Exhibit 10.1
EMPLOYMENT AGREEMENT
This employment agreement (the "Agreement") is effective as of September
1, 2001, between LearningStar Corp. ("Employer") and Xxxxxxx Xxxxxxx
("Employee").
RECITALS
Employer desires the services of Employee in order to retain Employee's
experience, abilities, and knowledge, and is therefore willing to engage
Employee's services on the terms and conditions set forth. Employee desires to
be employed by Employer and is willing to do so on the terms and conditions set
forth below.
THEREFORE, in consideration of the above recitals and of the mutual
promises and conditions set forth in this Agreement, it is agreed as follows:
1. DURATION: Subject to earlier termination as provided in this Agreement,
Employee shall be employed for a term beginning September 1, 2001, and
continuing through August 31, 2004.
2. PLACE OF EMPLOYMENT: Unless the parties agree otherwise in writing,
during the employment term Employee shall perform the services Employee
is required to perform under this Agreement at Employer's headquarters
(which are currently located at 0 Xxxxx Xxxxxxxx Xx., Xxxxx 000,
Xxxxxxxx, XX, 00000) on an average of two to three days per week and at
an office in Los Angeles for the balance of the week; provided, however,
that Employer may from time to time require Employee to travel
temporarily to other locations on Employer's business.
3. DUTIES AND AUTHORITY: Employer shall employ Employee as its Chief
Financial Officer or in such other capacity or capacities as Employer may
from time to time prescribe. Employee shall have the full power and
authority to manage and conduct business for the Employer, subject to the
directions and policies of Employer as they may be, from time to time,
stated either orally or in writing.
4. REASONABLE TIME AND EFFORT: During Employee's employment, Employee shall
devote such time, interest, and effort to the performance of this
Agreement as may be fairly and reasonably necessary.
5. SALARY: During the term of this Agreement, Employer agrees to pay
Employee a base salary of $240,000 per year. The base salary shall be
payable as a current salary on a bi-weekly basis. Employer, in its sole
discretion, may increase Employee's base salary or any other benefits but
may not decrease Employee's salary during the term of this Agreement.
If during the term of this Agreement Employee's position is eliminated
for any reason and/or Employee's employment with Employer is otherwise
involuntarily terminated
for any reason apart from the reasons set forth in the sections below
titled "Termination," "Termination Because of Death," and/or "Termination
Because of Disability," Employer shall continue to pay Employee's base
salary in effect at the time of Employee's termination of employment
through August 31, 2004, or for one year, whichever is greater.
Whenever compensation is payable to Employee during a time when Employee
is partially or totally disabled and such disability would entitle
Employee to disability income or to salary continuation payments from
Employer according to the terms of any plan now or hereafter provided by
Employer or according to any policy of Employer in effect at the time of
such disability, Employee shall apply for such disability income or
salary continuation, and the compensation payable to Employee under this
Agreement shall be inclusive of any such disability income or salary
continuation and shall not be in addition to such disability income or
salary continuation. If disability income is payable to Employee by an
insurance company under an insurance policy paid for by Employer, the
compensation payable to Employee under this Agreement shall be inclusive
of the amounts paid to Employee by that insurance company and shall not
be in addition to the amounts paid to Employee by that insurance company.
6. ADDITIONAL BENEFITS: During the employment term, Employee shall be
entitled to receive all other benefits of employment generally available
to Employer's other senior managerial employees when and as Employee
becomes eligible for them, including medical, dental, life and disability
insurance benefits, and participation in any pension plan, quarterly
bonus plan, incentive plan and/or profit-sharing plan.
Employer reserves the right to modify, suspend or discontinue any and all
of the above benefit plans, policies and practices at any time without
notice to or recourse to Employee so long as such action is taken
generally with respect to other similarly situated persons and does not
single out Employee.
7. STOCK OPTIONS: Employee shall be entitled to options to purchase up to
80,000 shares of LearningStar common stock pursuant to, and governed by,
the LearningStar Corp. 2001 Stock Option and Incentive Plan. Such options
are in addition to the options to purchase up to 40,000 shares of
LearningStar common stock previously granted to Employee under the
LearningStar Corp. 2001 Non-Employee Director Stock Option Plan.
8. PAID TIME OFF: Employee shall be entitled to 38 business days of Paid
Time Off ("PTO") annually. Employee's PTO will continue to accrue so long
as Employee's total accrued PTO does not exceed 57 business days. In the
event Employee's accrued PTO should reach 57 business days, Employee will
cease to accrue further PTO until Employee's accrued PTO falls below that
level. Other than the accrual and maximum accrual of PTO as set forth in
this section of the Agreement, Employee's PTO shall be governed by the
PTO provisions of the Xxxxxxxxxxxxxx.xxx Employee Manual.
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9. HOUSING AND TRANSPORTATION: Employer will reimburse Employee for mutually
agreeable, reasonable furnished housing and transportation for Employee
while Employee is in Monterey pursuant to this Agreement.
10. OFFICE FACILITIES AND ADMINISTRATIVE SUPPORT IN LOS ANGELES: Employer
will provide Employee with commercially reasonable office space and
administrative support in Los Angeles while working for Employer pursuant
to this Agreement.
11. EXPENSE REIMBURSEMENT: During the employment term, to the extent that
such expenditures satisfy the criteria under the Internal Revenue Code
for deductibility by Employer (whether or not fully deductible) for
federal income tax purposes as ordinary and necessary business expenses,
Employer shall reimburse Employee promptly for reasonable business
expenses, including travel, entertainment, parking, business meetings,
and professional dues, made and substantiated in accordance with the
policies and procedures established from time to time by Employer with
respect to Employer's other managerial employees.
12. TERMINATION: Employer may terminate Employee's employment at any time for
cause. Under this Agreement, the term "cause" shall mean (i)
misappropriation of any material funds or property of Employer or of any
of its related companies; (ii) unjustifiable neglect of duties under this
Agreement; (iii) conviction of a felony involving moral turpitude; (iv)
gross misconduct and/or the failure to act in good faith to the material
detriment of Employer, or (v) willful and bad faith failure to obey
reasonable and material orders given by Employer. If Employee is
terminated as set forth in this paragraph, then payment of the specified
salary earned and benefits accrued as of the date of the termination
shall be payment in full of all compensation payable under this
Agreement.
In the event of a total and complete closure of Employer's business
operations, for any reason whatsoever, Employee shall be entitled to
continue to receive Employee's regular agreed-upon compensation for up to
and including a maximum period of 12 weeks. If the business operations
remain totally and completely closed for a period exceeding 12 weeks,
Employer has the option of terminating the Agreement for the then
remaining portion of the Term.
If Employee is terminated or resigns as set forth in this section
entitled "Termination," Employer shall be released and discharged of and
from all further obligations under this Agreement, except for any monies
due and owing to Employee and then unpaid which shall have vested prior
to such termination.
13. TERMINATION ON RESIGNATION: Employee may resign Employee's employment
under this Agreement by giving Employer at least thirty (30) calendar
days written notice of resignation. If Employee resigns as set forth in
this section, Employer shall be released and discharged of and from all
further obligations under this Agreement, except for any monies due and
owing to Employee and then unpaid which shall have vested prior to such
resignation.
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14. TERMINATION BECAUSE OF DEATH: In the event that Employee should die
during the term of this Agreement, this Agreement shall be terminated on
the last day of the calendar month of Employee's death and Employer shall
be required to pay to Employee's estate the specified salary and any
additional benefits accrued by Employee at the time of Employee's death.
15. TERMINATION BECAUSE OF DISABILITY: If, at the end of any calendar month
during the initial term or any renewal term of this Agreement, Employee
is and has been for the four (4) consecutive full calendar months then
ending, or for 80% or more of the normal working days during the six (6)
consecutive full calendar months then ending, unable due to mental or
physical illness or injury to perform Employee's duties under this
Agreement, Employer shall have the right, subject to applicable federal
and state law, to terminate Employee's employment, and Employer shall
only be obligated to pay Employee the specified compensation earned and
benefits accrued by Employee at the time of her termination by Employer.
16. AGREEMENT SURVIVES COMBINATION OR DISSOLUTION: This Agreement shall not
be terminated by Employer's voluntary or involuntary dissolution or by
any merger in which Employer is not the surviving or resulting
corporation, or on any transfer of all or substantially all of Employer's
assets. In the event of any such merger or transfer of assets, the
provisions of this Agreement shall be binding on and inure to the benefit
of the surviving business entity or the business entity to which such
assets shall be transferred.
17. NOTICES: All notices that either party is required or may desire to serve
upon the other may be served either personally or by depositing the same
in the US mail addressed to the other party to be served as follows:
To Employer: Xxx Xxxxxxx, c/o LearningStar Corp., 0 Xxxxx Xxxxxxxx Xx.,
#000, Xxxxxxxx, XX 00000.
To Employee: Xxxxxxx Xxxxxxx, 000 Xxx Xx Xx Xxx, Xxxxxxx Xxxxxxxxx, XX
00000.
18. EMPLOYEE MANUAL: Employee acknowledges that Employee has been provided a
copy of the Employee Manual, attached hereto as Exhibit A. It is agreed
and understood that the Employee Manual represents guidelines that
Employer may change from time to time in its sole discretion. It is not
intended to be a contract. To the extent that this Agreement conflicts
with the Employee Manual, the terms of this Agreement pertain to
Employee's employment.
19. NONDISCLOSURE OF CONFIDENTIAL INFORMATION OR TRADE SECRETS: In the course
of Employee's employment with Employer, Employee will have access to
confidential records and data pertaining to Employer's customers and its
operations. Such information is considered secret and is disclosed to
Employee in confidence. Furthermore, all memoranda, notes, records,
computer files, and other documents or tangible material made or compiled
by Employee, or made available to Employee
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during the term of this Agreement concerning the business of Employer,
shall be the sole property of Employer and shall be delivered to Employer
on the expiration or termination of this Agreement, or at another time on
request. During Employee's employment with Employer and thereafter,
Employee shall keep in confidence and shall not directly or indirectly
disclose any secret or confidential information belonging to Employer or
any of its related companies except as required in the course of
Employee's employment by Employer and/or authorized in writing by
Employer, or required by law.
20. GOVERNING LAW: This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California.
21. ARBITRATION AND EQUITABLE RELIEF: (1) Arbitration: Employee agrees that
in consideration of Employee's employment with Employer, its promise to
arbitrate all employment-related disputes and Employee's receipt of the
compensation, pay raises and other benefits paid to Employee by Employer,
at present and in the future, Employee agrees that any and all
controversies, claims, or disputes with anyone (including Employer and
any employee, officer, director, shareholder or benefit plan of Employer
in their capacity as such or otherwise) arising out of, relating to, or
resulting from Employee's employment with Employer or the termination of
Employee's employment with Employer, including any breach of this
Agreement, shall be subject to binding arbitration under the arbitration
rules set forth in California Code of Civil Procedure section 1280
through 1294.2, including section 1283.05 (the "rules") and pursuant to
California law. Disputes which Employee agrees to arbitrate, and thereby
agrees to waive any right to a trial by jury, include any statutory
claims under state or federal law, including, but not limited to, claims
under Title VII of the Civil Rights Act of 1964, the Americans with
Disabilities Act of 1994, the Age Discrimination in Employment Act of
1967, the Older Workers Benefit Protection Act, the California Fair
Employment and Housing Act, the California Labor Code, claims of
harassment, discrimination or wrongful termination and any statutory
claims. Employee further understands that this agreement to arbitrate
also applies to any disputes that Employer may have with Employee. (2)
Procedure: Employee agrees that any arbitration will be administered by
the American Arbitration Association ("AAA") and that the arbitrator will
be selected in a manner consistent with its national rules for the
resolution of employment disputes. Employee agrees that the arbitrator
shall have the power to decide any motions brought by any party to the
arbitration, including motions for summary judgment and/or adjudication
and motions to dismiss and demurrers, prior to any arbitration hearing.
Employee also agrees that the arbitrator shall have the power to award
any remedies, including attorneys' fees and costs, available under
applicable law. Employee understands Employer will pay for any
administrative or hearing fees charged by the arbitrator or AAA except
that Employee shall pay the first $200.00 of any filing fees associated
with any arbitration Employee initiates. Employee agrees that the
arbitrator shall administer and conduct any arbitration in a manner
consistent with the rules and that to the extent that the AAA's national
rules for the resolution of employment disputes conflict with the rules,
the rules shall take precedence. (3) Remedy: Except as provided by the
rules,
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arbitration shall be the sole, exclusive and final remedy for any dispute
between Employee and Employer. Accordingly, except as provided for by the
rules, neither Employee nor Employer will be permitted to pursue court
action regarding claims that are subject to arbitration. Notwithstanding,
the arbitrator will not have the authority to disregard or refuse to
enforce any lawful Employer policy, and the arbitrator shall not order or
require Employer to adopt a policy not otherwise required by law which
Employer has not adopted. (4) Availability of Injunctive Relief: In
addition to the right under the rules to petition the court for
provisional relief, Employee agrees that any party may also petition the
court for injunctive relief where either party alleges or claims a
violation of any agreement or obligation regarding trade secrets,
confidential information, nonsolicitation, Labor Code Section 2870, or
invention assignment. In the event either party seeks injunctive relief,
the prevailing party shall be entitled to recover reasonable costs and
attorneys' fees. (5) Administrative Relief: Employee understands that
this agreement does not prohibit Employee from pursuing an administrative
claim with a local, state or federal administrative body such as the
Department of Fair Employment and Housing, the Equal Employment
Opportunity Commission or the Workers' Compensation Appeals Board. This
agreement does, however, preclude Employee from pursuing court action
regarding any such claim. (6) Voluntary Nature of Agreement: Employee
acknowledges and agrees that Employee is executing this arbitration
provision voluntarily and without any duress or undue influence by
Employer or anyone else, and that Employee fully understands the terms,
consequences and binding effect of this arbitration provision, including
that Employee is waiving Employee's right to a jury trial.
22. WAIVER: The failure by either party to exercise or enforce any terms or
conditions under this Agreement shall not be deemed to be a waiver of
that party's right to exercise or enforce any such term or condition in
the future. The waiver by either party of any breach, default, or
omission in the performance of any of the terms or conditions of this
Agreement by the other party shall not be deemed to be a waiver of any
other breach, default, or omission.
23. SEVERABILITY: If any part of this Agreement is invalidated or rendered
unenforceable by any court of competent jurisdiction or by any regulation
or legislation to which it is subject, the remaining provisions and that
provision found invalid or unenforceable as it may apply to other
circumstances, shall remain in full force and effect. In such event, the
parties shall promptly negotiate in good faith to amend this Agreement by
replacing such stricken provision with a valid and enforceable provision
that fulfills the original intention of the invalid or unenforceable
provision.
24. ENTIRE AGREEMENT: This Agreement constitutes the entire agreement of the
parties with respect to the subject matter hereof and cancels and
supersedes all previous agreements or understandings relating thereto,
whether written or oral, between the parties.
25. AMENDMENT: This Agreement shall only be amended or waived by a writing
that explicitly refers to this Agreement and that is signed by both
parties.
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26. EXECUTION: The parties, having carefully read this Agreement and having
consulted or having been given an opportunity to consult legal counsel,
hereby acknowledge their agreement to all of the foregoing terms and
conditions by executing this Agreement. Each signatory hereto represents
and warrants that it is authorized to sign this Agreement on behalf of
the respective party. This Agreement may be executed in any number of
counterparts, and each such counterpart shall be an original and together
they shall constitute one Agreement.
EMPLOYER EMPLOYEE
By: By:
/s/ Xxxxxx Xxxxxxx /s/ Xxxxxxx Xxxxxxx
-------------------------- -------------------------
Xxxxxx Xxxxxxx Xxxxxxx Xxxxxxx
CEO -- LearningStar Corp.
Date: September 1, 2001 Date: September 1, 2001
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