THIS AGREEMENT is made between Covenant EcoNet Inc., a
Nevada corporation with its principal place of business at 00 Xxxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx, XX 00000 ("EcoNet") and Xxxxxx X.
Xxxx ("Pree") residing at 0000 Xxxx Xxxxx Xxxxx, XX, Xxxxxxxxxx, XX
00000.
WHEREAS Xx. Xxxx and EcoNet desire and agree to enter into an
employment relationship by means of this Employment Agreement.
NOW, THEREFORE in consideration of the promises and mutual
covenants herein contained, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, on this 15th day of
May, 2001 (the "Effective Date"), it is mutually covenanted and agreed by
and between the parties as follows:
1. Employment Acceptance. EcoNet hereby employs Pree as the
President of EcoNet, with the powers and duties in that capacity to be those
powers and duties customary to such positions in similar publicly held
corporations, and Pree hereby accepts such employment.
2. Duties of President. Pree shall render full time professional
services to EcoNet in the capacity of president of EcoNet. Pree will at all
times faithfully, industriously, and to the best of his ability, perform all
duties that may be required by virtue of the position of president and all
duties as set forth in EcoNet's bylaws, corporate policy, and in the job
description in 3 below to the reasonable satisfaction of the Board of
Directors. Pree is hereby vested with authority to act on behalf of the Board
in keeping with policies adopted by the Board, as amended from time to time,
and Pree shall perform in the same manner any special duties assigned or
delegated by the board. Pree shall report to the Board of Directors.
3. Description of Duties. Pree acknowledges that EcoNet's current
business plan entails creating four new divisions: (1) GeNex, a marketing and
distribution company that will own at least ten percent of each company for
which it will provide marketing services and distribution; (2) Covenant
InterNetworks, a company that will enter into affiliate relationships with
community-based television stations, provide its affiliated stations with
banner advertising and integrate Internet and televisions programming and
advertising; (3) Covenant Financial Services, a financial services firm that
will offer brokerage and insurance products, and to the extent permissible,
commercial banking products; and (4) Financial Warfare Club, a company
that will provide financial literacy courses to members of the church
community. In addition to performing the duties in 2, Pree shall exercise
responsibility for developing and implementing viable business plans for each
of the aforementioned divisions and overseeing the development of each such
division such that the foregoing divisions shall generate revenues and become
profitable businesses. Pree shall exercise supervisory authority over the
heads of each such division and cause the divisions to enter into productive
strategic alliances with other business entities in the best overall interests
of EcoNet.
4. Personal Guarantee, Office Space, and Electronic Transactions.
Subject to the approval of the EcoNet's Board of Directors, Pree
acknowledges his obligation to secure office space for EcoNet and to the
extent the lessor of such lease requires the execution of a personal guarantee
to secure the lease, Pree agrees to serve as the guarantor. Pree further
acknowledges his obligation, on terms acceptable to the Board of Directors of
EcoNet, to take all necessary steps to cause EcoNet to set itself up to process
MasterCard and Visa transactions including serving as a
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guarantor on any personal guarantee required for EcoNet to process
MasterCard and Visa transactions.
5. Term. EcoNet hereby agrees to employ Pree and Pree hereby
agrees to serve EcoNet, in accordance with the terms and conditions set forth
herein, for an initial period of three (3) years, commencing as of the
Effective Date of this Agreement, as indicated above. Additionally, the
automatic extensions of the term of this Agreement set forth below shall
immediately be suspended upon an employment termination as provided for
herein.
Notwithstanding the foregoing and subject to the provisions for termination
otherwise included herein, such term shall automatically be extended for an
additional one (1) year period commencing on May 15, 2004, and each May
15 thereafter unless this Employment Agreement is terminated as provided for
herein or unless either party provides ninety-days' written notice of an intent
not to re-new.
6. Compensation. Pree shall receive the following compensation for is
services during the term of initial employment hereunder:
(a) Pree's base salary ("Base Salary") shall be $175,000 per year,
payable in monthly installments, subject to increase by the Board of
Directors, which shall review Pree's Base Salary semi-annually.
(b) In addition to the aforesaid salary, EcoNet will pay Pree a
signing bonus in the amount of $8,000 and 166,666 shares of EcoNet
Common Stock both payable on the Effective Date of this Agreement.
(c) In addition to the Base Salary, during the Term of this Agreement,
Pree shall accrue incentive compensation equal to ten percent (10%) of
EcoNet's annual net profit as reported on its federal tax return. The
incentive compensation shall be paid in shares of EcoNet Common Stock,
value for this purpose at $.60 per share, adjusted for any stock splits or
stock dividends. By July 31 or each year, Pree shall receive the
incentive compensation relating to the prior fiscal year. (i.e., Pree
shall receive incentive compensation for 2001 on or before July 31, 2002.)
During the Term of this Agreement, Pree's incentive compensation in the
aggregate shall not exceed 333,334 shares of EcoNet Common Stock.
Fractional shares shall be rounded up to the next whole share.
(d) Pree, if otherwise eligible, shall participate in any annuity or
group insurance plan, medical plan, and other benefits maintained by
EcoNet for its employees or EcoNet's subsidiary employees. If the term of
Initial employment hereunder terminates on a date other than the end of
EcoNet's fiscal year, the payment which Pree receives under the applicable
plan will be prorated based on the portion of the fiscal year prior to the
termination.
(e) Pree shall be eligible for two weeks of paid vacation in any
fiscal year. Unused vacation may not be accrued and carried over from
year to year. Pree shall be eligible, after three months of employment for
eight days of paid sick leave and three days of paid leave for personal
reasons in each fiscal year. Unused sick days and personal days may not be
accrued and carried over from year to year.
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7. Expense Accounts. EcoNet shall reimburse Pree for all ordinary and
necessary business expenses incurred by Pree while carrying out his
employment responsibilities under this Agreement. EcoNet retains the right
to establish limits on the types or amounts of business expenses that Pree may
incur.
8. Best Efforts. Pree agrees to devote in good faith his full time and
best efforts, during reasonable business hours, to the services which he is
required to render to EcoNet hereunder, and agrees to travel to the extent he
or the Board of Directors deems necessary to perform such duties.
9. Indemnification. EcoNet hereby covenants and agrees to indemnify
and hold harmless Pree in a manner consistent with the provisions of EcoNet's
bylaws.
10. Voluntary Termination by Pree. Pree may terminate this Agreement
at any time during the first two years of this Agreement by giving EcoNet's
Board of Directors written notice of intent to terminate delivered at least
sixty (60) calendar days prior to the effective date of such termination, and
Pree may terminate this Agreement at any time during the third year of this
Agreement by giving at least forty-five (45) calendar days prior to the
effective date of such termination. This provision shall not apply if Pree
terminates employment because of Retirement. EcoNet shall pay Pree a full
Base Salary, at the rate then in effect, through the effective date of
termination, plus all other benefits to which Pree has a vested right at that
time.
11. Termination for Cause. Pree's employment may be terminated
immediately hereunder for cause if in the good faith determination of
EcoNet's Board of Directors, Pree (1) acted dishonestly or incompetently or
engaged in willful misconduct in the performance of his duties; (2) breached a
fiduciary duty; (3) intentionally failed to perform reasonably assigned duties;
(4) willfully violated any law, rule, or regulation (other than traffic
violations or similar offenses); or (5) materially breached this Agreement.
12. Involuntary Termination Without Cause. At any time during the
term of this Agreement, the Board may terminate Pree's employment, as
provided under this Agreement, for reasons other than death, disability,
retirement, or for cause, by notifying Pree in writing of EcoNet's intent to
terminate, at least ninety (90) calendar days prior to the effective date of
such termination. Following the expiration of the ninety (90) day notice
period, EcoNet shall pay to Pree a lump-sum cash payment equal to the
present value of the Base Salary which would have been paid to Pree through
the remainder of the fiscal year in which Pree is terminated, except that if
Pree is terminated at a time such that less than ninety days is remaining in
such fiscal year of termination, EcoNet shall pay to Pree a lump-sum cash
payment equal to the present value of one-fourth of Pree's Base Salary that
would have been payable to Pree through the remainder of the following fiscal
year. For purposes of making the aforementioned present value calculations,
EcoNet's Board shall treat such payments as if they were made at the point in
time in the future when each such payment is scheduled to have been made.
Such present value calculations shall be made at the sole discretion of the
Board, using such assumptions and factors as it deems appropriate.
13. Termination for Disability. If at any time during the term of this
Agreement Pree becomes disabled or is unable for any reason substantially to
perform his duties hereunder and Pree has not breached any of the provisions
of this Agreement, compensation shall continue to be
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paid to Pree as provided but only as to the first six-month period during which
Pree shall be so disabled. EcoNet may, at its sole option, continue payment of
Pree's salary until Pree is able to return to work or for such period greater
than six months as EcoNet elects, or EcoNet may terminate this Agreement.
If Pree should die during the term of this Agreement, Pree's employment and
EcoNet's obligations hereunder shall terminate as of the end of the month in
which death occurs.
14. Covenant not to Compete. During the Term of this Agreement and
for a period of one year following Pree's termination of employment during
the Term, Pree shall not become associated, whether as a principal, partner,
employee, consultant, or shareholder (other than as a holder of not in excess
of one percent (1%) of the outstanding voting shares of any publicly traded
company), with any entity that is actively engaged in any geographic area in
any business which is in substantial and direct competition with the business
or businesses of EcoNet for which Pree provides substantial services or for
which Pree has substantial responsibility, provided that nothing in this
paragraph shall preclude Pree from performing services solely and exclusively
for a division or subsidiary of such an entity that is engaged in a
noncompetitive business.
Pree acknowledges that the restrictions imposed by this Agreement are fully
understood and will not preclude Pree from becoming gainfully employed
following a termination of employment with EcoNet. Pree understands that
the geographical area set forth in this clause is divisible so that if this
clause is invalid or unenforceable in an included geographical area, that area
is severable and this clause remains in effect for the remaining included
geographic areas in which the clause is valid.
15. Disclosure of Information. Pree agrees to receive confidential and
proprietary information of EcoNet in confidence, and not to disclose such
information to others except as authorized by EcoNet. Confidential and
proprietary information shall mean information not generally known to the
public that is disclosed to Pree as a consequence of employment by EcoNet,
whether or not pursuant to this Agreement.
16. Arbitration. Any controversy or claim arising out of or relating to
this contract, or the breach thereof, shall be settled by arbitration in the
District of Columbia in accordance with the Commercial Arbitration rules of
the American Arbitration Association, and judgment upon the award rendered
by the Arbitrator(s) may be entered in any court having jurisdiction thereof.
17. Severability. If any provision of this Agreement is declared by any
arbitration panel or court of competent jurisdiction to be invalid, illegal or
incapable of being enforced, such provision or part thereof shall be deemed
not to be a part of this Agreement, and the remainder of such provision and of
this Agreement shall not be affected thereby and shall continue in full force
and effect. In the event that any court or tribunal shall at any time
hereafter hold covenants or restrictions contained in this Agreement
unenforceable or unreasonable as to scope or time, the parties shall
specifically request the court or arbitrator to determine the scope and/or
period of time that it deems to be reasonable and to enforce the provisions to
such extent.
18. Notices. Any notice hereby required or permitted to be given shall be
sufficiently given if in writing and upon mailing by registered or certified
mail, postage prepaid, to either party
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at the address of such party as set forth on the first page of this Agreement
or such other address as shall have been designated by written notice by such
party to the other party.
19. Waiver. Either party's failure to enforce any provision or provisions
of this Agreement shall not in any way be construed as a waiver of any such
provision or provisions as to any future violations thereof, nor prevent that
party thereafter from enforcing each and every other provision of this
Agreement. The rights granted the parties herein are cumulative and the
waiver by a party of any single remedy shall not constitute a waiver of such
party's right to assert all other legal remedies available under the
circumstances.
20. Assignment. By reason of the special and unique nature of the
services hereunder, it is agreed that neither party hereto may assign any
interest, rights or duties which it or he may have in this Agreement without
the prior written consent of the other party, except that upon any merger,
liquidation, or sale of all or substantially all of the assets of EcoNet to
another corporation, this Agreement shall inure to the benefit of and be
binding upon Pree and the purchasing, surviving or resulting company or
corporation in the same manner and to the same extent as though such
company or corporation were EcoNet.
21. Governing Law. EcoNet and Pree agree that this Agreement shall be
governed by the laws of the District of Columbia.
22. Entire Agreement. This Agreement expresses the entire
understanding and agreement of the parties regarding the terms and conditions
governing Pree's employment with EcoNet, and all prior agreements
governing Pree's employment with EcoNet shall have no further effect.
23. Binding Effect. This Agreement shall be binding on, and shall
inure to the benefit of, EcoNet and any person or entity that succeeds to the
interest of EcoNet (regardless of whether such succession does or does not
occur by operation of law) by reason of the sale of all or a portion of
EcoNet's stock, a merger, consolidation, or reorganization involving EcoNet
or, unless EcoNet otherwise elects in writing, a sale of the assets of the
business of EcoNet (or portion thereof) in which Pree performs a majority of
his services. Any successor in interest to EcoNet shall acknowledge in
writing to Pree that it has assumed this Agreement and is responsible to Pree
for the performance of EcoNet's obligations under this Agreement. Without
limiting the generality of the foregoing, EcoNet shall have the right, without
the consent of Pree, to assign this Agreement and its obligations hereunder to
any new entity or any subsidiary of any new entity by which Pree becomes
employed, at EcoNet's discretion, by reason of the implementation of any
restructuring of EcoNet, and, following any such assignment, such new entity
or subsidiary shall be treated as EcoNet for all purposes of this Agreement.
This Agreement shall also inure to the benefit of Pree's heirs, executors,
administrators, and legal representatives.
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24. Amendments. This Agreement may not be altered, modified, or
amended except by a written instrument signed by each of the parties hereto.
IN WITNESS WHEREOF, EcoNet has caused this Agreement to be
executed by its duly authorized officer, and Pree has hereunto set his
signature as of the day and year first above written.
Covenant EcoNet, Inc.
/S/ /S/
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Xxxxxx Xxxxx, President Xxxxxx Xxxx
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