EX-10.4
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the 20th day of February, 2002, at
Westminster, Colorado, between WORLD AM COMMUNICATIONS, INC., a
Florida corporation ("Corporation" or "Company" or "Employer"), and
XXXXX XXXXXXXXX, ("Employee").
In consideration of the mutual covenants, agreements and
provisions contained in this Agreement, the parties agree as follows:
EMPLOYMENT
1.0 EMPLOYMENT. Employer employs Employee as President, and
Employee accepts employment, upon the terms and conditions set forth
herein.
2.0 TERM. This Agreement shall commence effective as of
February 20,2002, and shall continue in effect for a period of three
(3) years (the "Employment Period"); unless terminated earlier, by
Company or Employee, upon prior written notice. Further, if a change
of control (as defined herein) of the Company shall have occurred
during the Employment Period, this Agreement shall continue in effect
for a period of twelve (12) months beyond the month in which such
change of control occurred.
3.0 CHANGE OF CONTROL. The term "Change of Control of the
Company" shall mean a change in control of a nature that would be
required to be reported in response to Item 5(f) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act of 1934
as in effect on the date of this Agreement or, if Item 5(f) is no
longer in effect, any regulations issued by the Securities and
Exchange Commission pursuant to the Securities and Exchange Act of
1934 which serve similar purposes; provided that, without limitation,
such change in control shall be deemed to have occurred if and when
(a) any "person" (as such term is used in Sections 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934) is or becomes a beneficial
owner, directly or indirectly, of securities of the company
representing 25% or more of the combined voting power of the company's
then outstanding securities or (b) individuals who were members of the
Board of Directors of the Company immediately prior to a meeting of
the shareholders of the Company involving a contest for the election
of directors shall not constitute a majority of the Board of Directors
following such election.
4.0 COMPENSATION. For all services to be rendered by the
Employee pursuant to his duties set forth in this Agreement, the
Employee shall be paid as compensation;
4.1. Base Salary and Considerations. A fixed salary in the
amount of $30,000 per year, payable in equal installments according to
the Company's regular payroll schedule. This salary shall be reviewed
from time to time during the term of this Agreement by the
Corporation's Board of Directors or Compensation and Benefits
Committee of the Board.
4.2. Stock Issuances. Executive shall be issued:
4.2.1. Fourteen Million Four Hundred Thousand
(14,400,000) shares of the Common Stock of the Company
pursuant to the terms of the Employee Stock Purchase
Plan ("ESSP") to be adopted by the Company and
registered under Form S-8. These shares shall vest in
equal installments, One Million Two Hundred (1,200,000)
shares quarterly over the three year Term; and
4.2.2 Fifteen Million (15,000,000) unregistered
shares of the Common Stock of the Company. Company
undertakes no obligation to register these shares.
Issuance of the shares shall be in accordance with all applicable
securities laws and any and all other terms and conditions of the
Company's ESSP to be adopted by the Company.
4.3 Employee Benefit Plans. The Employee, his dependents
and beneficiaries, shall be entitled to participate in any pension,
profit sharing, medical reimbursement, insurance or other employee
payment or benefit plan of the Employer as may be in effect from time
to time, subject to the participation standards and other terms
thereof, to the same extent as other officers under the benefit
practices of the Company.
Executive shall be entitled to a percentage equal to Fifteen
percent (15%) of the Company's net profits. Further, Executive shall
be entitled to participate in any pension or profit sharing plan or
other type of plan adopted by Company for the benefit of its officers
and/or regular employees
4.4 Cumulative Compensation. The compensation provided for
in paragraphs 4.1, 4.2 and 4.3 above, together with the perquisites
set forth in section 6.0 below, are in addition to the benefits
provided for upon termination pursuant to Section 12.0 below.
4.5 Indemnification. The Corporation hereby agrees to
indemnify, and keep indemnified in accordance with, and to the fullest
extent authorized by, the Laws of the State of Colorado as it may be
in effect from time to time, the Employee, from and against any
expenses (including attorney's fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by the Employee in
connection with any threatened, pending or completed action, suit or
proceeding, whether or not such action is by or in the right of the
Corporation or such other enterprise with respect to which the
Employee serves or has served as a director, officer or employee, by
reason of the fact that the Employee is or was a director, officer or
employee , of the Corporation, or is or was serving at the request of
the Corporation as a director, officer or employee of another
corporation, partnership, joint venture, trust or other enterprise.
The indemnification rights granted to the Employee under this
Agreement shall not be deemed exclusive of, or in limitation of, any
rights to which Employee may be entitled under the law of its state of
incorporation, the Corporation's Certification of Incorporation of By-
Laws, any other agreement, vote of stockholders or directors or otherwise.
5.0 EXPENSES. During the term hereof, the Corporation will
reimburse the Employee for any reasonable out-of-pocket expenses
incurred by the Employee in performance of service for the Corporation
under this Agreement (e.g., transportation, lodging and food expenses
incurred while traveling on Corporation business) and any other
expenses incurred by the Employee in furtherance of the Corporation's
business; provided, however, that the Employee renders to the
Corporation a complete and accurate accounting of all such expenses.
6.0 PERQUISITES. During the period of employment, Employee
shall be entitled to perquisites, including, without limitation, an
appropriate office, and fringe benefits accorded executives of equal rank.
7.0 MINIMUM COMPENSATION. Nothing in this Agreement shall
preclude the Company from amending or terminating any employee benefit
plan or practice or the provision of certain perquisites; provided,
however, that it is the intent of the parties that the Employee shall
continue to be entitled, during the period of employment, to
compensation, benefits and perquisites as set forth above at least
equal to those attached to his position on the date of this Agreement.
Nothing in this Agreement shall operate or be construed to reduce, or
authorize a reduction, without the Employee's written consent, in the
level of such compensation, benefits and perquisites.
8.0 VACATIONS. The Employee shall be entitled to a vacation
with full compensation equal to (3) weeks each year; provided,
however, that the Employee's vacation will be scheduled at such time
as will least interfere with the business of the Employer. Attendance
at a business seminar is not to be deemed a vacation; provided,
whoever, that attendance at such meetings or seminars shall be planned
so as to least interfere with the business of the Employer.
9.0 EMPLOYMENT. The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in
the employ of the Company, for the Employment Period as specified in
Section 2.0, to exercise such authority and perform such duties as are
commensurate with the authority being exercised and duties being
performed by the Executive immediately prior to the effective date of
this Agreement, which services shall be performed at the location
where the Executive was employed immediately prior to the Effective
Date of this Agreement or at such other location as the Company may
reasonably require; provided that the Executive shall not be required
to accept a location which is unreasonable in the light of the
Executive's personal circumstances. The Executive agrees that during
the Employment Period he shall devote his business time to his
executive duties as described herein and perform such duties
faithfully and efficiently.
10.0 PERFORMANCE. It is contemplated that during the period of
employment the Employee shall serve as an executive of the Company
with the office and title of President reporting directly to the Chief
Executive Officer during the period of employment, the Employee shall
hold a position of responsibility and importance and a position of
scope, with the functions, duties and responsibilities attached
thereto, at least equal to in responsibility and importance and in
scope to and commensurate with his position described in general terms
in this Section 10.0.
11.0 TERMINATION.
11.1 During the period of employment, Employee may
terminate this Agreement without cause or for cause. For the purposes
of this Section 11.1, the term "cause" shall include the occurrence of
any of the following:
11.1.1 The breach or violation by the Company of any
of the terms of this Agreement;
11.1.2. Any significant change in position, duties and
responsibilities of the Employee to which the Employee
does not consent;
11.1.3. In the event of a change in control as defined
in Section 2.0 hereof, any change in the circumstances
of employment which the Employee determines, in good
faith, results in his being unable to carry out the
duties and responsibilities attached to the position
and contemplated by the definition of that position set
forth in this Agreement.
11.2. In the event of an occurrence described in subsection
11.1.1, 11.1.2, or 11.1.3 above, the Employee shall serve written
notice of such event upon the Company, setting forth in detail the
circumstances which the Employee has determined constitutes "cause"
within any of those definitions. In the event the Company should
remedy or otherwise cure the facts constituting the cause relied upon
by the Employee within thirty (30) days after such written notice,
such fact or circumstance shall not be deemed to constitute "cause"
for which employment can be terminated within the meaning of Section
11.1 above.
11.3. During the period of employment, the Corporation may
terminate this Agreement for cause and upon 30 days written notice and
opportunity to cure being given to Employee. For the purpose of this
Section 11.3, the term "cause" shall include the occurrence of any of
the following:
11.3.1. Employee breaches or violates any of the terms
of this Agreement;
11.3.2. Employee is convicted of any felony or is
shown to have engaged in any act of dishonesty or fraud
upon the Corporation, any of its affiliated companies,
or any of its customers or clients;
11.3.3. Employee has been grossly negligent in the
performance of his employment duties or responsibilities.
11.4. During the period of employment, the Corporation may
not terminate this Agreement without cause.
11.5. This Agreement shall also terminate upon the
insolvency, bankruptcy, dissolution, or liquidation of the Corporation
or cessation of business by the Corporation for at least thirty (30)
consecutive days.
12.0 TERMINATION PAYMENTS. In the event of a Termination and
subject to the provisions of Sections 11.1.1., 11.1.2., 11.1.3. or
11.4 of this Agreement, the Company shall pay to the Executive and
provide him with the following:
12.1. the Company shall continue to pay the Executive his
salary on a monthly basis at the same rate as an amount equal to
payment at Executive's base salary rate for the remaining period of
Term, plus an amount equal to one hundred percent (100%) of
Executive's base salary. Any shares not yet vested in Employee shall
vest immediately.
12.2. During the remainder of the Employment or payment
Period, the Executive shall continue to be treated as an employee
under the provisions of any incentive compensation described in
Section 4.2. In addition, the Executive shall continue to be
entitled to all benefits and service credit for benefits under
medical, insurance, split-dollar life insurance and other employee
benefit plans, programs and arrangements of the Company described or
referred to in Section 4.3 as if he were still employed during such
period under this Agreement.
12.3. If, despite the provisions of paragraph 12.2 above,
benefits or the right to accrue further benefits under any stock
option or other incentive compensation arrangement described in
Section 4.2 shall not be provided under any such arrangement to the
Executive or his dependents, beneficiaries or estate because he is no
longer an employee of the Company, the Company shall, to the extent
necessary, pay or provide for payment of such benefits to the
Executive or his dependents, beneficiaries or estate.
13.0 DISABILITY.
13.1. If the Employee is unable to perform the Employee's
services by reason of illness or incapacity, the Employee's regular
compensation shall be continued for a period of four (4) weeks
following the week in which such illness or incapacity commences, at
the end of which time no further compensation shall be due and payable
to the Employee until the Employee shall return and resume the
Employee's duties. In the event the Employee is eligible to receive
payments on account of the fringe benefit program covering disability
provided by the Corporation, then the Employee's base salary, as
defined as above, will be reduced to the extent of such entitlement
and receipt.
13.2. If, because of illness, physical or mental disability
or other incapacity, Employee shall fail, for a period of 120 work
days during the term hereof, to render the services provided for by
this Agreement, or if Employee contracts an illness or injury which
will permanently prevent performance by him of the services and
duties provided for by this Agreement by notice to the Employee
effective 30 days after the giving of such notice, after which no
additional compensation shall be due.
14.0 DEATH. In the event of the death of Employee during the
term of this Agreement, his employment hereunder shall terminate on
the date of his death. In the accounting between the Employer and the
Employee's personal representative, Employee's estate shall be due
compensation under this Agreement equal to one year of Employee's
salary. Further one-fourth of the total amount of shares to be issued
to Employee pursuant to 4.2.1, Three Million Six Hundred (3,600,000)
shares, shall vest immediately, if not yet vested in Employee prior to
his death.
15.0 COMPETITION.
15.1. Employee covenants to and with the Employer, its
successors and assigns, that during the term of this Agreement and for
a period of twelve (12) months from the date of the termination of
this Agreement for any reason, he will not directly or indirectly,
enter into any agreement or arrangement with any other person, firm,
corporation or entity to conduct any research or development, nor
shall Employee directly or indirectly conduct such research or
development on his own behalf, related to the discovery of processes,
inventions, improvement, development or commercialization of any new
device, apparatus or product competitive with a product developed,
produced or reduced to practice solely by the Corporation, unless
Employee shall have first obtained the Corporation's expressed written
consent thereto.
15.2. In the event of a breach or threatened breach by
Employee of any provisions of this Section 15.0 the Corporation shall
be entitled to an injunction restraining it from the commission of
such breach. Nothing herein contained shall be construed as
prohibiting the Corporation from pursuing any other remedies available
to it for such breach or threatened breach, including the recovery of
money damages. The covenants contained in this Section 15.0 shall be
construed as independent of any other provisions in this Agreement;
and the existence of any claim or cause of action of Employee against
the Corporation, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by the Corporation
of said covenants.
15.3. The covenants contained in this Section 15.0 shall
terminate and, upon termination, shall be unenforceable and of no
further legal force and effect, in the event the Corporation, or any
successor to the Corporation, becomes insolvent, is liquidated or
ceases for any reason to conduct business operations for a continuous
period of at least thirty (30) days.
15.4. The Corporation shall have the right to assign the
aforesaid covenants; and Employee agrees to remain bound by the terms
of the covenants to any and all subsequent purchaser and assignees of
the assets and business of the Corporation.
16.0 NON-INTERFERENCE WITH EMPLOYEES.
16.1. Employee covenants with the Corporation that
employees of or consultants to the Corporation and employees of and
consultants to firms, corporations or entities affiliated with the
Corporation have, of necessity, been exposed to and have acquired
certain knowledge, understandings, and know-how concerning the
Corporation's business operations which is confidential information
and proprietary to the Corporation.
16.2. In order to protect the Corporation's confidential
information and to promote and insure the continuity of the
Corporation's contractual relations with its employees and
consultants, Employee covenants and agrees that for so long as
Employee holds any position or affiliation with the Corporation,
including service to the Corporation as an officer, director,
employee, consultant, agent or contractor, and for a period of twelve
(12) months from the date Employee ceases to hold any such position or
status with the Corporation or otherwise becomes disaffiliated with
the Corporation, he will not directly or indirectly, or permit or
encourage other to directly or indirectly (i) interfere in any manner
whatsoever with the Corporation's contractual or other relations with
any or all of its employees or consultants, or (ii) induce or attempt
to induce any employee or consultant to the Corporation to cease
performing services for or on behalf of the Corporation, or (iii)
solicit, offer to retain, or retain, or in any other manner engage or
employ the services of, any person or entity who or which is retained
or engaged by the Corporation, or any firm, corporation or entity
affiliated with the Corporation, as an employee, consultant or agent.
16.3. In the Event any court of competent jurisdiction
determines or holds that all or any portion of the covenants contained
in this Section 16.0 are unlawful, invalid, or unenforceable for any
reasons, then the parties hereto agree to modify the provisions of
this Section 16.0 if and only to the extent necessary to render the
covenants herein contained enforceable and otherwise in conformance
with all legal requirements.
17.0 CLIENTS AND CUSTOMERS.
17.1. Employee covenants with the Corporation that the
clients and customers of the Corporation, both actual and
contemplated, constitute actual and prospective business relationships
which are proprietary to the Corporation and comprise, in part, the
Corporation's confidential information and trade secrets.
17.2. In order to protect the Corporation's proprietary
rights and to promote and ensure the continuity of the Corporation's
contractual relations with its customers and clients, Employee
covenants and agrees that, notwithstanding the provisions of Section
15.1 hereof, and for so long as Employee holds any position or
affiliation with the Corporation, including service to the Corporation
as an officer, director, employee, consultant, agent or contractor,
and for a period of twelve (12) months from the date Employee ceases
to hold any such position or status with the Corporation or otherwise
becomes disaffiliated with the Corporation, he will not directly or
indirectly, or permit or encourage others to directly or indirectly
(i) interfere in any manner whatsoever with the Corporation's
contractual relations with any clients or customers, or (ii) induce or
attempt to induce any client or customer of the Corporation to cease
doing business with the Corporation.
17.3. In the event any court of competent jurisdiction
determines or holds that all or any portions of the covenants
contained in this Section 17.0 are unlawful, invalid or unenforceable
for any reason, then the parties hereto agree to modify the provisions
of this Section 17.0 if and only to the extent necessary to render the
covenants herein contained enforceable and otherwise in conformance
with all legal requirements.
18.0 COVENANT TO RETAIN CONFIDENCES.
18.1. Employee understands that all information learned,
known, made, devised or developed concerning any of the Company's
products and activities, including, without limitation, any
inventions, discoveries, improvements, processes, formulas, computer
programs (including their structure, sequence, organization,
coherence, look and feel), apparatus, equipment, customer and client
lists, marketing plans, mailing lists, art, graphics, display,
research, and the like used by the Corporation in connection with its
business constitutes the confidential information, proprietary
information and trade secrets of the Corporation. Employee covenants
and agrees that he will not (except as required in the course of his
position with the Corporation), during the term hereof or thereafter
for a period of twelve (12) months, communicate or divulge to, or use
for the benefit of himself or any other person, firm, association, or
corporation, without the consent of the Corporation, any confidential
information or trade secrets possessed, owned, or used by the
Corporation or its affiliates that may be communicated to, acquired
by, or learned of by the Employee in the course of or as a result of
his services with the Corporation. For the purposes of this Section
18.1, confidential information of the Corporation shall not include
(i) any information developed by the Employee independently of
services performed by the Employee for the Corporation pursuant to
this Agreement; (ii) any information rightfully obtained by the
Employee from a third party without restriction; (iii) any information
publicly available other than through the fault or negligence of the
Employee; (iv) any information disclosed by the corporation to third
parties without restriction; or (v) information already known by the
Employee prior to its disclosure by the Corporation.
18.2. Employee will not use in the course of Employee's
employment with the Corporation, or disclose or otherwise make
available to the Corporation, any information, documents or other
items which Employee may have received from any other person or entity
(including any prior employer), and which Employee is prohibited from
so using, disclosing or making available.
18.3. All records, files, memoranda, reports, price lists,
customer lists, drawings, plans, sketches, documents, prototypes,
testing data, equipment, electronically stored information on disk,
tape or any other medium or existing in computer memory transmitted by
any means, including, but not limited to, telephone or electronic data
transmission and the like, relating to the business of the Corporation
or its affiliates, which Employee shall use or prepare or come into
contact with, shall remain the sole property of the Corporation.
19.0 WORK PRODUCT.
19.1. All trade secrets, know-how, confidential
information, copyrightable material, inventions, discoveries, and
improvements, including computer programs (their structure, sequence,
organization, coherence, look and feel), whether patentable or
unpatentable, copyrightable or uncopyrightable, made, devised,
discovered or reduced to practice by the Employee, whether by himself
or jointly with others, from the time of becoming an employee of the
Corporation until the termination of that status, shall be deemed work
for hire and shall be promptly disclosed in writing to the Corporation
and are to redound to the benefit of the Corporation and become and
remain its sole and exclusive property.
19.2. By executing this Agreement, Employee hereby
transfers and assigns to the Corporation, or person, firms or
corporations designated by the Corporation, any or all of Employee's
rights, title and interest in and to any and all developments,
inventions, computer programs, discoveries, improvements, processes,
devices, copyrights, patents and patent applications therefore, and to
execute at any and all times any and all instruments and do any and
all acts necessary or which the Corporation may deem desirable in
connection with conveying, transferring and assigning Employee's
entire right, title and interest in and to any inventions,
discoveries, improvements, computer programs, processes devices,
copyrights, patent applications therefore or patents thereon in any
way related to the technology or trade secrets developed, discovered
or reduced to practice by Employee during the term of this Agreement,
it being the express understanding and agreement of the parties that
any and all future developments, inventions, and discoveries of
Employee during the term hereof shall be the property of the
Corporation, or its assigns.
20.0 PATENTS AND COPYRIGHTS.
20.1. Employer shall cause to be filed United States and
foreign patent and/or copyright applications on each invention deemed
to be patentable or copyrightable and embodied in any technology
developed and reduced to practice during the term hereof which inure
to the Corporation by virtue of the provisions of Section 19.0 hereof.
20.2. The Corporation shall forfeit patent rights or
copyrights to any patentable or copyrightable technology developed by
Employee during the term hereof in any jurisdiction in which it fails
to file patent or copyright applications after a timely request by
Employee. Employer shall provide to Employee a copy of each
application filed, and within six (6) months thereafter Employee shall
designated what, if any, foreign countries he desires applications to
be filed. Patent or copyright prosecution and maintenance shall be
done by an attorney to be selected by the Corporation and approved by
Employee, which approval shall not be unreasonably withheld. All
reasonable expense of filing, prosecution and maintenance of domestic
and foreign patents or copyrights and patent or copyright applications
shall be borne by Employer.
20.3. Employer and Employee agree to forebear from, and not
permit others to make or permit any public disclosure of any of the
patentable matter prior to the application for a United States patent.
All foreign patent applications shall be made no later than one (1)
year following the date of the U.S. patent application.
20.4. All patents shall be applied for in the name of
Employee, as inventor, and shall be assigned to the Corporation or its
assigns. All copyrights shall be registered in the name of the
Corporation. The Employee shall, upon demand, execute and deliver to
the Corporation or its assigns such documents or assignments as may be
deemed necessary or advisable by counsel for the Corporation or its
assigns for filing in the appropriate patent offices to evidence the
assignment of the patent rights hereby granted.
21.0 REPRESENTATIONS OF EMPLOYEE. The Employee represents that,
to the best of his knowledge and belief, neither his affiliation with
the Corporation, nor his holding any position as officer, director,
Employee, or consultant with the Corporation, nor his ownership of
common stock in the Corporation, nor his performing any other services
for the Corporation violates any presently existing, valid and
enforceable contract, agreement, commitment or other legal
relationship between Employee and any other person or entity.
22.0 ATTORNEYS' FEES. In the event there is any litigation or
arbitration between the parties concerning this Agreement, the
successful party shall be awarded reasonable attorneys' fees and
litigation or arbitration costs, including the attorneys' fees and
costs incurred in the collection of any judgment.
23.0 NOTICES. All notices required or permitted hereunder shall
be sufficient if delivered personally or mailed to the parties at the
address set forth below or at such other address as either party may
designate in writing from time to time. Any notice by mailing shall
be effective 48 hours after it has been deposited in the United States
certified mail, return receipt requested, duly addressed and with
postage prepaid.
24.0 PARTIAL INVALIDITY. If any provisions of this Agreement are
in violation of any statute or rule of law of any state or district in
which it may be sought to be enforced, then such provisions shall be
deemed null and void only to the extent that they may be in violation
thereof, but without invalidating the remaining provisions.
25.0 BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the respective parties hereto, their heirs,
personal representatives, successors and assigns; provided, however,
that Employee may not assign his employment hereunder, and any
assignment by Employee in violation of this Agreement shall vest no
rights in the purported assignee.
26.0 WAIVER. No waiver of any breach of any one of the
agreements, terms, conditions or covenants of this Agreement by the
Employer or the Employee shall be deemed to imply or constitute a
waiver of any other agreement, term, condition or covenant of this
Agreement. The failure of either party to insist on strict
performance of any agreement, term, condition or covenant, herein set
forth, shall not constitute or be construed as a waiver of the rights
of either or the other thereafter to enforce any other default of such
agreement, term, condition or covenant; neither shall such failure to
insist upon strict performance be deemed sufficient grounds to enable
either party hereto to forego or subvert or otherwise disregard any
other agreement, term, condition or covenants of this Agreement.
27.0 GOVERNING LAW. This Agreement and the rights and duties of
the parties shall be construed and enforced in accordance with the
laws of the State of Colorado.
28.0 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject matter
thereof. There are no representations, warranties, conditions or
obligations except as herein specifically provided. Any amendment or
modification hereof must be in writing.
IN WITNESS WHEREOF, the parties to this Agreement have duly
executed it on the day and year first above written.
EMPLOYER:
WORLD AM COMMUNICATIONS, INC.
By: /s/ Xxxx X. Xxxxxxxx
Xxxx X. Xxxxxxxx, Director
EMPLOYEE:
/s/ Xxxxx Xxxxxxxxx
Xxxxx Xxxxxxxxx
