EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is between DME
Interactive Holdings, Inc. ("DME" or "Company") and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Packard
("Employee").
In consideration of the promises and covenants set forth in this
Agreement, DME and Employee hereby agree as follows:
1. EMPLOYMENT
Company hereby employs Employee and Employee hereby accepts
employment, to render professional services to Company as Senior Vice President
of Internet Services in accordance with the terms and conditions set forth
herein. All of Employee's services and duties hereunder shall be performed when
Company may require and, except as specifically limited herein, subject to
Company's direction and control.
2. TERM
Subject to the provisions for termination as hereinafter provided in
Section 7 of this Agreement , the Term of this Agreement shall begin on
September 1, 1999 and shall continue for a period of three (3) years. When used
herein, "Term" shall refer to the entire period of engagement of Employee,
whether for the period provided above or whether terminated earlier as
hereinafter provided.
3. DUTIES
In Employee's capacity as Senior Vice President of Interactive
Services, Employee duties shall include such duties and responsibilities as
assigned from time to time by the Chief Executive Officer of the Company or its
board of directors. Employee agrees and acknowledges that Company retains sole
discretion to change the scope and extent of Employee's duties at any time,
subject only to the terms of this Agreement.
4. COMPENSATION
(a) During the Term and conditioned upon full performance by Employee
of all of Employee's material obligations hereunder, Company agrees to pay
Employee, as full and complete compensation for all of the services to be
rendered by Employee, for all rights granted to Company, and for all
representations, warranties and agreements made by Employee hereunder, the
following, payable on a semi-monthly basis:
Annual Compensation
Year 1 - $125,000.00
Year 2 - $137,500.00
Year 3 - $151,250.00
(b) Pursuant to the terms and conditions set forth in the Stock Option
Agreement attached hereto, Company grants to Employee an option to purchase up
to 60,000 shares of the Company's common stock at a per share exercise price of
$2.00.
(c) If Employee submits a list of Employee's active existing clients
(the "Active Client List") to Company within ten (10) days of the commencement
of the Term, Employee will be entitled to additional compensation of five (5%)
percent of the gross revenues actually collected from clients on the Active
Client List ("Incentive Compensation") within the term of this agreement,
subject to the following terms:
(i) Incentive Compensation will be paid in January for the
preceding six month period and in July for the preceding six months;
(ii) Employee acknowledges that she will not be entitled to
receive any Incentive Compensation until the Company has collected gross
revenues from clients on the Employee's Active Client List in the amount of
$500,000, it being mutually agreed and understood that the first $25,000 of
Incentive Compensation otherwise payable to Employee will be paid by Company to
Kathoderay Media, Inc., pursuant to the terms of an Asset Purchase Agreement
dated September 1, 1999, between Kathoderay and Company. In calculating
Employee's Incentive Compensation, the first $500,000 of collections from
clients on the Employee's Active Client List shall be excluded and listed on the
Active Client List.
(iii)Employee may add clients to the Employee's Active Client
List during the term, it being agreed and understood that the Active Client List
is limited to existing and future clients of the Company developed principally
by Employee and listed on the Active Client List.
(d) Employee will be eligible for a bonus based upon her satisfactory
performance under this agreement at the discretion of the Company and subject to
the Company's overall performance.
5. BENEFITS
(a) Benefits. Employee shall be entitled to participate in any Company
benefit plans now existing or hereafter adopted for which she may be eligible
pursuant to established Company policy, subject to the provisions of such plans
as the same may be in effect from time to time. Employee agrees that nothing
contained in this Agreement shall prevent Company from terminating or modifying
any such benefit plan in whole or in part at any time.
(b) Vacation. Employee shall be entitled to two (2) week(s) per
contract year as hereinafter defined, of fully paid vacation time, and holidays
in accordance with current Company policy during the term of this Agreement
subject to Company's absolute approval of the dates when such vacation may be
taken. For purposes of this Agreement, the term "Contract Year" shall mean the
period commencing September 1, and ending August 31. Notwithstanding the above,
such
2
vacation rights shall not vest until Employee has worked for Company for at
least six (6) months. Vacation rights shall not be cumulative from Contract Year
to Contract Year, nor shall Employee be paid for more than fifty-two (52) weeks
of employment in each Contract Year irrespective of whether or not vacation
rights are exercised.
(c) Sick/Personal Days. Employees shall be entitled to six (6) days
per Contract Year of fully paid sick/personal days in accordance with current
Company policy during the term of this Agreement. Notwithstanding the above,
such sick/personal day rights shall not vest until Employee has worked for
Company for at least three (3) months. Sick/Personal Day rights shall not be
cumulative from Contract Year to Contract Year, nor shall Employee be paid for
more than fifty-two (52) weeks of employment in each Contract Year irrespective
of whether or not sick/personal days are exercised.
6. EMPLOYEE COVENANTS
6.1. Notice of Creation. Employee shall both during and after the
Term of this Agreement promptly and fully disclose to the Company any and all
inventions, discoveries, improvements, ideas, devices, designs, models,
prototypes, processes, compositions, know-how, information, works (including
computer programs and written and graphics materials), mask works and data,
whether of a business, technical or other nature and whether or not protectable
under U.S. or foreign patent, copyright, trade secret or other law
(collectively, "Works"), that concern or relate to or are useful to the Company
in connection with its business activities ("Company Business") and that are
first conceived, reduced to practice, fixed in a tangible medium of expression
or are otherwise made by Employee solely or jointly with others during the Term
of this Agreement, whether during regular business hours or otherwise (the
"Intellectual Property").
6.2. Ownership of Intellectual Property. Upon its respective
conception, reduction to practice or fixation in a tangible medium of expression
or other making, an item of Intellectual Property and all worldwide right, title
and interest in and to that Intellectual Property, including all common law,
statutory, treaty and convention rights, including the right to ▇▇▇ for all
past, present and future infringement, shall immediately become and forever
remain the property of Company without any further act or deed being required
and without any additional consideration from Company to Employee, and Employee
hereby irrevocably assigns to Company, and Company hereby accepts, all such
Intellectual Property and all such worldwide right, title and interest. The
Employee hereby waives and agrees not to assert any moral rights or similar
rights under the laws of any jurisdiction with respect to any Intellectual
Property.
6.3. Further Assurances. Employee will from time to time, both
during and after the Term of this Agreement, upon the request and at the expense
of the Company, but without further consideration from the Company, (a) make
application through the attorneys for the Company for Letters Patent, utility
models, copyright registrations and other forms of intellectual property
protection for and on the Intellectual Property in the United States and in
countries foreign thereto, (b) cooperate with the attorneys in the prosecution,
maintenance, reissue, renewal, extension and defense of, and suit upon, all such
applications and resulting Letters Patent, utility models, copyright
registrations and other forms of intellectual property protection, and (c) do
and perform all acts, including executing documents, believed by the attorneys
to be necessary or desirable in furtherance of the foregoing and for assigning
and perfecting all right, title and interest
3
in and to the Intellectual Property in the Company or its successors or assigns,
including executing applications and assignment documents. All decisions
concerning such applications and resulting Letters Patent, utility models,
copyright registrations and other forms of intellectual property protection,
including all decisions concerning their filing, prosecution, maintenance,
reissue, renewal, extension, defense and suits upon them, shall be solely those
of the Company, and Employee shall have no claim or cause of action against the
Company arising out of or concerning any such decisions of the Company or the
results of those decisions.
6.4. Non-Competition. In addition to her obligations of
non-competition set forth in that Asset Purchase Agreement dated
contemporaneously herewith by and among Company, Employee and Employee's then
wholly owned corporation, Kathoderay Media, Inc., Employee hereby expressly
covenants and agrees that she shall not, without the express written consent of
the Company, for her own account or jointly with any other person, during the
Term of this Agreement and for a period of one year thereafter, for any reason,
directly or indirectly, (i) own, manage, operate, join, control, loan money to,
invest in, or otherwise participate in, or be connected with, or become or act
as an officer, employee, consultant, representative or agent of any business,
individual, partnership, firm or corporation (other than the Company) which is a
customer of the Company or was at any time during the Term of this Agreement a
customer of the Company ("Competitive Activities"); or (ii) intervene in or
interfere with any relationships between the Company and its vendors or
customers (including potential customers identified by the Company during the
Term of this Agreement) or disrupt its customer markets, anywhere in the world
in which the Company conducts Company business. Notwithstanding the foregoing,
the Employee may at any time own, solely as an inactive investor, securities of
any entity, whether or not in competition with the Company, if (i) such
securities are publicly traded on a nationally-recognized stock exchange or on
NASDAQ, and (ii) the aggregate holdings of such securities by the Employee and
her immediate family do not exceed two percent (2%) of the voting power or two
percent (2%) of the capital stock of such entity.
6.5. Reasonableness of Restrictions. The Employee acknowledges
and agrees that the covenants contained herein with respect to non-competition
are reasonable in scope, geographic application and duration, in view of the
economic bargain contained herein. The Employee represents and warrants to the
Company that her experience, background and skills are such that she is able to
obtain employment on reasonable terms and conditions without violation of the
restrictive covenant contained herein with respect to non-competition; and that
such covenant does not and will not pose any undue hardship to the Employee.
6.6. Tangible Things. Employee covenants and agrees that (i) all
tangible things, including confidential memoranda, notes, notebooks, drawings,
lists (including, without limitation, mailing and customer lists), records and
other confidential documents (and all copies thereof), made or compiled by
Employee or made available to Employee concerning the Company Business shall be
the property of the Company, and (ii) if such tangible things or copies thereof
are in the possession or control of Employee, Employee shall deliver them to the
Company promptly following the Term of this Agreement or at any other time upon
request of the Company.
6.7. No Improper Disclosure. Employee represents and warrants
that Employee has not disclosed, and will not disclose, to the Company any
information, whether
4
confidential, proprietary or otherwise, that the Employee possesses and that
Employee is not legally free to disclose.
6.8. No Employee Solicitation. The Employee hereby agrees that
during the Term of this Agreement and for a period of one (1) years thereafter,
she shall not, directly or indirectly, for her own account or jointly with
another, or for or on behalf of any entity, as principal, agent or otherwise,
solicit or induce or in any manner attempt to solicit or induce any person
employed by the Company or any of its affiliates to leave such employment,
whether or not such employment is pursuant to a written contract with the
Company or otherwise.
6.9. Non-Disclosure. Employee acknowledges that Employee's work
for the Company is expected to bring Employee into close contact with various
confidential technical and research data, confidential business data and other
information of the Company not readily available to the public. The Employee
expressly covenants and agrees that she will not at any time, whether during or
after the Term of this Agreement, directly or indirectly, on any basis for any
reason, use or permit third parties within her control or authority or under her
supervision the use of any trade secrets, confidential information or
proprietary information of, or relating to, the Company, or any affiliate of the
Company (including, without limitation, data and other information relating to
any of the Company's processes, apparatus, products, software, packages,
programs, trends in research, product development techniques or plans, research
and development programs and plans or any works and all secrets, customer lists,
lists of employees, sales representatives and their territories, mailing lists,
details of consultant contracts, pricing policies, operational methods,
marketing plans or strategies, business acquisition plans, new personnel
acquisition plans, designs and design projects and other confidential business
affairs concerning the Company and the Company Business), in connection with any
activity or business, whether for her own account or otherwise, and will not
divulge such trade secrets, confidential information or proprietary information
to any person, firm, corporation or other entity whatsoever. The Employee shall
not be prohibited from divulging information deemed to be trade secret or
confidential or proprietary information of the Company: (i) if and to the extent
that disclosure of any such information is pursuant to appropriate safeguards on
confidentiality and (x) necessary and appropriate in connection with the
submission of bids by the Company in the ordinary course of business or (y)
required pursuant to the Company's marketing efforts directed to specific
clients or bona fide prospective clients or the provision of services to
existing clients in the ordinary course of business, (ii) if the specific item
of information becomes generally available to the public without violation of
this Agreement or any other confidentiality agreement between the Employee and
the Company or any other confidentiality agreement to which the Employee is a
party, or (iii) if such disclosure is compelled by law, in which event the
Employee agrees to give the Company prior written notice of any disclosure to be
made pursuant to this Subsection (iii), and the Employee, at the Company's
expense, shall cooperate fully with the Company to obtain protective orders,
confidential treatment or other such protective action as may be available to
preserve the confidentiality of the information required to be disclosed.
6.10. Remedies. It is expressly understood and agreed that the
services to be rendered hereunder by the Employee are special, unique and of
extraordinary character, and in the event of the breach by the Employee of any
of the terms and conditions of this Agreement on her part to be performed
hereunder, or in the event of the breach or threatened breach by the Employee of
the terms and provisions of this Section 6 of this Agreement, then the Company
shall
5
entitled, if it so elects, to institute and prosecute any proceedings in any
court of competent jurisdiction, either in law or equity, for such relief as it
deems appropriate, including without limiting the generality of the foregoing,
any proceedings to obtain damages for any breach of this Agreement or to enforce
the specific performance thereof by the Employee or to enjoin the Employee from
performing services which are prohibited by this Agreement for any other person,
firm or corporation.
6.11. Enforcement. It is hereby expressly agreed by the Company
and the Employee that if any portion of the restrictive covenants and provisions
set forth in this Section 6 is held to be unreasonable, arbitrary, against
public policy or otherwise unenforceable for any reason, then each such covenant
or provision shall be considered divisible as to scope, time and geographical
area, with each month of a specified period being deemed a separate period of
time and each county within any geographical area being deemed a separate
geographic area. The parties hereto expressly agree that notwithstanding their
mutual expectation that the covenants and restrictions contained herein will be
enforceable and enforced, a lesser scope, period of time or geographic area
shall be enforced to the extent that the covenants contained herein may be
unenforceable as written. The existence of any claim or cause of action by the
Employee against the Company, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by the Company of the
restrictive covenants contained in this Section 6.
6.12. Covenants Non-Exclusive. The Employee acknowledges and
agrees that the covenants contained in this Section 6 shall not be deemed
exclusive of any common law rights of the Company in connection with the
relationships contemplated hereby; and that the Company shall have any and all
rights as may be provided by law in connection with the relationships
contemplated hereby.
7. TERMINATION
The Employee's employment hereunder shall terminate under the
following circumstances:
(a) Termination by For Cause. Company may terminate the employment of
Employee for cause at any time upon written notice to Employee specifying the
cause for termination. For purposes of this Section, "for cause" shall include
discharge resulting from a determination by Company that the Employee has: (i)
been convicted of a criminal offense involving dishonesty, fraud, theft,
embezzlement, breach of trust or moral turpitude; (ii) performed an act or
failed to act, which, if she were prosecuted and convicted, would constitute a
crime or offense involving money or property of Company; or (iii) willfully
refused to perform the duties reasonably assigned to Employee and consistent
with her status as a Senior Vice President of Company; or (iv) violates any
non-competition or non-disclosure agreement of the Company.
In the event of Employee's termination under this Section 7(a),
Company shall have no further obligation to Employee except for any amounts
earned by, or accrued for, Employee under any employee benefit plans in which
the Employee is then a participant, earned and unpaid salary, accrued and unused
vacation pay, and any rights of Employee under any bonus or stock option
agreement, which right has been earned by Employee at the time of such
termination pursuant to the terms of such plan or agreement. Employee shall not
be entitled to any further Base
6
Salary, Incentive Compensation, severance pay, fringe benefits, additional stock
options, or any other compensation or benefits, except as otherwise provided
herein.
(b) Termination by Employee Without Cause. Employee may terminate
this Agreement at any time upon thirty (30) days' prior written notice to
Company. In the event of such termination, Company shall have no further
obligations to Employee under this Agreement except for any amounts earned by,
or accrued for, Employee under any employee benefit plans in which the Employee
is then a participant, earned and unpaid salary and accrued and unused vacation
pay and any rights of Employee under any bonus or stock option agreement, which
right has been earned by Employee at the time of such termination pursuant to
the terms of such plan or agreement. Employee shall not after termination be
entitled to Base Salary, Incentive Compensation, severance pay, fringe benefits,
additional stock options, or any other compensation or benefits. Company may, in
its sole discretion, accept Employee's resignation and terminate her employment
prior to the expiration of the thirty (30) day notice period and pay Employee's
compensation for the notice period (or remaining term thereof).
(c) Employee's employment hereunder shall also terminate
automatically, and without any further action by the Employee or the Company,
upon the earlier to occur of (i ) the death of the Employee; (ii) the
adjudicated incompetency of the Employee; or (iii) the disability of the
Employee to perform a material portion of her duties for 180 consecutive days,
or for 100 business days, which need not be consecutive, during any twelve-month
period.
8. GENERAL
8.1. No Brokers. Each of the parties to this Agreement represents
and warrants, each to the other, that it has not utilized the services of any
finder, broker or agent. Each of the parties agrees to indemnify the other party
against and hold it harmless from any and all liabilities to any person, firm or
corporation claiming any broker's or finder's fee or commission of any kind on
account of services rendered on behalf of such party in connection with the
transactions contemplated by this Agreement.
8.2. Applicable Law. This Agreement shall, in all respects, be
governed by the laws of the State of New York.
8.3. Venue; Process. The parties to this Agreement agree that
jurisdiction and venue shall properly lie only in any New York state court
located in New York County or the City of New York or in the United States
District Court for the Southern District of New York, with respect to any legal
proceedings arising from this Agreement. The parties agree that they will not
object that any action commenced in the foregoing jurisdictions is commenced in
a forum non conveniens. The parties further agree that the mailing by certified
or registered mail, return receipt requested, of any process required by any
such court shall constitute valid and lawful service of process against them,
without the necessity for service by any other means provided by statute or rule
of court. Notwithstanding the foregoing, however, nothing contained in this
Subsection 8.3 shall be deemed to limit or waive any right of the parties to
remove any dispute to federal court in New York which might otherwise properly
be removed to such court.
7
8.4. Survival The parties hereto agree that the covenants
contained in Section 6 hereof shall survive any termination of employment by the
Employee and any termination of this Agreement.
8.5. Notices. Any and all notices required or desired to be given
hereunder by any party shall be in writing and shall be validly given or made to
another party if delivered either personally, by telex, facsimile transmission,
same day delivery service, overnight delivery service, or if deposited in the
United States mail, certified or registered, postage prepaid, return receipt
requested. If notice is served personally, notice shall be deemed effective upon
receipt. If notice is served by telex or by facsimile transmission, notice shall
be deemed effective upon transmission, provided that such notice is confirmed in
writing by the sender within one day after transmission. If notice is served by
same day delivery service or overnight expedited delivery service, notice shall
be deemed effective the day after it is sent, and if notice is given by mail,
notice shall be deemed effective five days after it is sent. In all instances,
notice shall be sent to the parties at the respective addresses set forth above.
Any party may change its address for the purpose of receiving notices by a
written notice given to the other party.
8.6. Modifications or Amendments. No amendment, change or
modification of this document shall be valid unless in writing and signed by all
of the parties hereto.
8.7. Waiver. Failure of either party to exercise in any respect
any right provided for herein shall not be deemed a waiver of any right
hereunder.
8.8. Successors and Assigns. All of the terms and provisions
contained herein shall inure to the benefit of and shall be binding upon the
parties hereto and their respective heirs, personal representatives, successors
and assigns, but Employee's rights and obligations hereunder are personal to
Employee and shall not be subject to voluntary or involuntary alienation,
assignment or transfer.
8.9. Separate Counterparts. This document may be executed in one
or more separate counterparts, each of which, when so executed, shall be deemed
to be an original. Such counterparts shall, together, constitute and shall be
one and the same instrument.
8.10. Specific Performance. It is agreed that the rights granted
to the parties hereunder are of a special and unique kind and character and
that, if there is a breach by any party of any material provision of this
document, the other party would not have any adequate remedy at law. It is
expressly agreed, therefore, that the rights of the parties hereunder may be
enforced by an action for specific performance and other equitable relief.
8.11. Further Assurances. Each of the parties hereto shall
execute and deliver any and all additional papers, documents and other
assurances, and shall do any and all acts and things reasonably necessary in
connection with the performance of their obligations hereunder and to carry out
the intent of the parties hereto.
8.12. Legal Fees. Each party in any action, proceeding,
arbitration or similar legal proceeding arising under this agreement shall be
responsible for such party's own attorneys' fees.
8
PLEASE NOTE: BY SIGNING THIS AGREEMENT, EMPLOYEE IS HEREBY CERTIFYING
THAT EMPLOYEE (A) RECEIVED A COPY OF THIS AGREEMENT FOR REVIEW AND STUDY BEFORE
EXECUTING IT; (B) READ THIS AGREEMENT CAREFULLY BEFORE SIGNING IT; (C) HAD
SUFFICIENT OPPORTUNITY BEFORE SIGNING THE AGREEMENT TO ASK ANY QUESTIONS
EMPLOYEE HAD ABOUT THE AGREEMENT AND RECEIVED SATISFACTORY ANSWERS TO ALL SUCH
QUESTIONS; AND (D) UNDERSTANDS EMPLOYEE'S RIGHTS AND OBLIGATIONS UNDER THE
AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
DME INTERACTIVE HOLDINGS, INC. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PACKARD
By: /s/ Darien Dash /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Packard
------------------ -------------------------------
Title: Chief Executive Officer
-----------------------------