Employment Agreement - Shbang! Inc. and Kent Kalinoski
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made as of February 1,
1999, by and between Shbang! Inc., a Texas corporation (the "Company"), and Ken
Kalinoski ("Employee").
WHEREAS, pursuant to the terms of that certain Assignment dated as of
the date hereof (the "Assignment") between Employee and the Company, Employee
has transferred certain intellectual property to the Company;
WHEREAS, the Company desires to obtain the services of Employee, and
Employee desires to provide services to the Company, in accordance with the
terms and conditions of this Agreement;
NOW, THEREFORE, for good and valuable consideration, including,
without limitation, the Assignment, the receipt and sufficiency of which are
hereby acknowledged, the Company and Employee agree as follows.
1. Employment. Effective on the Effective Date (as defined in
Section 2) and subject to the terms and conditions of this Agreement, the
Company agrees to employ Employee as its Vice President - Development, and
Employee agrees to perform the duties associated with that position diligently
and to the reasonable satisfaction of the Company's President and Board of
Directors. From the Effective Date until termination of this Agreement,
Employee will devote his full business time, attention and energies to the
business of the Company. Employee will report to the President of the Company
and will comply with the policies and guidelines established by the Company's
Board of Directors from time to time.
2. Term and Termination. Employee will be employed under this
Agreement for an initial term of two years (the "Initial Term"), beginning on
the date of the Agreement (the "Effective Date"). This Agreement shall renew
for successive one year periods after the completion of the Initial Term unless
either party gives written notice of termination at least 30 days prior to the
expiration of the Initial Term or any renewal term. Notwithstanding the
foregoing, either party may terminate this Agreement at any time, with or
without cause, by giving 30 days written notice of termination to the other
party, and upon termination, neither party will have any continuing obligation
to the other party, except as follows: (a) if the Company terminates this
Agreement without Cause (as defined below) prior to the end of the first year of
the Initial Term, then the Company will be obligated to continue paying
Employee's base salary and employee benefits pursuant to Section 4 hereof for a
period of six (6) months after such termination; and (b) the provisions of
Sections 5, 6 and 7 hereof will survive any termination of this Agreement for
any reason in accordance with their terms. As used in this Agreement,
termination for "Cause" shall mean any termination of Employee for (a) refusal
to perform duties assigned, or disobedience of orders and directives issued to
Employee; (b) violation of any rule or regulation of which Employee has notice
and that may be established from time to time for the conduct of the Company's
business, (c) unlawful misconduct by Employee, including, without limitation,
the commission of an act of fraud or embezzlement against the Company or
commission of a crime
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involving moral turpitude, (d) consistent willful misconduct or negligence in
performing Employee's duties hereunder, (e) breach of fiduciary duty in
connection with Employee's employment by the Company or (f) a breach of any of
the terms of this Agreement.
3. Compensation. Beginning on the Effective Date and thereafter
during the term of Employee's employment, the Company will pay Employee a base
salary at the rate of $150,000 per year, payable biweekly or semi-monthly in
accordance with the payroll practices of the Company in effect from time to
time; provided, that as part of the consideration for the Assignment and the
agreements made herein, the Company shall pay to Employee effective on the date
hereof an amount equal to the Employee's bi-weekly or semi-monthly salary. Such
base salary shall be subject to review and potential adjustment annually, in
accordance with the compensation policies of the Company in effect from time to
time. Employee shall also, during the term of his employment hereunder, be
eligible for an annual discretionary incentive bonus of up to 15% of Employee's
base salary, such bonus to be awarded in the discretion of the Company in
accordance with the bonus policies established by the Company from time to time.
All of Employee's compensation under this Agreement will be subject to deduction
and withholding authorized or required by applicable law.
4. Employee Benefits. Beginning on the Effective Date and thereafter
during the term of this Agreement, the Company will provide to Employee such
fringe benefits, perquisites, vacation and other benefits that the Company
provides to its similarly situated employees. The Company will reimburse
Employee for reasonable out-of-pocket business expenses incurred and documented
in accordance with the policies of the Company in effect from time to time.
5. Assignment of Intellectual Property Rights.
(a) In consideration of the Company's agreement to employ
Employee and the receipt by the Employee of Confidential Information,
Employee hereby assigns to the Company all of his rights in all
Intellectual Property which Employee makes or conceives, whether as a sole
inventor or as a joint inventor, whether made within or outside working
hours or upon the premises of the Company or elsewhere, during Employee's
employment with the Company, its subsidiaries or affiliates. This
assignment shall not apply to Intellectual Property that Employee has an
obligation to assign to a former employer. "Intellectual Property" means
any information of a technical and/or business nature such as ideas,
discoveries, inventions, trade secrets, know-how, and writings and other
works of authorship which relate in any manner to the actual or anticipated
business or research and development of the Company, its subsidiaries or
affiliates.
(b) During and subsequent to Employee's employment, upon the
request and at the expense of the Company or its nominee and for no
additional personal remuneration, Employee agrees to execute any instrument
which the Company considers necessary to secure for or maintain for the
benefit of the Company adequate patent and other property rights in the
United States and all foreign countries with respect to any
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Intellectual Property. Employee also agrees to assist the Company as
required to draft said instruments and to obtain and enforce said rights.
(c) Employee agrees to promptly disclose to the Company any
Intellectual Property when conceived or made by Employee, in whole or in
part, and to make and maintain adequate and current records thereof. Upon
the termination of Employee's employment for any reason, Employee agrees to
promptly turn over to the Company all models, prototypes, drawings,
records, documents, and the like in Employee's possession or under
Employee's control, whether prepared by Employee or others, relating to
Intellectual Property, and any other work done for the Company related
thereto. Employee acknowledges that all such items are the sole property
of the Company.
(d) Employee agrees that any Intellectual Property disclosed by
Employee within one (1) year following termination of Employee's employment
for any reason shall be the sole property of the Company unless and until
finally determined by a court of competent jurisdiction to have been made
or conceived after the termination of Employee's employment.
6. Confidential Information.
(a) In the course of performing services for the Company under
this Agreement, Employee may receive or have access to commercially
valuable, confidential or proprietary information. "Confidential
Information" means all confidential information, whether oral or written,
now or hereafter developed, acquired or used by the Company and relating to
the business of the Company that is not generally known to others in the
Company's area of business, including without limitation (to the extent
confidential) (i) any trade secrets, work product, processes, analyses,
know-how, software and hardware development information or other
Intellectual Property of the Company; (ii) the Company's advertising,
product development, strategic and business plans and information; (iii)
customer lists and prices at which the Company has sold or offered to sell
its products or services; and (iv) the Company's financial statements and
other financial information.
(b) Employee acknowledges and agrees that the Confidential
Information (to the extent it can be owned) is and will be the sole and
exclusive property of the Company. Employee will not use any Confidential
Information for his own benefit or disclose any Confidential Information to
any third party (except in the course of performing his authorized duties
for the Company under this Agreement), either during or subsequent to his
employment with the Company. Upon termination of his employment with the
Company, Employee will promptly deliver to the Company all documents,
computer disks and other computer storage devices and other papers and
materials (including all copies thereof in whatever form) containing or
incorporating any Confidential Information or otherwise relating in any way
to the Company's business that are in his possession or under his control.
Employee also agrees not to disclose to the Company any Confidential
Information belonging to others.
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7. Restrictive Covenant. For purposes hereof, the "Noncompetition
Period" will begin on the Effective Date and end eighteen (18) months after the
date Employee's employment with the Company is terminated for any reason. In
consideration of the Company's agreement to employ Employee and the receipt by
the Employee of Confidential Information, Employee hereby agrees that, during
the Noncompetition Period, he will not (except in the course of performing his
authorized duties for the Company under this Agreement), directly or indirectly,
on his own behalf or as an officer, director, employee, consultant or other
agent of, or as a stockholder, partner or other investor in, any person or
entity (other than the Company or its affiliates):
(a) engage in any business conducted by the Company, its
subsidiaries or affiliates and any business competitive with the business
conducted by the Company, its subsidiaries or affiliates (collectively a
"Competing Business") within any geographic area in which the Company, its
subsidiaries or affiliates conducts any business, or in which businesses
competitive with the businesses of the Company, its subsidiaries or
affiliates are conducted (the "Territory"), or give advice or lend credit,
money or Employee's reputation to any natural person or entity engaged in
or establishing a Competing Business in the Territory or;
(b) directly or indirectly influence or attempt to influence any
customer, potential customer, supplier or accounts of the Company, its
subsidiaries or affiliates located within the Territory to purchase, sell
or lease goods or services related to a Competing Business other than from
or to the Company; or
(c) solicit, encourage, or take any other action which is
intended, directly or indirectly, to induce any other employee of the
Company to terminate his or her employment with the Company, or interfere
in any manner with the contractual or employment relationship between the
Company and any other employees of the Company, or hire or attempt to hire
any former employee of the Company whose termination from employment has
been effective for ninety (90) days or less;
provided, that the foregoing will not apply to any investment in publicly traded
securities constituting less than 5% of the outstanding securities in such
class. For purposes of this Agreement, the term "affiliate" means with respect
to any person or entity any other person or entity controlling, controlled by or
under common control with such person or entity.
8. Enforcement.
(a) Employee represents to the Company that he is willing and
able to engage in businesses other than a Competing Business within the
Territory and that enforcement of the restrictions set forth in Section 7
would not be unduly burdensome to Employee. The Company and Employee
acknowledge and agree that the restrictions set forth in Section 7 are
reasonable as to time, geographic area and scope of activity and do not
impose a greater restraint than is necessary to protect the goodwill and
other business interests of the Company, and Employee agrees that that the
Company is justified in believing the foregoing.
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(b) If the provisions of Section 7 are found by a court of
competent jurisdiction to contain unreasonable or unnecessary limitations
as to time, geographical area or scope of activity, then such court is
hereby directed to reform such provisions to the minimum extent necessary
to cause the limitations contained therein as to time, geographical area
and scope of activity to be reasonable and enforceable.
(c) Employee acknowledges and agrees that the Company would be
irreparably harmed by any violation of Employee's obligations under
Sections 5, 6 and 7 hereof and that, in addition to all other rights or
remedies available at law or in equity, the Company will be entitled to
injunctive and other equitable relief to prevent or enjoin any such
violation. If Employee violates Section 7, the period of time during which
the provisions thereof are applicable will automatically be extended for a
period of time equal to the time that Employee began such violation until
such violation permanently ceases.
9. No Obligation to Third Party. Employee represents and warrants
that Employee is not under any obligation to any person or other third party and
does not have any other interest which is inconsistent or in conflict with this
Agreement, or which would prevent, limit, or impair Employee's performance of
any of the covenants hereunder or Employee's duties as an employee of the
Company.
10. Entire Agreement. This Agreement and the Assignment embody the
complete agreement of the parties with respect to the subject matter hereof and
supersedes any prior written, or prior or contemporaneous oral, understandings
or agreements between the parties that related in any way to the subject matter
hereof. This Agreement may be amended only in writing executed by the Company
and Employee.
11. Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the respective heirs, executors, administrators, legal
representatives and successors of the Company and Employee.
12. Notice. Any notice required or permitted under this Agreement
must be in writing and will be deemed to have been given when delivered
personally, by telecopy or by overnight courier service or three days after
being sent by mail, postage prepaid, to (a) if to the Company, to the Company's
principal place of business, or (b) if to Employee, to his residence or to his
latest address then contained in the Company's records (or to such changed
address as such person may subsequently give notice of in accordance herewith).
13. GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH SUBSTANTIVE LAWS OF TEXAS, WITHOUT GIVING
EFFECT TO ANY CONFLICTS OF LAW, RULE OR PRINCIPLE THAT MIGHT REQUIRE THE
APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
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IN WITNESS WHEREOF, the Company and Employee have executed and
delivered this Agreement as of the date first above written.
SHBANG! INC.
By:_________________________________________
Name: Kent Savage
Title: President and Chief Executive Officer
____________________________________________
Name: KEN KALINOSKI
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