Nevada
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000-54277
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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12300 Dundee Court, Suite 203, Houston, Texas
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77429
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code:
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(281) 369-4063
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o
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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o
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14-12)
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o
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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o
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Pre-commencement communications pursuant to Rule 13-e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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-
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Calm Seas has purchased an aggregate of $2,000,000 of the registrant’s common stock; or
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-
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19 months after the Effective Date.
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10.1
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Employment Agreement, dated as of April 16, 2012, by and between the registrant and Randy Bayne
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10.2
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Employment Agreement, dated as of April 16, 2012, by and between the registrant and Mark Van Eman
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10.3
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Employment Agreement, dated as of April 16, 2012, by and between the registrant and Dale Roberts
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10.4
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Letter Agreement, dated as of March 27, 2012, by and between the registrant and Calm Seas Capital, LLC
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EASTERN WORLD SOLUTIONS INC.
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Dated: April 20, 2012
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By:
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/s/ Randy Bayne
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Name: Randy Bayne
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Title: Chief Executive Officer
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a)
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172,125 Founders Shares will be released to Employee one (1) year from the date of execution of this Agreement;
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b)
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172,125 Founders Shares will be released to Employee two (2) years from the date of execution of this Agreement; and
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c)
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172,125 Founders Shares will be released to Employee three (3) years from the date of execution of this Agreement.
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a)
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the acquisition described in clause (i) of the definition of Change of Control;
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b)
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the change in the composition of the Board of Directors described in clause (ii) of such definition;
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c)
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the shareholder approval or adoption described in clauses (iii) or (iv) of such definition;
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d)
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the commencement date of any tender offer subject to the terms of Section 14(d)(1) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or exchange offer subject to the terms of the Securities Act of 1933, as amended (the "Securities Act"), or any other offer or series of offers to purchase for cash, or to exchange for securities of a person other than the Company or any of its affiliates, Encom Common Stock by any "person" or "group" of persons (as such terms are used in Rule 13d of the Exchange Act) other than an offer or offers by Encom or by employee benefit plan(s) sponsored by Encom ("Tender Offer") if such person or group would hold 30% or more of the then outstanding Encom Common Stock after the consummation of the Tender Offer;
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e)
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the Termination of Employee subject to the provisions of Section 20, 21 or Section 22 that specifically trigger the vesting of all of the Employee’s stock options
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a)
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During the term of this Agreement, Employee shall be allowed to pursue other business interests and/or professional pursuits, provided such involvement would not (i) interfere with his duties as set forth herein.
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b)
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Employee will not engage, directly or indirectly, in any activity competitive with the business of the Employer. This prohibition shall include the ownership, management, operation, control of, employment by, participation in, or connection with the management, ownership, operation or control of, in any manner, any business of the type and character engaged in by the Employer. Notwithstanding the foregoing, the Employee may make or maintain an investment not to exceed five percent (5%) of the capital stock of any publicly traded company.
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c)
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Employee will truthfully and accurately make, maintain, and preserve all records and reports that the Employer may from time-to-time request or require.
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d)
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Employee will fully account for all money, records, goods, wares and merchandise, or other property belonging to the Employer of which the Employee has custody, and will promptly pay over and deliver the same whenever and however the Employee may be reasonably directed to do so.
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e)
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Employee will obey all rules, regulations, and special instructions applicable to him, including but not limited to, those set forth in Employer’s then existing policies and procedures manual, and will be loyal and faithful to the Employer at all times.
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f)
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Employee will make available to the Employer any and all of the information of which the Employee has knowledge relating to the business of the Employer, and will make all suggestions and recommendations which the Employee feels will be mutually beneficial to the Parties.
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g)
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Employee agrees that upon termination of his employment hereunder, he will immediately surrender and turn over to the Employer all books, records, forms, specifications, formulae, data, processes, programs, papers and writings related to the business of the Employer and all other property belonging to the Employer, together with all copies of the foregoing, it being understood and agreed that the same are the sole property of the Employer.
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h)
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Employee agrees that all ideas, concepts, processes, discoveries, devices, machines, tools, materials, designs, improvements, inventions, and other things of value whether patentable or not, which are conceived, made, invented, or suggested either by the Employee alone or in collaboration with others, whether before or during the Term of his employment which pertain specifically to the Employer and whether or not during regular working hours, shall be promptly disclosed in writing to the Employer and shall be the sole and exclusive property of the Employer. The Employee hereby assigns all of his right, title, and interest in and to all such Intangible Rights to the Employer, and the Employer’s successors or assignees. In the event that any of said Intangible Rights are deemed by the Employer to be patentable or otherwise registerable under any federal, state, or foreign law, the Employee further agrees that at the expense of Employer, he will execute all documents and do all things necessary, advisable, or proper to obtain patents therefore or registration thereof, and to vest in the Employer full title thereto.
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a)
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Employee shall not, by reason of this Agreement, have any vested interest in, or right, title or claim to, any land, buildings, equipment, machinery, processes, software, systems, products, contracts, goods, wares, merchandise, business assets, or other things of value belonging to or which may hereafter be acquired, owned or leased from Employee by the Employer unless otherwise approved by the Board from time-to-time.
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b)
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Complete control of the Employer, including, but not limited to, their plans, properties, contracts, methods, and policies, shall be established by the Board of Directors, and the Employee shall not, by reason of anything contained in this Agreement, either express or implied, have any control over such matters, and the Employer may, in their sole and absolute discretion, give, sell, assign, transfer or otherwise dispose of any or all of their assets or business in whole or in part, to any person, firm, or corporation, whether or not such person, firm, or corporation is in any manner owned by, associated with, or affiliated with the Employer.
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c)
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Employee acknowledges that the nature of his position with the Employer may mandate that the Employee perform such duties and render such services as are required of him hereunder.
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d)
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Employee during the term of this Agreement shall be allowed to pursue other business interests and/or professional pursuits, provided that Employee's pursuit of other business interests shall not materially diminish Employee's performance of his duties as set forth here.
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a)
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Employee's then current wages and projected bonus for the remainder of the current Contract Year plus;
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b)
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an amount equal to the total compensation that would have been due for the following full Contract Year including any and all benefits, transition bonus, projected bonuses, vacation pay, and incentives in place at the time of such termination plus;
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c)
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the Company shall immediately cause all unvested shares to become fully vested and exercisable;
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d)
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the present value (10% discount rate) of the balance due based on the full value for the remainder of the existing term of this Agreement including all extensions available to Employee hereunder;
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e)
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an amount equal to all taxes, penalties, or assessments of any nature that Employee shall incur in connection with such lump sum payment.
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a)
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Agreement Not to Compete. Employee will not, either directly or indirectly, (i) for himself, or (ii) as a shareholder, owner, partner, joint venturer, promoter, consultant, manager, independent contractor, agent, or in some similar capacity, participate in a Competing Business (as defined below) within the Territory (as defined below); and
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b)
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Agreement Not to Solicit Customers. Employee will not, either directly or indirectly, on his own behalf or in the service of or on behalf of others, solicit or attempt to divert to a Competing Business or to any third party any person, concern, or entity who is or was, or in the future will be (at the time of solicitation), a Customer of the Business (as defined below) or of Employer (or any Customer of any of the foregoing) whether within or without the Territory, and further, Employee will not, either directly or indirectly, on his own behalf or in the service of or on behalf of others, initiate a call upon any person, concern or entity who is, or was, or in the future will be (at the time of solicitation), a Customer of the Business or of Employer for the purpose of diverting or appropriating business to a Competing Business or to any third party. In the event any such Customers initiate a call upon Employee, then Employee shall not entertain any such call without first referring such person to Employer.
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c)
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Agreement Not to Solicit Employees. Employee will not, either directly or indirectly, on his own behalf or in the service of or on behalf of others, solicit, divert, or recruit any employee of Employer to leave such employment or otherwise terminate his or her employment, whether or not such employment is pursuant to a written contract or at will.
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If to Employer: |
Encom Group, Inc.
12300 Dundee Ct.
Suite 203
Cypress, Texas 77429
Attn: Dale Roberts
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If to Employee: |
Randy Bayne
3202 Lake Park Lane
League City, Texas 77573
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Notices in Care of: |
Randy Bayne
3202 Lake Park Drive
League City, Texas
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And to: |
Encom Group, Inc.
Mark Van Eman, Director
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ENCOM GROUP, INC. | |
/s/Richard C. Fox | |
By: | Richard C. Fox |
Its: | Chief Executive Officer |
With copies and notices to: | r.davidson@dandslegal.com |
―
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The Chairman is to plan the agenda, coordinate and chair the meetings of the Board of Directors to be held a minimum of four (4) times per year
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―
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The Chairman is to plan, coordinate and chair the Annual Meeting of Shareholders to be held a minimum of once per year
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―
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Review on the performance of the organizations executive officers and directors
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―
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Establish relationships with other corporate executives and identify potential board candidates
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―
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Establish and maintain an efficient and appropriate information reporting process to the directors
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―
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The Corporate Services Group charter is to plan, implement, and manage the organizations domestic and international budget policies, business development, brand management, performance management, legal group, capital services, treasury management, audit services and public services.
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―
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The Financial Services Group
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―
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The Operational Services Group
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―
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The Solutions Services Group
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―
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Define and Lead the organizations domestic and international operations
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―
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Define and Lead the overall process of management and corporate decision-making to ensure the organization maximizes its short, medium and long-term profitability objectives and shareholder return.
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―
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Define and Lead and direct the other executives on the implementation of the company’s strategic and operational plans
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―
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Define and Lead the development and refinement of Company’s vision and strategy
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―
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Define the organizations stated goals and Lead the organization in their achievement
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―
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Define and Lead the organizations mandate of achieving and maintaining competitive and financial dominance in the marketplace.
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―
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Establish annual and quarterly objectives for the organization and the means by which to evaluate performance in order to insure successful achievement of stated goals
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―
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Establish and lead the organizations operational procedures, policies and standards.
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―
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Oversee company operations to insure production efficiency, quality, service, and cost-effective management of resources
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―
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Provide for the organization a strong day-to-day leadership presence; establish and expand national, regional and international operations and support an open-door policy among all employees.
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―
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Other duties as assigned by the Board of Directors
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1.
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$50,000 One Time Annual Increase Upon Sustaining Cash Flow Breakeven (Net Income after Cost and Expenses) for three (3) consecutive months
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2.
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$50,000 One Time Annual Increase Upon Sustaining Cash Flow Breakeven (Net Income after Cost and Expenses) for two (2) consecutive quarters
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3.
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$50,000 One Time Annual Increase Upon Sustaining Cash Flow Breakeven (Net Income after Cost and Expenses) for four (4) consecutive quarters
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§
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$5,000 Should the Company be 2% Under Budget for the Year
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§
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$10,000 Should the Company be 4% Under Budget for the Year
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§
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$15,000 Should the Company be 6% Under Budget for the Year
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§
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$20,000 Should the Company be 8% Under Budget for the Year
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§
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$25,000 Should the Company be 10% Under Budget for the Year
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1.
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Level 1: If the Company reaches an annual sales level of $5 million combined with an annual gross profit equal to a minimum of 40%; the pool shall receive $325,000 to be divided equally among the participants.
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2.
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Level 2: If the Company reaches an annual sales level of $10 million combined with an annual gross profit equal to a minimum of 40%; the pool shall receive $550,000 to be divided equally among the participants.
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3.
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Level 3: If the Company reaches an annual sales level of $20 million combined with an annual gross profit equal to a minimum of 35%; the pool shall receive $1,000,000 to be divided equally among the participants.
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4.
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Level 4: If the Company reaches an annual sales level of $30 million combined with an annual gross profit equal to a minimum of 35%; the pool shall receive $1,500,000 to be divided equally among the participants.
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5.
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Level 5: If the Company reaches an annual sales level of $40 million combined with an annual gross profit equal to a minimum of 30%; the pool shall receive $2,000,000 to be divided equally among the participants.
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6.
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Level 6: If the Company reaches an annual sales level of $50 million combined with an annual gross profit equal to a minimum of 30%; the pool shall receive $2,250,000 to be divided equally among the participants.
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7.
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Level 7: For annual sales that exceed $50 million combined with an annual gross profit equal to a minimum of 25%, the pool shall receive $2,250,000 plus 2.5% of the gross revenue that exceeds $50 million.
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1.
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“Cause” means when used in connection with the termination of employment with the Company, means the termination of Employee's employment by the Company by reason of (i) the conviction of Employee of a crime involving moral turpitude by a court of competent jurisdiction as to which no further appeal can be taken; (ii) the proven commission by Employee of an act of fraud upon the Company; (iii) the willful and proven misappropriation of any funds or property of the Company by Employee; (iv) the willful, continued and unreasonable failure by Employee to perform material duties assigned to Employee and agreed to by Employee after reasonable notice and opportunity to cure such performance; (v) the knowing engagement by Employee in any direct, material conflict of interest with the Company and which is a specific violation of the Company's conflict of interest policy, if any, then in effect; (vi) the knowing engagement by Employee, without the written approval of the Board of Directors of the Company, in any activity which directly competes with the business of the Company or any of its Affiliates or which would result in material injury to the Company; or (vii) the knowing engagement in any activity which would constitute a material violation of the provisions of the Company's Insider Trading Policy or Business Ethics Policy, if any, then in effect.
The terms "Cause," "for cause," and "with cause" (in upper or lower case) shall not include any of the following: (1) bad judgment; (2) negligence other than gross negligence; (3) any act or omission that was based upon (i) authority given pursuant to a resolution duly adopted by the Board, (ii) instructions of the chief executive officer of the Company or (iii) the advice of counsel for the Company; or (4) any act or omission that the Executive believed in good faith to have been in the interest of the Company, without intent of the Executive to gain therefrom, directly or indirectly, a personal profit to which he was not legally entitled.
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2.
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“Change of Control” means the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a "Designated Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended, (the "Exchange Act")) of 30% or more of either: (1) the then outstanding shares of Common Stock of Encom (the "Outstanding Encom Common Stock") or (2) the combined voting power of the then outstanding voting securities of Encom entitled to vote generally in the election of directors (the "Outstanding Encom Voting Securities"); provided, however, that the following acquisitions shall not constitute a Change in Control if, (i) any acquisition of Common Stock of Encom or Outstanding Encom Voting Securities directly from Encom (excluding an acquisition by virtue of the exercise of a conversion privilege), (ii) any acquisition of Common Stock of Encom or Outstanding Encom Voting Securities by Encom, (iii) any acquisition of Common Stock of Encom or voting securities of Encom by any employee benefit plan(s) (or related trust(s)) sponsored or maintained by Encom or any Outstanding Encom Voting Securities by any corporation controlled by Encom and approved by the Incumbent Board, or (iv) any acquisition by any corporation pursuant to a reorganization, merger or consolidation, if, immediately following such reorganization, merger or consolidation, the conditions described in clauses (1), (2) and (3) of paragraph (iii) of this definition are satisfied; or
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3.
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“Confidential Information” means information conveyed or assigned to the Company by Employee or conceived, compiled, created, developed, discovered or obtained by Employee from and during his employment relationship with the Company, whether solely by Employee or jointly with others, which concerns the affairs of the Company or its Affiliates and which the Company could reasonably be expected to desire be held in confidence, or the disclosure of which would likely be embarrassing, detrimental or disadvantageous to the Company or its Affiliates and without limiting the generality of the foregoing includes information relating to inventions, and the trade secrets, technologies, products, services, finances, business plans, marketing plans, legal affairs, supplier lists, client lists, potential clients, business prospects, business opportunities, personnel assignments, contracts and assets of the Company or any of its Affiliates and information made available to the Company or any of its Affiliates by other parties under a confidential relationship. Confidential Information, however, shall not include information (a) which is, at the time in question, in the public domain through no wrongful act of Employee, (b) which is later disclosed to Employee by one not under obligations of confidentiality to the Company or any of its Affiliates or Employee, (c) which is required by court or governmental order, law or regulation to be disclosed, or (d) which the Company has expressly given Employee the right to disclose pursuant to written agreement.
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4.
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“Competing Business” means any person, concern or entity which is engaged in, and to the extent engaged in, a business that is wholly or partially the same as the Business.
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5.
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“Contract Year” shall mean during the term of employment, each year of the Employee’s employment with the company beginning on the anniversary date of execution of this Employment Agreement and continuing 365 days thereafter, ending on that day which is immediately preceding the execution anniversary date for the following year.
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6.
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“Good Reason” means the occurrence of any of the following events:
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a.
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Employee is assigned any duties materially inconsistent with, or diminished from, Employee's positions, duties, responsibilities and status with the Company immediately prior to the commencement of the Protected Period, or Employee's status, reporting responsibilities, titles or offices are materially diminished from those in effect immediately prior to the commencement of the Protected Period, or Employee is removed from or is not re-elected or appointed to any of such responsibilities, titles, offices or positions, or Employee's duties and responsibilities are materially increased without a corresponding increase in the Employee's compensation (such increase in compensation to be satisfactory to Employee, in Employee's sole reasonable judgment), except in each case in connection with the termination of Employee's employment by the Company for Cause or on account of disability, or as a result of the Employee's death, or by the Employee for other than Good Reason; or
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b.
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Employee's Annual Base Salary is reduced from that in effect immediately prior to the commencement of the Protected Period or as the same may be increased from time to time thereafter; or
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c.
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The Company fails to continue in effect any benefit or compensation plan, including, but not limited to, the annual bonus plan, qualified retirement plan, executive life insurance plan and/or health and accident plan, in which Employee is participating immediately prior to the commencement of the Protected Period, or plans providing, in the sole reasonable judgment of Employee, Employee with substantially similar benefits, or the Company takes any action that would adversely affect Employee's participation in or reduce Employee's benefits or compensation under any of such plans (excluding any such action by the Company that is required by law); or
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d.
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The Company's principal executive offices are relocated at any time following a Change in Control more than 20 miles from where such offices were located immediately prior to such Change in Control; or
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e.
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The Company requires Employee at any time following a Change in Control to relocate more than 20 miles from where Employee's office was located immediately prior to such Change in Control; or
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f.
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The amendment, modification or repeal of any provision of the Certificate of Incorporation or Bylaws of the Company that was in effect immediately prior to the commencement of the Protected Period, if such amendment, modification or repeal would materially adversely affect Employee's rights to indemnification by the Company; or
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g.
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The Company shall violate or breach any obligation of the Company in effect immediately prior to the commencement of the Protected Period (regardless whether such obligation be set forth in the Bylaws of the Company and/or in this Agreement or any other separate agreement entered into between the Company and Employee) to indemnify Employee against any claim, loss, expense or liability sustained or incurred by Employee by reason, in whole or in part, of the fact that Employee is or was an officer or director of the Company; or
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h.
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The Company shall violate or breach any other material obligation of the Company owing to Employee in effect immediately prior to the commencement of the Protected Period relating to Employee's employment with the Company, but only if such violation or breach (if capable of being remedied) shall continue unremedied for more than 15 days after written notice thereof is given by Employee to the Company; or
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i.
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The Board (or any nominating committee of the Board) fails to recommend and support Employee's re-election as a director of the Company if the Employee is a director of the Company immediately prior to the commencement of the Protected Period; or
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j.
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The Company shall fail to keep in force, for the benefit of Employee, directors' and officers' insurance policy with coverage amounts and scope equal to the coverage amounts and scope under such policy immediately prior to the commencement of the Protected Period; or
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k.
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The Company fails to obtain from a successor (including a successor to a material portion of the business or assets of the Company a satisfactory assumption in writing of the Company's obligations under this Agreement; or
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l.
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The Company fails to provide Employee with office space, related facilities and support personnel (including, but not limited to, administrative and secretarial assistance) that are both commensurate with the Employee's position and Employee's responsibilities to and position with the Company immediately prior to the Change of Control and not materially dissimilar to the office space, related facilities and support personnel provided to other executive officers of the Company or executive officers of similar stature in other businesses; or
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m.
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The Company notifies Employee of the Company's intention not to observe or perform one or more of the obligations of the Company under this Agreement.
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7.
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“Customer” means a person or entity which buys goods or services from Employer.
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8.
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“Protected Period” means the period of time beginning with a Change of Control and ending 12 months following such Change of Control; provided, however, that if any event has occurred which could reasonably be expected to result in a Change of Control and a Change of Control occurs within twelve months after such event, then the Protected Period will begin on the date of such event and continue for twelve months after such Change of Control.
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9.
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“Territory” means the world.
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a)
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172,125 Founders Shares will be released to Employee one (1) year from the date of execution of this Agreement;
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b)
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172,125 Founders Shares will be released to Employee two (2) years from the date of execution of this Agreement; and
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c)
|
172,125 Founders Shares will be released to Employee three (3) years from the date of execution of this Agreement.
|
a)
|
the acquisition described in clause (i) of the definition of Change of Control;
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b)
|
the change in the composition of the Board of Directors described in clause (ii) of such definition;
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c)
|
the shareholder approval or adoption described in clauses (iii) or (iv) of such definition;
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d)
|
the commencement date of any tender offer subject to the terms of Section 14(d)(1) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or exchange offer subject to the terms of the Securities Act of 1933, as amended (the "Securities Act"), or any other offer or series of offers to purchase for cash, or to exchange for securities of a person other than the Company or any of its affiliates, Encom Common Stock by any "person" or "group" of persons (as such terms are used in Rule 13d of the Exchange Act) other than an offer or offers by Encom or by employee benefit plan(s) sponsored by Encom ("Tender Offer") if such person or group would hold 30% or more of the then outstanding Encom Common Stock after the consummation of the Tender Offer;
|
e)
|
the Termination of Employee subject to the provisions of Section 20, 21 or Section 22 that specifically trigger the vesting of all of the Employee’s stock options
|
a)
|
During the term of this Agreement, Employee shall be allowed to pursue other business interests and/or professional pursuits, provided such involvement would not (i) interfere with his duties as set forth herein.
|
b)
|
Employee will not engage, directly or indirectly, in any activity competitive with the business of the Employer. This prohibition shall include the ownership, management, operation, control of, employment by, participation in, or connection with the management, ownership, operation or control of, in any manner, any business of the type and character engaged in by the Employer. Notwithstanding the foregoing, the Employee may make or maintain an investment not to exceed five percent (5%) of the capital stock of any publicly traded company.
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c)
|
Employee will truthfully and accurately make, maintain, and preserve all records and reports that the Employer may from time-to-time request or require.
|
d)
|
Employee will fully account for all money, records, goods, wares and merchandise, or other property belonging to the Employer of which the Employee has custody, and will promptly pay over and deliver the same whenever and however the Employee may be reasonably directed to do so.
|
e)
|
Employee will obey all rules, regulations, and special instructions applicable to him, including but not limited to, those set forth in Employer’s then existing policies and procedures manual, and will be loyal and faithful to the Employer at all times.
|
f)
|
Employee will make available to the Employer any and all of the information of which the Employee has knowledge relating to the business of the Employer, and will make all suggestions and recommendations which the Employee feels will be mutually beneficial to the Parties.
|
g)
|
Employee agrees that upon termination of his employment hereunder, he will immediately surrender and turn over to the Employer all books, records, forms, specifications, formulae, data, processes, programs, papers and writings related to the business of the Employer and all other property belonging to the Employer, together with all copies of the foregoing, it being understood and agreed that the same are the sole property of the Employer.
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h)
|
Employee agrees that all ideas, concepts, processes, discoveries, devices, machines, tools, materials, designs, improvements, inventions, and other things of value whether patentable or not, which are conceived, made, invented, or suggested either by the Employee alone or in collaboration with others, whether before or during the Term of his employment which pertain specifically to the Employer and whether or not during regular working hours, shall be promptly disclosed in writing to the Employer and shall be the sole and exclusive property of the Employer. The Employee hereby assigns all of his right, title, and interest in and to all such Intangible Rights to the Employer, and the Employer’s successors or assignees. In the event that any of said Intangible Rights are deemed by the Employer to be patentable or otherwise registerable under any federal, state, or foreign law, the Employee further agrees that at the expense of Employer, he will execute all documents and do all things necessary, advisable, or proper to obtain patents therefore or registration thereof, and to vest in the Employer full title thereto.
|
a)
|
Employee shall not, by reason of this Agreement, have any vested interest in, or right, title or claim to, any land, buildings, equipment, machinery, processes, software, systems, products, contracts, goods, wares, merchandise, business assets, or other things of value belonging to or which may hereafter be acquired, owned or leased from Employee by the Employer unless otherwise approved by the Board from time-to-time.
|
b)
|
Complete control of the Employer, including, but not limited to, their plans, properties, contracts, methods, and policies, shall be established by the Board of Directors, and the Employee shall not, by reason of anything contained in this Agreement, either express or implied, have any control over such matters, and the Employer may, in their sole and absolute discretion, give, sell, assign, transfer or otherwise dispose of any or all of their assets or business in whole or in part, to any person, firm, or corporation, whether or not such person, firm, or corporation is in any manner owned by, associated with, or affiliated with the Employer.
|
c)
|
Employee acknowledges that the nature of his position with the Employer may mandate that the Employee perform such duties and render such services as are required of him hereunder.
|
d)
|
Employee during the term of this Agreement shall be allowed to pursue other business interests and/or professional pursuits, provided that Employee's pursuit of other business interests shall not materially diminish Employee's performance of his duties as set forth here.
|
a)
|
Employee's then current wages and projected bonus for the remainder of the current Contract Year plus;
|
b)
|
an amount equal to the total compensation that would have been due for the following full Contract Year including any and all benefits, transition bonus, projected bonuses, vacation pay, and incentives in place at the time of such termination plus;
|
c)
|
the Company shall immediately cause all unvested shares to become fully vested and exercisable;
|
d)
|
the present value (10% discount rate) of the balance due based on the full value for the remainder of the existing term of this Agreement including all extensions available to Employee hereunder;
|
e)
|
an amount equal to all taxes, penalties, or assessments of any nature that Employee shall incur in connection with such lump sum payment.
|
a)
|
Agreement Not to Compete. Employee will not, either directly or indirectly, (i) for himself, or (ii) as a shareholder, owner, partner, joint venturer, promoter, consultant, manager, independent contractor, agent, or in some similar capacity, participate in a Competing Business (as defined below) within the Territory (as defined below); and
|
b)
|
Agreement Not to Solicit Customers. Employee will not, either directly or indirectly, on his own behalf or in the service of or on behalf of others, solicit or attempt to divert to a Competing Business or to any third party any person, concern, or entity who is or was, or in the future will be (at the time of solicitation), a Customer of the Business (as defined below) or of Employer (or any Customer of any of the foregoing) whether within or without the Territory, and further, Employee will not, either directly or indirectly, on his own behalf or in the service of or on behalf of others, initiate a call upon any person, concern or entity who is, or was, or in the future will be (at the time of solicitation), a Customer of the Business or of Employer for the purpose of diverting or appropriating business to a Competing Business or to any third party. In the event any such Customers initiate a call upon Employee, then Employee shall not entertain any such call without first referring such person to Employer.
|
c)
|
Agreement Not to Solicit Employees. Employee will not, either directly or indirectly, on his own behalf or in the service of or on behalf of others, solicit, divert, or recruit any employee of Employer to leave such employment or otherwise terminate his or her employment, whether or not such employment is pursuant to a written contract or at will.
|
If to Employer: |
Encom Group, Inc.
12300 Dundee Ct.
Suite 203
Cypress, Texas 77429
Attn: Dale Roberts
|
|
If to Employee: |
Mark Van Eman
13403 Oak Alley Lane
Cypress, Texas 77429
|
Notices in Care of: |
Mark Van Eman
13403 Oak Alley Lane
Cypress, Texas 77429
|
And to: |
Encom Group, Inc.
Mark Van Eman, Director
|
ENCOM GROUP, INC. | |
/s/ Richard C. Fox | |
By: | Richard C. Fox |
Its: | Chief Executive Officer |
With copies and notices to: | r.davidson@dandslegal.com |
―
|
The Operational Services Group charter is to plan, implement, and manage the organizations business operations, manpower management, technology management, network operations, and client and product support and information technology.
|
―
|
The Solutions Services Group charter is to plan, implement and manage the organizations domestic and international sales and marketing operations, CRM management, sales support, media services, event services and market intelligence programs.
|
―
|
Lead the overall process of management and corporate decision-making to ensure the organization maximizes its short, medium and long-term profitability objectives and shareholder return.
|
―
|
Lead and direct the other executives on the implementation of the company’s strategic and operational plans
|
―
|
Oversee company operations to insure production efficiency, quality, service, and cost-effective management of resources.
|
―
|
Lead the development and refinement of Company’s vision and strategy
|
―
|
Establish annual and quarterly objectives for the organization and the means by which to evaluate performance in order to insure successful achievement of stated goals
|
―
|
Establish and lead the organizations operational procedures, policies and standards.
|
―
|
Provide for the organization a strong day-to-day leadership presence; bridge national, regional and international operations and support an open-door policy among all employees.
|
―
|
Direct and oversee all aspects of the organizations Business Operations functions; to include but not limited to:
|
§
|
Establish and maintain effective project management protocols
|
§
|
Establish and manage effective procurement processes and policies
|
§
|
Effective management of the organizations facilities and office resources
|
―
|
Direct and oversee all aspects of the organizations Manpower Management functions; to include but not limited to:
|
§
|
Development of an annual manpower plan, compensation plan and overall employee recruiting plan
|
―
|
Direct and oversee all aspects of the organizations Technology Management functions; to include but not limited to:
|
§
|
Develop and manage the organizations intellectual property plan
|
§
|
Develop and manage the organizations product development programs
|
§
|
Establish and manage the organizations in-house and outsourced engineering services
|
―
|
Direct and oversee all aspects of the organizations Network Operations functions; to include but not limited to:
|
§
|
Development, implementation and management of the organizations domestic and international network strategy
|
§
|
Development, implementation and management of the organizations cloud services programs
|
―
|
Direct and oversee all aspects of the organizations Client and Product Support functions; to include but not limited to:
|
§
|
Development, implementation and management of the organizations product training and client training programs, client account management and service activation programs; development, implementation and management of the product support and third party support programs
|
§
|
Development, implementation and management of the organizations quality control programs
|
―
|
Direct and oversee all aspects of the organizations Information Technology functions; to include but not limited to:
|
§
|
Development, implementation and management of the organizations software management services to include but not limited to; CRM software, Accounting Software, Productivity Software, Project Management Software, and Media Production Software
|
§
|
Development, implementation and management of the organizations internal and external communications services to include but not limited to; domestic phone, internet, and mobile telecommunications providers
|
―
|
Direct and oversee all aspects of the organizations domestic and international sales functions; to include but not limited to:
|
―
|
Lead the company's sales and business development efforts to ensure adherence to the projected revenue goals and overall budget.
|
―
|
Manage and cultivate relationships with resellers, vendors and customers to secure and expand recurring revenue streams.
|
§
|
Development, implementation and management of the organizations Plan-to-Sell to include but not limited to; establishing sales objectives, sales timelines, budgets, pricing plans and defining the organizations target market segments
|
§
|
Direct and oversee all aspects of the organizations CRM Management functions; to include but not limited to:
|
§
|
Selection and implementation of the organizations CRM software
|
§
|
Development, implementation and management of all CRM protocols and policies
|
§
|
Establishing sales tracking and reporting metrics and the performance measurement processes and corrective action procedures to insure achievement of stated sales goals.
|
―
|
Direct and oversee all aspects of the organizations Sales Support functions; to include but not limited to:
|
§
|
Establishing, implementation and management of all client and user based contracts
|
§
|
Developing and insuring adequate resources for the sales channel
|
―
|
Direct and oversee all aspects of the organizations Media Services functions; to include but not limited to:
|
§
|
Developing a media services plan for establishing and providing in-house and outsourced client support services to include but not limited to; content production, bulk e-mail services, and lead generation services
|
―
|
Direct and oversee all aspects of the organizations Event Services functions; to include but not limited to:
|
§
|
Development, implementation and management of the organizations tradeshow strategy and event functions
|
―
|
Direct and oversee all aspects of the organizations Event Services functions; to include but not limited to:
|
§
|
Development, implementation and management of the organization intelligence gathering programs in order to insure the Company’s ability to react to market changes in a proactive and timely fashion
|
―
|
Other duties as assigned
|
1.
|
$50,000 One Time Annual Increase Upon Sustaining Cash Flow Breakeven (Net Income after Cost and Expenses) for three (3) consecutive months
|
2.
|
$50,000 One Time Annual Increase Upon Sustaining Cash Flow Breakeven (Net Income after Cost and Expenses) for two (2) consecutive quarters
|
3.
|
$50,000 One Time Annual Increase Upon Sustaining Cash Flow Breakeven (Net Income after Cost and Expenses) for four (4) consecutive quarters
|
§
|
$5,000 Should the Company be 2% Under Budget for the Year
|
§
|
$10,000 Should the Company be 4% Under Budget for the Year
|
§
|
$15,000 Should the Company be 6% Under Budget for the Year
|
§
|
$20,000 Should the Company be 8% Under Budget for the Year
|
§
|
$25,000 Should the Company be 10% Under Budget for the Year
|
1.
|
Level 1: If the Company reaches an annual sales level of $5 million combined with an annual gross profit equal to a minimum of 40%; the pool shall receive $325,000 to be divided equally among the participants.
|
2.
|
Level 2: If the Company reaches an annual sales level of $10 million combined with an annual gross profit equal to a minimum of 35%; the pool shall receive $550,000 to be divided equally among the participants.
|
3.
|
Level 3: If the Company reaches an annual sales level of $20 million combined with an annual gross profit equal to a minimum of 35%; the pool shall receive $1,000,000 to be divided equally among the participants.
|
4.
|
Level 4: If the Company reaches an annual sales level of $30 million combined with an annual gross profit equal to a minimum of 30%; the pool shall receive $1,500,000 to be divided equally among the participants.
|
5.
|
Level 5: If the Company reaches an annual sales level of $40 million combined with an annual gross profit equal to a minimum of 30%; the pool shall receive $2,000,000 to be divided equally among the participants.
|
6.
|
Level 6: If the Company reaches an annual sales level of $50 million combined with an annual gross profit equal to a minimum of 25%; the pool shall receive $2,250,000 to be divided equally among the participants.
|
7.
|
Level 7: For annual sales that exceed $50 million combined with an annual gross profit equal to a minimum of 20%, the pool shall receive $2,250,000 plus 2.5% of the gross revenue that exceeds $50 million.
|
1.
|
“Cause” means when used in connection with the termination of employment with the Company, means the termination of Employee's employment by the Company by reason of (i) the conviction of Employee of a crime involving moral turpitude by a court of competent jurisdiction as to which no further appeal can be taken; (ii) the proven commission by Employee of an act of fraud upon the Company; (iii) the willful and proven misappropriation of any funds or property of the Company by Employee; (iv) the willful, continued and unreasonable failure by Employee to perform material duties assigned to Employee and agreed to by Employee after reasonable notice and opportunity to cure such performance; (v) the knowing engagement by Employee in any direct, material conflict of interest with the Company and which is a specific violation of the Company's conflict of interest policy, if any, then in effect; (vi) the knowing engagement by Employee, without the written approval of the Board of Directors of the Company, in any activity which directly competes with the business of the Company or any of its Affiliates or which would result in material injury to the Company; or (vii) the knowing engagement in any activity which would constitute a material violation of the provisions of the Company's Insider Trading Policy or Business Ethics Policy, if any, then in effect.
|
2.
|
“Change of Control” means the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a "Designated Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended, (the "Exchange Act")) of 30% or more of either: (1) the then outstanding shares of Common Stock of Encom (the "Outstanding Encom Common Stock") or (2) the combined voting power of the then outstanding voting securities of Encom entitled to vote generally in the election of directors (the "Outstanding Encom Voting Securities"); provided, however, that the following acquisitions shall not constitute a Change in Control if, (i) any acquisition of Common Stock of Encom or Outstanding Encom Voting Securities directly from Encom (excluding an acquisition by virtue of the exercise of a conversion privilege), (ii) any acquisition of Common Stock of Encom or Outstanding Encom Voting Securities by Encom, (iii) any acquisition of Common Stock of Encom or voting securities of Encom by any employee benefit plan(s) (or related trust(s)) sponsored or maintained by Encom or any Outstanding Encom Voting Securities by any corporation controlled by Encom and approved by the Incumbent Board, or (iv) any acquisition by any corporation pursuant to a reorganization, merger or consolidation, if, immediately following such reorganization, merger or consolidation, the conditions described in clauses (1), (2) and (3) of paragraph (iii) of this definition are satisfied; or
(ii) individuals who, as of the date hereof, constitute the entire Board of Directors of Encom (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board of Directors of Encom (the "Board "); provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by Encom 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, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of either (1) an actual or threatened election contest (as such terms are used in Rule l4a-1 1 of the Regulation 14A promulgated under the Exchange Act), or an actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board or (2) a plan or agreement to replace a majority of the members of the Board then comprising the Incumbent Board; or
|
3.
|
“Confidential Information” means information conveyed or assigned to the Company by Employee or conceived, compiled, created, developed, discovered or obtained by Employee from and during his employment relationship with the Company, whether solely by Employee or jointly with others, which concerns the affairs of the Company or its Affiliates and which the Company could reasonably be expected to desire be held in confidence, or the disclosure of which would likely be embarrassing, detrimental or disadvantageous to the Company or its Affiliates and without limiting the generality of the foregoing includes information relating to inventions, and the trade secrets, technologies, products, services, finances, business plans, marketing plans, legal affairs, supplier lists, client lists, potential clients, business prospects, business opportunities, personnel assignments, contracts and assets of the Company or any of its Affiliates and information made available to the Company or any of its Affiliates by other parties under a confidential relationship. Confidential Information, however, shall not include information (a) which is, at the time in question, in the public domain through no wrongful act of Employee, (b) which is later disclosed to Employee by one not under obligations of confidentiality to the Company or any of its Affiliates or Employee, (c) which is required by court or governmental order, law or regulation to be disclosed, or (d) which the Company has expressly given Employee the right to disclose pursuant to written agreement.
|
4.
|
“Competing Business” means any person, concern or entity which is engaged in, and to the extent engaged in, a business that is wholly or partially the same as the Business.
|
5.
|
“Contract Year” shall mean during the term of employment, each year of the Employee’s employment with the company beginning on the anniversary date of execution of this Employment Agreement and continuing 365 days thereafter, ending on that day which is immediately preceding the execution anniversary date for the following year.
|
6.
|
“Good Reason” means the occurrence of any of the following events:
|
a.
|
Employee is assigned any duties materially inconsistent with, or diminished from, Employee's positions, duties, responsibilities and status with the Company immediately prior to the commencement of the Protected Period, or Employee's status, reporting responsibilities, titles or offices are materially diminished from those in effect immediately prior to the commencement of the Protected Period, or Employee is removed from or is not re-elected or appointed to any of such responsibilities, titles, offices or positions, or Employee's duties and responsibilities are materially increased without a corresponding increase in the Employee's compensation (such increase in compensation to be satisfactory to Employee, in Employee's sole reasonable judgment), except in each case in connection with the termination of Employee's employment by the Company for Cause or on account of disability, or as a result of the Employee's death, or by the Employee for other than Good Reason; or
|
b.
|
Employee's Annual Base Salary is reduced from that in effect immediately prior to the commencement of the Protected Period or as the same may be increased from time to time thereafter; or
|
c.
|
The Company fails to continue in effect any benefit or compensation plan, including, but not limited to, the annual bonus plan, qualified retirement plan, executive life insurance plan and/or health and accident plan, in which Employee is participating immediately prior to the commencement of the Protected Period, or plans providing, in the sole reasonable judgment of Employee, Employee with substantially similar benefits, or the Company takes any action that would adversely affect Employee's participation in or reduce Employee's benefits or compensation under any of such plans (excluding any such action by the Company that is required by law); or
|
d.
|
The Company's principal executive offices are relocated at any time following a Change in Control more than 20 miles from where such offices were located immediately prior to such Change in Control; or
|
e.
|
The Company requires Employee at any time following a Change in Control to relocate more than 20 miles from where Employee's office was located immediately prior to such Change in Control; or
|
f.
|
The amendment, modification or repeal of any provision of the Certificate of Incorporation or Bylaws of the Company that was in effect immediately prior to the commencement of the Protected Period, if such amendment, modification or repeal would materially adversely affect Employee's rights to indemnification by the Company; or
|
g.
|
The Company shall violate or breach any obligation of the Company in effect immediately prior to the commencement of the Protected Period (regardless whether such obligation be set forth in the Bylaws of the Company and/or in this Agreement or any other separate agreement entered into between the Company and Employee) to indemnify Employee against any claim, loss, expense or liability sustained or incurred by Employee by reason, in whole or in part, of the fact that Employee is or was an officer or director of the Company; or
|
h.
|
The Company shall violate or breach any other material obligation of the Company owing to Employee in effect immediately prior to the commencement of the Protected Period relating to Employee's employment with the Company, but only if such violation or breach (if capable of being remedied) shall continue unremedied for more than 15 days after written notice thereof is given by Employee to the Company; or
|
i.
|
The Board (or any nominating committee of the Board) fails to recommend and support Employee's re-election as a director of the Company if the Employee is a director of the Company immediately prior to the commencement of the Protected Period; or
|
j.
|
The Company shall fail to keep in force, for the benefit of Employee, directors' and officers' insurance policy with coverage amounts and scope equal to the coverage amounts and scope under such policy immediately prior to the commencement of the Protected Period; or
|
k.
|
The Company fails to obtain from a successor (including a successor to a material portion of the business or assets of the Company a satisfactory assumption in writing of the Company's obligations under this Agreement; or
|
l.
|
The Company fails to provide Employee with office space, related facilities and support personnel (including, but not limited to, administrative and secretarial assistance) that are both commensurate with the Employee's position and Employee's responsibilities to and position with the Company immediately prior to the Change of Control and not materially dissimilar to the office space, related facilities and support personnel provided to other executive officers of the Company or executive officers of similar stature in other businesses; or
|
m.
|
The Company notifies Employee of the Company's intention not to observe or perform one or more of the obligations of the Company under this Agreement.
|
7.
|
“Customer” means a person or entity which buys goods or services from Employer.
|
8.
|
“Protected Period” means the period of time beginning with a Change of Control and ending 12 months following such Change of Control; provided, however, that if any event has occurred which could reasonably be expected to result in a Change of Control and a Change of Control occurs within twelve months after such event, then the Protected Period will begin on the date of such event and continue for twelve months after such Change of Control.
|
9.
|
“Territory” means the world.
|
a)
|
76,500 Founders Shares will be released to Employee one (1) year from the date of execution of this Agreement;
|
b)
|
76,500 Founders Shares will be released to Employee two (2) years from the date of execution of this Agreement; and
|
c)
|
76,500 Founders Shares will be released to Employee three (3) years from the date of execution of this Agreement.
|
a)
|
the acquisition described in clause (i) of the definition of Change of Control;
|
b)
|
the change in the composition of the Board of Directors described in clause (ii) of such definition;
|
c)
|
the shareholder approval or adoption described in clauses (iii) or (iv) of such definition;
|
d)
|
the commencement date of any tender offer subject to the terms of Section 14(d)(1) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or exchange offer subject to the terms of the Securities Act of 1933, as amended (the "Securities Act"), or any other offer or series of offers to purchase for cash, or to exchange for securities of a person other than the Company or any of its affiliates, Encom Common Stock by any "person" or "group" of persons (as such terms are used in Rule 13d of the Exchange Act) other than an offer or offers by Encom or by employee benefit plan(s) sponsored by Encom ("Tender Offer") if such person or group would hold 30% or more of the then outstanding Encom Common Stock after the consummation of the Tender Offer;
|
e)
|
the Termination of Employee subject to the provisions of Section 18, 19 or Section 20 that specifically trigger the vesting of all of the Employee’s stock options
|
a)
|
During the term of this Agreement, Employee shall be allowed to pursue other business interests and/or professional pursuits, provided such involvement would not (i) interfere with his duties as set forth herein.
|
b)
|
Employee will not engage, directly or indirectly, in any activity competitive with the business of the Employer. This prohibition shall include the ownership, management, operation, control of, employment by, participation in, or connection with the management, ownership, operation or control of, in any manner, any business of the type and character engaged in by the Employer. Notwithstanding the foregoing, the Employee may make or maintain an investment not to exceed five percent (5%) of the capital stock of any publicly traded company.
|
c)
|
Employee will truthfully and accurately make, maintain, and preserve all records and reports that the Employer may from time-to-time request or require.
|
d)
|
Employee will fully account for all money, records, goods, wares and merchandise, or other property belonging to the Employer of which the Employee has custody, and will promptly pay over and deliver the same whenever and however the Employee may be reasonably directed to do so.
|
e)
|
Employee will obey all rules, regulations, and special instructions applicable to him, including but not limited to, those set forth in Employer’s then existing policies and procedures manual, and will be loyal and faithful to the Employer at all times, constantly endeavoring to improve his ability and knowledge of the business in an effort to increase the value of his services for the mutual benefit of the Parties.
|
f)
|
Employee will make available to the Employer any and all of the information of which the Employee has knowledge relating to the business of the Employer, and will make all suggestions and recommendations which the Employee feels will be mutually beneficial to the Parties.
|
g)
|
Employee agrees that upon termination of his employment hereunder, he will immediately surrender and turn over to the Employer all books, records, forms, specifications, formulae, data, processes, programs, papers and writings related to the business of the Employer and all other property belonging to the Employer, together with all copies of the foregoing, it being understood and agreed that the same are the sole property of the Employer.
|
h)
|
Employee agrees that all ideas, concepts, processes, discoveries, devices, machines, tools, materials, designs, improvements, inventions, and other things of value whether patentable or not, which are conceived, made, invented, or suggested either by the Employee alone or in collaboration with others, whether before or during the Term of his employment which pertain specifically to the Employer and whether or not during regular working hours, shall be promptly disclosed in writing to the Employer and shall be the sole and exclusive property of the Employer. The Employee hereby assigns all of his right, title, and interest in and to all such Intangible Rights to the Employer, and the Employer’s successors or assignees. In the event that any of said Intangible Rights are deemed by the Employer to be patentable or otherwise registerable under any federal, state, or foreign law, the Employee further agrees that at the expense of Employer, he will execute all documents and do all things necessary, advisable, or proper to obtain patents therefore or registration thereof, and to vest in the Employer full title thereto.
|
a)
|
Employee shall not, by reason of this Agreement, have any vested interest in, or right, title or claim to, any land, buildings, equipment, machinery, processes, software, systems, products, contracts, goods, wares, merchandise, business assets, or other things of value belonging to or which may hereafter be acquired, owned or leased from Employee by the Employer unless otherwise approved by the Board from time-to-time.
|
b)
|
Complete control of the Employer, including, but not limited to, their plans, properties, contracts, methods, and policies, shall be established by the Board of Directors, and the Employee shall not, by reason of anything contained in this Agreement, either express or implied, have any control over such matters, and the Employer may, in their sole and absolute discretion, give, sell, assign, transfer or otherwise dispose of any or all of their assets or business in whole or in part, to any person, firm, or corporation, whether or not such person, firm, or corporation is in any manner owned by, associated with, or affiliated with the Employer.
|
c)
|
Employee acknowledges that the nature of his position with the Employer may mandate that the Employee perform such duties and render such services as are required of him hereunder.
|
d)
|
Employee during the term of this Agreement shall be allowed to pursue other business interests and/or professional pursuits, provided that Employee's pursuit of other business interests shall not materially diminish Employee's performance of his duties as set forth here.
|
a)
|
Employee's then current base salary for six months (6) months from the date of termination;
|
b)
|
the option to continue medical coverage, at the Company’s expense, existing on the date of termination for six (6) months and;
|
c)
|
the Company shall immediately cause all unvested shares to become fully vested and exercisable;
|
a)
|
Agreement Not to Compete. Employee will not, either directly or indirectly, (i) for himself, or (ii) as a shareholder, owner, partner, joint venturer, promoter, consultant, manager, independent contractor, agent, or in some similar capacity, participate in a Competing Business (as defined below) within the Territory (as defined below); and
|
b)
|
Agreement Not to Solicit Customers. Employee will not, either directly or indirectly, on his own behalf or in the service of or on behalf of others, solicit or attempt to divert to a Competing Business or to any third party any person, concern, or entity who is or was, or in the future will be (at the time of solicitation), a Customer of the Business (as defined below) or of Employer (or any Customer of any of the foregoing) whether within or without the Territory, and further, Employee will not, either directly or indirectly, on his own behalf or in the service of or on behalf of others, initiate a call upon any person, concern or entity who is, or was, or in the future will be (at the time of solicitation), a Customer of the Business or of Employer for the purpose of diverting or appropriating business to a Competing Business or to any third party. In the event any such Customers initiate a call upon Employee, then Employee shall not entertain any such call without first referring such person to Employer.
|
c)
|
Agreement Not to Solicit Employees. Employee will not, either directly or indirectly, on his own behalf or in the service of or on behalf of others, solicit, divert, or recruit any employee of Employer to leave such employment or otherwise terminate his or her employment, whether or not such employment is pursuant to a written contract or at will.
|
If to Employer: |
Encom Group, Inc.
12300 Dundee Ct.
Suite 203
Cypress, Texas 77429
Attn: Dale Roberts
|
|
If to Employee: |
Dale Roberts
12300 Dundee Ct.
Suite 203
Cypress, Texas 77429
|
Notices in Care of: |
Dale Roberts
|
And to: |
Encom Group, Inc.
Randy Bayne, Chairman of the Board
Mark Van Eman, Director
|
ENCOM GROUP, INC. | |
/s/ Randy Bayne | |
By: | Randy Bayne |
Its: | Chief Executive Officer |
Copies and notices to: | r.davidson@dandslegal.com |
―
|
The Financial Services Group charter is to plan, implement, and manage the organizations accounting services, banking services, risk management, records management and human resources.
|
―
|
The Corporate Services Group charter is to plan, implement, and manage the organizations budget, business development, brand management, performance management, legal services, capital services, treasury services and public services.
|
―
|
Managing the financial organization through effective performance driven leadership
|
―
|
Establishing annual and quarterly objectives and the means by which to evaluate performance in order to insure successful achievement of stated goals
|
―
|
Direct and oversee all aspects of the organizations Finance & Accounting functions; to include but not limited to:
|
§
|
Create, Coordinate, and Evaluate the Financial Programs and Supporting Information Systems of the Company to include Budgeting, Tax Planning and Conservation of Assets
|
§
|
Develop and Implement Finance, Accounting, Billing, and Auditing Procedures; Ensure that Effective Internal Controls are in Place and Ensure Compliance with GAAP and Applicable Federal, State and Local Regulatory Laws and Rules for Financial and Tax Reporting
|
§
|
Approve and Coordinate Changes and Improvements in Automated Financial and Management Information Systems for the Company
|
§
|
Coordinate the Preparation of Financial Statements, Financial Reports, Special Analyses, and Information Reports
|
§
|
Manage Processes for Financial Forecasting, Budgets and Consolidation and Reporting to the Company. Provide Executive Management with Advice on the Financial Implications of Business Activities and Provide Recommendations to Strategically Enhance Financial Performance and Business Opportunities.
|
―
|
Direct and oversee all aspects of the Banking functions of the organization. To Include but not limited to:
|
§
|
Establishing and managing the Company’s banking policies
|
§
|
Establishing and managing commercial and international banking relationships
|
§
|
Establishing and managing the Company’s merchant services
|
―
|
Direct and oversee all aspects of the organizations Risk Management functions; to include but not limited to:
|
§
|
Selection of Providers and Management of Commercial and Professional Insurance Programs
|
§
|
Selection of Providers and Management of Health Insurance and Employee Benefits Programs
|
§
|
Establish and Maintain Appropriate Internal Control Safeguards
|
§
|
Credit Rating Management
|
§
|
Risk Reporting
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―
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Direct and oversee all aspects of the organizations Records Management functions; to include but not limited to:
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§
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Management of Corporate Organization Records
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§
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Contract Management to Include Establishing and Oversight of the Approval and Renewal Processes
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§
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Establishing Approved Business Forms and Proper Version Control Processes
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§
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Establishing and Management of Records Retention and Storage Policies and Procedures
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―
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Direct and oversee all aspects of the organizations Human Resources functions; to include but not limited to:
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§
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Hiring and Management of HR Consulting Services
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§
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Establishing and Management of Payroll and Benefits Programs
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§
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Establishing and Management of Employee Practices Programs to Include but not Limited to Hiring Policies, Probation Policies, Review and Compensation Policies and Termination Polices
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―
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Other duties as assigned
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1.
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$15,000 One Time Annual Increase Upon the Company (i) Obtaining a Minimum of $1,500,000 in Capital Financing and or (ii) Reaching Cash Flow Breakeven (Net Income after Cost and Expenses)
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2.
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$15,500 One Time Annual Increase Upon Sustaining Cash Flow Breakeven (Net Income after Cost and Expenses) for three (3) consecutive quarters
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§
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$5,000 Should the Company be 2% Under Budget for the Year
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§
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$10,000 Should the Company be 4% Under Budget for the Year
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§
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$15,000 Should the Company be 6% Under Budget for the Year
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§
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$20,000 Should the Company be 8% Under Budget for the Year
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§
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$25,000 Should the Company be 10% Under Budget for the Year
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1.
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Level 1: If the Company reaches an annual sales level of $5 million combined with an annual gross profit equal to a minimum of 40%; the pool shall receive $325,000 to be divided equally among the participants.
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2.
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Level 2: If the Company reaches an annual sales level of $10 million combined with an annual gross profit equal to a minimum of 35%; the pool shall receive $550,000 to be divided equally among the participants.
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3.
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Level 3: If the Company reaches an annual sales level of $20 million combined with an annual gross profit equal to a minimum of 35%; the pool shall receive $1,000,000 to be divided equally among the participants.
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4.
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Level 4: If the Company reaches an annual sales level of $30 million combined with an annual gross profit equal to a minimum of 30%; the pool shall receive $1,500,000 to be divided equally among the participants.
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5.
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Level 5: If the Company reaches an annual sales level of $40 million combined with an annual gross profit equal to a minimum of 30%; the pool shall receive $2,000,000 to be divided equally among the participants.
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6.
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Level 6: If the Company reaches an annual sales level of $50 million combined with an annual gross profit equal to a minimum of 25%; the pool shall receive $2,250,000 to be divided equally among the participants.
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7.
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Level 7: For annual sales that exceed $50 million combined with an annual gross profit equal to a minimum of 20%, the pool shall receive $2,250,000 plus 2.5% of the gross revenue that exceeds $50 million.
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1.
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“Cause” means when used in connection with the termination of employment with the Company, means the termination of Employee's employment by the Company by reason of (i) the conviction of Employee of a crime involving moral turpitude by a court of competent jurisdiction as to which no further appeal can be taken; (ii) the proven commission by Employee of an act of fraud upon the Company; (iii) the willful and proven misappropriation of any funds or property of the Company by Employee; (iv) the willful, continued and unreasonable failure by Employee to perform material duties assigned to Employee and agreed to by Employee after reasonable notice and opportunity to cure such performance; (v) the knowing engagement by Employee in any direct, material conflict of interest with the Company and which is a specific violation of the Company's conflict of interest policy, if any, then in effect; (vi) the knowing engagement by Employee, without the written approval of the Board of Directors of the Company, in any activity which directly competes with the business of the Company or any of its Affiliates or which would result in material injury to the Company; or (vii) the knowing engagement in any activity which would constitute a material violation of the provisions of the Company's Insider Trading Policy or Business Ethics Policy, if any, then in effect.
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2.
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“Change of Control” means the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act (a "Designated Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended, (the "Exchange Act")) of 30% or more of either: (1) the then outstanding shares of Common Stock of Encom (the "Outstanding Encom Common Stock") or (2) the combined voting power of the then outstanding voting securities of Encom entitled to vote generally in the election of directors (the "Outstanding Encom Voting Securities"); provided, however, that the following acquisitions shall not constitute a Change in Control if, (i) any acquisition of Common Stock of Encom or Outstanding Encom Voting Securities directly from Encom (excluding an acquisition by virtue of the exercise of a conversion privilege), (ii) any acquisition of Common Stock of Encom or Outstanding Encom Voting Securities by Encom, (iii) any acquisition of Common Stock of Encom or voting securities of Encom by any employee benefit plan(s) (or related trust(s)) sponsored or maintained by Encom or any Outstanding Encom Voting Securities by any corporation controlled by Encom and approved by the Incumbent Board, or (iv) any acquisition by any corporation pursuant to a reorganization, merger or consolidation, if, immediately following such reorganization, merger or consolidation, the conditions described in clauses (1), (2) and (3) of paragraph (iii) of this definition are satisfied; or
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3.
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“Confidential Information” means information conveyed or assigned to the Company by Employee or conceived, compiled, created, developed, discovered or obtained by Employee from and during his employment relationship with the Company, whether solely by Employee or jointly with others, which concerns the affairs of the Company or its Affiliates and which the Company could reasonably be expected to desire be held in confidence, or the disclosure of which would likely be embarrassing, detrimental or disadvantageous to the Company or its Affiliates and without limiting the generality of the foregoing includes information relating to inventions, and the trade secrets, technologies, products, services, finances, business plans, marketing plans, legal affairs, supplier lists, client lists, potential clients, business prospects, business opportunities, personnel assignments, contracts and assets of the Company or any of its Affiliates and information made available to the Company or any of its Affiliates by other parties under a confidential relationship. Confidential Information, however, shall not include information (a) which is, at the time in question, in the public domain through no wrongful act of Employee, (b) which is later disclosed to Employee by one not under obligations of confidentiality to the Company or any of its Affiliates or Employee, (c) which is required by court or governmental order, law or regulation to be disclosed, or (d) which the Company has expressly given Employee the right to disclose pursuant to written agreement.
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4.
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“Competing Business” means any person, concern or entity which is engaged in, and to the extent engaged in, a business that is wholly or partially the same as the Business.
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5.
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“Contract Year” shall mean during the term of employment, each year of the Employee’s employment with the company beginning on the anniversary date of execution of this Employment Agreement and continuing 365 days thereafter, ending on that day which is immediately preceding the execution anniversary date for the following year.
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6.
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“Good Reason” means the occurrence of any of the following events:
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a.
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Employee is assigned any duties materially inconsistent with, or diminished from, Employee's positions, duties, responsibilities and status with the Company immediately prior to the commencement of the Protected Period, or Employee's status, reporting responsibilities, titles or offices are materially diminished from those in effect immediately prior to the commencement of the Protected Period, or Employee is removed from or is not re-elected or appointed to any of such responsibilities, titles, offices or positions, or Employee's duties and responsibilities are materially increased without a corresponding increase in the Employee's compensation (such increase in compensation to be satisfactory to Employee, in Employee's sole reasonable judgment), except in each case in connection with the termination of Employee's employment by the Company for Cause or on account of disability, or as a result of the Employee's death, or by the Employee for other than Good Reason; or
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b.
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Employee's Annual Base Salary is reduced from that in effect immediately prior to the commencement of the Protected Period or as the same may be increased from time to time thereafter; or
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c.
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The Company fails to continue in effect any benefit or compensation plan, including, but not limited to, the annual bonus plan, qualified retirement plan, executive life insurance plan and/or health and accident plan, in which Employee is participating immediately prior to the commencement of the Protected Period, or plans providing, in the sole reasonable judgment of Employee, Employee with substantially similar benefits, or the Company takes any action that would adversely affect Employee's participation in or reduce Employee's benefits or compensation under any of such plans (excluding any such action by the Company that is required by law); or
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d.
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The Company's principal executive offices are relocated at any time following a Change in Control more than 20 miles from where such offices were located immediately prior to such Change in Control; or
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e.
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The Company requires Employee at any time following a Change in Control to relocate more than 20 miles from where Employee's office was located immediately prior to such Change in Control; or
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f.
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The amendment, modification or repeal of any provision of the Certificate of Incorporation or Bylaws of the Company that was in effect immediately prior to the commencement of the Protected Period, if such amendment, modification or repeal would materially adversely affect Employee's rights to indemnification by the Company; or
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g.
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The Company shall violate or breach any obligation of the Company in effect immediately prior to the commencement of the Protected Period (regardless whether such obligation be set forth in the Bylaws of the Company and/or in this Agreement or any other separate agreement entered into between the Company and Employee) to indemnify Employee against any claim, loss, expense or liability sustained or incurred by Employee by reason, in whole or in part, of the fact that Employee is or was an officer or director of the Company; or
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h.
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The Company shall violate or breach any other material obligation of the Company owing to Employee in effect immediately prior to the commencement of the Protected Period relating to Employee's employment with the Company, but only if such violation or breach (if capable of being remedied) shall continue unremedied for more than 15 days after written notice thereof is given by Employee to the Company; or
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i.
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The Board (or any nominating committee of the Board) fails to recommend and support Employee's re-election as a director of the Company if the Employee is a director of the Company immediately prior to the commencement of the Protected Period; or
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j.
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The Company shall fail to keep in force, for the benefit of Employee, directors' and officers' insurance policy with coverage amounts and scope equal to the coverage amounts and scope under such policy immediately prior to the commencement of the Protected Period; or
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k.
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The Company fails to obtain from a successor (including a successor to a material portion of the business or assets of the Company a satisfactory assumption in writing of the Company's obligations under this Agreement; or
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l.
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The Company fails to provide Employee with office space, related facilities and support personnel (including, but not limited to, administrative and secretarial assistance) that are both commensurate with the Employee's position and Employee's responsibilities to and position with the Company immediately prior to the Change of Control and not materially dissimilar to the office space, related facilities and support personnel provided to other executive officers of the Company or executive officers of similar stature in other businesses; or
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m.
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The Company notifies Employee of the Company's intention not to observe or perform one or more of the obligations of the Company under this Agreement.
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7.
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“Customer” means a person or entity which buys goods or services from Employer.
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8.
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“Protected Period” means the period of time beginning with a Change of Control and ending 12 months following such Change of Control; provided, however, that if any event has occurred which could reasonably be expected to result in a Change of Control and a Change of Control occurs within twelve months after such event, then the Protected Period will begin on the date of such event and continue for twelve months after such Change of Control.
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9.
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“Territory” means the world.
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Issuer:
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Eastern World Solutions, Inc. (OTC BB: ESRN)
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Offerings:
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Bridge Loan: Up to $400,000 in Convertible Debentures (with Warrants)
Equity Line: Up to $2,000,000 in shares of Common Stock
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Investor(s):
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Calm Seas Capital, LLC, as lead investor, and independent participating entities associated with the lead investor
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Maximum Bridge:
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Up to $400,000, of which:
(i) $150,000 is acknowledged to have already been advanced for the payment of the License Fee to Motion Notes, LLC; and
(ii) $180,000 shall be paid in three installments of $60,000, the first installment within twenty (20) days of the acceptance date hereof (“Execution Date”) and the second and third installments on the same day of the succeeding two (2) months; and
(iii) up to $70,000 shall be paid, as invoiced, directly to the attorneys, accountants, auditors, edgarizers, stock transfer agents, etc. for fees and costs of the S-1 filing for the Equity Line of Credit set forth hereinbelow; with such advances to be deemed for the purchase of, and evidenced by the issuance of, Units consisting of Convertible Debentures and cashless Common Stock Purchase Warrants (see below). Payments of the bridge investment shall be by wire transfer.
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Convertible Debentures:
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The debentures shall be in the face amount of $10,000 each, shall have an issuance date of the date on which cleared funds are received by the Company, mature on December 31, 2013 regardless of issuance date, and bear interest at the rate of 6% simple interest per annum payable at maturity or convertible with the principal. The principal and interest shall be convertible at the option of the holder at the lower of:
(i) a fixed price of $.105 (10 ½ cents) per share, and
(ii) 70% of the average daily volume (“ADV”) multiplied by the average of the daily closing prices for the twenty (20) trading days immediately preceding the conversion date (including the conversion date).
The debentures cannot be repaid from the proceeds of the Equity Line.
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Warrants:
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Each debenture shall have a warrant attached exercisable for the purchase of 10,000 shares; the warrants shall expire on December 31, 2013, have a cashless exercise provision, and be exercisable at the lower of:
(i) a fixed price of $.105 (10 ½ cents) per share, and
(ii) 70% of the average daily volume (“ADV”) multiplied by the average of the daily closing prices for the twenty (20) trading days immediately preceding the exercise date (including the exercise date).
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Execution Date:
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The Execution Date is the date on which the final Letter attached to this Term Sheet is signed by both the Company and the Investor
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Structure:
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Equity Line of Credit, with monthly puts (1 per month) against the Commitment Amount, during the “Term”
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Use of Proceeds:
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Working capital, as more specifically described in the schedule and on the timeline to be attached to this Term Sheet as the “Schedule of Use of Proceeds”
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Term:
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The Term shall be that period commencing with the Effective Date as defined below and ending on the earlier of (a) the drawing down of the entire Commitment Amount or (b) that date 19 months after the Effective Date
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Commitment Amount:
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The Investor(s) shall commit to purchase up to $2,000,000 of the Company’s Common Stock over the course of no more than 18 months (the “Commitment Period”) after the date a registration statement for the resale of the Common Stock has been declared effective (the “Effective Date”) by the U.S. Securities and Exchange Commission (“SEC”)
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First Put:
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The Company may issue its first “Put Notice” during the first 5 business days of the month succeeding the month in which the Effective Date occurs
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Calculation of Put Amount:
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Prior to the end of each calendar month, the Company shall determine its working capital needs (consistent with the Schedule of Use of Proceeds) and, subject to the Put Ceiling and Put Floor, by the fifth business day of the following month shall deliver to Investor(s) a “Put Notice” for the necessary amount; the date of delivery of the Put Notice shall be the “Put Date”
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Put Ceiling:
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The maximum amount which the Company shall be entitled to request by each Put shall be the lesser of (a) $150,000 or (b) 150% of the average daily volume (“ADV”) multiplied by the average of the daily closing prices for the three (3) trading days immediately preceding the Put Date. The ADV shall be computed using the 10 trading days prior to the Put Date.
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Put Floor:
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The Company shall automatically withdraw that portion of the Put Notice amount if the Market Price with respect to that put does not meet the Minimum Acceptable Price, which is defined as 70% of the average closing “sale” price for the Common Stock for the 10 trading days prior to the Put Date
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Put by Mutual
Agreement:
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Notwithstanding the ceiling for each Put, as described above, at any time either as a part of a monthly Put or as an additional Put(s) during a month, the Company may request permission to request funds in excess of the Put Ceiling for such month and may deliver to Investor(s) a Put or Puts in excess of the Put Ceiling, which Put or Puts Investor(s) may fund, in its/their sole discretion, subject to the terms and conditions herein applicable to the monthly Puts.
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Pricing Period:
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The five (5) consecutive trading days immediately after the Put Date.
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Market Price:
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The lowest closing “sale” price of the Common Stock during the Pricing Period.
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Purchase Price:
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The purchase price shall be seventy percent (70%) of the Market Price.
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Put Closing Date:
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The Investor shall make the investment required by the Put Notice, subject to the Put Ceiling, by the 10th business day after the Put Notice is delivered to the Company, not counting the day the notice is given. Payments of the Puts shall be made by wire transfer.
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Registration Statement:
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The Investor will work with the Company to have a registration statement covering the Common Stock (or a portion thereof if there is a Rule 415 cutback - see below) prepared and filed by corporate counsel as chosen by the Investor, within 60 days after the Execution Date. Such Registration Statement shall be prosecuted with all due speed with the intent to have it be declared effective within 120 days after the Effective Date.
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Expenses:
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The Company agrees to pay all expenses related to the preparation of the final documents to be signed on the Execution Date and all expenses related to the filing and prosecution of the Registration Statement. Investor shall advance such funds as a part of the Bridge Loan as provided hereinabove. The Investor will select counsel of its choice to prepare the documents.
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Commitment Fee:
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Waived
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Rule 415 Cutback:
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In the event that the SEC objects to the number of shares proposed to be registered, the Company shall use its best efforts to register the maximum number of shares permissible by the SEC to retain the status of the offering as a secondary offering under SEC Rule 415.
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Equity Issuance Restriction:
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The Company agrees not to issue any equity or equity equivalents (exercisable or convertible into equity securities), including those on Form S-8, (other than those hereunder) in an amount which would exceed 5% of the Company’s issued and outstanding shares without the prior written consent of the Investor. This Equity Issuance Restriction will remain in effect until the earlier of (a) thirty (30) days after the issuance to Investor of all registered Common Stock, (b) nineteen (19) months after the effective date of the Registration Statement, or (c) the termination of this Equity Line of Credit. This Equity Issuance Restriction does not apply to the shares of Common Stock being held as a reserve for a Rule 506 Private Placement.
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Covenants:
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1. During the Term, the Company shall maintain the effectiveness of the Registration Statement
2. During the Term, the Company shall maintain its status as a company trading on the OTC BB and eligible for quotation on the OTC Pink
3. During the Term, the Company shall maintain its status as a reporting company under the 1934 Act and shall timely file all required SEC reports
4. Proceeds from the Puts shall be used only as set forth in the Schedule of Use of Proceeds without the written approval of a variation by the Investor(s)
5. During the Term, the Company shall maintain its existing R&D contracts and relationships
6. The Company shall maintain a contractual relationship for investor relations/financial public relations services for a period of 36 months from the effective date, with the extent of the costs of such services to be proportional to the size and growth of the Company
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Short Sales:
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During the Term, the Investor(s) agree not to engage in any short selling of the Company’s Common Stock
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Exclusivity:
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From the date of the execution of this Term Sheet until the Effective Date, the Company shall not pursue any other transaction of the nature contemplated herein with any other person unless and until good faith negotiations with the Investor have been terminated.
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Right of First Refusal:
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During the Term and for a period of six (6) months thereafter, if the Company receives, from any third party, a bona fide offer to purchase, of if the Company offers to sell to any third party, any New Security (as hereinafter defined), the Company shall first offer such New Security to Investor on the same terms and conditions as offered by or to the third party. The Company shall notify the Investor, in writing, of all of the material terms of the offer (“Offer Notice”). The Investor will have ten (10) business days from the date on which the Investor receives the Offer Notice (not including the day of delivery) to determine, in its sole discretion, whether to purchase some or all of the New Security on such terms and conditions. The Company shall not close any third party sale and purchase until such ten day term has expired. Further, if the Company changes any of the terms and conditions, it shall deliver a new Offer Notice to Investor and initiate a new ten day determination period. “New Security” shall mean any equity security (whether or not currently authorized), any right, option or warrant to purchase an equity security, and any security or instrument that is, or becomes, convertible into, exchangeable for, or exercisable to acquire, an equity security.
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