EXECUTIVE EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of the 5th day
of June, 2000 to be effective as of June 12, 2000, by and between Mizar Energy
Company, a Colorado corporation (the "Company") and Xxxxxx Xxxxxxx (the
"Executive").
WITNESSETH:
WHEREAS, the Company desires to employ the Executive, and the Executive
desires to be employed by the Company, as Chief Executive Officer and President
of the Company;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, the receipt and sufficiency of which is hereby acknowledged by
the parties, the parties hereby agree as follows:
1. Employment, Duties and Acceptance.
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1.1 The Company shall employ the Executive, for the Employment Period,
as defined in Section 2.1, as an executive to perform such executive and
managerial duties as are associated with his position as President and Chief
Executive Officer of the Company, and such duties that may, from time to time,
be assigned to the Executive by the Company's Board of Directors, subject to the
general direction and control of the Board of Directors of the Company.
Accordingly, and not by way of limitation, the Executive will be responsible for
the core operations of the Company, which shall include (i) increasing the
Company's revenue stream in the Company's core businesses, (ii) growing the
Company's sales and distribution channels, (iii) building marketing and brand
awareness for the Company's products, and (iv) performing all functions of a
Chief Executive Officer. The Executive acknowledges that he will not be
officially appointed to the position as President, Chief Executive Officer and
director of the Company until August 14, 2000, after Board approval of such
appointment.
1.2 The Executive hereby agrees to contribute his best skills and
services at all times to the Company. The Executive agrees to diligently and
competently perform the duties and responsibilities assigned to him by the Board
of Directors of the Company. The Executive agrees to devote his full-working
time and efforts (except for absences due to illness and appropriate vacations)
to the business and affairs of the Company. The Executive represents and
warrants that he has no arrangements, contracts, obligations or other
agreements, legal or otherwise (collectively, the "Contracts"), inconsistent
with the terms of this Agreement or with his undertaking a relationship with the
Company.
1.3 The employment relationship between the parties shall be governed
by the general employment policies and practices of the Company, including those
relating to the protection of confidential information and assignment of
inventions and the non-competition. The Executive 1
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hereby agrees to abide by all reasonable rules and regulations established by
the Board of Directors of the Company.
1.4 The Executive represents and warrants that (i) that the performance
of the services called for by this Agreement does not and will not violate any
applicable Contracts or proprietary or other rights of any third party or any
applicable laws, rules or regulations and (ii) that he has not entered into and
will not enter into any agreement (whether oral or written) in conflict with
this Agreement.
2. Term and Compensation.
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2.1 The Company hereby employs the Executive and the Executive agrees
to be employed for a continuous and ongoing period of two (2) years from the
effective date of this Agreement (the "Employment Period"), subject to prior
termination under Section 3 hereof.
2.2 As compensation for his services hereunder, the Executive shall be
entitled to a salary of One Hundred Thirty Five Thousand Dollars ($135,000) per
year, payable in bimonthly installments ("Annual Salary") or in accordance with
the compensation procedures established by the Company for all other employees.
2.3 Upon the effective date of this Agreement, the Executive shall
receive 50,000 shares of the Company's common stock (the "Signing Bonus Shares")
and these shares shall have "piggy- back" registration rights that are equal to
the Rule 506 shareholders. The Executive will forfeit his right to the Signing
Bonus Shares, if he is terminated for Cause as defined under Section 3.2 of this
Agreement. The Signing Bonus Shares will have "piggy-back" registration rights
for a period of two years after the effective date of this Agreement.
2.4 Upon the effective date of this Agreement, the Executive will
receive options to purchase up to 150,000 shares of the Company's common stock
at an exercise price of $1.50 per share ("the Signing Bonus Options") and the
Signing Bonus Option Agreement is attached hereto as Exhibit 2.4 and
incorporated herein by this reference (the "Option Agreement"). The Signing
Bonus Options will be exercisable for a period of five (5) years from the date
of the grant. The Signing Bonus Options will vest at the rate of 12,500 options
per month (1/12 of the Signing Bonus Options per month). Even after the Signing
Bonus Options have vested, they are still subject to forfeiture if the Executive
is terminated for Cause as defined in Section 3.2 of this Agreement. The Signing
Bonus Options will have "piggy-back" registration rights for a period of two
years after the effective date of this Agreement.
2.5 After the Executive completes his first year of employment, the
Executive will be entitled to receive options (the "Performance Based Options")
to purchase 500,000 shares of the Company's common stock, based on certain
performance criteria. Within ninety (90) days after the effective date of this
Agreement, the Company and the Executive shall mutually agree upon the
performance goals to be reached in order to receive these performance based
options. The Company
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agrees that it will use its best efforts to register the shares of common stock
underlying the Executive's Performance Based Options; however, there is no
guarantee that the Company will effect such registration.
2.6 During his first and second year of employment, the Executive may
be entitled to receive a cash bonus, which will be payable upon a semi-annual
basis. The amount of the cash bonus will be based upon the attainment of certain
performance goals. The maximum bonus payments on an annual basis shall be equal
to $100,000, though there is no guarantee by the Company that such cash bonuses
will be paid. Within ninety (90) days after the effective date of this
Agreement, the Company and the Executive shall mutually agree on the performance
goals to be reached in order to receive any additional cash bonuses.
2.7 If the Company and the Executive do not mutually agree on the terms
of the performance based options described in Section 2.5 and the performance
based bonuses described in Section 2.6 within ninety (90) days after the
effective date of this Agreement, the Company shall not have any liability to
the Executive
2.8 The Company shall provide the Executive with hospital, health and
disability insurance to the extent offered by the Company and in amounts
consistent with the Company's policy, for all key management employees, as
reasonably determined by the Board and as allowed by the Company's carrier under
its current and subsequent health care plans. The Executive shall also be
entitled to take two weeks of vacation time per year in his first year and four
weeks in his second year. The timing of paid vacation shall be scheduled in a
reasonable manner agreed to by the Executive and the Company.
2.9 All compensation payable to the Company hereunder in stated in
gross amounts and shall be subject to all applicable withholding taxes, other
normal payroll and any other amounts required by law to be withheld.
2.10 Throughout the Employment Period, the Company agrees to seek to
cause the Executive to be elected to the Company's Board of Directors. Upon
termination of the Executive's employment with the Company for any reason, the
Executive shall be deemed to have automatically resigned from any position he
may then hold on the Board. Such resignation shall be deemed to be effective
immediately without the requirement that a written resignation be delivered.
3. Termination of Employment. The Executive's employment may be
terminated without any breach of this Agreement only under the following
circumstances:
3.1 The Executive's employment shall terminate upon his death. The
Company shall pay the Executive's estate the portion of his Annual Salary that
is due as of the Termination Date and any accrued cash bonuses, on a pro-rata
basis, through the Termination Date. Any Signing Bonus Options and Performance
Based Options that have vested shall be transferable to the Executive's
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estate. Any Signing Bonus Options and Performance Based Options that have not
vested shall be deemed to be forfeited.
3.2 The Executive's employment with the Company shall be deemed to have
been terminated for "Cause" if such employment is terminated following: (a) any
intentional misconduct, fraud or bad faith on the part of the Executive in the
performance of his duties as an employee of the Company, including any breaches
of the Confidentiality Agreement or the Non-Competition Agreement; (b) the
conviction of the Executive of, or the entry by the Executive of a plea of
guilty or no contest to, any felony; (c) the breach by the Executive of any
material provision in any other agreements between the Executive and the
Company, if such breach or failure is not fully cured by the Executive within
ten (10) days after he receives written notice of such breach; and (d) the
continued failure of the Executive to perform any reasonable duties assigned to
him by the Company that are commensurate with his position as a senior executive
with the Company, if such breach or failure is not fully cured by the Executive
within thirty (30) days after he receives written notice of such failure. The
Executive will be entitled to receive the portion of his Annual Salary that is
due as of the Termination Date and the Company shall have no further obligation
to the Executive. Upon such termination, the Executive's Signing Bonus Shares,
Signing Bonus Options, any Performance Based Options and any accrued but unpaid
bonuses shall be forfeited.
3.3 The Company may terminate the Executive without cause by giving the
Executive thirty (30) days prior written notice of his termination. If the
Company terminates the Executive's employment without Cause, the Executive shall
be entitled to a severance payment equal to the Annual Salary payments that are
due and owing under this Agreement. The Company shall make these Annual Salary
payments on a bi-monthly basis for the remaining term of the Agreement. The
Company shall also pay the Executive any accrued but unpaid cash bonuses that
are due and owing (on a pro rata basis) as of the Termination Date. The
Executive shall also be entitled to keep any Signing Bonus Options and
Performance Based Options that have vested. The Executive shall forfeit his
rights to any Signing Bonus Options and Performance Based Options that have not
vested.
3.4 The Company may terminate the Executive's employment because of
Disability by giving the Executive fifteen (15) days written notice of such
termination. For this purpose, "Disability" shall mean the inability of the
Executive to substantially perform his duties under this Agreement because of
physical illness or incapacity for a period of thirty (30) days. If the
Executive is Disabled, the Executive shall be entitled to receive disability
payments pursuant to a disability insurance policy that the Company has
purchased for the Executive. Within thirty (30) days after signing this
Agreement, the Company intends to purchase a disability policy that will provide
the Executive with disability payments equal to approximately seventy (70%) of
the Executive's Annual Salary (as defined in Section 2.2 of this Agreement);
however, there is no assurance that the Company will be able to procure such a
policy. The Executive agrees that the Company shall have no liability to the
Executive if it cannot obtain such a policy and provide the benefits described
in this Section 3.4. The Company shall also pay the Executive any accrued but
unpaid cash bonuses (on a pro-rata basis) that are due and owing on the
Termination Date. The Executive shall be entitled to keep any Signing Bonus
Options and Performance Based Options that have vested. The
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Executive shall forfeit his rights to any Signing Bonus Options and Performance
Based Options that have not vested.
3.5 Any termination of the Executive's employment by the Company hereto
shall be communicated to the other party by a written Notice of Termination. Any
Notice of Termination given by a party shall specify the particular termination
provision of this Agreement relied upon by such party and shall set forth in
reasonable detail the facts and circumstances relied upon as providing a basis
for the termination under the provisions so specified.
3.6 Termination Date shall mean (1) if the Executive's employment is
terminated by his death, the date of his death; (2) if the Employee's employment
is terminated for Cause pursuant to Section 3.2, or without Cause under Section
3.3, the date specified in the Notice of Termination; or (3) if the Executive's
employment is terminated by illness under Section 3.4, the date specified in the
Notice of Termination.
4. Governing Law and Service of Process.
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4.1 This Agreement has been entered into and shall be construed and
enforced in accordance with the laws of the State of Florida without reference
to the choice of law principles thereof. This Agreement shall be subject to the
exclusive jurisdiction of the federal or state courts of the State of Florida
located in Broward County, Florida. The parties to this Agreement agree that any
and all causes of action or claims arising out of or relating to this Agreement
shall be governed by and construed in accordance with the laws of the State of
Florida and irrevocably and expressly agree to submit to the jurisdiction of the
courts of the State of Florida for the purpose of resolving any and all disputes
relating to this Agreement.
4.2 The parties irrevocably waive, to the fullest extent permitted by
law, any objection which they may now or hereafter have to the laying of venue
of any suit, action or proceeding arising out of or relating to this Agreement,
or any judgment or permanent or temporary injunction entered by any court in
respect hereof brought in Broward County, Florida, and further irrevocably waive
any claim that any suit, action or proceeding brought in Broward County, Florida
has been brought in an inconvenient forum. This provision shall not prevent the
Company from seeking to enforce this Agreement in any court of competent
jurisdiction. The Executive agrees that service of process may be effected by
certified mail of by any other means permitted by law, and the Executive waives
any objection which he may have to the laying of venue of any such suit, action
or proceeding in any such court and any claim or defense of inconvenient forum.
5. Noncompetition, Confidentiality and Proprietary Rights.
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5.1 For purposes of this Section 5 of this Agreement and any related
sections of this Agreement, the term "Company" shall mean the Company, its
present and future subsidiaries and affiliated parties. The Executive
acknowledges and agrees that all covenants and agreements
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contained in Section 5 of this Agreement shall survive the termination or
expiration of this Agreement.
5.2 In order to assure that the Company will realize the benefits of
this Agreement, the the Executive agrees that he will not:
(a) during the Employment Period and for a period of two (2)
years after the termination or expiration of this Agreement,
engage in, represent in any way, or be connected with any
business (such business being referred to as a "Competing
Business") competing with the business of the Company or any
of its subsidiaries or affiliates in any area of the world,
whether such engagement shall be as an officer, director,
owner, employee, consultant, agent, independent contractor,
shareholder, partner, joint venturer or any other form of
participation in any Competing Business. The Executive agrees
that the geographic area covered by this covenant not to
compete is the world and it shall be construed broadly to
prevent competition in any country, nation, kingdom, province,
municipality or any other form of governmental organization
whatsoever in the world during the two-year non-competition
period described herein. "Competing Business" shall mean any
business that is similar to the business conducted by the
Company and its subsidiaries or affiliates as of the present
date or at any time in the future. As of the present date, the
Company's business consists of being an Internet portal for
home based businesses. At the present time, the Company may
consider investing in two companies: (1) Song1, Inc., a
company which provides music lyrics and other music related
information through the utilization of the Internet and (2)
Alpha 2001, Inc., a company which is the owner of certain
patents which have two distinct usages, i.e., real time
debiting of pre-paid telephone calling cards and other
utilizations.
(b) during the Employment Period and for a period of two (2)
years after the termination or expiration of this Agreement,
directly or indirectly (i) induce any person which is a
customer of the Company to patronize any business directly or
indirectly engaged in any Competing Business; (ii) canvass,
solicit or accept from any person or entity which is a
customer of the Company; or (iii) request or advise any person
or entity which is a customer or supplier of the Company to
withdraw, curtail or cancel any such customer's or supplier's
business with the Company;
(c) during the Employment Period and for a period of two (2)
years after the termination or expiration of this Agreement,
directly or indirectly employ, or knowingly permit any company
or business directly or indirectly controlled by him, to
employ any person who was employed by the Company at or within
the six month period immediately preceding the date of such
employment or in any manner seek to induce any such person to
leave his employment;
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(d) at any time following the execution of this Agreement,
directly or indirectly, in any way utilize, disclose, copy,
reproduce or retain in his possession the Company's
Confidential Information (as defined herein).
5.3 The Executive understands that the restrictions contained in
Section 5 of this Agreement may limit his ability to earn a livelihood in a
business similar to the Business of the Company and its affiliated entities, but
he nevertheless believes that he has received and will receive sufficient
consideration and other benefits as an employee of the Company as provided
hereunder, to justify clearly such restrictions. The Company and Executive agree
that the restrictions contained in this Section 5 are reasonable in scope and
duration and are necessary to protect Company after the execution of this
Agreement.
5.4 Executive agrees that any and all intellectual property and
proprietary information ("Confidential Information"), including, but no limited
to, information about the Company, employees, clients, consultants, business
associates, products, intellectual capital, marketing activities, strategic
plans, forecasts, trade secrets and any similar items not generally known
outside of the Company and related entities, from whatever source produced or
derived, including from the Company and third party sources, shall be kept
confidential and belong to the Company and unless authorized to do so will not
disclose the Confidential Information to anyone not authorized to receive the
Confidential Information. Upon request or upon termination, Executive shall
immediately deliver to the Company all copies of any and all materials and
writings received from, created for, or belonging to the Company, including, but
not limited to, any material which relates to the Confidential Information.
5.5 Executive hereby agrees to transfer and assign to the Company any
and all rights in the Confidential Information and any Inventions (as defined)
that he may have as the author, inventor or producer of such Confidential
Information and Inventions, and that information shall be deemed works for hire,
including immediately transferring, upon the Company's request, any and all
copies of material relating to the development of the Confidential Information
and the Inventions including, but not limited to, sketches, drawings, notes,
schematics, audiovisual, or electronically stored. In the event there is a
dispute as to the nature or authorship of the Confidential Information or
Inventions, the Company's decision as to the Confidential Information and
Inventions shall be binding upon all parties. "Inventions" shall mean all
improvements, discoveries, inventions, designs - documents, licenses and patents
or other data devised, conceived, made, developed, obtained filed, perfected,
acquired, or first reduced to practice, in whole or in part, during the term of
this Agreement, which the Executive conceives or makes alone or with others,
whether or not during regular working hours, and related in any way to the
business, including development and research of the Company. The Executive
agrees to cooperate fully with the Company on any and all enforcement actions
regarding Confidential Information and Inventions; in the event that Executive
is unable to assist in such enforcement actions, he hereby irrevocably
designates and appoints the Company and its duly authorized officers and agents
as his agent and attorney-in-fact, which appointment is coupled with an
interest, to act for and on his behalf and stead to execute and file any such
application, applications or other documents and to do all other lawfully
permitted acts to
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further the prosecution, issuance and enforcement of letters patent, copyright
or other analogous rights or protections thereon with the same legal force and
effect as if executed by the Executive.
5.6 The parties recognize that, because of the nature of the subject
matter of this Agreement, it would be impracticable and extremely difficult to
determine actual damages to the Company in the event of a breach of this
Agreement by the Executive. The Executive agree and acknowledge that the breach
of this Section 5 will cause irreparable damage to the Company and upon breach
of any provision of this Section 5, the Company shall be entitled to injunctive
relief, specific performance or any other equitable relief; provided, however,
that, this shall in no way limit any other remedies which the Company may have
including, without limitation, the right to seek monetary damages. The Executive
agrees that the Company shall not be required to post a surety bond in
connection for any actions hereunder.
5.7 Each of the covenants and agreements contained in this Section 5 of
the Agreement is an independent covenant and may be enforced independent of any
other covenants hereunder and is enforceable regardless of any breach by the
Company of the Company's covenants hereunder.
6. General Provisions.
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6.1 Entire Agreement. This Agreement and the Option Agreement
constitutes the entire agreement between the parties hereto regarding the
subject matter hereof, and there are no agreements, understandings,
restrictions, warranties or representations relating to said subject matter
among the parties other than those herein provided for. This Agreement cannot be
changed, modified, or terminated herein except by a written agreement signed by
the authorized representatives of each party hereto. Any amendment of any of the
provisions of this Agreement must be in writing and signed by a duly authorized
representative of the party against whom enforcement of such waiver is sought.
6.2 Severability. Each provision of this Agreement is separable from
every other provision of this Agreement, and each part of each provision of this
Agreement is separable from every other part of such provision. If any provision
of Section 5 is adjudged by a court to be invalid or unenforceable, the same
will in no way effect any other circumstance or the validity or enforceability
of this Agreement. If any such provision, or any part thereof, is held to be
unenforceable because of the duration of such provision or the area covered
thereby, the parties agree that the court making such determination shall have
the power to reduce the duration and/or area of such provision, and/or to delete
specific words or phrases, and in its reduced form, such provision shall then be
enforceable and shall be enforced
6.3 Interpretation. The headings contained in this Agreement are for
reference purposes only and will not affect in any way the meaning or
interpretation of this Agreement. This Agreement shall be construed as a whole,
accordingly to its fair meaning, and not in favor of or against any party. By
way of example and not limitation, this Agreement shall not be construed against
the party responsible for any language in this Agreement.
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6.4 Waiver. No failure on the part of the Company to exercise any
power, right, privilege or remedy under this Agreement, shall operate as a
waiver of such power, right, privilege or remedy; and no single or partial
exercise of any such power, right, privilege or remedy shall preclude any other
or further exercise thereof or of any other power, right, privilege or remedy.
The Company shall not be deemed to have waived any claim arising out of this
Agreement or any power, right, privilege or remedy under this Agreement, unless
the waiver of such claim, power, right, privilege or remedy is expressly set
forth in a written instrument duly executed and delivered on behalf of such
party; and any such waiver shall not be applicable to have any effect except in
the specific instance in which it is given.
6.5 Notices. Any communications or notices required or desired
hereunder shall be written and shall be provided by (a) hand delivery, or (b)
recognized national overnight delivery service to the parties hereto at the
following addresses, or such other address as either party may designate in
writing from time to time. Such notice shall be effective on the date delivered.
Addresses for notice are:
If to the
Company: Mizar Energy Company
0000 X. Xxxxxxxxxx Xxxx., Xxxxx 000
Xx. Xxxxxxxxxx, XX 00000
If to the
Executive
6.6 Assignment. This Agreement and all obligations hereunder are
personal to the Executive and may not be transferred or assigned by the
Executive at any time. This Agreement will be binding upon the Executive and the
Executive's representatives, executors, administrators, estate, heirs,
successors and assigns, and will inure to the benefit of the Company and its
respective successors and assigns.
6.7 Exhibits. All exhibits or schedules annexed hereto and the
documents and instrument referred to herein and attached hereto are expressly
made a part of this Agreement as fully as though completely set forth herein.
6.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. Any facsimile copy of a
manually executed original shall be deemed an original. Any facsimile copy of a
manually executed original shall be deemed a manually executed original.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Employment Agreement on the 5th day of June, 2000, to be effective as of June
12, 2000.
COMPANY:
MIZAR ENERGY COMPANY
By: /s/ Xxxx Xxxxxxx
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Xxxx Xxxxxxx, Chief Executive Officer and President
EXECUTIVE:
/s/ XXXXXX XXXXXXX
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XXXXXX XXXXXXX
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