Exhibit 10.7
Employment Agreement
This Agreement made as of the 1st day of December, 1999.
BETWEEN:
C Me Run Corp., (the "Company").
AND
Xxxxx Xxxxxx (the "Employee").
Background:
A. The Company and the Employee wish to enter into an employment agreement on
the following terms and conditions.
B. The Company has spent significant time, effort, and money to develop certain
Confidential Information, which the Company considers vital to its business and
goodwill.
C. The Confidential Information will necessarily be communicated to or acquired
by Employee in the course of the Employee's employment with the Company, and the
Company wishes to hire Employee only if, in doing so, it can protect the
Confidential Information and goodwill.
D. The Company anticipates that certain Inventions will be conceived, developed,
or reduced to practice by the Employee or by others with whom the Employee works
during the course of the Employee's employment by the Company.
E. The Company wishes to hire the Employee only if, in doing so, it can provide
for the disclosure, assignment, and protection of these Inventions as provided
in this Agreement.
Definitions:
In this Agreement:
"Affiliate" means a company which directly or indirectly:
(a) controls or is controlled by the Company; or
(b) is controlled by the same company that directly or indirectly controls the
Company;
"Agreement" means this Employment Agreement between the Company and the Employee
and includes any schedules that may be executed by the parties from time to
time;
"Company" means, unless specifically noted otherwise, the Company and its
Affiliates;
"Confidential Information" means all information, communicated in any form,
received or acquired by the Employee during the course of or incidental to the
Employee's employment with the Company, which in any way concerns or is related
to the property, business, undertakings, or affairs of the Company or any
Affiliate, including, but not limited to, customer lists, financial information,
business information, technical data, or research.
Confidential Information does not include information that:
(a) becomes public through no action of the Employee; or
(b) is received from a third party lawfully in possession of the information
and under no obligation to keep the information confidential; or
(c) is required to be disclosed by a court of competent jurisdiction.
"Inventions" shall have the meaning as defined in section 5.1.
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1. Appointment and Duties
1.1 The Company appoints Employee to the position of Vice-President of Product
Development.
1.2 The Employee shall carry out the duties and assume the responsibilities set
forth in the position description annexed hereto as Schedule A.
1.3 The Employee accepts employment with the Company and shall devote the
Employee's best efforts and full-time attention to the performance of the
Employee's duties. The Employee is subject to the direction of the Company,
which shall retain full control of the means and methods by which the Employee
performs the above services and of the place(s) at which all services are
rendered. The Employee is expected to travel at reasonable dates and times and
at the expense of the Company if necessary or advisable in order to meet the
obligations of the position.
1.4 Except with the prior written consent of the Company, the Employee (while
employed by the Company) shall not accept any other employment; or engage,
directly or indirectly, in any other business, commercial, or professional
activity (whether or not pursued for pecuniary advantage) that is or may be
competitive with the Company or its Affiliates, that might create a conflict of
interest with the Company, or that otherwise might interfere with the business
of the Company, or any Affiliate. So that the Company may be aware of the extent
of any other demands upon the Employee's time and attention, the Employee shall
disclose in confidence to the Company the nature and scope of any other business
activity in which he is or becomes engaged during the employment.
2. Salary and Vacation
2.1 The Employees' salary and compensation shall be as set out in Schedule A,
commencing on November 15th, 1999 (the "Commencement Date") and payable twice
per month.
2.2 The Employee shall be entitled to three (3) weeks of vacation each year,
with times and dates as mutually arranged.
3. Termination
3.1 The Employee may terminate employment under this contract anytime, with or
without cause, by notifying the Company in writing. In accordance with
applicable law, the Company shall pay the Employee all compensation then due and
owing, after which all of the Company's and Employee's obligations (with the
exception of those in sections 3.5, 4.1, 4.2, 8.3 and Articles 5 and 7) under
this Agreement shall cease.
3.2 At any time, the Company may terminate the Employee for any reason, with or
without cause, and without prior notice. The Company shall pay the Employee all
compensation then due and owing after which, all of the Company's and Employee's
obligations (with the exception of those in sections 3.5, 4.1, 4.2, 8.3 and
Articles 5 and 7) under this Agreement shall cease. The Company may discipline
or demote the Employee with or without cause and with or without prior notice.
3.3 To the extent permitted by law, the Company, in its sole discretion, may
terminate the employment [in which case all of the Company's and Employee's
obligations (with the exception of those in sections 3.5, 4.1, 4.2, 8.3 and
Articles 5 and 7) under this Agreement shall cease after payment of all
compensation due and owing] upon any formal action of the Company's management
to terminate the Company's existence or otherwise wind up its affairs, to sell
all or substantially all of its assets, or to merge with or into another entity.
3.4 All benefits to which the Employee is otherwise entitled shall cease upon
the Employee's termination, unless explicitly continued either under this
Agreement or under any specific written policy or benefit plan of the Company or
applicable law.
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3.5 The Employee agrees that during the term of this agreement and for a period
of 1 year immediately following the termination of this Agreement:
(a) within Canada or the United States, directly or indirectly, own
manage, operate, control, be employed by, participate in, or be connected
in any manner with the ownership, management, operation, or control of any
business which is directly competitive with the Company or any business
which they plan to engage in which the Employee has received Confidential
Information with respect thereto (determined, in case of termination, as
of the date thereof), it being specifically recognized by the Employee
that due to the nature of the internet and web related businesses of the
Company that such geographical restriction is reasonable and necessary to
protect the Company;
(b) the Employee will not induce any executive or employee of the Company
or any of its affiliates to leave the service of the Company, nor will it
employ, in any business competitive with the Company, such executive or
employee for a period of six (6) months following such executive or
employee's employment with the Company;
(c) the Employee agrees not to divert or attempt to divert (by
solicitation or other means) the customers or Prospective Customers of the
Company who are or were customers or Prospective Customers of the Company
at any time throughout the duration of this Agreement (Prospective
Customers being defined as entities with which the Company is then in
formal negotiations or discussions, as evidenced by correspondence or
other documentation);
Should the Employee breach this covenant, in addition to other relief to which
the Company may be entitled, the Employee agrees that the Company shall, in
addition to all other remedies, also be entitled to injunctive relief from a
court of competent jurisdiction, enjoining the Employee, his or her agents,
attorneys, and all others acting on his or her behalf from any further actions
in breach of this Agreement.
3.6 The Employee agrees that all property, including, without limitation, all
equipment, tangible Confidential Information, documents, books, records,
reports, notes, contracts, lists, computer disks (and other computer-generated
files and data), and copies thereof, created on any medium and furnished to,
obtained by, or prepared by Employee in the course of or incidental to his
employment, belongs to the Company and shall be returned promptly to the Company
upon termination of Employment, except to the extent copies are required to be
retained by Employee in connection with any possible litigation against
Employee.
4. Confidential Information and Proprietary Rights
4.1 The Employee agrees not to disclose Confidential Information acquired by the
Employee during the performance of the Employee's duties pursuant to this
Agreement nor use such information for the benefit of any party other than the
Company or its Affiliates. The Employee agrees and acknowledges that the
disclosure of any Confidential Information to the competitors of the Company or
its Affiliates or to the general public, or the use of the same by the Employee
or any competitor of the Company or its Affiliates, would be highly detrimental
to the interests of the Employer.
4.2 Following termination, the Employee shall neither, directly or indirectly,
use nor disclose any Confidential Information except as expressly and
specifically authorized in writing by the Company. The publication of any
Confidential Information through literature or speeches must be approved in
advance in writing by the Company.
4.3 The Employee further acknowledges that the right to maintain the
Confidential Information, the right to preserve the goodwill of the Company and
the right to the benefit of any relationships that develop between the Employee
and the Company's Affiliates, clients, suppliers and employees of the Company by
virtue of the Employee's employment with the Company constitute proprietary
rights of the Company, which the Company is entitled to protect.
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5. Inventions
5.1 The term "Invention(s)" includes any and all ideas, processes, trademarks,
service marks, inventions, technology, computer hardware or software, original
works of authorship, designs, logos, formulas, discoveries, patents, copyrights,
products, and all improvements, know-how, rights, and claims related to the
foregoing that are conceived, developed, or reduced to practice by Employee,
alone or with others, during the Employee's employment.
5.2 The Employee agrees that any Inventions which are discovered, developed or
become known to the Employee during the time of employment with the Company will
become the property of the Company except those inventions that the employee
developed entirely on his or her own time without using the employer's
equipment, supplies, facilities, or trade secret information and that do not:
(1) Relate at the time of conception or reduction to practice of the
invention to the Company's or its Affiliate's business, or actual or
demonstrably anticipated research or development of the Company; or
(2) Result from any work performed by the Employee for the Company or its
Affiliates.
5.3 The Employee shall disclose promptly to the Company the development of all
Inventions and all relevant records of such Invention, which records and
Inventions will remain the sole property of the Company.
5.4 The Employee agrees that all information and records pertaining to any idea,
process, trademark, service xxxx, invention, technology, computer hardware or
software, original work of authorship, design, logo, formula, discovery, patent,
copyright, product, and all improvements, know-how, rights, and claims related
to the foregoing, that the Employee does not believe to be an Invention, but
that is conceived, developed, or reduced to practice by the Employee (alone or
with others) during the course of employment (or for 12 months after
termination), shall be disclosed promptly to the Company (such disclosure to be
received in confidence). The Company shall examine such information to determine
if it is an Invention subject to this Agreement and shall advise the Employee
within a reasonable period of time.
5.5 The Employee agrees to, and hereby does, assign to the Company, the
Employee's entire right, title, and interest (throughout Canada and the world),
free and clear of all liens and encumbrances, in and to each Invention, which
shall be the sole property of the Company, whether or not patentable.
5.6 In the event any Invention is deemed by the Company to be patentable or
otherwise registerable, the Employee shall assist the Company (at its expense)
in obtaining letters patent or other applicable registrations thereon and shall
execute all documents and do all other things necessary or proper thereto
(including testifying at the Company's expense) and to vest the Company, or any
entity or person specified by the Company, with full and perfect title to or
interest in the invention.
5.7 The Employee shall also take any reasonable action requested by the Company
necessary or advisable in connection with any continuations, renewals, or
reissues thereof or in any related proceedings or litigation regarding the
Inventions.
5.8 Should the Company be unable to secure the Employee's signature on any
document necessary to apply for, prosecute, obtain, or enforce any patent,
copyright, or other right or protection relating to any Invention, whether due
to Employee's mental or physical incapacity or any other cause, the Employee
irrevocably designates and appoints the Company and each of its duly authorized
officers and agents as the Employee's agent and attorney-in-fact, to act for and
in Employee's behalf and stead and to execute and file any such document, and to
do all other lawfully permitted acts to further the prosecution, issuance, and
enforcement of patents, copyrights, or other rights or protections with the same
force and effect as if executed, delivered, and/or done by the Employee.
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5.9 The Employee represents that there are no Inventions that the Employee
desires to exclude from the operation of this Agreement. To the best of the
Employee's knowledge, there is no existing contract in conflict with this
Agreement and there is no contract to assign any Invention that is now in
existence between the Employee and any other person or entity.
5.10 Because of the difficulty of establishing when any Invention is first
conceived or developed by the Employee, or whether it results from access to
Confidential Information or the Company's equipment, supplies, facilities, or
data, the Employee agrees that any intellectual property shall be presumed to be
an Invention, if reduced to practice by Employee or with the aid of the Employee
during the course of the employment or within one (1) year after termination of
employment unless the Employee has followed the procedure in Section 5.4.
5.11 The Employee can rebut the above presumption if the Employee proves that
the Invention was developed entirely on Employee's own time without using the
Company's equipment, supplies, facilities, or trade secret information; was not
conceived or reduced to practice during employment, or, if conceived or reduced
to practice during this period, did not, at the time of conception or reduction
to practice, relate to the Company's business or actual or demonstrably
anticipated research or development; and did not result from any work performed
by the Employee for the Company or its Affiliates.
6. Acknowledgment
6.1 The Employee acknowledges that the Employee has had the opportunity to read
and understands this Agreement, is fully aware of its legal effect, and has
entered into it freely and voluntarily and based on the Employee's own judgment
and not on any representations or promises other than those contained in this
Agreement. The Employee acknowledges that the Employee has had ample time to
read, and has read this Agreement. The Employee acknowledges that the Company
has advised the Employee to obtain independent legal advice with respect to this
agreement. The Employee further acknowledges that the Employee has had an
adequate opportunity to be advised by legal advisors of his or her own choosing.
7. Arbitration and Waiver of Jury Trial
7.1 Any and all disputes which may arise from or relate to this Agreement or the
employment of Employee or the termination of such employment shall be subject to
final and binding arbitration to be held in the city where the Employee was
based when the Agreement was signed. All such disputes shall be arbitrated under
the auspices and rules of the American Arbitration Association pursuant to its
Expedited Labor Arbitration Rules in effect at the time the claim or dispute
arises. There shall be one arbitrator, who shall be a retired superior court or
federal court judge. The arbitrator shall have the authority only to enforce the
legal and contractual rights of the parties and shall not add to, modify,
disregard or refuse to enforce any contractual provision. The arbitrator shall
have no right, power or jurisdiction to award Employee any punitive or exemplary
damages of any kind. EMPLOYEE AND THE COMPANY RECOGNIZE AND AGREE THAT BY
ENTERING INTO THIS AGREEMENT, THEY ARE WAIVING ANY AND ALL RIGHTS TO A TRIAL BY
JURY. Notwithstanding any of the foregoing, this provision for arbitration shall
not prevent the parties, or any of them, from seeking injunctive relief for
violation of the provisions hereof. The prevailing party in any arbitration or
in any action or proceeding involving injunctive relief shall be entitled to
recover his/her or its reasonable attorneys' fees and costs.
8 General
8.1 This Agreement shall be governed by and construed in accordance with the
laws of the State of Massachusetts.
8.2 The Employee agrees and acknowledges that the time and geographic
limitations in this Agreement are reasonable and are properly required for the
adequate protection of the business interests of the Company and its Affiliates
particularly with respect to any internet business. In the event that any limits
in this Agreement with respect to capacities, activities, time periods or
geographic areas are found to
Page 5 of 8
be unreasonable by a court of competent jurisdiction, then the said court may
set, and the Employee agrees to be bound by, reduced limits with respect to
capacities, activities, time periods or geographic areas as the said court deems
to be reasonable.
8.3 All of the clauses in this Agreement are distinct and severable and if any
clause shall be held to be illegal or void, it shall not affect the validity or
legality of the remaining clauses of this Agreement.
8.4 This Agreement is fully assignable by the Company to any Affiliate or
successor of the Company, including any purchaser of the whole or any part of
the assets or controlling interest in the Company, without requiring the consent
of the Employee and shall enure to the benefit of the assignee or other legal
successor to its interest herein
8.5 This Agreement contains the entire Agreement between the parties with
respect to the matters herein and supercedes all agreements, verbal
representations or warranties made by any of the parties prior to the date
hereof with respect to the matters herein.
8.6 The terms and conditions of this Agreement shall remain in effect throughout
the Employee's employment with the Company unless modified or superseded by
agreement in writing signed by each of the parties. The terms and covenants in
this Agreement, which by the nature of their operation must necessarily survive
the termination of this Agreement, shall be deemed to survive.
The parties have duly executed this Agreement as of the date above first written
C Me Run Corp. Employee
Per: /s/ Xxxxx X. Xxxxx /s/ Xxxxx Xxxxxx
------------------ ----------------
Xxxxx Xxxxxx
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Schedule A
1) The Employee's duties and responsibilities are:
a) To act as Vice President of Product Development, including providing
leadership and direction regarding the future product and service
strategy of the Company.
b) To contribute to the overall growth and success of the organization.
c) To perform such duties as may be assigned from time to time by the
Company.
2) The Employee's compensation is:
a) Base salary of One Hundred Thousand DOLLARS (US$100,000) per annum,
subject to annual increase based on performance.
b) eligibility for participation in the Company's existing and future
health and vision care plan, together with all other insurance
programs and benefits available to key executives. Company reserves
the right to change the carrier and the plan to provide the most
cost-effective benefits package available.
c) The Company will pay for all reasonable expenses to relocate the
Employee, his family and personal belongings to Massachusetts,
including but not limited to real estate fees.
d) The Company will cover all legal fees, filing fees, and associated
costs with obtaining the necessary work visa(s) for the Employee in
order to legally work in the United States for the duration of
employment with the Company.
e) eligibility for participation in stock option plan of the Company.
The Employee is hereby granted options or warrants to purchase
150,000 common shares of the Company at $5.00 per share. Such
options or warrants shall vest as follows:
Number of Options Vesting Date
----------------- ------------
50,000 December 1, 2000
50,000 December 1, 2001
50,000 December 1, 2002
In the event of a termination of employment, voluntary or
involuntary, for any reason whatsoever, any of the Employee's stock
options in the Company which have vested, or which will vest within
ninety (90) days from the date of termination, shall not be affected
by the termination of employment; however, any other unvested
options shall terminate. All vested options must be exercised within
3 months of the termination of employment.
Page 7 of 8
Schedule A (Continued)
f) As founder of the Company, a grant, at nominal consideration, of
350,000 common shares of the Company or a parent, merged, related or
affiliated corporation resulting from any reorganization of the
Company. An escrow agent shall hold the share certificates as
specified under the terms of the Escrow Agreement signed by the
Employee. The shares will be released to the Employee as follows:
Number of Shares Release Date
---------------- ------------
175,000 December 1, 2000
175,000 December 1, 2001
g) In the event the Employee's employment is terminated, involuntarily
voluntarily or for any reason, any shares in escrow at such time
will remain in escrow and be released to the Employee as detailed
above.
3) The terms and conditions of this Schedule A to the Agreement shall remain
in effect throughout the Employee's employment with the Company unless
modified or superseded by agreement in writing signed by each of the
parties.
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