EMPLOYMENT
AGREEMENT
This EMPLOYMENT
AGREEMENT (the “ Agreement ”) is made
effective as of June 1, 2005 (the “ Effective Date
”), by and between Who’s Your Daddy, Inc. (formerly
Snocone Systems Inc . ), a Nevada corporation (the “
Company ”), and Reuven I. Rubinson (the “
Executive ”). The Company and the Executive are
hereinafter collectively referred to as the “ Parties
,” and individually referred to as a “ Party
.”
RECITALS
A. The Company desires assurance of the association
and services of the Executive in order to retain the
Executive’s experience, skills, abilities, background and
knowledge, and is willing to engage the Executive’s services
on the terms and conditions set forth in this Agreement.
B. The Executive desires to be in the employ of the
Company, and is willing to accept such employment on the terms and
conditions set forth in this Agreement.
AGREEMENT
In
consideration of the foregoing Recitals and the mutual promises and
covenants herein contained, and for other good and valuable
consideration, the Parties, intending to be legally bound, agree as
follows:
1. EMPLOYMENT.
1.1 Term . The Company hereby employs the Executive, and the
Executive hereby accepts employment by the Company, upon the terms
and conditions set forth in this Agreement. The term of this
Agreement will begin on the Effective Date and will continue until
the third (3rd) anniversary of the Effective Date, unless
terminated earlier in accordance with Section 3 and/or 4 below (the
“ Term ”).
1.2 Title . The Executive will have the title of Chief
Financial Officer of the Company and will serve in such other
capacity or capacities as may be prescribed by the Company or the
Executive’s superiors. The Executive will report to the Chief
Executive Officer of the Company or such other person or persons
designated by the Policies established by the Company’s Board
of Directors (the “Board”).
1.3 Duties . The Executive will do and perform all services,
acts or things reasonably consistent with his position, in
accordance with the bylaws of the Company and the Policies
established by the Board.
1.4 Policies and Practices . The employment relationship
between the Parties will be governed by the policies and practices
established by the Company and the Board. The Executive will
acknowledge in writing that he has read the Company’s
Employee Handbook, which will govern the terms and conditions of
his employment with the Company, along with this Agreement. If the
terms of this Agreement differ from or are in conflict with the
Company’s policies or practices or the Company’s
Employee Handbook, this Agreement will control. The
Executive
also acknowledges that he has received a copy of the
Company’s Code of Conduct Manual and will follow its
guidelines for ethical business behavior.
2. COMPENSATION OF THE
EXECUTIVE.
2.1 Base Salary . The Company will pay the Executive a base
salary as set forth below (the “ Base Salary ”),
less payroll deductions and all required withholdings, payable in
regular periodic payments in accordance with Company policy. Such
Base Salary will be prorated for any partial year of employment on
the basis of a 365-day fiscal year at the then-current rate. The
Executive’s Base Salary may be increased at the sole
discretion of the Board.
2.1.1
June 1, 2005 to July 31, 2005: Paid
$12,500 in cash, for time worked.
2.1.2
August 1, 2005 to August 31, 2005:
Paid $7,000 in cash
2.1.3 September 1, 2005 until the Company receives
additional financing in excess of $4,000,000 or has cumulative
revenues of $4,000,000, $8,000 per month in cash
2.1.4
Thereafter, the Company shall pay
Executive $10,000 per month in cash
2.2 Warrants. The Company shall issue to Executive warrants
with piggyback registration rights, such warrants to be eligible
for cashless exercise, as follows:
2.2.1 One warrant for the purchase of 175,000 shares of
Common Stock of the Company, exercisable for a period of
forty-eight months, commencing in month 12 and terminating at the
end of month 60, at an exercise price of $1.00 per share; these
warrants are conditional on the Executive still being employed by
the Company at the time of exercise;
2.2.2 One warrant for the purchase of an additional 175,000
shares of Common Stock of the Company, exercisable for a period of
forty-eight months, commencing in month 12, and terminating at the
end of month 60, at an exercise price of one dollar and fifty cents
($1.50) per share; these warrants are conditional on the Executive
still being employed by the Company at the time of
exercise;
2.2.3 One warrant for the
purchase of an additional 175,000 shares of Common Stock of the
Company, exercisable for a period of forty-eight months, commencing
in month 12, and terminating at the end of month 60, at an exercise
price of two dollars ($2.00) per share; these warrants are
conditional on the Executive still being employed by the Company at
the time of exercise.
2.3 Gross Revenue Payments The Executive will be entitled to
receive payments from the Company for the amount of one-half
percent (0.5%) of the annual gross revenue of the Company (each, a
“ Gross Revenue Payment ”). Gross revenue will
be calculated in accordance with generally accepted accounting
principles. The Company shall pay the Executive the Gross Revenue
Payments on an annual basis and shall be paid within fifteen (15)
days after the audited financial statements for the applicable
calendar year are issued. The Company shall pay the Gross Revenue
Payments in cash, provided that, if the Board of Directors makes a
good faith
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determination that there is insufficient cash to
pay any Gross Revenue Payment, the Company may pay any Gross
Revenue Payment in the Company’s Common Stock based on a
price per share equal to the average closing bid price based on the
ten (10) trading days prior to the date of the payment.
2.4 Benefits . The Executive will, in accordance with
Company policy and the terms of the applicable plan documents, be
eligible to participate in benefits under any executive benefit
plan or arrangement which may be in effect from time to time and
made available to the Company’s executive or key management
employees. In the event Executive chooses to use an alternate
medical plan, the Company shall reimburse Executive for payments
under such benefit plan not to exceed the amount the Company would
have paid under its existing medical plan.
2.5 Sick Time / Personal Time Off . The Executive will
accrue three (3) weeks sick time / personal time off over each
one-year period in the Term. All other provisions provided for in
the Company’s Employee Handbook will apply.
2.6 Employment Taxes . All of the Executive’s
compensation will be subject to customary payroll deductions and
all required withholdings as are commonly required to be collected
or withheld by the Company.
2.7 Stock Plan . The Executive may also be granted options
to purchase the Company’s Common Stock or restricted shares
of the Company’s Common Stock (the “Shares”) upon
the achievement of certain performance objectives as agreed to, in
writing, between the Executive and the Company.
2.8 Auto Lease . The Company will reimburse the executive
for an automobile lease or monthly payment, not to exceed $1,000,
once the Company’s cumulative revenues exceed
$4,000,000.
3. TERMINATION.
3.1 Termination By the Company . The Executive’s
employment with the Company may be terminated under the following
conditions:
3.1.1 Termination for Death or Disability . The
Executive’s employment with the Company will terminate
effective upon the date of the Executive’s death or “
Complete Disability ” (as defined in Section 3.5.1
below).
3.1.2 Termination by the Company For Cause . The Company may
terminate the Executive’s employment under this Agreement for
“ Cause ” (as defined in Section 3.5.2 below) by
delivery of written notice to the Executive specifying the Cause or
Causes relied upon for such termination. Any notice of termination
given pursuant to this Section 3.1.2 will effect termination of
employment as of the date specified in such notice or, in the event
no such date is specified, on the last day of the month in which
written notice is given.
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3.2
Termination By The Executive . Good Reason . The
Executive may terminate the Executive’s employment under this
Agreement for “ Good Reason ” (as defined below
in Section 3.5.2 below) by delivery of written notice to the
Company specifying the “ Good Reason ” relied
upon by the Executive for such termination, provided that such
notice is delivered within three (3) months following the
occurrence of any event or events constituting Good Reason and that
the Executive has given the Company a minimum of thirty (30) days
written notice and an opportunity to cure the event which
constitutes “ Good Reason .”
3.3 Termination by Mutual Agreement of the Parties . The
Executive’s employment pursuant to this Agreement may be
terminated at any time upon a mutual agreement. in writing, of the
Parties. Any such termination of employment will have the
consequences specified in such agreement.
3.4 Compensation
Upon Termination .
3.4.1 Death or Complete
Disability . If the Executive’s employment is terminated
by death or Complete Disability, as provided in Section 3.1.1
above, the Company will pay to the Executive and/or the
Executive’s heir(s), less standard deductions and
withholdings, (i) the Executive’s Base Salary through the end
of the six months of said death or disability or the end of the
Term of this Agreement, whichever occurs sooner, at the rate in
effect at the time and (ii) accrued and unused Sick Time / Personal
Time Off earned through the end of the month of said death or
disability. The amount of Gross Revenue Payment set forth in
Section 2.3 will continue to be earned through the end of the sixth
month after said death or disability or the end of the Term of this
Agreement, whichever occurs sooner. If the Term of the Agreement
has not then expired, it will then continue to be earned monthly
thru the end of the Term of this Agreement based on the average
monthly Revenues during that six month period. In addition, all
warrants included in Section 2.2 shall be deemed earned and
delivered to the Executive and/or the Executive’s heirs. The
Company will thereafter have no further obligations to the
Executive and/or the Executive’s heirs under this
Agreement.
3.4.2 With Cause . If the
Executive’s employment is terminated by the Company for
Cause, as provided in Section 3.1.12 above, the Company will pay to
the Executive, less standard deductions and withholdings, (i) the
Executive’s Base Salary through the date of termination at
the rate in effect at the time, (ii) accrued and unused Sick Time /
Personal Time Off earned through the date of termination and (iii)
the amount of Gross Revenue Payment set forth in Section 2.3 earned
through the date of termination. In addition, all warrants included
in Section 2.2 shall be deemed earned and delivered to the
Executive and/or the Executive’s heirs. The Company will
thereafter have no further obligations to the Executive and/or the
Executive’s heirs under this Agreement.
3.4.3 Without Cause or With Good
Reason . If Executive’s employment is terminated by the
Company without Cause, or if the Executive terminates the
Executive’s employment with Good Reason, the Company will pay
to the Executive, less standard deductions and withholdings, (i)
the Executive’s Base Salary through the through the end of
the month of termination at the rate in effect at the time and (ii)
accrued and unused Sick Time / Personal Time Off earned through the
through the end of the month of termination, to be paid within
thirty (30) days of termination. In addition, upon the
Executive’s furnishing to the
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Company a
fully executed waiver and release of claims (generally in the form
attached hereto as Exhibit A ), the Executive will be
entitled to (i) the accelerated vesting of all Shares and warrants
which are then unvested, (ii) reimbursement of any premiums paid by
the Executive to continue group health coverage for himself and his
dependents pursuant to COBRA, for the greater of (A) the remainder
of the Term or (B) for a period of one (1) ye
