EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT (the “Agreement”), effective as of January 1,
2007, is entered into this 12th day of
December
2007 by and between ▇▇▇▇▇▇▇ de Vilmorin (“Employee”), and Ethos Environmental,
Inc., a Nevada corporation (“Company”).
RECITALS
WHEREAS,
the Employee has been serving as President and Chief Executive Officer of
the
Company and the parties hereto desire for the Employee to continue serving
in
such capacity; and
WHEREAS,
no formal document exists governing the relationship between the Company
and the
Employee, and the Company and Employee desire by the execution of this Agreement
to create a document memorializing the terms and conditions of the Employee’s
service with the Company; and
WHEREAS,
the Company has granted Employee, by unanimous written consent of the Board
of
Directors effective as of even date herewith, 5,000,000 shares of the
Company’s Common Stock, $0.0001 par value per share, (the “Issued Stock”) as
bonus consideration for past services and for services hereunder.
NOW,
THEREFORE, in consideration of the mutual agreements hereinafter set
forth, Employee and the Company have agreed and do hereby agree as
follows:
AGREEMENT
1.
Duties. The Company hereby agrees to continue to employ and engage Employee
as
President and Chief Executive Officer of the Company, and Employee hereby
accepts and agrees to such hiring, engagement, and employment. Employee agrees
to perform any and all duties and to assume any and all responsibilities
that
may be assigned to him from time to time by the Board of Directors of the
Company or as may be required by the Bylaws, Articles of Incorporation or
other
governing documents of the Company. During the duration of his employment,
Employee will devote his full time, energy, and skill to the performance
of his
duties for the Company and for the benefit of the Company. Employee shall
render
such services to the Company and perform his duties at such place or places
in
as the Company shall require in accordance with its best interests, needs,
business and opportunities. Employee will also exercise due diligence and
care
in the performance of Employee’s duties to the Company under this Agreement.
During the term hereof, Employee shall not enter into the services of or
be
employed in any capacity or for any purposes whatsoever, whether directly
or
indirectly, by any person, firm, corporation or entity other than Company,
and
will not, during said period of time, be engaged in any business, enterprise
or
undertaking other than employment by the Company, except with the prior written
consent of the Company.
2.
Employment Period. Employee’s employment with the Company shall be for an
initial term of five (5) years (the “Initial Term”), commencing on the date
hereof and shall continue thereafter until ended in accordance with this
Agreement. In the absence of a Notice of Termination, as provided herein,
this
Agreement shall renew automatically on the anniversary date hereof, on a
year by
year term, for each of the successive ten (10) years (the “Extended Term”)
following the Effective Date. Provided, however, after the Initial
Term, Employee’s employment will be “at will,” meaning that either Employee or
the Company will be entitled to terminate the employment at any time and
for any
reason, with or without cause prior to the expiration of this
Agreement. Any contrary representations which may have been made to
Employee are superseded by this Agreement. The “at will” nature of the
employment after the Initial Term may only be changed in an express written
agreement signed by Employee and a duly authorized officer of the
Company.
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3.
Compensation.
(a)
Base
Salary. The Company shall pay Employee, and Employee agrees to accept from
the
Company in full payment for Employee’s services and promises to the Company
(specifically including the covenants set forth in Sections 5 and 9), a base
salary at the rate of $30,000 per month during the duration of Employee’s
employment (“Base Salary”), payable in equal monthly installments or otherwise
in accordance with the Company’s normal pay practices as the same may be altered
from time to time by Company.
(b)
Bonus. At the discretion of the Board of Directors, and subject to the
satisfaction of such conditions or performance criteria as may be established
from time to time at the sole discretion of the Board of Directors, Employee
may, at any time and from time to time, receive a bonus. This bonus may consist
of, without limitation, either equity interests of the Company or
cash.
(c)
Withholding Taxes. All forms of compensation paid or payable to Employee
whether
set forth in this Agreement or otherwise are subject to reduction to reflect
applicable withholding and payroll taxes.
(d)
Reimbursement for Business Expenses. Employee shall receive reasonable and
customary reimbursement for business expenses incurred on behalf of the Company;
provided, however, that Employee shall provide appropriate receipts and
documentation for any such expenses.
(e)
Vacation. Employee shall be entitled to vacation on the terms and subject
to the
conditions established by the Board of Directors of the Company.
(f)
Health Care Benefits. In addition to Employee’s Base Salary during the duration
of the Employee’s employment, when and if the Company adopts health care
benefits and/or life insurance benefits, Employee shall be eligible for
participation in any such plan(s) on the terms and subject to the conditions
established by the Board of Directors of the Company.
4.
Issued
Stock; Transferability. The Issued Stock and the rights and privileges conferred
in whole or in part hereby may not be transferred, assigned, pledged or
hypothecated in any way (whether by operation of law or otherwise), and the
Company shall have no obligation to transfer such shares, unless registered
under the Securities Act of 1933, as amended (the “Act”) or, in the opinion of
counsel to the Company, such transaction is in compliance with or exempt
from
the registration and prospectus requirements of the Act. The Employee shall
pay
all costs incurred by the Company in such a transaction, including but not
limited to legal fees and costs. The Issued Stock shall not be subject to
levy
and execution, attachment or similar process. Upon any attempt to transfer,
assign, pledge, hypothecate or otherwise dispose of the Issued Stock, or
any
right or privilege conferred hereby, contrary to the provisions of this
Agreement, or upon the levy or execution, attachment or similar process on
the
Issued Stock or the rights and privileges conferred under this Agreement,
the
Company shall have the right to buy back the Issued Stock, in whole or in
part,
in the manner described in Section 6. Each certificate or other
documentation evidencing the ownership of any shares of Issued Stock to be
imprinted with a legend in substantially the following form:
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT
OF 1933, AS AMENDED. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND
MAY
NOT BE REOFFERED, SOLD, TRANSFERRED, PLEDGED, OR ASSIGNED IN THE ABSENCE
OF
(A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID ACT
AND THE STATE SECURITIES ACT OR BLUE SKY ACT OF ANY STATE HAVING JURISDICTION
THEREOF, OR (B) AN OPINION OF COUNSEL, REASONABLY SATISFACTORY IN FORM,
SCOPE AND SUBSTANCE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER
SAID
ACT OR THE SECURITIES ACT OR BLUE SKY ACT OF ANY STATE HAVING JURISDICTION
WITH
RESPECT THERETO. ADDITIONALLY, THE SECURITIES REPRESENTED HEREBY ARE SUBJECT
TO
AN OPTION TO REPURCHASE IN FAVOR OF THE COMPANY AS DESCRIBED IN THAT CERTAIN
EMPLOYMENT AGREEMENT DATED JANUARY 1, 2007.
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The
certificate may also bear additional inscriptions that the Company, in its
sole
and absolute discretion, otherwise deems are required by federal, state,
foreign
or local securities laws. All shares of Issued Stock shall be subject to
such
stop-transfer orders and other restrictions as the Company may deem advisable
under the rules, regulations, and other requirements of the US Securities
and
Exchange Commission, any stock exchange upon which the Common Stock is then
listed, and any applicable federal or state securities law, and the Company
may
cause a legend or legends to be put on any certificates evidencing such shares
to make appropriate reference to such restrictions.
5.
Restrictions on the Issued Stock. The Issued Stock is subject to all
restrictions in this Agreement. By acceptance of the Issued Stock, the Employee
agrees that the Issued Stock will be held for investment and will not be
held
with a view to their distribution, as that term is used in the Act, unless
in
the opinion of counsel to the Company, such distribution is in compliance
with
or exempt from the registration and prospectus requirements of that Act.
As a
condition of this Agreement, the Company may require the Employee to confirm
any
factual matters reasonably requested by counsel for the Company.
THE
EMPLOYEE UNDERSTANDS THAT THE ISSUED STOCK WILL NOT BE REGISTERED AT THE
TIME
THIS AGREEMENT UNDER THE SECURITIES ACT. THE EMPLOYEE REPRESENTS THAT IT
IS
EXPERIENCED IN EVALUATING COMPANIES SUCH AS THE COMPANY, HAS SUCH KNOWLEDGE
AND
EXPERIENCE IN FINANCIAL AND BUSINESS MATTERS AS TO BE CAPABLE OF EVALUATING
THE
MERITS AND RISKS OF ITS INVESTMENT, AND HAS THE ABILITY TO SUFFER THE TOTAL
LOSS
OF THE INVESTMENT. THE EMPLOYEE FURTHER REPRESENTS THAT IT HAS HAD THE
OPPORTUNITY TO ASK QUESTIONS OF AND RECEIVE ANSWERS FROM THE COMPANY CONCERNING
THE TERMS AND CONDITIONS OF THE ISSUED STOCK, THE COMMON STOCK, AND THE BUSINESS
OF THE COMPANY, AND TO OBTAIN ADDITIONAL INFORMATION TO SUCH EMPLOYEE’S
SATISFACTION. THE EMPLOYEE FURTHER REPRESENTS THAT IT IS AN “ACCREDITED
INVESTOR” WITHIN THE MEANING OF REGULATION D UNDER THE ACT, AS PRESENTLY IN
EFFECT.
6.
Resignation; Termination.
(a)
Resignation. Employee shall have the right to terminate this Agreement at
any
time upon thirty (30) days prior written notice to the Company of any such
termination (“Employee Notice of Termination”). In the event that such
resignation is for Good Reason (as that term is defined below), all of
Employee’s rights and all of the Company’s obligations hereunder shall terminate
effective on the date of Employee’s resignation and Employee shall be entitled
to receive the unpaid portion of the Base Salary earned up to the date of
such
termination and all benefits payable to Employee as a result of such termination
under the terms of the Company’s employee benefit plans. In the event Employee
shall resign for other than Good Reason, Employee’s obligations and the
Company’s rights under Sections 5, 6, 7, 8, 9 and 10 shall survive the
termination of this Agreement for a period of one (1) year, and the Issued
Stock will be subject to the Option to Repurchase as set forth below. The
Employee may terminate the Employee’s employment with the Company at any time
for “Good Reason”, if any of the following have occurred without the Employees
consent:
(i)
the
material reduction of the Employee’s authority, duties and responsibilities, or
the assignment to the Employee of duties materially inconsistent with the
Employee’s position or positions with the Company and its subsidiaries, except
that the Company shall have thirty (30) days from the date on which the
Employee gives the notice thereof to cure such event or condition and, if
the
Company does so, such event or condition shall not constitute Good Reason
hereunder;
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(ii)
a
reduction of the Annual Salary of the Employee, except that a reduction of
the
Employee’s Base Salary shall not constitute Good Reason for termination if
(i) the Company cures such reduction no later than thirty (30) days
from the date on which the Employee gives the Company notice that the reduction
constitutes Good Reason for termination hereunder; or (ii) such reduction
is made in connection with a reduction in compensation of not more than ten
percent (10%) of the Employee’s Base Salary and such reduction is made
generally applicable to all senior management employees of the
Company;
(iii)
the
failure by the Company to obtain an agreement in form and substance reasonably
satisfactory to the Employee from any successor to the business of the Company
to assume and agree to perform this Agreement;
(iv)
the
Company’s material and willful breach of this Agreement, except that the Company
shall have thirty (30) days from the date on which the Employee gives the
notice thereof to cure such event or condition and, if the Company does so,
such
event or condition shall not constitute Good Reason hereunder;
(v)
a
requirement by the Company that Employee’s work location be moved more than
fifty (50) miles of the Company’s principal place of business in San Diego,
California; or
(vi)
Change of Control: "Change of Control" means the occurrence of any of the
following events:
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(a)
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Any
"person" or group (as such terms and used in Sections 13(d) and
14(d) of
the Securities Exchange Act of 1934, as amended) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under said
Act), directly or indirectly, of securities of the Company
representing 20% or more of the total voting power represented by the
Company's then outstanding voting securities;
or
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(b)
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A
change in the composition of the Board occurring within a two-year
period,
as a result of which fewer than a majority of the directors are
Incumbent Directors. "Incumbent Directors" shall mean directors who
either (A) are directors of the Company as of the date hereof;
or (B)
are elected, or nominated for election, to the Board with the
affirmative votes of at least a majority of the Incumbent Directors
at the time of such election or nomination (but shall not include an
individual whose election or nomination is in connection with an
actual or threatened proxy contest relating to the election of
directors for the Company); or
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(c)
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The
stockholders of the Company approve any transaction which would
be a
reorganization under Nevada or California law and result in the
voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity) less than fifty percent (50%) of the total voting
power represented by the voting securities of the surviving entity
outstanding immediately after such merger or
consolidation; or
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(d)
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The
stockholders of the Company approve a plan of complete liquidation
of the
Company or an agreement for the sale or disposition by the Company of
all or substantially all the Company's
assets.
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(b)
Termination for Cause. The Company may terminate Employee’s employment at any
time for Cause (as defined below) with thirty (30) days written notice and
opportunity to cure the violation “Employer Notice of Termination”). Such
opportunity to cure will only be available if the violation is contained
in one
of the following paragraphs (contained below in this Subsection 6(b)): (iv),
(viii), (ix), (x) (xi). If Employee’s employment is terminated pursuant to
this Subsection 6(b), all of Employee’s rights and all of the Company’s
obligations hereunder shall immediately terminate. As used in this section,
“for
Cause” shall mean any of the following:
(i)
Willfully damaging the Company’s property, business, reputation or
goodwill;
(ii)
Committing a felony;
(iii)
Death, theft, dishonesty, fraud or embezzlement;
(iv)
Using alcohol, narcotics or other controlled substances to the extent that
it
prevents the Employee from efficiently performing services for the
Company;
(v)
Willfully injuring any other employee of the Company;
(vi)
Willfully injuring any person in the course of performance of services for
the
Company;
(vii)
Disclosing to a competitor or other unauthorized persons confidential or
proprietary information or secrets of the Company;
(viii)
Soliciting business on behalf of a competitor or a potential
competitor;
(ix)
Sexually harassing any other employee of the Company or committing any act
which
otherwise creates an offensive work environment for other employees of the
Company;
(x)
Failing to comply with any provision of the Company’s policy manual as it
applies to Employee; or
(xi)
Breaching this Agreement.
(c)
Termination of Employment Prior to a Change of Control: The
following provisions shall apply with respect to termination of Employee's
employment prior to a Change of Control:
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(i)
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Termination
without Cause:
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(a)
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General: If,
prior to the end of the Initial Term and prior to a Change of Control
Employee's employment is terminated by the Company without Cause,
then the
Company shall:
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(A)
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Cash
Severance Payments: Pay to Employee severance payments of one
month's Base Salary for a period of 36 months following the date
of
termination; (the "Severance Period"). Such severance payments shall
be paid at regular payroll intervals, or in one lump sum within 30
days of the Termination Date, as determined by
Company.
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(B)
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Accelerated
Vesting Option: Give Employee (or his legal representative if
he is Disabled) 30 days to elect to accelerate the vesting of 80% all
unvested equity compensation (forfeiting the 20% balance of unvested
equity compensation) to the same extent as if it would have vested if
Employee remained employed through the required vesting
period.
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(C)
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Continued
Group Health and Insurance Benefits: Continue to make available
to the
Employee and the covered dependents, and to pay directly or
indirectly for, to the same extent as paid prior to the Termination
Date, all group health plan, life and other similar insurance plans
or Company-sponsored arrangements providing comparable benefits in
which Employee or such covered dependents participate on the
Termination Date through the Severance
Period.
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(b)
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Death: In
the event of Employee's death while he is receiving benefits pursuant
to
Section 6(c)(i)(a) hereof, the Company shall continue providing and
paying severance and for group health plan, life and similar
insurance coverage or Company-sponsored arrangements
providing comparable benefits for the covered dependents through the
Severance Period.
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(c)
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All
vested options or other equity compensation must be exercised within
12
months of the Termination Date.
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(d) Termination
for Cause; Resignation: If, during the Employment Period and prior to a
Change of Control, Employee's employment is terminated by the Company for
Cause, or if Employee resigns from his employment, then Employee shall be
entitled only to payment of all amounts including benefits earned or owed
to Employee and only to such equity compensation as is fully vested as of
the Termination Date.
(e) Termination
of Employment Following a Change of Control: The following provisions shall
apply to termination of Employee's employment on or following a Change of
Control:
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(i)
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Termination
without Cause; Resignation for Good
Reason:
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(a)
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General: If,
following a Change of Control (A) Employee's employment is terminated
by
the Company without Cause, or (B) Employee resigns from his employment
hereunder for Good Reason, then the Company
shall:
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(A)
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Cash
Severance Payments: Pay to Employee a lump sum, within 30 days
of the Termination Date and in cash, equal to three times Employee’s
Base Salary for a twelve month
period.
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(B)
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Accelerated
Vesting: Cause the vesting of all restricted stock, stock
options and other equity-based compensation held on the date of
termination by Employee, to fully accelerate, as of the date
of termination, so that they become 100%
vested.
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(C)
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Continued
Group Health and Insurance Benefits: Continue to make available
to the
Employee and the Covered Dependents, and pay for, to the same extent
as paid prior to the Change of Control and termination of the
employment or consulting relationship, all group health plan, life
and other similar insurance plans or Company-sponsored arrangements
providing comparable benefits in which Employee or such
Covered Dependents participate on the date of the Employee's
termination, and for the 10 year period following the Termination
Date.
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(D)
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Stock
Bonus: Employee shall also receive within 30 days of the Termination
Date
a one-time issuance of shares of the Company’s common stock equal to
10,000,000 shares.
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(b)
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Death
During Severance Period: In the event of Employee's death while
he is receiving benefits pursuant to Section 6(e)(i)(a) hereof, the
Company shall continue providing and paying for group health
plan, life and similar insurance plan coverage or Company-sponsored
arrangements providing comparable benefits to the covered dependents
through period set forth in Section
6(e)(i)(a)(C).
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(f)
Termination for Cause; Resignation Without Good Reason: If, following a
Change of Control, Employee's employment is terminated by the Company for
Cause, or if Employee resigns from his employment hereunder other than for
Good Reason, then Employee shall be entitled only to payment of all amounts
(including benefits) earned or owed to Employee, and only to such equity
compensation as is fully vested as of the Termination Date. The Company
shall not be limited to termination as a remedy for any improper or illegal
act
of Employee, but may also seek damages, injunction or such other remedy as
it
may deem appropriate under the circumstances. This shall include without
limitation the option by the Company, in its sole and absolute discretion,
to
repurchase the Issued Stock, in whole or in part, for an amount of $5.00
per
share (the “Option to Repurchase”), immediately upon the termination of the
Employee’s employment with the Company for Cause, or the Employee’s resignation
without Good Reason; provided, however, that the Issued Stock subject to
the
Option to Repurchase shall be reduced by 1/12 for each month of Employee’s
completed employment with the Company, beginning the date hereof and continuing
hereafter. Upon the termination of the Employee for Cause, Employee’s
obligations and the Company’s rights under Sections 7, 8, 9, 10, 11 and 12 shall
survive the termination of this Agreement for a period of one
(1) year.
(g)
Golden Parachute Limitation: The payments and benefits payable to Employee
under
this Agreement and all other contracts, arrangements, or programs with the
Company shall not, in the aggregate exceed the maximum amount that may be
paid to Employee without triggering golden parachute penalties under
Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"),
as determined in good faith by the Company's independent auditors. Employee
agrees that, to the extent payments or benefits under this Agreement would
not be deductible under Code Section 162(m) if made or provided
when otherwise due under this Agreement, such payments and benefits shall
be made or provided later, immediately after Section 162(m) ceases to
preclude their deduction, with interest thereon at the rate provided in
Code Section 1274(b)(2)(B). If even after such deferral the payments and
benefits otherwise payable to Employee must be reduced to avoid triggering
such penalties, the payments and benefits will be reduced in the priority
order designated by the Employee, or, if the Employee fails promptly to
designate an order, in the priority order designated by the Company. If an
amount in excess of the limit set forth in this Section 6 is paid to Employee,
Employee shall repay the excess amount to the Company upon demand. Employee
and the Company agree to cooperate with each other in connection with any
administrative or judicial proceedings concerning the existence or amount
of golden parachute penalties on payments or benefits received by
Employee.
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7.
Non-solicitation; Non-competition.
(a)
Employee agrees that he will not at any time during the Employee’s employment or
the Restriction Period (“Restriction Period” shall mean the one (1) year
subsequent to the end of Employee’s employment by the Company for any reason,
which ending of employment shall be referred to as the “Termination Date”),
whether voluntarily or involuntarily, directly or indirectly for himself
or any
other person or entity solicit, interfere with or endeavor to entice away
from
Company or any of its affiliates any other employee of Company or any of
its
affiliates. Additionally, Employee agrees that during the Restriction Period
any
employment by Employee or any entity in which he has an interest, directly
or
indirectly (other than a publicly traded company in which he has less than
a 1%
interest) of any person who was in the employ of the Company or any of its
affiliates within the preceding year, shall be a violation of this Section.
For
the purposes of this Agreement indirect interests shall include interests
held
by Employee’s family members or any partner in a partnership, limited liability
company or other entity in which he has a 10% or greater ownership
interest.
(b)
Employee further agrees that he will not at any time during the Restriction
Period, whether voluntarily or involuntarily, directly or indirectly, for
himself or any other person or entity:
(i)
engage, directly or indirectly (either as an employee, officer, director,
partner, shareholder, consultant or independent contractor), in any business
substantially similar to that carried on by the Company, or any of its
affiliates, or in providing services or products or offering to provide products
or services of the kind provided by the Company or any of its affiliates
as of
the Termination Date within those areas in the United States, US Territories,
Mexico, Central America and the Caribbean (the “Non-Competition Area”) which the
Company or any of its affiliates is doing business as of the Termination
Date or
in which, at the time of the Termination Date, the Company or any of its
affiliates contemplates doing business, or, for those customers of the Company
or any of its affiliates for whom the Company or any of its affiliates:
(A) is engaged in providing services or products as of the Termination
Date, or (B) has either provided services or products within the twenty
four month (24) period prior to the Termination Date, or (C) has
contacted at any time during the twelve (12) months prior to the
Termination Date, for the purpose of offering to provide services or products
(all of which are hereinafter referred to as the “Clients”);
(ii)
Solicit or attempt to solicit those Clients for the purposes of providing
or
offering to provide any services or products of a type which the Company
or any
of its affiliates provides or contemplates providing as of the Termination
Date,
on behalf of those Clients, whether directly or through any other persons,
partnerships, corporations, companies or other entities; or
(iii)
Take any other action which would impair the value of the business or assets
of
the Company or any of its affiliates, including, without limitation, any
action
which would tend to disparage or diminish the reputation of the Company or
any
of its affiliates.
(c)
If in
any judicial proceeding, a court shall refuse to enforce this Agreement,
whether
because the time limit is too long or because the restrictions contained
herein
are more extensive (whether as to geographic area, scope of business or
otherwise) than is necessary to protect the business and goodwill of the
Company, it is expressly understood and agreed between the parties hereto
that
this Agreement is deemed modified to the extent necessary to permit this
Agreement to be enforced in any such proceedings.
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(d)
If
the Company or its successors in interest shall make application to a court
of
competent jurisdiction for injunctive relief, then the Restriction Period
specified herein shall be tolled from the time of application for injunctive
relief until the date of final adjudication of the claim for injunctive relief.
Additionally, Employee waives, to the greatest extent permissible, any
requirement that the Company post bond or other security as a precondition
to an
injunction, whether temporary or permanent.
(e)
Employee agrees that compliance with this Section is necessary to protect
the
goodwill and other proprietary interests of the Company and that a breach
of
this Section will give rise to irreparable and continuing injury to the Company
which is not adequately compensable in monetary damages or at law. Accordingly,
Employee agrees that the Company, its successors and assigns may obtain
injunctive relief against the breach or threatened breach of the foregoing
provisions, in addition to any other legal remedies which may be available
to it
under this Agreement. Employee further acknowledges that in the event of
his
termination or expiration of employment with the Company, his knowledge,
experience and capabilities are such that Employee can obtain employment
in
business activities which are of a different or noncompeting nature than
those
performed in the course of employment with the Company; and that the enforcement
of a remedy hereunder by way of injunction will not prevent Employee from
earning a reasonable livelihood.
8.
Accounting for Profits. Employee covenants and agrees that if he violates
the
provisions of Sections 7, 9, 11, or 12 the Company shall be entitled to an
accounting and repayment of all profits, compensation, commissions, remuneration
or other benefits that Employee has realized and/or may realize as a result
of
or in connection with any such violation. These remedies shall be in addition
and not in limitation of any injunctive relief or other rights or remedies
to
which the Company is or may be entitled at law, in equity or under this
Agreement.
9.
Assignment of Proprietary Information. Except as may be required in the course
of employment by the Company, Employee agrees that any and all Proprietary
Information, as hereinafter defined, which Employee has made, conceived of,
developed or originated, either individually or jointly with any other person
or
persons at any time during the period of employment by the Company, or during
a
period of five (5) years after termination or expiration of said
employment, whether during working hours or any other time, which relate
in any
way to the business or the type of business now or hereafter engaged in or
contemplated by the Company during the period of Employee’s employment or which
result from or may be suggested by any work Employee does for the Company
or at
the Company’s request, shall be the property of the Company. As used herein,
“Proprietary Information” shall mean any and all proprietary property including
but not limited to all techniques, processes, devices, charts, manuals, payroll,
and improvements thereto together with the names and identities of all clients
and prospective clients, price lists, suppliers and all other information
or
materials which the Company may from time to time designate and treat as
confidential and proprietary or as a trade secret.
Employee
shall promptly disclose and assign such Proprietary Information to the Company’s
representatives and do all such acts, and execute and deliver all such
documents, as may be necessary to vest in the Company the title to all such
Proprietary Information and enable the Company to properly prepare and prosecute
any and all applications for patents, trademarks or copyrights thereon as
well
as all reissues, renewals and extensions thereof, so that the Company shall
be
the sole and absolute owner of all right, title and interest in said proprietary
property. It is understood and agreed that the words “which relate in any way to
the business or the type of business now or hereafter carried on or contemplated
by the Company” shall properly cover any reasonable development or extension of
the Company’s field of operation. These obligations shall continue beyond the
termination or expiration of Employee’s employment with respect to inventions,
discoveries and developments conceived or made by Employee during the period
of
employment and shall be binding on Employee’s assigns, executors, heirs,
administrators and other legal representatives. Employee agrees that all
correspondence, drawings, reports, ideas, blueprints, manuals, letters, notes,
analyses, notebooks, reports, charts, programs, proposals or any other documents
concerning the Company’s customers or products or processes, whether or not
prepared by and in the course of employment, alone or in conjunction with
others, is the property of the Company and upon termination or expiration
of
employment for any reason, Employee shall promptly return to the Company
any
such documents in his possession, custody or control.
9
10.
Information and Testimony. Employee will, without expense to himself, give
such
true information and testimony under oath if requested, as may be requested
of
him by the Company relative to any Proprietary Information that is subject
to
disclosure to the Company under the terms hereof.
11.
Proprietary Information. Employee agrees that he will not at any time during
or
after the termination or expiration of his employment, except as authorized
or
directed in writing by the Company, use for Employee’s own benefit, copy,
reveal, divulge or make known in any manner to any person, firm or the Company
the contents of any methods, inventions, systems, processes, concepts,
techniques, and devices related to such matters used or developed by the
Company, whether or not owned by the Company, or the methods, processes or
manner of the creation and sale of products or services provided by, sold
or
leased by the Company, all sometimes referred to as “Trade Secrets,” as defined
below.
Employee
further agrees that he will not at any time during or after the termination
or
expiration of said employment, except as authorized or directed in writing
by
the Company, sell, exchange or give away or otherwise dispose of any methods,
inventions, systems, processes, concepts, techniques and devices related
to the
business now or hereafter owned and operated by the Company, whether the
same
shall or may have been originated, discovered or otherwise created by Employee.
Employee further agrees not to reveal, divulge or make known to any person,
firm
or the Company the name of any of the Company’s clients, price lists, suppliers
or any secret, trade secret or other Proprietary Information whatsoever in
connection with the Company, its business or its clients or anything pertaining
thereto.
Employee
understands that if, either during employment or thereafter, he discloses
to
others, uses for his own benefit or for the benefit of any person or entity
other than the Company, copies or makes notes of any such Trade Secrets,
information or facilities, such conduct will constitute a breach of the
confidence and trust bestowed upon Employee by the Company and will be a
breach
of this Agreement.
“Trade
Secret” shall mean the whole or any portion of any formula, pattern, device,
combination of devices, or compilation of information which is for use, or
is
used in the operation of the Company’s business and which provides the business
an advantage, or an opportunity to obtain an advantage, over those who do
not
know or use it. Trade Secret includes any scientific, technical or commercial
information, including any design, process, procedure, list of suppliers,
list
of customers, business code, sales or installation technique, or improvement
thereof. For purposes of interpretation hereunder the following shall
apply:
(a)
Irrespective of novelty, invention, patentability, the state of the prior
art,
and the level of skill in the business, art, or field to which the subject
matter pertains, when the owner thereof takes measures to prevent it from
becoming available to persons other than those selected by the owner to have
access thereto for limited purposes, a trade secret is considered to be secret,
of value, for use or in use by the business, and of advantage to the business,
or providing an opportunity to obtain an advantage, over those who do not
know
or use it.
(b)
In
addition, a “Trade Secret” shall include information (not readily compiled from
publicly available sources) which has been made available to Employee during
the
course of his employment, including but not limited to the names, addresses,
telephone number, qualifications, education, accomplishments, experience
and
resumes of all persons who have applied or been recruited for employment,
for
either or both permanent and temporary jobs, job order specifications and
the
particular characteristics and requirements of persons generally hired by
the
Company, as well as specific job listings from companies with whom the Company
does, or attempts to do business, as well as mailing lists, computer runoffs,
financial or other information not generally available to others, and all
information defined as a trade secret by applicable California and/or Federal
law.
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(c)
Employee further agrees that he is under no obligation to any former company
which is in any way inconsistent with this Agreement or which imposes any
restriction on behalf of the Company. The Employee also acknowledges that
he has
been instructed that during the term of employment by the Company, he is
not to
divulge to the Company, its employees or its consultants any confidential
information obtained from any previous employers or any other
person.
12.
Return of Records. On termination of employment, Employee shall deliver all
records, notes, data, memoranda, models, and equipment of any nature that
are in
Employee’s possession or under his control and that are the property of the
Company or relate to the employment or to the business of the
Company.
13.
No
Slander. Employee agrees not to in any way slander or injure the business
reputation or goodwill of the Company, including, by way of illustration,
through any contact with Clients, prospective clients, vendors, suppliers,
employees or agents of the Company which could slander or injure the business
reputation or goodwill of the Company.
14.
Waiver or Modification. No waiver or modification of this Agreement or of
any
covenant, condition, or limitation herein contained shall be valid unless
in
writing and duly executed by the party to be charged therewith. Furthermore,
no
evidence of any modification or waiver shall be offered or received as evidence
in any proceeding, arbitration or litigation between the parties arising
out of
or affecting this Agreement or the rights or obligations of any party hereunder,
unless such waiver or modification is in writing, duly executed as aforesaid.
The provisions of this Section may not be waived except as herein set
forth.
15.
Choice of Law; Waiver of Jury Trial. This Agreement and the performance
hereunder and all suits and special proceedings hereunder shall be construed
in
accordance with the laws of the State of California. In any action, special
proceeding or other proceeding that may be brought arising out of, in connection
with, or by reason of this Agreement, the laws of the State of California
shall
be applicable and shall govern to the exclusion of the law of any other forum,
without regard to the jurisdiction in which the action or special proceeding
may
be instituted. All actions under this Agreement shall be taken in a court
of
competent jurisdiction within the State of California in which the Company’s
principal place of business is located and Employee hereby waives and agrees
that he shall not assert that such forum is inconvenient.
EACH
PARTY HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO DEMAND
A TRIAL
BY JURY FOR ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN ANY
WAY
RELATED TO THIS AGREEMENT OR THE RELATIONSHIP OF THE PARTIES. THIS WAIVER
EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING FROM ANY
SOURCE,
INCLUDING BUT NOT LIMITED TO THE CONSTITUTION OF THE UNITED STATES, THE
CONSTITUTION OF ANY STATE, COMMON LAW OR ANY APPLICABLE STATUTE OR REGULATION.
EACH PARTY HEREBY ACKNOWLEDGES THAT IT IS KNOWINGLY AND VOLUNTARILY WAIVING
THE
RIGHT TO DEMAND TRIAL BY JURY.
16.
Binding Effect of Agreement. This Agreement shall be binding upon and inure
to
the benefit of the parties hereto and their respective heirs, successors,
assigns and legal representatives.
17.
Life
Insurance. Inasmuch as the services of Employee are important to the success
or
failure of the Company, the Company may, by its sole discretion, purchase
disability insurance or insurance on the life of the Employee during the
term
hereof in such amounts as the Company shall determine appropriate. Such
insurance shall be owned by the Company, the Company shall be the sole
beneficiary, and all premiums therefor shall be paid by the Company. The
Employee agrees to cooperate with the reasonable requirements of the Company
and/or its insurance carriers as necessary to obtain such insurance, including
submitting to any and all necessary medical examinations.
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18.
Invalid Provision. The invalidity or unenforceability of a particular provision
of this Agreement shall not effect the other provisions hereto, and this
Agreement shall be construed in all respects as if such invalid or unenforceable
provisions were omitted.
19.
Costs
of Enforcement. In the event either party initiates action to enforce his,
her
or its rights hereunder, the substantially prevailing party shall recover
from
the substantially non-prevailing party its reasonable expenses, court costs,
including taxed and untaxed costs, and reasonable attorneys’ fees, whether suit
be brought or not (jointly referred as to “Expenses”). As used herein, Expenses
include expenses incurred in any appellate or bankruptcy proceeding. All
such
Expenses shall bear interest at the highest rate allowable under the laws
of the
Province of British Columbia from the date the substantially prevailing party
pays such Expenses until the date the substantially non-prevailing party
repays
such Expenses. Expenses incurred in enforcing this Section shall be covered
by
this Section. For this purpose, the court is requested by the parties to
award
actual costs and attorneys’ fees incurred by the substantially prevailing party,
it being the intention of the parties that the substantially prevailing party
be
completely reimbursed for all such costs and fees. The parties request that
inquiry by the court as to the fees and costs shall be limited to a review
of
whether the fees charged and hourly rates for such fees are consistent with
the
fees and hourly rates routinely charged by the attorneys for the substantially
prevailing party.
20.
Assignment. This Agreement shall be construed as a contract for personal
services by Employee to the Company and shall not be assignable by Employee.
This Agreement may be assigned by the Company.
21.
Strict Construction. This Agreement was the joint, negotiated product of
the
parties. Therefore, neither party shall advance a position that any provision
hereof should be more strictly construed against the other party on the basis
that such other party prepared such provision.
22.
Cumulative Rights. Unless otherwise provided herein, all rights, powers and
privileges conferred upon the parties by law, this Agreement or otherwise
shall
be cumulative.
23.
Waiver. No failure of any party to exercise any power given such party hereunder
or to insist upon strict compliance by any party with its obligations hereunder,
and no custom or practice of the parties in variance with the terms hereof
shall
constitute a waiver of the parties’ right to demand exact compliance with the
terms hereof.
24.
Survival. The provisions of this Agreement shall continue and survive the
closing hereof unless or until there is a completion and fulfillment of all
the
conditions, covenants and warranties herein.
25.
Time.
Time is of the essence of this Agreement.
26.
Notices. All notices, requests, demands and other communications required
or
permitted hereunder shall be in writing and shall be deemed to have been
duly
given when delivered by hand or when mailed by certified registered mail,
return
receipt requested, with postage prepaid to their current address or to such
other address as they request in writing.
27. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of
which
shall constitute the same instrument.
28.
Singular/Plural Feminine/Masculine, Successors or Assigns. All references
as
used herein shall include male and female, singular and plural, and successors
or assigns in the use of a corporation, partnership, individual or entity
in any
place or places herein in which the context may require or permit such
substitution, substitutions or designations.
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29.
Legal
Representation. Employee acknowledges having carefully read and reviewed
this
Agreement and Employee acknowledges that Employer has advised him to seek
independent legal counsel to review this Agreement and to advise him of his
rights hereunder. Employee acknowledges having had an opportunity to
ask questions about this Agreement and to consult other legal
counsel. Employee understands and acknowledges that Employer is
represented by an attorney responsible for drafting the provisions of this
Agreement in accordance with the wishes of the Company.
29.
Complete Agreement. This written Agreement contains the sole and entire
agreement between the parties as to the matters contained herein, and supersedes
any and all other agreements between them. The parties acknowledge and agree
that neither of them has made any representation with respect to such matters
of
this Agreement or any representations except as are specifically set forth
herein, and each party acknowledges that he or it has relied on his or its
own
judgment in entering into this Agreement. The parties further acknowledge
that
statements or representations that may have been heretofore made by either
of
them to the other are void and of no effect and that neither of them has
relied
thereon in connection with his or its dealing with the other.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
DATED:
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