Exhibit 10.7
EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement ("Agreement") is made and effective
September 24, 1999, by and between Intraco Systems, Inc., a Florida Corporation
("Company") and Xxxx Xxxxxxxx ("Executive").
NOW, THEREFORE, the parties hereto agree as follows:
1. EMPLOYMENT.
Company hereby agrees to employ Executive as its Chief Executive Officer and
Executive hereby accepts such employment in accordance with the terms of this
Agreement and the terms of employment applicable to regular employees of the
Company. In the event of any conflict or ambiguity between the terms of this
Agreement and terms of employment applicable to regular employees of the Company
as set forth in ADDENDUM A appended hereto and made a part of this Agreement,
the terms of this Agreement shall control.
2. TERM.
The term of this Agreement shall commence as of September 24, 1999 and shall
continue until terminated as provided in Section 7 below.
3. DUTIES OF EXECUTIVE.
The duties of Executive shall include the performance of all of the duties
typical of a Chief Executive Officer as described in the bylaws of the Company
and such other duties and projects as may be assigned by the Board of Directors
of the Company, as long as such duties are consistent with and typical to the
position of Chief Executive Officer. Executive shall devote his entire
productive time, ability and attention to the business of the Company and shall
perform all duties in a professional, ethical and businesslike manner. Executive
will not, during the term of this Agreement, directly or indirectly engage in
any other business, either as an employee, employer, consultant, principal,
officer, director, advisor, or in any other capacity, either with or without
compensation, without the prior written consent of Company. The Company shall
not unreasonably deny approval of Executive to sit as a director for up to three
(3) other companies.
4. BOARD OF DIRECTORS.
Immediately upon the effective date of this Agreement and securing of DNO
insurance, the Board of Directors of the Company shall meet and shall elect
Executive to the Board of Directors of the Company. Executive shall remain on
the Board of Directors throughout the term of this Agreement.
5. COMPENSATION.
Executive will be paid compensation during this Agreement as follows:
A. A base annual salary of One Hundred Seventy Five Thousand Dollars
($175,000) per year, payable in installments according to the Company's
regular payroll schedule. The base annual salary shall be increased at
the end of each year of employment by the greater of (a) 3% of the
prior year's annual salary; or (b) the percentage increase in the
Consumer Price Index (CPI) as published by the United States Department
of Labor at the end of each year. The Company shall provide the
Executive the CPI Information by September 1st of each year to permit
Executive to confirm such information.
B. For an initial period of Employment, the salary will be reduced to an
annual rate of $135,000.00. The difference between $175,000.00 and
$135,000.00, i.e., $40,000.00, will be accrued and shall be paid as a
lump sum to the Executive, less taxes, at the earlier of:
1. successfully raising $2.0 million of investment capital or,
2. the six month anniversary of the effective date of this
Agreement, i.e., by March 24, 2000.
C. An option to purchase 4,000,000 (Four Million) shares of Intraco
Systems common stock will be furnished to Executive as per terms of the
"Stock Option Agreement" set forth in ADDENDUM B, appended to and made
part of this Agreement.
6. BENEFITS.
A. HOLIDAYS. Executive shall be entitled to Holiday, Vacation & Sick Leave and
Emergency leave according to the regular policies and procedures of Company per
ADDENDUM A with the exception of vacation. Executive shall receive four (4)
weeks of paid vacation annually. Additional sick leave or emergency leave over
and above paid leave provided by the Company, if any, shall be unpaid and shall
be granted at the discretion of the Board of Directors.
B. MEDICAL AND GROUP LIFE INSURANCE. Company agrees to include Executive in the
group of executives provided group life insurance. The Company shall provide
group life insurance for Executive at no charge to Executive in the amount of
Five Hundred Thousand ($500,000) during the term of this Agreement. Executive
shall be responsible for payment of any federal or state income tax imposed upon
these benefits.
C. PENSION AND PROFIT SHARING PLANS. Executive shall be entitled to participate
in any pension or profit sharing plan or other type of plan adopted by Company
for the benefit of its officers and/or regular employees.
D. AUTOMOBILE. Company will provide to Executive the use of an automobile of the
Executive's choice. Company will pay all automobile expenses incurred by
Executive in the performance of an Executive's company duties. Company will
procure and maintain in force an automobile liability policy for the automobile
with coverage, including Executive, in the amount as it currently exists in
combined single limit on bodily injury and property damage.
E. EXPENSE REIMBURSEMENT. Executive shall be entitled to reimbursement for all
reasonable expenses, including travel and entertainment, incurred by Executive
in the performance of Executive's duties. Executive will maintain records and
written receipts as required by the Company policy and reasonably requested by
the board of directors to substantiate such expenses.
7. TERM AND TERMINATION.
A. The Initial Term of this Agreement shall commence on September 24, 1999 and
it shall continue in effect for a period of Three (3) years on an annual basis.
Thereafter, the Agreement shall be renewed upon the mutual agreement of
Executive and Company. This Agreement and Executive's employment may be
terminated at Company's discretion during the Initial Term, provided that
immediately upon the Executive's termination, Company shall pay to Executive in
a lump sum an amount equal to Executive's base salary for the remaining period
of the Initial Term, plus an amount equal to Fifty percent 50% of Executive's
then applicable base annual salary for the remaining period of the Initial Term.
In the event of such termination, Executive shall not be entitled to any
incentive salary payment or any other compensation then in effect, prorated or
otherwise, except as provided in Addendum C, appended hereto and made a part of
this Agreement..
B. This Agreement and Executive's employment may be terminated by Company at its
discretion at any time after the Initial Term, provided that immediately upon
the Executive's termination, the Company shall pay to the Executive in lump sum
an amount equal to Executive's base annual salary in effect for the remainder of
the annual term plus an amount equal to Fifty percent (50%) of Executive's then
applicable base salary. In the event of such a discretionary termination,
Executive shall not be entitled to receive any incentive salary payment or any
other compensation then in effect, prorated or otherwise, except as provided in
ADDENDUM C.
C. This Agreement may be terminated by Executive at Executive's discretion by
providing at least thirty (30) days prior written notice to Company. In the
event of termination by Executive pursuant to this subsection, Company may
immediately relieve Executive of all duties and immediately terminate this
Agreement, provided that Company shall pay Executive at the then applicable base
annual salary rate to the termination date included in Executive's original
termination notice, and any additional payment in accordance with ADDENDUM C.
D. In the event that Executive (a) engages in any tortious conduct with respect
to any matter involving the Company which has a material adverse impact on the
Company, (b) repeatedly and habitually fails after written notice by the Board
of Directors to follow instructions of the Board of Directors consistent with
the Executive's title and duties of employment as provided in Section 3 herein,
or (c) is convicted of any criminal act if it relates to the Executive's
employment or the business of the Company, then Company may terminate this
Agreement upon sixty (60) days written notice to Executive. In event of
termination of this agreement pursuant to this subsection, Executive shall be
paid only at the then applicable base annual salary rate up to and including the
date of termination. Executive shall not be paid any incentive salary payments
or other compensation then in effect, prorated or otherwise.
E. This Agreement shall be fully assumed for its full Initial term and,
thereafter, for any subsequent annual term, by any successor, assign or, in the
event Company is acquired, or is the non-surviving party in a merger, or sells
all or substantially all of its assets, by any successor entity.
8. NONDISCLOSURE AND NONCOMPETITION.
The Executive and Company will comply with the terms of the Non-Compete and
Non-disclosure Agreement appended hereto as ADDENDUM C and made a part of this
Agreement as if fully set forth herein.
9. NOTICES.
Any notice required by this Agreement or given in connection with it, shall be
in writing and shall be given to the appropriate party by personal delivery or
by certified mail, postage prepaid, or recognized overnight delivery services;
If to Company:
Intraco Systems, Inc.
0000 XXX Xxxx #000
Xxxx Xxxxx, XX 00000
If to Executive:
Xxxx Xxxxxxxx
000 X.X. 00xx Xxxxxx
Xxxx Xxxxx XX 00000
10. FINAL AGREEMENT.
This Agreement terminates and supersedes all prior understandings or agreements
on the subject matter hereof This Agreement may be modified only by a further
writing that is duly executed by both parties.
11. GOVERNING LAW.
This Agreement shall be construed and enforced in accordance with the laws of
the state of Florida with venue in Palm Beach County.
12. HEADINGS
Headings used in this Agreement are provided for convenience only and shall not
be used to construe meaning or intent.
13. NO ASSIGNMENT.
Neither this Agreement nor any or interest in this Agreement may be assigned by
Executive without the prior express written approval of Company, which may be
withheld by Company at Company's absolute discretion.
14. SEVERABILITY. If any term of this Agreement is held by a court of competent
jurisdiction to be invalid or unenforceable, then this Agreement, including all
of the remaining terms, will remain in full force and effect as if such invalid
or unenforceable term had never been included.
15. ARBITRATION.
Any and all disputes regarding the application, breach and/or interpretation of
this Agreement, with the sole and exclusive exception of the Company's right to
injunctive relief under the Nondisclosure and Noncompetition Agreement referred
to herein and appended as Addendum C, herein shall be exclusively determined by
arbitration. In the event a dispute arises between the parties, the party
asserting such a claim shall serve a Complaint on the other party. Within
fifteen (15) days thereafter, the parties shall agree upon a mediator and submit
to mediation within ten (10) days thereafter. In the event the parties cannot
agree as to the identity of a mediator or the dispute cannot be resolved through
mediation, the parties shall proceed to arbitration in accordance with the then
applicable Employment Dispute Arbitration Rules of the American Arbitration
Association and request a panel of seven (7) arbitrators located in South
Florida within ten (10) days after mediation. Within ten (10) days of receipt of
the list of arbitrators, the parties shall select one arbitrator from the list
to hear the dispute. In the event the parties cannot agree to an arbitrator then
the parties shall meet and alternatively cross out names on the list, and the
remaining name shall be the arbitrator. A coin shall be tossed to determine who
shall cross out first. The arbitration shall be conducted within sixty (60) days
of the date of issuance of the initial arbitrators' list. In the event that the
arbitrator jointly selected is unavailable, the parties shall request an
alternate list of seven (7) arbitrators and select a single arbitrator from that
list upon agreement or utilizing the method identified above. The arbitrator
shall issue his decision within thirty (30) days from the close of the
arbitration hearing. The parties shall have the right to file post-arbitration
briefs within fifteen (15) days after the close of the hearing. It is further
agreed that in the event of a determination against one of the parties, that
party shall pay all arbitration costs, including the arbitrator's fees, court
reporter's fees, arbitration transcript fees, expert witness fees and any and
all costs associated with arbitration including room rental. Further, the
parties agree the prevailing party shall be entitled to attorney's fees for the
arbitration and all related court litigation, including all appeals.
Notwithstanding any dispute arising under this Agreement, if requested by the
other party, each party will continue its obligations under this Agreement
pending the arbitration decision. The venue of mediation and arbitration shall
be in and for Palm Beach County, Florida. The decision of the arbitrator shall
be final and binding upon both parties. Either party may enforce the terms of
this provision, including but not limited to the time periods set forth, in a
court of competent jurisdiction in and Palm Beach County, Florida and take any
appeals therefrom. The parties agree upon venue of any court litigation is in
Palm Beach County, Florida, and waive all rights to contest such venue or claim
the right to any other venue. In any arbitration regarding this Agreement, the
arbitrator shall be required to determine a prevailing party and shall be
required to award that prevailing party all attorney's fees and costs for any
such arbitration. This provision will survive the termination of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
Intraco Systems, Inc. Xxxx Xxxxxxxx
0000 XXX Xxxx. 000 X.X. 00xx Xxxxxx
Xxxxx 000 Xxxx Xxxxx, Xxxxxxx 00000
Xxxx Xxxxx, Xxxxxxx 00000
By: /s/ XXXX XXXXXX By: /s/ XXXX XXXXXXXX
------------------------------- ------------------------
Xxxx X. Xxxxxx Xxxx Xxxxxxxx
President
ADDENDUM A
STANDARD TERMS OF EMPLOYMENT
Xxxx Xxxxxxxx
Holidays: Employee will be entitled to at least six (6) paid
holidays each calendar year. The Company will notify
Employee at the beginning of each year of the holiday
schedule for the coming year.
Vacation: Employee will be entitled to vacation time according
to the regular policies of the Company:
Date of Hire- 14 Years - 20 business days
15+Years - Board of Directors
Medical: The Company will include Employee in the group
medical plan of the Company at the Company's expense.
Spouse and or Dependents of the Employee may be added
at One Hundred percent (100%) of the Employer's
expense as a payroll deduction.
Sick Leave: Employee will be entitled to sick leave according to
the regular policies of the Company.
Expense
Reimbursement: Employer will reimburse Employee for any and all
pre-approved necessary, customary, and usual expenses
incurred by him while traveling for and on behalf of
the Employer pursuant to Employer's directions.
Employee will provide appropriate receipts in a
timely manner for all reimbursed expenses.
ADDENDUM C
INTRACO SYSTEMS, INC.
NONDISCLOSURE AND NONCOMPETITION AGREEMENT
As an employee of Intraco Systems, Inc., I, Xxxx Xxxxxxxx, hereby agree
to observe all the provisions of this Agreement, as well as all other rules and
policies that Intraco Systems, Inc. may announce from time to time. Furthermore,
this AGREEMENT is provided by me for the benefit of Intraco Systems, Inc., its
subsidiaries, affiliates, successors and assigns (collectively referred to
"Intraco Systems" or the "Company"). This Agreement serves as a legally binding
acknowledgment and assignment of the ownership of all "Work Product" (as defined
below) that Company may encounter.
SECTION 1. AVOIDANCE OF CONFLICT OF INTEREST
While employed by Intraco Systems, I will not engage in. any other
business activity that conflicts with my duties to Intraco Systems. Under no
circumstances win I work for any competitor or have any financial interest in
any competitor of Intraco Systems; provided, however, that this Agreement does
not prohibit investment of a reasonable part of my assets in the stock or
securities of any competitor whose stock or securities are publicly traded on a
national exchange.
SECTION 2. OWNERSHIP AND RIGHTS IN WORK PRODUCT
For purposes of this Agreement, "Work Product" shall mean all
intellectual property rights, including all trade secrets, U.S. and
international copyrights, patentable inventions, and other intellectual property
rights in any programming, documentation, technology, or other work product that
is created in connection with my Work. In addition, all rights in any
preexisting programming, documentation, technology, or other Work Product
provided to Company during the course of my employment or engagement shall
automatically become part of the Work Product. hereunder, whether or not it
arises specifically out of my "Work." For purposes of this Agreement, "Work"
shall mean (1) any direct assignments and required performance by or for
Company, and (2) any other productive output that relates to the business of
Company and is produced during the course of my engagement by Company. For this
purpose, Work may be considered present even after normal working hours, away
from Owner's premises, on an unsupervised basis, alone or with others. Unless
otherwise provided in a subsequent writing signed by Company, this Agreement
shall apply to all Work Product created in connection with all Work conducted
before or after the date of this Agreement.
Intraco Systems, Inc. shall own all rights in the Work Product. To this
end, all Work Product shall be considered Work made by me for hire for Company.
If any of the Work Product may not, by operation of law or agreement be
considered Work made by me for hire for Company (or if ownership of all rights
therein do not otherwise vest exclusively in Company), I agree to assign, and
upon creation thereof automatically assign, without further consideration, the
ownership thereof to Company. I hereby irrevocably relinquish for the benefit of
Company and its assigns any moral rights in the Work Product recognized by
applicable law. Company shall have the right to obtain and hold, in whatever
name or capacity it selects, copyrights, registrations, and any other protection
available in the Work Product.
I agree to perform upon the request of Company, during or after my
Work, such Further acts as may be necessary or desirable to transfer, perfect,
and defend Owner's ownership of the Work Product, including by (1) executing,
acknowledging, and delivering any requested affidavits and documents of
assignment and conveyance, (2) obtaining and/or aiding in the enforcement of
copyrights, trade secrets, and (if applicable) patents with respect to the Work
Product in any countries, and (3) providing testimony in connection with any
proceeding affecting the rights of Company in any Work Product.
I warrant that my Work for Company does not and will not in any way
conflict with any remaining obligations I may have with any prior employer or
contractor. I also agree to develop all Work Product in a manner that avoids
even the appearance of infringement of any third party's intellectual property
rights.
SECTION 3. CONFIDENTIALITY AND NON-DISCLOSURE
During the course of my engagement and afterwards, I agree not to use
or disclose any "trade secrets" of Company as defined by law at any time except
as necessary to perform my duties for Company. Under the law, a "trade secret"
-is a type of intangible property, the theft (i.e., misappropriation) of which
is a tort and crime in most states. It does not have to be in written form to be
protected. A trade secret generally consists of valuable, secret information or
ideas that Company collects or uses in order to keep its competitive edge,
including confidential information supplied to Company by its customers,
clients, vendors, or agents. Examples of trade secrets are such technical
information as manufacturing or operating processes, equipment design, product
specifications, computer software in source code form, and other proprietary
technology, and such business information as selling and pricing information and
procedures, customer lists, business and marketing plans, ideas and plans for
products, services or other business development, and internal financial
statements. These restrictions do not apply to any information generally
available to the public or any information properly obtained from a completely
independent source.
Furthermore, I agree to maintain in strict confidence, and agree not to
use and disclose except as authorized by Intraco Systems, any information of a
competitively sensitive or proprietary nature that I receive from Intraco
Systems, Inc. or its clients or contractors in connection with my services
hereunder. Intraco Systems agrees to take reasonable steps to identify, and
cause its clients and contractors to identify, for my benefit such information,
including by using confidentiality notices in written material where
appropriate. These restrictions shall not be construed to apply to (1)
information generally available to the public, (2) information released by
Intraco Systems or its clients or contractors, as the case may be, generally
without restriction, (3) information independently developed or acquired by me
without reliance in any way on other protected information of Intraco Systems or
its clients or contractors, or (4) information approved by Intraco Systems or
its clients or contractors, as the case may be, for my use and. disclosure
without restriction.
SECTION 4. RETURN OF MATERIALS
Upon the request of Intraco Systems and, in any event, upon termination
of -my employment, I will leave with Intraco Systems all memoranda, notes,
records, drawings, manuals, disks, or other documents and media pertaining to
Intraco Systems business, including all copies thereof
SECTION 5. COVENANT NOT TO COMPETE
During the term of my employment with Intraco Systems and for a period
of one year after termination of my employment, in exchange for payment to me by
Intraco Systems within fourteen (14) days of my termination of employment for
any reason in lump sum, less appropriate taxes, of my then applicable one year's
annual base salary in addition to any other payment owed or due to me at that
time, I shall not compete, directly or indirectly, with the Company, interfere
with, disrupt or attempt to disrupt the relationship, contractual or otherwise,
between the Company and any customer, client, supplier, consultant or employee
of the Company, including, without limitation, employing or being an investor
(representing more than a 5% equity interest) in, or officer, director or
consultant to, any person or entity which employs any former key or technical
employee whose employment with the Company was terminated after the date which
is one year prior to the date of termination of the employee's employment
therewith. An activity competitive with an activity engaged in by the Company
shall mean performing services specifically in the computer systems integration
industry (whether as an employee, officer, consultant, director, partner or sole
proprietor) for any person or entity engaged in the business engaged in by the
Company during the time of my relationship with the Company or at the time of my
termination of my relationship with the Company. The Company understands my
agreement not to compete after termination of my employment - for any reason -
requires separate, additional payment to me in the amount of one year's annual
base salary then in effect, regardless of the reason for my termination and/or
any other obligation by the Company to provide payment to me. In the event of
any conflict between my Employment Agreement and this Section 5 - Covenant Not
to Compete - this provision shall prevail.
It is the desire and intent of the parties that the provisions of this
Section shall be enforced to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, if any particular portion of this Section shall be adjudicated to
be invalid or unenforceable, this Section shall be deemed amended to delete
therefrom the portion thus adjudicated to be invalid or unenforceable, such
deletion to apply only with respect to the operation of this Section in the
particular jurisdiction in which such adjudication is made.
Nothing in this Section shall reduce or abrogate the employee's
obligations during the term of this Agreement..
SECTION 6. NONINTERFERENCE WITH PERSONNEL RELATIONS
During my employment with Intraco Systems and for a period of twelve
months afterwards, I will not knowingly solicit, entice, or persuade any other
employees of Intraco Systems to leave the services of Intraco Systems, Inc. for
any reason.
SECTION 7. REMEDIES
If there is a breach or threatened breach of the provisions of this
Agreement, the Company shall be entitled to an injunction restraining the
employee from such breach. Nothing herein shall be construed as prohibiting the
Company from pursuing any other remedies for such breach or threatened breach.
SECTION 8. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the Laws of the State of Florida with venue in Palm Beach County.
SECTION 9. MISCELLANEOUS
This Agreement shall inure to the benefit of, and be binding upon,
Intraco Systems and its subsidiaries and affiliates, together with their
successors and assigns, and me, together with my executor, administrator,
personal representative, heirs, and legatees.
This Agreement merges and supersedes all prior and contemporaneous
agreements, undertakings, covenants, or conditions (including specifically all
prior confidentiality and noncompetition agreements I have entered), whether
oral or written, express or implied, to the extent they contradict or conflict
with the provisions hereof.
Although it is understood that my employment is contingent on the
acceptance and observance of this Agreement, this Agreement shall not be
construed to make my employment other than -terminable at will at any time by me
or Intraco Systems in the sole discretion of either party.
IN WITNESS WHEREOF, I have accepted and executed this Agreement under
seal as of the 24th day of September 1999.
Intraco Systems, Inc. Xxxx Xxxxxxxx
0000 XXX Xxxx. 000 X.X. 00xx Xxxxxx
Xxxxx 000 Xxxx Xxxxx, Xxxxxxx 00000
Xxxx Xxxxx, Xxxxxxx 00000
By: /s/ XXXX XXXXXX By: /s/ XXXX XXXXXXXX
---------------------------- ---------------------------
Xxxx X. Xxxxxx Xxxx Xxxxxxxx
President
