EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") made and entered into
this 23rd day of April 2009 (the "Effective Date"), by and between CHINA WI MAX
Communications, INC., a Nevada corporation (the "Company") and Frank R. Ventura
(the "Executive").
W I T N E S S E T H:
WHEREAS, the Company wishes to secure the services of the
Executive subject to the contractual terms and conditions set forth herein; and
WHEREAS, the Executive is willing to enter into this Agreement
upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and
agreements set forth herein, the parties hereto agree as follows:
1. Employment. The Company hereby agrees to employ the Executive, and the
Executive hereby agrees to accept such employment with the Company, all upon the
terms and conditions set forth herein.
A. Term. Subject to the terms and conditions of this
Agreement, the Executive shall be employed for a term commencing on the
Effective Date and ending on the first (1st) anniversary of the
Effective Date (the "Term") unless sooner terminated as provided for
herein. The Term shall renew automatically for additional one (1) year
terms, unless either party gives written notice no less than ninety
(90) days prior to the expiration of the Term that it does not intend
to extend the Term.
B. Duties and Responsibilities and Capacity. During the Term, the Executive
shall serve in the capacity of Chief Financial Officer (CFO) subject to the
supervision of the Chairman of the Board, President or Chief Executive Officer
of the Company. Executive will be permitted to perform his primary duties, as
appropriate, from his principal work location in or near Overland Park, Kansas
and will not be required to relocate to Denver, Colorado or any other location
unless agreed to by Executive. Failure to relocate shall not be deemed a "for
Cause" termination event.
C. Part-Time to Full-Time Duties. During the Term, and excluding any
periods of disability, vacation or sick leave to which the Executive is
entitled, the Executive shall devote substantially all of his business time,
attention and energies to the business of the Company, provided, however, for
the time period between the Effective Date and September 1, 2009, Executive
shall devote approximately three-fourths of his time and energies to the
business of the Company. During the Term, it shall not be a violation of this
Agreement for the Executive to (i) serve on corporate, university, civic, or
charitable boards or committees (ii) deliver lectures or fulfill speaking
engagements and (iii) manage personal investments, so long as such activities do
not materially interfere with the performance of the Executive's
responsibilities as an employee of the Company in accordance with this
Agreement.
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D. Standard of Performance. The Executive will perform his duties under
this Agreement with fidelity and loyalty, to the best of his ability, experience
and talent and in a manner consistent with his duties and responsibilities.
2. Compensation.--Base Salary.
A. Beginning on May 1, 2009 (but deferring and accruing receipt of payment
until the Company receives "Round-3 Financing" in a minimum amount of $500,000),
the Executive shall receive a Base Salary of $4,000 per month through August 31,
2009, and then the Base Salary shall increase beginning September 1, 2009 to
$6,500 per month for the remainder of the Term. The Base Salary shall be payable
in accordance with the general payroll practices of the Company in effect from
time to time. During the remainder of the Term, the Base Salary shall be
reviewed at least annually by the Board after consultation with the Executive
and may from time to time be increased (but not decreased) as solely determined
by the Board. Effective as of the date of any such increase, the Base Salary as
so increased shall be considered the new Base Salary for all purposes of this
Agreement and may not thereafter be reduced. Any increase in Base Salary shall
not limit or reduce any other obligation of the Company to the Executive under
this Agreement.
B. Annual Performance Bonus. The Executive shall be eligible for annual
discretionary bonus awards payable in cash or common stock of the Company, as so
determined solely by the Board, based on performance objectives submitted
annually by senior management and approved by the Board.
C. Long-Term Incentives. Upon the execution of this Agreement, the Company
agrees to issue the Executive the initial option award set forth on the term
sheet attached hereto as Exhibit A. and incorporated by reference. Following the
initial option award, the Executive shall be eligible for grants of stock
options, restricted stock and/or other long-term incentives in the discretion of
the Board on the same basis as other similarly situated senior executives of the
Company. The Company agrees to enter into negotiations and to provide Executive
with a long-term options plan -- similar in scope and kind to the President's -
beginning six months from the Effective Date.
D. Benefits. If and to the extent that the Company maintains employee
benefit plans (including, but not limited to, pension, profit-sharing,
disability, accident, medical, life insurance, and hospitalization plans) (it
being understood that the Company may but shall not be obligated to do so);
(1) The Executive shall be entitled to participate
therein in accordance with the Company's regular practices
with respect to similarly situated senior executives.
(2) The Executive shall be entitled to prompt,
normally 15 days or less from receipt of approved expense
report, reimbursement from the Company for reasonable
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out-of-pocket expenses incurred by him in the course of the
performance of his duties hereunder, upon the submission of
appropriate documentation in accordance with the practices,
policies and procedures applicable to other senior executives
of the Company.
(3) The Executive shall be entitled to such vacation,
holidays and other paid or unpaid leaves of absence as are
consistent with the Company's normal policies available to
other senior executives of the Company or as are otherwise
approved by the Board. Notwithstanding the foregoing, vacation
will be a minimum of three weeks per year, accrued monthly
beginning on the Effective Date.
3. Termination of Employment. Notwithstanding the provisions of Section 2
hereof, the Executive's employment hereunder shall terminate under any of the
following conditions:
A. Death. The Executive's employment under this Agreement shall terminate
automatically upon his death.
B. Total Disability. The Company shall have the right to terminate this
Agreement if the Executive becomes Totally Disabled. For purposes of this
Agreement, "Totally Disabled" means that the Executive is not working and is
currently unable to perform the substantial and material duties of his position
hereunder as a result of sickness, accident or bodily injury for a period of
three consecutive months. Prior to a determination that Executive is Totally
Disabled, but after Executive has exhausted all sick leave and vacation benefits
provided by the Company, Executive shall continue to receive his Base Salary,
offset by any disability benefits he may be eligible to receive that are
provided directly or indirectly by the Company.
C. Termination by Company for Cause. The Executive's employment hereunder
may be terminated for Cause upon written notice by the Company. For purposes of
this Agreement, "Cause" shall mean:
(1) conviction of the Executive by a court of competent jurisdiction
of any felony or a crime involving moral turpitude;
(2) the Executive's willful and intentional failure or willful and
intentional refusal to follow reasonable and lawful instructions
of the Board;
(3) the Executive's material breach or default in the performance of
his obligations under this Agreement; or
(4) the Executive's act of misappropriation, embezzlement,
intentional fraud or similar conduct involving the Company.
Executive may not be terminated for Cause pursuant to subsections (2) and (3)
above unless Executive is given written notice of the circumstances constituting
"Cause" and a reasonable period to cure such circumstances, which period shall
be no less than thirty (30) days.
D. Termination for Good Reason. The Executive's employment hereunder may be
terminated by the Executive for Good Reason on written notice by Executive to
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the Company. For purposes of this Agreement, "Good Reason" means the occurrence
of any of the following circumstances without the Executive's consent:(1)
(1). a material reduction in the Executive's salary or benefits
excluding the substitution of substantially equivalent
compensation and benefits provided that a reduction in the level
of compensation payable to a substantial portion of the Company's
employees or to substantially all of the Company's officers as
part of a unilateral cost-cutting program of the Company will not
be taken into account for acceleration or vesting;
(2) a material diminution of the Executive's duties, authority or
responsibilities as in effect immediately prior to such
diminution;
(3) the relocation of the Executive' principal work location to a
location more than 50 miles from its current location; or
(4) the failure of a successor to assume and perform under this
Agreement.
4. Payments Upon Termination..
A. Upon termination of Executive's employment hereunder for any reason as
so provided for in Section 3 hereof, the Company shall be obligated to pay and
the Executive shall be entitled to receive, on such terms and conditions as is
customary in the normal course of business (based on past practice and
experience), Base Salary which has accrued for services performed to the date of
termination and which has not yet been paid. In addition, the Executive shall be
entitled to any vested benefits to which he is entitled under the terms of any
applicable Executive benefit plan or program, vested restricted stock plan and
stock option plan of the Company, and, to the extent applicable, short-term or
long-term disability plan or program with respect to any disability, or any life
insurance policies and the benefits provided by such plan, program or policies,
or applicable law as duly adopted from time to time by the Board.
B. Upon termination of Executive's employment by the Company without Cause
or by the Executive for Good Reason, the Company shall be obligated to pay and
the Executive shall be entitled to receive:
(1) all of the amounts and benefits described in Section 4.A. hereof;
and
(2) Base Pay for a total of three (3) months, payable in the normal
course of business according to the Company's payment policy at
that time; and
(3) continued participation in all Executive welfare benefit programs
of the Company for three (3) months from the Executive's
termination of employment.
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Payments under Section 4.B., with the exception of amounts due
pursuant to Section 4.B(1), are conditioned on the execution by the Executive of
a release of all employment-related claims; provided, however, that such release
shall be contingent upon the Company's satisfaction of all terms and conditions
of this Section.
C. Upon termination of the Executive's employment upon the death of
Executive pursuant to Section 3.A., the Company shall be obligated to pay, and
the Executive shall be entitled to receive:
(1) all of the amounts and vested benefits described in Section 4.A.;
(2) any death benefit payable under a plan or policy provided by the
Company; and
(3) continued participation by the Executive's dependents in the
welfare benefit programs of the Company, including reimbursement
for health care benefit premiums agreed to hereof, for a period
of time no longer than (i) three months or (ii) the amount of
time remaining in the Term.
D. Upon termination of the Executive's employment upon the Disability of
the Executive pursuant to Section 3.B., the Company shall be obligated to pay,
and the Executive shall be entitled to receive:
(1) all of the amounts and vested benefits described in Section 4.A.;
(2) the Base Salary, at the rate in effect immediately prior to the
date of his termination of employment due to Disability, for a
period no longer than (i) three-months or (ii) the amount of time
remaining in the Term, offset by any payments the Executive
receives under the Company's long-term disability plan and any
supplements thereto, whether funded or unfunded, which is adopted
by the Company for the Executive's benefit and not attributable
to the Executive's own contributions; and
(3) continued participation by the Executive and his dependents in
the welfare benefit programs of the Company, including
reimbursement for health care benefit premiums agreed to hereof,
for a period of time no longer than (i) three months or (ii) the
amount of time remaining in the Term.
Payments under Section 4.D., with the exception of amounts due
pursuant to Section 4.D(1), are conditioned on the execution by the Executive or
the Executive's representative of a release of all employment-related claims;
provided, however, that such release shall be contingent upon the Company's
satisfaction of all terms and conditions of this Section.
E. Upon voluntary termination of employment by the Executive (other than
for Good Reason as described in Section 4.B.) or termination by the Company for
Cause, the Company shall have no further liability under or in connection with
this Agreement, except to provide the amounts set forth in Section 4.A.
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F. Upon voluntary or involuntary termination of employment of the Executive
for any reason whatsoever or expiration of the Term, the Executive shall
continue to be subject to the provisions of Section 5, hereof (it being
understood and agreed that such provisions shall survive any termination or
expiration of the Executive's employment hereunder for any reason whatsoever).
5. Confidentiality, Return of Property, and Covenant Not to Compete.
(1) Company Information. The Company agrees that it will provide the
Executive with Confidential Information, as defined below that
will enable the Executive to optimize the performance of the
Executive's duties to the Company. In exchange, the Executive
agrees to use such Confidential Information solely for the
Company's benefit. The Company and the Executive agree and
acknowledge that its provision of such Confidential Information
is not contingent on the Executive's continued employment with
the Company. Notwithstanding the preceding sentence, upon the
termination of the Executive's employment for any reason, the
Company shall have no obligation to provide the Executive with
its Confidential Information. "Confidential Information" means
any Company proprietary information, technical data, trade
secrets or know-how, including, but not limited to, research,
product plans, products services, customer lists and customers
(including, but not limited to, customers of the Company on whom
the Executive called or with whom the Executive became acquainted
during the term of the Executive's employment), markets,
software, developments, inventions, processes, formulas,
technology, designs, drawings, engineering, hardware
configuration information, marketing finances or other business
information disclosed to the Executive by the Company either
directly or indirectly in writing, orally or by drawings or
observation of parts or equipment. Confidential Information does
not include any of the foregoing items that have become publicly
known and made generally available through no wrongful act of the
Executive or of others who were under confidentiality obligations
as to the item or items involved or improvements or new versions.
The Executive agrees at all times during the Term
and thereafter, to hold in strictest confidence,
and not to use, except for the exclusive benefit
of the Company, or to disclose to any person or
entity without written authorization of the Board
of Directors of the Company, any Confidential
Information of the Company.
(2) Former Employer Information. The Executive agrees that he will
not, during his employment with the Company, improperly use or
disclose any proprietary information or trade secrets of any
former employer or other person or entity and that the Executive
will not bring onto the premises of the Company any unpublished
document or proprietary information belonging to any such
employer, person or entity unless consented to in writing by such
employer, person or entity.
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(3) Third-Party Information. The Executive recognizes that the
Company has received and in the future will receive from third
parties their confidential or proprietary information subject to
a duty on the Company's part to maintain the confidentiality of
such information and to use it only for certain limited purposes.
The Executive shall hold all such confidential or proprietary
information in the strictest confidence and not disclose it to
any person or entity or use it except as necessary in carrying
out the Executive's work for the Company consistent with the
Company's agreement with such third party.
a. Returning Company Documents. At the time of leaving the
employ of the Company, the Executive will deliver to the
Company (and will not keep in the Executive's possession)
specifications, drawings blueprints, sketches, materials,
equipment, other documents or property, or reproductions of
any aforementioned items developed by the Executive pursuant
to the Executive's employment with the Company or otherwise
belonging to the Company, its successors or assigns.
b. Notification of New Employer. In the event that the
Executive leaves the employ of the Company, the Executive
hereby grants consent to notification by the Company to the
Executive's new employer about the Executive's rights and
obligations under this Agreement.
c. Solicitation of Employees. The Executive agrees that for a
period of twenty-four (24) months immediately following the
termination of the Executive's relationship with the Company
for any reason, the Executive shall not either directly or
indirectly solicit, induce or recruit any of the Company's
employees to leave their employment, or take away such
employees, or attempt to solicit, induce, recruit, encourage
or take away employees of the Company, either for himself or
for any other person or entity.
d. Covenant Not to Compete.
(1). The Executive agrees that during the course of his
employment and for twenty-four (24) months following the
termination of the Executive's relationship with the Company
for any reason, the Executive will not compete, without the
prior written consent of the Company, as a partner,
employee, consultant, officer, director, manager, agent,
associate, investor, or otherwise, directly or indirectly,
own, purchase, organize or take preparatory steps for the
organization of, build, design, finance, acquire, lease,
operate, manage, invest in, work or consult for or otherwise
affiliate with any business, in competition with the
Company's Chinese communications business; provided,
however, that the beneficial ownership by Executive of up to
5% of the voting stock of any corporation subject to the
periodic reporting requirements of the Securities and
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Securities Exchange Act of 1934 shall not violate this
Section 5. The foregoing covenant shall cover the
Executive's activities in every part of the Territory in
which the Executive may conduct business during the term of
such covenant as set forth above. "Territory" shall mean the
Peoples Republic of China.
(2). The Executive acknowledges that he will derive
significant value from the Company's agreement in Section
5.A(1) to provide the Executive with that Confidential
Information to enable the Executive to optimize the
performance of the Executive's duties to the Company. The
Executive further acknowledges that his fulfillment of the
obligations contained in this Agreement, including, but not
limited to, the Executive's obligation neither to disclose
nor to use the Company's Confidential Information other than
for the Company's exclusive benefit and the Executive's
obligation not to compete contained in subsection (1) above,
is necessary to protect the Company's Confidential
Information and, consequently, to preserve the value and
goodwill of the Company. The Executive further acknowledge
the time, geographic and scope limitations of the
Executive's obligations under subsection (1) above are
reasonable, especially in light of the Company's desire to
protect its Confidential Information, and that the Executive
will not be precluded from gainful employment if the
Executive is obligated not to compete with the Company
during the period and within the Territory as described
above.
(3). The covenants contained in subsection (1) above shall
be construed as a series of separate covenants, one for each
city, county and state of any geographic area in the
Territory. Except for geographic coverage, each such
separate covenant shall be deemed identical in terms to the
covenant contained in subsection (1) above. If, in any
judicial proceeding, a court refuses to enforce any of such
separate covenants (or any part thereof), then such
unenforceable covenant (or such part) shall be eliminated
from this Agreement to the extent necessary to permit the
remaining separate covenants (or portions thereof) to be
enforced. In the event the provisions of subsection (1)
above are deemed to exceed the time, geographic or scope
limitations permitted by Nevada law, then such provisions
shall be reformed to the maximum time, geographic or scope
limitations, as the case may be, then permitted by such law.
e. Representations. The Executive agrees to execute any proper
oath or verify any proper document required to carry out the
terms of this Agreement. The Executive represents that his
performance of all the terms of this Agreement will not
breach any agreement to keep in confidence proprietary
information acquired by the Executive in confidence or in
trust prior to the Executive's employment by the Company.
The Executive has not entered into, and the Executive agrees
that he will not enter into, any oral or written agreement
in conflict herewith.
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6. Arbitration. Any dispute or controversy arising under or in connection
with this Agreement (other than any dispute or controversy arising from a
violation or alleged violation by the Executive of the provisions of Section 5)
shall be settled exclusively by final and binding arbitration in Kansas City,
Missouri, in accordance with the Employment Arbitration Rules of the American
Arbitration Association ("AAA"). The arbitrator shall be selected by mutual
agreement of the parties, if possible. If the parties fail to reach agreement
upon appointment of an arbitrator within thirty days following receipt by one
party of the other party's notice of desire to arbitrate, the arbitrator shall
be selected from a panel or panels of persons submitted by the AAA. The
selection process shall be that which is set forth in the AAA Employment
Arbitration Rules then prevailing, except that, if the parties fail to select an
arbitrator from one or more panels, AAA shall not have the power to make an
appointment but shall continue to submit additional panels until an arbitrator
has been selected. This agreement to arbitrate shall not preclude the parties
from engaging in voluntary, non-binding settlement efforts including mediation.
7. Notices All notices and other communications hereunder shall be in writing
and shall be given (and shall be deemed to have been duly given upon receipt) by
delivery in person, by registered or certified mail (return receipt requested
and with postage prepaid thereon) or by facsimile transmission to the respective
parties.
China Wi-Max Communications, Inc.
Steven T. Berman, President
Denver Tower 1905 Sherman St. Suite 335, Denver, CO 80203
cc: Allan Rabinoff, Chairman of the Board
If to Executive:
Frank R. Ventura
9993 Mackey Circle, Overland Park, Kansas 66212
7. Amendment; Waiver. The terms and provisions of this Agreement may be
modified or amended only by a written instrument executed by each of the parties
hereto, and compliance with the terms and provisions hereof may be waived only
by a written instrument executed by each party entitled to the benefits thereof.
No failure or delay on the part of any party in exercising any right, power or
privilege granted hereunder shall constitute a waiver thereof, nor shall 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 right, power or
privilege granted hereunder.
8. Entire Agreement. This Agreement and all Exhibits attached hereto
constitute the entire agreement between the parties with respect to the subject
matter hereof and supersede all prior written or oral agreements or
understandings between the parties relating thereto.
9. Severability. In the event that any term or provision of this Agreement
is found to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining terms and provisions hereof shall not be in any
way affected or impaired thereby, and this Agreement shall be construed as if
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such invalid, illegal or unenforceable provision had never been contained
therein.
10. Binding Effect; Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns
(it being understood and agreed that, except as expressly provided herein,
nothing contained in this Agreement is intended to confer upon any other person
or entity any rights, benefits or remedies of any kind or character whatsoever).
The Executive may not assign this Agreement without the prior written consent of
the Company. Except as otherwise provided in this Agreement, the Company may
assign this Agreement to any of its affiliates or to any successor (whether by
operation of law or otherwise) to all or substantially all of its business and
assets without the consent of the Executive. For purposes of this Agreement,
"affiliate" means any entity in which the Company owns shares or other measure
of ownership representing at least 40% of the voting power or equivalent measure
of control of such entity.
11. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado (except that no effect shall
be given to any conflicts of law principles thereof that would require the
application of the laws of another jurisdiction).
12. Headings. The headings of the sections contained in this Agreement are
for convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS THEREOF, the Company has caused this Agreement to
be executed by its duly authorized officer and the Executive has signed this
Agreement as of the Effective Date.
CHINA WI MAX COMMUNICATIONS, INC.
-----------------------------------------
By: Steven T. Berman, President
EXECUTIVE
-----------------------------------------
Frank R. Ventura
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Exhibit A
Frank Ventura -- Initial Option Award
I. Options. Company will grant Executive a signing bonus of 50,000 options to
purchase of Company common stock, based on the fair market value as of the grant
date, which shall be the date of execution of this Agreement.
A. Fair market value shall be $0.25 per share, the price set forth in the
first-round private placement.
B. Options will have a term of 3 years.
D. Company will register the shares subject to the option on Form S-8 or
such other form as may be available, and shall provide a cashless
exercise procedure.
II. Change in Control.
A. In the event of a Change in Control, Company will pay Executive a
gross-up payment to cover the excise tax, if any, imposed under
Section 4999 of the Internal Revenue Code in connection with excess
parachute payments as defined in Section 280G of the Internal Revenue
Code.
B. For purpose of the options, "Change in Control" means: (a) the
consummation of a merger or consolidation of the Company with or into
another entity or any other transaction, where the stockholders of the
Company immediately prior to such merger, consolidation or other
transaction own or beneficially own immediately after such merger,
consolidation or other transaction less than 50% of the voting power
of the outstanding securities of each of (i) the continuing or
surviving entity and (ii) any direct or indirect parent entity of such
continuing or surviving entity; (b) the sale, transfer or other
disposition of all or substantially all of the Company's assets to a
Person which is not owned or controlled by the Company or its
stockholders immediately prior to such sale, transfer or other
disposition; (c) individuals who, 30 days following the effective date
of this Agreement, constitute the Board (the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director thereafter
whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board; or (d)
any transaction as a result of which any Person is the "Beneficial
Owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing at least 50% of
the total voting power represented by the Company's then outstanding
voting securities. For purposes of this definition of Change in
Control, the term "Persons" means, acting individually or as a group,
an individual or a corporation, Limited Liability Company,
partnership, joint venture, trust, unincorporated organization,
association, government agency or political subdivision thereof or
other entity.
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