EXHIBIT 10.5
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EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") dated as of January 30, 2007 (the
"Date of this Agreement"), is made by and between DigitalPost Interactive, Inc.,
a Nevada corporation (the "Employer"), and Steven Dong (the "Executive").
WHEREAS, the Employer wishes to employ the Executive on the terms set
forth below.
WHEREAS, Executive wishes to accept such employment.
Accordingly, the parties hereto agree as follows:
1. Term. The Employer hereby employs the Executive, and the Executive
hereby accepts such employment, for an initial term commencing as of the Date of
this Agreement and ending on the second anniversary of such date, unless sooner
terminated in accordance with the provisions of Section 4 or Section 5; with
such employment to continue thereafter for successive one-year periods in
accordance with the terms of this Agreement on each anniversary of the Date of
this Agreement (subject to termination as aforesaid) unless either party
notifies the other party in writing not less than thirty (30) days before
expiration of the initial term and each annual renewal thereof (the period
during which the Executive is employed hereunder being hereinafter referred to
as the "Term") of an intent not to renew this Agreement. To the extent Employer
does not obtain a minimum of $2,000,000 in financing with in the 90 days
following the Date of this Agreement ("Floor Amount") then, this Agreement shall
terminate on such 90th day, and become null and void, except for: (i) Section
3.3; (ii) Section 3.6; (iii) Section 3.7; and: (iv) Section 3.11 all of which
shall remain valid pursuant to the terms of this agreement and not be subject to
the limitation of the Floor Amount. If financing of at least $2,000,000 is
obtained within 90 days following the Date of this Agreement, then this entire
Agreement shall remain valid and in full force.
2. Duties. During the Term, the Executive shall be employed by the
Employer as its Chief Financial Officer ("CFO"), and as such, the Executive
shall faithfully perform for the Employer the duties and have the powers
customary for such position, including general financial oversight of the
Employer's operations and preservation of the Company's assets. During the Term,
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Executive shall be required to report to the CEO of the Employer. The Executive
shall devote substantially all of his business time and effort to the
performance of his duties hereunder, and shall work primarily at the Employer's
main business offices.
3. Compensation.
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3.1 Salary. The Employer shall pay the Executive during the Term a
salary at the rate of One Hundred Seventy Five Thousand Dollars ($175,000) per
annum (the "Annual Salary"), in accordance with the customary payroll practices
of the Employer applicable to senior executives, provided the payments are no
less frequent than monthly (or, if there is no such policy, payments shall be
semi-monthly). The Annual Salary shall be annually reviewed by the Employer for
possible increases. The Annual Salary shall be subject to possible further
increase from time to time in the discretion of the CEO or such committee of the
Board as they shall designate for such purpose from time to time. Any increased
Annual Salary shall thereupon be the "Annual Salary" for the purposes hereof.
The Executive's Annual Salary shall not be decreased without his prior written
consent at any time during the Term.
3.2 Incentive Compensation. During the Employment Term, the
Executive shall be eligible to receive, in addition to his Annual Salary, an
annual bonus (the "Bonus") of up to 30% of the Annual Salary. The amount of such
Bonus and any performance standards or goals required to be attained in order to
receive such Bonus shall be set by the CEO or such committee of the Board as
they shall designate for such purpose from time to time based on, but not
limited to, any of the following criteria: (i)amount of capital raised for the
Employer; (ii) positioning of the Employer for a secondary public offering of
the Employer's common stock; (iii) valuation attained for the Employer, as
measured by arm's length investment transactions or market capitalization; (iv)
periodic revenues as measured by total transaction dollars; and (v) entering
into key strategic relationships. The Bonus shall be declared on or before the
thirtieth day following each quarterly period, and paid not later than the last
business day of the quarter following the quarter for which the Bonus is being
paid. Paid bonus as defined in this section 3.2 only is subject to final
approval of the board of directors.
3.3 Stock Options. The Executive was granted options (the "Options")
to purchase Five Hundred Thousand (500,000) shares [pre-merger basis] of the
common stock of the Employer pursuant to previous stock option agreements with
Executive, dated March 15, 2006 (400,000 options) and November 13, 2006
(100,000) which, at the option of the Executive as of their date of grant, may
be intended to qualify as "incentive stock options" within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended. Such options shall
have an exercise price per share as stated in the stock option agreement, which
is equal to or exceeds the agreed fair market value of shares of Employer's
stock as of the date of the stock option agreement. Such Options shall vest
according to the stock option agreements. Pursuant to the stock option
agreements, as a result of the merger on or about January 29, 2007, 50% (or
250,000) of the option to purchase 500,000 (in aggregate) shares were fully
vested as of the date of this agreement. As such, further accelerated vesting
discussed below will be calculated on the remaining 250,000 unvested option
shares. The vesting period shall be subject to possible acceleration in the
discretion of the CEO or such committee of the Board as they shall designate for
such purpose from time to time. Such options shall become fully vested
immediately upon (i) a Change of Control, defined below, of the Employer, or
(ii) a termination of the executive by Employer without Cause (defined in
Section 5.1(a) below, or a termination due to resignation by Executive for Good
Reason (defined in Section 5.2(a) below), if the same occurs within 120 days
prior to the execution and delivery of an acquisition, merger, consolidation or
other agreement which results in a Change of Control. For purposes of this
Agreement "Change of Control" shall be deemed to have occurred if, as a result
of a tender offer, other acquisition, merger, consolidation or sale or transfer
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of assets, any person(s) (as used in Sections 13(d) or 14(d) of the Securities
Exchange Act of 1934 ("SEA")) becomes the beneficial owner (as defined in Rule
13(d)-3 of the SEA) of a total of fifty percent (50%) or more of either the
outstanding shares of Employer's stock or Employer's assets; provided, however,
that a change of control shall not be deemed to have occurred if a person who
beneficially owned 50% or more of the Employer's stock as of the effective date
of this Agreement continued to do so during the term of this Agreement. The
terms of this Section 3.3 shall be included in the applicable stock option
agreement between Employer and Executive relating to the issuance of the
Options.
3.4 Benefits. Except otherwise provided herein, the Executive shall
be entitled to participate in any group life, medical or disability insurance
plans, health programs, retirement plans, fringe benefit programs and similar
benefits that may be available to other senior executives of the Employer
generally, on the same terms as such other executives, to the extent that the
Executive is eligible under the terms of such plans or programs as they may be
in effect from time to time. Employer will provide coverage for the Executive
under the Employer's health benefits plan and will pay 100% of the cost of
spouse or dependent coverage. Coverage under the health benefits plan will be in
effect commencing with the first month following ninety (90) days of employment.
Executive shall receive credit for the 10 months of service as consultant to
Employer.
3.5 Expenses. The Employer shall pay or reimburse the Executive for
all ordinary and reasonable out-of-pocket expenses actually incurred (and, in
the case of reimbursement, paid) by the Executive during the Term in the
performance of the Executive's services under this Agreement, provided that the
Executive submits proof of such expenses, with the properly completed forms as
prescribed from time to time by the Employer, no later than 30 days after the
end of the monthly period in which such expenses have been so incurred. In
addition, the Employer will pay the Executive's reasonable basic relocation
expenses, if any, which shall consist of airfare, moving company expenses and
hotel stays during the transition period, such expenses to be approved in
advance, in writing, by the Company.
3.6 Successful Merger Bonus. The Executive shall be paid thirty
thousand dollars ($30,000) as incentive to sign this Agreement, hold the office
designated herein and successful completion of merger of The Family Post, Inc.
and a subsidiary of the Company on or about January 30, 2007. The obligations
under this Section 3.6 are not cancellable for any reason except for the pro
rata terms of Section 3.11 herein.
3.7 Other Incentive Compensation. Just prior to this agreement,
Executive held the role of consulting CFO of Employer pursuant to an agreement
between Irvine CPA Group, PC ("ICPA") on one hand and Employer on the other,
dated March 15, 2006. Executive is owner of ICPA. Employer agrees to allow
Executive flexibility to wind down ICPA business and transition from ICPA to
Employer such that Executive may need to attend meetings during normal business
hours outside of Employers office for business of ICPA during the first ninety
days of this agreement. To the extent Executive does not work a 160 hours per
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month during the transition period, Executives pay shall be pro-rated based upon
the monthly salary rate times the ratio of the actual monthly time worked
divided by the standard 160 hour month. For example, if Executive works only 120
hours during one monthly period, then, Executives pay shall be the normal
monthly rate of $14,583.33 times the ratio of 75% (120 hours / 160 hours) which
equals $10,937.50. Furthermore, as incentive for Executive to transition from
ICPA to Employer, Employer agrees to pay additional following amounts as
additional incentive compensation:
- - Employer shall pay Executive Twenty Thousand dollars ($20,000) due on March
31, 2007.
- - Employer shall pay Executive Twenty Thousand dollars ($20,000) due on May 15,
2007.
- Employer shall pay Executive Fifteen Thousand dollars ($15,000) due on August
15, 2007.
- - Employer shall pay Executive Fifteen Thousand dollars ($15,000) due on
November 15, 2007.
The obligations under this Section 3.7 are not cancelable due to termination of
this Agreement for any reason except for the pro-rata terms under section 311.
3.8 Executive is a currently licensed Certified Public Accountant
(CPA) in good standing with the California State Board of Accountancy and
American Institute of CPAs. Employer shall also indirectly benefit from
Executive having such CPA designation, as such, Employer agrees to reimburse
Executive for all costs of keeping current Executives CPA license. Such
reimbursed costs shall not exceed $2,500 and be used for licensing fees,
professional memberships and continuing professional education (CPE) courses or
seminars, which Employer shall allow Executive to attend such CPE courses or
seminars from time to time during the term of this Agreement.
3.9 Paid Time Off. Executive is eligible for paid vacations,
personal holidays, and sick leave. The Employee handbook describes Employers
current policies regarding these benefits. As a member of Employers executive
management team, Executive will be eligible to accrue up to four (4) weeks
annual paid vacation in addition to those paid holidays recognized in Employers
policies.
3.10 Unpaid Time Off. As additional benefit to Executive, in
addition to the paid time off in Section 3.10, Employer shall allow Executive up
to two (2) additional weeks of unpaid vacation annually. It is Executives sole
discretion to take or not take unpaid time off. Scheduling of such unpaid time
off shall be approved by the CEO.
3.11 To the extent there is not any financing obtained in 2007, the
above additional compensation defined in Section 3.6, and Section 3.7, the sum
of which is equal to an aggregate of $100,000 additional compensation
("Financing Compensation") is cancelable by Employer except for the following
condition: to the extent financing obtained is less than $4,000,000, the
Financing Compensation of $100,000 shall be reduced by a number that is equal to
$100,000 multiplied by the "Lessor Financing Ratio" which is the amount raised
in the financing divided by $4,000,000 . For example, if only $3,000,000 is
raised, then the Lesser Financing Ratio is 75% ($3,000,000/$4,000,000),
therefore the $100,000 Financing Compensation will be reduced to $75,000 (75%
multiplied by $100,000). To the extent financing is obtained in an amount
greater than $4,000,000, then all compensation due under Section 3.6, is due and
payable to Executive . Any payment of the Financing Compensation to Executive
shall be immediately paid in a single full amount upon closing of any financing.
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4. Termination upon Death or Disability. If the Executive dies during the
Term, the Term shall terminate as of the date of death, and the obligations of
the Employer to or with respect to the Executive shall terminate in their
entirety upon such date except as otherwise provided under this Section 4. If
the Executive becomes disabled for purposes of the long-term disability plan of
the Employer for which the Executive is eligible, or, in the event that there is
no such plan, if the Executive by virtue of ill health or other disability is
unable to perform substantially and continuously the duties assigned to him for
more than 180 consecutive or non-consecutive days out of any consecutive
12-month period, then the Employer shall have the right, to the extent permitted
by law, to terminate the employment of the Executive upon notice in writing to
the Executive. Upon termination of employment due to death or disability, (i)
the Executive (or the Executive's estate or beneficiaries in the case of the
death of the Executive) shall be entitled to receive any Annual Salary and other
benefits earned and accrued under this Agreement prior to the date of
termination (and reimbursement under this Agreement for expenses incurred prior
to the date of termination), including, but not limited to a pro-rata Bonus for
the year of termination (which in no event shall be less than a similar pro-rata
portion of the Executive's bonus for the preceding year) to be paid at such time
as Bonuses are ordinarily paid; (ii) in the case of termination due to
disability, the Executive shall be entitled to receive his Annual Salary for the
lesser of six (6) months following such termination, or the period until long
term disability insurance benefits commence under disability coverage furnished
by the Employer to the Executive; and (iii) the Executive (or, in the case of
his death, his estate and beneficiaries) shall have no further rights to any
other compensation or benefits hereunder on or after the termination of
employment, or any other rights hereunder, except as otherwise provided in the
plans and policies of the Employer.
5. Certain Terminations of Employment.
5.1 Termination for Cause; Termination of Employment by the
Executive without Good Reason.
(a) For purposes of this Agreement, "Cause" shall mean the
Executive's:
(i) conviction of (or pleading nolo contendere to) a felony
involving the crime of theft or a related or similar act of unlawful
taking, or a felony involving the federal or California securities or
pension laws, or any felony , which results in material economic harm to
the Employer;
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(ii) engagement in the performance of his duties hereunder or
otherwise to the material and demonstrable detriment of the Employer, in
willful misconduct, willful or gross neglect, fraud, misappropriation or
embezzlement;
(iii) After notice from the Board of Directors, and, if
requested by Executive, the opportunity to be heard by the Board of
Directors, the failure to adhere to the lawful and reasonable directions
of the Board that are consistent with the terms of this Agreement, or the
failure to devote substantially all of the business time and effort to the
Employer (except for any activities expressly authorized by the Employer);
(iv) material breach of any of the provisions of Section 6,
other than inadvertent breaches; or
(v) breach in any material respect of the terms and provisions
of this Agreement and failure to cure such breach within thirty (30) days
following written notice from the Employer specifying such breach;
provided however, if Executive delivers written notice to Employer during
the 30 day cure period requesting to be heard at a meeting of the Board of
Directors, his termination under this Section 5.2(a)(v) shall not be
effective until such Board of Directors meeting at which Executive had an
opportunity to be heard.
provided that Cause shall not exist except on written notice given to the
Executive at any time not more than 60 days following the occurrence of any of
the events described above (or, if later, the Employer's knowledge thereof),
which events in any case must have occurred after the effective date of this
Agreement.
(b) The Employer may terminate the Executive's employment hereunder
for Cause, and the Executive may terminate his employment for any or no reason
on at least 30 days' and not more than 60 days' written notice given to the
Employer. If the Employer terminates the Executive for Cause, or the Executive
terminates his employment and the termination by the Executive is not covered by
Section 4 or 5.2, (i) the Executive shall receive Annual Salary and other
benefits earned and accrued under this Agreement prior to the termination of
employment (and reimbursement under this Agreement for expenses incurred prior
to the termination of employment); and (ii) the Executive shall have no further
rights to any other compensation or benefits hereunder on or after the
termination of employment, or any other rights hereunder, except as otherwise
provided in the plans and policies of the Employer.
5.2 Termination by the Employer without Cause; or by the Executive
for Good Reason.
(a) For purposes of this Agreement, "Good Reason" shall mean, unless
otherwise consented to in writing by the Executive;
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(i) a reduction in Annual Salary or in benefits of the
Executive, or the failure of the Employer timely to make any Annual Salary
payment due to the Executive, provided that such deferral or failure to pay
continues unremedied for more than thirty (30) days;
(ii) any action by the Employer that results in a material
diminution in the Executive's position, authority, duties or
responsibilities; provided that the appointment to the office of Chief
Financial Officer of another person approved by the Executive shall be
deemed not to be a material diminution in the Executive's position,
authority, duties or responsibilities;
(iii) a material breach of any provision of this Agreement by
the Employer or;
(iv) a failure of the Employer to have a successor entity
specifically assume this Agreement.
Notwithstanding the foregoing, (i) Good Reason shall not be deemed to exist
unless notice of termination on account thereof (specifying a termination date
no later than 30 days from the date of such notice) is given no later than 60
days after the time at which the event or condition purportedly giving rise to
Good Reason first occurs or arises (or when the Executive first becomes aware of
such circumstances); and (ii) if there exists (without regard to this clause
(ii)) an event or condition that constitutes Good Reason, the Employer shall
have 30 days from the date notice of such a termination is given to cure such
event or condition and, if the Employer does so fully cure such event or
condition, such event or condition shall not constitute Good Reason hereunder.
(b) The Employer may terminate the Executive's employment at any
time for any reason or no reason and the Executive may terminate the Executive's
employment with the Employer for Good Reason. A notice of non-renewal shall
constitute a termination of employment by the Employer without Cause.
(c) If the Employer terminates the Executive's employment and the
termination is not covered by Section 4 or 5.1, or the Executive terminates his
employment for Good Reason, the Executive shall receive:
(i) Annual Salary and other benefits earned and accrued under
this Agreement prior to the termination of employment (and reimbursement
under this Agreement for expenses incurred prior to the termination of
employment);
(ii) the greater of (A) the Annual Salary for the unexpired
Term of this Agreement, payable over such term or (B) one (1) times the
Annual Salary payable in accordance with standard payroll practices of the
Company;
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(iii) not applicabe;
(iv) reimbursement for COBRA payments equal to employee's
regular monthly contributions toward the Executive's health insurance
benefits for the twelve (12) month period following the termination date
if the Executive elects COBRA benefits, and;
(v) the right to exercise any or all vested stock options for
a period of twelve (12) months after the effective date of termination of
Executive's employment; provided however, (A) in the event the termination
occurs within 120 days of the execution of a Change of Control agreement
as provided in Section 3.3 above, vesting of all options shall be
accelerated as provided in Section 3.3 above, and (B) in the event the
termination occurs at a time not within such 120 day period, for purposes
of this provision, all unvested options that would have vested had this
Agreement remained in force through the end of the initial Term, shall be
fully vested immediately prior to the termination under this Section
5.2(c); The provisions of this subparagraph (v) shall be included in any
stock option agreement between the Employer and the Executive.
(vi) all incentive pay amounts as outlined in Section 3.6
through Section 3.10 above without any limitations or any conditions,
except for the limitations provided for in Section 2 and Section 3.11
above.
In order to be eligible to receive the benefits specified under sections
5.2(c)(ii) - (iv), the Executive must execute a general release of claims in a
form acceptable to the Employer, which shall not apply to the Employer's
obligations described above in this Section 5.2(c).
6. Invention, Non-Disclosure and Non-Competition.
6.1 Inventions and Patents.
(a) The Executive will promptly and fully disclose to the Employer
any and all inventions, discoveries, improvements, ideas, developments, designs,
products, formulas, software programs, processes, techniques, technology,
know-how, negative know-how, data, research, technical data and original works
of authorship (whether or not patentable or registrable under patent, copyright
or similar statutes and including all rights to obtain, register, perfect and
enforce those proprietary interests) that are related to or useful in the
Employer's present or future business or result from use of property owned,
leased, or contracted for by the Employer and which the Executive develops,
makes, conceives or reduces to practice during the Executive's employment by the
Employer, either solely or jointly with others (collectively, the
"Developments"). All such Developments shall be the sole property of the
Employer, and the Executive hereby assigns to the Employer, without further
compensation, all of the Executive's right, title and interest in and to such
Developments and any and all related patents, patent applications, copyrights,
copyright applications, trademarks, service marks and trade names in the United
States and elsewhere.
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(b) The Executive shall disclose promptly to an officer or to
attorneys of the Employer in writing any inventions, discoveries, improvements,
ideas, developments, designs, products, formulas, software programs, processes,
techniques, technology, know-how, negative know-how, data, research, technical
data and original works of authorship, whether or not patentable or registrable
under patent, copyright or similar statutes, the Executive may conceive, make,
develop or work on, in whole or in part, solely or jointly with others during
the Executive's employment, for the purpose of permitting the Employer to
determine whether they constitute Developments. The Employer shall receive such
disclosures in confidence.
(c) The Executive will keep and maintain adequate and current
written records of all Developments (in the form of notes, sketches, drawings
and as may be specified by the Employer), which records shall be available to
and remain the sole property of the Employer at all times.
(d) The Executive will assist the Employer in obtaining and
enforcing patent, copyright, trademark, service marks and other forms of legal
protection for the Developments in any country. Upon request, the Executive will
sign all applications, assignments, instruments and papers and perform all acts
necessary or desired by the Employer to assign all such Developments fully and
completely to the Employer and to enable the Employer, its successors, assigns
and nominees, to secure and enjoy the full and exclusive benefits and advantages
thereof.
(e) The Executive understands that the Executive's obligations under
this section will continue after the termination of the Executive's employment
with the Employer and that during the Executive's employment the Executive will
perform such obligations without further compensation, except for reimbursement
of expenses incurred at the request of the Employer. The Executive further
understands that if the Executive is not employed by the Employer as an employee
at the time the Executive is requested to perform any obligations under this
section, the Executive shall receive for such performance a reasonable per diem
fee, as well as reimbursement of any expenses incurred at the request of the
Employer.
(f) Any provision in this Agreement requiring the Executive to
assign the Executive's rights in all Developments shall not apply to an
invention that qualifies fully under the provisions of California Labor Code
section 2870, the terms of which are set forth below:
(i) Any provision in an employment agreement which provides
that an employee shall assign, or offer to assign, any of his or her
rights in an invention to his or her employer shall not apply to an
invention that the employee developed entirely on his or her own time
without using the employer's equipment, supplies, facilities, or trade
secret information except for those inventions that either:
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(1) Relate at the time of conception or reduction to
practice of the invention to the employer's business, or actual or
demonstrably anticipated research or development of the employer; or
(2) Result from any work performed by the employee for
the employer.
(ii) To the extent a provision in an employment agreement
purports to require an employee to assign an invention otherwise excluded
from being required to be assigned under subdivision (i), the provision is
against the public policy of this state and is unenforceable.
6.2 Proprietary Information.
(a) The Executive recognizes that the Executive's relationship with
the Employer is one of high trust and confidence by reason of the Executive's
access to and contact with the trade secrets and confidential and proprietary
information of the Employer including, without limitation, information not
previously disclosed to the public regarding current and projected revenues,
expenses, costs, profit margins and any other financial and budgeting
information; marketing and distribution plans and practices; business plans,
opportunities, projects and any other business and corporate strategies; product
information; names, addresses, terms of contracts and other arrangements with
customers, suppliers, agents and employees of the Employer; confidential and
sensitive information regarding other employees, including information with
respect to their job descriptions, performance strengths and weaknesses, and
compensation; and other information not generally known regarding the business,
affairs and plans of the Employer (collectively, the "Proprietary Information").
The Executive acknowledges and agrees that Proprietary Information is the
exclusive property of the Employer and that the Executive shall not at any time,
either during the Executive's employment with the Employer or thereafter
disclose to others, or directly or indirectly use for the Executive's own
benefit or the benefit of others, any of the Proprietary Information.
(b) The Executive acknowledges that the unauthorized use or
disclosure of Proprietary Information would be detrimental to the Employer and
would reasonably be anticipated to materially impair the Employer's value.
(c) The Executive's undertakings and obligations under this Section
6.2 will not apply, however, to any Proprietary Information which: (a) is or
becomes generally known to the public through no action on the Executive's part,
(b) is generally disclosed to third parties by the Employer without restriction
on such third parties, (c) is approved for release by written authorization of
the Board, (d) is known to the Executive other than as a result of work
performed for the Employer, or (e) is required to be disclosed by law or
governmental or court process or order.
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(d) Upon termination of the Executive's employment with the Employer
or at any other time upon request, the Executive will promptly deliver to the
Employer all notes, memoranda, notebooks, drawings, records, reports, written
computer code, files and other documents (and all copies or reproductions of
such materials) in the Executive's possession or under the Executive's control,
whether prepared by the Executive or others, which contain Proprietary
Information. The Executive acknowledges that this material is the sole property
of the Employer.
6.3 Covenant Not to Compete.
(a) During the time that this Agreement is in effect, the Executive
shall not directly or indirectly:
(i) own, engage in, conduct, manage, operate, participate in,
be employed by, be connected in any manner whatsoever with, or render services
or advice to (whether for compensation or without compensation), any other
person or business entity which, in the sole judgment of the Employer, directly
or indirectly competes with the Business of the Employer (as hereinafter
defined); or
(ii) recruit or otherwise solicit or induce any employee of
the Employer to terminate his or her employment with, or otherwise cease
his or her relationship with, the Employer in order to join any person or
entity which, in the sole judgment of the Employer, competes with the
Business of the Employer.
(b) For a period of 12 months after the expiration or termination of
this Agreement, the Executive shall not directly or indirectly recruit or
otherwise solicit or induce any employee of the Employer to terminate his or her
employment with, or otherwise cease his or her relationship with, the Employer
in order to join any person or entity which, in the sole judgment of the
Employer, competes with the business of the employer as engaged in at the
expiration or termination of this Agreement.
(c) The obligations set forth in paragraphs 6.3(a) and (b) above
shall not restrict the Executive's right to invest in the securities (not to
exceed 1% of the outstanding securities of any class) of any publicly-held
corporation in the management of which the Executive does not participate.
(d) For purposes of Section 6.3(a), "Business of the Employer"
means the business of Employer as engaged in internet website provider from time
to time during the term] of this Agreement.
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6.4 Absence of Restrictions Upon Disclosure and Competition.
(a) The Executive hereby represents that, except as the Executive
has disclosed in writing to the Employer on Exhibit A attached hereto, the
Executive is not bound by the terms of any agreement with any previous employer
or other party to refrain from using or disclosing any trade secret or
confidential or proprietary information in the course of the Executive's
employment with the Employer or to refrain from competing, directly or
indirectly, with the business of such previous employer or any other party.
(b) The Executive further represents that the Executive's
performance of all the terms of this Agreement and as an employee of the
Employer does not and will not breach any agreement to keep in confidence
proprietary information, knowledge or data acquired by the Executive in
confidence or in trust prior to his employment with the Employer, and the
Executive will not disclose to the Employer or induce the Employer to use any
confidential or proprietary information or material belonging to any previous
employer or others.
6.5 Other Obligations. The Executive acknowledges that the Employer
from time to time may have agreements with other persons or with the U.S.
Government or agencies thereof, which impose obligations or restrictions on the
Employer regarding inventions made during the course of work under such
agreements or regarding the confidential nature of such work. The Executive
agrees to be bound by all such obligations and restrictions which are made known
to the Executive and to take all action necessary to discharge the obligations
of the Employer under such agreements.
6.6 Rights and Remedies upon Breach. The Executive acknowledges and
agrees that any breach by him of any of the provisions of Section 6 (the
"Restrictive Covenants") would result in irreparable injury and damage for which
money damages may not provide an adequate remedy. Therefore, if the Executive
breaches any of the provisions of Section 6, the Employer shall have the
following rights and remedies, each of which rights and remedies shall be
independent of the other and severally enforceable, and all of which rights and
remedies shall be in addition to, and not in lieu of, any other rights and
remedies available to the Employer under law or in equity (including, without
limitation, the recovery of damages) the right and remedy to have the
Restrictive Covenants specifically enforced (without posting bond and without
the need to prove damages) by any court having equity jurisdiction, including,
without limitation, the right to an entry against the Executive of restraining
orders and injunctions (preliminary, mandatory, temporary and permanent) against
violations, threatened or actual, and whether or not then continuing, of such
covenants.
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7. Other Provisions.
7.1 Severability. The Executive acknowledges and agrees that (i) he
has had an opportunity to seek advice of counsel in connection with this
Agreement and (ii) the Restrictive Covenants are reasonable in geographical and
temporal scope and in all other respects. If it is determined that any of the
provisions of this Agreement, including, without limitation, any of the
Restrictive Covenants, or any part thereof, is invalid or unenforceable, the
remainder of the provisions of this Agreement shall not thereby be affected and
shall be given full effect, without regard to the invalid portions.
7.2 Duration and Scope of Covenants. If any court or other
decision-maker of competent jurisdiction determines that any of the Executive's
covenants contained in this Agreement, including, without limitation, any of the
Restrictive Covenants, or any part thereof, is unenforceable because of the
duration or geographical scope of such provision, then, after such determination
has become final and unappealable, the duration or scope of such provision, as
the case may be, shall be reduced so that such provision becomes enforceable
and, in its reduced form, such provision shall then be enforceable and shall be
enforced.
7.3 Resolution of Differences Over Breaches of Agreement. The
parties shall use good faith efforts to resolve any controversy or claim arising
out of, or relating to this Agreement or the breach thereof. If, despite their
good faith efforts, the parties are unable to resolve such controversy or claim
through the Employer's internal review procedures, then such controversy or
claim shall be resolved by binding arbitration before a single, mutually
acceptable arbitrator under the rules of the Judicial Arbitration and Mediation
Service in Orange County, California and judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof. If any
contest or dispute shall arise between the Employer and the Executive regarding
any provision of this Agreement, the prevailing party, as determined by the
Arbitrator, shall be entitled to an award of all legal fees, costs, and expenses
reasonably incurred in connection with such contest or dispute.
7.4 Notices. All notices or deliveries authorized or required
pursuant to this Agreement shall be deemed to have been given when in writing
and when (i) deposited in the U.S. mail, certified, return receipt requested,
postage prepaid, or (ii) otherwise delivered by hand or by overnight delivery,
against written receipt, by a common carrier or commercial courier or delivery
service addressed to the parties at the following addresses or to such other
addresses as either may designate in writing to the other party:
to the Employer:
DigitalPost Interactive, Inc.
One Peters Canyon Rd.
Suite 150
Irvine, CA 92653
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to the Executive:
Mr. Steven Dong
4790 Irvine Blvd., #105-243
Irvine, CA 92620
7.5 Entire Agreement. This Agreement, together with the Option
Agreement described in Section 3.3, contains the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
agreements, written or oral, with respect thereto.
7.6 Waivers and Amendments. This Agreement may be amended,
superseded, canceled, renewed or extended, and the terms hereof may be waived,
only by a written instrument signed by the parties or, in the case of a waiver,
by the party waiving compliance. No delay on the part of any party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any such right, power or privilege
nor any single or partial exercise of any such right, power or privilege,
preclude any other or further exercise thereof or the exercise of any other such
right, power or privilege.
7.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES.
7.8 Assignment. This Agreement, and the Executive's rights and
obligations hereunder, may not be assigned by the Executive; any purported
assignment by the Executive in violation hereof shall be null and void. In the
event of any sale, transfer or other disposition of all or substantially all of
the Employer's assets or business, whether by merger, consolidation or
otherwise, the Employer may assign this Agreement and its rights hereunder;
provided that such assignment shall not limit the Employer's liability under
this Agreement to the Executive.
7.9 Withholding. The Employer shall be entitled to withhold from any
payments or deemed payments any amount of tax withholding required by law.
7.10 Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors, permitted
assigns, heirs, executors and legal representatives.
7.11 Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original but all such counterparts together shall constitute one and
the same instrument. Each counterpart may consist of two copies hereof each
signed by one of the parties hereto.
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7.12 Survival. Anything contained in this Agreement to the contrary
notwithstanding, the provisions of Sections 6, 7. 3, 7. 9 and 7.14, and the
other provisions of this Section 7 (to the extent necessary to effectuate the
survival of Sections 6, 7.3, 7.9 and 7.14), shall survive termination of this
Agreement and any termination of the Executive's employment hereunder.
7.13 Headings. The headings in this Agreement are for reference only
and shall not affect the interpretation of this Agreement.
7.14 Indemnification; Directors and Officers Insurance. To the
fullest extent permitted by law, the Employer shall indemnify, defend and hold
harmless the Executive from and against all actual or threatened actions, suits
or proceedings, whether civil or criminal, administrative or investigative,
together with all attorneys' fees and costs, fines, judgments or settlements
imposed upon or incurred by the Executive in connection therewith, that arise
from the Executive's employment by, or serving as an officer of, the Employer,
so long as the Executive acted or refrained from acting legally and in good
faith or reasonably believed that his actions or refraining from acting were
legal and performed or omitted in good faith. Employer currently has directors
and officers liability insurance and will use reasonable efforts to maintain
such insurance coverage during the term of this Agreement.
IN WITNESS WHEREOF, the parties hereto have signed their names as of the day
and year first above written to this Executive Agreement.
EMPLOYER
DigitalPost Interactive, Inc.,
a Nevada corporation
By:
- -------------------
Mike Sawtell, CEO, President and Director
EXECUTIVE
- ----------------------
Steven Dong
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INDEMNITY AGREEMENT
THIS AGREEMENT is made and entered into this 30th day of January 2007 by and
between DigitalPost Interactive, Inc. a California corporation (the
"Corporation"), and Steven Dong ("Agent").
RECITALS
WHEREAS, Agent performs a valuable service to the Corporation in his capacity as
Director and/or Executive Officer of the Corporation;
WHEREAS, the stockholders of the Corporation have adopted bylaws (the "Bylaws")
providing for the indemnification of the directors, officers, employees and
other agents of the Corporation, including persons serving at the request of the
Corporation in such capacities with other corporations or enterprises, as
authorized by the California Corporation Law, as amended (the "Code");
WHEREAS, the Bylaws and the Code, by their non-exclusive nature, permit
contracts between the Corporation and its agents, officers, employees and other
agents with respect to indemnification of such persons; and
WHEREAS, in order to induce Agent to continue to serve as Director and/or
Executive Officer of the Corporation, the Corporation has determined and agreed
to enter into this Agreement with Agent;
NOW, THEREFORE, in consideration of Agent's continued service as Director and/or
Executive Officer after the date hereof, the parties hereto agree as follows:
AGREEMENT
1. SERVICES TO THE CORPORATION. Agent will serve, at the will of the Corporation
or under separate contract, if any such contract exists, as Director and/or
Executive Officer of the Corporation or as a director, officer or other
fiduciary of an affiliate of the Corporation (including any employee benefit
plan of the Corporation) faithfully and to the best of his ability so long as he
is duly elected and qualified in accordance with the provisions of the Bylaws or
other applicable charter documents of the Corporation or such affiliate;
PROVIDED, HOWEVER, that Agent may at anytime and for any reason resign from such
position (subject to any contractual obligation that Agent may have assumed
apart from this Agreement) and that the Corporation or any affiliate shall have
no obligation under this Agreement to continue Agent in any such position.
2. INDEMNITY OF AGENT. The Corporation hereby agrees to hold harmless and
indemnify Agent to the fullest extent authorized or permitted by the provisions
of the Bylaws and the Code, as the same may be amended from time to time (but,
only to the extent that such amendment permits the Corporation to provide
broader indemnification rights than the Bylaws or the Code permitted prior to
adoption of such amendment).
3. ADDITIONAL INDEMNITY. In addition to and not in limitation of the
indemnification otherwise provided for herein, and subject only to the
exclusions set forth in Section 4 hereof, the Corporation hereby further agrees
to hold harmless and indemnify Agent:
(a) against any and all expenses (including attorneys' fees), witness fees,
damages, judgments, fines and amounts paid in settlement and any other amounts
that Agent becomes legally obligated to pay because of any claim or claims made
against or by him in connection with any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, arbitrational,
administrative or investigative (including an action by or in the right of the
Corporation) to which Agent is, was or at any time becomes a party, or is
threatened to be made a party, by reason of the fact that Agent is, was or at
any time becomes a director, officer, employee or other agent of Corporation, or
is or was serving or at any time serves at the request of the Corporation as a
director, officer, employee or other agent of another corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise; and
(b) otherwise to the fullest extent as may be provided to Agent by the
Corporation under the non-exclusivity provisions of the Code and Section 41 of
the Bylaws.
4. LIMITATIONS ON ADDITIONAL INDEMNITY. No indemnity pursuant to Section 3
hereof shall be paid by the Corporation:
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(a) on account of any claim against Agent solely for an accounting of profits
made from the purchase or sale by Agent of securities of the Corporation
pursuant to the provisions of Section 16(b) of the Securities Exchange Act of
1934 and amendments thereto or similar provisions of any federal, state or local
statutory law;
(b) on account of Agent's conduct that is established by a final judgment as
knowingly fraudulent or deliberately dishonest or that constituted willful
misconduct;
(c) on account of Agent's conduct that is established by a final judgment as
constituting a breach of Agent's duty of loyalty to the Corporation or resulting
in any personal profit or advantage to which Agent was not legally entitled;
(d) for which payment is actually made to Agent under a valid and collectible
insurance policy or under a valid and enforceable indemnity clause, bylaw or
agreement, except in respect of any excess beyond payment under such insurance,
clause, bylaw or agreement;
(e) if indemnification is not lawful (and, in this respect, both the Corporation
and Agent have been advised that the Securities and Exchange Commission believes
that indemnification for liabilities arising under the federal securities laws
is against public policy and is, therefore, unenforceable and that claims for
indemnification should be submitted to appropriate courts for adjudication); or
(f) in connection with any proceeding (or part thereof) initiated by Agent, or
any proceeding by Agent against the Corporation or its directors, officers,
employees or other agents, unless (i) such indemnification is expressly required
to be made by law, (ii) the proceeding was authorized by the Board of Directors
of the Corporation, (iii) such indemnification is provided by the Corporation,
in its sole discretion, pursuant to the powers vested in the Corporation under
the Code, or (iv) the proceeding is initiated pursuant to Section 9 hereof.
5. CONTINUATION OF INDEMNITY. All agreements and obligations of the Corporation
contained herein shall continue during the period Agent is a director, officer,
employee or other agent of the Corporation (or is or was serving at the request
of the Corporation as a director, officer, employee or other agent of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise) and shall continue thereafter so long as Agent shall be subject to
any possible claim or threatened, pending or completed action, suit or
proceeding, whether civil, criminal, arbitrational, administrative or
investigative, by reason of the fact that Agent was serving in the capacity
referred to herein.
6. PARTIAL INDEMNIFICATION. Agent shall be entitled under this Agreement to
indemnification by the Corporation for a portion of the expenses (including
attorneys' fees), witness fees, damages, judgments, fines and amounts paid in
settlement and any other amounts that Agent becomes legally obligated to pay in
connection with any action, suit or proceeding referred to in Section 3 hereof
even if not entitled hereunder to indemnification for the total amount thereof,
and the Corporation shall indemnify Agent for the portion thereof to which Agent
is entitled.
7. NOTIFICATION AND DEFENSE OF CLAIM. Not later than thirty (30) days after
receipt by Agent of notice of the commencement of any action, suit or
proceeding, Agent will, if a claim in respect thereof is to be made against the
Corporation under this Agreement, notify the Corporation of the commencement
thereof; but the omission so to notify the Corporation will not relieve it from
any liability which it may have to Agent otherwise than under this Agreement.
With respect to any such action, suit or proceeding as to which Agent notifies
the Corporation of the commencement thereof:
(a) the Corporation will be entitled to participate therein at its own expense;
(b) except as otherwise provided below, the Corporation may, at its option and
jointly with any other indemnifying party similarly notified and electing to
assume such defense, assume the defense thereof, with counsel reasonably
satisfactory to Agent. After notice from the Corporation to Agent of its
election to assume the defense thereof, the Corporation will not be liable to
Agent under this Agreement for any legal or other expenses subsequently incurred
by Agent in connection with the defense thereof except for reasonable costs of
investigation or otherwise as provided below. Agent shall have the right to
employ separate counsel in such action, suit or proceeding but the fees and
expenses of such counsel incurred after notice from the Corporation of its
assumption of the defense thereof shall be at the expense of Agent unless (i)
the employment of counsel by Agent has been authorized by the Corporation, (ii)
Agent shall have reasonably concluded, and so notified the Corporation, that
there is an actual conflict of interest between the Corporation and Agent in the
17
conduct of the defense of such action or (iii) the Corporation shall not in fact
have employed counsel to assume the defense of such action, in each of which
cases the fees and expenses of Agent's separate counsel shall be at the expense
of the Corporation. The Corporation shall not be entitled to assume the defense
of any action, suit or proceeding brought by or on behalf of the Corporation or
as to which Agent shall have made the conclusion provided for in clause (ii)
above; and
(c) the Corporation shall not be liable to indemnify Agent under this Agreement
for any amounts paid in settlement of any action or claim effected without its
written consent, which shall not be unreasonably withheld. The Corporation shall
be permitted to settle any action except that it shall not settle any action or
claim in any manner which would impose any penalty or limitation on Agent
without Agent's written consent, which may be given or withheld in Agent's sole
discretion.
8. EXPENSES. The Corporation shall advance, prior to the final disposition of
any proceeding, promptly following request therefore, all expenses incurred by
Agent in connection with such proceeding upon receipt of an undertaking by or on
behalf of Agent to repay said amounts if it shall be determined ultimately that
Agent is not entitled to be indemnified under the provisions of this Agreement,
the Bylaws, the Code or otherwise.
9. ENFORCEMENT. Any right to indemnification or advances granted by this
Agreement to Agent shall be enforceable by or on behalf of Agent in any court of
competent jurisdiction if (i) the claim for indemnification or advances is
denied, in whole or in part, or (ii) no disposition of such claim is made within
ninety (90) days of request therefore. Agent, in such enforcement action, if
successful in whole or in part, shall be entitled to be paid also the expense of
prosecuting his claim. It shall be a defense to any action for which a claim for
indemnification is made under Section 3 hereof (other than an action brought to
enforce a claim for expenses pursuant to Section 8 hereof, PROVIDED THAT the
required undertaking has been tendered to the Corporation) that Agent is not
entitled to indemnification because of the limitations set forth in Section 4
hereof. Neither the failure of the Corporation (including its Board of Directors
or its stockholders) to have made a determination prior to the commencement of
such enforcement action that indemnification of Agent is proper in the
circumstances, nor an actual determination by the Corporation (including its
Board of Directors or its stockholders) that such indemnification is improper
shall be a defense to the action or create a presumption that Agent is not
entitled to indemnification under this Agreement or otherwise.
10. SUBROGATION. In the event of payment under this Agreement, the Corporation
shall be subrogated to the extent of such payment to all of the rights of
recovery of Agent, who shall execute all documents required and shall do all
acts that may be necessary to secure such rights and to enable the Corporation
effectively to bring suit to enforce such rights.
11. NON-EXCLUSIVITY OF RIGHTS. The rights conferred on Agent by this Agreement
shall not be exclusive of any other right which Agent may have or hereafter
acquire under any statute, provision of the Corporation's Certificate of
Incorporation or Bylaws, agreement, vote of stockholders or directors, or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding office.
12. SURVIVAL OF RIGHTS.
(a) The rights conferred on Agent by this Agreement shall continue after Agent
has ceased to be a director, officer, employee or other agent of the Corporation
or to serve at the request of the Corporation as a director, officer, employee
or other agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise and shall inure to the benefit of
Agent's heirs, executors and administrators.
(b) The Corporation shall require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business or assets of the Corporation, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent that the Corporation
would be required to perform if no such succession had taken place.
13. SEPARABILITY. Each of the provisions of this Agreement is a separate and
distinct agreement and independent of the others, so that if any provision
hereof shall be held to be invalid for any reason, such invalidity or
unenforceability shall not affect the validity or enforceability of the other
provisions hereof. Furthermore, if this Agreement shall be invalidated in its
entirety on any ground, then the Corporation shall nevertheless indemnify Agent
to the fullest extent provided by the Bylaws, the Code or any other applicable
law.
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14. GOVERNING LAW. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of California.
15. AMENDMENT AND TERMINATION. No amendment, modification, termination or
cancellation of this Agreement shall be effective unless in writing signed by
both parties hereto.
16. IDENTICAL COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original
but all of which together shall constitute but one and the same Agreement. Only
one such counterpart need be produced to evidence the existence of this
Agreement.
17. HEADINGS. The headings of the sections of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or
to affect the construction hereof.
18. NOTICES. All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given (i) upon
delivery if delivered by hand to the party to whom such communication was
directed or (ii) upon the third business day after the date on which such
communication was mailed if mailed by certified or registered mail with postage
prepaid:
(a) If to Agent, to:
DigitalPost Interactive, Inc., One Peters Canyon Rd., Suite #150, Irvine,
CA 92620
(b) If to the Corporation, to:
DigitalPost Interactive, Inc., One Peters Canyon Rd., Suite #150, Irvine,
CA 92620
or to such other address as may have been furnished to Agent by the Corporation.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of
the day and year first above written.
DIGITALPOST INTERACTIVE, INC.
By:
Name: Mike Sawtell Title: President, CEO and Director
AGENT
By:
Name: Steven Dong
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