EMPLOYMENT AGREEMENT, dated as of October 9th, 2003,
between Tango Pacific, Inc., an Oregon corporation (the
"Company"), and Xxxxx Xxxxxxxx (the
"Executive").
Introduction
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The Company recognizes that the future growth, profitability and success of the
Company's business will be substantially and materially enhanced by the
employment of the Executive by the Company.
The Company desires to employ the Executive and the Executive has
indicated his willingness to provide his services, on the terms and conditions
set forth herein.
NOW, THEREFORE, on the basis of the foregoing premises and in
consideration of the mutual covenants and agreements contained herein, the
parties hereto agree as follows:
Employment.
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The Company hereby agrees to employ the Executive and the Executive
hereby accepts employment with the Company, on the terms and subject to the
conditions hereinafter set forth. Subject to the terms and conditions contained
herein, the Executive shall serve as the Vice President of Sales and Marketing
of the Company and, in such capacity, shall report directly to the President of
sales and Marketing and shall have such duties as are typically performed by the
Vice President of Sales and Marketing a corporation, together with such
additional duties, commensurate with the Executive's position as Vice President
of sales and Marketing of the Company, as may be assigned to the Executive from
time to time by the President of the Company (the "Board of Directors");
provided, however, the President of the Company shall in its sole discretion,
have the right at any time to remove the Executive from his position as Vice
President of Sales and Marketing of the Company and in such event the President
shall, after consultation with the Executive, reasonably determine the
Executive's new title and responsibilities and to whom the Executive will
report; provided, further, that in the event of any such changes, Executive's
compensation and benefits shall remain unchanged and that the Executive's
position shall be at the senior management level. The principal location of the
Executive's employment shall be at the Company's principal executive office
located in Portland, Oregon, although the Executive understands and agrees that
he may be required to travel from time to time for business reasons. If the
Executive is elected or appointed with his consent to be a director or officer
of the Company during the term of this Agreement, he shall serve in such
capacity or capacities without additional compensation.
The Executive shall devote his best efforts and his full business time
and attention (except for permitted vacation periods and reasonable periods of
illness or other incapacity) to the business and affairs of the Company and its
Subsidiaries. Executive shall perform his duties, responsibilities and functions
to the Company and its Subsidiaries hereunder to the best of his abilities in a
diligent, trustworthy, businesslike and efficient manner.
1
For purposes of this Agreement, "Subsidiaries" shall mean any
corporation or other entity of which the securities or other ownership interests
having the voting power to elect a majority of the board of directors or other
governing body are, at the time of determination, owned by the Company directly
or through one or more subsidiaries.
Term. Unless terminated pursuant to Section 6 hereof, the Executive's
employment hereunder shall commence on the date hereof and shall continue during
the period ending on the third anniversary of the date hereof (the "Initial
Term"). Thereafter, the Employment Term shall extend automatically for
consecutive periods of one year unless either party shall provide notice of
termination not less than 30 days prior to an anniversary date of this
Agreement. The Initial Term, together with any extension pursuant to this
Section 2, is referred to herein as the "Employment Term." The Employment Term
shall terminate upon any termination of the Executive's employment pursuant to
Section 6.
Compensation. During the Employment Term, the Executive shall be
entitled to the following compensation and benefits contingent on the Transition
Period provisions described in Section 3(f):
Salary. As compensation for the performance of the Executive's services
hereunder, the Executive shall receive a salary (the "Salary") of eighty-four
thousand dollars ($84,000.00) per annum to be paid by Tango Pacific Inc. with
increases, if any, as may be approved in writing by the Board of Directors. The
Salary shall be payable in accordance with the payroll practices of Pacific
Print Works, LLC, as the same shall exist from time to time. Other than during
the Transition Period described in Section 3(f) of this Agreement, in no event
shall the Salary be decreased during the Employment Term.
Stock. The Executive is entitled to receive 500,000 warrants of stock
with the right to purchase shares at the price of $.001 of Company stock over
the course of this three-year Agreement, with said to be provided to the
Executive in periodic pro-rata over four disbursements. The initial distribution
shall take place upon the execution of this agreement followed by three equal
distributions upon each of the following anniversaries of the execution of this
document.
Benefits. The Executive shall be entitled to participate in health
insurance, pension, an automobile allowance of $450.00 per month and other
benefits provided to other senior executives of the Company on terms no less
favorable than those available to such senior executives of the Company. The
Executive shall also be entitled to the same number of vacation days, holidays,
sick days and other benefits as are generally allowed to other senior executives
of the Company in accordance with the Company's policies in effect from time to
time.
2
Tax Withholdings. All amounts payable to Executive as compensation
hereunder shall be subject to all legally required withholding by the Company.
Production Bonus- The Executive has the right to earn bonuses
based upon the following terms and conditions:
4.) On Time Delivery - The Executive shall earn a $1,000
monthly bonus upon the company delivery 85% of the orders
scheduled during the month on time and the volume of
business billed for that exceeds $500,000 in revenue earned
during the month. The bonus amount should increase to a
total of $2,000, if the monthly volume should exceed
$750,000 and the 85% on time delivery is maintained. The
bonus should increase to a total of $3,000 if the monthly
volume should exceed $1,000,000 in a month and the 85% on
time delivery is maintained.
Monthly Revenue On Time delivery rate Bonus in Dollars
per Revenue level
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$500,000 85% $1,000.00
$750,000 85% $2,000.00
$1,000,000 85% $3,000.00
5.) Production Bonus- The Executive shall earn an additional
10,000 common stock warrants if the companies revenue during
a month exceeds $500,000 in revenue earned during the month,
the bonus amount should increase to a total of 15,000 common
stock warrants, if the monthly volume should exceed $750,000
and increase to a total 20,000 common stock warrants if the
monthly volume should exceed $1,000,000 in a month.
Exclusivity. During the Employment Term, the Executive shall devote his
full time to the business of the Company, shall faithfully serve the Company,
shall in all respects conform to and comply with the lawful and reasonable
directions and instructions given to him by the Chief Executive Officer in
accordance with the terms of this Agreement, shall use his best efforts to
promote and serve the interests of the Company and shall not engage in any other
business activity, whether or not such activity shall be engaged in for
pecuniary profit, except that the Executive may (i) participate in the
activities of professional trade organizations related to the business of the
Company, (ii) engage in personal investing activities, and (iii) participate in
the activities set forth on Schedule I; provided that activities set
forth in these clauses (i), (ii) and (iii), either singly or in the aggregate,
do not interfere in any material respect with the services to be provided by the
Executive hereunder.
3
Reimbursement for Expenses. The Executive is authorized to incur
reasonable expenses in the discharge of the services to be performed hereunder,
including expenses for travel, entertainment, lodging and similar items in
accordance with the Company's expense reimbursement policy, as the same exists
from time to time. The Company shall reimburse the Executive for all such proper
expenses upon presentation by the Executive of itemized accounts of such
expenditures in accordance with the financial policy of the Company, as in
effect from time to time.
Termination and Default.
Death. The Executive's employment shall automatically terminate upon his
death and upon such event, the Executive's shall be entitled to receive the
amounts accrued but not paid to the Executive through the date of the
Executive's death.
Disability. If the Executive is unable to perform the duties required of
him under this Agreement because of illness, incapacity, or physical or mental
disability, the Employment Term shall continue and the Company shall pay all
compensation required to be paid to the Executive hereunder, unless the
Executive is unable to perform the duties required of him under this Agreement
due to such disability for an aggregate of 120 days (whether or not consecutive)
during any 12-month period during the term of this Agreement.
Cause. The Company may terminate the Executive's employment at any time,
with or without Cause. In the event of termination pursuant to this Section 6(c)
for Cause, the Company shall deliver to the Executive written notice setting
forth the basis for such termination, which notice shall specifically set forth
the nature of the Cause which is the reason for such termination. Termination of
the Executive's employment hereunder shall be effective upon delivery of such
notice of termination. For purposes of this Agreement, "Cause" shall mean: (i)
any material breach of this Agreement by the Executive, but only if such
material breach shall not have been corrected by the Executive within 30
business days of receipt by the Executive of written notice from the Company of
the occurrence of such material breach; (ii) the Executive's repeated failure
(except where due to a disability contemplated by subsection (b) hereof),
neglect or refusal to perform his duties hereunder; (iii) any willful or
intentional act or omission by the Executive that has the effect of injuring the
reputation or business of the Company or its affiliates in any material respect;
(iv) any habitual lateness or continued or repeated absence from the Company,
unless such lateness or absence is (A) approved or excused by the Board of
Directors or (B) is the result of the Executive's illness, disability or
incapacity (in which event the provisions of Section 6(b) hereof shall control);
(v) use of illegal drugs by the Executive or repeated drunkenness; (vi) the
Executive being convicted of, or pleading guilty or nolo contendere to a felony,
misdemeanor (other than, if applicable, minor traffic violations) or crime of
moral turpitude; or (vii) the commission by the Executive of an act of
dishonesty, fraud or embezzlement against the Company. The determination as to
the occurrence of any event, act or omission enumerated in this Section 6(c)
shall solely be made by the Board of Directors acting in good faith.
4
Good Reason. The Executive may terminate his employment for "Good Reason"
following a Substantial Breach (as hereinafter defined), but only if such
Substantial Breach shall not have been corrected by the Company within 30 days
of receipt by the Company of written notice from the Executive to the Chief
Executive Officer of the occurrence of such Substantial Breach, which notice
shall specifically set forth the nature of the Substantial Breach which is the
reason for such resignation. The term "Substantial Breach" means (i) the failure
by the Company to pay to the Executive the Salary 3(a) and 3(b) hereof; (ii) the
failure by the Company to allow the Executive to participate in the Company's
employee benefit plans generally available from time to time to senior
executives of the Company; or (iii) the failure of any successor to all or
substantially all of the business and/or assets of the Company to assume this
Agreement; provided, however, that the term "Substantial Breach" shall not
include a termination of the Executive's employment hereunder pursuant to
Section 6(a), (b) or (c) hereof. The date of termination of the Executive's
employment under this Section 6(d) shall be the effective date of any
resignation specified in writing by the Executive, which shall not be less than
30 days after receipt by the rs of written notice of such resignation; provided
that such resignation shall not be effective pursuant to this Section
6(d), and the Substantial Breach shall be deemed to have been cured, if such
Substantial Breach is corrected by the Company during such 30-day period.
Payments. In the event that the Executive's employment terminates for
any reason, the Company shall pay to the Executive all amounts accrued but
unpaid hereunder through the date of termination in respect of Salary or
unreimbursed expenses. In the event the Executive's employment is terminated by
the Company without Cause or by the Executive with Good Reason, in addition to
the amounts specified in the foregoing sentence, (i) the Executive shall
continue to receive the Salary (less any applicable withholding or similar
taxes) at the rate in effect hereunder on the date of such termination
periodically, in accordance with the Company's prevailing payroll practices, for
a period of 6 months following the date of such termination (the "Severance
Term"), (ii) to the extent permissible under the Company's health plans, the
Executive shall continue to receive any health benefits provided to him as of
the date of such termination in accordance with Section 3(c) hereunder during
the Severance Term; provided, however, the Company's obligations pursuant to
this sentence shall be contingent upon the Executive signing a release agreement
reasonably satisfactory to the Company, that releases the Company, its officers,
directors, employees, stockholders and affiliates from all claims and
liabilities through the termination date other than the payment obligations in
this Section 6(e). In the event the Executive accepts other employment or
engages in his own business prior to the last date of the Severance Term, the
Executive shall forthwith notify the Company and the Company shall be entitled
to set off from amounts due the Executive under this Section 6(e) the amounts
paid to the Executive in respect of such other employment or business activity.
Amounts owed by the Company in respect of the Salary or reimbursement for
expenses under the provisions of Section 5 hereof shall, except as otherwise set
forth in this Section 6(e), be paid promptly upon any termination.
Notwithstanding the foregoing, all payments by the Company pursuant to the
second sentence of this Section 6(e) may be immediately terminated and recovered
by the Company in the event the Executive materially breaches Sections 7 or 8 of
this Agreement.
5
Survival of Operative Sections. Upon any termination of the Executive's
employment, the provisions of Sections 6(e) and 7 through 20 of this Agreement
shall survive to the extent necessary to give effect to the provisions thereof.
Secrecy and Non-Competition.
No Competing Employment. The Executive acknowledges that the agreements
and covenants contained in this Section 7 are essential to protect the value of
the Company's business and assets and by his current employment with the Company
and its Subsidiaries, the Executive has obtained and will obtain such knowledge,
contacts, know-how, training and experience and there is a substantial
probability that such knowledge, know-how, contacts, training and experience
could be used to the substantial advantage of a competitor of the Company and to
the Company's substantial detriment. Therefore, the Executive agrees that for
the period commencing on the date of this Agreement and ending on the 24 month
anniversary of the termination of the Executive's employment hereunder (such
period is hereinafter referred to as the "Restricted Period") with respect to
any geographical area in which the Company or its Subsidiaries engage or plan to
engage in business during the Employment Term, the Executive shall not
participate or engage, directly or indirectly, for himself or on behalf of or in
conjunction with any person, partnership, corporation or other entity, whether
as an employee, agent, officer, director, shareholder, partner, joint venturer,
investor or otherwise, in any business activities if such activity consists of
any activity undertaken or expressly contemplated to be undertaken by the
Company or any of its Subsidiaries or by the Executive at any time during the
Employment Term.
Nondisclosure of Confidential Information. The Executive, except in
connection with his employment hereunder, shall not disclose to any person or
entity or use, either during the Employment Term or at any time thereafter, any
information not in the public domain or generally known in the industry, in any
form, acquired by the Executive while employed by the Company or any predecessor
to the Company's business or, if acquired following the Employment Term, such
information which, to the Executive's knowledge, has been acquired, directly or
indirectly, from any person or entity owing a duty of confidentiality to the
Company or any of its Subsidiaries or affiliates or any non-public third party
information which is subject to an obligation of confidentiality to which the
Company is bound, relating to the Company, its Subsidiaries or affiliates or any
non-public third party information which is subject to an obligation of
confidentiality to which the Company is bound, including but not limited to
information regarding customers, vendors, suppliers, trade secrets, training
programs, manuals or materials, technical information, contracts, systems,
procedures, mailing lists, know-how, trade names, improvements, price lists,
financial or other data (including the revenues, costs or profits associated
with any of the Company's products or services), business plans, code books,
invoices and other financial statements, computer programs, software systems,
databases, discs and printouts, plans (business, technical or otherwise),
customer and industry lists, correspondence, internal reports, personnel files,
sales and advertising material, telephone numbers, names, addresses or any other
compilation of information, written or unwritten, which is or was used in the
business of the Company or any Subsidiaries or affiliates thereof. The Executive
agrees and acknowledges that all of such information, in any form, and copies
and extracts thereof, are and shall remain the sole and exclusive property of
the Company, and upon termination of his employment with the Company, the
Executive shall return to the Company the originals and all copies of any such
information provided to or acquired by the Executive in connection with the
performance of his duties for the Company, and shall return to the Company all
files, correspondence and/or other communications received, maintained and/or
originated by the Executive during the course of his employment.
6
No Interference. During the Restricted Period, the Executive shall not,
whether for his own account or for the account of any other individual,
partnership, firm, corporation or other business organization (other than the
Company), directly or indirectly solicit, endeavor to (i) induce or attempt to
induce any employee of the Company or any Subsidiary to leave the employ of the
Company or such Subsidiary, or in any way interfere with the relationship
between the Company or any Subsidiary and any employee thereof, (ii) hire any
person who was an employee or manager of the Company or any Subsidiary at any
time during the Employment Term or (iii) induce or attempt to induce any
customer, supplier, licensee, licensor, franchisee or other business relation of
the Company or any Subsidiary to cease doing business with the Company or such
Subsidiary, or in any way interfere with the relationship between any such
customer, supplier, licensee or business relation and the Company or any
Subsidiary (including, without limitation, making any negative or disparaging
statements or communications regarding the Company or its Subsidiaries).
Inventions, etc. The Executive hereby sells, transfers and assigns to
the Company or to any person or entity designated by the Company all of the
entire right, title and interest of the Executive in and to all inventions,
ideas, disclosures and improvements, whether patented or unpatented, and
copyrightable material, made or conceived by the Executive, solely or jointly,
during his employment by the Company which relate to methods, apparatus,
designs, products, processes or devices, sold, leased, used or under
consideration or development by the Company, or which otherwise relate to or
pertain to the business, functions or operations of the Company or which arise
from the efforts of the Executive during the course of his employment for the
Company. The Executive shall communicate promptly and disclose to the Company,
in such form as the Company requests, all information, details and data
pertaining to the aforementioned inventions, ideas, disclosures and
improvements; and the Executive shall execute and deliver to the Company such
formal transfers and assignments and such other papers and documents as may be
necessary or required of the Executive to permit the Company or any person or
entity designated by the Company to file and prosecute the patent applications
and, as to copyrightable material, to obtain copyright thereof. Any invention
relating to the business of the Company and disclosed by the Executive within
one year following the termination of his employment with the Company shall be
deemed to fall within the provisions of this paragraph unless proved to have
been first conceived and made following such termination.
7
Enforcement. The Executive acknowledges and agrees that the covenants set
forth in Section 7 hereof are reasonable and valid in geographical and temporal
scope and in all other respects. If a court of competent jurisdiction makes a
final determination that the restrictions stated in Section 7 are invalid or
unenforceable, the parties hereto agree that the maximum period, scope or
geographical area reasonable under such circumstances shall be substituted for
the stated period, scope or area.
Injunctive Relief. Without limiting the remedies available to the
Company, the Executive acknowledges that a breach of any of the covenants
contained in Section 7 hereof will result in material irreparable injury to the
Company or its Subsidiaries or affiliates for which there is no adequate remedy
at law, that it will not be possible to measure damages for such injuries
precisely and that, in the event of such a breach or threat thereof, the Company
shall be entitled to obtain a temporary restraining order and/or a preliminary
or permanent injunction, without the necessity of proving irreparable harm or
injury as a result of such breach or threatened breach of Section 7 hereof,
restraining the Executive from engaging in activities prohibited by Section 7
hereof or such other relief as may be required specifically to enforce any of
the covenants in Section 7 hereof.
Extension of Restricted Period. In addition to the remedies the Company
may seek and obtain pursuant to Section 8 of this Agreement, the Restricted
Period shall be extended by any and all periods during which the Executive shall
be found by a court to have been in violation of the covenants contained in
Section 7 hereof.
Representations and Warranties of the Executive. The Executive
represents and warrants to the Company as follows:
This Agreement, upon execution and delivery by the Executive, will be
duly executed and delivered by the Executive and (assuming due execution and
delivery hereof by the Company) will be the valid and binding obligation of the
Executive enforceable against the Executive in accordance with its terms.
Neither the execution and delivery of this Agreement, the consummation
of the transactions contemplated hereby nor the performance of this Agreement in
accordance with its terms and conditions by the Executive (i) requires the
approval or consent of any governmental body or of any other person or (ii)
conflicts with or results in any breach or violation of, or constitutes (or with
notice or lapse of time or both would constitute) a default under, any
agreement, instrument, judgment, decree, order, statute, rule, permit or
governmental regulation applicable to the Executive. Without limiting the
generality of the foregoing, the Executive is not a party to any employment,
non-competition, non-solicitation, no hire or similar agreement that restricts
in any way the Executive's ability to engage in any business or to solicit or
hire the employees of any person.
Executive hereby acknowledges and represents that he fully understands
the terms and conditions contained herein.
The representations and warranties of the Executive contained in this
Section 10 shall survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby.
8
Successors and Assigns; No Third-Party Beneficiaries. This Agreement
shall inure to the benefit of, and be binding upon, the successors and assigns
of each of the parties, including, but not limited to, the Executive's heirs and
the personal representatives of the Executive's estate; provided, however, that
neither party shall assign or delegate any of the obligations created under this
Agreement without the prior written consent of the other party. Notwithstanding
the foregoing, the Company shall have the unrestricted right to assign this
Agreement and to delegate all or any part of its obligations hereunder to any of
its Subsidiaries, affiliates and successors (including to an entity into which
the Company merges), but in such event such assignee shall expressly assume all
obligations of the Company hereunder and the Company shall remain fully liable
for the performance of all of such obligations in the manner prescribed in this
Agreement. Nothing in this Agreement shall confer upon any person or entity not
a party to this Agreement, or the legal representatives of such person or
entity, any rights or remedies of any nature or kind whatsoever under or by
reason of this Agreement.
Waiver and Amendments. Any waiver, alteration, amendment or modification
of any of the terms of this Agreement shall be valid only if made in writing and
signed by the parties hereto; provided, however, that any such waiver,
alteration, amendment or modification is consented to on the Company's behalf by
the Board of Directors. No waiver by either of the parties hereto of their
rights hereunder shall be deemed to constitute a waiver with respect to any
subsequent occurrences or transactions hereunder unless such waiver specifically
states that it is to be construed as a continuing waiver.
Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired, unless the
provisions held invalid, illegal or unenforceable shall substantially impair the
benefits of the remaining provisions hereof.
GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF OREGON APPLICABLE TO CONTRACTS MADE AND
TO BE PERFORMED ENTIRELY WITHIN SUCH STATE WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.
Notices.
All communications under this Agreement shall be in writing and shall be
delivered by hand or mailed by overnight courier or by registered or certified
mail, postage prepaid:
if to the Executive, at 00000 XX XXX XXXXXX Xxx., Xxxxxxxx, Xxxxxx 00000
or at such other address as the Executive may have furnished the Company in
writing.
9
if to the Company, at 00000 XX XXX XXXXXX Xxx., Xxxxxxxx, Xxxxxx 00000
marked for the attention of the Board of Directors, or at such other address as
it may have furnished in writing to the Executive.
Any notice so addressed shall be deemed to be given: if delivered by
hand, on the date of such delivery; if mailed by courier, on the first business
day following the date of such mailing; and if mailed by registered or certified
mail, on the third business day after the date of such mailing.
Section Headings. The headings of the sections and subsections of this
Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof, affect the meaning or interpretation of this
Agreement or of any term or provision hereof.
Entire Agreement. This Agreement constitutes the entire understanding
and agreement of the parties hereto regarding the employment of the Executive.
This Agreement supersedes all prior negotiations, discussions, correspondence,
communications, understandings and agreements between the parties relating to
the subject matter of this Agreement including any prior oral or written
Employment Agreement between the Company and the Executive (the "Existing
Employment Agreement"). The Existing Employment Agreement shall be of no further
force or effect. No promises, covenants or representations of any character or
nature other than those expressly stated herein have been made to induce either
party to enter into this Agreement.
Construction. The parties hereto agree that any rule of construction to
the effect that ambiguities are to be resolved against the drafting party shall
not be applied in the construction or interpretation of this Agreement.
WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY SUIT, ACTION OR PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT.
Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original and all of which together shall be
considered one and the same agreement.
10
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
TANGO PACIFIC, INC.
By: _________________________
Name: Xxxx Xxxxx Xxxxxxxx
Title: Chief Executive Officer
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Xxxxx Xxxxxxxx
