Document:

ex10-4.htm

    Exhibit
10.4

     

    VEMICS,
INC.

     

    2007 EQUITY COMPENSATION
PLAN

     

    The
purpose of the Vemics, Inc. 2007 Equity Compensation Plan (the “Plan”) is to
provide (i) designated employees of Vemics, Inc., a Nevada corporation (the
“Company”), and its parents and subsidiaries, (ii) certain consultants and
advisors who perform services for the Company or its parents or subsidiaries,
and (iii) non-employee members of the Board of Directors of the Company (the
“Board”) with the opportunity to receive grants of incentive stock options,
nonqualified stock options and stock awards.  The Company believes
that the Plan will reward participants for past services to the Company and
encourage participants to contribute to the growth of the Company, thereby
benefitting the Company’s shareholders, and will align the economic interests of
the participants with those of the shareholders.

     

    1. Administration

     

    (a) Committee.  The
Plan shall be administered and interpreted by the Board or by a committee
consisting of members of the Board, which shall be appointed by the
Board.  After an initial public offering of the Company’s stock as
described in Section 18(b) (a “Public Offering”), the Plan shall be administered
by a committee of Board members, which may consist of “outside directors” as
defined under section 162(m) of the Internal Revenue Code of 1986, as amended
(the “Code”), and related Treasury regulations, and “non-employee directors” as
defined under Rule 16b-3 under the Securities Exchange Act of 1934, as amended
(the “Exchange Act”).  However, the Board may ratify or approve any
grants as it deems appropriate, and the Board shall approve and administer all
grants made to non-employee directors.  The committee may delegate
authority to one or more subcommittees as it deems appropriate.  To
the extent that a committee or subcommittee administers the Plan, references in
the Plan to the “Board” shall be deemed to refer to the committee or
subcommittee.

     

    (b) Board
Authority.  The Board shall have the sole authority to (i)
determine the individuals to whom grants shall be made under the Plan, (ii)
determine the type, size and terms of the grants to be made to each such
individual, (iii) determine the time when the grants will be made and the
duration of any applicable exercise or restriction period, including the
criteria for exercisability and the acceleration of exercisability, (iv) amend
the terms of any previously issued grant, and (v) deal with any other matters
arising under the Plan.

     

    (c) Board
Determinations.  The Board shall have full power and authority
to administer and interpret the Plan, to make factual determinations and to
adopt or amend such rules, regulations, agreements and instruments for
implementing the Plan and for the conduct of its business as it deems necessary
or advisable, in its sole discretion.  The Board’s interpretations of
the Plan and all determinations made by the Board pursuant to the powers vested
in it hereunder shall be conclusive and binding on all persons having any
interest in the Plan or in any awards granted hereunder.  All powers
of the Board shall be executed in its sole discretion, in the best interest of
the Company, not as a fiduciary, and in keeping with the objectives of the Plan
and need not be uniform as to similarly situated individuals.

     

    2. Grants

     

    (a) Awards
under the Plan may consist of grants of incentive stock options as described in
Section 5 (“Incentive Stock Options”), nonqualified stock options as described
in Section 5 (“Nonqualified Stock Options”) (Incentive Stock Options and
Nonqualified Stock Options are collectively referred to as “Options”) and stock
awards as described in Section 6 (“Stock Awards”) (hereinafter collectively
referred to as “Grants”).  All Grants shall be subject to the terms
and conditions set forth herein and to such other terms and conditions
consistent with this Plan as the Board deems appropriate and as are specified in
writing by the Board to the individual in a grant instrument or an amendment to
the grant instrument (the “Grant Instrument”).  All Grants shall be
made conditional upon the Grantee’s acknowledgement, in writing or by acceptance
of the Grant, that all decisions and determination of the Board shall be final
and binding on the Grantee, his or her beneficiaries and any other person having
or claiming an interest under such Grant.  The Board shall approve the
form and provisions of each Grant Instrument.  Grants under a
particular Section of the Plan need not be uniform as among the
grantees.

     

    3. Shares Subject to the
Plan

     

    (a) Shares
Authorized.  Subject to adjustment as described below, the
aggregate number of shares of common stock of the Company (“Company Stock”) that
may be issued under the Plan is _________ shares.  The shares may be
authorized but unissued shares of Company Stock or reacquired shares of Company
Stock, including shares purchased by the Company on the open market for purposes
of the Plan.  If and to the extent Options granted under the Plan
terminate, expire, or are canceled, forfeited, exchanged or surrendered without
having been exercised or if any Stock Awards (including restricted Stock Awards
received upon the exercise of Options) are forfeited, the shares subject to such
Grants shall again be available for purposes of the Plan.

     

    
      
        
        

      

      
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    (b) Adjustments.  If
there is any change in the number or kind of shares of Company Stock outstanding
(i) by reason of a stock dividend, spinoff, recapitalization, stock split, or
combination or exchange of shares, (ii) by reason of a merger, reorganization or
consolidation, (iii) by reason of a reclassification or change in par value, or
(iv) by reason of any other extraordinary or unusual event affecting the
outstanding Company Stock as a class without the Company’s receipt of
consideration, or if the value of outstanding shares of Company Stock is
substantially reduced as a result of a spinoff or the Company’s payment of an
extraordinary dividend or distribution, the maximum number of shares of Company
Stock available for Grants, the maximum number of shares of Company Stock that
any individual participating in the Plan may be granted in any year, the number
of shares covered by outstanding Grants, the kind of shares issued under the
Plan, and the price per share of such Grants may be appropriately adjusted by
the Board to reflect any increase or decrease in the number of, or change in the
kind or value of, issued shares of Company Stock to preclude, to the extent
practicable, the enlargement or dilution of rights and benefits under such
Grants; provided, however, that any fractional shares resulting from such
adjustment shall be eliminated.  The Board shall be required to make
the forgoing adjustments in the event of a stock split, reverse stock split,
stock dividend, recapitalization, combination or reclassification of the
Company’s Stock.  Any adjustments determined by the Board shall be
final, binding and conclusive.

     

    4. Eligibility for
Participation

     

    (a) Eligible
Persons.  All employees of the Company and its parents or
subsidiaries (“Employees”), including Employees who are officers or members of
the Board, and members of the Board who are not Employees (“Non-Employee
Directors”) shall be eligible to participate in the Plan.  Consultants
and advisors who perform services for the Company or any of its parents or
subsidiaries (“Key Advisors”) shall be eligible to participate in the Plan if
the Key Advisors render bona fide services to the Company or its parents or
subsidiaries, the services are not in connection with the offer and sale of
securities in a capital-raising transaction, and the Key Advisors do not
directly or indirectly promote or maintain a market for the Company’s
securities.

     

    (b) Selection of
Grantees.  The Board shall select the Employees, Non-Employee
Directors, and Key Advisors to receive Grants and shall determine the number of
shares of Company Stock subject to a particular Grant in such manner as the
Board determines.  Employees, Key Advisors, and Non-Employee Directors
who receive Grants under this Plan shall hereinafter be referred to as
“Grantees”.

     

    5. Granting of
Options

     

    (a) Number of
Shares.  The Board shall determine the number of shares of
Company Stock that will be subject to each Grant of Options to a
Grantee.

     

    (b) Type of Option and
Price.

     

    (i) The Board
may grant Incentive Stock Options that are intended to qualify as “incentive
stock options” within the meaning of section 422 of the Code or Nonqualified
Stock Options that are not intended so to qualify or any combination of
Incentive Stock Options and Nonqualified Stock Options, all in accordance with
the terms and conditions set forth herein.  Incentive Stock Options
may be granted only to employees of the Company or its parents or subsidiaries,
as defined in Section 424 of the Code.  Nonqualified Stock Options may
be granted to Employees, Non-Employee Directors, and Key Advisors.

     

    (ii) The
purchase price (the “Exercise Price”) of Company Stock subject to an Option
shall be determined by the Board and may be equal to, greater than, or less than
the Fair Market Value (as defined below) of a share of Company Stock on the date
the Option is granted; provided, however, that

     

    (A) The
Exercise Price of an Incentive Stock Option shall be equal to, or greater than,
the Fair Market Value of a share of Company Stock on the date of
grant;

     

    (B) An
Incentive Stock Option may not be granted to an Employee who, at the time of
grant, owns stock possessing more than ten percent of the total combined voting
power of all classes of stock of the Company or any parent or subsidiary of the
Company, unless the Exercise Price per share is not less than 110% of the Fair
Market Value of Company Stock on the date of grant;

     

    
      
        
        

      

      
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    (C) Unless
otherwise specifically approved by the Board, the Exercise Price of a
Nonqualified Stock Option shall not be less than the Fair Market Value of a
share of Company Stock; and

     

    (D)  If
the Board determines to set the Exercise Price of any Nonqualified Stock Option
at less than the Fair Market Value of a share of Company Stock, the Board shall
also impose terms and conditions on the exercise and holding of such Option as
it determines to be appropriate to prevent the grantee of such Option from being
subject to income tax under Section 409A(a)(1)(B) of the Code.

     

    (iii) If the
Company Stock is publicly traded, then the Fair Market Value per share shall be
determined as follows: (A) if the principal trading market for the Company Stock
is a national securities exchange, the Nasdaq National Market, or the
Over-the-Counter Bulleting Board, the last reported sale price thereof on the
relevant date or (if there were no trades on that date) the latest preceding
date upon which a sale was reported, or (B) if the Company Stock is not
principally traded on such exchange or market, the mean between the last
reported “bid” and “asked” prices of Company Stock on the relevant date, as
reported on Nasdaq or, if not so reported, as reported by the Pink Sheets, Inc.
or as reported in a customary financial reporting service, as applicable and
only if the Board determines that such prices should be utilized for this
purpose in its sole discretion.  If the Company Stock is not publicly
traded or, if publicly traded, is not subject to reported transactions or “bid”
or “asked” quotations as set forth above, the Fair Market Value per share shall
be as determined by the Board.

     

    (c) Option
Term.  The Board shall determine the term of each
Option.  The term of any Option shall not exceed ten years from the
date of grant.  However, an Incentive Stock Option that is granted to
an Employee who, at the time of grant, owns stock possessing more than ten
percent of the total combined voting power of all classes of stock of the
Company, or any parent or subsidiary of the Company, may not have a term that
exceeds five years from the date of grant.

     

    (d) Exercisability of
Options.

     

    (i) Options
shall become exercisable in accordance with such terms and conditions,
consistent with the Plan, as may be determined by the Board and specified in the
Grant Instrument.  The Board may accelerate the exercisability of any
or all outstanding Options at any time for any reason.

     

    (ii) The Board
may provide in a Grant Instrument that the Grantee may elect to exercise part or
all of an Option before it otherwise has become exercisable.  Any
shares so purchased shall be restricted shares and shall be subject to a
repurchase right in favor of the Company during a specified restriction period,
with the repurchase price equal to the lesser of (i) the Exercise Price or (ii)
the Fair Market Value of such shares at the time of repurchase, or such other
restrictions as the Board deems appropriate.

     

    (e) Termination of Employment,
Disability or Death.  Except as provided below or as otherwise
specifically approved by the Board, an Option may only be exercised while the
Grantee is employed by, or providing service to, the Employer (as defined below)
as an Employee, Key Advisor or member of the Board.

     

    (i) In the
event that a Grantee ceases to be employed by, or provide service to, the
Employer for any reason other than Disability, death, or termination for Cause
(as defined below), any Option which is otherwise exercisable by the Grantee
shall terminate unless exercised within 90 days after the date on which the
Grantee ceases to be employed by, or provide service to, the Employer (or within
such other period of time, which period shall be at least 30 days, as may be
specified by the Board), but in any event no later than the date of expiration
of the Option term.  Except as otherwise provided by the Board, any of
the Grantee’s Options that are not otherwise exercisable as of the date on which
the Grantee ceases to be employed by, or provide service to, the Employer shall
terminate as of such date.

     

    (ii) In the
event the Grantee ceases to be employed by, or provide service to, the Employer
on account of a termination for Cause by the Employer, any Option held by the
Grantee shall terminate as of the date the Grantee ceases to be employed by, or
provide service to, the Employer.  In addition, notwithstanding any
other provisions of this Section 5, if the Board determines that the Grantee has
engaged in conduct that constitutes Cause at any time while the Grantee is
employed by, or providing service to, the Employer or after the Grantee’s
termination of employment or service, any Option held by the Grantee shall
immediately terminate, and the Grantee shall automatically forfeit all shares
underlying any exercised portion of an Option for which the Company has not yet
delivered the share certificates, upon refund by the Company of the Exercise
Price paid by the Grantee for such shares.  Upon any exercise of an
Option, the Company may withhold delivery of share certificates pending
resolution of an inquiry that could lead to a finding resulting in a
forfeiture.

     

    
      
        
        

      

      
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    (iii) In the
event the Grantee ceases to be employed by, or provide service to, the Employer
because the Grantee is Disabled, any Option which is otherwise exercisable by
the Grantee shall terminate unless exercised within one year after the date on
which the Grantee ceases to be employed by, or provide service to, the Employer
(or within such other period of time, which period shall be at least six months
as may be specified by the Board), but in any event no later than the date of
expiration of the Option term.  Except as otherwise provided by the
Board, any of the Grantee’s Options which are not otherwise exercisable as of
the date on which the Grantee ceases to be employed by, or provide service to,
the Employer shall terminate as of such date.

     

    (iv) If the
Grantee dies while employed by, or providing service to, the Employer or within
90 days after the date on which the Grantee ceases to be employed or provide
service on account of a termination specified in Section 5(f)(i) above (or
within such other period of time as may be specified by the Board), any Option
that is otherwise exercisable by the Grantee shall terminate unless exercised
within one year after the date on which the Grantee ceases to be employed by, or
provide service to, the Employer (or within such other period of time, which
period shall be at least 6 months, as may be specified by the Board), but in any
event no later than the date of expiration of the Option term.  Except
as otherwise provided by the Board, any of the Grantee’s Options that are not
otherwise exercisable as of the date on which the Grantee ceases to be employed
by, or provide service to, the Employer shall terminate as of such
date.

     

    (v) For
purposes of the Plan:

     

    (A) The term
“Employer” shall mean the Company and its parent and subsidiary corporations or
other entities, as determined by the Board.

     

    (B) “Employed
by, or provide service to, the Employer” shall mean employment or service as an
Employee, Key Advisor or member of the Board (so that, for purposes of
exercising Options and satisfying conditions with respect to Stock Awards, a
Grantee shall not be considered to have terminated employment or service until
the Grantee ceases to be an Employee, Key Advisor and member of the Board),
unless the Board determines otherwise.

     

    (C) “Disability”
shall mean a Grantee’s becoming disabled within the meaning of section 22(e)(3)
of the Code, within the meaning of the Employer’s long-term disability plan
applicable to the Grantee, or as otherwise determined by the Board.

     

    (D) “Cause”
shall mean, except to the extent specified otherwise by the Board, a finding by
the Board that the Grantee (I) has breached his or her employment or service
contract with the Employer, (II) has engaged in disloyalty to the Company,
including, without limitation, fraud, embezzlement, theft, commission of a
felony or proven dishonesty, (III) has disclosed trade secrets or confidential
information of the Employer to persons not entitled to receive such information,
(IV) has breached any written noncompetition or nonsolicitation agreement
between the Grantee and the Employer or (V) has engaged in such other behavior
detrimental to the interests of the Employer as the Board
determines.

     

    (f) Exercise of
Options.  A Grantee may exercise an Option that has become
exercisable, in whole or in part, by delivering a notice of exercise to the
Company.  The Grantee shall pay the Exercise Price for an Option as
specified by the Board (i) in cash, (ii) with the approval of the Board, by
delivering shares of Company Stock owned by the Grantee (including Company Stock
acquired in connection with the exercise of an Option, subject to such
restrictions as the Board deems appropriate) and having a Fair Market Value on
the date of exercise equal to the Exercise Price or by attestation (on a form
prescribed by the Board) to ownership of shares of Company Stock having a Fair
Market Value on the date of exercise equal to the Exercise Price, (iii) after a
Public Offering, payment through a broker in accordance with procedures
permitted by Regulation T of the Federal Reserve Board, or (iv) by such other
method as the Board may approve.  The Board may authorize loans by the
Company to Grantees in connection with the exercise of an Option, upon such
terms and conditions as the Board, in its sole discretion, deems
appropriate.  Shares of Company Stock used to exercise an Option shall
have been held by the Grantee for the requisite period of time to avoid adverse
accounting consequences to the Company with respect to the
Option.  The Grantee shall pay the Exercise Price and the amount of
any withholding tax due (pursuant to Section 7) as specified by the
Board.

     

    (g) Limits on Incentive Stock
Options.  Each Incentive Stock Option shall provide that, if
the aggregate Fair Market Value of the stock on the date of the grant with
respect to which Incentive Stock Options are exercisable for the first time by a
Grantee during any calendar year, under the Plan or any other stock option plan
of the Company or a parent or subsidiary, exceeds $100,000, then the Option, as
to the excess, shall be treated as a Nonqualified Stock Option.  An
Incentive Stock Option shall not be granted to any person who is not an employee
of the Company or a parent or subsidiary (within the meaning of section 424(f)
of the Code) of the Company.

     

    
      
        
        

      

      
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    6. Stock
Awards

     

    The Board
may issue or transfer shares of Company Stock to an Employee, Non-Employee
Director, and Key Advisor under a Stock Award, upon such terms as the Board
deems appropriate.  The following provisions are applicable to Stock
Awards:

     

    (a) General
Requirements.  Shares of Company Stock issued or transferred
pursuant to Restricted Stock Awards may be issued or transferred subject to
restrictions or no restrictions, as determined by the Board.  The
value of the consideration (cash, services or other consideration) for a
Restricted Stock Award may be equal to, greater than, or less than the Fair
Market Value (as defined below) of a share of Company Stock on the date the
Option is granted, as determined by the Board at the time that the issuance of
the Company Stock is authorized. The Board may establish conditions under which
restrictions on Restricted Stock Awards shall lapse over a period of time or
according to such other criteria as the Board deems appropriate.  The
period of time during which the Restricted Stock Award will remain subject to
restrictions will be designated in the Grant Instrument as the “Restriction
Period.”

     

    (b) Number of
Shares.  The Board shall determine the number of shares of
Company Stock to be issued or transferred pursuant to a Stock Award and the
restrictions applicable to such shares.

     

    (c) Requirement of Employment or
Service.  If the Grantee ceases to be employed by, or provide
service to, the Employer during a period designated in the Grant Instrument as
the Restriction Period, or if other specified conditions are not met, the Stock
Award shall terminate as to all shares covered by the award as to which the
restrictions have not lapsed, and those shares of Company Stock must be
immediately returned to the Company.  The Board may, however, provide
for complete or partial exceptions to this requirement as it deems
appropriate.  With respect to Stock Awards granted to persons other
than officers, Board members or Key Advisors, the restrictions shall lapse over
a period of not more than five years and a rate of not less than 20% per
year.

     

    (d) Restrictions on Transfer and
Legend on Stock Certificate.  During the Restriction Period, a
Grantee may not sell, assign, transfer, pledge or otherwise dispose of the
shares of the Stock Award except as permitted under Section
8(a).  Each certificate for Stock Awards shall contain a legend giving
appropriate notice of the restrictions in the Grant.  The Grantee
shall be entitled to have the legend removed from the stock certificate covering
the shares subject to restrictions when all restrictions on such shares have
lapsed.  The Board may determine that the Company will not issue
certificates for Stock Awards until all restrictions on such shares have lapsed,
or that the Company will retain possession of certificates for Stock Awards
until all restrictions on such shares have lapsed.

     

    (e) Right to Vote and to Receive
Dividends.  During the Restriction Period,  the
Grantee shall have the right to vote shares subject to Stock Awards and to
receive any dividends or other distributions paid on such shares, except as
otherwise determined by the Board.

     

    (f) Lapse of
Restrictions.  All restrictions imposed on Stock Awards shall
lapse upon the expiration of the applicable Restriction Period and the
satisfaction of all conditions imposed by the Board.  The Board may
determine, as to any or all Stock Awards, that the restrictions shall lapse
without regard to any Restriction Period.

     

    (g) Stock
Units.  The Board may grant Stock Awards in the form of phantom
stock units, upon such terms and conditions as the Committee deems
appropriate.  Each stock unit shall represent the right of the Grantee
to receive an amount based on the value of a share of Company Stock, if
specified conditions are met, at the time specified in the Grant
Instrument.  All stock units shall be credited to bookkeeping accounts
established on the Company’s records for purposes of the
Plan.  Payments with respect to stock units shall be made in the form
of Company Stock, cash or a combination of the two, as determined by the
Board.

     

    7. Withholding of
Taxes

     

    (a) Required
Withholding.  All Grants under the Plan shall be subject to
applicable federal (including FICA), state and local tax withholding
requirements.  The Employer may require that the Grantee or other
person receiving or exercising Grants pay to the Employer the amount of any
federal, state or local taxes that the Employer is required to withhold with
respect to such Grants, or the Employer may deduct from other wages paid by the
Employer the amount of any withholding taxes due with respect to such
Grants.

     

    (b) Election to Withhold
Shares.  If the Board so permits, a Grantee may elect to
satisfy the Employer’s tax withholding obligation with respect to a Grant by
having shares withheld up to an amount that does not exceed the Grantee’s
minimum applicable withholding tax rate for federal (including FICA), state and
local tax liabilities.  The election must be in a form and manner
prescribed by the Board and may be subject to the prior approval of the
Board.

     

    
      
        
        

      

      
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    8. Transferability of
Grants

     

    (a) Nontransferability of
Grants.  Except as provided below, only the Grantee may
exercise rights under a Grant during the Grantee’s lifetime.  A
Grantee may not transfer those rights except (i) by will or by the laws of
descent and distribution or (ii) with respect to Grants other than Incentive
Stock Options, if permitted in any specific case by the Board, pursuant to a
domestic relations order or otherwise as permitted by the Board.  When
a Grantee dies, the personal representative or other person entitled to succeed
to the rights of the Grantee may exercise such rights.  Any such
successor must furnish proof satisfactory to the Company of his or her right to
receive the Grant under the Grantee’s will or under the applicable laws of
descent and distribution.

     

    (b) Transfer of Nonqualified
Stock Options. Notwithstanding the foregoing, the Board may provide, in a
Grant Instrument, that a Grantee may transfer Nonqualified Stock Options to
family members, or one or more trusts or other entities for the benefit of or
owned by  family members, consistent with applicable securities laws,
according to such terms as the Board may determine; provided that the Grantee
receives no consideration for the transfer of an Option and the transferred
Option shall continue to be subject to the same terms and conditions as were
applicable to the Option immediately before the transfer.

     

    9. Right of First Refusal;
Repurchase Right

     

    (a) Offer.  Prior
to a Public Offering, if at any time an individual desires to sell, encumber, or
otherwise dispose of shares of Company Stock that were distributed to him or her
under this Plan and that are transferable, the individual may do so only
pursuant to a bona fide written offer, and the individual shall first offer the
shares to the Company by giving the Company written notice disclosing: (a) the
name of the proposed transferee of the Company Stock; (b) the certificate number
and number of shares of Company Stock proposed to be transferred or encumbered;
(c) the proposed price; (d) all other terms of the proposed transfer; and (e) a
written copy of the proposed offer.  Within 60 days after receipt of
such notice, the Company shall have the option to purchase all or part of such
Company Stock at the price and on the terms described in the written notice;
provided that the Company may pay such price in installments over a period not
to exceed four years, at the discretion of the Board.

     

    (b) Sale.  In
the event the Company (or a shareholder, as described below) does not exercise
the option to purchase Company Stock, as provided above, the individual shall
have the right to sell, encumber, or otherwise dispose of the shares of Company
Stock described in subsection (a) at the price and on the terms of the transfer
set forth in the written notice to the Company, provided such transfer is
effected within 15 days after the expiration of the option period.  If
the transfer is not effected within such period, the Company must again be given
an option to purchase, as provided above.

     

    (c) Assignment of
Rights.  The Board, in its sole discretion, may waive the
Company’s right of first refusal and repurchase right under this Section
9.  If the Company’s right of first refusal or repurchase right is so
waived, the Board may, in its sole discretion, assign such right to the
remaining shareholders of the Company in the same proportion that each
shareholder’s stock ownership bears to the stock ownership of all the
shareholders of the Company, as determined by the Board.  To the
extent that a shareholder has been given such right and does not purchase his or
her allotment, the other shareholders shall have the right to purchase such
allotment on the same basis.

     

    (d) Purchase by the
Company.  Prior to a Public Offering, if a Grantee ceases to be
employed by, or provide service to, the Employer, the Company shall have the
right to purchase all or part of any Company Stock distributed to him or her
under this Plan at its then current Fair Market Value (as defined in Section
5(b)) (or at such other price as may be established in the Grant Instrument);
provided, however, that such repurchase shall be made in accordance with
applicable accounting rules to avoid adverse accounting treatment.

     

    (e) Public
Offering.  On and after a Public Offering, the Company shall
have no further right to purchase shares of Company Stock under this Section
9.

     

    (f) Shareholder’s
Agreement. Notwithstanding the provisions of this Section 9, if the Board
requires that a Grantee execute a shareholder’s agreement with respect to any
Company Stock distributed pursuant to this Plan, which contains a right of first
refusal or repurchase right, the provisions of this Section 9 shall not apply to
such Company Stock, unless the Board determines otherwise.

     

    
      
        
        

      

      
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    10. Change of Control of the
Company

     

    As used
herein, a “Change of Control” shall be deemed to have occurred if:

     

    (a) Any
“person” (as such term is used in sections 13(d) and 14(d) of the Exchange Act)
(other than persons who are shareholders on the effective date of the Plan)
becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing more than 50%
of the voting power of the then outstanding securities of the Company; provided
that a Change of Control shall not be deemed to occur as a result of a change of
ownership resulting from the death of a shareholder, and a Change of Control
shall not be deemed to occur as a result of a transaction in which the Company
becomes a subsidiary of another corporation and in which the shareholders of the
Company, immediately prior to the transaction, will beneficially own,
immediately after the transaction, shares entitling such shareholders to more
than 50% of all votes to which all shareholders of the parent corporation would
be entitled in the election of directors (without consideration of the rights of
any class of stock to elect directors by a separate class vote); or

     

    (b) The
consummation of (i) a merger or consolidation of the Company with another
corporation where the shareholders of the Company, immediately prior to the
merger or consolidation, will not beneficially own, immediately after the merger
or consolidation, shares entitling such shareholders to more than 50% of all
votes to which all shareholders of the surviving corporation would be entitled
in the election of directors (without consideration of the rights of any class
of stock to elect directors by a separate class vote),  (ii) a sale or
other disposition of all or substantially all of the assets of the Company or
(iii) a liquidation or dissolution of the Company.

     

    11. Consequences of a Change of
Control

     

    (a) Assumption of
Grants.  Upon a Change of Control where the Company is not the
surviving corporation (or survives only as a subsidiary of another corporation),
unless the Board determines otherwise, all outstanding Options that are not
exercised shall be assumed by, or replaced with comparable options by the
surviving corporation (or a parent or subsidiary of the surviving corporation),
and outstanding Stock Awards shall be converted to Stock Awards of the surviving
corporation (or a parent or subsidiary of the surviving
corporation).

     

    (b) Other
Alternatives.  Notwithstanding the foregoing, in the event of a
Change of Control, the Board may take any of the following actions with respect
to any or all outstanding Grants: the Board may (i) determine that outstanding
Options shall accelerate and become exercisable, in whole or in part, upon the
Change of Control or upon such other event as the Board determines, (ii)
determine that the restrictions and conditions on outstanding Stock Awards shall
lapse, in whole or in part, upon the Change of Control or upon such other event
as the Board determines, (iii) require that Grantees surrender their outstanding
Options in exchange for a payment by the Company, in cash or stock as determined
by the Board, in an amount equal to the amount by which the then Fair Market
Value of the shares of Company Stock subject to the Grantee’s unexercised
Options exceeds the Exercise Price of the Options or (iv) after giving Grantees
an opportunity to exercise their outstanding Options, terminate any or all
unexercised Options at such time as the Board deems appropriate.  Such
surrender or termination shall take place as of the date of the Change of
Control or such other date as the Board may specify.  The Board shall
have no obligation to take any of the foregoing actions, and, in the absence of
any such actions, outstanding Options and Stock Awards shall continue in effect
according to their terms (subject to any assumption pursuant to subsection
(a)).

     

    12. Requirements for Issuance or
Transfer of Shares

     

    (a) Shareholder’s
Agreement.  The Board may require that a Grantee execute a
shareholder’s agreement, with such terms as the Board deems appropriate, with
respect to any Company Stock issued or distributed pursuant to this
Plan.

     

    (b) Limitations on Issuance or
Transfer of Shares.  No Company Stock shall be issued or
transferred in connection with any Grant hereunder unless and until all legal
requirements applicable to the issuance or transfer of such Company Stock have
been complied with to the satisfaction of the Board.  The Board shall
have the right to condition any Grant made to any Grantee hereunder on such
Grantee’s undertaking in writing to comply with such restrictions on his or her
subsequent disposition of such shares of Company Stock as the Board shall deem
necessary or advisable, and certificates representing such shares may be
legended to reflect any such restrictions.  Certificates representing
shares of Company Stock issued or transferred under the Plan will be subject to
such stop-transfer orders and other restrictions as may be required by
applicable laws, regulations and interpretations, including any requirement that
a legend be placed thereon.

     

    (c) Lock-Up
Period.  If so requested by the Company or any representative
of the underwriters (the “Managing Underwriter”) in connection with any
underwritten offering of securities of the Company under the Securities Act of
1933, as amended (the “Securities Act”), a Grantee (including any successor or
assigns) shall not sell or otherwise transfer any shares or other securities of
the Company during the 30-day period preceding and the 180-day period following
the effective date of a registration statement of the Company filed under the
Securities Act for such underwriting (or such shorter period as may be requested
by the Managing Underwriter and agreed to by the Company) (the “Market Standoff
Period”).  The Company may impose stop-transfer instructions with
respect to securities subject to the foregoing restrictions until the end of
such Market Standoff Period.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    13. Amendment and Termination of
the Plan

     

    (a) Amendment.  The
Board may amend or terminate the Plan at any time; provided, however, that the
Board shall not amend the Plan without shareholder approval if such approval is
required in order to comply with the Code or other applicable laws, or, after an
Initial Public Offering, to comply with applicable stock exchange
requirements.

     

    (b) Termination of
Plan.  The Plan shall terminate on the day immediately
preceding the tenth anniversary of its effective date, unless the Plan is
terminated earlier by the Board or is extended by the Board with the approval of
the shareholders.

     

    (c) Termination and Amendment of
Outstanding Grants.  A termination or amendment of the Plan
that occurs after a Grant is made shall not materially impair the rights of a
Grantee unless the Grantee consents or unless the Board acts under Section
19(b).  The termination of the Plan shall not impair the power and
authority of the Board with respect to an outstanding Grant.  Whether
or not the Plan has terminated, an outstanding Grant may be terminated or
amended under Section 19(b) or may be amended by agreement of the Company and
the Grantee consistent with the Plan.

     

    (d) Governing
Document.  The Plan shall be the controlling
document.  No other statements, representations, explanatory materials
or examples, oral or written, may amend the Plan in any manner.  The
Plan shall be binding upon and enforceable against the Company and its
successors and assigns.

     

    14. Funding of the
Plan

     

    This Plan
shall be unfunded.  The Company shall not be required to establish any
special or separate fund or to make any other segregation of assets to assure
the payment of any Grants under this Plan.  In no event shall interest
be paid or accrued on any Grant, including unpaid installments of
Grants.

     

    15. Rights of
Participants

     

    Nothing
in this Plan shall entitle any Employee, Key Advisor, Non-Employee Director or
other person to any claim or right to be granted a Grant under this
Plan.  Neither this Plan nor any action taken hereunder shall be
construed as giving any individual any rights to be retained by or in the employ
of the Employer or any other employment rights.

     

    16. No Fractional
Shares

     

    No
fractional shares of Company Stock shall be issued or delivered pursuant to the
Plan or any Grant.  The Board shall determine whether cash, other
awards or other property shall be issued or paid in lieu of such fractional
shares or whether such fractional shares or any rights thereto shall be
forfeited or otherwise eliminated.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    17. Headings

     

    Section
headings are for reference only.  In the event of a conflict between a
title and the content of a Section, the content of the Section shall
control.

     

    18. Effective Date of the
Plan.

     

    (a) Effective
Date.  The Plan shall be effective on _____________,
2007.  The Plan is adopted subject to shareholder approval of the Plan
within 12 months before or after the Plan is adopted.

     

    (b) Public
Offering.  The provisions of the Plan that refer to a Public
Offering, or that refer to, or are applicable to persons subject to, section 16
of the Exchange Act or section 162(m) of the Code, shall be effective, if at
all, upon the initial registration of the Company Stock under section 12(g) of
the Exchange Act, and shall remain effective thereafter for so long as such
stock is so registered.

     

    19. Miscellaneous

     

    (a) Grants in Connection with
Corporate Transactions and Otherwise.  Nothing contained in
this Plan shall be construed to (i) limit the right of the Board to make Grants
under this Plan in connection with the acquisition, by purchase, lease, merger,
consolidation or otherwise, of the business or assets of any corporation, firm
or association, including Grants to employees thereof who become Employees, or
for other proper corporate purposes, or (ii) limit the right of the Company to
grant stock options or make other awards outside of this
Plan.  Without limiting the foregoing, the Board may make a Grant to
an employee of another corporation who becomes an Employee by reason of a
corporate merger, consolidation, acquisition of stock or property,
reorganization or liquidation involving the Company, the Parent or any of their
subsidiaries in substitution for a stock option or Stock Awards grant made by
such corporation.  The terms and conditions of the substitute grants
may vary from the terms and conditions required by the Plan and from those of
the substituted stock incentives.  The Board shall prescribe the
provisions of the substitute grants.

     

    (b) Compliance with
Law.  The Plan, the exercise of Options and the obligations of
the Company to issue or transfer shares of Company Stock under Grants shall be
subject to all applicable laws and to approvals by any governmental or
regulatory agency as may be required.  With respect to persons subject
to section 16 of the Exchange Act, after a Public Offering it is the intent of
the Company that the Plan and all transactions under the Plan comply with all
applicable provisions of Rule 16b-3 or its successors under the Exchange
Act.  In addition, it is the intent of the Company that the Plan and
applicable Grants under the Plan comply with the applicable provisions of
section 162(m) of the Code, after a Public Offering, and section 422 of the
Code.  To the extent that any legal requirement of section 16 of the
Exchange Act or section 162(m) or 422 of the Code as set forth in the Plan
ceases to be required under section 16 of the Exchange Act or section 162(m) or
422 of the Code, that Plan provision shall cease to apply.  The Board
may revoke any Grant if it is contrary to law or modify a Grant to bring it into
compliance with any valid and mandatory government regulation.  The
Board may also adopt rules regarding the withholding of taxes on payments to
Grantees.  The Board may, in its sole discretion, agree to limit its
authority under this Section.

     

    (c) Employees Subject to
Taxation Outside the United States.  With respect to Grantees
who are subject to taxation in countries other than the United States, the Board
may make Grants on such terms and conditions as the Board deems appropriate to
comply with the laws of the applicable countries, and the Board may create such
procedures, addenda and subplans and make such modifications as may be necessary
or advisable to comply with such laws.

     

    (d) Governing
Law.  The validity, construction, interpretation and effect of
the Plan and Grant Instruments issued under the Plan shall be governed and
construed by and determined in accordance with the laws of the State of Nevada,
without giving effect to the conflict of laws provisions thereof.

     

    

     

    Approved
on _________, 2007

     

    

    
      
        
        

      

      
        9ex10-5.htm

    Exhibit
10.5

     

    EMPLOYMENT
AGREEMENT

    

    

    This
Employment Agreement (this "Agreement"), is entered into on October 1, 2004,
between VEMICS, Inc. ("VEMICS") and Fred Zolla ("Employee").

    

    In
consideration of the mutual covenants contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

    

    1. Employment;
Duties.

    

    VEMICS
hereby employs Employee as the Chief Executive Officer and Chairman of the Board
of Directors of VEMICS. The employee shall function with full authority to
establish policy, set corporate direction and manage VEMICS's strategic
direction, investor relations, vendor relations, strategic alliances, operations
and strategic planning. Employee agrees to perform and discharge such duties and
responsibilities as are prescribed from time-to-time by the VEMICS Board of
Directors and as are appropriate for video conference/distance learning
executives of corporations with the financial, personnel and other resources
that are similar to that of VEMICS.  The Employee shall devote all of
his business time, attention, and energy to the Company and shall not, during
the term of his employment, be actively engaged in any managerial or employment
capacity in any other business activity for gain, profit, or other pecuniary
advantage; provided that the foregoing does not prohibit the Employee from
making investments that do not unreasonably interfere with the performance of
his duties with the Company.

    

    2. Compensation and
Withholding.

    

    For his
services pursuant to this Agreement, VEMICS will pay Employee an interim salary
at the annual rate of $86,400. VEMICS will pay the Salary semimonthly (as
calculated by dividing the gross salary by 26 equal payments) and may withhold
from the Salary, the Benefits and any other compensation provided to Employee
hereunder, all Federal, state and local income, employment and other taxes, as
and in such amounts as may be required to be withheld under applicable
law.

    

    Employee's
salary will immediately be increased to $155,000 ("Salary") for the first year
either upon improved financial condition or full funding or of the VEMICS
business plan (minimum of $3,000,000 in equity or debt financing or sales).
Partial funding will result in proportionate salary increases to be determined
by the compensation committee or through approval of the "Use of Proceeds"
report submitted to investors.

    

    In the
second year of this contract, following either improved financial condition or
full funding of the business plan, Employee's salary shall be increased to
$190,000 annually. The Salary may be increased and cash or stock bonuses may be
awarded from time-to-time to Employee as the Board determines at its sole
discretion. .

    

    3. Employment
Term.

    

    The term
of this Agreement will commence on the date of this agreement or Employee's
first date of employment, whichever is later, and, unless sooner terminated as
provided in Section 5, will end on December 31, 2007.

    

    4. Benefits and Incentive
Payments.

    

        4.1           
VEMICS will approve the grant to Employee of an option to purchase shares of
the
Company's common stock, in accordance with the terms of the Company's stock
option plan, as the same may be amended from time to time, and a nonqualified
stock option agreement to be entered into by the Employee and the Company. This
option expires when Employee's employment terminates for cause or without cause
or when Employee resigns, or upon Employee's death.

    

      
4.2            Employee
will be entitled to a noncumulative paid vacation of three (3) weeks,
plus the
week between Christmas and New Year's Day for each full year of the term hereof,
each of which weeks may be taken separately or together, and sick days in
accordance with VEMICS's policy, during which Employee will be entitled to the
full compensation and Benefits (as defined in Section 4.3) otherwise payable
hereunder; provided, however, any allotted vacation time which has not been used
in any particular year of the term hereof shall not be carried over to the next
ensuing year without the express written consent of the Employer.

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

     
4.3            Employee
may participate, on the same basis and subject to the same qualifications
as other personnel of VEMICS, or as offered to key executives of the company, in
any pension, profit sharing, life insurance, health insurance, hospitalization,
dental, drug prescription, short and long term disability, accidental death or
dismemberment and other benefit plans and policies VEMICS provides with respect
to its personnel generally (collectively, the "Benefits").  In
addition, VEMICS shall provide a workman's compensation and disability coverage
equal to full salary in the event that the employee becomes permanently disabled
while employed at VEMICS while engaged in performing his duties, or not, during
work time or on personal time. In the event that the company shall fail to
provide this coverage and employee becomes disabled VEMICS shall fulfill its
obligation from corporate funds for the rest of employees life or for an equal
duration that would be covered by an executive level similar insurance policy
intended to provide an income for the employee and/or his family if employee
becomes disabled and can not perform his regular duties.

    

     
4.4            VEMICS
will pay or promptly reimburse Employee, in accordance with VEMICS's
normal policies and procedures for its personnel, for all allowances and
expenses provided for hereunder and for all reasonable out-of-pocket business,
entertainment and travel expenses incurred by Employee in the performance of his
duties hereunder.  Upon full funding or sufficiently improved
financial condition, VEMICS will provide employee with a monthly auto allowance
of $800 which will cover all direct auto expense of auto payments (if any) gas,
oil, and insurance.

     

    
                 
    
4.5             A
guaranteed minimum year end bonus of $25,000 will also be paid to employee
on or before December 15 of each year following the first full year of funding,
providing the cash flow of the company warrants such payments. In the event that
a cash payment can not be executed due to the cash flow situation at the time,
as determined by the compensation committee, bonus money can accrue or be taken
in stock options at the current best rate available.

    

    

                 
5.         Termination of Employment
and Severance Benefits.

     

     
5.1            Termination by VEMICS of
Employee with cause. VEMICS Board of Directors
may terminate Employee's employment with VEMICS, with Cause. Termination with
Cause shall be effective immediately. For purposes of this section "Cause" shall
be defined as: (i) gross misfeasance, gross malfeasance or gross nonfeasance by
the Employee with respect to his duties hereunder; (ii) conviction of the
Employee of a criminal offense, other than a traffic offense; or (iii)
performance by the Employee of any act of moral turpitude, fraud or gross
dishonesty, with respect to the performance by the
Employee of his duties hereunder. Employee
terminated by VEMICS for cause, as defined herein, shall only be entitled to
receive, except as otherwise required by law, salary, benefits and
reimbursements (provided for in Section 4.3), that accrued prior to the
effective date of the termination.  In addition, VEMICS shall pay
salary and benefits of employee for an additional one hundred eighty (180) days
from the effective date of termination herein. Nothing in this Section shall
create any implication that VEMICS is waiving any remedy VEMICS may have for
breach by the Employee of this Agreement. The amount of salary and benefits
shall be the same as existed at the time of termination by Company. The Company
shall be required to give employee thirty (30) days written notice prior to
termination with cause as defined herein.

     

    
                        
5.2            
Termination be VEMICS
of Employee without cause; If VEMICS's Board or its designee terminates
Employee's employment hereunder for any reason other than Cause as defined under
section 5.1, or Employee's death or Permanent Disability (as defined in Section
5.5), then (a) the Employee shall be entitled to receive (i) the salary and
benefits accrued prior to the Termination Date, and (ii) payment or
reimbursement of any expenses, provided for under Section 4.3, that were
incurred by Employee prior to the Termination Date, and (b) after the
Termination Date. VEMICS will also continue to pay the full salary and benefits
(salary to be paid in equal semimonthly payments) to Employee for a period of
time of eighteen (18) months from the date employment is terminated by the Board
of Directors without cause. The amount of salary and benefits shall be the same
as existed at the time of termination by Company. The Company shall be required
to give employee ninety (90) days written notice prior to termination without
cause.

    

     

                      
5.3            Employee's Resignation from
VEMICS without Cause. If Employee voluntarily resigns his employment with
VEMICS, without Cause, then employee shall be entitled to salary, benefits and
reimbursements (provided for in Section 4.3), that accrued prior to the
effective date of the termination.  In addition, VEMICS shall pay
employee salary and benefits for an additional thirty (30) days from the
effective date of termination. The amount of salary and benefits shall be the
same as existed at the time of termination by Employee. The Employee shall be
required to give VEMICS sixty (60) days written notice prior to termination
without cause.

    
       

                       
5.4  
 Employees Resignation from
VEMICS with Cause.  If Employee resigns from VEMICS with Cause,
as defined herein, then (a) Employee shall be entitled to receive (i) the salary
and benefits accrued prior to the termination Date and (ii) payment or
reimbursement of any expenses, provided for under Section 4.3, that were
incurred by Employee prior to the termination date and (b) after the termination
date. The amount of salary and benefits shall be the same as existed at the time
of termination by Employee.  VEMICS will also continue to pay the full
salary and benefits of Employee (salary to paid in equal semimonthly payments)
to Employee for a period of time of eighteen (18) months from the date Employee
resigns from VEMICS with Cause.  For purposes of this section "Cause"
shall be defined as (i) a breach by VEMICS of any of its material agreements
contained herein and the continuation of such breach for ten business days after
written notice thereof is given to VEMICS (ii) The creation of a hostile work
environment such that employee is unable to perform his responsibilities and
duties as set forth under this agreement as well as the continuation of a
hostile work environment for ten business days after written notice thereof is
given to VEMICS. The Employee shall be required to give VEMICS thirty (30) days
written notice prior to termination with cause as defined herein.

      

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      5.5           
Compensation Upon
Death or Permanent Disability.  If Employee dies or suffers a
Permanent Disability, then VEMICS will () pay Employee or his estate, six months
Salary and bonus as described in section 5.2, according to the regular payroll
and (ii) continue for Employee's spouse and dependent children (if Employee has
died) and for Employee and his spouse and dependent children (if Employee
suffers a Permanent Disability), all of the Benefits that Employee was receiving
at the time of his death or Permanent Disability, for 18 months after Employee's
death or permanent disability.  This clause is in addition to the
disability key man insurance policy clause in section 4.2.  "Permanent
Disability' means the inability of Employee to perform his duties hereunder as a
result of any physical or mental incapacity for 60 consecutive days or 90 days
during any twelve month period, as determined by the Board.  The
amount of Salary and Benefits shall be the same as existed at the time of
termination by Company.

       

                                  
 6.            Covenant Regarding
Confidentiality.

      

      6.1.           
Employee acknowledges that he will have access to, and knowledge of, VEMICS
Confidential Information, and that improper use or disclosure of VEMICS
Confidential Information by Employee, whether during or after the termination of
his employment by VEMICS, could cause serious injury to the business of VEMICS.
Accordingly, Employee agrees that he will forever keep secret and inviolate all
VEMICS Confidential Information which has or shall come into his possession, and
that he will not use the same for his own private benefit or directly or
indirectly for the benefit of others, and that he will not discuss VEMICS
Confidential Information with any other person or organization, all for so long
as VEMICS Confidential Information is not generally known by, or accessible to,
the public.

       

                         
6.2           
Definition of
Confidential Information: 'VEMICS Confidential Information" as used in
this Agreement shall mean any and all technical and non-technical information
including patent, copyright, trade secret, and proprietary information,
techniques, sketches, drawings, models, inventions, know-how, processes,
apparatus, equipment, algorithms, software programs, software source documents,
and formulae related to the current, future, and proposed products and services
of VEMICS, and includes, without limitation, VEMICS information concerning
research, experimental work, development, design details and specifications,
engineering, financial information, procurement requirements, purchasing,
manufacturing, customer lists, business forecasts, sales and merchandising, and
marketing plans and information. "Confidential Information" shall also include
proprietary or confidential information of any third party that may disclose
such information to employee in the course of their employment to
VEMICS.

       

                         
6.3  
The
Employee further agrees that he will, immediately after termination of his
employment with the Company, and in no event later than 24 hours after
termination, return to the Company all books, records, customer and pricing
lists, correspondences, contracts or orders, advertising or promotion material,
and other written, typed or printed materials, whether furnished by the Company
or prepared by the Employee, which contain any information relating to the
Company's business, and the Employee agrees that he will neither make nor retain
any copies of such materials.

      

      6.4           
Nondisclosure and
Nonuse obligation:  Employee hereby agrees that he will not
make use of, disseminate, or in any way disclose any Confidential Information of
the VEMICS to any other party to any person, firm, or business, except to the
extent necessary for the performance of his duties as an employee of VEMICS and
any other purpose that VEMICS may hereafter authorize in writing. Employee
hereby agrees that it shall treat all Confidential Information of the VEMICS
with due care to protect its Confidentiality.

       

                        
6.5            Exclusions from
Nondisclosure and Nonuse obligations: VEMICS and Employee's obligations
under this section with respect to any portion of the VEMICS Confidential
Information shall terminate under this section when Employee can document
that:

      

      i. It was in
the public domain at or subsequent to the time it was communicated
to Employee by VEMICS through no fault of Employee;

      ii. It was
rightfully in Employee's possession free of any obligation of confidence
at or subsequent to the time it was communicated to Employee by VEMICS;
or

      

      A
disclosure of Confidential Information:

      

      a)         in
response to a valid order by a court or other governmental
body;

      b)        otherwise
required by law, or necessary to establish the rights of either party
under this Agreement, shall not be considered to be a breach of
this  Agreement or a waiver of confidentiality for other purposes;
provided, however, that Recipient shall provide prompt written notice thereof to
enable Discloser to seek a protective order or otherwise prevent such
disclosure.

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

                       
6.6  
 Enforceability of this
Confidentiality Provision:  A breath of any of the promises
contained in this section will result in irreparable and continuing damage to
VEMICS for which there will be no adequate remedy at law, Employee agrees that
VEMICS shall be entitled to injunctive relief and/or a decree for specific
performance, and such other relief as may Court may deem proper and just.
(including monetary damages if appropriate).

       

                                  
7. Arbitration.

      

      Any
dispute or controversy arising under or in connection with this Agreement or in
any manner associated with Employee's employment shall be settled exclusively by
arbitration in New York, in accordance with the Rules of the American
Arbitration Association then in effect, except for the terms under Section 6.6.
The parties agree to execute and be bound by the mutual agreement to arbitrate
claims relating to Employee's employment, attached hereto as Attachment
A.

       

                                  
8. General.

      

      8.1           
This Agreement will be construed, interpreted and governed by the laws of the
State of New York, without regard to the conflicts of law rules
thereof.

       

                         
8.2  
The
provisions set forth in Sections 6 ,7 and 8 of this employment agreement shall
remain in full force and effect even in the event this agreement is terminated,
for whatever reason, by Employee or VEMICS. All reference to VEMICS in Sections
6 ,7 and 8 include VEMICS's subsidiaries and other affiliates, if
any.

      

      8.3           
This Agreement will extend to and be binding upon Employee, his legal
representatives, heirs and distributees, and upon VEMICS, its successors and
assigns regardless of any change in the business structure of VEMICS, be it
through spin-offs merger, sale of stock, sale of assets or any other
transaction. However, this Agreement is a personal services contract and, as
such, Employee may not assign any of his duties or obligations
hereunder.

      

       8.4           
In the event that VEMICS shall be sold or the current organizational structure
is altered or changed by a change in ownership then the stock vesting shall be
accelerated to the end of the current employment year plus twelve months and be
transferred to the employee's estate.

      

      8.5           
In the event of a future disposition of the properties and businesses of the
Company by merger, acquisition, consolidation, sale of assets or otherwise, then
the Company may elect to assign this Agreement and all of its rights and
obligations hereunder to the acquiring or surviving person or entity; provided
that such corporation, person or entity shall
assume in-writing all of the obligations of the Company hereunder; or in
addition to the Company's other rights of termination, to terminate this
Agreement upon at least five days' written notice by paying Employee the
compensation owed him in accordance with Section 5.3 (Termination Without Cause)
of this Agreement.

      

      8.6           
This Agreement constitutes the entire agreement of the parties with respect to
the subject matter hereof. No waiver, modification or change of any of the
provisions of this Agreement will be valid unless in writing and signed by both
parties. Any and all prior agreements between the parties written or oral
relating to Employee's employment by VEMICS are of no further force or
effect.

      

      8.7           
The waiver of any breach of any duty, term or condition of this Agreement shall
not be deemed to constitute a waiver of any preceding or succeeding breach of
the same or any other duty, term or condition of this Agreement. No waiver of
any provision of this Agreement shall be valid unless in writing and signed by
both the Employee and an authorized officer of the Company. If any provision of
this Agreement is unenforceable in any jurisdiction in accordance with its
terms, the provision shall be enforceable to the fullest extent permitted in
that jurisdiction and shall continue to be enforceable in accordance with its
terms in any other jurisdiction.

      

      8.8           
All notices pursuant to this Agreement shall be in writing and delivered
personally receipt acknowledged (which shall include Federal Express, Express
Mail or similar service) or sent by certified mail, return receipt requested,
addressed to the parties hereto and shall be deemed given upon receipt, if
delivered personally, and three days after mailing, if mailed, unless received
earlier. Notices shall be addressed and sent to VEMICS at its principal
executive office and to executive at this home address as it appears in VEMICS's
personnel records.

       

      8.9           
The parties agree that, in the event of any breach or violation of this
Agreement, such breach of violation will result in immediate and irreparable
injury and harm to, the
innocent party, who shall be entitled to the remedies of injunction and specific
performance or either of such remedies, if available, as well as all other legal
or equitable remedies, if available, plus reasonable attorneys fees and costs
incurred in obtaining any such relief.

      

             
8.9A                      
The Section headings contained in this Agreement are for convenience of
reference only and shall not be used in construing this Agreement.

      

              8.9B                      
This Agreement may be executed in counterparts, each of which will be deemed an
original but all of which will together constitute one and the same
agreement.

      

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      IN
WITNESS HEREOF, the parties have executed this Agreement as of the date first
above written.

       

       

      
        
          	 	Vemics, Inc.	 
	 	 	 	 
	
                  Date

                	
                  By:
      

                	                                                         
      	 
	 	 	Fred
      Zolla	 
	 	 	Chairman/CEO	 
	 	 	 	 

        

       

      
        
           

        

        
          5

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