EMPLOYMENT AGREEMENT
This
Employment Agreement (the “Agreement”) is made as of December 13, 2006, between
Etwine Holdings, Inc. (“Etwine” or “the Company”), a Delaware Corporation at 000
Xxxxx Xxxxxxxx Xxxxx 00000, Xxxxxxx, XX 11753.and
Xxxxxxxx Xxxxxx, (“Employee”) c/o Etwine Holdings, Inc., 000
Xxxxx
Xxxxxxxx Xxxxx 00000, Xxxxxxx, XX 00000.
BACKGROUND
The
Company and Employee are desirous of setting forth the terms and conditions
of
the employment by the Company of the Employee. In consideration of the mutual
covenants and agreements contained herein, the parties, intending to be legally
bound, do hereby agree as follows:
1. |
Title:
Employee shall have the title of President and Chief Executive Officer
of
Etwine. In addition, Employee shall serve, if duly elected, as a member,
and Chairman, of the Board of Directors of
Etwine.
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2. |
Term:
Subject to the terms and conditions hereof, the Company agrees to employ
Employee and Employee agrees to serve the Company as President and
Chief
Executive Officer from the date hereof until December 1, 2007. At such
time, the term of employment may be automatically extended for an
additional three year period on terms no less favorable than those
contained in this Employment Agreement; provided, however, that either
party may terminate this Agreement at the end of its initial term or
any
subsequent annual term by giving six (6) months prior written notice
of
his/its election to do so.
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3. |
Services
to be Rendered by the Employee; Duties
and Responsibilities and
Span of Authority and Control:
Employee agrees to serve the Company as President and Chief Executive
Officer, and, if duly elected, as a member, and Chairman, of the Board
of
Directors of the Company. Employee shall have the duties and privileges
customarily associated with an executive occupying such roles, and
shall
perform all reasonable acts customarily associated with such roles,
or
necessary and/or desirable to protect and advance the best interests
of
the Company. Employee will report to the Board of Directors on matters
involving policy and long-term strategic issues, specifically such
things
as the annual budget and strategic plan, developing and executing
incentive compensation plans and sales compensation plans for all
employees, major joint venture or merger/acquisition agreements. In
such
capacity, Employee shall perform such acts and carry out such duties,
and
shall in all other respects serve the Company faithfully and to the
best
of his ability. Specific areas where Employee shall have complete
operating responsibility and authority are as follows: staffing, finance
and financial reporting, marketing and sales including all aspects
of
advertising sales and product positioning, marketing and promotion,
sales
and marketing, research, design and graphics product development for
the
web sites and publications (print and electronic) associated with the
Company’s business. The Employee will solicit the input of the Board of
Directors on matters of long-term strategy and company direction, but
with
respect to day-to-day operations and management, the Employee shall
have
absolute and complete authority, control and
responsibility.
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4. |
Compensation:
Upon
the execution of this Agreement, Employee shall receive options to
purchase one million five hundred thousand shares of the Company’s Common
Stock at a price of $0.40. These options shall vest immediately and
shall
be exercisable by the Employee at any time until the year 2012.
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5. |
Reimbursement
of Expenses:
The Company understands that the nature of Employee’s work requires
frequent travel away from the office. Accordingly, the Company shall
reimburse Employee for any and all reasonable out-of-pocket cash expenses
incurred on behalf of the Company. This includes, but is not limited
to,
reimbursement to such business-related costs as the Employee’s travel,
accommodations, automobile leasing or financing, cellular phone and
automobile insurance expenses, along with reasonable expenses for gas,
oil, tire replacement and repairs. In addition, the Company will also
reimburse Employee for all reasonable entertainment and other related
expenses wholly, exclusively and necessarily incurred by Employee in
the
discharge of his duties hereunder, in accordance with the Company’s normal
practice. The Company shall provide Employee with an American Express
Corporate Card (or similar card) in this regard. The Company will also
pay
for the cost of Employee’s membership in an accredited health and fitness
facility and the cost of a complete annual physical exam for each year
employee is employed by the Company.
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6. |
Time
to be Devoted by Employee:
Employee agrees to devote his business time, attention and efforts
to the
business of the Company and to use his best efforts to promote the
interests of the Company. Employee shall be permitted to serve on the
Board of Directors or Trustees or similar management bodies of other
companies or entities that will, in the judgment of the Employee, be
of
benefit to the Company.
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7. |
Termination:
Employment
of the Employee under this Agreement will immediately terminate upon
the
happening of the following events:
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(i) The
mutual agreement of the Employee and the Company, as indicated in a writing
signed and notarized, by and between the parties.
(ii) The
death
of the Employee.
(iv)
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Disability.
If, as a result of the Employee’s incapacity due to physical or mental
illness, he shall have been absent from his duties and responsibilities
under this Agreement for the entire period of one-hundred-eighty
(180)
consecutive business days or for an aggregate period of two-hundred-ten
(210) business days during a consecutive period of two-hundred-seventy
(270) business days, the Company may elect to terminate the Employee’s
employment.
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(iv) The
dissolution and liquidation of the Company (other than as part of a
reorganization, merger, consolidation or sale of all or substantially all of
the
assets of the Company in connection with which the business of the Company
is
continued).
(vi) By
the
Company for Just Cause. For purposes of this Agreement "Just Cause" shall mean
only the following: (i) a final non-appealable conviction of or a plea of guilty
or nolo
contendere
by the
Employee to a felony or misdemeanor involving fraud, embezzlement, theft,
dishonesty or other criminal conduct against the Company; or (ii) habitual
neglect of the Employee 's duties or failure by the Employee to perform or
observe any substantial lawful obligation of such employment that is not
remedied within thirty (30) days written notice thereof from the Company or
its
Board of Directors; or (iii) any material breach by the Employee of this
Agreement.
(vii) Change
in Control. In
the
event that there is a change in control of the Company as a result of a
reorganization, merger, consolidation, or sale of all or substantially all
of
the assets of the Company, in connection with which the business of the Company
is continued, Employee shall have the right to resign his position and be
released from his obligations under this Agreement. If Employee elects to
exercise that right, the Company shall be obligated to pay the Employee the
compensation provided for in Section 14 of this Agreement.
(viii) Resignation. Employee
shall have the right to resign from his position with the Company at any time;
however, all obligations of the Company to the Employee shall immediately cease
as of the effective date of any such resignation.
(ix) If
Employee’s employment is terminated other than for Just Cause, as defined in
Section 7 (vi), or his death or disability, Employee shall be entitled to
severance payments equal to the annual compensation amounts for each of the
remaining years of this Agreement due and owing to him under the terms of this
Agreement, plus a minimum of two year’s base compensation, plus any prorated
share of incentive compensation and stock options associated with any “sign on
bonus” or earned under an incentive/performance plan, if any, earned by him.
Such calculation is to be made by the Company’s independent auditors and
reviewed and approved by the Board of Directors within thirty days of
termination. In addition, any stock options to be issued under the incentive
stock option plan or otherwise under this Agreement will vest immediately,
and
the Employee may exercise these options at his discretion, and the Company
will
provide the financing necessary for the Employee to exercise such options in
the
form of a non-interest bearing loan. In addition, if Employee’s employment is
terminated other than for Just Cause, or his death or disability, the Employee
may, at his sole discretion, put all of his shares to the Company, and the
Company shall be obliged to purchase such shares for the fair market value
at
the time such put is exercised by Employee
8. |
Employee
Benefit Plans and Vacation:
Employee shall be entitled to participate in all formal retirement,
insurance, health care and disability plans that are in existence or
may
be adopted by the Company. Employee shall be entitled to vacation and
personal days totaling not more than twenty-six working days in each
fiscal year of the Company, such vacation days to be taken at times
mutually agreeable to the Company and the
Employee
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9. |
Indemnification:
The Company will indemnify and hold harmless Employee with respect
to any
liability, damage, cost or expense incurred in connection with the
defense
of any action, suit or proceeding to which he is a party, or threat
thereof, by reason of his being or having been an officer or director
of
the Company or any affiliate of the Company, to the extent permitted
by
applicable law; provided, however, that this indemnity shall not apply
if
the Employee is determined by a court of competent jurisdiction to
have
acted against the interests of the Company with gross negligence, gross
misconduct, or gross malfeasance.
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10. |
Non-Competition:
Employee agrees that while in the employ of the Company and, if this
Agreement is terminated on account of Employee’s breach hereof, for a
period of two years after termination of his employment, Employee will
not
directly or indirectly, as principal or agent, own, manage, operate,
participate in or be employed or otherwise interested in, or connected
in
any manner with, any person, firm, corporation of other enterprise
which
is directly competitive, and wholly unaffiliated, with the Company
or any
of its affiliates. Nothing contained herein shall be construed as denying
Employee the right to own securities of any corporation which is listed
on
a securities exchange, foreign or domestic, or quoted on the NASDAQ
System
to an extent of an aggregate of 5% of the outstanding share of such
securities. In the event that the Company ceases doing business or
files
for Chapter 7 bankruptcy relief, Employee shall be wholly relieved of his
duties of non-disclosure and non-competition with the Company.
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11. |
Confidentiality:
Employee agrees that while he is in the employ of the Company and at
all
times thereafter, or otherwise in connection with the provisions hereof,
he will not directly or indirectly make use of, divulge to any person,
firm, corporation or entity or business organization and he shall use
his
best efforts to prevent the disclosure or publication of any information
concerning the business, accounts, finances or the methods of doing
business used by the Company, or of the dealings, transactions, or
affairs
of the Company which have or may have come to the attention and knowledge
of Employee during his employment, unless such disclosure is in the
best
interests of the Company or is required by federal, state or local
law or
by Court order. Employee shall use his best professional judgment with
respect to this sensitive area, giving due weight and consideration
to how
business affairs are conducted in the publishing and communications
industry. The provisions this section shall survive the termination
of
Employee’s employment.
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12. |
Non-Interference:
Employee agrees that he will not for a period of two years following
the
termination of his employment, (i) endeavor or attempt, directly of
indirectly, to induce any person, firm corporation or enterprise which
is
competitive with the Company, and which shall have been at any time
during
his employment by the Company a customer or client of the Company,
either
to cease dealing with the Company or to deal with any other person,
firm,
corporation, enterprise or institution or (ii) deal in any way as
principal or agent or in any other capacity with any such client or
(iii)
solicit the employment of any employee of the Company on behalf of
any
firm, corporation, enterprise or business organization or otherwise
interfere with the employment relationship between any employee or
offer
of the Company and the Company. The provisions of this section shall
survive the expiration of this agreement.
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13. |
Remedies:
Upon any material breach of any provision of this Agreement, the Company
and or the Employee, as the case may be, shall be entitled, if he/it
so
elects, to institute and prosecute proceedings at law or in equity
to
obtain damages with respect to such breach or to enforce the specific
performance of this Agreement by the other party or to enjoin the other
party from engaging in any activity in violation of any provision of
this
Agreement. Notwithstanding the foregoing, the Company understands that
Employee has made his reputation and living in the publishing industry
and
nothing herein contained is intended to prevent Employee from working
in
this industry except that he shall not, for the period contemplated
in
this Agreement, compete directly with the Company in the area of
publications directed at parents of children with disabilities for
such
period.
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14. |
Non-Assignability.
This Agreement is personal and non-assignable by Employee. It shall
extend
to, and be binding upon any corporation or other entity, other than
an
affiliate of the Company, with which the Company shall merge or
consolidate or to which the Company shall sell, transfer, assign, lease
all, or substantially all of its assets to a third party or a majority
of
the voting capital stock of the Company is transferred to a third party
who currently does not hold a majority of the voting capital stock
of the
Company (or related party), (a “Change of Control event”). In the event
Employee is terminated as a consequence of a Change of Control Event,
Employee shall be entitled to receive, in addition to the amount payable
under Section 7, (i) the full value of compensation remaining on the
Agreement or one year’s base salary whichever is greater; (ii) any portion
of any earned incentive/bonus compensation payable in a lump sum within
thirty (30) days of termination; (iii) reimbursement of all outstanding
expenses including health care, auto, etc.; (iv) upon presentation
of
reasonable documentation and support for such expenses, up to $50,000.00
in out-placement fees to be used in connection with Employee’s search for
new employment and (v) continuation of all Employee benefits up to
the
time Employee finds new employment or for a period of two years following
such termination, whichever first occurs.
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15. |
Notices:
All notices to be given under this Agreement shall be deemed duly given
when delivered personally in writing or mailed, certified mail, return
receipt requested, postage prepaid, and addressed as
follows:
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If
to be
given to the Company:
000
Xxxxx
Xxxxxxxx
Xxxxx
00000
Xxxxxxx,
XX 00000
Attention: Xxxxxxxx Xxxxxx
If
to be
given to the Employee:
Xxxxxxxx Xxxxxx
000
Xxxxx
Xxxxxxxx
Xxxxx
00000
Xxxxxxx,
XX 00000
16. |
Miscellaneous:
This Agreement may not be changed or modified, nor can any provision
of
this Agreement be waived, except by an instrument in writing duly signed
by the party to be charged. This Agreement shall be interpreted, governed
by and controlled by the internal laws of the State of New Jersey without
reference to principles of conflict of laws. This Agreement shall continue
in effect in the event of a Change of Control Event as defined above
in
this Agreement, and in the event of a sale or transfer of any significant
assets of the Company, acquisition of the company, or merger with another
business or entity.
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IN
WITNESS WHEREOF,
this
Agreement has been executed as of the date and year first above
written.
SIGNATURE
PAGE
The “Company”
Attest:
Etwine
Holdings, Inc.
_____________________ _________________________
Secretary Name:
Xxxxxxxx Xxxxxx
Title:
President and Chief Executive
Officer
The
“Employee”
_____________________ _____________________________
Witness
Xxxxxxxx
Xxxxxx