Exhibit 99.11
Employment Agreement with Xxxxxxx Xxxxxx
EMPLOYMENT AND NON-COMPETITION AGREEMENT
This AGREEMENT, effective as of the 1st day of April 2004, is made by and
between Xxxxx Biometry, Inc., a Florida corporation (the "Company"), and
Xxxxxxx Xxxxxx, a resident of the province of Ontario (the "Executive").
RECITALS
A. The Company is in the business of developing a Finger Print
Biometrics business (the "Business");
B. The Company desires to retain the services of the Executive;
C. The Executive is willing to be employed by the Company; and
D. The parties hereto desire to enter into this Agreement in
order to set forth the respective rights, limitations and
obligations of both the Company and the Executive with respect
to the Executive's employment with the Company, the
Confidential Information, the Discoveries, and the other
matters set forth herein.
NOW THEREFORE, in consideration of the employment of the Executive by
the Company, the compensation paid to the Executive and the Company continuing
to provide Confidential Information to the Executive, as well as the other
mutual promises and consideration hereinafter contained, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Term.
Subject to the provisions for termination hereinafter provided, the Executive's
employment hereunder shall commence on the first day of the month after the
Company receives funding in the amount of US$ 300,000 (the "Employment Date")
and unless otherwise extended, end one year after the Employment Date commences
(the "Contract Termination Date"). The Contract Termination Date shall be
automatically extended for a successive one (1) year period at the end of each
contract year unless the Board of Directors of the Company (the "Board") shall
give contrary notice to the Executive, pursuant to the terms of Section 11
below, at least ninety (90) days prior to the end of the each contract year. In
the event that the Company does not receive funding in the amount of $300,000 on
or before December 31, 2004, this agreement shall become null and void.
2. Position and Duties.
During the Employment Term, the Executive shall serve as Executive
Assistant. The Executive will report to the Company's Chief Financial Officer
and to the Company's Board of Directors as required by law and by the Company's
governance policy in effect from time to time, and perform such employment
duties, consistent with his position, as specified in the Job Description, and
more particularly defined in Exhibit A, attached hereto and incorporated into
this Agreement. The Executive shall not have the ability to enter into any
agreements or contracts or otherwise legally bind the Company without the
express consent and written approval of the President. The Executive shall
devote his full productive time, energy and ability to the proper and efficient
conduct of the Company's business. The Executive may only devote reasonable
periods of time to service as a Director of other businesses, with the prior
written approval and consent of the President, to the extent that such service
does not interfere with the performance of his obligations hereunder. Similarly,
the Executive may engage in such charitable or community activities as shall not
interfere with the performance of his obligations hereunder. The Executive shall
observe and comply with all lawful and reasonable rules of conduct set by the
Board for executives of the Company, and shall endeavor to promote the business,
reputation and interests of the Company.
3. Compensation.
(d) Base Compensation.
As defined in further detail below, during the Employment Term the
Company shall pay the Executive a Base Compensation, subject to annual
review, as the Board, in its sole discretion, may determine. The Base
Compensation shall be paid in Canadian Dollars in accordance with the
Company's normal payroll practices. The Base Compensation paid to the
Executive shall be forty five thousand (C$ 45,000) per year, payable
bi-weekly in arrears.
Other Compensation.
(v) Annual Bonus: The Executive shall be eligible to receive a
Performance Bonus (the "Bonus") for the achievement of the
performance goals as determined by the Board, and dependent
upon the financial performance of the Company. The annual
bonus may be paid in cash, fully vested stock, restricted
stock, or a combination thereof.
(vi) The Executive shall be granted 35,000 fully vested shares upon
signing of this agreement.
(iii) The Executive shall be eligible to participate in any Company
incentive plan established by the Company under the terms and
conditions of the Plan.
(e) Expenses.
The Executive shall be entitled to receive prompt reimbursement for all
reasonable business expenses pre-approved by the President (exclusive
of any commuting expenses) incurred by him in the course of his
employment by the Company.
(f) Other Benefits.
(i) Insurance: The Executive shall be entitled to participate in or
receive benefits on the same basis as other executive officers of the
Company under any employee benefit plans and arrangements applicable to
senior management including life insurance plans, pension and
profit-sharing plans, medical and health plans or other employee
welfare benefit plans, annual paid vacation, sick leave, sick pay and
short-term and long-term disability benefits and holidays, as in effect
from time to time.
(ii) Vacation: The Executive shall be entitled to receive three (3)
weeks of paid vacation per contract year. Such vacation days shall
accrue and become vested on the first anniversary day of each year of
the Employment Term. This benefit shall be reviewed by the Board of
Directors and the Executive from time to time and increased when
appropriate.
(iii) Holidays: The Executive shall be entitled to the designated
Company holidays.
5. Termination.
The Executive's employment by the Company pursuant hereto is subject to
termination during the Employment Term as follows:
(a) Death. The Executive's employment hereunder shall terminate upon
his death. In such event, the Executive's Base Compensation and any prorated
amount of the Bonus, if any, shall be paid through the date of the Executive's
death. Eligibility for all other benefits shall be determined by the terms of
any applicable plan or program.
(b) Disability. The Company may, by written notice to the Executive,
terminate the Executive's employment if, as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from his duties hereunder for ninety (90) consecutive days or for a total
of one hundred eighty (180) days in any three hundred sixty five (365) day
period (the "Disability Period"). In the event of such termination, the
Executive shall receive the same benefits payable in the event of death;
provided however that, if the Company should adopt a disability policy at any
time during the Employment Term, the terms of such policy shall govern.
(c) Termination by the Company for Cause or Executive's Voluntary
Termination. The Company shall be entitled to terminate the Executive's
employment at any time, by written notice to the Executive, for Cause, as
defined herein:
(i) fraud or embezzlement on the part of the Executive;
(ii) conviction of or the entry of a plea of nolo contendere
by the Executive to any felony or other crime of fraud or moral
turpitude;
(iii) any act of willful or negligent misconduct by the
Executive which is either intended to result in substantial personal
enrichment of the Executive at the expense of the Company or any of its
subsidiaries or affiliates, or has a material adverse impact on the
business or reputation of the Company, any of its subsidiaries or
affiliates, or directors or other officers (such determination to be
made by the Company's Board of Directors in the good faith exercise of
its reasonable judgment); or
In the event of termination for Cause, the Executive's Base
Compensation and other benefits shall be paid through the Date of Termination
(as hereafter defined), and the Executive shall have no further rights to
compensation or benefits other than as determined by the terms of any applicable
plan or program. The Executive shall not be eligible to receive any portion of
his Annual Bonus.
The Executive may terminate his employment hereunder voluntarily at any
time with ninety (90) day's written notice to the Board. In the event of the
Executive's voluntary termination, the Executive shall be entitled to receive
his Base Compensation and prorated Bonus, if any, and benefits through the Date
of Termination.
(d) Without Cause. The Company may terminate the Executive's employment
at any time by giving written notice to the Executive of its intent to terminate
this Agreement without Cause. In such event:
(i) the Executive shall be paid his Base Compensation, any
prorated Bonus and other benefits to which the Executive is entitled for the
remainder of the Employment Term, provided that the Base Compensation shall
represent not less than 3 months pay in lieu of notice of termination;
(ii) all stock options held by the Executive under any stock
option plan of the Company shall become fully exercisable, and shall remain
exercisable for a period of 180 days following the Date of Termination; and
(iii) the Executive shall have such other rights in respect of
any incentive, other compensation plan or benefit plan or program as may be set
forth in such plan or program.
(e) Change in Control. Notwithstanding any other provision of this
Agreement, should a "change in control" occur, the Employee, at his sole option
and discretion, may terminate his employment under this Agreement at any time
within one (1) year after such change of control upon fifteen (15) days notice.
In the event of such termination, Company shall pay to the Employee a severance
payment ("Severance Payment") equal to three (3) times the base amount as
defined in paragraph 3(a) above. The amount determined under the foregoing
provisions of this Section 4(e) shall be payable no later than one (1) month
after the effective date of the Employee's termination of employment. A change
in control means: the acquisition, without the approval of the Company's board
of directors, by any person or entity, other than Company or a "related entity,"
of more than twenty percent (20%) of the outstanding shares of Company's voting
common stock through a tender offer, exchange offer or otherwise; the
liquidation or dissolution of the Company following a sale or other disposition
of all or substantially all of its assets; a merger of consolidation involving
the Company which results in the Company not being the surviving parent
corporation; or any time during any two-year (2) period in which individuals who
constituted the board of directors of Company at the start of such period (or
whose election was approved by at least two-thirds of the then members of the
board of directors of Company who were members at the start of the two-year
period) do not constitute at least fifty (50%) of the board of directors, for
any reason. A related entity is the parent, a subsidiary or any employee benefit
plan (including a trust forming a part of such a plan) maintained by the
Company, its parent or a subsidiary.
(f) Date of Termination. The date upon which a termination pursuant to
this Section 4 becomes effective (the "Date of Termination" or "Termination
Date") shall be: the date upon which the party terminating this Agreement gives
the other party written notice thereof in accordance with Section 11 hereof.
5. Confidential Information.
(a) The Executive recognizes that the services to be performed by him
hereunder are special, unique and extraordinary and that, by reason of his
employment with the Company, he may acquire Confidential Information (as
hereinafter defined) concerning the operation of the Company, the use or
disclosure of which would cause the Company substantial loss and damage which
could not be readily calculated and for which no remedy at law would be
adequate. Accordingly, the Executive agrees that he will not (directly or
indirectly) at any time, whether during or after the Employment Term:
(i) knowingly use for an improper personal benefit any
Confidential Information that he may learn or has learned by reason of his
employment with the Company; or
(ii) disclose any such Confidential Information to any person
except (A) in the performance of his obligations to the Company hereunder, (B)
as required by a court of competent jurisdiction, (C) in connection with the
enforcement of his rights under this Employment Agreement or (D) with the prior
consent of the Board.
As used herein, "Confidential Information" includes information with
respect to the Company's facilities and methods, trade secrets and other
intellectual property, systems, patents and patent applications, procedures,
manuals, confidential reports, financial information, business plans, prospects
or opportunities, personnel information or lists of customers and suppliers;
provided, however, that such term shall not include any information that is or
becomes generally known or available publicly other than as a result of
disclosure by the Executive which is not permitted as described in clause (ii)
above, or the Company discloses to others without obtaining an agreement of
confidentiality.
(b) The Executive confirms that all Confidential Information is the
exclusive property of the Company. All business records, papers and documents
and electronic materials kept or made by the Executive relating to the business
of the Company which comprise Confidential Information shall be and remain the
property of the Company during the Employment Term and at all times thereafter.
Upon the termination of his employment with the Company or upon the request of
the Company at any time, the Executive shall promptly deliver to the Company,
and, without the express consent of the Board, shall retain no copies of any
written or electronic materials, records and documents made by the Executive or
coming into his possession concerning the business or affairs of the Company and
which comprise Confidential Information.
(c) The Executive shall keep the terms of this Agreement strictly
confidential, other than as may be necessary to enforce his rights hereunder or
as otherwise required by law, or for estate planning or personal financial
reasons.
6. Non-Competition.
(a) During the Employment Term and for a period of one (1) year after
the Termination Date (the "Restricted Period"), the Executive shall not directly
or indirectly, for his own account or for the account of others, serve as an
officer, director, stockholder, owner, partner, employee, promoter, consultant,
advisor, manager or otherwise participate in the promotion, financing,
ownership, operation, or management of, or assist in or carry on through a
proprietorship, corporation, partnership or other form of business entity or
otherwise that intends to compete against the Company or any of its affiliates
or customers.
Nothing in this Section 6 shall prohibit the Executive from acquiring
or holding any issue of stock or securities of any Person that has any
securities registered under Section 12 of the Exchange Act, listed on a national
securities exchange or quoted on the automated quotation system of the National
Association of Securities Dealers, Inc. so long as the Executive is not deemed
to be an "affiliate" of such Person as such term is used in paragraphs (c) and
(d) of Rule 145 under the Securities Act and the Executive, members of his
immediate family, or persons under his control do not own or hold more than five
percent (5%) of any voting securities of any such Person.
(b) During the Restricted Period, the Executive shall not, whether for
his own account or for the account of any other person (excluding the Company):
(i) solicit or contact in an effort to do business with any
person who was a customer or a potential customer of the Company during
the term of this Agreement, or any affiliate of any such person, if
such solicitation or contact is for the purpose of competition with the
Company;
(ii) solicit or induce any of the Company's employees to leave
their employment with the Company or accept employment with anyone
except the Company; or
(iii) interfere in a similar manner with the business of the
Company.
Nothing herein shall prohibit or preclude the Executive from performing any
other types of services that are not precluded by Section 6 (a) for any
other Person.
(c) The Executive has carefully read and considered the provisions of this
Section 6 and, having done so, agrees that the restrictions set forth in
this Section 6 (including the Restricted Period, scope of activity to be
restrained and the geographical scope) are fair and reasonable and are
reasonably required for the protection of the interests of the Company, its
officers, directors, employees, creditors and shareholders. The Executive
understands that the restrictions contained in this Section 6 may limit his
ability to engage in a business similar to the Company's business, but
acknowledges that he will receive sufficiently high remuneration and other
benefits from the Company hereunder to justify such restrictions.
7. Inventions.
(a) Disclosure of Inventions: The Executive shall promptly disclose to the
Company (or any persons designated by it) all discoveries, developments,
designs, improvements, inventions, blueprints, formulae, processes,
techniques, computer programs, strategies, and data, whether or not
patentable or registerable under copyright or similar statutes, made or
conceived or reduced to practice or learned by the Executive, either alone
or jointly with others, during the period of employment that result
directly from tasks assigned to the Executive by the Company and relate
specifically to the Business or result from the use of premises or property
(including computer systems and engineering facilities) owned, leased or
contracted for by the Company (all such discoveries, developments, designs,
improvements, inventions, formulae, processes, techniques, computer
programs, strategies, blueprints, know-how and data are hereinafter
referred to as "Inventions"). The Executive will also promptly disclose to
the Company, and the Company hereby agrees to receive all such disclosures
in confidence, all other discoveries, developments, designs, improvements,
inventions, formulae, processes, techniques, computer programs, strategies,
blueprints and data, whether or not patentable or registerable under
copyright or similar statutes, made or conceived or reduced to practice or
learned by the Executive, either alone or jointly with others, during the
period of employment for the purpose of determining whether they constitute
"Inventions", as defined above.
(b) Ownership of Inventions.
(i) All Inventions shall be the sole property of the Company and its
assigns, and the Company and its assigns shall be the sole owner of all
patents, copyrights, trademarks and other rights in connection therewith.
The Executive does hereby assign to the Company any rights the Executive
may have or acquire in such Inventions. The Executive shall assist the
Company (at the Company's expense) in obtaining and, from time to time,
enforcing patents, copyrights, trademarks and other rights and protections
relating to said Inventions in any and all countries. The Executive will
execute all documents necessary to apply for and obtain such patents,
copyrights, trademarks and other rights and protections on such Inventions,
as the Company may request, together with any assignments thereof to the
Company or persons designated by it. The Executive's obligation to assist
the Company in obtaining and enforcing patents, copyrights, trademarks and
other rights and protections relating to such Inventions shall continue
beyond the termination of employment, but the Company shall compensate the
Executive at a reasonable rate after the Executive's termination, for time
actually spent by the Executive at the Company's request on such
assistance.
(ii) In the event the Company is unable, after reasonable effort, to
secure the Executive's signature on any document or documents needed to
apply for or prosecute any patent, copyright or other right or protection
relating to an Invention, for any reason whatsoever, the Executive does
hereby irrevocably designate and appoint the Company and its duly
authorized officers and agents as his agent and attorney-in-fact, to act
for and on his behalf to execute and file any such application or
applications and to do all other lawfully permitted acts to further the
prosecution and issuance of patents, copyrights or similar protections
solely with respect to Inventions with the same legal force and effect as
if executed by the Executive and the Executive does ratify, affirm and
approve all such lawfully permitted acts accordingly.
8. Specific Performance.
The Executive acknowledges that a breach of any of the covenants
contained in this agreement may result in material, irreparable injury to the
Company for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of such a breach, any payments remaining under the terms of this Agreement shall
cease and the Company, without posting any bond, shall be entitled to obtain a
temporary restraining order and a preliminary or permanent injunction
restraining the Executive from engaging in activities prohibited by this
agreement or such other relief as may be required to enforce any of the
covenants contained in this agreement.
9. Successors; Binding Agreement.
(a) The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business or assets of the Company to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform if no such succession had taken place. Failure of the
Company to obtain such assumption and agreement prior to the effectiveness of
any such succession shall be a material breach of this Agreement. As used in
this Employment Agreement, "Company" shall mean the Company as defined in this
Agreement and any successor to its business or assets as aforesaid which assumes
and agrees to perform this Agreement by operation of law, or otherwise.
(b) This Agreement shall inure to the benefit of and be enforceable by
the Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive should
die while any amount would still be payable to him hereunder if he had continued
to live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Executive's spouse or, if
there is no such spouse, to the Executive's estate. This Agreement is personal
to the Executive and may not be assigned by him.
10. Resignation as Officer and/or Director.
In the event that the Executive's employment is terminated for any
reason whatsoever or the Executive voluntarily terminates his employment,
the Executive agrees to resign immediately as an Officer and/or Director of
Company.
11. Notice.
For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered by hand or mailed by United States
overnight express mail, or nationally recognized private delivery service on an
overnight basis, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive: Xxxxxxx Xxxxxx
000-0000 Xxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxx
(000) 000-0000
With copies to: Xxxxxxxx X. Xxxxxxx
The Galleria
0 Xxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxxxx
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to the Company: Xxxxx Biometry, Inc.
Notices may also be sent to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon receipt.
13. Arbitration of Disputes.
Any controversy or claim arising out of or relating to this Agreement
or the breach hereof, other than an action brought by the Company for injunctive
or other equitable relief in the enforcement of the Company's rights under
Section 8 above, in which case such action may be brought in any court of
competent jurisdiction, shall be settled by arbitration in accordance with the
laws of the Province of Ontario by a single arbitrator. Such arbitration shall
be conducted in the City of Ottawa, Ontario in accordance with the rules of the
ADR Institute of Canada. Judgment upon the award rendered by the arbitrators may
be entered in any court having jurisdiction thereof. In the event that it shall
be necessary or desirable for the Executive to retain legal counsel and/or incur
other costs and expenses in connection with the enforcement of any or all of the
Executive's rights under this Agreement, the Company shall pay (or the Executive
shall be entitled to recover from the Company, as the case may be) the
Executive's reasonable attorneys' fees and other reasonable costs and expenses
in connection with the enforcement of said rights (including the enforcement of
any arbitration award in court) in the event that an arbitration award is made
in favor of the Executive, unless and to the extent that the arbitrators shall
determine that under the circumstances recovery by the Executive of all or part
of any such fees and costs and expenses would be inequitable or otherwise
unjust.
13. Attorneys' Fees.
The prevailing party in any legal or arbitration proceedings brought by or
against the other party to enforce any provision of this Agreement shall be
entitled to recover against the non-prevailing party the reasonable attorneys'
fees, court costs, arbitration fees and other expenses incurred by the
prevailing party.
14. Representations and Warranties.
The Executive hereby represents and warrants that he is willing and
able to enter into this Employment Agreement and to render his services pursuant
hereto and that neither the execution and delivery of this Employment Agreement,
nor the performance of his duties hereunder, violates the provisions of any
other agreement to which he is a party or by which he is bound. It is further
provided that the Executive shall indemnify the Company for any and all damages
and/or expenses (including attorney's fees) that may result from a breach of
such representations.
15. Expenses.
Each party shall pay its own expenses incident to the performance or
enforcement of this Agreement, including all fees and expenses of its
counsel for all activities of such counsel undertaken pursuant to this
Agreement, except as otherwise herein specifically provided.
16. Waivers and Further Agreements.
Any waiver of any terms or conditions of this Agreement shall not
operate as a waiver of any other breach of such terms or conditions or any
other term or condition, nor shall any failure to enforce any provision
hereof operate as a waiver of such provision or of any other provision
hereof; provided, however, that no such written waiver, unless it, by its
own terms, explicitly provides to the contrary, shall be construed to
effect a continuing waiver of the provision being waived and no such waiver
in any instance shall constitute a waiver in any other instance or for any
other purpose or impair the right of the party against whom such waiver is
claimed in all other instances or for all other purposes to require full
compliance with such provision. Each of the parties hereto agrees to
execute all such further instruments and documents and to take all such
further action as the other party may reasonably require in order to
effectuate the terms and purposes of this Agreement.
17. Amendments.
This Agreement may not be amended, nor shall any waiver, change,
modification, consent or discharge be effected except by an instrument in
writing executed by or on behalf of the party against whom enforcement of
any waiver, change, modification, consent or discharge is sought.
18. Severability.
If any provision of this Agreement shall be held or deemed to be, or
shall in fact be, invalid, inoperative or unenforceable as applied to any
particular case in any jurisdiction or jurisdictions, or in all
jurisdictions or in all cases, because of the conflict of any provision
with any constitution or statute or rule of public policy or for any other
reason, such circumstance shall not have the effect of rendering the
provision or provisions in question invalid, inoperative or unenforceable
in any other jurisdiction or in any other case or circumstance or of
rendering any other provision or provisions herein contained invalid,
inoperative or unenforceable to the extent that such other provisions are
not themselves actually in conflict with such constitution, statute or rule
of public policy, but this Employment Agreement shall be reformed and
construed in any such jurisdiction or case as if such invalid, inoperative
or unenforceable provision had never been contained herein and such
provision reformed so that it would be valid, operative and enforceable to
the maximum extent permitted in such jurisdiction or in such case.
19. Counterparts.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same instrument, and in pleading or proving any
provision of this Agreement, it shall not be necessary to produce more than
one of such counterparts.
20 Survival.
Sections 3, 4, 5, 6, 7, 8, 11, 12, and 20 shall survive the termination
of this Agreement.
21. Section Headings.
The headings contained in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
22. Gender.
Whenever used herein, the singular number shall include the plural, the
plural shall include the singular, and the use of any gender shall include
all genders.
23. Entire Agreement.
This Agreement together with any attachments or Exhibits hereto
contains the entire agreement of the parties and there are no other
promises or conditions in any other agreement, whether oral or written.
This Agreement supersedes any prior written or oral agreements between the
parties.
24. Governing Law.
This Agreement shall be governed by and construed and enforced in
accordance with the law (other than the law governing conflict of law
questions) of the State of Florida.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
Executive:
Name: ______________________
Xxxxxxx Xxxxxx
Xxxxx Biometry, Inc.
By: _________________________
Xxx Ko Chau
President
