THIS
EMPLOYMENT AGREEMENT (“Agreement”) is made and entered into on June 6, 2007 by
and between YP Corp., a Nevada Corporation (the “Company”), and Rajesh Navar
(“Executive”). This agreement supersedes any other Agreement between Executive
and Company.
In
consideration of the mutual promises, covenants and agreement herein contained,
intending to be legally bound, the parties agree as follows:
1. Employment.
The
Company hereby agrees to employ Executive, and Executive hereby agrees to
serve,
subject to the provisions of this Agreement, as an employee of the Company
in
the position of President. Executive will perform all services and acts
reasonably necessary to fulfill the duties and responsibilities of his position
and will render such services on the terms set forth herein and will report
to
the Company’s Chief Executive Officer (“CEO”). Executive agrees to devote his
business time, attention and energies to the extent reasonably necessary
to
perform the duties assigned hereunder, and to perform such duties diligently,
faithfully and to the best of his abilities. It is expressly understood and
agreed that Executive shall have the right to engage in any activities that
are
generally engaged in by executives of his position and status, provided that
Executive agrees to refrain from any activity that interferes with the
performance of Executive’s duties hereunder.
2. Term.
This
Agreement is for the three-year period (the “Term”) commencing on the date
hereof and terminating on the third anniversary of such date, or upon the
date
of termination of employment pursuant to Section 8 of this Agreement; provided,
however, that commencing on the third anniversary of the date hereof and
each
anniversary thereafter the Term will automatically be extended for one
additional year unless, not later than 90 days prior to any such anniversary,
either party hereto will have notified the other party hereto that such
extension will not take effect, in which event the Term shall end on the
last
day of the then current period.
3. Place
of Performance.
Executive will perform his duties and conduct business on behalf of the Company
at a location mutually agreed upon with the CEO and shall be permitted to
telecommute provided that it does not substantially interfere with the
performance of his duties hereunder.
4. Compensation.
Executive’s salary during the first year of the Term will be at the annual rate
of $300,000 (the “Annual Salary”), payable in accordance with the Company’s
regular payroll practices. During the Term, commencing with the second year
of
the Term, the Annual Salary shall be increased on an annual basis at a rate
of
at least 10% of the preceding year’s Annual Salary. All applicable withholdings,
including taxes, will be deducted from such payments.
5. Business
Expenses.
During
the Term, the Company will reimburse Executive for all business expenses
incurred by him in connection with his employment, upon submission by the
Executive of receipts and other documentation in conformance with the Company’s
normal procedures for executives of Executive’s position and
status.
6. Vacation,
Holidays and Sick Leave.
During
the Term, Executive will be entitled to paid vacation (21 business days per
calendar year), paid holidays and paid sick leave in accordance with the
Company’s standard policies for its officers, as may be amended from time to
time.
7. Benefits.
During
the Term, Executive will be eligible to participate fully in all health,
disability and dental benefits, insurance programs, pension and retirement
plans
and other employee benefit and compensation arrangements (collectively, the
“Employee Benefits”) available to senior officers of the Company generally, as
the same may be amended form time to time by the Board.
8. Termination
of Employment.
a) Notwithstanding
any provision of this Agreement to the contrary, the employment of Executive
hereunder will terminate on the first to occur of the following
dates:
(i)
the
date
of Executive’s death;
(ii) the
date
on which Executive has experienced a Disability (as defined below), and the
Company gives Executive notice of termination on account of
Disability;
(iii) the
date
on which Executive has engaged in conduct that constitutes Cause (as defined
below), and the Company gives Executive notice of termination for
Cause;
(iv) expiration
of the Term without renewal or extension;
(v) the
date
on which the Company gives Executive notice of termination for any reason
other
than the reasons set forth in (i) through (iv) above;
(vi) the
date
on which Executive gives the Company notice of termination for Good Reason
(as
defined below); or
(vii)
the
date
that is 60 days following the date on which Executive gives the Company notice
of termination for any reason other than Good Reason.
b) For
purposes
of the Agreement, “Disability” will mean an illness injury or other
incapacitation condition as a result of which Executive is unable to perform,
with reasonable accommodation, the services required to be performed under
this
Agreement for 180 consecutive days during the Term. In any such event, the
Company, in its sole discretion, may terminate this Agreement by giving notice
to Executive of termination for Disability. Executive agrees to submit to
such
medical examinations as may be necessary to determine whether a Disability
exists, pursuant to such reasonable requests made by the Company from time
to
time. Any determination as to the existence of a Disability will be made
by a
physician mutually selected by the Company and Executive.
c) For
purposes
of the Agreement, “Cause” will mean the occurrence of any of the following
events, as reasonably determined by the Board:
(i)
Executive’s
willful and continued refusal to substantially perform his duties
hereunder;
(ii) Executive’s
conviction of a felony, or his guilty plea to or entry of a nolo contendere
plea
to a felony charge;
(iii) Executive’s
breach of any material term of this Agreement or the Company’s written policies
and procedures, as in effect from time to time; provided, however, that with
respect to (i), or (iii) above, such termination for Cause will only be
effective if the conduct constituting Cause is not cured by Executive within
30
days of receipt by Executive of notice specifying in reasonable detail the
nature of the alleged breach. For purposes of this Section 8(c), no act or
omission by Executive shall be considered “willful” unless done, or not done, by
Executive in bad faith or without reasonable belief that such act or omission
was in the best interests of the Company, and any act or omission by Executive
based upon or consistent with authority given to Executive under this Agreement
or by the Board or upon advice of the Company’s counsel, shall be conclusively
presumed to be done in good faith and in the best interests of the Company.
There shall be a presumption that Executive has not violated Section 8(c)(i)
and
(iii) above until there is a finding by the fact finder (i.e., judge, jury,
or
arbitrator) of wrongdoing sufficient to justify termination for Cause under
these sections. Until such a finding is made, Executive shall receive all
the
payments and benefits that he would otherwise receive if his employment was
terminated pursuant to Section 8(a)(v) or (vi) above.
d) For
purposes
of this Agreement, “Good Reason” will mean the occurrence of any of the
following events, as reasonably determined by Executive:
(i)
A
substantial reduction in Executive’s responsibilities and duties by the Board or
adverse change in job title;
(ii) The
removal of Executive from the Board other than for cause;
(iii) The
failure of the Company to pay executive on a timely basis his total Annual
Salary and/or bonuses or payments earned;
(ii) the
Company’s breach of any material term of this Agreement; provided that in all
cases Executive will have provided the Company with notice and not less than
a
15 calendar day opportunity to cure the conduct that Executive claims
constitutes Good Reason; and/or
(iii) a
Change
of Control shall have occurred. For purposes of this Agreement, “Change of
Control” shall have the meaning ascribed to it in the Company’s 2003 Stock
Plan.
9. Compensation
in Event of Termination.
Upon
termination of the Term, this Agreement will terminate and the Company will
have
no further obligation to Executive except to pay the amounts set forth in
this
Section
9.
a) In
the event
Executive’s employment is terminated pursuant to Sections 8 (a)(i), (ii), (iii),
(iv) or (vii) on or before the expiration of the Term, Executive or his estate,
conservator or designated beneficiary, as the case may be, will be entitled
to
payment of any earned but unpaid Annual Salary for the year in which the
Executive’s employment is terminated through the date of termination, as well as
any accrued but unused vacation, reimbursement of expenses and vested benefits
to which Executive is entitled in accordance with the terms of each applicable
Employee Benefits plan.
b) In
the event
Executive’s employment is terminated pursuant to Section 8(a)(i), Executive’s
estate, conservator or designated beneficiary, as the case may be, will be
entitled to receive, in addition to Executive’s accrued salary and benefits
through the date of death, a lump sum payment equivalent to three months’ of
Executive’s Annual Salary in effect at the time of death;
c) In
the event
Executive’s employment is terminated pursuant to Section 8(a)(v) or (vi) on or
before the expiration of the Term, and provided that Executive executes a
valid
release of any and all claims that Executive may have relating to his employment
against the Company and its agents, including, but not limited to, its officers,
directors and employees, in a form provide by the Company, Executive will
be
entitled to receive on the date of termination, as his sole and exclusive
remedy, the amounts set forth above in Section 9(a), plus a lump sum amount
equal to three months of Annual Salary that Executive would receive under
the
Agreement if his employment with the Company had not been terminated. Executive
shall have no duty to mitigate in order to receive the benefits set forth
herein
and the benefits shall not be reduced or offset by other income payment or
profits received by Executive from any source. If Executive Dies before he
receives the above payment, the Company will distribute the benefits to
Executive’s beneficiary as soon as administratively feasible following the date
of Executive’s death.
10. Confidentiality.
Executive covenants and agrees that he will not at any time during or after
the
end of the Term, without written consent of the Company or as may be required
by
law or valid legal process, directly or indirectly, use for his own account,
or
disclose to any person, firm or corporation, other than authorized officers,
directors, attorneys, accountants and employees of the Company or its
subsidiaries, Confidential Information (as hereinafter defined) of the Company.
As used herein, “Confidential Information” of the Company means information
about the Company of any kind, nature or description, including but not limited
to, any proprietary information, trade secrets, data, formulae, supplier,
client
and customer lists or requirements, price lists or pricing structures, marketing
and sales information, business plans or dealings and financial information
and
plans as well as all papers, resumes and records (including computer records)
that are disclosed to or otherwise known to Executive as a direct or indirect
consequence of Executive’s employment with the Company, which information is not
generally known to the public or in the businesses in which the Company is
engaged. Confidential Information also includes any information furnished
to the
Company by a third party with restrictions on its use or further
disclosure.
11. Dispute
Resolution.
Except
for an action exclusively seeking injunctive relief, any disagreement, claim
or
controversy arising under or in connection with this Agreement, including
Executive’s employment or termination of employment with the Company will be
resolved exclusively by arbitration before a single arbitrator in accordance
with the National Rules for the Resolution of Employment Disputes of the
American Arbitration Association (the “Rules”), provided that, the arbitrator
will allow for discovery sufficient to adequately arbitrate any statutory
claims, including access to essential documents and witnesses; provided further,
that the Rules will be modified by the arbitrator to the extent necessary
to be
consistent with applicable law. The arbitration will take place in Santa
Clara,
California. The award of the arbitrator with respect to such disagreement,
claim
or controversy will be in writing with sufficient explanation to allow for
such
meaningful judicial review as permitted by law, and that such decision will
be
enforceable in any court of competent jurisdiction and will be binding on
the
parties hereto. The remedies available in arbitration will be identical to
those
allowed at law. The arbitrator will be entitled to award reasonable attorneys’
fees to the prevailing party in any arbitration or judicial action under
this
Agreement, consistent with applicable law. The Company and Executive each
will
pay its or his own attorneys’ fees and costs in any such arbitration, provided
that, the Company will pay for any costs, including the arbitrator’s fee, that
Executive would not have otherwise incurred if the dispute were adjudicated
in a
court of law, rather than through arbitration.
12. Binding
Agreement.
a) This
Agreement is a personal contract and the rights and interests of Executive
hereunder may not be sold, transferred, assigned, pledged, encumbered or
hypothecated by him, provided that all rights of the Executive hereunder
shall
inure to the benefit of, and be enforceable by executive’s personal or legal
representative, executors, heirs, administrators, successors, distributors,
devisees and legatees.
b) In
addition
to any obligations impose by law upon any successor to Company (whether direct
or indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all of the assets of Company, by agreement in form and substance
satisfactory to Executive, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would
by
required to perform if no such succession had taken place.
13. Disclosure
Obligations.
Executive agrees that the Company has the right to notify any third party
of the
existence and content of Executive’s obligations hereunder.
14. Return
of Company Property.
Executive agrees that following the termination of his employment for any
reason, he will promptly return all property of the Company, its subsidiaries,
affiliates and any divisions thereof he may have managed that is then in
or
thereafter comes into his possession, including, but not limited to, documents,
contracts, agreements, plans, photographs, books, notes, electronically stored
data and all copies of the foregoing, as well as any materials or equipment
supplied by the Company to Executive.
15. Entire
Agreement.
This
Agreement contains all the understandings between the parties hereto pertaining
to the matters referred to herein, and supersedes all undertakings and
agreements, whether oral or written, previously entered into by them with
respect thereto; provided that nothing contained herein will supersede or
render
inoperable the provisions of any other non-competition, non-solicitation
or
confidentiality covenants made by Executive or his affiliates and such covenants
will supplement the covenants made by Executive herein. Executive represents
that, in executing this Agreement, he does not rely, and has not relied,
on any
representation or statement not set forth herein made by the Company with
regard
to the subject matter, bases or effect of this Agreement or
otherwise.
16. Amendment
or Modification, Waiver.
No
provision of this Agreement may be amended or waived unless such amendment
or
waiver is agreed to in writing, signed by Executive and by a duly authorized
officer of the Company. The failure of either party to this Agreement to
enforce
any of its terms, provisions or covenants will not be construed as a waiver
of
the same or of the right of such party to enforce the same. Waiver by either
party hereto of any breach or default by the other party of any term or
provision of this Agreement will not operate as a waiver of any other breach
or
default.
17. Notices.
Any
notice to be given hereunder will be in writing and will be deemed given
when
delivered personally, sent by courier or fax or registered or certified mail,
postage prepaid, return receipt requested, addressed to the party concerned
at
the address indicated below or to such other address as such party may
subsequently give notice of hereunder in writing:
To
Executive at:
Rajesh
Navar
__________________
__________________
__________________
Phone:
(___) _______
Fax:
(___) _________
To
the
Company at:
YP
Corp.
Suite
105
4840
East
Jasmine Street
Mesa,
Arizona 85205-3321
Phone:
(480) 654-9646
Fax:
(480) 325-1257
Attention:
CEO
Any
notice delivered personally or by courier under this Section will be deemed
given on the date delivered. Any notice sent by fax or registered or certified
mail, postage prepaid, return receipt requested, will be deemed given on
the
date faxed or mailed. Each party may change the address to which notices
are to
be sent by giving notice of such change in conformity with the provisions
of the
Section.
18. Severability.
In the
event that any one or more of the previsions of this Agreement will be held
to
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remainder of the Agreement will not in any way be affected or impaired
thereby. Moreover, if any one or more of the provisions contained in the
Agreement will be held to be excessively broad as to duration, activity or
subject, such provisions will be construed by limiting and reducing them
so as
to be enforceable to the maximum extent allowed by applicable law.
19. Survivorship.
The
respective rights and obligations of the parties hereunder will survive any
termination of this Agreement to the extent necessary for the intended
preservation of such rights and obligations.
20. Each
Party the Drafter.
This
Agreement and the provisions contained in it will not be construed or
interpreted for or against any party to this Agreement because that party
drafted or caused that party’s legal representative to draft any of its
provisions.
21. Governing
Law.
This
Agreement will be governed by and construed in accordance with the laws of
the
State of California, without regard to its conflicts of laws
principles.
22. Heading.
All
descriptive headings of sections and paragraphs in this Agreement are intended
solely for convenience, and provision of this Agreement is to be construed
by
reference to the heading of any section or paragraph.
23. Counterparts.
This
Agreement may be executed in counterparts, each of which will be deemed an
original, but all of which together will constitute one and the same
instrument.
24. Indemnification.
Company
shall indemnify, hold harmless and defend Executive for all acts or omissions
taken or not taken by Executive while performing services for Company upon
the
terms and conditions set forth in the Company’s bylaws. At all times during the
Term, Company shall maintain an insurance policy covering all Officers and
Directors of the Company against third party claims and lawsuits, and Company
shall ensure that Executive shall be covered by such policy upon terms and
conditions no less favorable to Executive than the terms and conditions
governing the coverage accorded to such other Officers and
Directors.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date
first written above.
|
YP
CORP., a Nevada corporation
|
|
EXECUTIVE
|
| |
|
|
| |
|
|
| |
|
|
| /s/
Daniel L. Coury, Sr. |
|
/s/
Rajesh
Navar |
|
Daniel
L. Coury, Sr.
|
|
Rajesh
Navar
|
|
Chief
Executive Officer
|
|
|