EMPLOYMENT AGREEMENT
This
EMPLOYMENT AGREEMENT is entered into by and between, Advanced ID Corporation
(the "Company"), and Xxxxx Xxxxxxx, the undersigned individual ("Executive")
effective this 15th
day of
November 2005.
RECITAL
The
Company and Executive desire to enter into an Employment Agreement setting
forth
the terms and conditions of Executive’s employment with the
Company.
AGREEMENT
NOW,
THEREFORE, in consideration of the mutual covenants and agreements hereinafter
set forth, the Company and Executive agree as follows:
1. Employment.
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a.
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Term.
The Company hereby employs Executive to serve as Executive Vice-President
and Chief Operating Officer of the Company and AVID Canada Corporation.
The employment with the Company is not for any specified period
of time.
As a result, either the Company or the Executive is free to terminate
the
employment relationship at any time, subject to the other provisions
of
this Agreement.
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b.
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Duties
and Responsibilities.
Executive will be reporting to the Company’s Board of Directors and the
CEO. Within the limitations established by the Bylaws of the Company,
the
Executive shall have each and all of the duties and responsibilities
of
the Executive Vice-President and Chief Operating Officer’s position and
such other duties on behalf of the Company as may be reasonably
assigned
from time to time by the Company’s Board and the CEO. The specifics of
such duties and responsibilities are attached hereto as Schedule
“A”
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c.
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Location.
The location at which Executive shall perform services for the
Company
shall be Calgary, Alberta.
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2. Compensation.
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a.
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Base
Salary.
Executive shall be paid a base salary ("Base Salary") at the annual
rate
of $92,000, payable in semi-monthly installments in Canadian Dollars
consistent with Company’s payroll practices. The annual Base Salary shall
be reviewed on or before January 1st
of
each year, unless Executive’s employment hereunder shall have been
terminated earlier pursuant to this Agreement, by the Board of
Directors
of the Company to determine if such Base Salary should be increased
for
the following year in recognition of services to the Company.
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b.
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Payment.
Payment of all compensation to Executive hereunder shall be made
in
accordance with the relevant Company policies in effect from time
to time,
including normal payroll practices, and shall be subject to all
applicable
employment and withholding taxes.
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c.
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Bonus.
Executive shall also be entitled to a bonus determined at the sole
discretion of the Board of Directors. The Company shall set proposed
milestones and proposed bonuses if those milestones are met each
year.
Specifically, but without limiting the generality of the foregoing,
the
following bonus package shall be made available to the Executive
concurrent with the execution of this
agreement:
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1
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(i)
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Upon
the sale by the Company and/or AVID Canada of Five Hundred Thousand
(500,000) Thousand AIDO tags based on Cumulative sales of any AIDO
000 Xxx
tags from the period commencing November 15, 2005, the executive
shall
receive:
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—
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200,000
shares of the Company
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| — | a 10% increase in Executives Base Salary commencing on the first month following the date that the aforedescribed target has been achieved. |
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(ii)
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Upon
the sale by the Company and/or Avid Canada of an additional One
(1,000,000) million AIDO tags based on sales of any AIDO 000 XXx
tags
after the sale of 500,000 tags as set out above has been achieved,
the
Executive shall receive:
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—
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an
additional 400,000 shares of the AIDO
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—
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a
further 10% increase in Executive’s Base Salary commencing on the first
month following the date that this target has been
achieved
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3.
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Other
Employment Benefits.
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a.
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Business
Expenses.
Upon submission of itemized expense statements in the manner specified
by
the Company, Executive shall be entitled to reimbursement for reasonable
travel and other reasonable business expenses duly incurred by
Executive
in the performance of his duties under this Agreement.
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b.
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Benefit
Plans.
Executive shall be entitled to participate in the Company’s medical and
dental plans, life and disability insurance plans and retirement
plans
pursuant to their terms and conditions. Executive shall be entitled
to
participate in any other benefit plan offered by the Company to
its
employees during the term of this Agreement (other than stock option
or
stock incentive plans, which are governed by Section 3(d) below).
Nothing
in this Agreement shall preclude the Company from terminating or
amending
any employee benefit plan or program from time to time.
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c.
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Vacation.
Executive shall be entitled to four (4) weeks of vacation each
year of
full employment, exclusive of legal holidays, as long as the scheduling
of
Executive’s vacation does not interfere with the Company’s normal business
operations.
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d.
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Stock
Options.
Executive shall be entitled to options to acquire shares of the
Common
Stock of the Company pursuant to the terms of the Company’s Stock Option
and Incentive Plan, subject to the terms as determined by the Board.
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e.
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No
Other Benefits.
Subject to Section 5(b), Executive understands and acknowledges
that the
compensation specified in Sections 2 and 3 of this Agreement shall be
in lieu of any and all other compensation, benefits and plans.
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4.
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Executive’s
Business Activities.
Executive shall devote the substantial portion of his entire business
time, attention and energy exclusively to the business and affairs
of the
Company, Executive may serve as a member of the Board of Directors
of
other organizations that do not compete with the Company, and may
participate in other professional, civic, governmental organizations
and
activities that do not materially affect his ability to carry out
his
duties hereunder.
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2
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5.
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Termination
of Employment.
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a.
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For
Cause.
Notwithstanding anything herein to the contrary, the Company may
terminate
Executive’s employment hereunder for cause for any one of the following
reasons: (1) conviction of a felony, or a misdemeanor where
imprisonment is imposed, (2) commission of any act of theft, fraud,
or falsification of any employment or Company records in any material
way,
(3) executive’s failure or inability to perform any material
reasonable assigned duties after written notice from the Company
of, and a
reasonable opportunity to cure, such failure or inability, or
(4) material breach of this Agreement which breach is not cured
within ten (10) days following written notice of such breach. Upon
termination of Executive’s employment with the Company for cause, the
Company shall be under no further obligation to Executive for salary
or
bonus, except to pay all accrued but unpaid base salary, accrued
bonus (if
any) and accrued vacation to the date of termination thereof.
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b.
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Without
Cause.
The Company may terminate Executive’s employment hereunder at any time
without cause, provided, however, that Executive shall be entitled
to
severance pay in the amount of one year of Base Salary in addition
to
accrued but unpaid Base Salary and accrued vacation, less deductions
required by law, but if, and only if, Executive executes a valid
and
comprehensive release of any and all claims that the Executive
may have
against the Company in a form provided by the Company and Executive
executes such form. Executive shall also be entitled to maintain
his or
her options under the identical terms except that any non-vested
options
shall immediately become vested on the date of termination.
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c.
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Termination
for Good Reason.
If Executive terminates his employment with the Company for Good
Reason
(as hereinafter defined), he shall be entitled to the vesting benefits
set
forth in Section 3(d)(5) and the severance benefits set forth in
Section 5(b). For purposes of this Agreement, "Good Reason" shall
mean any of the following: (i) relocation of the Company’s executive
offices more than forty miles from the current location, without
Executive’s concurrence; (ii) any material breach by the Company of
this Agreement; (iii) a material change in the principal line of
business of the Company, without Executive’s concurrence; (iv) any
significant change in the Executive’s duties and responsibilities; or (v)
a change in control which shall
mean:
(1) the acquisition (other than from Company) by any person, entity
or
"group," within the meaning of Section 13(d)(3) or 14(d)(2) of
the
Exchange Act (excluding, for this purpose, any employee benefit
plan of
Company or its subsidiaries which acquires beneficial ownership
of voting
securities of Company) of beneficial ownership (within the meaning
of Rule
13d-3 promulgated under the Exchange Act) of 50% or more of either
the
then outstanding shares of Common Stock or the combined voting
power of
Company's then outstanding voting securities entitled to vote generally
in
the election of directors; or (2) the failure for any reason of
individuals who constitute the Incumbent Board to continue to constitute
at least a majority of the Board; or (3) approval by the stockholders
of
Company of a reorganization, merger, consolidation, in each case,
with
respect to which the shares of Company voting stock outstanding
immediately prior to such reorganization, merger or consolidation
do not
constitute or become exchanged for or converted into more than
50% of the
combined voting power entitled to vote generally in the election
of
directors of the reorganized, merged or consolidated company's
then
outstanding voting securities, or a liquidation or dissolution
of Company
or of the sale of all or substantially all of the assets of
Company.
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d.
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Cooperation.
After notice of termination, Executive shall cooperate with the
Company,
as reasonably requested by the Company, to effect a transition
of
Executive’s responsibilities and to ensure that the Company is aware of
all matters being handled by Executive.
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3
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6.
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Disability
of Executive.
The Company may terminate this Agreement without liability if Executive
shall be permanently prevented from properly performing his essential
duties hereunder with reasonable accommodation by reason of illness
or
other physical or mental incapacity for a period of more than 120
consecutive days. Upon such termination, Executive shall be entitled
to
all accrued but unpaid Base Salary, accrued bonus (if any) and
accrued
vacation.
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7.
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Death
of Executive.
In the event of the death of Executive, the Company’s obligations
hereunder shall automatically cease and terminate; provided, however,
that
within 15 days the Company shall pay to Executive’s heirs or personal
representatives Executive’s Base Salary and accrued vacation accrued to
the date of death.
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8.
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Confidential
Information.
Executive shall
hold in confidence and not divulge to any third party any information
concerning the affairs of the Company or any proprietary information
of a
secret or confidential nature owned or obtained by the Company
which may
have been disclosed to Executive by the Company or developed for
the
Company by Executive. Furthermore, Executive shall not use the
information, which has been disclosed to it by the Company or developed
for the Company by Executive for its own purpose or in connection
with any
work Executive may undertake for a third party.
The obligations under this clause shall survive termination of
this
Agreement for any reason.
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9.
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Intellectual
Property.
Executive acknowledges that the Company shall or may, in reliance
of this
agreement, provide employee access to trade secrets, customers,
and other
confidential data and good will. Executive agrees to retain said
information as confidential and not to use said information on
his or her
behalf or disclose same to any third party during the period of
employment
and for a period of one year following termination of employment
and
notwithstanding the cause or reason for termination.
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Executive
acknowledges that he or she has been employed, in part, for the purpose of
creating ideas and material that are useful for the business of the Company.
Executive further acknowledges that the Company is the owner of the Intellectual
Property rights associated with these ideas and materials and he or she will
sign any assignments necessary to transfer or confirm the assignment of such
ownership.
Executive
shall disclose promptly to the Board of Directors, all trade secrets,
confidential information, inventions, designs, copyrightable works and
trademarks ("Intellectual Property") he or she may create, either by himself
or
herself, or in cooperation with others, during the course of his or her
employment.
Executive
agrees to keep written or electronic records of the Intellectual Property
he or
she creates at the office of the Company and further acknowledges that such
records are the property of the Company. Executive shall not use any
Intellectual Property that he or she may create during the course of his
or her
employment for any other purpose than company business, nor shall the
undersigned disclose such Intellectual Property at any time within one year
following termination of employment and notwithstanding the cause or reason
for
termination.
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10.
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Exclusive
Employment.
During employment with the Company, (a) Executive will not do
anything to compete with the Company’s present or contemplated business,
nor will he plan or organize any competitive business activity
and
(b) Executive will not enter into any agreement which conflicts with
his duties or obligations to the Company. Executive will not during
his
employment or within one (1) year after it ends, without the Company’s
express written consent, solicit or encourage any employee, agent,
independent contractor, supplier, consultant, investor, or alliance
partner to terminate or alter a relationship with the Company.
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11.
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Assignment
and Transfer.
Executive’s rights and obligations under this Agreement shall not be
transferable by assignment or otherwise, and any purported assignment,
transfer or delegation thereof shall be void.
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12.
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Governing
Law.
This Agreement shall be interpreted and enforced in accordance
with the
laws of the state of South Dakota.
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13.
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Severability.
Whenever possible, each provision of this Agreement shall be interpreted
in such manner as to be effective and valid, but if any one or
more of the
provisions contained in this Agreement shall be invalid, illegal
or
unenforceable in any respect for any reason, the validity, legality
and
enforceability of any such provisions in every other respect and
of the
remaining provisions of this Agreement shall not be in any way
impaired.
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14.
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Entire
Agreement.
This Agreement (including the equity documentation referred to
herein, and
any indemnification agreement between the Executive and the Company)
contains the entire agreement of the parties with respect to the
subject
matter contained in this Agreement. There are no restrictions,
promises,
covenants, or undertakings between Company and Executive, other
than those
expressly set forth in this Agreement. This Agreement supersedes
all prior
agreements and understandings between the parties. This Agreement
may not
be amended or modified except in writing executed by the
parties.
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IN
WITNESS WHEREOF,
the
undersigned have executed this Agreement as of the date first
written.
| ADVANCED ID CORPORATION | ||
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| By: | ||
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Xxxxx X. Xxxxxxxxxx |
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| Director | ||
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| By: | ||
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Xxxxxxx Xxxxxxxxxx, |
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| Director | ||
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| By: | ||
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Che Ki Li |
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| Director | ||
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| By: | ||
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Xxxxxx Xxxxx, |
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| Director | ||
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| By: | ||
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Xxxxx Xxxxxx, |
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| Director | ||
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