Executive Employment Agreement - RoomSystems Inc.
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement"), dated
______________________, is by and between _____________________ ("Employee") and
RoomSystems, Inc. ("Employer").
R E C I T A L S:
WHEREAS, Employer's board of directors (the "Board") desires to employ
Employee in an executive capacity and the Employee desires to be so employed in
such capacity;
NOW THEREFORE, in consideration of the mutual covenants and conditions
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
Term
1.1 Employment. Employer employs Employee and Employee accepts employment
under the terms and conditions of this Agreement.
1.2 Term. The term of this Agreement shall be for ____________ (____)
months with an open option thereon as set forth herein and shall be effective as
of ______________________, and shall terminate on ____________________, unless
extended by mutual agreement of the parties. Upon mutual agreement of the
parties, this Agreement may be extended for an additional period upon written
notice given to Employee not less than three (3) months prior to the termination
of this Agreement.
A. Option Term. Upon mutual agreement of the parties, and upon the
condition that there is no breach of any condition or term of this Agreement at
the time of exercise, this Agreement may be extended for an additional twelve
(12) months on the same terms and conditions of this Agreement, unless modified
or amended upon the written consent of Employer and Employee.
ARTICLE II
Compensation
2.1 Compensation. For all services rendered by Employee, Employer shall
pay Employee the salary commencing on ___________________, of $____________ per
year. Salary payments shall be subject to withholding and other applicable
taxes.
A. Salary Adjustment. Employer and Employee recognize that certain
"Events" (as defined in the following paragraph) may occur which will give rise
to a salary increase. Upon the occurrence of any one of the Events listed in the
following paragraph, Employee's salary shall be increased to $______________ per
year during the term of this Agreement. Such increase shall be automatic upon
the happening of any one of the Events listed below.
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B. Definition of "Events." For purposes of this Agreement and
particularly, the salary increases described in the foregoing paragraph, any one
of the following shall be considered an "Event":
i. Merger. A merger with a third party entity, whereby at least
fifty-one percent (51%) of Employer's outstanding common stock is merged with
such entity.
ii. Sale/Acquisition. A sale or acquisition of at least fifty-one
percent of Employer's outstanding common stock or the sale of all or
substantially all of Employer's assets to a third party entity.
iii. Capital. Employer's raising at least $4 million through the
sale of equity securities by September 30, 1999, unless otherwise extended by
the parties hereto.
iv. Debt Facility. A debt facility is put in place offering Employer
a debt facility of at least $6 million.
C. Second Salary Adjustment. Upon Employer's successful funding of
an IPO or a similar transaction, Employee's base compensation shall
automatically increase to $________________.
2.2 Earned Monetary Bonuses. Employee shall be entitled to an annual bonus
as determined by the Company's compensation committee (to be formed). Employee's
performance shall be reviewed annually to determine the payment of bonuses.
2.3 Automobile Allowance. Employee shall be entitled to an automobile
allowance of $_______ per month, payable in equal payments. Employer shall pay
Employee's automobile insurance and reasonable maintenance.
2.4 Stock Option Consideration. Employee, as partial consideration for his
services, shall be entitled to receive Stock Options as determined by the
Company's Stock Option Committee (to be formed). Such determination shall be
made on an annual basis.
2.5 Employee Benefits. In addition to the foregoing, Employee shall be
entitled to the following:
A. Health Insurance. Employer shall provide and pay for health,
dental and life insurance for Employee and his family with an insurance carrier
of Employer's choice. The benefits offered under this paragraph shall include a
standard executive employee health and life insurance program.
B. Expenses. Employee may incur reasonable expenses for promoting
Employer's business, including expenses for entertainment, travel and similar
items. Employer will reimburse Employee for all such reasonable expenses upon
Employee's presentation of an itemized account of such expenditures. Employer
shall provide Employee with a Diner's Club, American Express or other credit
card for his use in promoting and representing Employer, dependent upon
Employee's credit worthiness.
C. Vacations. Employee shall be entitled each year to "Flexible Time
Off" ("FTO") commensurate with a "Grade I" employee, as described in Employer's
Employee Handbook.
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ARTICLE III
Duties of Employee
3.1 Duties. Employee is engaged as ______________________________; and
shall have authority over such decision-making and managerial duties regarding
the business of Employer; and shall supervise and direct all of the business of
Employer according to business plans and strategies provided by Employer,
reporting only to the Board. The precise services of Employee may be extended or
curtailed by mutual agreement of Employer and Employee from time to time.
3.2 Extent of Services. Employee shall devote so much of his productive
time, ability and attention to the business of the Company as is necessary to
fulfill his duties; and shall perform all such duties in a professional, ethical
and businesslike manner. Employee will not, either during the term of this
Agreement and for a period of twelve (12) months thereafter, directly or
indirectly engage in any other business, either as an employee, employer,
consultant, principal, officer, director, advisor, or in any other business
capacity, which is competitive with the business of the Company, without the
express written consent of the Company. Furthermore, the Board may require that
Employee account for his time spent performing his duties hereunder at any time.
Upon such notice, Employee shall account for his time and deliver such
accounting to the Board until further notified. Based upon such records, the
Board, in its sole discretion, may adjust Employee's FTO and/or salary during
such period accordingly.
3.3 Engaging in Other Employment. Employee hereby agrees to undertake the
responsibilities for and devote his productive time, abilities, and attention to
the business of Employer during the term of this Agreement.
3.4 Regulations. Employee agrees to comply with all federal, state and
local laws, ordinances, and regulations in the conduct of his business on behalf
of Employer.
3.5 Accountability. Employee shall be directly responsible to the Board .
ARTICLE IV
Duties of Employer
4.1 Payment of Compensation and Provision of Benefits. During the terms
hereof, Employer agrees to pay all compensation, benefits, allowances and FTO
due to Employee as set forth herein.
4.2 Working Facilities. Employer shall provide offices, stenographic help
and such other facilities and services as are suitable to his position and
appropriate for the performance of his duties.
ARTICLE V
Disability; Death During Employment
5.1 Disability. If Employee is unable to perform his services by reason of
illness or incapacity for a period of more than one (1) month, the compensation
thereafter payable to him during the continued period of such illness or
incapacity for a period not to exceed
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twelve (12) shall be sixty percent (60%) of Employee's then current salary.
Employee's full compensation shall be reinstated upon his recovery.
Notwithstanding anything to the contrary, Employer may terminate this Agreement
at any time after Employee shall be absent from his employment, for whatever
cause, for a continuous period of more than twelve months (12), and the
obligations of Employer shall thereupon terminate. If it is determined, pursuant
to the terms of this Agreement, that Employee is disabled or incapacitated and
cannot discharge the duties and responsibilities contemplated hereunder,
Employer shall have the right to hire an employee to replace him in whatever
position he may have at that time.
A. Disability Insurance. In lieu of the foregoing, Employer may
obtain disability insurance for Employee. Should this occur, paragraph 5.1 shall
be null and void and the terms of said disability insurance shall govern, so
long as the terms in such policy are equal to or greater than the terms outlined
in Section 5.1.
5.2 Death During Employment. If Employee dies during the term of
employment, Employer shall pay to the estate of Employee the compensation which
would otherwise be payable to Employee up to the end of the month in which death
occurs. In addition, Employer shall pay a sum equal to two (2) year's
compensation payable in three equal monthly installments after the death of
Employee to the spouse of Employee or if he is not survived by his spouse, then
to Employee's heirs in equal shares, or if there are no such surviving heirs, to
the estate of Employee.
ARTICLE VI
Confidential Information; Trade Secrets; Proprietary Rights
6.1 Confidentiality. Employee hereby acknowledges that he has received
information regarding the business of Employer, including but not limited to
customer lists, product information, business strategy, employee agreements,
which information is confidential information (the "Confidential Information").
The parties hereto recognize and acknowledge that the Confidential Information
is proprietary and integral to Employer's business and agrees to keep such
Confidential Information confidential and not disclose the same to any third
person, corporation and/or entity for a period of three (3) years subsequent to
the termination of this Agreement or termination of Employee as an employee of
Employer, whether such termination is with or without cause.
6.2 Products. All products relating to Employer's business, designed,
improved or enhanced by Employee, will be the sole property of Employer and
Employee will not be allowed to possess or use them unless Employer agrees in
writing thereto. Whenever requested to do so by Employer, Employee will execute
any and all applications, assignments or other instruments that Employer deems
necessary to protect Employer's interests therein. Employee's obligations
hereunder shall survive the termination of Employee's employment with respect to
inventions, discoveries and improvements conceived or made by Employee during
the term of Employee's employment described in this Agreement.
ARTICLE VII
Non-Competition
7.1 Non-Competition. During Employee's term of employment set forth in
this Agreement, and for a period of one (1) year thereafter, Employee will not
directly or
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indirectly be an owner, partner, director, manager, officer or employee or
otherwise render services or be associated with any business that competes with
Employer.
ARTICLE VIII
Termination / Note Purchase
8.1 Termination With Cause. With cause, Employer may terminate this
Agreement upon thirty (30) days' notice to Employee. In such event, Employee
shall continue to render his services and shall be paid his regular compensation
up to the date of termination. Severance allowance shall be equal to six (6)
month's salary of Employee. For purposes of this Agreement, termination "with
cause" shall be for any of the following:
A. Any breach of any material obligations owed to Employer;
B. Failure to follow the directive of the Company's board of
directors; or
C. Conviction of a felony or any act involving moral turpitude.
8.2 Termination Without Cause. Employer may terminate Employee without
cause upon thirty (30) days written notice. Upon termination without cause by
employer, Employee shall be entitled to cash compensation equal to the greater
of the following: (A) the then existing base salary of Employee, as defined in
Article 2.1, for the remainder of the term of this Agreement; or (B) the then
existing base salary of Employee, as defined in Article 2.1, for a period of one
(1) year from the date of termination without cause. In the event of termination
without cause, all cash compensation, as referred to above, shall be paid to
Employee on a bi-monthly basis.
8.3 Reserved.
8.4 Termination Upon Sale of Business. Notwithstanding anything to the
contrary, Employer may terminate this Agreement upon thirty (30) days' written
notice upon the happening of any of the following events which any one event
will be treated as a termination without cause for purposes of severance
allowance pursuant to this Agreement.
A. The sale by Employer of substantially all of its assets to a
single purchaser or a group of associated purchasers;
B. The sale, exchange or other disposition, in one transaction, of
at least fifty percent (50%) of the outstanding common shares of the Employer;
C. A decision by Employer to terminate its business and liquidate
its assets; or the merger or consolidation of Employer in a transaction in which
the shareholders of Employer receive at least fifty percent (50%) of the
outstanding voting shares of the new or continuing corporation.
D. Notwithstanding the foregoing, should Employer agree to
sell all or substantially all of its assets, Employer shall purchase Employee's
Shares for an amount of the greater of the Stock Purchase Price or the same
price sold by other of Employer's shareholders.
ARTICLE IX
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General Provisions
9.1. Waiver of Breach. The waiver by Employer of breach of any provisions
of this Agreement by Employee shall not operate or be construed as a waiver of
any subsequent breach by Employee. No waiver shall be valid unless in writing
and signed by an authorized officer of Employer.
9.2 Assignment. Employee acknowledges that the services to be rendered by
him are unique and personal. Accordingly, Employee may not assign any of his
rights under this Agreement. The rights and obligations of Employer under this
Agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of Employer.
9.3 Modification. This Agreement may not be modified, changed or altered
orally but only by an agreement in writing signed by the party against an
enforcement of any waiver, change, modification, extension or discharge as
sought.
9.4. Governing Law. This Agreement shall be governed by and construed
under the laws of the State of Nevada.
9.5 Integration Clause. This instrument contains the entire agreement
between the parties hereto and supersedes any and all prior written and/or oral
agreements. This Agreement may be altered or modified only in writing signed by
the parties hereto.
9.6 Notices. Any notice required or desired to be given under this
Agreement shall be deemed given if in writing sent by certified mail to the
parties at each party's last known address.
9.7 Attorneys' Fees. Should any party seek the enforcement of any term of
this Agreement, the prevailing party thereunder shall be entitled to attorneys'
fees and costs for the enforcement of such term or provision.
9.8 Arbitration. In the event of any dispute arising under this Agreement,
including any dispute regarding the nature, scope or quality of services
provided by either party hereto, its is hereby agreed that such dispute shall be
resolved by binding arbitration to be conducted by the American Arbitration, to
be arbitrated in accordance with its rules and regulations and procedures in Las
Vegas, Nevada. In the event of any such arbitration, pending resolution of the
arbitration and the award of costs by the arbitrator, each party hereto shall
advance one-half of the amounts, if any, requested by the arbitrator and/or the
sponsoring organization.
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IN WITNESS WHEREOF, the parties executed this Agreement as of the
date first written above.
EMPLOYEE
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EMPLOYER
By: _____________________________
Its:______________________________
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