EXHIBIT 10.24
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made by and between TechAlt,
Inc., a corporation duly organized and existing under the laws of the State of
Nevada (the "Company"), and Seth Farbman, an individual residing in the State of
New York ("Consulting Executive").
RECITALS
WHEREAS, the Company desires to hire Consulting Executive and
Consulting Executive desires to become employed by the Company; and
WHEREAS, the Company and Consulting Executive have determined that it
is in their respective best interest to enter into this Agreement on the terms
and conditions as set forth herein; and
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and promises contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. Nature of Agreement.
1.1. Cancellation of Prior Offers. Any and all prior oral
understandings, offers, and/or representations (if any) with respect to the
employment of Consulting Executive are deemed by the parties to be either
canceled and void and/or are deemed to be superseded by this final written
Agreement.
2. Employment Terms and Duties.
2.1. Term of Employment. The employment of Consulting Executive under
this Agreement shall be deemed to have commenced on August 15, 2005 (the
"Effective Date"), and shall continue for a period of one (1) years (the
"Initial Term"), unless otherwise terminated as provided in this Agreement. This
Agreement shall be automatically renewed for additional consecutive one (1) year
periods (the "Renewal Term," and together with the Initial Term, the "Employment
Term") unless written notice of the intention to let this Agreement expire is
provided by the Company to Consulting Executive thirty (30) days prior to the
expiration of the Initial Term (or prior to the expiration of the Renewal Term
in the event of a renewal).
2.2. Location. Consulting Executive agrees that he shall carry out his
duties and obligations under the terms of this Agreement at his home office, or
the Company's principal office as required by the Company.
2.3. Position and Primary Responsibility. It is understood that
Consulting Executive serves as financial publications manager for the Company.
3. Compensation.
3.1. Base Compensation. In consideration for the financial publication
management rendered to the Company hereunder by Consulting Executive and
Consulting Executive's covenants hereunder, the Company shall pay Consulting
Executive compensation at the rate of one hundred fifty thousand (150,000)
options for the purchase of common stock of the Company (the "Options"), which
shares shall be registered on Form S-8 ("Base Compensation"). The Options shall
have an exercise price of $.001 and shall be exercisable on a cashless basis at
the Consulting Executive's option. Shares issued pursuant to the exercise of
options in connection with this Agreement shall be issued to Seth Farbman, the
natural person performing the employment services for the Company. All shares
and certificates representing such shares shall be subject to applicable SEC,
federal, state (Blue sky) and local laws and additional restrictions set forth
herein.
3.2. Payment. All compensation payable to Consulting Executive
hereunder shall be subject to the Company's rules and regulations, and shall
also be subject to all applicable State and federal employment law(s); it being
understood that Consulting Executive shall be responsible for the payment of all
taxes resulting from a determination that any portion of the compensation and/or
benefits paid/received hereunder is a taxable event to Consulting Executive; it
being further understood that Consulting Executive shall hold the Company
harmless from any governmental claim(s) for Consulting Executive's personal tax
liabilities, including interest or penalties, arising from any failure by
Consulting Executive to pay his individual taxes when due.
3.3. Compensation Review. It is understood and agreed that Consulting
Executive's performance will be reviewed by the Company's Board of Directors on
a monthly basis during the Employment Term of this Agreement is in force for the
purpose of determining whether or not Consulting Executive's Base Compensation
should be modified and/or adjusted; it being further understood that the
decision to increase Consulting Executive's compensation shall be at the sole
and exclusive option of the Board of Directors.
4. Benefits.
4.1. Reimbursement for Business Expenses. The Company, subject to its
prior consent, shall reimburse Consulting Executive for all reasonable business
expense(s) actually incurred prior to and after the Effective Date of this
Agreement by Consulting Executive on behalf of the Company in the performance of
his duties hereunder upon prior presentation by Consulting Executive of
voucher(s), receipt(s) or other written evidence(s) in accordance with the
policies of the Company and the rules of the Internal Revenue Service. This
includes reimbursement for reasonable business expenses incurred by Consulting
Executive while working from his home office, such as telephone, fax and
internet services, and general office supplies.
2
5. Confidential Information and Records.
5.1. Consulting Executive represents that his employment with the
Company under the terms of this Agreement will not conflict with any continuing
duty(ies) or obligation(s) Consulting Executive has with any other person(s),
firm(s) and/or entity(ies). Consulting Executive also represents that he has not
brought to the Company (during the period before or after the Effective Date of
this Agreement) any material(s) and/or document(s) of any former employer(s), or
any confidential information or property belonging to other(s).
5.2. Consulting Executive also represents that he will not disclose to
any person(s) or entity(ies) (other than to the Company's Board of Directors, or
to others as required in the performance of his duties) any confidential or
secret information with respect to the business or affairs of the Company and/or
its product(s).
6. Termination. Consulting Executive's employment and this Agreement (except as
otherwise provided hereunder) shall terminate upon the occurrence of any of the
following, at the time set forth therefor (the "Termination Date"):
6.1 Voluntary Termination. Fourteen (14) days following Consulting
Executive's written notice to the Company of voluntary termination of
employment; provided, however, that the Company may waive all or a portion of
the Fourteen (14) days' notice and accelerate the effective date of such
termination (and the Termination Date) (termination pursuant to this Section 6.2
being referred to herein as "Voluntary" termination); or
6.2 Termination For Cause. Immediately following notice of termination
for "Cause" (as defined below), specifying such Cause, given by the Company
(termination pursuant to this Section 6.3 being referred to herein as
termination for "Cause"). As used herein, "Cause" means (i) termination based on
Consulting Executive's conviction or plea of "guilty" or "no contest" to any
crime constituting a felony in the jurisdiction in which the crime constituting
a felony is committed, any crime involving moral turpitude (whether or not a
felony), or any other violation of criminal law involving dishonesty or willful
misconduct that materially injures the Company (whether or not a felony); (ii)
Consulting Executive's substance abuse that in any manner interferes with the
performance of his duties; (iii) Consulting Executive's failure or refusal to
perform his duties at all or in an acceptable manner, or to follow the lawful
and proper directives of the Board of Directors or Consulting Executive's
supervisor(s) that are within the scope of Consulting Executive's duties; (iv)
Consulting Executive's breach of this agreement; (v) Consulting Executive's
breach of the Company's Confidentiality, Proprietary Information and Inventions
policies; (vi) misconduct by Consulting Executive that has or could discredit or
damage the Company; (vii) Consulting Executive's indictment for a felony
violation of the federal securities laws; or (viii) Consulting Executive's
chronic absence from work for reasons other than illness. Any determination of
for Cause termination shall be made by the Board of Directors of the Company
after having first given thirty (30) days written notice to Consulting Executive
of such determination, and afforded Consulting Executive the opportunity to be
heard by the full Board of Directors. Notwithstanding any other provision in
this Agreement, if Consulting Executive is terminated pursuant to subsection
(iii) of this Section 6.3 for poor job performance, excluding refusal to perform
his duties, Consulting Executive shall have sixty (60) days to cure the behavior
upon which the threatened termination is based.
3
6.3 Termination Without Cause. Notwithstanding any other provisions
contained herein, the Company may terminate Consulting Executive's employment
fourteen (14) days following notice of termination without Cause given by the
Company; provided, however, that during any such fourteen (14) day notice
period, the Company may suspend, with no reduction in pay or benefits,
Consulting Executive from his duties as set forth herein (including, without
limitation, Consulting Executive's position as a representative and agent of the
Company) (termination pursuant to this Section 6.4 being referred to herein as
termination "Without Cause").
6.4 Other Remedies. Termination pursuant to Section 6.3 above shall be
in addition to and without prejudice to any other right or remedy to which the
Company may be entitled at law, in equity, or under this Agreement.
7. Severance and Termination.
7.1. Voluntary Termination, Termination for Cause, Termination for
Death or Disability. In the case of a termination of Consulting Executive's
employment hereunder for Death in accordance with Section 6.1 above, or
Consulting Executive's Voluntary termination of employment hereunder in
accordance with Section 6.2 above, or a termination of Consulting Executive's
employment hereunder for Cause in accordance with Section 6.3 above, (i)
Consulting Executive shall not be entitled to receive payment of, and the
Company shall have no obligation to pay, any severance or similar compensation
attributable to such termination, other than Base compensation earned but
unpaid, accrued but unused vacation to the extent required by the Company's
policies and any non-reimbursed expenses pursuant to Section 4 hereof incurred
by Consulting Executive as of the termination date, and (ii) the Company's
obligations under this Agreement shall immediately cease. Provided further, in
the event of Consulting Executive's Voluntary termination of employment
hereunder in accordance with Section 6.2 above, or a termination of Consulting
Executive's employment hereunder for Cause in accordance with Section 6.3 above,
Consulting Executive shall tender back to the Company all unvested options
granted to Consulting Executive by the Company in connection with Consulting
Executive's employment.
8. Severance Conditioned on Release of Claims.
8.1. The Company's obligation to provide Consulting Executive with any
severance payment shall be addressed in further good faith negotiations and
contingent upon Consulting Executive's execution of a satisfactory release of
claims in favor of the Company.
4
9. Non-competition, Non-solicitation.
9.1. As a stipulated condition of employment and entitlement to any
Severance Allowance, Consulting Executive agrees that he shall not, during the
Employment Term and for eighteen (18) months subsequent thereto, without both
the disclosure to and the written approval of the Board of Directors of the
Company, directly or indirectly, provide more favorable terms of service to
(whether as a principal, lender, employee, officer, director, partner, venturer,
consultant or otherwise) any business(es) that is directly competitive with the
business of the Company or any company affiliated with the Company, without the
express written approval of the Board of Directors.
9.2. During the term of this Agreement, Consulting Executive shall
promptly disclose to the Board of Directors of the Company all information
concerning any interests, direct or indirect, he holds (whether as a principal,
stockholder, lender, employee, officer, director, partner, venturer, consultant
or otherwise) in any business which Consulting Executive reasonably knows
purchases goods or provides services to the Company or any affiliate of the
Company.
10. Inventions, Discoveries and Improvements.
10.1. Any and all invention(s), discovery(ies) and improvement(s),
whether protectible or unprotectible by Patent, trademark, copyright or trade
secret, made, devised, or discovered by Consulting Executive, whether by
Consulting Executive alone or jointly with others, from the time of entering the
Company's employ until the earlier of the Termination Date of this Agreement or
the actual date of termination of employment, relating or pertaining in any way
to Consulting Executive's employment with the Company, shall be promptly
disclosed in writing to the Board of Directors of the Company, and become and
remain the sole and exclusive property of the Company. Consulting Executive
agrees to execute any assignments to the Company, or its nominee, of the
Consulting Executive's entire right, title, and interest in and to any such
inventions, discoveries and improvements and to execute any other instruments
and documents requisite or desirable in applying for and obtaining Patents,
trademarks or copyrights at the cost of the Company, with respect thereto in the
United States and in all foreign countries, that may be requested by the
Company. Consulting Executive further agrees, whether or not then in the
employment of the Company, to cooperate to the fullest extent and in the manner
that may be reasonably requested by the Company in the prosecution and/or
defense of any suit(s) involving claim(s) of infringement and/or
misappropriation of proprietary rights relevant to Patent(s), trademark(s),
copyright(s), trade secret(s), processes, and/or discoveries involving the
Company's product(s); it being understood that all reasonable costs and expenses
thereof shall be paid by the Company. The Company shall have the sole right to
determine the treatment of disclosures received from Consulting Executive,
including the right to keep the same as a trade secret, to use and disclose the
same without a prior Patent Application, to file and prosecute United States and
foreign Patent Application(s) thereon, or to follow any other procedure which
the Company may deem appropriate. In accordance with this provision, Consulting
Executive understands and is hereby further notified that this Agreement does
not apply to an invention which the employee developed entirely on his own time
without using the Company's equipment, supplies, facilities, or trade secret
information.
5
11. Confidential Information and Trade Secrets.
11.1. Confidentiality. Consulting Executive hereby acknowledges that
all trade, engineering, production, and technical data, information or
"know-how" including, but not limited to, customer lists, sales and marketing
techniques, vendor names, purchasing information, processes, methods,
investigations, ideas, equipment, tools, programs, costs, product profitability,
plans, specifications, Patent Application(s), drawings, blueprints, sketches,
layouts, formulas, inventions, processes and data, whether or not reduced to
writing, used in the development and manufacture of the Company's products
and/or the performance of services, or in research or development, are the
exclusive secret and confidential property of the Company, and shall be at all
times, whether after the Effective Date or after the Termination Date, be kept
strictly confidential and secret by Consulting Executive.
11.2. Return of Property. Consulting Executive agrees not to remove
from the Company's office or copy any of the Company's confidential information,
trade secrets, books, records, documents or customer or supplier lists, or any
copies of such documents, without the express written permission of the Board of
Directors of the Company. Consulting Executive agrees, at the Termination Date,
to return any property belonging to the Company, including, but not limited to,
any and all records, notes, drawings, specifications, programs, data and other
materials (or copies thereof) pertaining to the Company's businesses or its
product(s) and service(s), generated or received by Consulting Executive during
the course of his employment with the Company.
11.3. Non-Disclosure. Consulting Executive represents and agrees that
during the term of this Agreement, and after the Termination Date, he will not
report, publish, disclose, use, or transfer to any person(s) or entity(ies) any
property or information belonging to the Company without first having obtained
the prior express written consent of the Company to do so; it being understood,
however, that information which was publicly known, or which is in the public
domain, or which is generally known, shall not be subject to this restriction.
12. Information of Others.
12.1 Consulting Executive agrees that the Company does not desire to
acquire from Consulting Executive any secret or confidential information or
"know-how" of others. Consulting Executive, therefore, specifically represents
to the Company that he will not bring to the Company any materials, documents,
or writings containing any such information. Consulting Executive represents and
warrants that from the Effective Date of this Agreement he is free to divulge to
the Company, without any obligation to, or violation of, the rights of others,
information, practices and/or techniques which Consulting Executive will
describe, demonstrate or divulge or in any other manner make known to the
Company during Consulting Executive's performance of services. Consulting
Executive also agrees to indemnify and hold the Company harmless from and
against any and all liabilities, losses, costs, expenses, damages, claims or
demands for any violation of the rights of others as it relates to Consulting
Executive's misappropriation of secrets, confidential information, or "know-how"
of others.
6
13. Notice.
13.1. Notices. All notices and other communications under this
Agreement shall be in writing and shall be delivered personally or mailed by
registered or certified mail, return receipt requested, and shall be deemed
given when so delivered or mailed, to a party at his or its address as follows
(or at such other address as a party may designate by notice given hereunder):
If to Consulting Executive: Seth Farbman
Vintage Filings, LLC
150 W. 46th Street, 6th Floor
New York, NY 10036
If to the Company:
TechAlt, Inc.
601 Union Street, Suite 4500
Seattle, WA 98101
With a copy to:
The Otto Law Group, PLLC
601 Union Street, Suite 4500
Seattle, WA 98101
14. Suit, Jurisdiction.
Any controversy between the Company and Consulting Executive arising
out of or relating to any of the terms, provisions or conditions of this
Agreement shall be submitted to arbitration in accordance with the American
Arbitration Association's National Arbitration Rules for the Resolution of
Employment Disputes. On the written request of either party for arbitration of
such a claim pursuant to this paragraph, the Company and Consulting Executive
shall both be deemed to have waived the right to litigate the claim in any
federal or state court. To the extent that any claim or controversy arising out
of this Agreement cannot be submitted to arbitration as set forth above, each
party hereby agrees that any suit, action or proceeding with respect to this
Agreement, and any transactions relating hereto, shall be brought in the State
of Washington, County of Cook, and each of the parties hereby irrevocably
consents and submits to the jurisdiction of such Court(s) for the purpose of any
such suit, action or proceeding. Each of the parties hereby waives and agrees
not to assert, by way of motion, as a defense or otherwise, in any such suit,
action or proceeding; any claim that it (he) is not personally subject to the
jurisdiction of the above-named Court(s); and, to the extent permitted by
applicable law, any claim that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or proceeding is
improper or that this Agreement or any replacements hereof or thereof may not be
enforced in or by such Court(s). The Company shall pay any and all costs
associated with arbitration.
7
15. Miscellaneous.
15.1. Post Termination Obligations. Notwithstanding the termination of
Consulting Executive's employment hereunder, the provision(s) of Section(s) "5,"
"9," "10," "11," and "14" shall survive the Termination Date.
15.2. Assignment. This Agreement shall be assigned to and inure to the
benefit of, and be binding upon, any successor to substantially all of the
assets and business of the Company as a going concern, whether by merger,
consolidation, liquidation or sale of substantially all of the assets of the
Company or otherwise. Consulting Executive understands and agrees, however, that
this Agreement is exclusive and personal to his only, and, as such, he will
neither assign nor subcontract all or part of his undertaking(s) or
obligation(s) under the terms of this Agreement.
15.3. Entire Agreement. Each party acknowledges that this Agreement
constitutes the entire understanding between them, and that there are no other
written or verbal agreement(s) or understanding(s) between them other than those
set forth herein; it being understood that no amendment(s) to this Agreement
shall be effective unless reduced to writing and signed by each party hereto.
15.4. Severability. In the event that any provision of this Agreement
shall be determined to be unenforceable or otherwise invalid, the balance of the
provision(s) shall be deemed to be enforceable and valid; it being understood
that all provision(s) of this Agreement are deemed to be severable, so that
unenforceability or invalidity of any single provision will not affect the
remaining provision(s).
15.5. Headings. The Section(s) and paragraph heading(s) in this
Agreement are deemed to be for convenience only, and shall not be deemed to
alter or affect any provision herein.
15.6. Interpretation of Agreement. This Agreement shall be interpreted
in accordance plain meaning of its terms and under the laws of the State of
Washington.
15.7. Variation. Any changes in the Sections relating to salary, bonus,
or other material condition(s) after the Effective Date of this Agreement shall
not be deemed to constitute a new Agreement. All unchanged terms are to remain
in force and effect.
15.8. Unenforceability. The unenforceability or invalidity of any
provision(s) of this Agreement shall not affect the enforceability and/or the
validity of the remaining provision(s).
15.9. Collateral Documents. Each party hereto shall make, execute and
deliver such other instrument(s) or document(s) as may be reasonably required in
order to effectuate the purposes of this Agreement.
8
15.10. Written Policies and Procedures. The Company's written policies
and procedures, as codified and contained in the Company "Handbook," are deemed
to be incorporated herein by this reference.
15.11. Non-Impairment. This Agreement may not be amended or
supplemented at any time unless reduced to a writing executed by each party
hereto. No amendment, supplement or termination of this Agreement shall affect
or impair any of the rights or obligations which may have matured thereunder.
15.12. Execution. This Agreement may be executed in one or more
counterpart(s), and each executed counterpart(s) shall be considered by the
parties as an original.
15.13. Legal Counsel. Consulting Executive represents to the Company
that he has retained legal counsel of his own choosing, and was given sufficient
opportunity to obtain legal counsel prior to executing this Agreement.
Consulting Executive also represents that he has read each provision of this
Agreement and understands its meaning.
15.14. Effect of Merger, Transfer of Assets, Dissolution. This
Agreement shall not be terminated by any voluntary or involuntary dissolution of
the Company resulting from either a merger or consolidation in which the Company
is not the consolidated or surviving corporation, or a transfer of all or
substantially all of the assets of the Company. In the event of any such merger,
or consolidation or transfer of assets, the Company's rights, benefits, and
obligations hereunder shall be assigned to the surviving or resulting
corporation or the transferee of the Company's assets.
15.15. Transition. In the event that Consulting Executive's employment
with the Company terminates, Consulting Executive shall, through the last day of
employment, and at the Company's request, use Consulting Executive's reasonable
best efforts (at the Company's expense) to assist the Company in transitioning
Consulting Executive's duties and responsibilities to Consulting Executive's
successor and maintaining the Company's professional relationship with all
customers, suppliers, etc. Without limiting the generality of the foregoing,
Consulting Executive shall cooperate and assist the Company, at the Company's
direction and instruction, during the transition period between any receipt of
or giving of notice of the termination of employment and the final day of
employment.
9
IN WITNESS WHEREOF, the parties hereto have set their hands the day and
year written below.
THE COMPANY:
TECHALT, INC.
Date:
- ------------------------------------ ----------------------------
By: David M. Otto
Its: Director and Executive Officer
CONSULTING EXECUTIVE:
Date:
- ------------------------------------ ----------------------------
By: Seth Farbman
10
EXHIBIT A
OPTION EXERCISE FORM
I, _____________________________, do hereby exercise the Option with a
Date of Grant of ___________________, ______ granted to me pursuant to the
Option Agreement. The Shares being purchased and the Total Exercise Price are
set forth below:
Number of Shares: ________________ Shares
Exercise Price Per Share x $ ____________ per Share
Total Exercise Price: = $ ____________.
The Total Exercise Price is included with this Form.
____________________________________ Date: ___________________
Signature
Send or deliver this Form with an original signature to
The Otto Law Group, PLLC
601 Union Street, Suite 4500
Seattle, WA 98101
11