Employment Agreement (the “Agreement”) is entered into as of January 1, 2006, by
and between Bill Glaser (the “Executive”) and UKARMA CORPORATION, a Nevada
corporation (the “Company”).
the Company believes that Executive’s service, experience, and knowledge are
valuable to the Company in connection with its business; and
the Company desires to employ Executive, and Executive desires to be employed
the Company, as Chief Executive Officer of the Company.
THEREFORE, in consideration of the mutual promises and covenants herein
contained, the parties hereto agree as follows:
Company hereby employs Executive and Executive accepts such employment upon
terms and conditions hereinafter set forth.
to the provisions of Section 6, the term of Executive’s employment pursuant to
this Agreement shall commence on and as of the date hereof and shall terminate
on the fifth (5th)
anniversary of such date.
Extent of Service.
Executive’s employment under this Agreement, Executive (i) shall serve as an
employee of the Company with the title and position of Chief Executive Officer,
reporting to the Board of Directors of the Company and shall have such executive
responsibilities as the Board of Directors of the Company shall from time to
time designate, provided
cases Executive shall be subject to the oversight and supervision of the Board
of Directors of the Company in the performance of his duties, and (ii) shall
render all services reasonably incident to the foregoing. Executive hereby
accepts such employment, agrees to serve the Company in the capacity indicated,
and agrees to use Executive’s best efforts in, and shall devote Executive’s full
working time, attention, skill and energies to, the advancement of the interests
of the Company and its subsidiaries and the performance of Executive’s duties
and responsibilities hereunder.
in this Agreement shall preclude Executive from owning, purchasing, selling,
otherwise dealing in any manner with any property or engaging in any business
whatsoever, including without limitation, providing consulting services, acting
as a director of another company, or starting a new business, without notice
the Company, without participation of the Company, and without liability to
Company so long as the same does not materially interfere with the performance
of Executive’s services and such business does not compete with the Company’s
Executive’s employment under this Agreement, the Company shall pay Executive a
salary at the rate of $180,000 per annum (the “Salary”). Such Salary shall be
subject to withholding under applicable law, shall be prorated for partial
and shall be payable in periodic installments not less frequently than monthly
in accordance with the Company’s usual practice for its executive officers as in
effect from time to time.
Salary shall increase to $250,000 per annum if either: (1) the Company raises
million of debt or equity financing in the aggregate (i.e., in one or more
financing transactions) after the date hereof; or (2) the Company recognizes
million in cumulative gross revenues (i.e., the sum of all revenues recognized
since commencement of operations).
Salary shall increase to $360,000 per annum if either: (1) the Company raises
$2.5 million of debt or equity financing in the aggregate (i.e., in one or
financing transactions, and including transactions counted towards the $1
million target in the immediately preceding paragraph) after the date hereof;
(2) the Company recognizes $2.5 million in cumulative gross revenues (i.e.,
sum of all revenues recognized since commencement of operations).
Salary shall increase to $500,000 per annum if either: (1) the Company raises
million of debt or equity financing in the aggregate (i.e., in one or more
financing transactions, and including transactions counted towards the $1
million and $2.5 million targets in the immediately preceding paragraphs) after
the date hereof; or (2) the Company recognizes $2.5 million in cumulative gross
revenues (i.e., the sum of all revenues recognized since commencement of
Executive shall receive a performance bonus based on “Adjusted EBITDA” (the
“Performance Bonus”). For purposes of this Section, “Adjusted
shall mean earnings before interest, taxes, depreciation and amortization,
adjusted to account for non-cash expenses, and calculated from financial
statements that are prepared in accordance with GAAP. Executive shall receive
Performance Bonus in an amount equal to 5 % of Adjusted EBITDA for each fiscal
year. The Board shall have the right to grant Executive a bonus in addition
the foregoing Performance Bonus or, if so determined by the Board, a bonus
of Living Adjustment.
Commencing as of January 1, 2007, and on each January 1st thereafter, the then
effective Salary shall be increased (but not decreased) by an amount
shall reflect the increase, if any, in the cost of living during the previous
months by adding to the Salary an amount computed by multiplying the Salary
the percentage by which the level of the Consumer Price Index for the New York,
New York Metropolitan Area, as reported on January 1st of the new year by the
Bureau of Labor Statistics of the United States Department of Labor has
increased over its level as of January 1st of the prior year.
upon Change of Control.
time prior to the one month anniversary of the Executive’s termination, if the
Company shall merge, sell a controlling interest, or sell a majority of its
assets; or if there is a transaction (or series of transactions) in which the
Company’s shareholders sell a majority of outstanding shares of Company capital
stock, then the Company shall pay Executive the greater of the remainder of
salary or Two Hundred Fifty Thousand Dollars ($250,000). Further, at the date
any such merger or sale is consummated, all unvested options shall be
immediately accelerated and as to any unexercised options to purchases shares
the Company which are held by Executive, the Company shall pay Executive cash
the amount equal to the difference between the consideration paid to the Company
on a per share basis less the exercise price of the option, the value of which
is multiplied to the number of options which Executive holds.
execution of this Agreement, Executive shall receive options to purchase
5,000,000 shares of Company common stock exerciseable at $.20 per share. The
options shall be issued under the Company’s 2006 Stock Option, Deferred Stock
and Restricted Stock Plan (the “Plan”). The options shall be governed to the
provisions of the Plan. The options shall become exercisable at the rate of
from the six month anniversary of the date of this Agreement; 20% on January
2007, and then 10% every six months thereafter, and shall expire in ten (10)
years, subject to early termination for death, disability or other termination
of employment as set forth in the Plan.
In Lieu of Cash Payment.
event that Executive believes that it would be in the best interests of the
Company for Executive to accept shares of Company common stock in lieu of the
payment to him of Salary, benefits and/or bonus owing by the Company, Executive
shall have the right in his sole discretion to elect to accept shares of Company
common stock for amounts owing to him (or a portion thereof) as he shall
determine from time to time. In determining the number of shares to be issued
Executive in lieu of the cash payment, the shares of common stock issued to
shall be valued at 25% below the then current market price for the Company’s
Executive’s employment under this Agreement, Executive shall be entitled to
participate in any and all medical, pension, dental and life insurance plans
disability income plans, retirement arrangements and other employment benefits
as in effect from time to time for executive officers of the Company generally.
Such participation shall be subject to (i) the terms of the applicable plan
documents (including, as applicable, provisions granting discretion to the
of Directors of the Company or any administrative or other committee provided
for therein or contemplated thereby) and (ii) generally applicable policies
Executive’s employment under this Agreement, Executive shall receive paid
vacation annually in accordance with the Company’s practices for executive
officers, as in effect from time to time, but in any event not less than four
weeks per calendar year.
Company shall reimburse Executive for all reasonable business expenses incurred
by Executive during Executive’s employment hereunder to the extent in compliance
with the Company’s business expense reimbursement policies in effect from time
to time and upon presentation by Executive of such documentation and records
the Company shall from time to time require.
Executive’s employment under this Agreement, Executive shall receive a car
allowance of $750 per month.
of Payments and Benefits.
Company shall undertake to make deductions, withholdings and tax reports with
respect to payments and benefits under this Agreement to the extent that it
reasonably and in good faith believes that it is required to make such
deductions, withholdings and tax reports. Payments under this Agreement shall
in amounts net of any such deductions or withholdings. Nothing in this Agreement
shall be construed to require the Company to make any payments to compensate
Executive for any adverse tax effect associated with any payments or benefits
for any deduction or withholding from any payment or benefit.
of Salary and Benefits.
Executive shall not be entitled to any payments or benefits other than those
provided under this Agreement. Compliance with the provisions of this Section
shall in no way create or be deemed to create any obligation, express or
implied, on the part of the Company or any of its affiliates with respect to
continuation of any particular benefit or other plan or arrangement maintained
by them or their subsidiaries as of or prior to the date hereof or the creation
and maintenance of any particular benefit or other plan or arrangement at any
time after the date hereof.
and Termination Benefits.
Notwithstanding the provisions of Section 2, Executive’s employment under this
Agreement shall terminate under the following circumstances set forth in this
by the Company for Cause.
Executive’s employment under this Agreement may be terminated for Cause without
further liability on the part of the Company other than for accrued but unpaid
Salary through the date of termination effective immediately upon written notice
to Executive. “Cause” shall mean the following:
commission by Executive of any act of embezzlement, fraud, larceny or theft
or from the Company or an affiliate of the Company;
commission by Executive of, or indictment of Executive for a
to perform, or materially poor performance of, Executive’s duties and
responsibilities assigned or delegated under this Agreement, or any material
misconduct or violation of the Company’s policies, in either case, which
continues for a period of thirty (30) days after written notice given to
material breach by Executive of any of the covenants, terms or provisions of
this Agreement or any agreement between the Company and Executive regarding
confidentiality, non-competition or assignment of inventions.
Executive’s employment under this Agreement may be terminated by Executive by
written notice to the Board of Directors at least sixty (60) days prior to
by the Company Without Cause.
to the payment of Termination Benefits pursuant to Section 6(d), Executive’s
employment under this Agreement may be terminated without Cause by the Company
upon written notice to Executive.
otherwise specifically provided in this Agreement or otherwise required by
all compensation and benefits payable to Executive under this Agreement shall
terminate on the date of termination of Executive’s employment under this
Agreement. Notwithstanding the foregoing, in the event of termination of
Executive’s employment with the Company pursuant to Section 6(c) above: (1) the
Company shall pay to Executive the lesser of (i) Executive’s Salary for the
remainder of the Term, payable in the manner set forth in Section 4(a) or
(ii) one year’s Salary payable in the manner set forth in Section 4(a) (the
“Severance Benefits”); and (2) all stock options issued to Executive under the
Plan shall immediately vest in full and shall remain outstanding and exercisable
until ten (10) years from the date of grant.
parties hereto agree that the Severance Benefits are to be in full satisfaction,
compromise and release of any claims arising out of any termination of the
Executive’s employment pursuant to Section 6(c), and such amounts shall be
contingent upon the Executive’s delivery of a general release of such claims
upon termination of employment in a form reasonably satisfactory to the Company,
it being understood that no Severance Benefits shall be provided unless and
until the Executive determines to execute and deliver such release.
the death of the Executive, or upon the permanent disability (as defined below)
of the Executive continuing for a period in excess of one hundred eighty (180)
consecutive days, all obligations of the Company under this Agreement shall
immediately terminate other than any obligation of the Company with respect
earned but unpaid Salary and earned benefits contemplated hereby to the extent
accrued or vested through the date of termination. As used herein, the terms
“permanent disability” or “permanently disabled” shall mean the inability of the
Executive, by reason of injury, illness or other similar cause, to perform
major part of his duties and responsibilities in connection with the conduct
the business and affairs of the Company, as determined reasonably and in good
faith by the Company.
termination of this Agreement as provided in this Section 6 or any other
termination of Executive’s employment with the Company, Executive’s obligations
under Section 7 hereof shall survive any termination of Executive’s employment
with the Company at any time and for any reason.
Confidentiality; Proprietary Rights.
Executive agrees that he shall not, during the term of this Agreement, and
period of one (1) year thereafter, solicit any employee of the Company to
terminate such employee’s employment with the Company, or agree to hire any such
employee or former employee of the Company (unless at least 12 months have
passed since the termination of such employee’s employment with the Company);
in this Agreement, the term “Confidential Information” shall mean information
belonging to the Company (for purposes of this Section 7 including all
predecessors of the Company) of value to the Company or with respect to which
Company has right in the course of conducting its business and the disclosure
which could result in a competitive or other disadvantage to the Company.
Confidential Information includes information, whether or not patentable or
copyrightable, in written, oral, electronic or other tangible or intangible
forms, stored in any medium, including, by way of example and without
limitation, trade secrets, ideas, concepts, designs, configurations,
specifications, drawings, blueprints, diagrams, models, prototypes, samples,
flow charts processes, techniques, formulas, software, improvements, inventions,
domain names, data, know-how, discoveries, copyrightable materials, marketing
plans and strategies, sales and financial reports and forecasts, customer lists,
studies, reports, records, books, contracts, instruments, surveys, computer
disks, diskettes, tapes, computer programs and business plans, prospects and
opportunities (such as possible acquisitions or dispositions of businesses
facilities) which have been discussed or considered by the management of the
Company. Confidential Information includes information developed by Executive
the course of Executive’s employment by the Company, as well as other
information to which Executive may have access in connection with Executive’s
employment. Confidential Information also includes the confidential information
of others with which the Company has a business relationship. Notwithstanding
the foregoing, Confidential Information does not include information in the
public domain, unless due to breach of Executive’s duties under Section
course of performing services hereunder on behalf of the Company and its
affiliates, Executive has had and from time to time will have access to
Confidential Information. Executive agrees (i) to hold the Confidential
Information in strict confidence, (ii) not to disclose the Confidential
Information to any person (other than in the regular business of the Company
its affiliates), and (iii) not to use, directly or indirectly, any of the
Confidential Information for any purpose other than on behalf of the Company
its affiliates. All documents, records, data, apparatus, equipment and other
physical property, whether or not pertaining to Confidential Information, that
are furnished to Executive by the Company or are produced by Executive in
connection with Executive’s employment will be and remain the sole property of
the Company. Upon the termination of Executive’s employment with the Company for
any reason and as and when otherwise requested by the Company, all Confidential
Information (including, without limitation, all data, memoranda, customer lists,
notes, programs and other papers and items, and reproductions thereof relating
to the foregoing matters) in Executive’s possession or control, shall be
immediately returned to the Company.
Party Agreements and Rights.
Executive hereby confirms that Executive is not bound by the terms of any
agreement with any previous employer or other party that restricts in any way
Executive’s use or disclosure of information or Executive’s engagement in any
business. Executive represents to the Company that Executive’s execution of this
Agreement, Executive’s employment with the Company and the performance of
Executive’s proposed duties for the Company will not violate any obligations
Executive may have to any such previous employer or other party. In Executive’s
work for the Company, Executive will not disclose or make use of any information
in violation of any agreements with or rights of any such previous employer
other party, and Executive will not bring to the premises of the Company any
copies or other tangible embodiments of non-public information belonging to
obtained from any such previous employment or other party.
and Regulatory Cooperation.
and after Executive’s employment, Executive shall cooperate fully with the
Company in the defense or prosecution of any claims or actions now in existence
or which may be brought in the future against or on behalf of the Company that
relate to events or occurrences that transpired while Executive was employed
the Company. Executive’s full cooperation in connection with such claims or
actions shall include, but not be limited to, being available to meet with
counsel to prepare for discovery or trial and to act as a witness on behalf
the Company at mutually convenient times. During and after Executive’s
employment, Executive also shall cooperate fully with the Company in connection
with any investigation or review of any federal, state or local regulatory
authority as any such investigation or review relates to events or occurrences
that transpired while Executive was employed by the Company. The Company shall
reimburse Executive for any reasonable out-of-pocket expenses incurred in
connection with Executive’s performance of obligations pursuant to this Section
Executive recognizes that the Company and its affiliates possess a proprietary
interest in all of the Confidential Information and have the exclusive right
privilege to use, protect by copyright, patent or trademark, or otherwise
exploit the processes, ideas and concepts described therein to the exclusion
Executive, except as otherwise agreed between the Company and Executive in
writing. Executive expressly agrees that any products, inventions, discoveries
or improvements made by Executive in the course of Executive’s employment,
including any of the foregoing which is based on or arises out of the
Confidential Information, shall be the property of and inure to the exclusive
benefit of the Company. Executive further agrees that any and all products,
inventions, discoveries or improvements developed by Executive (whether or
able to be protected by copyright, patent or trademark) during the course of
employment, or involving the use of the time, materials or other resources
the Company or any of its affiliates, shall be promptly disclosed to the Company
and shall become the exclusive property of the Company, and Executive shall
execute and deliver any and all documents necessary or appropriate to implement
Executive agrees, while he is employed by the Company, to offer or otherwise
make known or available to it, as directed by the Board of Directors of the
Company and without additional compensation or consideration, any business
prospects, contracts or other business opportunities that Executive may
discover, find, develop or otherwise have available to Executive in the
Company’s general industry and further agrees that any such prospects, contacts
or other business opportunities shall be the property of the
Executive acknowledges that the provisions of this Section 7 are an integral
part of Executive’s employment arrangements with the Company.
in Interest; Certain Remedies.
specifically understood and agreed that this Agreement is intended to confer
benefit, directly or indirectly, on the Company and its direct and indirect
subsidiaries and affiliates, and that any breach of the provisions of this
Agreement by the Executive or any of the Executive’s affiliates will result in
irreparable injury to the Company and its subsidiaries and affiliates, that
remedy at law alone will be an inadequate remedy for such breach. Accordingly,
subject to Section 9 hereof, the Executive agrees that if the Executive
breaches, or proposes to breach, any portion of this Agreement, the Company
its subsidiaries and affiliates shall be entitled, in addition to any other
remedy it may have, to enforce the specific performance of this Agreement by
Executive through both temporary and permanent injunctive relief without the
necessity of posting a bond or proving actual damages, but without limitation
their right to damages and any and all other remedies available to them, it
being understood that injunctive relief is in addition to, and not in lieu
such other remedies.
Agreement constitutes the entire agreement between the parties with respect
the subject matter hereof and supersedes all prior agreements between the
parties with respect to any related subject matter.
Successors and Assigns, etc.
the Company nor the Executive may make any assignment of this Agreement or
interest herein without the prior written consent of the other party;
Company may assign its rights under this Agreement without the consent of the
Executive in the event that the Company shall effect a reorganization,
consolidate with or merge into any other corporation, partnership, organization
or other entity, or transfer all or substantially all of its properties or
assets to any other corporation, partnership, organization or other entity.
Agreement shall inure to the benefit of and be binding upon the Company and
Executive, their respective successors, executors, administrators, heirs and
portion or provision of this Agreement (including, without limitation, any
portion or provision of any section of this Agreement) shall to any extent
declared illegal or unenforceable by a court of competent jurisdiction, then
remainder of this Agreement, or the application of such portion or provision
circumstances other than those as to which it is so declared illegal or
unenforceable, shall not be affected thereby, and each portion and provision
this Agreement shall be valid and enforceable to the fullest extent permitted
waiver of any provision hereof shall be effective unless made in writing and
signed by the waiving parry. The failure of any party to require the performance
of any term or obligation of this Agreement, or the waiver by any party of
breach of this Agreement, shall not prevent any subsequent enforcement of such
term or obligation or be deemed a waiver of any subsequent breach.
notices, requests, demands and other communications provided for by this
Agreement shall be sufficient if in writing and delivered in person or sent
nationally recognized overnight courier service or by registered or certified
mail, postage prepaid, return receipt requested, to the Executive at the last
address the Executive has filed in writing with the Company or, in the case
the Company, at 770
New York, NY 10003.
Agreement may be amended or modified only by a written instrument signed by
Executive and by a duly authorized representative of the Company.
contract shall be construed under and be governed in all respects by the laws
the State of New York, without giving effect to the conflict of laws principles
Agreement may be executed in any number of counterparts, each of which when
executed and delivered shall be taken to be an original and all of which taken
together shall constitute one and the same document.
purposes of this Agreement, the term “person” means an individual, corporation,
limited liability company, partnership, entity, association, trust or any
unincorporated organization; a “subsidiary” means any corporation more than 50
percent of whose outstanding voting securities, or any limited liability
company, partnership, joint venture or other entity more than 50 percent of
whose total equity interest, is directly or indirectly owned by such person;
an “affiliate” of a person shall mean, with respect to a person or entity, any
person or entity which directly or indirectly controls, is controlled by, or
under common control with such person or entity.
Fees and Costs.
action at law or in equity is necessary to enforce or interpret any of the
rights or obligations under this Agreement, the prevailing party shall be
entitled to reasonable attorneys’ fees, costs, and disbursements in addition to
any other relief to which the prevailing party may be entitled.
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
set forth above.