Employment Agreement - eUniverse Inc. and William R. Wagner
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of
April 5, 1999, by and between eUniverse, Inc., a corporation organized under the
laws of the State of Nevada (the "Company"), and William R. Wagner, an
individual residing in Westport, Connecticut (the "Executive").
WHEREAS, the Company desires to employ the Executive, and the Executive
desires to accept such employment, on the terms and subject to the conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the parties hereto hereby agree as follows:
1. TERM OF EMPLOYMENT.
Subject to the terms and conditions of this Agreement, the Company
hereby employs the Executive and the Executive hereby accepts employment with
the Company pursuant to this Agreement for the period commencing on April 5,
1999 (the "Commencement Date"), and ending one (1) year after the Commencement
Date (the "Initial Term"), subject to the termination provisions contained in
Section 11. After the Initial Term, the Executive's employment under this
Agreement shall continue on the same terms and conditions, except that the
Executive shall be an employee-at-will, without a specified term of employment
subject to the notice provisions contained in Section 11(d).
As used herein, the term "Employment Period" shall mean the entire
period of time that the Executive is employed by the Company, inclusive of the
Initial Term, any extensions hereof for a specified period of time, and any
period during which the Executive is an employee-at-will without a specified
term of employment.
2. POSITION; DUTIES AND PLACE OF EMPLOYMENT.
(a) The Company hereby employs the Executive as the Chief Financial
Officer and Secretary. The Executive shall report to the Chief Executive
Officer, Chairman and Board of Directors of the Company; provided, however, that
the Company, in its sole discretion, shall have the right to make changes in the
Executive's reporting assignment. The Executive shall render to the Company such
services as are typically associated with the position in which he is employed,
and any other services that the Company may reasonably require of him.
(b) The Executive shall perform his duties faithfully, diligently and
to the best of his ability in accordance with the reasonable directions and
orders of the person to whom he reports, and the Company's Board of Directors,
or their designees, and shall devote such time, efforts and attention to the
business and affairs of the Company as may reasonably be required to achieve its
objectives and to perform the duties required hereunder. The Executive shall
devote all of his working time, efforts and attention for the benefit of the
Company and to the performance of his duties and responsibilities under this
Agreement.
(c) The Executive shall not render to others any service of any kind
for compensation without the prior approval of the Board of Directors of the
Company, which approval shall be at his sole discretion to grant or deny. The
Executive will not engage in any activity, including any ownership
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interest, which conflicts or interferes with the performance of duties hereunder
or usurps the business interests, existing or potential, of the Company.
(d) The place of employment of the Executive shall be at Wallingford,
Connecticut provided, however, that the Company, in its discretion, shall have
the right to assign the Executive to another location. At any time that the
Company deems it to be appropriate, the Executive shall temporarily work at such
other place or places as may be determined by the Company.
3. COMPENSATION.
During the Initial Term, the Company shall to pay to the Executive, as
compensation for Executive's services and his compliance with this Agreement,
(i) a salary of $125,000 per annum, payable in periodic installments in
accordance with the Company's regular payroll practices; and (ii) those certain
stock options set forth in the stock option letter dated June 15, 1999 and
pursuant to the Company's 1999 Stock Awards Plan. On an annual basis, the
Company shall review the Executive's performance and other relevant factors
relating to salary, and at the time of such review, the salary may be increased
as determined in the sole discretion of the Compensation Committee of the Board
of Directors of the Company. Executive shall be entitled to take a maximum of
four (4) weeks of vacation days during each calendar year.
4. ACCELERATED VESTING OF STOCK OPTIONS UPON A CHANGE OF CONTROL.
In the event of a "Change of Control" of the Company during the
Employment Period, all of the remaining Stock Options granted in Section 3
above, shall immediately Vest as of the date of the Change of Control. "Change
of Control" shall occur:
(a) upon the acquisition by any person, including a group (as defined
in Section 13(d) of the Securities Exchange Act of 1934, as amended), other than
the Company or any of its Subsidiaries or any employee benefit plan maintained
by the Company or any of its Subsidiaries, of beneficial ownership of 50% or
more of the outstanding stock of the Company entitled to vote;
(b) upon the approval by the shareholders of the Company of a
definitive agreement for the merger, consolidation, liquidation,
recapitalization or sale of substantially all of the assets of the Company; or
(c) Upon a sale or other transfer of all or substantially all of the
assets of the Company in one or a series of transactions.
5. BENEFITS.
The Company shall provide the Executive with coverage pursuant to a
medical plan that shall be selected by the Company in its sole discretion. The
Executive shall also be entitled to participate in all other benefit plans
provided by the Company to which Executive is eligible.
6. REIMBURSEMENT OF EXPENSES.
The Company shall reimburse the Executive for normal and reasonable
business expenses incurred by him in the course of his employment, including the
reasonable costs for transportation and accommodations when the Executive is
required to travel away from the location at which he is employed. Such
reimbursement shall be subject to the Company's standard procedures with respect
to
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reimbursement, including such matters as pre-approval requirements, lodging
and meal allowances, and reimbursement rates for automobile travel.
7. CONFIDENTIALITY.
The Executive acknowledges that in connection with his employment by
the Company, he will have access to trade secrets of the Company and other
information and materials which the Company desires to keep confidential,
including customer lists, supplier lists, financial statements, business records
and data, marketing and business plans, and information and materials relating
to the Company's services, products, methods of operation, key personnel,
proprietary software and other proprietary intellectual property and information
disclosed to the Company of third parties to which the Company owes a duty of
nondisclosure (collectively, the "Confidential Information"); provided, however,
that Confidential Information does not include information which (i) is or
becomes publicly known through the lawful action of any party other than the
Executive; (ii) has been made available by the Company, directly or indirectly,
to a non-affiliated third party without obligation of confidentiality; or (iii)
the Executive is obligated to produce as a result of a court order or pursuant
to governmental action or proceeding, provided that the Executive gives the
Company prompt written notice of such requirement prior to such disclosure and
assistance in obtaining an order protecting the information from public
disclosure. The Executive covenants and agrees that, both during and after the
Employment Period, he will keep secret all Confidential Information and will not
disclose, reveal, divulge or otherwise make known any Confidential Information
to any person (other than the Company or its employees or agents in the course
of performing his duties hereunder) or use any Confidential Information for his
own account or for the benefit of any other individual or entity, except with
the prior written consent of the Company.
8. OWNERSHIP OF INTELLECTUAL PROPERTY.
The Executive agrees that all inventions, copyrightable material,
software, formulas, trademarks, trade secrets and the like which are developed
or conceived by the Executive in the course of his employment by the Company or
on the Company's time or property (collectively, the "Intellectual Property"),
shall be disclosed promptly to the Company and the Company shall own all right,
title and interest in and to the Intellectual Property. The parties expressly
agree that any and all of the Intellectual Property developed by the Executive
shall be considered works made-for-hire for the Company pursuant to the United
States Copyright Act of 1976, as amended from time to time. In order to ensure
that the Company shall own all right, title and interest in and to the
Intellectual Property in the event that any of the Intellectual Property is not
deemed a work made-for-hire (as defined in Section 101 of the Copyright Act of
1976) and in any other event, the Executive hereby assigns all such Intellectual
Property to the Company, and the Executive covenants and agrees to affix to the
Intellectual Property appropriate legends and copyright notices indicating the
Company's ownership of all Intellectual Property and all underlying
documentation to the extent reasonably appropriate, and will execute such
instruments of transfer, assignment, conveyance or confirmation as the Company
considers necessary to transfer, confirm, vest, perfect, maintain or defend the
Company's right, title and interest in and to the Intellectual Property
throughout the world.
9. COVENANT TO DELIVER BUSINESS MATERIALS AND TO REPORT.
The Executive acknowledges and agrees that all written materials
including, without limitation, all memoranda, notes, records, reports, programs,
algorithms and other documents or codes (and all copies thereof) concerning the
business or affairs of the Company including, without limitation, the
Intellectual Property, which he created or obtained or which otherwise came into
his possession or control while employed with the Company, are property of the
Company, and the Executive shall promptly return all copies thereof to the
Company after the termination of his employment by the Company. In addition,
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the Executive agrees to render to the Company such reports as it may request
with respect to the activities undertaken by him or conducted under his
direction in connection with his employment by the Company.
10. NON-COMPETITION AGREEMENT.
The Executive hereby acknowledges and recognizes that prior to the date
hereof and during the Employment Period he has been and will be privy to trade
secrets and other Confidential Information which is critical to the business of
the Company; that his services to the Company will be of special, unique and
intellectual character; and that the Company would find it extremely difficult
to replace the Executive. Accordingly, in the event the employment of the
Executive is terminated for any reason, the Executive agrees that, in
consideration of the covenants and agreements of the Company contained in this
Agreement, the sufficiency of which are hereby acknowledged by the Executive, he
will not, directly or indirectly through another person or entity, on his own
behalf or in the service of or on behalf of others, from the date hereof through
the date which is one year after the last day of the Executive's employment by
the Company, (i) engage or participate in, offer, perform or provide any
services, business or products which are competitive with those provided by the
Company or its subsidiaries within the two year period immediately preceding the
date of termination of the Executive's employment by the Company, or (ii)
solicit, or attempt to solicit, persuade or induce any employee, client or
customer of the Company or any of its subsidiaries to terminate or reduce its
business relationship with the Company or any of its subsidiaries.
The Executive understands that the foregoing restrictions may limit his
ability to earn a livelihood in a business similar to the business of the
Company and its subsidiaries, but he nevertheless believes that he has received
and will receive sufficient consideration and other benefits pursuant to this
Agreement to clearly justify such restrictions. In light of his education,
skills and ability, the Executive believes that the foregoing restrictions will
not prevent him from earning a living.
11. RIGHT OF INJUNCTION.
The Executive acknowledges that the harm and injury to the Company
which would result from the breach or threatened breach of any of the provisions
of Sections 6, 7, 8 or 9 of this Agreement (the "Injunctive Sections") by the
Executive cannot be adequately compensated for in money damages. The Executive
further acknowledges that any breach of any of the provisions of the Injunctive
Sections by him would cause the Company irreparable harm. Therefore, the
Executive agrees that in the event of a breach or threatened breach of any of
the provisions of the Injunctive Sections by him, the Company in a lawsuit
seeking an injunction restraining the Executive from such actual or threatened
breach, shall not be required to prove (i) that irreparable harm or injury would
result from the breach of said Sections, or (ii) that the Company has no
adequate remedy at law.
The Executive shall reimburse the Company for all reasonable costs and
expenses (including, without limitation, reasonable attorney's fees and
expenses) incurred in connection with the enforcement of any of the provisions
of the Injunctive Sections if it is determined that the Company was entitled to
such relief.
Nothing contained herein shall be construed as prohibiting the Company
or the Executive from pursuing any other remedies (including, without
limitation, an action for damages) which may be available for any actual or
threatened breach of any provision this Agreement, and the pursuit of an
injunction or any other particular remedy shall not be deemed to be an election
of such remedy to the exclusion of any other remedy.
12. TERMINATION OF EMPLOYMENT.
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(a) Termination by Company for Cause. Notwithstanding anything to the
contrary contained herein, the Company may terminate the employment of the
Executive at any time for Cause (as defined below) upon written notice to the
Executive. As used herein, the term for "Cause" shall be defined as (i) the
Executive shall have committed any material breach of any of the provisions set
forth herein; provided that the Executive shall have been provided written
notice of such breach and shall not have cured or taken steps to cure such
breach within one week after receiving such notice; or (ii) the Executive shall
have committed any act of fraud or willful misconduct in connection with the
performance of his duties or obligations hereunder, or shall have been convicted
of any felony under the laws of the United States or any of its subdivisions (or
pleaded guilty or nolo contendre to any such crime) or any other crime that
relates to the Executive's services to, or employment by, the Company; or (iii)
the Executive shall have committed any material act of misfeasance, malfeasance,
nonfeasance, disloyalty, dishonesty or breach of trust to the detriment of the
Company; or (iv) the Executive shall have willfully failed to follow the
direction of his superiors or the Board of Directors of the Company to the
detriment of the Company; provided that such direction did not require that the
Executive violate any statute, rule or regulation applicable to the Executive;
provided further that the Executive shall have been provided with written notice
of such failure and shall not have cured or taken steps to cure such failure
within such one week after receiving such notice.
(b) Termination Due to Disability. Notwithstanding anything to the
contrary contained herein, but subject to the provisions of applicable law, the
Company shall have the right to terminate the Executive's employment by the
Company upon three (3) months prior written notice if he becomes Disabled (as
hereinafter defined) during the Employment Period. As used herein, "Disabled"
shall mean that the Executive has a physical or mental condition which prevents
him from performing the essential functions required of him pursuant to this
Agreement, with or without accommodation, which condition has continued for a
period of 60 consecutive business days or existed for a total of at least 90
business days in any twelve month period as determined in good faith by the
Board of Directors of the Company.
(c) Termination Due to Death. Notwithstanding anything to the contrary
contained herein, the Executive's employment by the Company shall terminate if
he dies during the Employment Period.
(d) Termination by Either Party. Either party may terminate this
Agreement upon three (3) months prior written notice given to the other party
with termination effective on the last day of such notice period.
13. MISCELLANEOUS PROVISIONS.
(a) Survival of Certain Obligations. The Executive's duties and
obligations under Sections 6, 7, 8 and 9 and the Company's rights under Section
10 of this Agreement and any other provision hereof specifying an obligation or
a right of a party after the termination of Executive's employment or this
Agreement, for any reason whatsoever, shall survive such termination and shall
remain in full force and effect.
(b) Successors and Assigns; Prohibition on Assignment. This Agreement
is binding upon, and shall inure to the benefit of, the Company and its
successors and assigns. With respect to the Executive, this is an agreement for
the performance of personal services. Absent the prior written consent of the
Company, and subject to the terms of the Executive's Will and the laws of
descent and distribution, the Executive shall not assign, transfer, convey,
encumber or otherwise dispose of any of his rights under this Agreement, and
likewise, he shall not assign any of his duties or obligations under this
Agreement.
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(c) No Conflicts. The Executive represents and warrants to, and
covenants with, the Company that the execution and delivery by him of this
Agreement do not, and his performance of his obligations hereunder will not,
constitute a breach of any agreement, written or oral, to which he is a party or
by which he is bound.
(d) Entire Agreement. This Agreement contains all of the
representations, covenants and agreements between the parties hereto with
respect to the subject matter hereof, and constitutes the entire agreement of
the parties with respect to said subject matter. This Agreement supersedes any
and all other prior or contemporaneous agreements, whether oral or in writing,
between the parties with respect to the subject matter thereof, including but
not limited to the Contract of Employment and several addenda thereto, dated
March 25 and 31, 1999.
(e) Construction in Favor of Validity. It is the desire and intent of
the parties hereto that the provisions of this Agreement be enforced to the
fullest extent permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, if any particular
provision of this Agreement shall be adjudicated by a court of competent
jurisdiction to be invalid, prohibited or unenforceable for any reason, such
provision, as to such jurisdiction, shall be ineffective, without invalidating
the remaining provisions of this Agreement or affecting the validity or
enforceability of such provision in any other jurisdiction. Notwithstanding the
foregoing, if such provision could be more narrowly drawn so as not to be
invalid, prohibited or enforceable in such jurisdiction, it shall, as to such
jurisdiction, be so narrowly drawn, without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
(f) Amendment and Waiver. This Agreement may not be amended or modified
except by an instrument in writing signed by the party to be bound thereby.
No delay by either party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any right, power or privilege hereunder. Any failure by either party hereto
to require strict performance by the other party or any waiver by any party
hereto of any term, covenant or agreement herein shall not be construed as a
waiver of any other breach of the same or any other term, covenant or agreement
herein.
(g) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Connecticut without giving effect to
any principles of conflicts of law.
(h) Notices. Any notice required or permitted to be given hereunder
shall be (a) in writing, (b) effective on the first business day following the
date of receipt, and (c) delivered by one of the following means: (i) by
personal delivery; (ii) by prepaid, overnight package delivery or courier
service; (iii) by the United States Postal Service, first class, certified mail,
return receipt requested, postage prepaid; or (iv) by prepaid telecopier, telex,
or other similar means of electronic communication (followed by confirmation on
the same or following day by overnight delivery or by mail as aforesaid). All
notices given under this Agreement shall be addressed as follows:
in the case of the Company:
eUniverse, Inc.
101 North Plains Industrial Road
Wallingford, CT 06492
Attention: President
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and, in the case of the Executive:
William R. Wagner
or to such other addresses or telecopier numbers of which the parties have been
advised in writing by any of the above-described means. Personal delivery to a
party or to any officer, partner, agent, or employee of such party at its
address herein shall constitute receipt. The following shall also constitute
receipt: (i) a party's rejection or other refusal to accept notice, and (ii) the
inability to deliver to a party because of a changed address or telecopier
number of which no notice has been received by the other party. Notwithstanding
the foregoing, no notice of change of address or telecopier number shall be
effective until ten (10) days after the date of receipt thereof. This Section
shall not be construed in any way to affect or impair any waiver of notice or
demand herein provided.
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IN WITNESS WHEREOF, this Agreement was executed by the undersigned as
of the date first above written.
EUNIVERSE, INC.
("Company")
By: /s/ Leland N. Silvas
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Its: President and CEO
/s/ William R. Wagner
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WILLIAM R. WAGNER
("Executive")
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