Exhibit 10.3
EMPLOYMENT AGREEMENT
XXXXXXX X. XXXXXX AND IPORUSSIA, INC.
THIS EMPLOYMENT AGREEMENT ("Agreement"), dated as of the 1st day of
April, 2002, by and between IPORUSSIA, INC., a Delaware corporation, having a
place of business at 00 Xxxxxxxx Xxxxxx, Xxxxxxx, XX 00000 (hereinafter
designated and referred to as "Company"), and Xxxxxxx X. Xxxxxx (hereinafter
designated and referred to as "Employee").
WHEREAS, the Company desires to employ the Employee in the capacity of
Treasurer and Secretary of the Company; and
WHEREAS, Employee is willing to accept such employment by the Company,
all in accordance with provisions hereinafter set forth.
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, the parties hereto agree as follows:
1. Term: The term of this Agreement shall be for a period of five (5)
years commencing April 1, 2002 and automatically terminating on March 31, 2007
subject to earlier termination as provided herein or unless extended by mutual
consent of both parties in writing sixty (60) days prior to the end of the term
of this Agreement or any extension thereof, but nothing herein shall require the
Company to agree to any specific term or condition or to any continuation of the
employment beyond March 31, 2007.
2. Effective Date: The effective date (the "Effective Date") of this
Agreement shall commence two weeks after the Company obtains funding in the
amount of at least Two Hundred and Fifty Thousand Dollars (USD$250,000). If the
Effective Date does not commence before December 31, 2002 either party may
terminate this Agreement on ten (10) days written notice, unless mutually
extended.
3. Scope of Employment:
[a] Capacity. Company hereby agrees to employ Employee, and
Employee hereby accepts such employment, as Treasurer and Secretary of Company
during the term of this Agreement and shall have such powers and authority as
may be given to him from time to time by the Board of Directors ("Board").
Employee shall report to the President and Chief Executive Officer of the
Company and perform the services and duties customarily incident to such office
and as otherwise decided upon by the President and Chief Executive Officer.
[b] Devotion Of Services. The Employee prior to the Effective Date
shall not be required to devote a significant amount of business time to the
Company, and commencing on the Effective Date expects to devote such business
time as is necessary to the business of the Company.
[c] Place of Performance. Employee agrees to work out of the
offices of the Company in Long Island, New York.
4. Salary and Bonus: In consideration of the services to be rendered by
Employee hereunder, including without limitation any services rendered as an
officer or director of Company or any subsidiary or affiliate thereof, during
the term of this Agreement commencing on the Effective Date, Company shall pay
to Employee the following:
[a] A salary in the amount of Fifty Thousand Dollars (USD $50,000)
per annum until the Company's funding reaches Five Hundred Thousand Dollars (USD
$500,000) at which time the full salary of One Hundred Thousand Dollars
(USD$100,000) per annum shall be paid. The Board may, at its sole and absolute
discretion, increase Employee's salary; provided, however, Employee's annual
salary shall be increased at the end of each twelve (12) month period from the
Effective Date by at least fifteen percent (15%) over the previous year.
[b] The Company's Board may, but shall not be obligated to, award
bonuses to Employee based upon his performance.
[c] All payments to Employee shall be subject to the regular
withholding requirements of all appropriate governmental taxing authorities.
5. Other Benefits:
[a] Commencing on the Effective Date, Company shall provide a
medical insurance plan for Employee. Employee acknowledges that the terms of
such plan may change from time to time. The Employee shall be entitled to a
three (3) weeks annual vacation.
[b] Commencing on the Effective Date, the Company shall provide
Employee with a Company car for Employee's use for business purposes in
accordance with standard Company guidelines. This car shall be insured and
registered with the Motor Vehicle Department by the Company. Company shall be
responsible for the costs of proper maintenance, gasoline, insurance, and
repairs. The Employee, in the alternative, may have the Company reimburse him
for the car, insurance, and related expenses.
6. Expenses: Company will advance to or reimburse Employee for all
reasonable travel and entertainment required by Company and other reasonable
expenses incurred by Employee in connection with the performance of his services
under this Agreement in accordance with Company policy as established from time
to time and upon submission to the Company by him of appropriate vouchers and
expense account reports.
7. Indemnification: Employee shall be indemnified by Company against
expenses, including attorney's fees, actually and necessarily incurred by him in
connection with the defense of any action, suit, investigation or proceeding or
similar legal activity, regardless of whether criminal, civil, administrative or
investigative in nature to which he is made a party by reason of his being or
having been an officer of Company, to the full extent permitted by applicable
law and the Certificate of Incorporation of Company. Such right of
indemnification will not be deemed exclusive of any other rights to which
Employee may be entitled under Company's Certificate of Incorporation or
By-Laws, as in effect from time to time, under any agreement or otherwise.
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8. Restrictive Covenant: (A) Employee acknowledges that (i) the
business in which the Company is engaged is intensely competitive and that his
employment by the Company will require that he have access to and knowledge of
confidential information of the Company, including, but not limited to, certain
of the Company's confidential business plans, expansion plans, financial status,
and plans and personnel information and trade secrets, which are of vital
importance to the success of the Company's business; (ii) the direct or indirect
disclosure of any such confidential information to existing or potential
competitors of the Company would place the Company at a competitive disadvantage
and would do damage, financial and otherwise, to the Company's business; and
(iii) by his training, experience and expertise, some of his services to the
Company will be special and unique. (B) Employee agrees that, during the term of
this Agreement and if the Agreement is terminated by the Company for cause, for
a period of two (2) years after the termination of this Agreement, he will not
directly or indirectly become affiliated as an officer, director, employee or
consultant or as a substantial security holder with any other company or entity
whose business is directly competitive with any business then being conducted by
the Company or its subsidiaries within the Continental United States.
9. Discoveries, etc.:
[a] The Company shall be the owner, without further compensation,
of all rights of every kind in and with respect to any reports, materials,
inventions, processes, discoveries, improvements, modifications, know-how or
trade secrets hereafter made, prepared, invented, discovered, acquired,
suggested or reduced to practice (hereinafter designated and referred to as
"Property Rights") by Employee in connection with Employee's performance of his
duties pursuant to this Agreement, and the Company shall be entitled to utilize
and dispose of such in such manner as it may determine.
[b] The Employee agrees to and shall promptly disclose to the
Board all Property Rights (whether or not patentable) made, discovered or
conceived of by him, alone or with others, at any time during his employment
with the Company. Any such Property Rights will be the sole and exclusive
property of the Company, and Employee will execute any assignments requested by
the Company of his right, title or interest in any such Property Rights. In
addition, the Employee will also provide the Company with any other instruments
or documents requested by the Company, at the Company's expense, as may be
necessary or desirable in applying for and obtaining patents with respect
thereto in the United States and all foreign countries. The Employee also agrees
to cooperate with the Company and to devote reasonable time to the prosecution
or defense of any patent claims or litigation or proceedings involving
inventions, trade secrets, trademarks, services marks, secret processes,
discoveries or improvements, whether or not he is employed by the Company at the
time.
10. Confidentiality:
[a] Restrictions On Use Of Trade Secrets And Records. During the
term of his employment, Employee will have access to and become acquainted with
various trade secrets of Company, consisting of formulas, business formulations
secret inventions, processes, compilations of information, records and
specifications (collectively "Trade Secrets"), all of which are owned by Company
and used in the operation of Company's business. Additionally, Employee will
have access to and may become acquainted with various files, records, customer
lists, documents, drawings, specifications, equipment and similar items relating
to the business of Company (collectively "Confidential Information"). All such
Trade Secrets and Confidential Information, whether they are designed, conceived
or prepared by Employee or come into Employee's possession or knowledge in any
other way, are and shall remain the exclusive property of Company and shall not
be removed from the premises of Company under any circumstances whatsoever
without the prior written consent of Company. Employee promises and agrees that
he will not use for himself or for others, or divulge or disclose to any other
person or entity, directly or indirectly, either during the term of his
employment by Company or at any time thereafter, for his own benefit or for the
benefit of any other person or entity or for any reason whatsoever, any of the
Trade Secrets or Confidential Information described herein, which he may
conceive, develop, obtain or learn about during or as a result of his employment
by Company unless specifically authorized to do so in writing by Company.
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[b] Employee recognizes that Company will invest substantial
effort in assembling its employees and in developing its customer base. As a
result, and particularly because of Company's many types of confidential
business information, Employee understands that any solicitation of a customer
or employee of Company, in an effort to get them to change business
affiliations, would presumably involve a misuse of Company's confidences, Trade
Secrets and Confidential Information. Employee therefore agrees that, for a
period of two (2) years from the later of the date of termination of Employee's
employment with Company for any reason whatsoever or the receipt by Employee of
any compensation paid to Employee by Company, Employee will not influence, or
attempt to influence, existing employees or customers of Company in an attempt
to divert, either directly or indirectly, their services or business from
Company.
11. Return of Company Property: Employee agrees that following the
termination of his employment for any reason, he shall return all property of
the Company which is then in or thereafter comes into his possession, including,
but not limited to, documents, contracts, agreements, plans, photographs, books,
notes, electronically stored data and all copies of the foregoing as well as any
other materials or equipment supplied by the Company to the Employee.
12. Termination Of Agreement:
[a] Termination By Company. The Company shall have the right,
before the expiration of the term of this Agreement, to terminate this Agreement
and to discharge Employee for cause (hereinafter "Cause"), and all compensation
to Employee shall cease to accrue upon discharge of the Employee for Cause. For
the purposes of this Agreement, the term "Cause" shall mean the Employee's (i)
violation of the Company's written policy or specific written directions of the
Board which directions are consistent with normally acceptable business
practices or the failure to observe, or the failure or refusal to perform any
obligations required to be performed in accordance with this Agreement, (ii) if
the Board determines that employee has committed a demonstrable act (or
omission) of malfeasance seriously detrimental to this Company (which shall not
include any exercise of business judgment in good faith or any illegal or
unethical act).
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[b] Notice by Company. If the Company, elects to terminate
Employee's employment for Cause, under Section 12[a], the Company shall first
give Employee written notice and a period of thirty (30) days to cure such
Cause, and if such Cause is not cured in said thirty (30) days, such termination
shall be effective five (5) days after the Company gives written notice of such
termination to the Employee. In the event of a termination of the Employee's
employment for Cause in accordance with the provisions of Section 12[a], the
Company shall have no further obligation to the Employee, except for the payment
of salary through the date of such termination from employment.
[c] Termination By Employee. Employee may terminate his employment
hereunder at any time for cause. For purposes of this Section 12[c], "Cause"
shall mean the breach of any provision of this Agreement by Company which is not
cured within thirty (30) days after Employee delivers written notice to the
Company's Board describing such breach. If the breach is not so cured within
such thirty (30) days after delivery of such notice, the termination of
employment shall become effective after the expiration of such cure period.
[d] Death Or Disability. Employee's employment with Company shall
cease upon the date of his death. In the event the Employee, by reason of
physical or mental incapacity, shall be disabled for a period of at least four
(4) consecutive months or six (6) months in the aggregate in any twelve (12)
month period of this Agreement or any extension hereof, the Company shall have
the option at any time thereafter to terminate Employee's employment and to
terminate this Agreement. Such termination to be effective ten (10) days after
the Company gives written notice of such termination to the Employee, and all
obligations of the Company hereunder shall cease upon the date of such
termination. "Incapacity" as used herein shall mean the inability of the
Employee to perform his normal duties.
[e] Effect Of Termination. Upon the termination of Employee's
employment hereunder or the expiration or termination of the Agreement,(a)
Company shall pay Employee all compensation accrued and outstanding as of the
date of such termination or expiration, and (b) notwithstanding anything to the
contrary contained herein, the rights and obligations of each party under
Sections 8, 9 and 10 herein shall survive such termination or expiration.
13. Waiver: Any waiver by either party of a breach of any provision of
this Agreement shall not operate as or be construed as a waiver of any other
breach or default hereof.
14. Governing Law: The validity of this Agreement or of any of the
provisions hereof shall be determined under and according to the laws of the
State of New York, and this Agreement and its provisions shall be construed
according to the laws of the State of New York without reference to its choice
of law rules.
15. Notice: All notices, requests, consents and other communications
hereunder shall be in writing, shall be addressed to the receiving party's
address set forth below or to such other address as a party may designate by
notice hereunder, and shall be either (i) delivered by hand, (ii) made by
telecopy or facsimile transmission and e-mail, (iii) sent by recognized national
overnight courier service, or (iv) sent by registered mail, return receipt
requested, postage prepaid.
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If to Employee: If to Company:
Xxxxxxx X. Xxxxxx IPORUSSIA, INC.
00 Xxxxxxxx Xxx. 00 Xxxxxxxx Xxx.
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
Tel: 000-000-0000 Tel: 000-000-0000
Fax: 000-000-0000 Fax: 000-000-0000
E-mail:Xxxxxx@xxxxxxx.xxx E-mail:xxxxxxxxx@xxxxx.xxx
16. Assignment: The Employee's assignment of this Agreement or any
interest herein, or any monies due or to become due by reason of the terms
hereof, without the prior written consent of the Company shall be void. This
Agreement shall be binding upon the Company, its successors (including any
transferee of the good will of the Company) or assigns.
17. Miscellaneous: This Agreement contains the entire understanding
between the parties hereto and supersedes all other oral and written agreements
or understandings between them. No modification or addition hereto or waiver or
cancellation of any provision shall be valid except by a writing signed by the
Company and Employee. Facsimile signatures of the undersigned parties will have
the same force and effect as original signatures.
18. Obligations of a Continuing Nature: It is expressly understood and
agreed that the covenants, agreements and restrictions undertaken by or imposed
on Employee hereunder, which are stated to exist or continue after termination
of Employee's employment with the Company, shall exist and continue irrespective
of the method or circumstances of such termination from employment or
termination of this Agreement.
19. Severability: Employee agrees that if any of the covenants,
agreements or restrictions on the part of Employee are held to be invalid by any
court of competent jurisdiction, such holding will not invalidate any of the
other covenants, agreements and/or restrictions herein contained and such
invalid provisions shall be severable so that the invalidity of any such
provision shall not invalidate any others. Moreover, if any one or more of the
provisions contained in this Agreement shall be held to be excessively broad as
to duration, activity or subject, such provisions shall be construed by limiting
and reducing them so as to be enforceable to the maximum extent allowed by
applicable law.
20. Representation: Employee represents and warrants that he has the
legal right to enter into this Agreement and to perform all of the obligations
on his part to be performed hereunder in accordance with its terms and that he
is not a party to any agreement or understanding, written or oral, which
prevents him from entering into this Agreement or performing all of his
obligations hereunder. In the event of a breach of such representation or
warranty on his part or if there is any other legal impediment which prevents
him from entering into this Agreement or performing all of his obligations
hereunder the Company may terminate this Agreement.
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21. Descriptive Headings: The paragraph headings contained herein are
for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
22. Counterparts: This Agreement may be executed in one or more
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
IPORUSSIA, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxxx
---------------------------
Xxxxxxxx X. Xxxxxxxxx
President and Chief Executive Officer
/s/ Xxxxxxx X. Xxxxxx
-----------------------------
Xxxxxxx X. Xxxxxx
Employee
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