EXHIBIT 1.1
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made and entered into as of the
20th day of June, 2001 by and between Cetalon Corporation a Nevada Corporation
(the "Company"), and Xxxx X. Xxxxxxxx ("Executive").
WHEREAS, the Company desires to employ Executive as Executive Vice
President Chief Operating Officer and Chief Financial Officer on the terms and
conditions as set forth herein and Executive desires to accept such employment
with the Company;
NOW, THEREFORE, in consideration of the foregoing premise, the terms
and conditions set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree to the following:
1. EMPLOYMENT AND DUTIES.
The Company hereby engages Executive in the capacity of Executive Vice President
Chief Operating Officer and Chief Financial Officer. Executive shall perform
such duties and functions as shall be specified from time to time by the
Company's Chief Executive Officer. Executive hereby accepts such employment and
agrees to perform such duties. During the term of the Agreement, Executive shall
not be required without Executive's consent to undertake responsibilities not at
least commensurate with Executive's position as the Company's Executive Vice
President Chief Operating Officer and Chief Financial Officer.
2. COMPENSATION.
(a) Base Salary. For all services to be rendered by Executive
hereunder, Executive shall be paid a base salary at the rate
of two hundred and fifty thousand dollars ($250,000.00) per
year. Executive base compensation shall be reviewed at least
annually and may be increased at the discretion of the Chief
Executive Officer or the Cetalon Compensation Committee, but
during the term of this Agreement may not be decreased below
the then-effective base salary. Executive's salary shall be
paid on such basis, as is the normal payment pattern for
executive officers of the Company. The base salary payable
under Section 2(a) shall be in addition to and exclusive of
any payments to Executive from time to time under formal or
informal bonus, incentive compensation or similar plans now in
effect or which hereafter may be adopted.
(b) Performance Bonus. With respect to each full fiscal year
("Bonus Year") of the Company beginning with fiscal year-ended
May 31, 2002, the Executive is entitled to participate in a
performance plan approved by the Cetalon Compensation
Committee. The target bonus percentage will be established at
a minimum of 50% of the then current base salary, which at the
option of the Company can be paid in either cash or
unrestricted stock of the Company. The calculation and payment
to Executive of a performance bonus contemplated by this
section 2(b), if any, shall be determined and paid by August
1st of each year immediately succeeding such Bonus Year, and
in any event, following the preparation of the Company's
annual audited financial statements for such Bonus Year. The
first bonus eligibility payment will be August 1, 2002 for the
fiscal year-ended May 31, 2002.
3. PAYMENT IN EVENT OF TERMINATION.
In the event of the termination of Executive's employment hereunder
pursuant to Section 8(d), the Company shall continue to make payments
to Executive for a period of 365 days beginning at the end of the
required notice period as defined in Section 8(d) at the rate then
being paid to Executive as specified in 2(a) and shall pay Executive a
cash lump sum payment representing vesting and acceleration of
Executive's current annual target performance bonus, irrespective of
eligibility or achievement requirements as outlined in 2(b). The
payment will be calculated on a prorated basis for the number of months
that Executive worked in the bonus eligible year. The Company shall
provide Executive, his/her spouse and covered dependents with medical
and dental insurance benefits at the same level and coverage terms,
which existed prior to termination for three hundred sixty-five days
(365) days from the date of such termination. The Company will be
responsible to make all payments for medical care coverage including
any supplementary coverage plan for medical claims, which the executive
participated prior to termination on behalf of the Executive. Executive
shall not be required or obligated to obtain other employment to
mitigate the payments due hereunder; however, the Company's obligation
to purchase medical and dental insurance benefits shall expire once the
Executive has obtained new medical coverage which is equal to or better
than the existing coverage for himself, Executive's spouse and
Executive's covered dependents without material conditions or
limitations (such as an applicable pre-existing condition exclusion).
Executive may, at Executive's sole option, terminate this Agreement and
receive the payments provided for in Section 3 following the occurrence
of any of the following events (a "Company Breach"): (a) Executive's
authority to function as Executive Vice President Chief Operating
Officer and Chief Financial Officer (or such higher position to which
the Executive may have been promoted during his/her term of this
Agreement) shall be removed or limited in any material respect, unless
such removal or limitation was a result of one or more events that
would permit the termination of Executive's employment For Cause (as
defined in Section 8(c), or (b) a relocation of Executive or the
Company's offices to a
location more than twenty five (25) miles from the location at which
the Executive previously performed his duties, or (c) the Company shall
have breached in any material respect any of its covenants and
agreements in this Agreement. Notwithstanding the foregoing, Executive
shall not be entitled to terminate this Agreement unless Executive
provides written notice to the Company specifying in reasonable detail
the nature of the Company Breach, and the Company shall have failed to
cure such Company Breach within 21 days thereafter.
4. OPTIONS
Executive shall be entitled to participate in any performance stock
option plan approved annually for other executive officers of the
Company by the Compensation Committee of the Board of Directors. To the
maximum extent permitted by the Internal Revenue Code of 1986, as
amended the (the "IRC"), including the rules and regulations there
under, all such options shall be incentive stock options, and the
remainder of such options shall be non-qualified stock options. In the
event of termination as defined in Section 8(d), the Executive's
options will continue to vest for a period of 365 days during the
severance period and Executive will have twelve (12) months after the
end of this period to exercise any vested options. In addition, reload
options will also continue to vest and become exercisable pursuant to
the conditions outlined in the Cetalon Corp. stock option plan.
5. BENEFITS.
(a) Executive shall be entitled to become immediately eligible and
participate in such fringe benefit and perquisites as are
generally made available to executive officers of the Company,
and such other fringe benefits as may be approved by the Board
for Executive Officers of the Company during the term hereof,
including, without limitation, medical, dental, and disability
insurance, group term life insurance at least equal in face
amount to two times the base salary payable pursuant to
Section 2(a) at no cost to the Executive. The Executive will
also be provided with additional coverage up to $10,000 per
calendar year for medical and dental costs, which are not
covered under the base plan for Executive, spouse and
immediate family members. The executive will also be entitled
to receive annual paid vacation of four weeks per year
becoming effective as of the date of this agreement.
(b) During the term of Executive employment, the Company shall
furnish Executive with a car lease payment allowance of $900
per month and will provide additional reimbursement for all
costs associated with repair, maintenance, insurance and fuel
in maintaining of a leased vehicle.
(c) Nothing contained herein is intended or shall be deemed to be
granted to Executive in lieu of any rights or privileges to
which Executive may currently be or become entitled as an
employee of the Company under any medical, dental, disability,
life insurance, retirement, stock option, stock bonus or
purchase, incentive compensation or other plan or arrangement
of the company which may now be in effect or which may
hereafter be adopted, it being understood that Executive shall
have the same rights and privileges to participate in such
plans as any other similarly situated Executive officer of the
Company.
6. REIMBURSEMENT OF EXPENSES.
The Company shall reimburse Executive for all reasonable business
expenses incurred by Executive in connection with the performance of
Executive duties hereunder and consistent with Company policy and
practice, provided that Executive furnishes to the Company receipts and
other documentation reasonably acceptable to the Company evidencing
such expenditures.
7. PERFORMANCE OF DUTIES.
(a) In consideration of the payments to be made hereunder,
Executive agrees to devote Executive's entire business time
and attention to the performance of Executive's duties
hereunder, to serve the Company diligently and to the best of
Executives abilities, and not to compete with the Company or
any of its Affiliates (as defined below) in any manner
whatsoever. Without limiting the generalities of the
foregoing, Executive shall not, during the term of Executive's
employment by the Company, directly or indirectly (whether for
compensation or otherwise), alone or as an agent, principal,
partner, officer, employee, trustee, director or in any other
capacity own, manage, operate, join, control or participate in
the ownership, management, operation or control of or furnish
any capital to or be connected in any manner with or provide
any services as a consultant for any of the business which
competes directly or indirectly with any of the businesses of
the Company or any of its Affiliates (as defined below) as
they may be conducted from time to time (including any
vitamin, supplement or herbal retail store business provided
however, that nothing contained in this Agreement shall be
deemed to preclude the Executive from owning not more than one
percent of the publicly-traded capital stock of entity which
is in competition with any of such businesses.
(b) Executive may conduct civic, educational and charitable
activities and may also serve on Boards of Directors of other
companies, if consistent with this Section 7 and if
Executive's service on the board of directors of other
companies is approved by the Board.
8. TERM AND TERMINATION.
(a) The term of Executive's employment with the Company hereunder
shall commence on the date hereof and continue until Executive
resigns or is terminated under this Section 8 or under Section
9 of this agreement.
(b) In the event of Executive's death, this Agreement shall
terminate. In the event of the Executive's total disability
for any consecutive twelve-month period during the term of
this Agreement, the Company may at its sole option thereafter
(unless Executive shall have resumed Executive's duties in
full prior to such termination) terminate this Agreement. In
either event the sole right hereunder of Executive,
Executive's widow or Executive's legal representative. As the
case may be, shall be to (i) receive the base salary due
Executive for three hundred and sixty five (365) days
following the month in which Executive's death or disability;
(ii) have any and all previously granted stock bonuses, stock
options or other rights accelerate and fully vest in Executive
or in Executive's estate with exercisability allowed up to
three hundred and sixty five (365) days from date of
termination of the agreement and (iii) have the Company
continue to maintain in effect at its sole expense, medical
and dental insurance as described in Section 3 for three
hundred and sixty five (365) days following the date of any
such termination.
(c) The Company, upon 60 days prior written notice to Executive,
may terminate this Agreement For Cause (as defined herein).
For the purpose of this Agreement, the term "For Cause" shall
mean only (i) Executive's conviction by, or entry of a plea of
guilty in, a court of competent jurisdiction for any crime
involving any felony punishable by imprisonment in the
jurisdiction involved; or (ii) Executives commission of any
act of fraud or dishonesty in connection with, or related to,
his duties; or (iii) gross negligence defined as causing the
company material and significant damage or loss in an
intentional and reckless manner. Upon termination of Executive
for Cause, this Agreement shall immediately terminate, and
Executive shall not be entitled to any further rights or
payments hereunder (other than payments under Section 2(a) for
services rendered prior to the date of such termination).
Without limiting the generalities of the foregoing, Executive
shall have no rights on or after the date of such termination
to any of the benefits set forth in Section 5 hereof (Other
than payment for accrued vacation), any payment of base salary
pursuant to Section 2(a), any payment of performance bonus
pursuant to Section 2(b) for the Bonus Year in which such
termination occurs or any other benefit or payment of any kind
whatsoever.
(d) The Company shall be entitled to terminate Executive's
employment without cause at any time by providing 6 months
prior written notice to the Executive and following the end of
the notice period, begin making payments to Executive and
adhere in providing Executive with
termination entitlements as outlined and specified in Section
3, 4, and 9(iv).
(e) The Executive is entitled to terminate his employment with the
Company under "Constructive Dismissal" and the Company is
required to make payments and adhere in providing Executive
with payments and entitlements outlined and specified in
Sections 3, 4, and 9(iv). Constructive Dismissal is defined
as:
1. The assignment to the Executive of duties materially
inconsistent with the positions, duties,
responsibilities, title and status of the Executive
with the Company the date of this Agreement, in
effect immediately prior to the date of this
Agreement, or any removal of the Executive from, or
any failure to re-elect the Executive to any of such
positions, duties, responsibilities and status of the
Executive except changes which are in the nature of a
promotion;
2. The alteration of the Executives hours of work or
days of work;
3. A reduction by the Company in the annual salary or
benefits of the Executive in effect on the date of
this Agreement, or as the same may be increased from
time to time;
4. A failure of the Company to continue any bonus plan
adopted by the Board after the date hereof in which
the Executive is entitled to participate, as the same
may be modified from time to time with the consent of
the Executive;
5. The company requiring the Executive to provide the
Executive's services to the Company anywhere other
than within 25 miles of the present office location
of the Executive, except for requiring travel on
Company business, to the extent substantially
consistent with present business travel arrangements
employed by the Company with respect to the Executive
at the date of this Agreement.
9. CHANGE IN CONTROL.
If a Change of Control (as defined below) of the Company occurs during the term
of this Agreement, the provisions of this Section 9 shall become operative. For
purposes of this Agreement, a Change in Control of the Company shall be deemed
to have occurred if (i) any "person" (as defined in Section 13(d) of the
Security Exchange Act of 1934, as amended (the Exchange Act") becomes the
"beneficial owner" (as defined in Rule 13d-d under the Exchange Act) directly or
indirectly of securities of the Company representing
more 35% of the combined voting power of the Company's then outstanding
securities, as a result of purchases which are not expressly approved by the
Board. For purposes of this Section 9, the Board expressly approving the 35% or
more voting power ownership must consist of individual who for the previous
consecutive twenty-four (24) month period, constituted at least a majority of
the Board; (ii) a dissolution or liquidation of the Company; (iii) a sale of
substantially all of the assets of the Company; (iv) a merger or consolidation
in which the Company is not the surviving Corporation and in which beneficial
ownership of securities of the Companies representing at least fifty (50%) of
the combined voting power entitled to vote in the election of directors has
changed; (v) a reverse merger in which the Company is the surviving corporation
but the shares of Common Stock outstanding immediately preceding the merger are
converted by virtue of the merger into other property, whether in the form of
securities, cash or otherwise, and in which the beneficial ownership of
securities of the Company representing at least fifty percent (50%) of the
combined voting power entitled to vote in election of directors has changed;
(vi) an acquisition by any person entity or group within the meaning of Section
13(d) or 14(d) of the Exchange Act, or any comparable successor provisions
(excluding any employee benefit plan, or related trust, sponsored or maintained
by the Company or subsidiary of the Company or other entity controlled by the
Company).
For a period of 18 months after a Change in Control of the Company, Executive
shall have the right to terminate Executive's employment with the Company
pursuant to this Section 9, and the Company shall pay Executive the following
amounts no later than the 15th business day after the date of termination of
Executive's employment:
(i) A lump sum severance payment equal to 2.75 multiplied by the
sum of (A) Executive's base annual salary at the highest rate
in effect during the fiscal year of the Company immediately
preceding the date Executive's employment terminates, and (B)
the greater of the amount of any incentive, bonus or other
cash compensation that was paid to Executive during either (x)
the 12 months immediately preceding the date Executive's
employment terminates and (y) the 12 months immediately
preceding the Change in Control, and
(ii) All outstanding stock options including restricted stock
grants for the Executive will vest upon a Change in Control
with the Executive having three hundred and sixty five days
(365) to exercise such options or at the option of the
Executive to receive a cash payment equal to the amount by
which the greater of (A) the closing price of the Company's
Stock on the day before the date of the Executive's employment
terminates or (B) the highest price per share actually paid in
connection with the Change of Control of the Company, exceeds
the per share exercise price of all vested and accelerated
vested and exercisable stock options held by Executive on the
day before the Executive's employment terminates, multiplied
by the number of shares covered by each option. In exchange
for such payment, Executive will surrender all such options to
the Company without exercising them. Upon exercise of options,
any reload options will
continue to be operative and will also vest immediately and
Executive will have three hundred and sixty five days to
exercise such options under the same conditions as listed in
(A) and (B) above.
(iii) The Executive will be entitled (but not obligated) to continue
health care coverage and life insurance coverage at the same
levels prior to termination with the Company for a period of 2
years at the Company's expense. If the Executive and
Executive's spouse and dependents cannot remain eligible to
receive benefits under the relevant Company sponsored plan,
then the Company will provide individual coverage at the above
levels for the remaining period. The Company's obligation to
provide benefits shall end at the time that the Executive
obtains coverage at the same level or greater from any other
source (such as a new employer's benefit plan).
(iv) The Executive will be entitled to select a career placement
firm or obtain office space and administrative support of his
choosing to assist in his transition to a new employer. The
Executive may select and negotiate the terms of services and
payment schedule in which the Company will pay up to $30,000
directly to the career placement firm or office landlord of
his choice and the Company will not consider this as
reportable compensation or income to the Executive.
(v) The executive will also be allowed to have voicemail and email
continued for a period of six months after the date of
termination.
10. TAX GROSS UP.
In the event that the Executive is subject to the "golden parachute" excise tax
based on the acceleration of income and additional payments as a result of
Change in Control, the Company will provide a gross up payment to offset the
impact of the tax. The gross-up will be made on the amount of payment assessed
(the "adjustment") and a separate gross-up on the amount of the payment for "the
adjustment." The calculations will be made by the independent accounting firm,
which is then serving at the Company's financial auditors at the Company's
expense.
11. CONFIDENTIALITY.
(a) The Company and Executive recognize that during the course of
Executive's employment with the Company he will accumulate
certain proprietary and confidential information and trade
secrets for use in the Company's business and will have
divulged to him certain crucial and confidential information
and proprietary information and trade secrets about the
business, operations and prospects of the Company, which
constitutes valuable business assets providing the Company the
opportunity to obtain an advantage over competitors who do not
know or use such information or have access to it without the
investment of considerable resources. Executive hereby
acknowledges and agrees that such information (the
"Proprietary Information") is confidential and proprietary and
a trade secret and that such information shall include,
without limitation:
i. The Company's customer and prospective
customer list (including rolodex/address
book information);
ii. The Company's vendor and prospective vendor
lists;
iii. Confidential correspondence, notes, files,
memoranda, notebooks, drawing, schematic,
specifications, plans, forecasts, programs,
price lists, inventory control lists,
materials, data, devices, records, research
and development information,
computer-recorded information of any kind,
and videotapes.
iv. Confidential information regarding the
company's operations, finances, methods,
strategies, plans, forecasts, and results;
v. The Companies confidential arrangements with
suppliers and distributors;
vi. The Company's confidential plans and
strategies for research, development,
expansion, store design, staffing and
management systems, new product, purchasing,
budgets, priorities, marketing and sales.
vii. The Company's confidential financial
statements and data regarding sales,
profits, productivity, purchasing
arrangements, price and cots;
viii. Confidential information regarding the
Company's computer system and programs;
ix. Third party confidential information which
the company has a duty to maintain in
confidence;
x. Confidential personnel information such as
identities, capabilities, activities,
compensation, performance, and rating of
employees;
xi. Confidential information regarding employee
hiring, incentive, evaluation and discipline
practices and programs;
xii. Confidential marketing and promotional
plans, methods, budgets, and targets; and
xiii. Confidential cost control methods and
practices;
(b) Executive understands that this list is not all-inclusive and
that other information may quality as proprietary information.
In the event the Executive is not sure whether certain
information is proprietary information, Executive shall treat
it as confidential unless the Company informs him to the
contrary.
(c) Executive agrees that he shall not, at any time subsequent to
the execution of this Agreement, whether during or after the
term hereof, disclose, divulge or make known, directly or
indirectly, to any person or otherwise use or exploit, any
Proprietary Information obtained by Executive at any time
prior or subsequent to the execution of this Agreement, except
to the extent required by his performance of his duties her
under for the company. Executive shall not conceal from or
fail to disclose to the Company, or divert or exploit for his
own personal profit or that of others, any business
opportunities or other opportunities to acquire an interest in
or a contractual relationship with any person or entity where
such person or entity is in the Company's line of business or
where such contractual relationship involves the acquisition
of real estate and which would be considered a feasible and
advantageous opportunity or acquisition for the Company.
12. NON-SOLICITATION OF EMPLOYEES.
(a) Executive hereby agrees that for the one year (1) period
following the date of termination of this Agreement, he will
not (i) authorize his name to be used by any person,
partnership, corporation or other business entity or (ii)
engage in or carry on, directly or indirectly, whether as an
advisor, principal, agent, partner, officer, director,
employee, stockholder, associate or consultant of any person,
partnership, corporation or other business entity which in
which their revenues are primarily in the Vitamin and
supplement business.
(b) Executive further agrees that during the period from the date
of this Agreement until one years after termination of this
Agreement he shall not contact or recruit any employees of the
Company or any of its Affiliates without advising the Company
of such contact and he shall not participate in any endeavor
or activity which would disrupt the Company's or any of its
Affiliates good business relationships with its employees.
(c) During the term of Executive's employment by the Company and
continue for a period of one (1) year after the termination of
Executive's
employment for any reason (whether by resignation, dismissal,
retirement or otherwise), Executive shall not compete with the
Company anywhere within the Company's sales territory as it
exists during the one (1) year period after Executive's
departure provided that during Executive's employment with the
Company, the Company distributes to announces such a plan; or
Executive or Executive's subsequent employer otherwise
acquires knowledge of such a plan. In view of the Company's
business style and character, its marketing methods, and its
strategy, Executive agrees that it is responsible to
reconsider that the Company's sales territory extends
throughout each stat in which it is doing business and
Executive shall not Compete within such area.
(d) Executive understands that while this Agreement allows
Executive to compete with the Company following the expiration
of the one (1) year period, it does not give the Executive
license to engage in acts, which would constitute unfair
competition in violation of the applicable law.
13. INDEMNIFICATION.
(a) Except as may be prohibited by applicable law, the Company
shall indemnify and hold harmless the Executive who served as
a director, officer, employee or consultant from and against
any and all losses, claims demands, costs, damages,
liabilities, expenses of any nature (including reasonable
attorney's fees and expenses), judgments, fines, settlements
and other amounts (collectively, the "Liabilities") arising
from, or related or incidental to, any and all claims,
demands, actions, suits or proceedings, civil, criminal,
threatened to be involved, as a party or otherwise, and
arising out of or related to this agreement, without
limitation, Liabilities under California law if such
Indemnified Executive interests of the Company, and, with
respect to any criminal proceeding, did not in good faith
believe its conduct was unlawful; provided, however, that such
Indemnified Executive repay all amounts previously advanced by
the Company pursuant hereto, that were caused by such
Indemnified Party's actual fraud, gross negligence or wanton
or willful misconduct, unless the court in which such
proceeding was brought shall determine the indemnification
shall be provided only to the extent permitted by such court.
Notwithstanding the foregoing, to the extent that an
Indemnified Executive has been successful on the merits or
otherwise in defense of any action, suit or proceeding
referred to in this paragraph, or in connection with any
appeal therein, or in defense of any claim, issue or matter
therein, the Company shall indemnify such Indemnified
Executive against the expenses, including, without limitation,
reasonable attorneys' and accountants' fees and expenses,
incurred by such Indemnified Executive in connection
therewith. The termination of any pending or threatened
action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its
equivalent, shall not, in and of itself,
create a presumption or otherwise constitute evidence that the
Indemnified Executive did not satisfy standards for
indemnification set fort in this paragraph.
(b) Liabilities incurred by any Indemnified Executive in defending
any pending or threatened claim, demand, action, suit or
proceeding shall, from time to time, be paid by the Company in
advance of the final disposition or settlement of such claim,
demand, action, suit or proceeding upon receipt of an
undertaking by or on behalf of the Executive to repay such
amounts (or a proportionate share of such amounts determined
in accordance with clause (c) of this paragraph if applicable)
if it is ultimately determined that the Executive is not to be
indemnified by the Company as provided in this agreement.
(c) If for any reason (other than gross negligence or the wanton
or willful misconduct or bad faith of the Executive), the
foregoing indemnification is unavailable to such Indemnified
Executive, then the Company shall contribute to the amount
paid or payable by such Executive as a result of such
Liabilities in such proportion as is appropriate to reflect
not only the relative benefits received by the Company, on the
one hand, and such Executive on the other hand, but also the
relative fault of the Company and such Executive as well as
any relevant equitable considerations.
(d) The indemnification (or contribution) and advancement of
amount provided by this agreement shall not be deemed
exclusive of, but shall be in addition to, any other rights to
which those persons seeking indemnification (or contribution)
or advancement of amounts may otherwise be entitled and shall
continue as to Executive notwithstanding the dissolution or
other cessation to exist of such Executive or the withdrawal,
adjudication of bankruptcy or insolvency of such Executive,
such Executive no longer serving in the capacity entitling it
to indemnification under the provisions of this agreement, or
the termination of the Company.
The advancement, indemnity and contribution obligations of the Company under
this agreement shall be in addition to any obligation which the Company may
otherwise have, shall be binding upon and inure to the benefit of any
successors, assigns heirs and personal representative of the Company and each of
the Executive and shall not be deemed to create any rights for the benefit of
any other party. The provisions of this paragraph shall survive any termination
of this Agreement.
14. MISCELLANEOUS.
(a) Executive represents and warrants to the Company that
Executive is not now under any obligation of a contractual or
other nature to any person, firm or corporation which is
inconsistent or in conflict with this Agreement, or which
would prevent, limit or impair in any way the performance by
Executive of Executive's obligations hereunder.
(b) The waiver by either party of a breach of any provision of
this Agreement must be in writing and shall nor operate or be
construed as a waiver of any subsequent breach thereof.
(c) All amounts payable by the Corporation under this Agreement
shall be paid without notice or demand. The Corporation hereby
irrevocably guarantees such payments to the Executive and
accepts full liability for insufficient or otherwise improper
payment by the Corporation.
(d) Within 21 days after the end of the month in which the
effective date of termination occurs, or if the Executive
should cease to perform his duties hereunder under any other
circumstances, then within 21 days after the end of the month
in which cessation occurs, the internal auditors of the
Corporation for the time being shall report as to the amounts
of remuneration payable to the Executive as aforesaid, and the
amount shown to be payable (taking into account any prior
payments that have been made on account thereof) shall be paid
within 14 days of the making of such report. The report of the
internal auditors of the Corporation as to the amount of
remuneration payable to the Executive and their decision in
respect of all matters necessary to enable them to make such
report shall be conclusive and binding upon the parties
hereto.
(e) This Agreement constitutes the entire Agreement of Executive
and the Company and supersedes all prior and contemporaneous
written or oral agreements, understandings, promises,
representations and negotiations between the parties with
respect to the subject matter hereof.
(f) Any and all notices referred to herein shall be sufficiently
furnished if in writing, and sent by registered or certified
mail, postage prepaid, or by facsimile transmission (but only
if confirmation of receipt is subsequently received by the
sender either orally or in writing), or by overnight courier
(if such overnight courier guarantees next day delivery and
such notice is sent for delivery on a day on which such
courier guarantees such overnight delivery), to the respective
parties at the following addresses or such other address or
facsimile number as either party may from time to time
designate in writing in the manner set forth in this Section
13(d):
THE COMPANY:
CETALON CORP.
Attn: Chief Executive Officer
0000 Xxxxxxx Xxxx Xxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Phone #: (000) 000-0000
Facsimile #: (000) 000-0000
EXECUTIVE:
Xxxx X. Xxxxxxxx
00000 Xxxxxx Xxxxx
Xxxxxx Xxxxx Xxxxxx, XX 00000
(g) If any portion or provision of this Agreement shall be invalid
or unenforceable for any reason, there shall be deemed to be
made such minor changes (and only such minor changes) in such
provision or portion as are necessary to make it valid and
enforceable. The invalidity or unenforceability of any
provision or portion of this Agreement shall not affect
validity of enforceability of any provisions or portions of
this Agreement. If any such unenforceable or invalid provision
or provisions shall be rendered enforceable and valid changes
in applicable law, then such provisions shall be deemed to
read as they presently do in this Agreement without change.
(h) The rights and obligations of the parties hereto shall inure
to and be binding upon the parties hereto and their respective
heirs, successors and assigns. Notwithstanding the foregoing,
this Agreement shall not be assignable without the written
consent of all parties and each party hereby agree that this
agreement and all provisions of this agreement shall survive
any change of control of the Corporation or the Parent if
applicable.
(i) The waiver by either party of a breach of a provision of this
Agreement shall not operate or be construed as a waiver of a
subsequent breach thereof.
(j) This Agreement is intended to and shall be governed by, and
interpreted under and construed in accordance with the laws of
the State of California without reference to any conflict of
laws or principles.
(k) If any litigation, arbitration or any other proceedings is
instituted in connection with or related to this Agreement,
Executive and the Company agree that any and all disputes or
controversies of any nature whatsoever, regarding the
interpretation, performance, enforcement or breach of this
Agreement shall be resolved by confidential, final binding
arbitration (rather than trial by jury or court or resolution
in some other forum) under the then-existing rules of Judicial
Arbitration and Meditation Services ("JAMS").
(l) The Company and Executive expressly agree that the provisions
of Sections 11, 12, 13, 14 and any action providing for the
payment of severance benefits shall survive the termination of
this Agreement.
This Agreement shall constitute the whole and entire agreement of the parties
hereto with respect to the matters set forth herein and shall not be modified or
amended in any respect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
THE COMPANY: CETALON CORP.
By:__________________________
Xxxxxxx X.X. Xxxxx
Chairman of the Board of Cetalon Corporation
EXECUTIVE: By:__________________________
Xxxx X. Xxxxxxxx
