EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT (this "Agreement")
is
made as of February 1, 2005, by and among Next Phase Wireless, Inc., a Nevada
corporation (the "Company"),
and
Xxxxxx Xxxx (the "Executive"),
each
a "Party"
and
collectively the "Parties."
Unless
otherwise indicated, capitalized terms are defined in Section 2.1.
WHEREAS,
the Parties hereto desire to enter into an employment agreement regarding the
Company employing the Executive in a managerial role.
NOW,
THEREFORE, the Parties hereto agree as follows:
ARTICLE
I
EMPLOYMENT
TERMS
1.1 Employment.
The
Company will employ the Executive, and the Executive accepts employment with
the
Company, upon the terms and conditions set forth in this Agreement for the
period beginning on the date hereof (the “Effective
Date”)
and
ending as provided in Section
l.4(a)
hereof
(the "Employment
Period").
1.2 Position
and Duties.
(a) Generally.
During
the Employment Period, (i)
the
Executive will be an Executive of the Company and will serve as President and
Chief Executive Officer, and (ii) in his capacity as President and Chief
Executive Officer, the Executive shall render such management and executive
and
managerial services to the Company and its Subsidiaries as are commensurate
with
the customary duties, responsibilities and authority of his office, subject
to
the power of the Board of Directors of the Company (the "Board").
The
Executive shall also serve as a member of the Board during the Employment
Period.
(b) Duties
and Responsibilities.
The
Executive will report to the Board of Directors of the Company and will devote
his best efforts and such reasonable and necessary business time and attention
to the business and affairs of the Company and its Subsidiaries, except for
permitted vacations and reasonable periods of illness or injury. The Executive
will perform his duties and responsibilities to the best of his abilities in
a
diligent, trustworthy, businesslike and efficient manner. The Executive shall
not engage in any other business activities that could reasonably be expected
to
conflict with the Executive’s duties, responsibilities and obligations
hereunder. Except in connection with professional, charitable or civic
endeavors, the Executive will not serve as a member of the board of directors
of
any Person without the prior approval of the Board, which shall not be
unreasonably withheld. The Executive may engage in any of the following business
activities while employed by the Company: (i) investing his personal assets
in
businesses which do not compete with the Company in such form or manner as
will
not require any services on the part of Executive in the operation or the
affairs of the companies in which such investments are made and in which his
participation is solely that of an investor, (ii) purchasing securities in
any
entity whose securities are regularly traded provided that such purchase shall
not result in his collectively owning beneficially at any time five percent
or
more of the equity securities of any entity engaged in a business competitive
to
that of the Company, and (iii) participating in conferences or preparing
or
publishing papers or books so long as the Board of Directors approves of such
activities prior to Executive’s engaging in them. During
the Employment Period, the Executive shall bring to the Company all investment
or business opportunities relating to the activities described in Section
1.8(a)
of which
the Executive becomes aware and which the Executive believes are, or may be,
within the scope and investment objectives related to the business of the
Company or any of its Subsidiaries, which would or may be beneficial to the
business of the Company or any of its Subsidiaries, or are otherwise competitive
with the business of the Company or any of its Subsidiaries.
1.3 Compensation.
(a) Base
Salary.
During
the Employment Period, the Executive’s base salary shall be $ 10,000 per annum
(the "Base
Salary"),
payable as follows: (i) from January 1, 2005 through May 31, 2005 $5,000 per
month in cash (“Cash Base Salary”) and $5,000 per month in common stock of the
Company valued at $0.25 per share for 20,000 shares per month (“Stock Base
Salary”) and (ii) from June 1, 2005 through the remainder of the Employment
Period $10,000 per month in Cash. The Cash Base Salary will be payable by the
Company in regular installments in accordance with the Company’s general payroll
practices. The Stock Base Salary shall be issued pursuant to an exemption from
registration of the Securities Act of 1933, as amended (the “Act”), and shall be
restricted pursuant to Rule 144 of the Act. The Board shall review the
Executive’s performance at least once each year during the Employment Period,
and determine, in the Board’s sole discretion, whether to grant any increase in
the rate of the Executive’s Base Salary for future years during the Employment
Period.
(b) Bonus.
The
Executive shall be entitled to a “sign-on” bonus of 300,000 shares of common
stock of the Company issued pursuant to an exemption from registration and
restricted pursuant to Rule 144 of the Securities Act. The Executive shall
be
eligible to receive additional stock bonuses under the Management Retention
and
Incentive Plan (“Plan”) to be established by the Board of Directors on or before
March 31, 2005. It is the intent of the parties that Executive’s stock ownership
in the Company shall be no less than the stock ownership of any other senior
executive of the Company at the end of the full three (3) year term of this
Agreement. All Company stock issued Executive hereunder or pursuant to the
Plan
shall contain anti-dilution protection in the event of a corporate
reorganization or issuance of stock for less than fair value. Executive shall
be
eligible to receive additional bonuses in cash and/or stock as determined from
time to time by the Board of Directors of the Company.
(c) Expenses.
The
Company will reimburse the Executive for all reasonable expenses incurred by
him
in the course of performing his duties under this Agreement which are consistent
with the Company’s policies in effect at that time with respect to travel,
entertainment and other business expenses, subject to the Company’s requirements
with respect to reporting and documentation of such expenses; provided, however,
any expense in excess of $500 shall be pre-approved by a board member other
than
the Executive.
(d) Vacation.
The
Executive shall be entitled to paid vacation in each calendar year pursuant
to
Company policy for similarly situated active executive Executives of the
Company, which if not taken during any year may not be carried forward to any
subsequent year.
(e) Additional
Benefits.
During
the Employment Period, the Executive shall be entitled to participate in any
group medical, 401(k) and other Executive benefit plans and perquisites adopted
by the Board for participation by the Executive subject to the terms and
conditions of such plans (collectively "Benefits")
which
participation shall be in accordance with the terms of such plans and on the
same terms and conditions as other similarly situated active executive
Executives of the Company. The Company shall have the right to purchase in
the
Executive’s name a "key man" life insurance policy naming the Company or any of
its Subsidiaries as the sole beneficiary thereunder.
(f) Withholding.
All
payments made to or on behalf of the Executive and the terms of this Agreement
shall be subject to all withholding required or permitted by law and such other
withholding as may be agreed to by the Executive.
(g) Share
Restrictions.
All
Shares issued hereunder have not been registered under the Act or under any
state securities law. Employee understands that the Shares will be characterized
as “restricted” securities under federal securities laws and that under such
laws and applicable regulations such Shares may not be resold without
registration except in certain limited circumstances. Employee agrees that
he
will not sell all or any portion of the Shares except pursuant to registration
under the Act or pursuant to an available exemption from registration under
the
Act. Employee understands and acknowledges that all certificates representing
the Shares shall bear the following legend or a legend of similar import and
the
Company shall refuse to transfer the Shares except in accordance with such
restrictions:
“THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER CERTAIN STATE
SECURITIES LAWS. NO SALE OR TRANSTER OF THESE SHARES MAY BE MADE IN THE ABSENCE
OF (A) AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR (B) AN OPINION
OF
COUNSEL ACCEPTABLE TO COMPANY THAT REGISTRATION UNDER THE ACT OR UNDER
APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED IN CONNECTION WITH SUCH
PROPOSED SALE OR TRANSFER.”
1.4 Term
and
Termination.
(a) Duration.
The
Employment Period shall commence on the Effective Date of this Agreement and
shall continue until the first to occur of (i)
termination of the Executive’s employment by the Company for Cause, (ii)
termination of the Executive’s employment by the Company without Cause,
(iii)
the
Executive’s resignation with Good Reason, (iv)
the
Executive’s resignation other than for Good Reason, (v)
the
Executive’s death or Disability, or (vi)
the
third anniversary of the Effective Date (the “Expiration”).
Notwithstanding the above, the parties agree to review this Agreement on each
one (1) year anniversary to determine if each party wishes to continue the
relationship and if so, if the salary and benefits are adequate for Executive
based on his duties and responsibilities.
(b) Severance
Upon Termination Without Cause or Upon Resignation by the Executive For Good
Reason.
If the
Employment Period is terminated by the Company without Cause or the Executive
resigns for Good Reason, the Executive will be entitled to receive (i)
an
amount equal to twelve (12) months of his Base Salary paid at such normal
payroll intervals during the Severance Period as otherwise applicable to active
employees of the Company, and (ii) Benefits under the Company’s insurance and
other employee benefit plans to the extent eligible. The Executive shall also
be
entitled to receive all reimbursable expenses, benefits or other entitlements
then due and owing to the Executive as of the Termination Date. The Company
will
be obligated to make such severance payments and provide such Benefits only
if
the Executive has not breached, and only for so long as the Executive does
not
breach, his obligations under Sections
1.5,
1.6,
1.7,
or
1.8
of this
Agreement and executes and delivers to the Company a mutual release acceptable
to both parties at the time of Termination.
(c) Salary
and Other Payments Through Termination.
If the
Executive’s employment with the Company is terminated before the Expiration
(i)
by the
Company for Cause, (ii)
by the
Executive other than for Good Reason, or (iii)
by
reason of the Executive’s death or Disability, the Executive will be entitled to
receive his Base Salary through the Termination Date and will not be entitled
to
receive any severance payments or Benefits after termination other than, in
the
case of termination under clause (iii) above, Benefits under the Company’s
insurance and other employee benefit plans to the extent eligible. The Executive
shall also be entitled to receive all reimbursable expenses, benefits or other
entitlements then due and owing to the Executive as of the Termination
Date.
(d) Other
Rights.
Except
as set forth in Section
1.4(b),
all of
the Executive’s rights to benefits, Base Salary, and Bonuses hereunder (if any)
which accrue or become payable after the termination of the Employment Period
shall cease upon such termination. The Company and its Subsidiaries may offset
any amounts the Executive owes any of them against any amounts the Company
owes
the Executive hereunder; provided
that
such offset shall occur only upon the Executive’s termination of employment with
the Company.
1.5 Confidential
Information.
(a) The
Executive shall not disclose or use at any time, either during his employment
with the Company or thereafter (excluding trade secrets of the Company and
its
Subsidiaries which may not be disclosed or used at any time), any Confidential
Information (as defined below) of which the Executive is or becomes aware,
whether or not such information is developed by him, except to the extent that
(i)
such
disclosure or use is directly related to and required by the Executive’s
performance of the duties assigned to the Executive, (ii)
the
Executive is required by subpoena or similar process to disclose or discuss
any
Confidential Information, provided,
that in
such case, the Executive shall promptly inform the Company of such event, shall
cooperate with the Company and its Subsidiaries in attempting to obtain a
protective order or to otherwise restrict such disclosure or (iii)
such
Confidential Information becomes generally known to and available for use by
the
public, other than as a result of any action or inaction by the Executive,
and
at the Company’s expense, the Executive shall take all appropriate steps to
safeguard Confidential Information and to protect it against disclosure, misuse,
espionage, loss and theft. The Executive acknowledges that the Confidential
Information obtained by him during the course of his employment with the Company
is the property of the Company and its Subsidiaries.
(b) The
Executive understands that the Company and its Subsidiaries will receive from
third parties confidential or proprietary information ("Third
Party Information")
subject
to a duty on the part of the Company and its Subsidiaries to maintain the
confidentiality of such information and to use it only for certain limited
purposes. During the Employment Period and thereafter, and without in any way
limiting the provisions of Section
1.5(a)
above,
the Executive will hold Third Party Information in the strictest confidence
and
will not disclose to anyone (other than personnel of the Company or its
Subsidiaries who need to know such information in connection with their work
for
the Company and its Subsidiaries) or use, except in connection with his work
for
the Company or its Subsidiaries, Third Party Information unless expressly
authorized by a member of the Board in writing.
(c) During
the Employment Period, the Executive shall not use or disclose any confidential
information or trade secrets, if any, of any former employers or any other
person to whom the Executive has an obligation of confidentiality, and shall
not
bring onto the premises of the Company or its Subsidiaries any unpublished
documents or any property belonging to any former employer or any other person
to whom the Executive has an obligation of confidentiality unless consented
to
in writing by the former employer or person. The Executive shall use in the
performance of his duties only information that is (i) generally known and
used
by persons with training and experience comparable to the Executive’s and that
is (x) common knowledge in the industry or (y) is otherwise legally in the
public domain, (ii) otherwise provided or developed by the Company or its
Subsidiaries or (iii) in the case of materials, property or information
belonging to any former employer or other person to whom the Executive has
an
obligation of confidentiality, approved for such use in writing by such former
employer or person.
(d) As
used
in this Agreement the term "Confidential
Information" means
information that is not generally known to the public and that is used,
developed or obtained by the Company or any of its Subsidiaries in connection
with its business, including but not limited to (i)
business
development, growth and other strategic business plans, (ii)
properties available for acquisition, financing, development or sale,
(iii)
accounting and business methods, (iv)
services
or products and the marketing of such services and products, (v)
fees,
costs and pricing structures, (vi)
the
status of or any information regarding the Company or any of its Subsidiaries’
relationship with any governmental or regulatory bodies (vii)
inventions, devices, new developments, methods, analysis and processes, whether
patentable or unpatentable and whether or not reduced to practice, (viii)
drawings, photographs and reports, (ix)
computer
software, including operating systems, applications and program listings,
(x)
manuals,
customer contracts, personnel data and documentation, (xi)
data
bases, (xii) copyrightable works, (xiii) all technology and trade secrets,
(xvi)
confidential terms of any supplier or customer relationships, and (xv) all
similar and related information in whatever form. Confidential Information
shall
not include any information that has become generally available to the public
prior to the date the Executive proposes to disclose or use such information
or
general know-how of the Executive.
1.6 Intellectual
Property.
In the
event that the Executive as part of his activities on behalf of the Company
or
any of its Subsidiaries generates, authors or contributes to any trade name,
trade xxxx, trade secret, invention, design, new development, device, product,
method or process (whether or not patentable or reduced to practice or
comprising Confidential Information), any copyrightable work (whether or not
comprising Confidential Information) or any Confidential Information
relating directly or indirectly to the business of the Company or any of its
Subsidiaries as now or hereinafter conducted (collectively, "Intellectual
Property"),
the
Executive acknowledges that such Intellectual Property is the exclusive property
of the Company and its Subsidiaries and hereby assigns all right, title and
interest in and to such Intellectual Property to the Company and its
Subsidiaries. Any copyrightable work prepared in whole or in part by the
Executive will be deemed "a work made for hire" under Section 201(b) of the
1976
Copyright Act, and the Company and its Subsidiaries shall own all of the rights
comprised in the copyright therein. The Executive shall promptly and fully
disclose all Intellectual Property to the Company and shall cooperate with
the
Company and its Subsidiaries to protect the Company’s and its Subsidiaries’
interests in and rights to such Intellectual Property (including, without
limitation, providing reasonable assistance in securing patent protection and
copyright registrations and executing all documents as reasonably requested
by
the Company, whether such requests occur prior to or after termination of the
Executive’s employment with the Company).
1.7 Delivery
of Materials Upon Termination of Employment.
As
requested by the Company from time to time and upon the termination of the
Executive’s employment with the Company for any reason, the Executive shall
promptly deliver to the Company all copies and embodiments, in whatever form,
of
all Confidential Information and Intellectual Property in the Executive’s
possession or within his control (including, but not limited to, written
records, notes, photographs, manuals, notebooks, documentation, program
listings, flow charts, magnetic media, disks, diskettes, tapes and all other
materials containing any Confidential Information or Intellectual Property)
irrespective of the location or form of such material and, if requested by
the
Company, shall provide the Company with written confirmation that all such
materials have been delivered to the Company.
1.8 Non-Compete.
Non-Solicitation.
(a) The
Executive acknowledges and agrees with the Company and its Subsidiaries that
the
Executive’s services to the Company and its Subsidiaries are unique in nature
and that the Company and its Subsidiaries would be irreparably damaged if the
Executive were to provide similar services to any Person competing with the
Company or its Subsidiaries or engaged in a similar business. The Executive
further acknowledges that in the course of his employment with the Company
he
will become familiar with the Company’s and its Subsidiaries’ trade secrets and
with other Confidential Information. During the Noncompete Period, he shall
not,
directly or indirectly, either for himself or for any other Person, permit
his
name to be used by or participate in any business or enterprise (including,
without limitation, any division, group or franchise of a larger organization)
that engages or proposes to engage (i)
in the
Business within the United States (collectively, the "Restricted
Territory")
or
(ii)
in a
business identical to or similar to any business which is engaged in by the
Company or any of its Subsidiaries or affiliates in the Restricted Territory
prior to the Executive’s termination. The Executive acknowledges and agrees that
the term of the Noncompete Period and that the geographical limits of the
Restricted Territory are reasonable. For purposes of this Agreement, the term
"participate in" shall include, without limitation, having any direct or
indirect interest in any Person, whether as a sole proprietor, owner,
stockholder, partner, member, joint venturer, creditor or otherwise, or
rendering any direct or indirect service or assistance to any Person (whether
as
a director, officer, supervisor, Executive, agent, consultant or otherwise).
Nothing herein will prohibit the Executive from mere passive ownership of less
than two (2) percent of the outstanding stock of any class of a publicly-held
corporation whose stock is traded on a national securities exchange or in the
over-the-counter market. As used herein, the phrase "mere passive ownership"
shall include voting or otherwise granting any consents or approvals required
to
be obtained from such Person as an owner of stock or other ownership interests
in any entity pursuant to the charter or other organizational documents of
such
entity, but shall not include, without limitation, any involvement in the
day-to-day operations of such entity. In addition, nothing herein will prohibit
the Executive from participating in any business or enterprise having a
subsidiary which engages in the Business, so long as the Executive does not
provide services to, act as an officer or director of or otherwise participate
in the management or operations of such subsidiary.
(b) During
the Nonsolicitation Period, the Executive will not directly or indirectly
through another Person induce or attempt to induce any customer, supplier,
licensee, or other business relation of the Company or any of its Subsidiaries
to cease doing business with the Company or any of its Subsidiaries, or induce
or attempt to induce any Executive of the Company or any of its Subsidiaries
to
terminate such Executive’s employment with the Company or any of its
Subsidiaries, or in any way interfere with the relationship between any such
customer, supplier, licensee, Executive or business relation and the Company
or
any of its Subsidiaries, including, without limitation, knowingly making any
negative statements or communications concerning the Company or any of its
Subsidiaries.
1.9 Enforcement.
If, at
the time of enforcement of Section
1.5,
1.6,
1.7
or
1.8,
a court
holds that the restrictions stated herein are unreasonable under circumstances
then existing, the Parties agree that, to the extent permitted by applicable
law, the maximum period, scope or geographical area reasonable under such
circumstances will be substituted for the Noncompete Period, scope or area.
Because the Executive’s services are unique and because the Executive has access
to Confidential Information and Intellectual Property, the Parties agree that
money damages would be an inadequate remedy for any breach of Section
1.5,
1.6,
1.7
or
1.8.
Therefore, in the event a breach or threatened breach of Section
1.5,
1.6,
1.7
or
1.8,
the
Company or any of its Subsidiaries or any of their respective successors or
assigns may, in addition to other rights and remedies existing in their favor,
apply to any court of competent jurisdiction for specific performance and/or
injunctive or other relief in order to enforce, or prevent any violations of,
the provisions hereof (without posting a bond or other security). The Parties
hereby agree that the Noncompete Period defined in this Agreement shall be
extended on a day-for-day basis for each day during which the Executive is
in
violation of the Section 1.8, so that the Executive will be restricted from
engaging in the activities prohibited in Section 1.8 for the full Noncompete
Period. The Parties hereby acknowledge and agree that (a)
performance of the services of the Executive hereunder may occur in
jurisdictions other than the jurisdiction whose law the Parties have agreed
shall govern the construction, validity and interpretation of this Agreement,
(b)
the law
of California shall govern construction, validity and interpretation of this
Agreement to the fullest extent possible, and (c) Section
1.5,
1.6,
1.7
and
1.8
shall
restrict the Executive only to the extent permitted by applicable law.
1.10 Survival.
Sections
1.5,
1.6,
1.7
or
1.8
(and any
defined terms related thereto) will survive and continue in full force in
accordance with their terms notwithstanding any termination of the Employment
Period.
1.11 Relocation.
Executive and the Company acknowledge (a) that Executive is required to change
his place of residence from Wilmington, Delaware, to Anaheim, California and
(b)
that it is not in the Company’s best financial interests to relocate Executive
at this time. Until such time as the parties mutually agree to relocate
Executive, Executive shall divide his time between the Company’s headquarters
and his home office in Wilmington, Delaware, subject to the requirements of
business related travel. The Company shall pay reasonable temporary dwelling
costs, as the parties may agree, near the Company’s headquarters and
transportation expenses for Executive while he is working at the Company’s
headquarters. At such time as Executive relocates, the Company shall pay all
the
costs and expenses of Executive connected with such relocation, including
reasonable moving and travel expenses and reasonable temporary dwelling costs
(for a period not to exceed 60 days) and costs associated with purchasing and
selling a permanent place of residence, all such expenses not to exceed
$10,000.
1.12 Legal
Fees.
The
Company shall either reimburse Executive for or directly pay Executive’s legal
fees in connection with the negotiation of this Agreement, up to a maximum
of
$1,000.
ARTICLE
II
DEFINED
TERMS
2.1 Definitions.
For
purposes of this Agreement, the following terms will have the following
meanings:
“Affiliates”means
a
person that directly controls, or is controlled by, or is under common control
with or by the Company or any of its Subsidiaries.
"Business"
means
the business of providing any products or services for wireless broadband
connectivity for small and medium sized businesses (400 employees or less)
in
the United States.
"Cause"
means
(a) theft, misappropriation
or embezzlement of the Company’s or any Subsidiary’s assets or business
opportunities, (b) the
commission of a felony or other crime involving moral turpitude or the
commission of any other act or omission involving dishonesty or fraud with
respect to the Company or any of its Subsidiaries or any of their customers
or
suppliers, (c) repeated reporting to work under the influence of alcohol or
illegal drugs, the repeated use of illegal drugs (whether or not at the
workplace) or other repeated conduct causing the Company or any of its
Subsidiaries substantial public disgrace, substantial disrepute or material
economic harm after 30 days’ written notice thereof to the Executive and
opportunity to meet with and discuss the grounds for termination with the Board
and any persons named in the notice, (d) substantial and repeated failure to
perform duties as reasonably directed by the Board which is not cured to their
reasonable satisfaction within 30 days after written notice thereof to the
Executive and opportunity to meet with and discuss the grounds for termination
with the Board and any persons named in the notice, (e) knowingly aiding or
abetting a competitor, supplier or customer of the Company or any of its
Subsidiaries to the material disadvantage or material detriment of the Company
and its Subsidiaries, (f) gross negligence, willful misconduct or material
breach of fiduciary duty with respect to the Company or any of its Subsidiaries,
or (g) any material breach of this Agreement which is not cured to the Board’s
reasonable satisfaction within 30 days after written notice thereof to the
Executive during which time Executive shall be given the opportunity to meet
with and discuss the grounds for termination with the Board and any persons
named in the notice.
“Change
of Control”means
the
occurrence, without the Executive’s written consent of one or more of the
following events: (i) sale of greater than 50% of the Company’s assets, (ii)
merger or reorganization with another entity wherein the Company will not be
the
surviving or controlling entity; (iii) issuance or aggregation of voting common
shares of the Company in an amount equal to or greater than 50 % of the issued
and outstanding voting common shares of the Company as of the date of this
Agreement in an outside individual or entity, or (iv) change in the majority
of
the existing members of the Board of Directors as of the date of this Agreement.
"Disability"
means
the reasonable, good faith determination by an independent physician selected
in
good faith by the Board and the Executive that, due to a mental or physical
impairment or disability, the Executive has been incapable or unable, even
with
reasonable accommodations, to fully perform the material duties performed by
the
Executive for the Company or its Subsidiaries immediately prior to such
disability for a period of at least ninety (90) consecutive days.
"Good
Reason"
means
the occurrence, without the Executive’s written consent, of one or more of the
following events: (i) the Company reduces the amount of the Base Salary, (ii)
the Company adversely changes the Executive’s titles or reduces his
responsibilities inconsistent with the positions he holds, (iii) except as
set
forth herein, relocation of the Company’s principal place of business out side
of Southern California, (iv) the requirement that Executive spend at least
two
(2) weeks per month for at least three (3) consecutive months at a location
more
than two (2) hours flight time from the Company’s principal place of business,
(v) a change of control of the Company as herein defined or (vi) any material
breach of this Agreement which is not cured to the Executive’s reasonable
satisfaction within 30 days after written notice thereof to the Board;
provided
that no
such event shall constitute Good Reason hereunder unless (a) the Executive
shall
have given written notice to the Company of the Executive’s intent to resign for
Good Reason within 30 days after the occurrence of any such event or occurrence
and (b) such event or occurrence shall not have been resolved to the Executive’s
reasonable satisfaction within 30 days of the Company’s receipt of such
notice.
"Noncompete
Period"
means
the Executive’s Employment Period and one (1) year from the termination of the
Executive’s employment from the Company for any reason.
"Nonsolicitation
Period"
means
the Executive’s Employment Period and one (1) year from the termination of the
Executive’s employment from the Company for any reason.
"Person"
means an
individual, a partnership, a corporation, a limited liability company, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or the United States of America any other nation, any state or
other political subdivision thereof, or any entity exercising executive,
legislative, judicial, regulatory or administrative functions of
government.
"Severance
Period"
means,
in the event that the Executive’s employment with the Company is terminated by
the Company without Cause or by the Executive with Good Reason, the period
of
time starting on the Termination Date and ending twelve (12) months from such
date.
"Subsidiary"
means,
with respect to any Person, any corporation, limited liability company,
partnership, association or business entity of which (a) if a corporation,
a
majority of the total voting power of shares of stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof, or (b) if a limited liability company,
partnership, association or other business entity (other than a corporation),
a
majority of partnership or other similar ownership interest thereof is at the
time owned or controlled, directly or indirectly, by any Person or one or more
Subsidiaries of that Person or a combination thereof. For purposes hereof,
a
Person or Persons shall be deemed to have a majority ownership interest in
a
limited liability company, partnership, association or other business entity
(other than a corporation) if such Person or Persons shall be allocated a
majority of limited liability company, partnership, association or other
business entity gains or losses or shall be or control any managing director
or
general partner of such limited liability company, partnership, association
or
other business entity. For purposes hereof, references to a "Subsidiary" of
any
Person shall be given effect only at such times that such Person has one or
more
Subsidiaries.
"Termination
Date"
means
the date of the Executive’s termination of employment with the
Company.
2.2 Other
Definitional Provisions.
(a) For
purposes of this Agreement, employment by the Company means employment by the
Company or any of its Subsidiaries.
(b) Section
references contained in this Agreement are references to sections in this
Agreement, unless otherwise specified. Each defined term used in this Agreement
has a comparable meaning when used in its plural or singular form. Each
gender-specific term used in this Agreement has a comparable meaning whether
used in a masculine, feminine or gender-neutral form.
(c) Whenever
the term "including" (whether or not that term is followed by the phrase "but
not limited to" or "without limitation" or words of similar effect) is used
in
this Agreement in connection with a listing of items within a particular
classification, that listing will be interpreted to be illustrative only and
will not be interpreted as a limitation on, or an exclusive listing of, the
items within that classification.
ARTICLE
III
MISCELLANEOUS
TERMS
3.1 Dispute
Resolution.
(a) Except
with respect to disputes and claims under Sections
1.4, 1.5, 1.6
and
1.8
hereof
(which the parties hereto may pursue in any Court of competent jurisdiction
and
which may be pursued in any Court of competent jurisdiction as specified below),
each party hereto agrees that any dispute relating to or arising out of the
provisions of this Agreement shall be decided by arbitration in the state of
California in accordance with the Expedited Arbitration Rules of the American
Arbitration Association then obtaining, unless the Parties mutually agree
otherwise in a writing signed by both Parties. The undertaking to arbitrate
shall be specifically enforceable. The decision rendered by the arbitrator
will
be final and judgment may be entered upon it in accordance with appropriate
law
in any court having jurisdiction thereof. Each Party shall pay its own costs
and
expenses for any such arbitration proceeding and shall share equally the costs
for the arbitration proceeding itself such as the arbitrator’s fee and
conference room rental fees.
3.2 Notices.
Any
notice provided
for in
this Agreement must be in writing and must be either personally delivered,
mailed by first class mail (postage prepaid and return receipt requested) or
sent by reputable overnight courier service (charges prepaid) to the recipient
at the address below indicated:
To
the
Company or the Board:
000
X.
Xxxxxx Xxxx., Xxxxx 000
Xxxxxxx,
Xxxxxxxxxx 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Attention:
Board of Directors
With
a
copy (which will not constitute notice to
the
Company or the Board) to:
Xxxx
X.
Xxxx, P.C.
0000
Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx,
Xxxxxxxx 00000-0000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
Attention:
Xxxx X. Xxxx
To
the
Executive:
Xxxxxx
Xxxx
With
a
copy to:
Xxxxx
X.
Xxxxxx, Esquire
Xxxxxx,
Fournaris & Xxxxxxxxxx, P.A.
0000
Xxxxxxxx Xxxxxx
Xxxxxxxxxx,
XX 00000
Telephone:
(000) 000-0000
Facsimile:
(000) 000-0000
or
such
other address or to the attention of such other person as the recipient party
will have specified by prior written notice to the sending party. Any notice
under this Agreement will be deemed to have been given when so delivered or
sent
or, if mailed, five days after deposit in the U.S. mail.
3.3 Severability.
Whenever possible, each provision of this Agreement will be interpreted in
such
manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal or unenforceable in any respect
under any applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability will not affect any other provision or any other
jurisdiction, but this Agreement will be reformed, construed and enforced in
such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.
3.4 Complete
Agreement.
This
Agreement embodies the complete agreement and understanding among the Parties
with regard to the subject matter hereof and supersede and preempt any prior
understandings, agreements or representations by or among the Parties, written
or oral, which may have related to the subject matter hereof in any way.
Notwithstanding the above, this Agreement shall not supercede any agreements,
including any noncompete agreements, entered into by former owners of the
Company with respect to the acquisition of the Company.
3.5 Counterparts.
This
Agreement may be executed in separate counterparts, each of which is deemed
to
be an original and all of which taken together constitute one and the same
agreement.
3.6 Successors
and Assigns.
This
Agreement is intended to bind and inure to the benefit of and be enforceable
by
the Company, the Executive, and their respective heirs, successors and assigns;
provided,
however, neither Party may assign its respective rights or delegate its
obligations hereunder without the prior written consent of the other Party.
Notwithstanding the foregoing, the Company may assign the Agreement to any
entity acquiring all or substantially all of the assets or the business of
the
Company.
3.7 Choice
of Law.
All
questions concerning the construction, validity and interpretation of this
Agreement will be governed by and construed in accordance with the domestic
laws
of California without giving effect to any choice of law or conflict of law
provision or rule (whether of California or any other jurisdiction) that would
cause the application of the laws of any jurisdiction other than
California.
3.8 Remedies.
Subject
to the provisions of Section
3.1
each
Party will be entitled to enforce its rights under this Agreement specifically,
to recover damages and costs caused by any breach of any provision of this
Agreement and to exercise all other rights existing in its favor. Nothing herein
shall prohibit any arbitrator or judicial authority from awarding attorney’s
fees or costs to a prevailing party in any arbitration or other proceeding
to
the extent that such arbitrator or authority may lawfully do so. The Parties
agree and acknowledge that money damages may not be an adequate remedy for
any
breach of the provisions of this Agreement and that, notwithstanding the
provisions of Section
3.1,
any
party may in its sole discretion apply to any court of law or equity of
competent jurisdiction (without posting any bond or deposit) for specific
performance and/or other injunctive relief in order to enforce or prevent any
violations of the provisions of this Agreement.
3.9 Amendment
and Waiver.
The
provisions of this Agreement may be amended or waived only with the prior
written consent of the Company and the Executive, and no course of conduct
or
failure or delay in enforcing the provisions of this Agreement will affect
the
validity, binding effect or enforceability of this Agreement.
3.10 Third
Party Beneficiaries.
This
Agreement will not confer any rights or remedies upon any Person other than
the
parties hereto and their respective successors and permitted assigns.
3.11 Executive’s
Representations.
The
Executive hereby represents and warrants to the Company that (a) the execution,
delivery and performance of this Agreement by the Executive do not and shall
not
conflict with, breach, violate or cause a default under any contract, agreement,
instrument, order, judgment or decree to which the Executive is a party or
by
which he is bound, (b) the Executive is not a party to or bound by any
employment agreement, noncompete agreement or confidentiality agreement with
any
other Person and (c) upon the execution and delivery of this Agreement by the
Company, this Agreement shall be the valid and binding obligation of the
Executive, enforceable in accordance with its terms.
IN
WITNESS WHEREOF, the parties hereto have executed this Employment Agreement
as
of the date first written above.
By:
/s/
Xxxxxxx
Xxxxx
Name:
Title:
/s/
Xxxxxx X. Xxxx
EEXECUTIVE
