1
EXHIBIT 10.5
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and entered into this
29th day of September 1999, between Net Command Tech, Inc., a Delaware
corporation with offices at 000 0xx Xxxxxx XX, Xxxxx 000, Xx. Xxxxxxxxxx,
Xxxxxxx 00000 and Xxxxx Xxxxxxxx ("Executive"), with an address of 0000
Xxxxxxxxxx Xxxxx, Xxxxxx Xxxxxxx, Xxxxxxx 00000.
RECITALS
The Company desires to be assured of the Executive's association and
services.
Executive is willing and desires to be employed by the Company and the
Company is willing to employ Executive as President and Chief Executive Officer,
of the Company, upon the terms, covenants and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual terms, covenants and
conditions hereinafter set forth, the parties hereto do hereby agree as follows:
1. Employment. The Executive shall be employed as President and Chief
Executive Officer of the Company, subject to the supervision and direction of
the Board of Directors.
2. Term. The initial term of this Agreement shall be for a period of three
(3) years ("Initial Term") commencing on September 29, 1999, unless terminated
earlier pursuant to Paragraph 6 below; provided, however, that Executive will
act as President and Chief Executive Officer only until such time as the Board
hires a permanent replacement. At such time, Executive shall become a senior
advisor to the Company for the duration of the Initial Term.
3. Compensation; Reimbursement.
3.1 Base Salary. For all services rendered by Executive under this
Agreement, the Company shall issue Executive a Stock Purchase Warrant in the
form of Exhibit "A" attached hereto.
3.2 Additional Benefits. Executive shall be entitled to all employment
fringe benefits provided to other executive officers of the Company, as approved
by the Company Board of Directors, to include participation in the Company
Incentive Stock Option program.
3.3 Reimbursement. Executive shall be reimbursed for all reasonable
"out-of-pocket" business expenses incurred in connection with the performance of
Executive's duties under this Agreement (1) so long as such expenses constitute
business deductions from taxable income for the Company or are excludable from
taxable income to the Executive under the governing laws and regulations of the
Internal Revenue Code (provided, however, that Executive shall be entitled to
full reimbursement in any case where the Internal Revenue Service may, under
Paragraph 274(n) of the Internal Revenue code, disallow to the Company 50% of
meals and entertainment expenses); and (2) to the extent such expenses do not
exceed the amounts
2
allocable for such expenses in budgets that are approved from time to time by
Company. The reimbursement of Executive's business expenses shall be upon
monthly presentation to and approval by Company of valid receipts and other
appropriate documentation for such expenses.
4. Scope of Duties.
4.1 Assignment of Duties. Executive shall have such duties as may be
assigned to Executive from time to time by the Company's Board of Directors
commensurate with Executive's experience and responsibilities in the position
for which he is employed pursuant to Section 1 above. Such duties shall be
exercised subject to the control and supervision of the Board of Directors.
4.2 General Specification of Duties. Executive's duties shall include,
but not be limited to, duties and performance goals listed on Exhibit B.
4.3 Executive's Devotion of Time. During normal business hours and while
on Company premises, Executive hereby agrees to devote Executive's full time,
abilities and energy to the faithful performance of the duties assigned to
Executive and to the promotion and forwarding of the business affairs of the
Company, and not to divert any opportunities within the Company's business
expertise and specialties, which, business includes, but is not limited to
software engineering, design, research, application, development, marketing,
sale and distribution ("Business") from the Company (to include its
subsidiaries, joint venturers and strategic partners, collectively, defined as
"Affiliates") to himself or to any other person or business entity.
4.4 Primary Business Endeavor. Executive shall not, during the term of
this Agreement, be engaged in any other business activity that competes in the
Company's Business without the prior consent of the Board of Directors of
Company; provided, however, that this restriction shall not be construed as
preventing Executive from investing Executive's personal assets in passive
investments in business entities not in competition with the Company, or its
Affiliates and licensees, or from pursuing business opportunities as permitted
by Paragraph 4.5.
4.5 Business Opportunities. Executive hereby agrees to promote and
develop all business opportunities that come to Executive's attention relating
to current or anticipated future business of the Company or its Affiliates, if
any, in a manner consistent with the best interest of the Company and with
Executive's duties under this Agreement. Should Executive discover a business
opportunity that relates to the current or anticipated future business of the
Company or its Affiliates, if any, Executive shall first offer such opportunity
to Company. Should the Company not exercise its right to pursue this business
opportunity within 10 days then Executive may develop the business opportunity
for himself or herself; provided, however, that such development may in no way
conflict or interfere with the duties owed by Executive to the Company and
Company under this Agreement. Further, Executive may develop such business
opportunities only on Executive's time, and may not use any service, personnel,
equipment, supplies, facility, or trade secrets of the Company or its Affiliates
in development of any such opportunities. As used herein, the term "business
opportunity" shall not include
2
3
business opportunities involving investments in publicly traded stocks, bonds
or other securities, or other investments of a personal nature.
4.6 Non-Compete Agreement. Executive shall enter into a separate
non-compete agreement with Company which shall, according to its terms, continue
and survive for one year after expiration or termination of this Agreement and
shall continue and survive for one year after expiration or termination of
employment, according to its terms, if Executive works for the Company without
any renewal of this Agreement.
5. Confidentiality of Trade Secrets and Other Materials.
5.1 Trade Secrets. Other than in the performance of Executive's
duties hereunder, Executive agrees not to disclose, either during the term of
Executive's employment by Company or at any time thereafter, to any person,
firm or corporation any information concerning the business affairs, the trade
secrets or the customer lists or similar information of the Company or its
Affiliates. Any technique, method, process, formula, computer software,
algorithm, source code, object code software technology, or other technology
developed, engineered, or used by the Company or its subsidiaries, in the
Company's Business shall be considered a "trade secret" under this Agreement.
5.2 Ownership of Trade Secrets; Assignment of Rights. Executive hereby
agrees that all know-how, documents, reports, plans, proposals, source codes,
object codes, algorithms, software, marketing and sales plans, client lists,
client files and materials, computer software, and any other information and
data qualifying as trade secrets under Chapter 688 of the Florida Statutes, the
Uniform Trade Secrets Act, other provisions of Florida law, and this Agreement,
(collectively, "Trade Secrets") made or developed by Executive, by the Company
or by any Company subsidiaries in the Company's Business or for Company product
research and development are the property of Company and shall not be used by
Executive in any way adverse to the interests of the Company or the Company
Companies. Unless so authorized by the Board of Directors, Executive shall not
deliver, reproduce or in any way allow such documents or things to be deliver,
reproduce or in any way allow such documents or things to be delivered or used
by any third party without specific direction or consent of the Board of
Directors. Executive shall use all reasonable precautions to ensure that the
Trade Secrets and proprietary information of the Company and any Company
subsidiaries is not disclosed to any unauthorized persons or used in an
unauthorized manner or published without the specific direction or consent of
the Company president. Executive hereby assigns to Company any rights which he
may have in any such trade secrets or proprietary information. Executive hereby
assigns to Company any rights which he may have in any such Trade Secrets or
proprietary information.
5.3 Employment Inventions. The Company shall own all inventions,
improvements, patents and patent applications, works of authorship, copyrights,
ideas, software programs, codes, algorithmic applications, technology, and
discoveries (collectively, "Inventions") conceived or developed by Executive as
part of the Company's research, development, introduction, production and/or
sale of software products and applications into the public marketplace or the
government sector. Executive agrees to disclose all such inventions to
3
4
the Company, and Executive assigns all right, title and interest in and to the
Inventions to the Company.
5.4 Ministerial Acts. Executive agrees to execute all documents and do
all things necessary to assist the Company, at Company expense, to obtain
worldwide protection for the Inventions, Trade Secrets, and other intellectual
property developed during the Agreement term.
5.5 Sections Survive Termination of Agreement. Executive's obligations
under this Paragraph 5 shall survive termination of this Agreement.
6. Termination.
6.1 Bases for Termination.
Executive's employment may be terminated at any time by mutual
agreement of the parties. In the case of mutually agreed termination, the
decision shall be in written form signed by both parties.
This Agreement shall automatically terminate on the last day of the
month in which Executive dies or becomes permanently incapacitated. "Permanent
incapacity" as used herein shall mean mental or physical incapacity, or both,
reasonably determined by the Company's Board of Directors based upon a
certification of such incapacity by, in the discretion of the Company Board of
Directors, either Executive's regularly attending physician or a duly licensed
physician selected by Company Board of Directors, rendering Executive unable to
perform substantially all of Executive's duties hereunder and which appears
reasonably certain to continue for at least six consecutive months without
substantial improvement. Executive shall be deemed to have "become permanently
incapacitated" on the date Company Board of Directors has determined that
Executive is permanently incapacitated and so notifies Executive.
Executive's employment may be terminated by Company "with cause,"
effective upon delivery of written notice to Executive given at any time if any
of the following occur:
(a) any action by Executive which constitutes willful breach of
duty, habitual neglect of duty, continued breach of duty, fraud upon
the Company, its affiliates, or a customer of any of them, and/or theft
or embezzlement of the property of the Company, or its Affiliates, or
the property of a customer of any of them.
(b) any material breach of Executive's obligations in Paragraph 5
above; or any material acts or events which inhibit Executive from
fully performing Executive's responsibilities to the Company in good
faith, such as (i) a felony criminal conviction, (ii) any other
criminal conviction involving Executive's lack of honesty or
Executive's moral turpitude; or (iii) acts of misconduct, as defined
under Chapter 443, Florida Statutes (Unemployment Compensation) and
court or administrative decisions interpreting that statute.
4
5
6.2 Dismissal from Premises. At Company's option, Executive shall
immediately leave the Company's premises on the date that any notice of
termination is given under this paragraph 6. Executive shall be allowed
adequate time to gather his personal belongings and property.
6.3 Failure to Perform. The failure of Executive to perform
services for the Company under this Agreement due to temporary or permanent
illness, disability, death (or any other circumstances set forth in Paragraph
6.1(2)) shall not be deemed to create an event of "cause" described in
Paragraphs 6.1(3)(a)-(c).
7. Injunctive Relief. Company and Executive hereby acknowledge and agree
that any default under Paragraph 5 above will cause damage to the Company in an
amount difficult to ascertain. Accordingly, in addition to any other relief to
which the Company may be entitled, the Company shall be entitled to such
injunctive relief as may be ordered by any court of competent jurisdiction
including, but not limited to, an injunction restraining any violation of
Paragraph 5.
8. Miscellaneous.
8.1 Transfer and Assignment. This Agreement is personal as to
Executive and shall not be assigned or transferred by Executive without the
prior written consent of the Company president. This Agreement shall be
binding upon and inure to the benefit of all of the parties hereto and their
respective permitted heirs, personal representatives, successors and assigns.
8.2 Severability. Nothing contained herein shall be construed to
require the commission of any act contrary to law. Should there be any conflict
between any provisions hereof and any present or future statute, law,
ordinance, regulation, or other pronouncement having the force of law, the
latter shall prevail, but the provision of this Agreement affected thereby
shall be curtailed and limited only to the extent necessary to bring it within
the requirements of the law, and the remaining provisions of this Agreement
shall remain in full force and effect.
8.3 Governing Law. This Agreement is made under and shall be
construed pursuant to the laws of the State of Florida.
8.4 Counterparts. This agreement may be executed in several
counterparts and all documents so executed shall constitute one agreement,
binding on all of the parties, notwithstanding that all of the parties did not
sign the original as the same counterparts.
8.5 Entire Agreement. This agreement constitutes the entire
agreement and understanding of the parties with respect to the subject matter
hereof and supersedes all prior oral or written agreements, arrangements, and
understandings with respect thereto. No representation, promise, inducement,
statement or intention has been made by any party hereto that is not embodied
herein, and no party shall be bound by or liable for any alleged
representation, promise, inducement or statement not so set forth herein.
5
6
8.6 Modification. This Agreement may be modified, amended,
superseded, or canceled, and any of the terms, covenants, representations,
warranties or conditions hereof may be waived, only by a written instrument
executed by the party or parties to be bound by any such modification,
amendment, supersession, cancellation, or waiver.
8.7 Waiver. The waiver by either of the parties, express or implied,
of any right under this Agreement or any failure to perform under this
Agreement by the other party shall not constitute or be deemed as a waiver of
any other right under this Agreement or of any other failure to perform under
this Agreement by the other party, whether of a similar or dissimilar nature.
8.8 Cumulative Remedies. Each and all of the several rights and
remedies provided in this Agreement, or by law or in equity, shall be
cumulative, and no one of them shall be exclusive of any other right or remedy,
and the exercise of any one of such rights or remedies shall not be deemed a
waiver of, or an election to exercise, any other such right or remedy.
8.9 Headings. The section and other headings contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning and interpretation of this Agreement. In construing this Agreement,
none of the parties hereto shall have any term or provision construed against
such party solely by reason of such party having drafted the same.
8.10 Notices. Any notice under this Agreement must be in writing,
sent by express 24-hour guaranteed courier, hand-delivered, or may be served by
depositing the same in the United States mail, addressed to the party to be
notified, postage-prepaid and registered or certified with a return receipt
requested. The addresses of the parties for the receipt of notice shall be as
follows:
If to the Company: Corsaire, Inc./Net Command Tech, Inc.
000 0xx Xxxxxx XX, Xxxxx 000
Xx. Xxxxxxxxxx, Xxxxxxx 00000
With Copy to: Xxxxxx X. Xxxx, Esq.
000 Xxxxxxxx Xxx Xxxxx, Xxxxx 000
Xxxxx, Xxxxxxx 00000
If to Executive: Xxxxx Xxxxxxxx
0000 Xxxxxxxxxx Xxxxx
Xxxxxx Xxxxxxx, Xxxxxxx 00000
With Copy to: Xxxxxxxx Xxxx Xxxxxx, Esquire
Xxxxxxx, Xxxxxx & Xxxxxxxxxx, P.A.
000 X. Xxxxx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Each notice given by registered or certified mail shall be deemed delivered and
effective on the date of delivery as shown on the return receipt, and each
notice delivered in any other manner
6
7
shall be deemed to be effective as of the time of actual delivery thereof. Each
party may change its address for notice by giving notice thereof in the manner
provided above.
8.11 Survival. Any provision of this Agreement which imposes an
obligation after termination or expiration of this Agreement shall survive the
termination or expiration of this Agreement and be binding on Executive and
Company.
IN WITNESS WHEREOF, the parties hereto have caused this Employment
Agreement to be executed as of the date first set forth above.
EXECUTIVE COMPANY
NET COMMAND TECH, INC.
/s/ Xxxxx Xxxxxxxx By: /s/ Xxxxxx Xxxxxxxx
-------------------------- ------------------------------------
XXXXX XXXXXXXX
7