EXHIBIT 10.3
MANAGEMENT AND EMPLOYMENT CONTRACT
EMPLOYMENT CONTRACT, dated as of October 1, 2005, between ENDAVO MEDIA AND
COMMUNICATIONS, INC., a Delaware corporation (the "Company"), Xxxx X. Xxxx an
individual, residing at 000 Xxxx Xxxxxxx Xxx, Xxxxxxxxxx, XX 00000
("Executive").
The Company desires to engage Executive to perform executive management
services for the Company, any present or future parent, subsidiary, or affiliate
of the Company, and (subject to Section 11) any successor or assign of any of
them (the "Corporations"), and Executive desires to perform such services, on
the terms and conditions hereinafter set forth.
1. Term
The Company agrees to employ Executive, and Executive agrees to serve, on
the terms and conditions of this Agreement for a period commencing on October 1,
2005 (the "Commencement Date") and ending 3 years from the commencement date, or
such shorter period as may be provided for herein. The period during which
Executive is employed hereunder is hereinafter referred to as the "Employment
Period."
2. Duties and Services
During the Employment Period, Executive shall be employed as President of
the Company and shall also perform duties and services in the capacity of Chief
Executive officer of the Company. Executive shall have such powers and duties in
the management of the Company as may be prescribed in one or multiple
resolutions by the Board of Directors and, to the extent not so provided, as
generally pertain to the office of Chief Executive Officer, subject to the
direction and oversight of the Board of Directors. Executive agrees to his
employment as described in this Section 2 and agrees to devote substantially all
of his business time and efforts to the performance of his duties under this
Agreement and to promote and advance the business interests of the Company in a
lawful, diligent and proper manner. Executive shall comply with the policies and
procedures of the Company adopted by the Board of Directors and executive
management from time to time. Executive shall not be required to change his
residence, but shall be available to travel as the needs of the business
require.
3. Consulting Provision
Without limiting all other rights under this agreement, including
compensation due and payable under the agreement, Executive may convert this
Employment Contract into a consulting contract, with the non-competition clause
in Section 7 no longer applicable, if
(a) Executive is not elected a director or does not continue to serve as a
director while he desires to be a director,
(b) Executive is not elected to and maintained in the executive position of
President as specified in the Employment Contract or is not allowed to perform
his duties as Chief Executive Officer as specified in the Employment Contract,
(c) Executive has a policy dispute with the Board of Directors of the
Company, with officers of the Company senior to him, or with the Board of
Directors or any officer of any of the Conglomerates Corporations (as defined
below), or
(d) the control of the Company or of any of the Conglomerates Corporations
changes.
4. Compensation
(a) As full compensation for his services hereunder, the Company shall (i)
pay Executive, during the Employment Period, an annual base salary rate of
$75,000, payable in equal semi monthly installments or at such intervals (at
least monthly) as salaries are paid generally to other full-time employees of
the Company, (ii) issue a non-qualified employee stock option to the Executive,
in the form of option typically used by the Company and under a current and
effective Stock Option Plan established by the Company, to purchase up to
1,000,000 shares of common stock of the Company, free and clear of any
encumbrances, at the fair market value of the common stock at the date of issue
of the options (The options shall vest according to the following schedule: 34%
on the first anniversary of this agreement; 33% on the second anniversary of
this agreement and 33% on the third anniversary of this agreement), (iii)
provide Executive with health and life insurance policies, if requested, or
alternatively shall pay Executive a monthly health insurance reimbursement not
to exceed $500, without further agreement by the Company, based on submission of
proper insurance premium expense documentation and (iv) reimburse Executive for
Executive's legal expenses related to negotiating this Agreement and the
Non-Qualified Stock Option Agreement of an amount not to exceed $1,000. Nothing
contained herein shall preclude Executive from participating in the present or
future Executive benefit or bonus compensation plans of the Company if he meets
the eligibility requirements therefore. Executive shall be entitled to
reasonable vacations in accordance with the then regular procedures of the
Company.
(b) Incentive Salary Rate. The Executive shall receive an increase in
annual base salary rate, as defined in section 4(a)(i) of this agreement, to
equal $120,000 ($10,000 per month) once the company has achieved net sales
(revenue) equal to or greater than the amount of $104,166.67 ($1,250,000
annualized) in any given month during the period of this agreement ("required
run rate"), as reported by the company's accounting Executive or controller and
reported to the executive officers of the company and the Board of Directors.
The new rate shall become effective on the month after the required run rate was
achieved and reported and shall continue for the duration of the contract.
5. Expenses
Executive shall be entitled to reimbursement for reasonable travel and
other out-of-pocket expenses necessarily incurred in the performance of his
duties hereunder, upon submission and approval of written statements and bills
in accordance with the then regular procedures of the Company.
6. Participation in Benefit Plans.
During the Employment Period, Executive shall be eligible to participate in
all Executive benefit plans and arrangements now in effect or which may
hereafter be established, including, without limitation, all life, group
insurance and medical care plans and all disability, 401k and other Executive
benefit plans of Employer.
Representations and Warranties of Executive
-------------------------------------------
Executive represents and warrants to the Company that (a) Executive is
under no contractual or other restriction or obligation which is inconsistent
with the execution of this Agreement, the performance of his duties hereunder,
or the other rights of the Company hereunder and (b) Executive is under no
physical or mental disability that would preclude his performance, with or
without reasonable accommodation, of the essential duties of his position.
7. Non-Competition
A. Executive agrees that he will not (a) during the period he is employed
by any of the Corporations under this Agreement or otherwise engage in, or
otherwise directly or indirectly be employed by, or act as a consultant or
lender to, or be a director, officer, manager, owner, or partner of, any other
business or organization, whether or not such business or organization now is or
shall then be competing with the Company, and (b) for a period of one year after
he ceases to be employed by the Company under this Agreement or otherwise,
directly or indirectly compete with or be engaged in the same business as of the
Company, or be employed by, or act as consultant or lender to, or be a director,
officer, manager, owner, or partner of, any business or organization which, at
the time of such cessation, directly or indirectly competes with or is engaged
in the same business as the Company, except that in each case the provisions of
this Section 7 will not be deemed breached merely because Executive owns not
more than 1% of the outstanding common stock of a corporation, if, at the time
of its acquisition by Executive, such stock is listed on a national securities
exchange, is reported on NASDAQ, or is regularly traded in the over-the-counter
market by a member of a national securities exchange.
B. In the event that there is a dispute between Executive and Company
whereby (i) Executive is no longer an executive manager of the Company, (ii) a
Change of Control has occurred, or (iii) the Company has failed to honor is
obligations hereunder; Executive shall no longer be subject to the terms of this
Section 7 Non-Competition clause. Additionally, participation in the ownership
and/or supporting the management of AlphaWest Capital Partners, LLC, The Tracker
Corporation of America (a.k.a., Hat Trick Networks, Inc.) and/or SovCap
Investment Management Group, LLC, or any of their affiliates shall not be deemed
a breach of this section.
8. Patents, Etc.
Any interest in patents, patent applications, inventions, copyrights,
developments, and processes ("Such Inventions") which Executive now or hereafter
during the period he is employed by the Company under this Agreement or
otherwise may own or develop relating to the fields in which the Company may
then be engaged shall belong to the Company; and forthwith upon request of the
Company Executive shall execute all such assignments and other documents and
take all such other action as the Company may reasonably request in order to
vest in the Company all his right, title, and interest in and to Such Inventions
free and clear of all liens, charges, and encumbrances.
9. Confidential Information
All confidential information which Executive may now possess, may obtain
during or after the Employment Period, or may create prior to the end of the
period he is employed by the Company under this Agreement or otherwise relating
to the business of the Company or of any customer or supplier of any of them
shall not be published, disclosed, or made accessible by him to any other
person, firm, or corporation either during or after the termination of his
employment or used by him except during the Employment Period in the business
and for the benefit of the Company, in each case without prior written
permission of the Company. Executive shall return all tangible evidence of such
confidential information to the Company prior to or at the termination of his
employment.
10. Life Insurance
If requested by the Company, Executive shall submit to such physical
examinations and otherwise take such actions and execute and deliver such
documents as may be reasonably necessary to enable the Company, at its expense
and for its own benefit, to obtain life insurance on the life of Executive.
Executive has no reason to believe that his life is not insurable with a
reputable insurance company at rates now prevailing for healthy men of his age.
11. Termination
The Executive's employment hereunder may be terminated under the following
circumstances:
(a) Death. The Executive's employment hereunder shall terminate upon his
death.
(b) Disability. If the Board determines in good faith, based on medical
evidence acceptable to it, that the Executive has become physically or mentally
disabled or incapacitated during his employment hereunder for a continuous
period of ninety (90) days to such an extent that he shall be unable to perform
his duties hereunder then the Company may, after the expiration of said ninety
(90) day period and during the continuance of such disability or incapacity,
give to the Executive a Notice of Termination (as defined in Section 11(e)
hereof) of the Executive's employment hereunder and such employment shall
terminate on the date provided in Section 11(f) hereof.
(c) Termination by the Company. The Company may terminate the Executive's
employment hereunder at any time with or without Cause. For purposes of this
Agreement, the Company shall have "Cause" to terminate the Executive's
employment hereunder upon (A) the engaging by the Executive in willful
misconduct that is materially injurious to the Company, (B) the embezzlement or
misappropriation of funds or property of the Company by the Executive or the
conviction of the Executive of a felony or the entrance of a plea of guilty by
the Executive to a felony or (C) the failure or refusal by the Executive to
devote his full business time and attention to the performance of his duties and
responsibilities hereunder or other breach by the Executive of this Agreement in
any material respect if such breach has not been cured by the Executive within
thirty (30) days after the Preliminary Notice (as defined below) has been given
to the Executive. For purposes of this paragraph, no act, or failure to act, on
the Executive's part shall be considered "willful" unless done, or omitted to be
done, by him not in good faith and without reasonable belief that his action or
omission was in the best interest of the Company. The Executive shall not be
deemed to have been terminated for Cause, unless the Company shall have given
the Executive (i) notice (the "Preliminary Notice") setting forth, in reasonable
detail the facts and circumstances claimed to provide a basis for termination
for Cause, (ii) a reasonable opportunity for the Executive, together with his
counsel, to be heard before the Board and (iii) a Notice of Termination stating
that, in the good faith judgment of the Board, the Executive was guilty of
conduct set forth in clauses (A), (B) or (C) above, and specifying the
particulars thereof in reasonable detail. Upon receipt of the Preliminary
Notice, the Executive shall have thirty (30) days in which to appear before the
Board with counsel, or take such other action as he may deem appropriate, and
such thirty (30) day period is hereby agreed to as a reasonable opportunity for
the Executive to be heard.
(d) Termination by the Executive. The Executive may voluntarily terminate
his employment hereunder at any time with or without Good Reason. For purposes
of this Agreement, "Good Reason" shall mean, so long as the Executive has not
been guilty of the conduct set forth in clauses (A), (B) or (C) of Section 11(c)
hereof, (i) a failure by the Company to comply with any material provision of
this Agreement that has not been cured within thirty (30) days after written
notice of such noncompliance has been given by the Executive to the Company or
(ii) the assignment to the Executive by the Company of duties inconsistent with
the Executive's position, duties or responsibilities as in effect immediately
prior to the Effective Date, including, but not limited to, any material
reduction in such position, duties or responsibilities or material change in his
title. The Executive's election to terminate under this Section 11(d) shall be
made by giving Notice of Termination not later than 60 days from, as applicable,
the date that the Company fails to cure under (i) above, the assignment of
duties under (ii) above, and the date that the Executive is advised of the
termination under (iii) above. Notwithstanding the provisions of clause (ii) of
the first sentence of this Section 11(d), a change in title which represents a
promotion and the assignment of different or additional duties or
responsibilities in connection therewith shall not constitute "Good Reason."
(e) Notice of Termination. Any termination of the Executive's employment by
the Company or by the Executive (other than termination pursuant to Section
11(a) hereof) shall be communicated by written Notice of Termination to the
other party hereto. For purposes of this Agreement, a "Notice of Termination"
shall mean a notice that shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances, if any, claimed to provide a basis for termination of the
Executive's employment under the provision so indicated.
(f) Date of Termination. Except to the extent otherwise herein provided,
"Date of Termination" shall mean (i) if the Executive's employment is terminated
pursuant to Section 11(a), the date of his death, (ii) if the Executive's
employment is terminated pursuant to Section 11(b) or (c), the date of or a
later date specified in the Notice of Termination, (iii) if the Executive's
employment is terminated pursuant to Section 11(d), the date on which the Notice
of Termination is given and (iv) if this Agreement is continued in effect to the
end of the Term, the last day of the Term. Except as provided in and subject to
Section 12 hereof, the Company shall not have any obligation to Executive for
salary continuation, severance or termination pay upon termination of this
Agreement.
12. Compensation Upon Termination
(a) If the Executive's employment is terminated (i) by the Company for
Cause, (ii) by the Executive other than for Good Reason, or (iii) by reason of
the Executive's death or disability (pursuant to Section 11(b) hereof), then the
Company shall pay the Executive his full Base Salary or Incentive Salary Rate
through the Date of Termination (to the extent not otherwise paid through the
Date of Termination) at the rate in effect immediately prior to the Date of
Termination, provided that if the Executive's employment hereunder terminates by
reason of his death, the Company shall continue to make salary payments at the
rate of the Base Salary then in effect in respect of the month of death and
three calendar months immediately following the month of death.
(b) If the Executive's employment is terminated (i) by the Company without
Cause (other than for disability pursuant to Section 5(b) hereof), or (ii) by
the Executive for Good Reason, then the Company shall pay to the Executive as
severance pay in a lump sum, not later than the fifth day following the Date of
Termination, the following amounts, which shall not be discounted to take into
account present value:
(i) to the extent not otherwise paid through the Date of Termination, the
amount of salary through the Date of Termination at the rate in effect at the
time Notice of Termination is given; and
(ii) in lieu of any further salary and bonus or other incentive
compensation payments to the Executive for periods subsequent to the Date of
Termination, the total amount of salary then in effect that would be paid for
three calendar months.
13. Merger, Etc.
In the event of a future disposition of more than 51% of the properties or
business of the Company, by merger, consolidation, sale of assets, or otherwise
(a "Change of Control"), then the Company may elect:
(a) to assign this Agreement and all of its rights and obligations
hereunder to the acquiring or surviving corporation; provided that such
corporation shall assume in writing all of the obligations of the Company
hereunder; and provided further that the Company (in the event and so long as it
remains in business as an independent going enterprise) shall remain liable for
the performance of its obligations hereunder in the event of an unjustified
failure of the acquiring corporation to perform its obligations under this
Agreement; or
(b) convert this Employment Contract into a consulting contract, except
with the non-competition clause described in Section 7 herein no longer being
applicable.
(c) If the agreement is not assigned by the acquiring or surviving
corporation or if a consulting contract is not agreed upon, then a Termination
Payment shall be made as defined in Section 12(b)(i) and 12(b)(ii) of this
agreement.
14. Survival
The covenants, agreements, representations, and warranties contained in or
made pursuant to this Agreement shall survive Executive's termination of
employment, irrespective of any investigation made by or on behalf of any party.
15. Modification
This Agreement and the exhibits thereto sets forth the entire understanding
of the parties with respect to the subject matter hereof, supersedes all
existing agreements between them concerning such subject matter, and may be
modified only by a written instrument duly executed by each party.
16. Notices
Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be given by Federal Express, Express
Mail, or similar overnight delivery or courier service or delivered against
receipt to the party to whom it is to be given at the address of such party set
forth below (or to such other address as the party shall have furnished in
writing in accordance with the provisions of this Section 16. Notice to the
estate of Executive shall be sufficient if addressed to Executive as provided in
this Section 16. Any notice or other communication given by certified mail or
such comparable method shall be deemed given at the time of certification
thereofor comparable act, except for a notice changing a party's address which
shall be deemed given at the time of receipt thereof. Any notice given by other
means permitted by this Section 16 shall be deemed given at the time of receipt
thereof.
If to the Company, to: If to Executive, to:
Endavo Media and Communications, Inc. Xxxx X Xxxx
00 Xxxx Xxxxxxxx, Xxxxx 000 700 High Xxxxxxx Xxx
Xxxx Xxxx Xxxx, XX 00000 Xxxxxxxxxx, XX 00000
Facsimile No. (000)000-0000 Facsimile No. (000) 000-0000
with a copy to with a copy to
J Xxxxxxx Xxxxxxx Xxxxxxx Xxxxxxx
The Business Law Group Xxxxx Xxxxxx
000 Xxxxx Xxxxxx Xxx, 000 Xxxxxxxxx Xxx
Xxxxx 0000 Xxx Xxxx, XX 00000
Xxxxxxx, XX 00000 Facsimile No. (000) 000-0000
Facsimile No. (000) 000-0000
17. Waiver
Any waiver by either party of a breach of any provision of this Agreement
shall not operate as or be construed to be a waiver of any other breach of such
provision or of any breach of any other provision of this Agreement. The failure
of a party to insist upon strict adherence to any term of this Agreement on one
or more occasions shall not be considered a waiver or deprive that party of the
right thereafter to insist upon strict adherence to that term or any other term
of this Agreement. Any waiver must be in writing.
18. Binding Effect
Executive's rights and obligations under this Agreement shall not be
transferable by assignment or otherwise, such rights shall not be subject to
commutation, encumbrance, or the claims of Executive's creditors, and any
attempt to do any of the foregoing shall be void. The provisions of this
Agreement shall be binding upon and inure to the benefit of Executive and his
heirs and personal representatives, and shall be binding upon and inure to the
benefit of the Company and its successors and those who are its assigns under
Section 13.
19. Separability
If any provision of this Agreement is invalid, illegal, or unenforceable,
the balance of this Agreement shall remain in effect, and if any provision is
inapplicable to any person or circumstance, it shall nevertheless remain
applicable to all other persons and circumstances.
20. No Third Party Beneficiaries
This Agreement does not create, and shall not be construed as creating, any
rights enforceable by any person not a party to this Agreement (except as
provided in Section 19).
21. Headings
The headings in this Agreement are solely for the convenience of reference
and shall be given no effect in the construction or interpretation of this
Agreement.
22. Counterparts; Governing Law
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. It shall be governed by and construed in accordance with
the laws of the State of Delaware, without giving effect to conflict of laws.
23. Arbitration
Any dispute or controversy arising out of or relating to this Agreement or
any breach of this Agreement shall be settled by arbitration to be held in the
State of Delaware in accordance with the National Rules for the Resolution of
Employment Disputes rules then in effect of the American Arbitration Association
or any successor thereto. The arbitrator may grant injunctions or other relief
in such dispute or controversy. The decision of the arbitrator shall be final,
conclusive, and binding on the parties to the arbitration. Judgment may be
entered on the arbitrator's decision in any court having jurisdiction, and the
parties irrevocably consent to the jurisdiction of courts of the State of
Delaware and of any federal court located in such State for this purpose. The
losing party in such arbitration shall pay all the costs and expenses of such
arbitration and all the reasonable attorneys' fees and expenses of the other
party(ies) thereto. Notwithstanding the foregoing, either party may apply to any
court of the State of Delaware or any federal court located in such State for
injunctive relief to maintain the status quo until the arbitration award is
rendered or the controversy is otherwise resolved, and each party hereby
consents to the exclusive jurisdiction and venue of such courts for such
purpose; and either party may apply to any court of competent jurisdiction for
injunctive relief and specific performance under Section 7, 8 or 9.
24. Attorneys' Fees.
Attorneys' Fees. In the event any dispute or litigation arises hereunder
between any of the parties hereto, their heirs, personal representatives,
agents, successors or assigns, the prevailing party shall be entitled to all
reasonable costs and expenses incurred by it in connection therewith (including,
without limitation, all reasonable attorneys' and paralegals' fees and costs
incurred before and at any trial, arbitration, or other proceeding and at all
tribunal levels), as well as all other relief granted in any suit or other
proceeding.
25. Jurisdiction and Service of Process
Each party hereby irrevocably consents to the jurisdiction of the courts of
the State of Delaware and of any federal court located in such State in
connection with any action or proceeding arising out of or relating to this
Agreement or a breach of this Agreement. In any such action or proceeding, each
party waives personal service of any summons, complaint, or other process and
agrees that service thereof may be made in accordance with Section 17. Within 30
days after such service, or such other time as may be mutually agreed upon in
writing by the attorneys for the parties to such action or proceeding, a party
so served shall appear or answer such summons, complaint, or other process.
Should such party so served fail to appear or answer within such 30-day period
or such extended period, as the case may be, such party shall be deemed in
default and judgment may be entered by the other party against such party or the
amount as demanded in any summons, complaint, or other process so served.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
ENDAVO MEDIA AND
COMMUNICATIONS , INC.
By:
--------------------------------
Name:
Member of the Board of Directors
EXECUTIVE
Xxxx X. Xxxx
