Exhibit 10.2
EMPLOYMENT AGREEMENT
EMPLOYMENT
AGREEMENT (this "
Agreement "),
made and entered into effective as of October 3, 2007 (the "
Effective Date "),
by and between Mystaru.com, Inc. (the "
Company ")
and Alan R. Lun (the "
Executive ").
WHEREAS,
the Company desires to employ the Executive and to enter into
an agreement embodying the terms of such employment and
considers it essential to its best interests and the best
interests of its stockholders to employ the Executive during
the term of the Agreement;
WHEREAS,
the Executive desires to accept such employment and enter into
such an agreement;
NOW,
THEREFORE, in consideration of the premises and mutual
covenants herein and for other good and valuable
consideration, the parties hereby agree as
follows:
1.
Term of Employment.
Subject to Section 8 below, the term
of the Executive's employment under this Agreement shall commence
on the Effective Date and shall end on October 2, 2009 (the
"
Initial Period ");
provided ,
however ,
that such term shall be automatically extended for additional
one-year periods (each, a "
Renewal Period ")
unless, not later than 180 days prior to the expiration of the
Initial Period or a Renewal Period, as applicable, either party
hereto shall provide written notice of its or his desire not to
extend the term hereof (a "
Non-Renewal Notice ")
to the other party hereto (the Initial Period, together with each
Renewal Period then in effect, shall be referred to hereinafter as
the "
Employment Term ").
2.
Position.
(a)
Duties. The
Executive shall serve as the Company's Chief Executive Officer and
President. In such position, the Executive shall have such duties
and authority as shall be determined from time to time by the Board
of Directors of the Company (the "
Board ")
and as shall be consistent with the by-laws of the Company as in
effect from time to time;
provided ,
however ,
that, at all times, the Executive's duties and responsibilities
hereunder shall be commensurate in all material respects with his
status as the senior-most officer of the Company. During the
Employment Term, the Executive shall devote his full time and best
efforts to his duties hereunder. The Executive shall report
directly to the Board (or any committee of the Board designated for
this purpose). In addition, as of the Effective Date, the Board
shall appoint the Executive a member of the Board, and the
Executive agrees to continue to serve during the Employment Term as
a member of the Board to the extent he is periodically elected or
appointed to such position in accordance with the by-laws of the
Company and applicable law.
(b)
Company Code of Conduct.
The
Executive shall comply in all respects with the NASD Code of
Conduct as may be amended from time to time (the "
Code of Conduct "),
and the Executive hereby acknowledges that he has received a copy
of the Code of Conduct. Pursuant to the Code of Conduct, and
subject to Section 9 below, the Executive shall be required
to: (i) disclose to the Audit Committee of the board of
directors of the National Association of Securities
Dealers, Inc. (the "
Audit Committee ")
the names of the boards of directors, boards of advisors or boards
of trustees on which he currently serves and (ii) obtain prior
approval from the Audit Committee for service as a new director of
any publicly traded company, which approval shall not be
unreasonably withheld. The Executive agrees to accept the final
Audit Committee decision on the suitability of all present and
future directorships as binding. Subject to the foregoing, the
Executive may, in accordance with the Code of Conduct,
(i) engage in personal activities involving charitable,
community, educational, religious or similar organizations,
(ii) manage his personal investments and (iii) continue
to serve as a member of the boards of directors, boards of advisors
or boards of trustees on which he is serving on the Effective
Date;
provided ,
however ,
that, in each case, such activities are in all respects consistent
with applicable law and are in accordance with Section 9
below.
3.
Base Salary. During
the Employment Term, the Company shall pay the Executive a base
salary (the "
Base Salary ")
at an annual rate of $40,000.00. The Base Salary shall be payable
in regular payroll installments in accordance with the Company's
payroll practices as in effect from time to time. The Management
Compensation Committee of the Board (the "
Compensation Committee ")
shall review the Base Salary at least annually and may (but shall
be under no obligation to) increase (but not decrease) the Base
Salary on the basis of such review.
4.
Annual Bonus; Transition Bonus.
N/A
5.
Equity Compensation.
T
he
Company will issue t he
Executive a
stock
base salary of 1,000,000 shares of
the Company’s common stock to be restricted under SEC rule
144. Further, it is agreed that such shares of common stock will be
restricted in that the shares of common stock are to
“vest” over the initial two year term of this
Agreement ,
beginning on the date this
Agreement is
signed below. Additionally,
t he
Executive or
the Company may terminate this
Agreement or
t he
Executive may
resign or be terminated by the Company with immediate effect. Upon
resignation or termination before the end of the two year term, if
applicable, t he
Executive will
return the pro-rata unvested shares of common stock which are
intended to vest over a two year term beginning with the date of
this Agreement.
6.
Employee Benefits.
(a)
Generally. During
the Employment Term, the Company shall provide the Executive with
benefits on the same basis as benefits are generally made available
to other senior executives of the Company, including, without
limitation, medical, dental, vision, disability and life insurance
and pension benefits. The Executive shall be entitled to four weeks
of paid vacation;
provided ,
however ,
that, in the event the Executive's employment ends for any reason,
the Executive shall be paid only for unused vacation that accrued
in the calendar year his employment terminated and any unused
vacation for any prior year shall be forfeited.
(b)
SERP Participation and
Provisions. The
Executive shall be entitled to participate in the National
Association of Securities Dealers, Inc. Supplemental Executive
Retirement Plan (the "
SERP ")
and is hereby designated an "
Executive Participant "
for purposes of the SERP. The Company has made available to the
Executive a complete copy of the SERP in effect as of the Effective
Date. Notwithstanding any term or condition contained in the SERP
to the contrary:
(i) Section 4.1
of the SERP shall be applied as if the age and service
requirements stated therein were age 49 and four years of
service rather than age 55 and ten years of service.
Accordingly, the Executive shall be 100% vested in his accrued
SERP benefit upon the later of his attainment of age 49 while
employed and his completion of four years of
service.
(ii) Section 4.1
of the SERP shall be applied as if the age and service
requirements stated therein were satisfied upon the
Executive's termination of employment by the Company without
Cause or by the Executive for Good Reason pursuant to
Section 8(b) below. Accordingly, under such
circumstances, the Executive shall be 100% vested in his SERP
benefit even if his employment terminates prior to his
attaining age 49 and having completed four years of service
with the Company.
(iii) The
death benefit provided in Section 5.1 of the SERP shall
become payable if the Executive dies before his SERP benefit
commences, but after having satisfied the requirements of
Section 4.1 of the SERP prior to modification by
Section 6(b)(i) above (and, if the foregoing
conditions are satisfied, such death benefit will be payable
even if the Executive's death occurs after he has left
employment with vested rights under the SERP, but before
payment of the SERP benefit commences).
(iv) Section 4.3
of the SERP (relating to early retirement) shall be applied as
if the service requirement stated therein were five years of
service rather than ten years of service;
provided that
this special rule shall not permit the Executive's SERP benefit to
start earlier than age 55.
(v) The
provisions of this Section 6(b) shall not accelerate the
rate at which the SERP benefit accrues so that the amount of
the accrued SERP benefit shall be determined with reference to
an accrual over a period of 3,650 days as provided in
Section 4.2(a) of the SERP.
7.
Business and Other
Expenses.
(a)
Business
Expenses. During
the Employment Term, the Company shall reimburse the Executive for
reasonable business expenses incurred by him in the performance of
his duties hereunder in accordance with the policy established by
the Compensation Committee. Accordingly, the Company shall
reimburse the Executive's expenses associated with business travel
in accordance with such policy.
(b)
Transportation and Security.
During
the Employment Term, in accordance with the directives of the
Compensation Committee, the Company shall provide the Executive
with an automobile and driver during the business week for personal
and business use and at other times as required for business
purposes. The driver shall have security training if the Executive
and the Compensation Committee determine in good faith that such
security training is necessary or advisable for the personal safety
of the Executive or his family. As soon as practicable following
the Effective Date, the Company, at its expense, shall conduct a
security audit at the Executive's New Jersey residence and, if
necessary, install or upgrade the Executive's home security system
at a reasonable cost to the Company not to exceed
$10,000.00.
(c)
Legal Fees. The
Company shall pay or reimburse the Executive for his reasonable
legal fees and expenses incurred in connection with the negotiation
and execution of this Agreement upon presentation by the Executive
of written invoices or receipts setting forth in reasonable detail
the basis for such legal fees and expenses in an amount not to
exceed $20,000.00.
8.
Termination. Notwithstanding
any other provision of this Agreement, subject to the further
provisions of this Section 8, the Company may terminate the
Executive's employment or the Executive may resign such employment
for any reason or no stated reason at any time, subject to the
notice and other provisions set forth below:
(a)
Generally. In
the event of the termination of the Executive's employment for any
reason, the Executive shall be entitled to receive payment of
(i) any unpaid Base Salary through the Date of Termination,
(ii) subject to Section 6(a) above, any accrued but
unpaid vacation through the Date of Termination (as defined below)
and (iii) any earned but unpaid Annual Bonus with respect to
the calendar year ended prior to the Date of Termination (the
"
Base Obligations ").
In addition, in the event of the Executive's termination of
employment, the applicable provisions of the Option Agreements and
any Restricted Stock Agreement shall govern the treatment of the
Options and the Restricted Shares, respectively.
For
purposes of this Agreement, "
Date of Termination "
means (i) in the event of a termination of the Executive's
employment by the Company for Cause or by the Executive for Good
Reason, the date specified in a written notice of termination (or,
if not specified therein, the date of delivery of such notice), but
in no event earlier than the expiration of the cure periods set
forth in Section 8(b)(ii) or 8(b)(iii) below,
respectively; (ii) in the event of a termination of the
Executive's employment by the Company without Cause, the date
specified in a written notice of termination (or if not specified
therein, the date of delivery of such notice); (iii) in the
event of a termination of the Executive's employment by the
Executive without Good Reason, the date specified in a written
notice of termination, but in no event less than 60 days
following the date of delivery of such notice; (iv) in the
event of a termination of the Executive's employment due to
Permanent Disability (as defined below), the date the Company
terminates the Executive's employment following the certification
of the Executive's Permanent Disability; (v) in the event of a
termination of Employment due to the Executive's death, the date of
the Executive's death; or (vi) in the event of a termination
of the Executive's employment due to the delivery of a Non-Renewal
Notice, the date on which the Initial Period or a Renewal Period
expires, as applicable.
(b)
Termination by the Company Without Cause or
by the Executive for Good Reason.
(i) The
Executive's employment hereunder may be terminated by the
Company without Cause or by the Executive for Good Reason.
Upon the termination of the Executive's employment by the
Company without Cause or by the Executive for Good Reason, the
Executive shall be entitled to receive, in addition to the
Base Obligations, the following payments and benefits (the
"
Severance Benefits "):
(A)
Severance Payment . The
Company shall pay the Executive an amount (the "
Severance Payment ")
equal to the sum of (I) the Base Salary paid to the Executive
with respect to the calendar year immediately preceding the
Executive's Date of Termination and (II) the Target Bonus for
the calendar year immediately preceding the Executive's Date of
Termination, payable in substantially equal monthly installments
for the twelve-month period following the Executive's Date of
Termination, or such shorter period as the Board, in its sole
discretion, may determine (the "Severance Period");
(B)
Transition Bonus . The
Company shall pay the Executive the Transition Bonus (to the extent
not already paid) in accordance with the provisions of
Section 4(e) above;
(C)
SERP . The
Company shall provide the Executive the SERP benefit as set forth
in Section 6(b)(ii) above; and
(D)
Health Care Coverage . The
Company shall provide the Executive with continued health care
coverage for the lesser of (I) twelve months or (II) the
date that the Executive is eligible for coverage under the health
care plans of a subsequent employer, such coverage to be
conditioned upon the Executive (X) being covered by the
Company's health care plans immediately prior to the Date of
Termination and (Y) paying his share of the applicable health
care premiums, deductibles and co-payments for such period of
coverage.
Receipt
of the Severance Benefits by the Executive is subject to the
execution by him of a general release of claims substantially
in the form attached as Exhibit D (the "
Release ").
All other benefits, if any, due the Executive following termination
pursuant to this Section 8(b) shall be determined in
accordance with the plans, policies and practices of the
Company;
provided ,
however ,
that the Executive shall not participate in any severance plan,
policy or program of the Company. If, during the Severance Period,
the Executive breaches in any material respect any of his
obligations under Section 9 or 10 below, the Company may, upon
written notice to the Executive, (x) terminate the Severance
Period and cease to make any further payments of the Severance
Payment and (y) cease any health care coverage continuation,
except in each case as required by applicable law.
(ii) For
purposes of this Agreement, "
Cause "
shall mean (A) the Executive's conviction of, or
pleading
nolo contend ere to,
any crime, whether a felony or misdemeanor, involving the purchase
or sale of any security, mail or wire fraud, theft, embezzlement,
moral turpitude, or Company property (with the exception of minor
traffic violations or similar misdemeanors); (B) the
Executive's repeated neglect of his duties to the Company; or
(C) the Executive's willful misconduct in connection with the
performance of his duties or other material breach by the Executive
of this Agreement;
provided ,
however ,
that the delivery of a Non-Renewal Notice by the Executive shall
not constitute Cause for purposes of this Agreement;
provided further that
the Company may not terminate the Executive's employment for Cause
unless (x) the Company first gives the Executive written
notice of its intention to terminate and of the grounds for such
termination within 90 days following the date the Board is
informed of such grounds at a meeting of the Board and
(y)
