other
document.
Section
2.15. Headings, Etc.
The
headings of the sections of this Agreement have been inserted for convenience
of
reference only and shall not be deemed to be a part of this
Agreement.
Section
2.16.
Counterparts.
This
Agreement may be executed in several identical counterparts, each of which
when
executed by the parties hereto and delivered shall be an original, but all
of
which together shall constitute a single instrument. In making proof of this
Agreement, it shall not be necessary to produce or account for more than one
such counterpart.
Section
2.17.
Additional
Defined Terms:
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A.
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“Affiliate"
means any person, corporation or other business entity that directly
or
indirectly controls, or is controlled by, or is under common control
with
another person, corporation or business
entity.
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B.
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”Subsidiary"
means any corporation fifty percent (50%) or more of the capital
stock of
which having ordinary voting power for the election of directors
is owned
directly or indirectly by another corporation or business
entity.
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IN
WITNESS WHEREOF, the parties have executed this Agreement as of this written
date: August 1, 2005.
Accepted
and Agreed to:
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Employee
Signature:
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Employee
Name:
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Xxxxxxx
Xxxxxxxx
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Company
Officer Name:
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Xxxx
X. Xxxxxxxxx
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