EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") effective as of the 1st day of
March, 2000 between OPEN DOOR ONLINE, INC., a New Jersey corporation (together
with its successors and assigns referred to herein as the "Corporation"), with
principal executive offices located at 00 Xxx Xxxx Xxxxx Xxxx, Xxxxxxxx, Xxxxx
Xxxxxx 00000; and XXXXXXX X XXXXXXX, residing at 000 Xxxxx'x Xx., Xxxxxxx, XX
00000 (the "Executive").
W I T N E S E T H:
WHEREAS, the Corporation desires to employ Executive as the Chief
Operating Officer to engage in such activities and to render such services under
the terms and conditions hereof and has authorized and approved the execution of
this Agreement; and
WHEREAS, Executive desires to be employed by the Corporation under the
terms and conditions hereinafter provided;
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings herein contained, the parties agree as follows:
1. Employment, Duties and Acceptance.
1.1 Services. The Corporation hereby employs Executive, for the Term
(as hereinafter defined in Section 2 hereof), to render services to the business
and affairs of the Corporation in the office referenced in the recitals hereof
and, in connection therewith, shall perform such duties as directed by the Board
of Directors of the Corporation from time to time, in its reasonable discretion,
and shall perform such other duties as shall be consistent with the
responsibilities of such office (collectively the "Services"). Executive shall
perform activities related to such office as he shall reasonably be directed or
requested to so perform by the Corporation's Board of Directors, to whom he
shall report. Executive shall use his best efforts, skill and abilities to
promote the interests of the Corporation and its subsidiaries.
1.2 Acceptance. Executive hereby accepts such employment and agrees to
render the Services.
1.3 Representations of the Executive. The Executive represents and
warrants to the Corporation that his execution and delivery of this Agreement,
his performance of the Services hereunder and the observance of his other
obligations contemplated hereby will not (i) violate any provisions of or
require the consent or approval of any party to any agreement, letter of intent
or other document to which he is a party or (ii) violate or conflict with any
arbitration award, judgment or decree or other restriction of any kind to or by
which he is subject or bound.
1.4 Executive's Ability to Contract. Notwithstanding anything herein
contained to the contrary, executive shall have the right to make any contracts
or commitments on behalf of the division the Executive operates as long as the
Executive holds the position described above. Ratification of this contract by
the Board of Directors authorizes the Executive right to negotiate for all
normal business contracts up to $500,000 per contract, per annum in conjunction
with and approval by the President of the Company. All other agreements in
excess of these amounts or requiring commitment of company stock require the
express consent of the Board of Directors.
2. Term of Employment.
The term of Executive's employment under this Agreement (the "Term")
shall commence on March 1, 2000 and shall terminate on February 28, 2003, unless
sooner terminated pursuant to Sections 9 or 5.2 of this Agreement; provided,
however, if the Corporation shall fail to give Executive notice of non-renewal
not less than 90 days prior to the scheduled expiration of the Term hereof, the
Term shall automatically be extended for an additional three (3) year period.
Notwithstanding anything to the contrary contained herein, the provisions of
this Agreement governing Protection of Confidential Information shall continue
in effect as specified in Section 10 hereof.
3. Base Salary, Expense Reimbursement and Stock Options.
3.1 Base Salary. During the Term, as full compensation for the
Services, the Corporation agrees to pay Executive a minimum base salary ("Base
Salary") at the annual rate of $75,000 for the period from March 1, 2000 to
December 31, 2000. Such Base Salary shall be (i) increased thirteen percent
(13%) annually effective January 1st of each year during the term of this
Agreement, (ii) reviewed periodically for possible increases promptly after each
future acquisition by the Corporation of any other corporation or business or
other material increase in the Corporation's revenues or scope of the
Corporation's business and (iii) renegotiated in good faith effective as of July
15, 2002 for possible increase based upon the Corporation's historical
performance and projections for future performance. Such Base Salary shall be
subject to withholding and other applicable taxes, payable during the term of
this Agreement in accordance with the Corporation's customary payment practices,
but not less frequently than monthly.
3.2 Business Expense Reimbursement. Upon submission to, and approval by
an officer of the Corporation designated by the Board of Directors of the
Corporation, of a statement of expenses, reports, vouchers or other supporting
information, which approval shall be granted or withheld based on the
Corporation's policies in effect at such time, the Corporation shall promptly
reimburse Executive for all reasonable business expenses actually incurred or
paid by him during the Term or renewals thereof in the performance of the
Services, including, but not limited to, expenses for entertainment, travel and
similar items.
3.3 Stock Option Agreement. In addition to the salary hereinabove
provided, the Executive shall be granted options to purchase 25,000 shares of
the Corporation's Common Stock as of January 1 of each year during the Term of
this Agreement at an exercise price equal to to average of the closing bid and
asked price of the Corporation's Common Stock during month of December
immediately preceeding said January 1, pursuant to the terms of the Stock Option
Agreement between the Corporation and the Executive executed concurrently
herewith.
4. Profit Sharing.
4.1 Profit Sharing Amount. In order to provide performance-based
incentive compensation to the Executive, the Corporation hereby agrees to pay
the Executive, in addition to the Base Salary set forth in Section 3 hereof, a
minimum cash bonus in respect of each fiscal year during the Executive's
employment hereunder (the "Bonus") equal to the Applicable Percentage (as
defined below) of the Net Pre-Tax Income (as defined below) of the Corporation.
For purposes hereof, the Applicable Percentage shall equal (a) 1.0% if the Net
Pre-Tax Income of the Corporation is less than $2,500,000 (b) 2.0% if the Net
Pre-Tax Income of the Corporation is at least $2,500,000, but less than
$3,500,000; (c) 2.50% if the Net Pre-Tax Income of the Corporation is at least
$3,500,001, but less than $5,000,000; and (d) 3.0% if the Net Pre-Tax Income of
the Corporation is at least $5,000,001.
4.2 Net Pre-Tax Income of the Corporation. For purposes hereof, the Net
Pre-Tax Income of the Corporation shall be the amount determined by the Board of
Directors of the Corporation, after consultation with the independent
accountants of the Corporation, to be the Net Pre-Tax Income of the Corporation
with respect to a given fiscal year, which amount shall be determined based on
the financial statements of the Corporation (a) in a manner consistent with
generally accepted accounting principles, (b) with regard solely to the
Corporation and its subsidiaries, (c) so as to exclude the effect of any
elimination of interCorporation transfers applied with respect to any entity
which is not a subsidiary of the Corporation, (d) after adding back any charges
for management consulting or corporate services or payments with respect to
non-competition agreements which may be paid to persons who are subject to
reporting obligations with respect to the Corporation under Section 16(a) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or their
affiliates (other than the Corporation and its subsidiaries), (e) having regard
to such other matters, if any, as the Board of Directors of the Corporation may
determine to be equitable to consider and (f) without giving effect to any Bonus
paid pursuant to this Section 4.2. The determination of the Board of Directors
of the Corporation shall be final, conclusive and binding for all purposes,
absent manifest error.
4.3 Determination and Payment. The determination of the Applicable
Percentage, of the Net Pre-Tax Income and of the extent to which any Bonus under
this Section 4 may be payable (the "Final Determination") shall be determined by
the Board of Directors (or a subcommittee thereof appointed for such purpose) of
the Corporation in accordance with the terms hereof based on the financial
statements of the Corporation and the criteria set forth herein with respect to
each fiscal year. Such Final Determination with respect to any fiscal year shall
be made promptly, and in any event within 15 days, after the Corporation has
filed its Annual Report on Form 10-K for each year with the Securities and
Exchange Commission. Within 45 days after the end of the Corporation's fiscal
year, based on the preliminary results of the Corporation for such fiscal year,
the Corporation shall pay the Executive an amount equal to 60% of the estimated
minimum cash Bonus based on such preliminary results. The balance of the
definitive Bonus so determined, if any, shall be payable to the Executive in a
single lump sum no later than thirty days after the Final Determination has been
made. In any event, all matters pertaining to the Bonus and to the payment of
any Bonus to the Executive hereunder, shall be administered and determined by
the Board of Directors (or a subcommittee thereof appointed for such purpose) in
its reasonable discretion consistent with the terms hereof, the determination of
which shall be final, conclusive and binding for all purposes, absent manifest
error.
4.4 Bonus. The Board of Directors, at its discretion shall be allowed
to provide an additional bonus in excess of the remuneration already included.
4.5 Partial Years. Notwithstanding anything contained herein to the
contrary, no Bonus under this Section 4 shall be deemed earned or payable with
respect to any fiscal year during which this Agreement or the Executive's
employment is terminated by the Corporation for Cause (as such term is
hereinafter defined).
4.6 Nothing in this Section 4 shall be construed as conferring upon the
Executive any right (i) normally associated with the ownership of capital stock;
(ii) to continue in the employ of the Corporation or any affiliate of the
Corporation; or (iii) to interfere in any way with the right of the Corporation
to terminate this Agreement in accordance with the provisions hereof. Nothing in
this Agreement shall be construed to imply that any specific assets of the
Corporation have been set aside to provide for payments under this Agreement.
Any payments under this Agreement shall be made solely from general assets of
the Corporation existing at the time such payments are due.
5. Severance Upon Termination.
5.1 Termination. In the event that Executive's employment hereunder
shall be terminated by the Corporation without Cause (as defined in Section 9.3
hereof) or by the Executive for Good Reason (as defined in Section 9.5 hereof)
or upon a Change in Control (as defined in Section 9.6 hereof) or upon the death
or Disability (as defined in Section 9.2) of Executive at any time prior to the
end of the Term, the Executive shall be entitled to receive from the
Corporation, in addition to any Base Salary earned to the date of termination, a
severance payment in an amount equal to the greater of (i) the balance of the
Executive's Base Salary due through the balance of the Term of this Agreement.
The amounts due hereunder shall be payable, in lump sum of the effective date of
termination, without offset or defense or any obligation of the Executive to
mitigate damages.
6. Additional Benefits.
6.1 In General. In addition to the compensation, bonuses, expenses and
other benefits to be paid under Sections 3, 4 and 5 hereof, Executive will be
entitled to all rights and benefits for which he shall be eligible under any
insurance, health and medical, incentive, bonus, profit-sharing, pension or
other extra compensation or "fringe" benefit plan of the Corporation or any of
its subsidiaries now existing or hereafter adopted for the benefit of the
executives or employees generally of the Corporation. The provisions of this
Agreement which incorporate employee benefit packages shall change as and when
such employee benefit packages change. In the event that the Corporation does
not provide family health and medical insurance for the benefit of the
executives and employees generally of the Corporation, the Corporation shall
provide Executive and pay the all costs associated with family health and
medical insurance for the benefit of Executive as selected by Executive in his
sole discretion.
6.2 Automobile. The Corporation shall pay Executive $300 per month,
plus all expenses including inssurance, repairs and maintenance, and fuel.
6.3 Life and Disability Insurance. The Corporation shall provide the
Executive with (i) a policy of term life insurance in an amount equal to not
less than three (3) times his annual Base Salary hereunder, payable to such
beneficiary or beneficiaries as shall be designated by him in writing and (b) a
policy of disability insurance that will provide Executive with an annual amount
equal to not less than seventy-five percent (75%) of his then current Base
Salary, payable until Executive shall reach 65 years of age, with a waiting
period not to exceed 120 days. This paragraph is effective, if and when all
officers compensation includes this provision.
6.4 Director's and Officers Insurance. The Corporation shall provide
the Executive with a policy of director's and officers liability insurance in
such amounts and providing such coverage as the Executive and the Corporation
shall reasonably agree, consistent with policies obtained by other publicly held
companies of similar size and engaged in similar businesses.
7. Vacation.
The Executive shall be entitled, during the Term of this Agreement, to
a vacation period annually, as follows:
November 15, 2000 through November 14, 2002 -- four (4) weeks;
during which all salary, compensation, benefits and other rights to which the
Executive is entitled to hereunder shall be provided in full. Such vacation may
be taken in the Executives discretion, and such time or times as are not
inconsistent with the reasonable business needs of the Corporation. In addition,
Executive shall be entitled to up to eight (8) sick days and two (2) personal
days for each year commencing January 1, during which all salary, compensation,
benefits and other rights to which the Executive is entitled to hereunder shall
be provided in full.
8. Insurability; Right to Insure.
Executive agrees that the Corporation shall have the right during the
Term to insure the life of Executive by a policy or policies of insurance in
such amount or amounts as it may deem necessary or desirable, and the
Corporation shall be the beneficiary of any stitch policy or policies and shall
pay the premiums or other costs thereof. The Corporation shall have the right,
from time to time, to modify any such policy or policies of insurance or to take
out new insurance on the life of Executive. Executive agrees, upon request, at
any time or times prior to the commencement of or during the Term to sign and
deliver any and all documents and to submit to any physical or other reasonable
examinations which may be required in connection with any such policy or
policies of insurance or modifications thereof.
9. Termination.
9.1 Death. If Executive dies during the Term of this Agreement,
Executive's employment hereunder shall terminate upon his death and all
obligations of the Corporation hereunder shall terminate on such date, except
that Executive's estate or his designated beneficiary shall be entitled to
payment of any unpaid accrued Base Salary through the date of his death. In
addition, any accrued and unpaid Bonus shall be paid in accordance with Section
4 hereof. In addition, Executive's estate or his designated beneficiary shall be
entitled to payment of the severance payments set forth in Section 5.1 hereof.
9.2 Disability. If Executive shall be unable to perform a significant
part of his duties and responsibilities in connection with the conduct of the
business and affairs of the Corporation and such inability lasts for (i) a
period of at least one hundred twenty (120) consecutive days, or (ii) periods
aggregating at least one hundred eighty (180) days during any three hundred
sixty-five (365) consecutive days, by reason of Executive's physical or mental
disability, whether by reason of injury, illness or similar cause, Executive
shall be deemed disabled, and the Corporation any time thereafter may terminate
Executive's employment hereunder by reason of the disability. Upon delivery to
Executive of such notice, all obligations of the Corporation hereunder shall
terminate, except that Executive shall be entitled to payment of any unpaid
accrued Base Salary through the date of termination. In addition, any accrued
and unpaid Bonus shall be paid in accordance with Section 4 hereof. In addition,
the Executive shall be entitled to those severance payments set forth in Section
5.1 hereof. The obligations of Executive under Section 10 hereof shall continue
notwithstanding termination of Executive's employment pursuant to this Section
9.2.
9.3 Termination For Cause. The Corporation may at any time during the
Term, without any prior notice, terminate this Agreement and discharge Executive
for Cause, whereupon the Corporation's obligation to pay compensation or other
amounts payable hereunder to or for the benefit of Executive shall terminate on
the date of such discharge. As used herein the term Cause shall mean: (i) a
willful and material breach by Executive of the terms of this Agreement' which
breach shall not have been cured within thirty (30) days of writen notice of
such breach; (ii) willful violation of specific and lawful written direction
from the Board of Directors of the Corporation, which violation shall not have
been cured within thirty (30) days of written notice of such violation, provided
such direction is not inconsistent with the Executive's duties and
responsibilities as the, Chief Executive Officer and President of the
Corporation; or (iii) conviction of the Executive of a felony by a federal or
state court of competent jurisdiction, which felony is directly and materially
related to or arises out of Executive's employment with the Corporation. The
obligations of the Executive under Section 10 shall continue notwithstanding
termination of the Executive's employment pursuant to this Section 9.3.
9.4 Termination Without Cause. The Corporation shall have the option to
terminate this Agreement Without Cause upon one hundred and eighty (180) days'
written notice to the Executive. In the event the Corporation terminates this
Agreement without Cause as defined above, the Corporation shall pay the
Executive upon termination, the amount required pursuant to Section 5.1. The
obligations of the Executive under Section 10 hereof shall continue
notwithstanding termination of the Executive's employment pursuant to this
Section 9.4.
9.5 Termination by Executive For Good Reason. The Executive shall have
the right to terminate this Agreement for Good Reason, as hereinafter defined,
upon written notice to the Corporation. Good Reason shall mean any of the
following: (i) the assignment to the Executive of duties inconsistent with the
Executive's position, duties, responsibilities, titles or offices as described
herein; (ii) any reduction by the Corporation of the Executive's compensation or
benefits payable hereunder (it being understood that a reduction of benefits
applicable to all executives of the Corporation, including the Executive, shall
not be deemed a reduction of the Executive's compensation package for purposes
of this definition.
9.6. Termination by Executive upon Change in Control. Executive, at his
option, shall be able to terminate this Agreement upon written notice given to
the Secretary of the Corporation within ninety (90) days of an occurrence of a
"Change in Control". A "Change in Control" of the Corporation shall mean a
change in control of the Corporation or any entity controlling the Corporation
(referred to collectively in this Section 5 as the Corporation) of a nature that
would be required to be reported in response to Item 1 of a Current Report on
Form 8-K, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 0000
(xxx "Xxxxxxxx Xxx"); provided that, without limitation, such a Change in
Control shall be deemed to have occurred at such time as (a) any "person" (as
such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than a
person who or which was a shareholder of the Corporation immediately prior to
the Corporation's initial public offering (the "IPO"), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Corporation representing thirty-five percent
(35%) or more of the combined voting power of the Corporation's outstanding
securities ordinarily having the right to vote at elections of directors; or (b)
individuals who constitute the Board concurrent with the execution of this
Agreement (the incumbent Board) cease for any reason to constitute at least a
majority thereof, provided that any person becoming a director subsequent to the
date hereof whose election or nomination for election by the Corporation's
shareholders was approved by a vote of at least three quarters of the directors
comprising the Incumbent Board, shall be, for purposes of this clause (b),
considered as though he were a member of the Incumbent Board; or (c) a sale by
the Corporation of all or substantially all of its assets occurs.
Notwithstanding anything in the foregoing to the contrary, no Change in Control
shall be deemed to have occurred for purposes of this Agreement by virtue of any
transactions which result in the acquisition by the Executive, or by a group of
persons which includes the Executive, directly or indirectly, of a majority of
either the outstanding shares of common stock of the Corporation or the voting
securities of any corporation which acquires all or substantially all of the
assets of the Corporation, whether by way of merger, consolidation, sale of such
assets or otherwise.
10. Protection of Confidential Information.
In view of the fact that Executive's work for the Corporation will
bring him into close contact with confidential information and plans for future
developments, Executive agrees to the following:
10.1 Secrecy. To keep secret and retain in the strictest confidence all
confidential matters of the Corporation, including, without limitation, trade
"know how" and trade secrets, customer lists, pricing policies, marketing plans,
technical processes, formulae, inventions and research projects, and other
business affairs of the Corporation, learned by him heretofore or hereafter, and
not to disclose them to anyone inside or outside of the Corporation, except in
the course of performing the Services hereunder or with the express written
consent of the Chief Executive Officer or Board of Directors of the Corporation
and except to the extent such information is already known to the general public
10.2 Return Memoranda, etc. To deliver promptly to the Corporation on
termination of his employment, or at any other time as the Chief Executive
Officer or the Board of Directors of the Corporation may so request, all
memoranda, notes, records, reports, manuals, drawings, blueprints and other
documents (and all copies thereof) relating to the Corporation's business and
all property associated therewith, which he may then possess or have under his
control.
10.3 Covenants.
10.3.1 Non-competition. Executive agrees that at all times
while he is employed by the Corporation and, regardless of the reason for
termination of his employment or this Agreement, for a period of one (1) year
thereafter, he will not, as a principal, agent, employee, employer, consultant,
stockholder, investor, director or co-partner of any person, firm, corporation
or business entity other than the Corporation, or in any individual or
representative capacity whatsoever, directly or indirectly, without the express
prior written consent of the Corporation:
(i) engage or participate in any business whose products or services are
competitive with that of the Corporation, which business is the
creation, distribution, publishing, production and sales of music and
product marketing, advertising plus radio and internet broadcasting
clients and customers located within the United States and worldwide;
(ii) aid or counsel any other person, firm, corporation or entity to do any
of the above;
(iii)become employed by a firm, corporation, partnership or joint venture
which competes with the business of the Corporation within the United
States; or
(iv) approach, solicit business from, or otherwise do business or deal with
any customer of the Corporation in connection with any product or
service competitive to any provided by the Corporation.
10.3.2 Anti-Raiding. Executive agrees that during the term of his
employment hereunder, and, thereafter for a period of one (1) year, he will
not, as a principal, agent, employee, employer, consultant, director or
partner of any person, firm, corporation or business entity other than the
Corporation, or in any individual or representative capacity whatsoever'
directly or indirectly, without the prior express written consent of the
Corporation approach, counsel or attempt to induce any person who is then
in the employ of the Corporation to leave the employ of the Corporation or
employ or attempt to employ any such person or persons who at any time
during the preceding six months was in the employ of the Corporation.
10.3.3 Executive's Acknowledgements. Executive acknowledges (i) that
his position with the Corporation requires the performance of services
which are special, unique, and extraordinary in character and places him in
a position of confidence and trust with e Customers and employees of the
Corporation, through which, among other things, he shall obtain knowledge
of the Corporation's "technical information" and "know-how" and become
acquainted with its customers, in which matters the Corporation has
substantial proprietary interests; (ii) that the restrictive covenants set
forth above are necessary in order to protect and maintain such proprietary
interests and the other legitimate business interests of the Corporation;
and (iii) that the Corporation would not have entered into this Agreement
unless such covenants were included herein.
Executive also acknowledges that the business of the Corporation
presently will extend throughout the United States, and that he will personally
supervise and engage in such business on behalf of Corporation and, accordingly,
it is reasonable that the restrictive covenants set forth above are not more
limited as to geographic area then is set forth therein. Executive also
represents to the Corporation that the enforcement of such covenants will not
prevent Executive from earning a livelihood or impose an undue hardship on the
Executive.
10.4 Severability. If any of the provisions of this Section 10, or any
part thereof, is hereinafter construed to be invalid or unenforceable, the same
shall not affect the remainder of such provision or provisions, which shall be
given full effect, without regard to the invalid portions. If any of the
provisions of this Section 10, or any part thereof, is held to be unenforceable
because of the duration of such provision, the area covered thereby or the type
of conduct restricted therein, the parties agree that the court making such
determination shall have the power to modify the duration, geographic area
and/or other terms of such provision and, as so modified, said provision(s)
shall then be enforceable. In the event that the courts of any one or more
jurisdictions shall hold such provisions wholly or partially unenforceable by
reason of the scope thereof or otherwise, it is the intention of the parties
hereto that such determination not bar or in any way affect the Corporation's
right to the relief provided for herein in the courts of any other jurisdictions
as to breaches or threatened breaches of such provisions in such other
jurisdictions, the above provisions as they relate to each jurisdiction being,
for this purpose, severable into diverse and independent covenants.
10.5 Injunctive Relief. Executive acknowledges and agrees that, because
of the unique and extraordinary nature of his services, any breach or threatened
breach of the provisions of Sections 10.1, 10.2, or 10.3 hereof will cause
irreparable injury and incalculable harm to the Corporation, and the Corporation
shall, accordingly, be entitled to injunctive and other equitable relief for
such breach or threatened breach and that resort by the Corporation to such
injunctive or other equitable relief shall not be deemed to waive or to limit in
any respect any right or remedy which the Corporation may have with respect to
such breach or threatened breach. The Corporation and Executive agree that any
such action for injunctive or equitable relief shall be heard in a state or
federal court situate in Rhode Island and each of the parties hereto, hereby
agrees to accept service of process by registered mail and to otherwise consent
to the jurisdiction of such courts.
10.6 Expenses of Enforcement of Covenants. In the event that any
action, suit or proceeding at law or in equity is brought to enforce the
covenants contained in Sections 10.1, 10.2, or 10.3 hereof or to obtain money
damages for the breach thereof, the party prevailing in any such action, suit or
other proceeding shall be entitled upon demand, to reimbursement from the other
party for all expenses (including, without limitation, reasonable attorneys'
fees and disbursements) incurred in connection therewith.
10.7 Separate Agreement. The provisions of this Section 10 shall be
construed as an agreement on the part of the Executive independent of any other
part of this Agreement or any other agreement, and the existence of any claim or
cause of action of the Executive against the Corporation, whether predicated on
this Agreement or otherwise, shall not constitute a defense to the enforcement
by the Corporation of the provisions of this Section 10.
11. Indemnification.
The Corporation shall provide the Executive (including his heirs,
executors and administrators) with coverage under a standard directors and
officers liability insurance policy at the Corporation's expense to the same
extent as provided for any other director, officer or trustee of the
Corporation. In addition, the Corporation shall indemnify the Executive (and his
heirs, executors and administrators) to the fullest extent permitted under the
law of its state of incorporation against all expenses and liabilities
reasonably incurred by him in connection with or arising out of any action, suit
or proceeding in which the Executive may be involved by reason of his having
been a director or officer of the Corporation or any subsidiary thereof. Such
expenses and liabilities shall include, but not be limited to, judgments, court
costs and attorneys' fees and the cost of reasonable settlements, such
settlements to be approved by the Board if such action is brought against the
Executive in his capacity as a director or officer of the Corporation or any
subsidiary thereof. The Corporation shall, upon the request of the Executive,
advance to the Executive such amounts as necessary to cover expenses, including
without limitation legal fees and expenses, incurred by the Executive in
connection with any suit or proceeding in which the Executive may be involved by
reason of his being or having been a director or officer of the Corporation or
of any subsidiary thereof. Such indemnity and advance of expenses, however,
shall not extend to matters as to which the Executive is finally adjudged to be
liable for wilful misconduct in the performance of his duties.
12. Arbitration.
Except with respect to any proceeding brought under Section 10 hereof,
any controversy, claim, or dispute between the parties, directly or indirectly,
concerning this Employment Agreement or the breach hereof, or the subject matter
hereof, including questions concerning the scope and applicability of this
arbitration clause, shall be finally settled by arbitration in Kent County,
Rhode Island pursuant to the rules then applying of the American Arbitration
Association The arbitrators shall consist of one representative selected by the
Corporation, one representative selected by the Executive and one representative
selected by the first two arbitrators The parties agree to expedite the
arbitration proceeding in every way, so that the arbitration proceeding shall be
commenced within thirty (30) days after request therefore is made, and shall
continue thereafter, without interruption, and that the decision of the
arbitrators shall be handed down within thirty (30) days after the hearings in
the arbitration proceedings areclosed. The arbitrators shall have the right and
authority to assess the cost of the arbitration proceedings and to determine how
their decision or determination as to each issue or matter in dispute may be
implemented or enforced. The decision in writing of any two of the arbitrators
shall be binding and conclusive on all of the parties to this Agreement. Should
either the Corporation or the Executive fail to appoint an arbitrator as
required by this Section 12 within thirty (30) days after receiving written
notice from the other party to do so, the arbitrator appointed by the other
party shall act for all of the parties and his decision in writing shall be
binding and conclusive on all of the parties to this Employment Agreement. Any
decision or award of the arbitrators shall be final and conclusive on the
parties to this Agreement; judgment upon such decision or award may be entered
in any competent Federal or state court located in the United States of America;
and the application may be made to such court for confirmation of such decision
or award for any order of enforcement and for any other legal remedies that may
be necessary to effectuate such decision or award.
13. Notices.
All notices, requests, consents and other communications required or
permitted to be given hereunder, shall be in writing and shall be deemed to have
been duly given if delivered personally or sent by prepaid telegram, telecopy or
mailed first-class, postage prepaid, by registered or certified mail (notices
sent by telegram or mailed shall be deemed to have been given on the date sent),
to the parties at their respective addresses hereinabove set forth or to such
other address as either party shall designate by notice in writing to the other
in accordance herewith. Copies of all notices shall be sent to the attorney
selecteed by the Executive and noticed in writing to mthe Corporation from time
to time.
14. General.
14.1 Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the local laws of the State of Rhode Island
applicable to agreements made and to be performed entirely in Rhode Island.
14.2 Captions. The section headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.
14.3 Entire Agreement. This Agreement sets forth the entire agreement
and understanding of the parties relating to the subject matter hereof, and
supersedes all prior agreements, arrangements and understandings, written or
oral, relating to the subject matter hereof. No representation, promise or
inducement has been made by either party that is not embodied in this Agreement,
and neither party shall be bound by or liable for any alleged representation'
promise or inducement not so set forth.
14.4 Severability. If any of the provisions of this Agreement shall be
unlawful, void, or for any reason, unenforceable, such provision shall be deemed
severable from, and shall in no way affect the validity or enforceability of,
the remaining portions of this Agreement.
14.5 Waiver. The waiver by any party hereto of a breach of any
provision of this Agreement by any other party shall not operate or be construed
as a waiver of any subsequent breach of the same provision or any other
provision hereof.
14.6 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same Agreement.
14.7 Assignability. This Agreement, and Executive's rights and
obligations hereunder, may not be assigned by Executive. The Corporation may
assign its rights, together with its obligations, hereunder in connection with
any sale, transfer or other disposition of all or substantially all of its
business or assets; in any event the rights and obligations of the Corporation
hereunder shall be binding on its successors or assigns, whether by merger,
consolidation or acquisition of all or substantially all of its business or
assets; provided, however, that any such assignment shall not release the
Corporation from its obligations hereunder. This Agreement shall inure to the
benefit of, and be binding upon, the Executive and his executors,
administrators, heirs and legal representatives.
14.8 Amendment. This Agreement may be amended, modified, superseded,
cancelled, renewed or extended and the terms or covenants hereof may be waived,
only by a written instrument executed by both of the parties hereto, or in the
case of a waiver, by the party waiving compliance. No superseding instrument,
amendment, modification, cancellation, renewal or extension hereof shall require
the consent or approval of any person other than the parties hereto. The failure
of either party at any time or times to require performance of any provision
hereof shall in no matter affect the right at a later time to enforce the same.
No waiver by either party of the breach of any term or covenant contained in
this Agreement, whether by conduct or otherwise, in any one or more instances,
shall be deemed to be, or construed as, a further or continuing waiver of any
such breach, or a waiver of the breach of any other term or covenant contained
in this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
ATTEST: OPEN DOOR ONLINE, INC.
By: _____________________ By: _____________________________
Name: Name: Xxxxx X. XxXxxxx
Title: President
WITNESS:
-------------------------- -----------------------------------
XXXXXXX X XXXXXXX, individually
Amendment to Employment Contract
Xxxxxxx X. Xxxxxxx
Xxxxx 0, 0000
Xxxxxxxxx 3.3 Stock Option Agreement is rescinded due to the lack of an
authorized employment stock option program. In the event the Board of Directors
of Open Door Online, Inc. and the shareholders agree to the formation of a stock
option plan awards may be made upon the approval of the Board of Directors at
that time.
Signed this 31st day of March, 2000
-----------------------------------
Xxxxxxx X. Xxxxxxx
