EMPLOYMENT AGREEMENT
EXHIBIT
10.14
THIS
EMPLOYMENT AGREEMENT, made this 11th day of April,
2008
, by and
between Mach One Corporation, a Nevada corporation with its address at 0000
Xxxxxxxx Xxxxx, Xxxx Xxxx, XX 53095(hereinafter called “Company”), and
Dr.
Xxxxx Xxxx,
an
individual residing at 00000 Xxxxx Xxxx Xxxxx, Xxxx Xxxxxxx, Xxxxxxxxx 00000
(hereinafter called “Employee”).
WITNESSETH:
WHEREAS,
Employee wishes to enter into the employ of Company and Company wishes to employ
Employee on the terms and conditions contained in this Agreement.
NOW,
THEREFORE, in consideration of the facts, mutual promises and covenants
contained herein and intending to be legally bound hereby, Company and Employee
agree as follows:
1. Definitions.
As used
herein, the following terms shall have the meanings set forth below unless
the
context otherwise requires.
“Affiliate”
shall
mean a person who, (i) with respect to any entity, directly or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, such entity; or (ii) with respect to Employee, is a parent,
spouse or issue of Employee, including persons in an adopted or step
relationship; or (iii) any other entity with which Employee has an affiliation
as defined herein.
“Base
Compensation”
shall
mean the annual rate of compensation set forth in Section 5.1, as such amount
may be adjusted from time to time.
“Board”
shall
mean the Board of Directors of Company.
“Business”
shall
mean the business conducted by Company in the past and on the date of execution
of this Agreement, and business activities under investigation or in
developmental stages, all other business activities which flow therefrom by
a
reasonable expansion of the present activities of Company, all business
activities which may be developed by Company during the period of Employee’s
employment by Company, and all business activities now conducted by Company
or
any Affiliate thereof or which may be developed by Company or such Affiliates,
during such period as reasonable expansions of their present
activities.
“Cause”
shall
mean:
a) Employee
is convicted of a felony or a crime involving moral turpitude or has entered
a
plea of nolo contendere (or similar plea) to a charge of such an
offense;
b) Employee’s
theft or embezzlement or attempted theft or embezzlement of money or tangible
or
intangible assets or property of the Company or its employees or business
relations;
c) any
act
or acts of moral turpitude by Employee which negatively affects the interest,
property, operations, business or reputation of the Company;
d) Employee
is convicted of or successfully prosecuted for intentional violation of a
federal, state or local law or regulation which conviction negatively affects
the interest, property, operations, business or reputation of the
Company;
e) Employee
uses alcohol or any unlawful controlled substance to an extent that it
interferes on a continuing and material basis with the performance of Employee’s
duties under the Agreement; alcoholism or substance addiction on the part of
Employee.
f) performance
of duties in an grossly incompetent manner;
g) any
demonstrated act of fraud, misappropriation or personal dishonesty;
h) gross
negligence or willful misconduct;
i) violation
of any express direction of the Board of Directors or any supervisor of Employee
or material violation of any rule, regulation, policy or plan established by
Company from time to time regarding the conduct of its employees and/or its
business, that is not an illegal act;
j) material
violations by Employee of Employee’s obligations hereunder that are demonstrably
willful and deliberate on Employee’s part and are not remedied within a
reasonable time period after receipt of written notice from
Company;
k) misrepresentation
of a material fact or omission of information necessary to make the information
supplied not materially misleading in any information provided by Employee
to
the Company or any representative of the Company ;
l) Employee
engages in the willful, unauthorized disclosure of confidential information,
unless such disclosure was required by an order of a court having jurisdiction
over the subject matter or a summons, subpoena or order in the nature thereof
of
any legislative body (including any committee thereof) or any governmental
or
administrative agency;
m) the
existence of any material conflict between the interests of Company and Employee
of which Employee is aware, and which is not disclosed in writing by Employee
to
the Board and approved in writing by the authority of the Board;
n) Employee
violates Sections of this Agreement relating to non-competition; or
“Confidential
Information”
shall
have the meaning specified in Section
12.1
hereof.
“Disability”
shall
mean Employee’s inability, for a period of three consecutive months, or a
cumulative period of 75 business days (i.e., Mondays through Fridays, exclusive
of days on which Company is generally closed for a holiday) out of a period
of
12 consecutive months, to perform the essential duties of Employee’s position,
even taking into account any reasonable accommodation required by law, due
to a
mental or physical impairment which substantially limits one or more major
life
activity. Due to the nature of Employee’s position, Employee acknowledges that
it would be an undue hardship on the Company if the time periods specified
in
the preceding sentence were longer.
“Employment
Year”
shall
mean each twelve-month period, or part thereof, during which Employee is
employed hereunder, commencing on the date of this Agreement, the first such
subsequent Employment Year being the twelve-month period which will begin on
January 1, 2008 or when Company first reaches one hundred thousand dollars
in
gross monthly sales, whichever occurs later.
“Exchange
Act”
shall
mean the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder.
“Restricted
Area”
shall
have the meaning specified in Section 12.1 hereof.
“Restricted
Period”
shall
have the meaning specified in Section 12.2 hereof.
“Subsidiary”
shall
mean any corporation in which Company owns directly or indirectly 50% or more
of
the Voting Stock; or any other venture in which it owns 50% or more of the
equity.
“Term
of Employment”
shall
mean the period specified in Section 4 hereof as such period may be extended
pursuant to such Section and as
the
same may be terminated in accordance with this Agreement.
“Voting
Stock”
shall
mean capital stock of any class or classes having general voting power under
ordinary circumstances, in the absence of contingencies, to elect the directors
of a corporation.
2. Employment.
Company
hereby employs Employee and Employee hereby accepts employment by Company for
the period and upon the terms and conditions specified in this
Agreement.
3. Office
and Duties.
3.1 Employee
shall serve Company generally as Chief Scientific Officer and shall have such
authority and responsibilities as Company may determine from time to time and
consistent with such position. Employee shall perform any other duties
reasonably required by Company and, if requested by Company, shall serve as
an
officer or director of Company or any Subsidiary without additional
compensation.
3.2 So
long
as Employee shall remain an employee of Company, Employee’s primary energy,
skill and efforts shall be devoted to the performance of Employee’s duties
hereunder in a manner which will faithfully and diligently further the business
and interests of Company. Employee may engage in charitable, civic, fraternal
and trade association activities that do not interfere with Employee’s
obligations to Company, but Employee shall not work for any other business
as an
employee of such business.
3.3 Employee
shall render Employee’s service at Company’s principal executive office in the
City of Newburg.
4. Term.
Employee
shall be employed by Company for an initial Term of Employment of three
(3)
years, commencing on April
11, 2008,
and
ending on April
10, 2011, unless
sooner terminated as hereinafter provided. Unless either party elects to
terminate this Agreement at the end of the initial or any renewal term by giving
the other party written notice of such election at least ninety (90) days before
the expiration of the then current term, the Term of Employment shall be deemed
to have been renewed for an additional term of one (1) year commencing on the
day after the expiration of the then current term.
5. Compensation
and Benefits.
5.1 For
all
of the services rendered by Employee to Company, Employee shall receive:
(i) Base
Compensation at the gross annual rate (subject to authorized or legally required
deductions and withholdings) of One
Hundred and Thirty Thousand
Dollars
($130,000),
payable in installments in accordance with Company’s regular payroll practices
in effect from time to time.
5.2 In
addition to the foregoing compensation, Company from time to time may pay
Employee such bonuses or other additional compensation as Company may determine,
but there is no agreement regarding any such additional payments, the existence
and amounts of which shall be within Company’s sole discretion and may be
changed or eliminated from time to time.
6. Fringe
Benefits.
Employee
shall be entitled to the benefits set forth in Exhibit “A” during the Term of
Employment for so long as Employee’s employment with Company continues. In
addition, Company will reimburse Employee for all reasonable and
necessary expenses
incurred by Employee in connection with the performance of Employee’s duties
hereunder upon receipt of documentation therefor in accordance with Company’s
regular reimbursement procedures and practices in effect from time to time.
The
Board of Directors from time to time may require prior approval for individual
expense items in excess of pre-established aggregate amounts for a fixed period
or in excess of pre-established amounts for any type of expenditure during
any
fixed period.
7. Disability.
If
Employee suffers a Disability, Company may terminate this Agreement at any
time
thereafter by giving Employee ten (10) days’ written notice of termination. Upon
such termination, Company shall have no obligation to Employee for Base
Compensation or other form of compensation or benefits to Employee, except
as
otherwise required by law, other than amounts accrued through the date of
termination.
8. Death.
If
Employee dies during the Term of Employment, the Term of Employment and
Employee’s employment with Company shall terminate as of the date of Employee’s
death. Company shall have no obligation to Employee or Employee’s estate for
Base Compensation or other form of compensation or benefit other than amounts
accrued through the date of Employee’s death except as otherwise required by law
or by benefit plans provided at Company expense.
In
the
event of the termination of Employee’s employment due to Employee’s death or
Disability, Employee or Employee’s legal representatives, as the case may be,
shall be entitled to:
8.1 (A)
In
the case of death, unpaid Base Compensation earned or accrued through Employee’s
date of death and continued Base Compensation at a rate in effect at the time
of
death for a period of three months following the month in which such termination
of employment due to death occurs; or (B) in the case of Disability, unpaid
Base
Compensation earned or accrued through Employee’s date of termination and the
disability benefit available under and only to the extent of any insurance
maintained;
8.2 any
performance or special incentive bonus earned but not yet paid;
8.3 any
other
compensation and benefits to which Employee or Employee’s legal representatives
may be entitled under applicable plans, programs and agreements of Company
to
the extent permitted under the terms thereof, including, without limitation,
life insurance and stock options as may have been provided.
9. Change
of Control.
(a)
If
prior to the expiration of the Employment Period, there is a Change of Control
(as such term is defined herein) and thereafter any of the following occur:
(i)
the
Employee is placed in any position of lesser
stature
than that of Chief Scientific Officer of the Company; is assigned duties
inconsistent with the position of Chief Scientific Officer or duties which,
if
performed, would result in a significant change in the nature or scope of
powers, authority, functions or duties inherent in such position on the date
hereof; is assigned performance requirements or working conditions which are
at
variance with the performance requirements and working conditions in effect
on
the date hereof; or is accorded treatment on a general basis that is in
derogation of his status as a Chief Scientific Officer;
(ii)
any
breach of Paragraphs 4, 5, 6, or 7, inclusive, of this Agreement;
or
(iii)
any
requirement of the Company that the location at which the Employee performs
his
principal duties for the Company be outside a radius of 50 miles from the
location at which the Employee performed such duties immediately prior to the
Change of Control,
then
the
Agreement shall be deemed to have been terminated by the Company otherwise
than
by reason of Cause and the Company shall pay to Executive within five days
after
notice from Employee to such effect, as liquidated damages, a lump sum cash
payment equal to 2.99 times the "base amount" of Employee's compensation. For
purposes hereof, "base amount" shall have the meaning provided in Section 280G
(b) (2) (A) of the Internal Revenue Code of 1986, as amended, and the Proposed
Regulations thereunder.
(b)
For
the purposes of this Agreement, a Change of Control means
(i)
the
direct or indirect sale, lease, exchange or other transfer of all or
substantially all (50% or more) of the assets of the Company to any person
or
entity or group of persons or entities acting in concert as a partnership or
other group (a "Group of Persons"),
(ii)
the
merger, consolidation or other business combination of the Company with or
into
another corporation with the effect that the shareholders of the Company, as
the
case may be, immediately following the merger, consolidation or other business
combination, hold 50% or less
of
the combined voting power of the then outstanding securities of the surviving
corporation of such merger, consolidation or other business combination
ordinarily (and apart from rights accruing under special circumstances) having
the right to vote in the election of directors,
(iii)
the
replacement of a majority of the Company's Board in any given year as
compared
to
the
directors who constituted the Company's Board at the beginning of such year,
and
such replacement shall not have been approved by the Company's Board, as the
case may be, as constituted at the beginning of such year,
(iv)
a
person or Group of Persons shall, as a result of a tender or exchange offer,
open market
purchases,
privately negotiated purchases or otherwise, have become the beneficial owner
(within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934,
as
amended) of securities of the Company representing 50% or more of the combined
voting power of the then outstanding securities of such corporation ordinarily
(and apart from rights accruing under special circumstances) having the right
to
vote in the election of directors.
10. Termination
for Cause.
Company
may terminate Employee’s employment relationship with Company at any time for
Cause. At time of termination, Company shall provide Employee with written
notice of termination with grounds of termination being set forth sufficiently
in such notice. Company shall have no obligation to Employee for Base
Compensation or other form of compensation or benefits, except as otherwise
required by law, other
than (a) amounts accrued through the date of termination, and (b) reimbursement
of appropriately documented expenses incurred by Employee before the termination
of employment, to the extent that Employee would have been entitled to such
reimbursement but for the termination of employment.
11. Company
Property.
Employee
agrees that Employee will not take or retain any Confidential Information (as
defined below), whether in written, computerized, machine readable, model,
sample, or other medium or form capable of physical delivery, upon or after
the
termination for any reason of Employee’s employment with the Company, without
the prior written consent of the Company’s Board of Directors or its designated
officer. Employee also agrees that upon the termination for any reason of
Employee’s employment with the Company or at any other time that the Company may
request, Employee shall deliver promptly and return to the Company all such
documents and materials, along with any other Confidential Information and
all
other property of the Company and property relating to the Company’s employees,
customers and business in Employee’s possession or control.
12. Non-Competition,
Non-Solicitation, Trade Secrets, etc.
Employee
hereby acknowledges that, in hiring Employee hereunder, Employer is specifically
relying upon Employee’s prior and current special knowledge, training and
education with respect to the operations of Company’s business and other related
matters, and access to confidential information, trade secrets and business
and
professional contacts. In consideration of such special and unique opportunities
afforded as a result of Employee’s employment, the Employee hereby agrees as
follows:
12.1 The
term
“Confidential Information” means information and data not generally known
outside the Company (unless as a result of a breach of any of the obligations
imposed by this Agreement) concerning the Company’s businesses and technical
information, including, without limitation, information relating to: (i)
information regarding the Company’s clients including without limitation their
purchasing habits, pricing, needs, credit histories, contact personnel,
concepts, and other information; (ii) information regarding freelance sources,
suppliers’ and vendors’ costs, products, discounts, margins, contact personnel
and other information; (iii) the Company’s Business, trade secrets, processes,
price lists, financial and marketing data, personnel and compensation
information, and business plans; (iv) information or data regarding the
Company’s research, marketing activities, techniques, and processes; and (v) the
Company’s technical specifications, film, artwork, proof sheets, copy, and
designs. Confidential Information shall not include information which (i) is
or
becomes public knowledge; (ii) is or becomes available to Employee from a source
other than the Company and without violation of any obligation of
confidentiality which such source may have; or (iii) is already in Employee’s
possession with out restriction as to disclosure.
Employee
acknowledges that Confidential Information is solely the property of the
Company. Except as otherwise herein provided, Employee agrees that during the
period of employment, and thereafter, Employee will hold in strictest confidence
and will not use or disclose to any person or entity without the written
authorization of the Board, any of the Company’s Confidential Information,
except as such use or disclosure may be required in connection with Employee’s
work for the Company or to the extent that such information becomes known in
the
public or trade other than as a result of Employee’s actions or failure to act
or the wrongful actions of any third party. Employee understands that this
Agreement applies to artwork, computerized and written information and to other
information, whether or not in written form. The foregoing provisions of this
Subsection 12.1 shall apply during and after the period when Employee is an
employee of the Company and shall be in addition to (and not a limitation of)
any legally applicable protections of Company’s interest in confidential
information, trade secrets and the like.
12.2 For
so
long as Employee remains an employee of the Company and for a period of twenty
four (24) months after the termination of employment with Company for any
reason, as such period may be extended as hereinafter set forth (the “Restricted
Period”), Employee shall not directly or indirectly (i) engage in (as a
principal, shareholder, partner, director, officer, agent, employee, consultant
or otherwise) or be financially interested in any business operating in business
activities which are the same as, similar to or in competition with business
activities carried on by Company, or being definitely planned
by Company, at the time of the termination of Employee’s employment; provided,
however, nothing contained in this Section 12 shall prevent Employee from
holding for investment no more than five percent (5%) of any class of equity
securities of a company whose securities are publicly traded on a national
securities exchange or in a national market system.
12.3 During
the Restrictive Period, Employee shall not, on Employee’s own behalf or on
behalf of any other person or entity, without the express written consent of
the
Board, solicit, induce or attempt to solicit or induce: (i) any then current
employee, representative, supplier, vendor or service provider of the Company
to
terminate or modify his, her or its employment or business relationship with
the
Company; and (ii) any then current client or prospective client of the Company
either to terminate or modify its use of the Company’s products or services or
to provide products or services competitive with the products or services
offered by the Company. “Current client” shall mean any person or entity for
which the Company has provided services to or has received payment from during
the two year period prior to the termination of Employee’s employment.
“Prospective client” shall mean any person or entity with which Employee has had
contact on behalf of the Company within the two year period prior to the
termination of Employee’s employment
12.4 Any
and
all writings, inventions, improvements, processes, procedures and/or techniques
which Employee may make, conceive, discover or develop, either solely or jointly
with any other person or persons, at any time when Employee is an employee
of
Company, whether or not during working hours and whether or not at the request
or upon the suggestion of Company, which relate to or are useful in connection
with any business now or hereafter carried on or contemplated by Company,
including developments or expansions of its present fields of operations, shall
be the sole and exclusive property of Company. Employee shall make full
disclosure to Company of all such writings, inventions, improvements, processes,
procedures and techniques, and shall do everything necessary or desirable to
vest the absolute title thereto in Company. Employee shall write and prepare
all
specifications and procedures regarding such inventions, improvements,
processes, procedures and techniques and otherwise aid and assist Company so
that Company can prepare and present applications for copyright or Letters
Patent therefor and can secure such copyright or Letters Patent wherever
possible, as well as reissues, renewals, and extensions thereof, and can obtain
the record title to such copyright or patents so that Company shall be the
sole
and absolute owner thereof in all countries in which it may desire to have
copyright or patent protection. Employee shall not be entitled to any additional
or special compensation or reimbursement regarding any and all such writings,
inventions, improvements, processes, procedures and techniques.
Attached
to this Agreement as Exhibit “B” is a list of all writings, inventions,
improvements, processes, procedures and/or techniques, and works of authorship
relevant to the subject matter of Employee’s employment by the Company that have
been made or conceived or first reduced to practice by Employee, alone or
jointly with others, prior to Employee’s employment by the Company, and that are
hereby removed from the scope of this Agreement, including this Section 12.4.
12.5 Employee
acknowledges that the restrictions contained in the foregoing Subsections 12.1
through 12.4, in view of the nature of the business in which Company is engaged,
are reasonable and necessary in order to protect the legitimate interests of
Company, the Company’s confidential and proprietary information and its
permanent and near-permanent relationships with its customers, that their
enforcement will not impose a hardship on Employee or significantly impair
Employee’s ability to earn a livelihood, and that any violation thereof would
result in irreparable injuries to Company. Employee therefore acknowledges
that,
in the event of Employee’s violation of any of these restrictions, Company shall
be entitled to obtain from any court of competent jurisdiction preliminary
and
permanent injunctive relief as well as damages and an equitable accounting
of
all earnings, profits and other benefits arising from such violation, which
rights shall be cumulative and in addition to any other rights or remedies
to
which Company may be entitled.
12.6 Notwithstanding
any other provision of this Agreement, nothing in this Agreement shall prohibit
Employee’s use, subsequent to the expiration of this Agreement, or the
termination of Employee’s employment with the Company, of Employee’s general
know-how that Employee acquires or enhances during Employee’s employment with
the Company, as the term “know-how” is defined under Wisconsin or other
applicable law.
127 If
a
court of competent jurisdiction rules that any restriction of this Section
12,
including without limitation the Restricted Area and Restricted Period, is
overbroad or unreasonable under the circumstances then existing, the court
shall
modify or revise such restriction to include the maximum reasonable restriction
allowed by law. If Employee violates any of the restrictions contained in this
Section 12, the Restricted Period shall be extended by a period equal to the
length of time from the commencement of any such violation until such time
as
such violation shall be cured by Employee to the satisfaction of Company.
Company shall have the right and remedy to require Employee to account for
and
pay over to Company all compensation, profits, monies, accruals, increments
or
other benefits derived or received by Employee as the result of any transactions
constituting a breach of this Section 12, and Employee shall account for and
pay
over such amounts to Company upon Company’s request therefor. Employee hereby
expressly consents to the jurisdiction of any court within the Restricted Area
to enforce the provisions of this Section 12, and agrees to accept service
of
process by mail relating to any such proceeding. Company may supply a copy
of
Section 12 of this Agreement to any future or prospective employer of Employee
or to any person to whom Employee has supplied information if the Company
determines in good faith that there is a reasonable likelihood that Employee
has
violated or will violate such Section.
13. Conflicts
of Interest.
Employee represents to Company: (a) that there are no restrictions, agreements
or understandings, oral or written, to which Employee is a party or by which
Employee is bound that prevent or make unlawful Employee’s execution or
performance of this Agreement; (b) none of the information supplied by Employee
to Company or any representative of Company or placement agency in connection
with Employee’s employment by Company misstated a material fact or omitted
information necessary to make the information supplied not materially
misleading; and (c) Employee does not have any business or other relationship
that creates a conflict between the interests of Employee and the
Company.
14. General
Terms.
14.1 Binding
Nature of Agreement. This
Agreement shall be binding upon Company and shall inure to the benefit of
Company, its present and future Affiliates, successors and assigns including
any
transferee of the business operation, as a going concern, in which Employee
is
employed and shall be binding upon Employee, Employee’s heirs and personal
representatives. None of the rights or obligations of Employee hereunder may
be
assigned or delegated, except that in the event of Employee’s death or
Disability, any rights of Employee hereunder shall be transferred to Employee’s
estate or personal representative, as the case may be. Any
entity into which Company is merged or with which Company is consolidated or
which acquires the business of Company or the business unit in which Employee
is
to be principally employed shall be deemed to be a successor of Company for
purposes hereof.
14.2 Provisions
Separable.
The
provisions of this Agreement are independent of and separable from each other,
and no provision shall be affected or rendered invalid or unenforceable by
virtue of the fact that for any reason any other or others of them may be
invalid or unenforceable in whole or in part.
14.3 Entire
Agreement.
This
Agreement contains the entire understanding among the parties hereto with
respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements and understandings, inducements or conditions,
express or implied, oral or written, except as herein contained. The express
terms hereof control and supersede any course of performance and/or usage of
the
trade inconsistent with any of the terms hereof. This Agreement may not be
modified or amended other than by an agreement in writing. Notwithstanding
the
foregoing, nothing herein shall limit the application of any generally
applicable Company policy, practice, plan or the terms of any manual or handbook
applicable to Company’s employees generally.
14.4 Governing
Law.
This
Agreement shall be governed by the substantive laws of the State of Wisconsin
regarding contracts made and performed in this State.
14.5 Deductions
and Withholding.
All
payments to be made to Employee under this Agreement or otherwise related to
Employee’s employment by the Company are subject to all deductions or
withholding authorized or required by law.
IN
WITNESS WHEREOF, the parties have executed this Agreement on April
11, 2008
.
Mach One Corporation.
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By:
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Dr. Xxxxx Xxxx
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