Exhibit 10.1
RETENTION AGREEMENT
This Retention Agreement ("Agreement") is executed and delivered as of
June 19, 2007, by and between Xxxx Security International, Inc., a Delaware
corporation ("Company"), and Xxxxxx Xxxxxxx ("Employee").
RECITALS
The Company conducts diversified businesses, including, without
limitation, electronic and personal security device marketing and car washes
("Business"). The Employee is an at-will employee, who currently serves as the
Company's Controller and Chief Accounting Officer. As an at-will employee the
Employee or the Company may terminate the Employee's employment at any time
without any payment other then accrued salary to the date of termination. The
Company has entered into this Agreement to provide the Employee with a payment
payable under the limited circumstances set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual promises, terms and
conditions set forth herein and the performance of each, the parties hereby
agree as follows:
1. Retention Payment.
To encourage Employee to remain employed with the Company, the Company
shall pay Employee a Retention Payment, as hereafter defined, upon the
occurrence of the Retention Payment Trigger Event, as hereafter defined;
provided that Employee is employed by the Company at the time of the Retention
Payment Trigger Event occurs. For purposes of this Agreement, the term
"Retention Payment" shall mean a lump sum cash payment equal to the Employee's
then current annual base salary, without consideration for any bonuses or the
value of any option award. The Retention Payment shall be paid to Employee
within ten (10) business days after the date that the Retention Payment Trigger
Event occurred. For purposes of this Agreement the Retention Payment Trigger
Event has occurred when both of the following items have occurred (i) Xxxxx X.
Xxxxxxx, Xx no longer serves as the Company's Chief Executive Officer, and (ii)
any one of the events set forth in items (a) through and including (c) below
have taken place. The Retention Payment Trigger Event shall have occurred when
both of items (i) and (ii) occur regardless of which of the items occurs first
or whether there is a time gap between the items. By way of example, if any one
of the items in (a) through (c) below occurs on October 1, 2007 and Xxxxx
Xxxxxxx, Xx. remains the Chief Executive Officer until December 30, 2007, the
Retention Payment Trigger Event has not occurred until December 30, 2007. Items
(a) through (c) are as follows:
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(a) the acquisition in one or more transactions by
any "Person", excepting Employee, as the term "Person" is used
for purposes of Sections 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), of
"Beneficial Ownership" (as the term beneficial ownership is
used for purposes or Rule 13d-3 promulgated under the 0000
Xxx) of fifty percent (50%) or more of the combined voting
power of the Company's then outstanding voting securities (the
"Voting Securities"). For purposes of this Paragraph 1(a),
Voting Securities acquired directly from the Company and from
third parties by any Person shall be included in the
determination of such Person's Beneficial Ownership of Voting
Securities.
(b) the approval by the shareholders of the Company
and the consummation of: (A) a merger, reorganization or
consolidation involving the Company, if the shareholders of
the Company immediately before such merger, reorganization or
consolidation do not or will not own directly or indirectly
immediately following such merger, reorganization or
consolidation, more than fifty percent (50%) of the combined
voting power of the outstanding Voting Securities of the
corporation resulting from or surviving such merger,
reorganization or consolidation in substantially the same
proportion as their ownership of the Voting Securities
immediately before such merger, reorganization or
consolidation, or (B) a complete liquidation or dissolution of
the Company, or (C) an agreement for the sale or other
disposition of 50% or more of the assets of the Company and a
distribution of the proceeds of the sale to the shareholders.
(c) the acceptance by shareholders of the Company of
shares in a share exchange, if the shareholders of the Company
immediately before such share exchange do not or will not own
directly or indirectly following such share exchange more than
fifty percent (50%) of the combined voting power of the
outstanding Voting Securities of the corporation resulting
from or surviving such share exchange in substantially the
same proportion as the ownership of the Voting Securities
outstanding immediately before such share exchange.
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2. Confidential Information. It is expressly acknowledged by the
Employee that customer lists, orders, current and closed out orders, prospect
lists, documents containing the names or addresses of existing or potential
customers, information regarding the Company's financial condition or business
plans, the methods by which the Company serves its customers or conducts its
operations, as well as other business procedures, are the property of the
Company and constitute confidential information or trade secrets of the Company
("Confidential Information"). Employee agrees to maintain the confidentiality of
the Confidential Information and further agrees that Employee will not, directly
or indirectly, use or disclose Confidential Information to any natural or legal
person, other than authorized employees or agents of the Company, during the
Term or thereafter. All Confidential Information and all correspondence,
reports, charts, products, records, designs, patents, plans, manuals, "field
guides", memoranda, advertising materials, lists and other data or property
collected by or delivered to Employee by or on behalf of Company, its
representatives, customers and government entities (including, without
limitation, customers obtained for Company by Employee), and all other materials
compiled by Employee which pertain to the business of Company shall be and shall
remain the property of Company, shall be subject at all times to its discretion
and control and shall be delivered, together with any and all copies thereof,
promptly to Company upon request at any time and without request upon completion
or other termination of Employee's employment hereunder.
3. Complete Agreement. This Agreement is the final, complete and
exclusive statement and expression of the agreement between Company and
employee, it being understood that there are no oral representations,
understandings or agreements covering the same subject matter as this Agreement.
This Agreement supersedes, and cannot be varied, contradicted or supplemented by
evidence of any prior or contemporaneous discussions, correspondence, or oral or
written agreements of any kind. This Agreement may be modified, altered or
otherwise amended only by a written instrument executed by both Company and
Employee.
4. No Waiver; Remedies Cumulative. No waiver by the parties hereto of
any default or breach of any term, condition or covenant of this Agreement shall
be deemed to be a waiver of any subsequent default or breach of the same or any
other term, condition or covenant contained herein. No right, remedy or election
given by any term of this Agreement shall be deemed exclusive but each shall be
cumulative with all other rights, remedies and elections available at law or in
equity.
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5. Assignment; Binding Effect. Employee understands that Employee has
been selected by Company on the basis of Employee's personal qualifications,
experience and skills. Employee agrees, therefore, that he cannot assign all or
any portion of this Agreement. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and Company's successors and assigns. It is
further understood and agreed that Company may be merged or consolidated with
another entity and that any such entity shall automatically succeed to the
rights, powers and duties of Company hereunder.
6. Notice. All notices or other communications required or permitted
hereunder shall be in writing and may be given by depositing the same in the
United States mail, addressed to the party to be notified, postage prepaid and
registered or certified with return receipt requested, by overnight courier or
by delivering the same in person to such party.
To Company: Chief Executive Officer
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxxxx, Xxx Xxxxxx 00000
To Employee: Xxxxxx Xxxxxxx
000 Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Notice shall be deemed given and effective the day personally delivered, the day
after being sent by overnight courier and three days after the deposit in the U.
S. mail of a writing addressed as above and sent first class mail, certified,
return receipt requested, or when actually received, if earlier. Either party
may change the address for notice by notifying the other party of such change in
accordance with this paragraph 6.
7. Severability; Headings. If any portion of this Agreement is held
invalid or inoperative, the other portions of this Agreement shall be deemed
valid and operative and, so far as is reasonable and possible, effect shall be
given to the intent manifested by the portion held invalid or inoperative. The
paragraph headings herein are for reference purposes only and are not intended
in any way to describe, interpret, define or limit the extent or intent of this
Agreement or of any part hereof.
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8. Gender. The use of the masculine pronoun in this Agreement has been
used for convenience and shall apply to the Employee.
9. Governing Law. This Agreement shall in all respects be construed in
accordance with the laws of the State of Delaware.
10. Arbitration.
(a) Each and every controversy or claim arising out of or relating to
this Agreement shall be settled by arbitration in Philadelphia, Pennsylvania, in
accordance with the commercial rules (the "Rules") of the American Arbitration
Association then obtaining, and judgment upon the award rendered in such
arbitration shall be final and binding upon the parties and may be confirmed in
any court having jurisdiction thereof. Notwithstanding the foregoing, this
Agreement to arbitrate shall not bar any party from seeking temporary or
provisional remedies in any Court having jurisdiction. Notice of the demand for
arbitration shall be filed in writing with the other party to this Agreement,
which such demand shall set forth in the same degree of particularity as
required for complaints under the Federal Rules of Civil Procedure the claims to
be submitted to arbitration. Additionally, the demand for arbitration shall be
stated with reasonable particularity with respect to such demand with documents
attached as appropriate. In no event shall the demand for arbitration be made
after the date when institution of legal or equitable proceedings based on such
claim, dispute or other matter in question would be barred by the applicable
statutes of limitations.
(b) The arbitrators shall have the authority and jurisdiction to
determine their own jurisdiction and enter any preliminary awards that would aid
and assist the conduct of the arbitration or preserve the parties' rights with
respect to the arbitration as the arbitrators shall deem appropriate in their
discretion. The award of the arbitrators shall be in writing and it shall
specify in detail the issues submitted to arbitration and the award of the
arbitrators with respect to each of the issues so submitted.
(c) Within sixty (60) days after the commencement of any arbitration
proceeding under this Agreement, each party shall file with the arbitrators its
contemplated discovery plan outlining the desired documents to be produced, the
depositions to be take, if ordered by the arbitrators in accordance with the
Rules, and any other discovery action sought in the arbitration proceeding.
After a preliminary hearing, the arbitrators shall fix the scope and content of
each party's discovery plan as the arbitrators deem appropriate. The arbitrators
shall have the authority to modify, amend or change the discovery plans of the
parties upon application by either party, if good cause appears for doing so.
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(d) The award pursuant to such arbitration will be final, binding and
conclusive.
(e) Counsel to Company and Employee in connection with the
negotiation of and consummation of this Agreement shall be entitled to represent
their respective party in any and all proceedings under this Paragraph or in any
other proceeding (collectively, "Proceedings"). Company and Employee,
respectively, waive the right and agree they shall not seek to disqualify any
such counsel in any such Proceedings for any reason, including but not limited
to the fact that such counsel or any member thereof may be a witness in any such
Proceedings or possess or have learned of information of a confidential or
financial nature of the party whose interests are adverse to the party
represented by such counsel in any such Proceedings.
IN WITNESS WHEREOF, the undersigned parties have executed this
Agreement on the year and day above written.
XXXX SECURITY INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxxxxx, Xx.
--------------------------------
Xxxxx X. Xxxxxxx, Xx., President
/s/ Xxxxxx Xxxxxxx
--------------------------------
Xxxxxx Xxxxxxx
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