EMPLOYMENT AGREEMENT
AGREEMENT made the 18th day of May, 2004 by and between Capitol
First Corporation, a Nevada corporation (the "Company"), and Xxxxxx X. Xxxxxxxxx
(the "Employee").
W I T N E S S E T H
WHEREAS, the Company wishes to assure itself of the services of the
Employee, and the Employee wishes to serve in the employ of the Company, upon
the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Employment, Term. The Company hereby employs the Employee on the terms
hereinafter set forth for a period of two (2) years commencing on May 18th,
2004, and ending on May 17th, 2006; provided that such employment shall continue
after May 17th, 2006, unless either party has given written notice to the other
party by no later than April 17th, 2006, of its intention to terminate the
Employee's employment on May 17th, 2006.
2. Position, Duties. The Employee shall serve as Vice President and Chief
Financial Officer of the Company, or in such other related capacity as may be
assigned by the Chief Executive Officer of the Company ("CEO") or his designee
or successor. The Employee shall report to, and shall have such duties and
responsibilities as shall be assigned to the Employee by the CEO, or his
designee or successor. The Employee shall perform her duties and
responsibilities hereunder faithfully and diligently. The Employee shall devote
her full business time and attention to the performance of her duties and
responsibilities hereunder. The Employee hereby represents that she is not bound
by any confidentiality agreements or restrictive covenants which restrict or may
restrict her ability to perform her duties hereunder, and agrees that she will
not enter into any such agreements or covenants during the term of her
employment hereunder, except such restrictive covenants or confidentiality
agreements which are required by the Company.
3. Compensation.
3.1 Base Salary. During the term of this Agreement, in consideration
of the performance by the Employee of the services set forth in Section 2 and
her observance of the other covenants set forth herein, the Company shall pay
the Employee, and the Employee shall accept, a base salary at the rate of ninety
thousand ($90,000.00) per annum, payable in accordance with the standard payroll
practices of the Company. In addition to the base salary payable hereunder, the
Employee may be entitled to receive merit increases in salary during the term
hereof in such amount and at such times as shall be determined by the
Compensation Committee of the Board of Directors in its sole discretion. In no
event shall the failure to grant any such increase (or the amount of any such
increase) give rise to a claim by the Employee under this Agreement.
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3.2 Bonus. The Employee shall be eligible to receive an annual bonus
based on achievement of quantitative and qualitative goals as mutually
established by the CEO and the Employee, as approved by the Compensation
Committee of the Board of Directors. Any bonus awarded hereunder shall be paid
contemporaneously with other discretionary bonuses paid to officers of the
Company.
3.3 Stock and Stock Options. The Employee shall be granted thirty
thousand (30,000) shares of restricted common stock, provided that such shares
shall vest ratably at the end of each quarter of the term of this Agreement. In
addition, the Employee shall be eligible to participate in any Stock Purchase
Agreement or Stock Option Plan which may from time to time become available to
other officers of the Company.
3.4 Fees/Commissions. The Employee shall be eligible to receive
compensation in the form of fees/commissions earned for finding a business
opportunity that is subsequently closed by the Company, subject to disclosure to
the Board of Directors, proper authorization of the transaction by a majority of
the disinterested Directors, and compensation to be based on industry standards.
4. Expense Reimbursement. During the term of the Employee's employment by
the Company pursuant to this Agreement, consistent with the Company's policies
and procedures as may be in effect from time to time, the Company shall
reimburse the Employee for all reasonable and necessary out-of-pocket expenses
incurred by her in connection with the performance of her duties hereunder, upon
the presentation of proper accounts therefor in accordance with the Company's
policies.
5. Other Benefits. During the term of the Employee's employment by the
Company pursuant to this Agreement, the Employee shall be entitled to receive
three (3) weeks paid vacation time per annum and such other benefits including
without limitation customary medical, dental, vision, short term disability,
long term disability and life insurance as are from time to time made available
to other similarly situated employees of the Company, on the same terms as are
available to such similarly situated employees, it being understood that the
Employee shall be required to make the same contributions and payments in order
to receive any of such benefits as may be required of such similarly situated
employees.
6. Termination of Employment.
6.1 Death. In the event of the death of the Employee during the term of
this Agreement, the Company shall pay to the estate or other legal
representative of the Employee (i) the salary provided for in Section 3.1 (at
the annual rate then in effect) accrued to the Employee's date of death and not
theretofore paid, and (ii) in the discretion of the CEO of the Company, and then
only if the quantitative and qualitative goals have been met, the bonus
described within section 3.2, above, prorated to the Employee's date of death
and payable only at such time as other discretionary bonuses for the applicable
year are paid to other officers of the Company, and the estate or other legal
representative of the Employee shall have no further rights under this
Agreement.
6.2 Disability. If the Employee shall become incapacitated by reason of
sickness accident or other physical or mental disability and shall for a period
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of thirty (30) consecutive calendar days be unable to perform his normal duties
hereunder, with or without reasonable accommodation, the employment of the
Employee hereunder may be terminated by the Company upon thirty (30) days prior
written notice to the Employee. Promptly after such termination, the Company
shall pay to the Employee the salary provided for in Section 3.1 (at the annual
rate then in effect) accrued to the date of such termination and not theretofore
paid. Additionally, in the event of termination under this section 6.2, in the
discretion of the CEO of the Company, and then only if the quantitative and
qualitative goals have been met, the Company shall, at such time as other
discretionary bonuses for the applicable year are paid to other officers of the
Company, pay to the Employee the bonus described within section 3.2, above,
prorated to the date of the Employee's termination hereunder. Neither the
Employee nor the Company shall have any further rights or obligations under this
Agreement, except as provided in Sections 7, 8, 9, and 10.
6.3 Due Cause. The employment of the Employee hereunder may be
terminated by the Company at any time during the term of this Agreement for Due
Cause. Said termination shall be evidenced by written notice thereof to the
Employee, which notice shall specify the cause for the termination. For purposes
of this Agreement, the term "Due Cause" shall be defined as (i) the inability of
the Employee, for any reason other than authorized vacation, to perform her
duties under this Agreement for a thirty (30) consecutive calendar day period;
(ii) dishonesty; (iii) theft; (iv) indictment on a felony; (v) any material
breach of this Agreement; (vi) the failure of the Employee, for any reason,
within five (5) calendar days after receipt by the Employee of a written notice
from the Company, to correct, cease, or otherwise alter any conduct or failure
to act by the Employee which the Company, in its sole discretion, considers
insubordination or which the Company considers material to its operation; (vii)
the failure of the Employee, within thirty (30) calendar days after receipt by
the Employee of a written notice from the Employer, to materially improve
performance which the Employer, in its reasonable discretion, considers
unsatisfactory; and (viii) any other act, omission, or series or combination of
same which the law recognizes as constituting "cause" for termination of
employment. Promptly after such termination, the Company shall pay to the
Employee the salary provided for in Section 3.1 (at the annual rate then in
effect) accrued to the date of such termination and not theretofore paid.
Neither the Employee nor the Company shall have any further rights or
obligations under this Agreement, except as provided in Sections 7, 8, 9, and
10.
6.4 Severance Benefits.
Notwithstanding any provision to the contrary in this Agreement,
Section 6.4 shall not be binding on the Company until and unless the Company has
not less than two consecutive quarters in which the Company has net operating
profits derived from its normal course of business.
(a) Change in Control. A "Change in Control" shall be deemed to
occur (1) on the effective date of any merger, consolidation, or reorganization
which results in the holders of the outstanding voting securities of the Company
(determined immediately prior to such merger or consolidation) owning less than
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an majority of the outstanding voting securities of the surviving corporation
(determined immediately following such merger or consolidation), or any sale or
transfer by the Company of all or substantially all of its assets; or (2) on the
date of closing of any tender offer or exchange offer for, or the acquisition,
directly or indirectly, by any person or group of, all or a majority of the then
outstanding voting securities of the Company. Notwithstanding the foregoing, a
Change in Control shall not be deemed to occur if the Company either merges or
consolidates with or into another company or sells or disposes of all or
substantially all of its assets to another company, if such merger,
consolidation, sale or disposition is in connection with a corporate
restructuring wherein the stockholders of the Company immediately before such
merger, consolidation, sale, or disposition own, directly or indirectly,
immediately following such merger, consolidation, sale, or disposition at least
a majority of the combined voting power of all outstanding classes of securities
of the Company resulting from such merger or consolidation, or to which the
Company sells or disposes of its assets, in substantially the same proportion as
their ownership in the Company immediately before such merger, consolidation,
sale, or disposition.
(b) Good Reason. "Good Reason" shall mean (i) a reduction in the
Employee's annual base salary; or (ii) a change in the Employee's duties and
responsibilities which represents a substantial reduction of the duties and
responsibilities which existed immediately prior thereto or the assignment to
the Employee of any substantial new duties or responsibilities inconsistent with
those which existed immediately prior thereto; or (iii) the requirement by the
Company that the Employee (without the consent of the Employee) be based at any
place outside of South Florida, except for reasonably required travel on the
Company's business.
(c) Right to Severance Benefit. The Employee shall be entitled to
receive from the Company a Severance Benefit in the amount provided in Section
6.4(d) if (i) a Change in Control occurs and, (ii) within two (2) years
thereafter the Employee terminates employment with the Company for Good Reason
or the Company terminates the Employee's employment for any reason other than as
set forth in Sections 6.1, 6.2, or 6.3, above.
(d) Amount of Severance Benefit. If the Employee's employment is
terminated under circumstances entitling the Employee to a Severance Benefit as
provided in Section 6.4(c), the Employee shall be entitled to the following
benefits:
(i) the Company shall pay to the Employee as severance pay and in
lieu of any further salary or bonus for periods subsequent to termination, an
amount in cash equal to 50% of the Employee's annual base salary in effect
immediately prior to such termination. Furthermore, the Employee shall be
entitled to receive a bonus, prorated to the date of termination, if, through
the date of termination, the quantitative and qualitative goals mutually
established by the CEO and the Employee and as approved by the Compensation
Committee, as the bonus criteria for the year in which the termination occurs,
have been met or (if the termination occurs prior to the end of the applicable
year) are reasonably on track to be met.
(ii) for six months subsequent to the Employee's termination of
employment, the Company shall at its expense continue on behalf of the Employee
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and her dependents and beneficiaries, the medical and dental benefits, life
insurance, short term disability insurance and long term disability insurance,
if any, which were being provided to the Employee immediately prior to
termination of employment. The benefits provided in this section 6.4(d)(ii)
shall be no less favorable to the Employee, in terms of amounts and deductibles
and costs to the Employee, than the coverage provided the Employee under the
plans providing such benefits at the time of termination of employment. The
Company's obligation hereunder to provide the foregoing benefits shall terminate
if the Employee obtains coverage under a subsequent employer's medical and
dental, life insurance, short term disability insurance and or long term
disability insurance benefit plans.
(iii) the amounts provided for in section 6.4(d)(i) shall be paid in
the same periodic installments as the Employee's salary had been paid
immediately prior to the termination of the Employee and shall commence upon
termination; provided, however that any pro rata bonus due and payable as
specified in 6.4(d)(i) shall be paid within thirty (30) days after the date of
Employee's termination. Except as set forth in Section 6.4(d)(ii), no benefits
payable hereunder will be reduced on account of Employee's procurement of other
employment.
(iv) notwithstanding the foregoing, if any payment to or for the
benefit of the Employee under this Agreement either alone or together with other
payments to or for the benefit of the Employee would constitute a "parachute
payment" (as defined in Section 280G of the Internal Revenue Code of 1986, as
amended (the "Code")), the payments under this Agreement shall be reduced to the
largest amount that will eliminate both the imposition of the excise tax imposed
by Section 4999 of the Code and the disallowance of deductions to the Company
under Section 280G of the Code for any such payments. The amount and method of
any reduction in the payments under this Agreement pursuant to this paragraph
shall be as reasonably determined by the Company.
6.5 Vesting of Stock and Options. If the Employee's employment is
terminated by the Company in connection with a Change in Control, (i) all of the
Employee's unvested shares, as defined in any Stock Purchase Agreement then in
effect, shall become Vested Shares and (ii) and any options granted pursuant to
any Stock Option Plan then in effect, shall become fully vested options.
6.6 Other Termination by the Company. The Company may terminate the
Employee's employment prior to the expiration of the term of this Agreement for
whatever reason it deems appropriate; provided, however, that in the event that
such termination is not pursuant to Sections 6.1, 6.2 or, 6.3, and the Employee
is not otherwise entitled to severance benefits pursuant to section 6.4, the
Company shall continue to pay to the Employee (or his estate or other legal
representative in the case of the death of the Employee subsequent to such
termination), in the same periodic installments as his annual salary was paid,
the salary provided for in Section 3 (at the annual rate then in effect) until
the earlier of (a) the then scheduled expiration of the term hereof or (b) six
(6) months following the date of such termination. Neither the Employee nor the
Company shall have any further rights or obligations under this Agreement,
except as provided in Sections 7, 8, 9, and 10.
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6.7 Rights to Benefits. Except as otherwise set forth herein, upon
termination of employment under any provision contained in this Section 6,
rights and benefits of the Employee, her estate or other legal representative
under the employee benefit plans and programs of the Company, if any, will be
determined in accordance with the terms and provisions of such plans and
programs. Neither the Employee nor the Company shall have any further rights or
obligations under this Agreement, except as provided in Sections 7, 8, 9, and
10.
7. Confidential Information.
7.1 (a) The Employee shall, during the Employee's employment with the
Company and at all times thereafter, treat all confidential material (as
hereinafter defined) of the Company or any of the Company's subsidiaries,
affiliates or parent entities (the Company and the Company's subsidiaries,
affiliates and parent entities being hereinafter collectively referred to as the
"Company Group") confidentially. The Employee shall not, without the prior
written consent of the CEO, disclose such confidential material, directly or
indirectly, to any party, who at the time of such disclosure is not an employee
or agent of any member of the Company Group, or remove from the Company's
premises any notes or records relating thereto, copies or facsimiles thereof
(whether made by electronic, electrical, magnetic, optical, laser, acoustic or
other means), or any other property of any member of the Company Group. The
Employee agrees that all confidential material, together with all notes and
records of the Employee relating thereto, and all copies or facsimiles thereof
in possession of the Employee (whether made by the foregoing or other means) are
the exclusive property of the Company.
(b) For the purposes hereof, the term "confidential material" shall
mean all information in any way concerning the activities, business or affairs
of any member of the Company Group or any of the customers of any member of the
Company Group, including, without limitation, information concerning trade
secrets, together with all sales and financial information concerning any member
of the Company Group and any and all information concerning projects in research
and development or marketing plans for any products or projects of the Company
Group, and all information concerning the practices and customers of any member
of the Company Group; provided however, that the term "confidential material"
shall not include information which becomes generally available to the public
other than as a result of a disclosure by the Employee.
7.2 Promptly upon the request of the Company, the Employee shall
deliver to the Company all confidential material relating to any member of the
Company Group in the possession of the Employee without retaining a copy thereof
(provided, however, that the Employee shall be entitled to retain a list of such
confidential material so long as the form of such list is reasonably acceptable
to the Company), unless, in the written opinion of counsel for the Company
delivered to the Employee, either returning such confidential material or
failing to retain a copy thereof would violate any applicable Federal, state,
local or foreign law, in which event such confidential material shall be
returned without retaining any copies thereof as soon as practicable after such
counsel advises in writing to the Employee that the same may be lawfully done.
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7.3 In the event that the Employee is required, by oral questions,
interrogatories, requests for information or documents, subpoena, civil
investigative demand or similar process, to disclose any confidential material
relating to any member of the Company Group, the Employee shall provide the
Company with prompt notice thereof so that the Company may seek an appropriate
protective order and/or waive compliance by the Employee with the provisions
hereof.
8. Non-Competition.
8.1 The Employee acknowledges that the services to be rendered by her
to the Company are of a special and unique character. The Employee agrees that,
in consideration of her employment hereunder, the Employee will not, directly or
indirectly, (a) so long as she is employed pursuant to this Agreement and one
year thereafter, unless she is entitled to benefits as set forth in 6.4(d), in
which case only as long as severance benefits are required to be paid, (w)
engage, whether as principal, agent, investor, distributor, representative,
stockholder, employee, consultant, volunteer or otherwise, with or without pay,
in any activity or business venture, which is competitive with the business of
the Company or any other members of the Company Group without the prior written
consent of the Board of Directors, (x) solicit or entice or endeavor to solicit
or entice away from any member of the Company Group any person who was or is at
the time of solicitation, a director, officer, employee, agent or consultant of
such member of the Company Group, on the Employee's own account or for any
person, firm, corporation or other organization, whether or not such person
would commit any breach of such person's contract of employment by reason of
leaving the service of such member of the Company Group, (y) solicit or entice
or endeavor to solicit or entice away any of the clients or customers or
potential customers of any member of the Company Group, either on the Employees
own account or for any other person firm, corporation or organization, or (z)
employ any person who was or is at the time of the solicitation, a director,
officer or employee of any member of the Company Group or any person who is or
may be likely to be in possession of any confidential information or trade
secrets relating to the business of any member of the Company Group, or (b) at
any time make any statement intended to disparage or impair the business
reputation of any member of the Company Group.
8.2 The Employee and the Company agree that if, in any proceeding, the
court or authority shall refuse to enforce the covenants herein set forth
because such covenants cover too extensive a geographic area or too long a
period of time, any such covenant shall be deemed appropriately amended and
modified in keeping with the intention of the parties to the maximum extent
permitted by law.
8.3 The Employee expressly acknowledges and agrees that the covenants
and agreements set forth in this Section 8 are reasonable in all respects, and
necessary in order to protect, maintain and preserve the value and goodwill of
the Company Group, as well as the proprietary and other legitimate business
interests of the members of the Company Group. The Employee acknowledges and
agrees that the covenants and agreements of the Employee set forth in this
Section 8 constitute a significant part of the consideration given by the
Employee to the Company in exchange for the salary and benefits provided for in
this Agreement, and are a material reason for such payment.
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9. Intellectual Property.
9.1 Any and all intellectual property, inventions or software made,
developed or created by the Employee (a) during the term of this Agreement or
(b) within a period of one year after the termination of the Employee's
employment with the Company or any other member or the Company Group, which
reasonably relate to the business conducted by the Company during the term of
the Employee's employment by the Company (each, an "invention"), whether at the
request or suggestion of the Company or otherwise, whether alone or in
conjunction with others, and whether during regular working hours of work or
otherwise, shall be promptly and fully disclosed by the Employee to the
President and/or the Board of Directors of the Company and shall be the
Company's exclusive property as against the Employee, and the Employee shall
promptly deliver to the President and/or the Board of Directors all papers,
drawings, models, data and other material relating to any Invention made,
developed or created by her as aforesaid. In addition, the Employee covenants
and agrees to disclose to the Board of Directors any Invention developed or
created by the Employee during the term of this Agreement, whether or not such
Invention relates to the business being conducted by the Company or any other
member of the Company Group at the time of development or creation of such
Invention.
9.2 The Employee hereby expressly acknowledges and agrees that an
Invention developed or created by the Employee during the term of this Agreement
which reasonably relates to the business of the Company or any other member of
the Company Group or which reasonably relates to the business conducted by the
Company during the Employee's employment by the Company shall be considered
"works made for hire" within the meaning of the Copyright Act of 1976, as
amended (17 U.S.C. ss. 101). Each such Invention as well as all copies of such
Invention in whatever medium fixed or embodied, shall be owned exclusively by
the Company as of the date of creation.
9.3 The Employee shall, upon the Company's request and without any
payment therefor, execute any documents necessary or advisable in the opinion of
the Company's counsel to direct issuance of patents or copyrights of the Company
with respect to such Invention as are to be in the Company's exclusive property
as against the Employee under this Section 9 or to vest in the Company title to
such inventions as against the Employee, the expense of securing any such patent
or copyright, to be borne by the Company. In addition, the Employee agrees not
to file any patent, copyright or trademark application related to such
Invention.
10. Successors and Assigns.
10.1 Assignment by the Company. The Company may assign this Agreement
to any member of the Company Group or Successor to the Company as defined in
11.3, and the Employee hereby consents to such assignment.
10.2 Assignment by the Employee. The Employee shall not assign this
Agreement or any part hereof without the prior written consent of the Board of
Directors of the Company.
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10.3 Successor to the Company. This Agreement shall bind any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and or/asset of the Company, in the
same manner and to the same extent that the Company would be obligated under
this Agreement if no succession had taken place. In the case of any transaction
in which a successor would not be bound by this Agreement, the Company shall
require such successor expressly and unconditionally to assume and agree to
perform the Company's obligation under 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.
11. Governing Law. This Agreement shall be deemed a contract made under,
and for all purposes shall be construed in accordance with, the laws of the
State of Florida applicable to contracts to be performed entirely within such
State.
12. Entire Agreement. This Agreement contains all the understandings and
representations between the parties hereto pertaining to the subject matter
hereof and supersedes, in their entirety, all undertakings and agreements,
whether oral or in writing, if there by any, previously entered into by them
with respect to employment, severance, and any and all other matters set forth
or reasonably contemplated herein; provided, however, that Section 8 shall not
serve as a limitation of the terms of any other non-competition agreement
between the Employee and any member of the Company Group.
13. Modification and Amendment; Waiver. The provisions of the Agreement
may be modified, amended or waived, but only upon the written consent of the
party against whom enforcement of such modification, amendment or waiver shall
be effective only to the extent set forth in such writing. No delay or failure
on the part of any party hereto in exercising any right, power or remedy
hereunder shall effect or operate as a waiver thereof, nor shall any single or
partial exercise thereof or any abandonment or discontinuance of steps to
enforce such right, power, or remedy preclude any further exercise thereof or of
any other right, power or remedy.
14. Notices. Any notices, demands or other communication given in
connection herewith shall be in writing and be deemed given (i) when personally
delivered, (ii) sent by facsimile transmission to a number provided in writing
by the addressee and a confirmation of the transmission is received by the
sender or (iii) three (3) days after being deposited for delivery with a
recognized overnight courier, such as FedEx, with directions to deliver within
three (3) days, and addressed or sent, as the case may be, to the address or
facsimile number set forth below or to such other address or facsimile number as
such party may designate in accordance herewith:
When the Company is the intended recipient:
Capitol First Corporation
Attention: Xxxxxx X. Xxxxx, Acting President and CEO
0000 X. Xxxxxx Xxxx Xxxx., Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
Facsimile No.: 0-000-000-0000
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When the Employee is the intended recipient:
Xxxxxx X. Xxxxxxxxx
000 Xxxxxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
15. Severability. Should any provision of this Agreement be held by a
court of competent jurisdiction to be enforceable only if modified, such holding
shall not affect the validity of the remainder of this Agreement, the balance of
which shall continue to be binding upon the parties hereto with any such
modification to become a part hereof and treated as though originally set forth
in this Agreement. The parties further agree that any such court is expressly
authorized to modify any such unenforceable provision of this Agreement in lieu
of severing such unenforceable provision this Agreement in its entirety, whether
by rewriting the offending provision, deleting any or all of the offending
provision, adding additional language to this Agreement, or by making such other
modifications as it deems warranted to carry out the intent and agreement of the
parties as embodied herein to the maximum extent permitted by law. The parties
expressly agree that this Agreement as so modified by the court shall be binding
upon and enforceable against each of them. In any event, should one or more of
the provisions of this Agreement be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provisions hereof, and if such provision or provisions are not
modified as provided above, this Agreement shall be construed as if such
invalid, illegal or unenforceable provisions had never been set forth herein.
16. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.
EXECUTED AS OF THE DATE FIRST ABOVE WRITTEN:
For the Company For the Employee
by: ____________________ by:______________________
Xxxxxx X. Xxxxx Xxxxxx X. Xxxxxxxxx
Acting President and
Chief Executive Officer
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