EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT effective as of April 4,
2005 (the “Commencement Date”) by and between Weida
Communications, Inc. (the “Company”) and Christopher
Lennon (the “Executive”) (this
“Agreement”).
The parties hereto wish to enter into an
employment agreement on the terms and conditions set forth below.
Accordingly, in consideration of the premises and the respective
covenants and agreements of the parties herein contained, and
intending to be legally bound hereby, the parties hereto agree as
follows:
1.
Term . The Executive's employment under this
Agreement shall commence on the Commencement Date and shall end,
unless terminated earlier pursuant to Section 4, at the close of
business on April 3, 2007 (the “Term”); provided
, however , that the Term shall thereafter be automatically
extended for each succeeding one (1) year period (the Company shall
also have the option to extend the Term for an additional one (1)
year, thereby increasing the extension period to two (2) years)
unless either party hereto shall provide the other party with a
written notice at least ninety (90) days prior to the end of the
then current Term, advising that the party providing the notice
shall not agree to so extend the Term.
2.
Title, Duties and
Authority . The Executive
shall serve as Chief Operating Officer of the Company, and shall
have such responsibilities and duties (consistent with the
Executive's position as Chief Operating Officer of the Company) as
may from time to time be assigned to the Executive by the board of
directors of the Company (the “Board”), and shall have
all of the powers and duties usually incident to such offices. The
Executive shall devote substantially all of his working time and
efforts to the business and affairs of the Company, except for
vacations, illness and incapacity; provided , however
, that the Executive may serve on the boards of directors of
non-public companies and charitable organizations and may devote
reasonable time to charitable and civic organizations, in all cases
provided that the performance of his duties and responsibilities on
such boards and in such service does not interfere substantially
with the performance of his duties and responsibilities under this
Agreement. The Company hereby agrees to consider the Executive as a
possible replacement should the Company’s Chief Executive
Officer need to be replaced during the Term.
3.
Compensation and
Benefits .
(a)
Base Salary
. During the Term, the Company shall
pay the Executive a base salary (“Base Salary) at the rate of
Two Hundred Twenty-Five Thousand Dollars ($225,000) per annum,
payable in accordance with the Company’s regular payroll
practices; provided , however , that following the
Commencement Date, should the Company successfully complete a
financing with an investment bank for an amount in excess of Ten
Million Dollars ($10,000,000), the rate of Base Salary shall
thereupon be prospectively increased to Two Hundred Seventy-Five
Thousand Dollars ($275,000) per annum and, thereafter, the
Compensation Committee of the Board shall on an annual basis
consider increasing the Executive’s rate of Base
Salary.
(b)
Annual Bonus
. For each calendar year (or part
thereof) during the Term, the Executive shall be eligible to
receive from the Company a cash bonus of up to Twenty-Five Thousand
Dollars ($25,000) upon the Company’s satisfaction of goals
predetermined by the Board for each such year (with proration for
any partial calendar years occurring during the Term). Such annual
bonus shall be payable by January 31 of the next following calendar
year. On an annual basis the Compensation Committee of the Board
shall consider increasing the Executive’s eligible Bonus
amount.
(c)
Equity Compensation
. The Executive shall receive the
following awards under the Weida Communications, Inc. Omnibus
Securities and Incentive Plan (the “Plan”), such awards
to be subject to all of the applicable terms and conditions of the
Plan:
(i) The Executive shall receive a stock option for
the purchase of that number of shares of the Company’s common
stock equal to eighty-five percent (85%) of the number of shares
subject to the stock option granted contemporaneously under the
Plan to the Company’s Chief Executive Officer (the
“CEO’s Option”). The terms of the
Executive’s option, including but not limited to the exercise
price and vesting requirements, if any, shall be substantially the
same as the terms of the CEO’s Option.
(ii) The Executive shall receive a restricted stock
award for Seven Hundred Fifty Thousand (750,000) shares, with a two
(2) year service-based cliff vesting requirement for the lapse of
the attendant transfer restrictions on the shares.
(d)
Employee Health and Dental
Benefits . The Executive
shall be entitled to participate in the Company’s employee
health and dental benefits plan during the Term, as such plan may
be in effect from time to time.
(e)
Expenses . The Executive shall be entitled to receive
prompt reimbursement of his expenses incurred in the performance of
his employment hereunder upon his submission to the Company of
reasonable and customary expense claims to the Company, in
accordance with the Company’s procedures for expense
reimbursement.
(f)
Vacations . The Executive shall be entitled to four (4)
weeks paid vacation during the Term with no right to carry over
unused days.
(g)
Sick Pay . The Executive shall be entitled to five (5)
paid sick days during the Term, with no right to carry over unused
days.
4.
Termination
. The Executive's employment
hereunder with the Company may be terminated under the following
circumstances:
(a)
Death or Disability
. If the Executive shall die or
become disabled during the Term, the Company may terminate the
Executive's employment hereunder for death or
“Disability,” as applicable. For purposes of this
Agreement, the Executive’s “Disability” shall be
determined in the sole discretion of the Board.
(b)
Cause . The Company by action of the Board may
terminate the Executive's employment hereunder for Cause. For
purposes of this Agreement, the Company shall have
“Cause” to terminate the Executive's employment
hereunder upon the determination by the Board of:
(i) the failure by the Executive to substantially
perform the Executive's duties hereunder (other than any such
failure resulting from the Executive's Disability which shall be
subject to the provisions of Section 4(a));
(ii) the willful violation by the Executive of any of
the Executive's material obligations hereunder;
(iii) the willful engaging by the Executive in
misconduct which is materially injurious to the business or
reputation of the Company or any of its affiliates; or
(iv) the Executive's conviction of a
felony.
Notwithstanding the foregoing, the Executive
shall not be terminated for Cause without:
(A) delivery of a written notice to the Executive
setting forth the reasons for the Company's intention to terminate
the Exe