EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and effective as of
April 9, 2001 between AMERICAN ACCESS TECHNOLOGIES, INC., a Florida corporation
(the "Corporation"), and XXXX XXXXXXX, an individual ("Executive").
WHEREAS, Executive has been in the employ of the Corporation as its
President and Chief Executive Officer; and
WHEREAS, the Corporation desires to assure the continuation of
Executive's services in connection with its business and that of its
subsidiaries and affiliates;
THEREFORE, in consideration of the premises and covenants herein set
forth, it is agreed as follows:
1. Employment. Corporation hereby employs Executive and Executive
accepts such employment on the terms and conditions set forth herein.
1.1 Executive covenants to perform in good faith his
employment duties as outlined herein, devoting his
full productive time, energies and abilities to the
proper and efficient management of the business of
the Corporation and its subsidiaries and affiliates
and for their exclusive benefit.
1.2 Executive shall not, without the prior written
consent of the Corporation, directly or indirectly,
during the term of this Agreement: (i) render
services of business, professional or commercial
nature to any other person or entity, whether for
compensation or otherwise, similar or relating to the
business of the Corporation or its subsidiaries and
affiliates, or (ii) engage in any activity
competitive with or adverse to the Corporation's
business or welfare, whether alone, as a partner or
member, or as an officer, director, Executive or 5%
or greater shareholder of a corporation.
2. Term of Employment. Subject to the provisions set forth herein, the
term of Executive's employment hereunder shall continue for one (1) year.
3. Duties. Executive shall be employed and perform duties similar to
those that he is now performing on behalf of Corporation, or such other
activities within his area of expertise which the Corporation determines.
4. Compensation. For all services he may render to the Corporation
during the term of this Agreement, including services as officer, director or
member of any committee of the Board of Directors of the Corporation and its
subsidiaries, Executive shall receive the following compensation: 4.1 Executive
shall receive a base salary at the rate of $175,000 per year.
4.2 Option to purchase from the Company 332,685 fully
paid and non-assessable shares of Common Stock of the
Company ( the "Option") at a purchase price of $2.25
per share (the "Purchase Price"). The number of said
shares of Common Stock and the Purchase Price are
subject to adjustment as provided herein.
4.3 Said Options shall expire five (5) years from the
date hereof and shall remain in full effect even if
employment should terminate at an earlier date.
Exercise of Option. (a) This Option may be exercised in full or in part
by the holder hereof by transmitting a notice of exercise hereof duly executed
by such holder, to the Secretary of the Company at its principal office,
accompanied by payment, by check or wire transfer, of the Purchase Price for the
shares of Common Stock to be purchased. To the extent unexercised, this Option
shall continue in full force and effect until the Expiration Date.
(b) As an alternative to payment of the Purchase Price in
accordance with sub-section (a) above, the holder may elect to effect a cashless
conversion by so indicating on the notice of exercise and including calculation
of the number of shares of Common Stock to be issued upon such conversion in
accordance with the terms hereof (a "Cashless Conversion"). In the event of a
Cashless Conversion, the holder shall surrender this Option for that number of
shares of Common Stock determined by (i) multiplying the number of shares for
which this Option is being exercised by the Per Share Option Value and (ii)
dividing the product by the closing price of one share of the Common Stock on
the trading day immediately preceding the exercise date.
For the purpose of this Option, Per Share Option Value shall mean the
difference resulting from subtracting the Exercise Price from the closing price
of one share of Company Common Stock on the trading day immediately preceding
the exercise of this Option.
4.4 Delivery of Stock Certificates, Etc. As soon as practicable after
any exercise of this Option and in any event within ten (10) days thereafter,
the Company at its expense (including the payment by it of any applicable
issuance fees) will cause to be issued in the name of and delivered to the
holder hereof, or as such holder (upon payment by such holder of any applicable
transfer taxes) may direct, a certificate or certificates for the number of
shares of Common Stock to which such holder shall be entitled upon such
exercise, together with any other stock or securities or property to which such
holder is entitled.
4.5 Adjustment of Purchase Price and Number of Shares. The number of
shares of Common Stock issuable upon exercise of this Option, and the Purchase
Price, are subject to adjustment upon the occurrence of the following events:
4.6 Adjustment for Stock Splits, Dividends, Recapitalizations, Etc. The
Purchase Price shall be subject to adjustment, upward or downward, pro rata, to
reflect any stock dividend, stock split, combination of shares, recapitalization
or other similar event. The number of shares issuable upon exercise shall be
adjusted such that the dollar amount determined by multiplying the Purchase
Price by the number of shares purchasable upon exercise of the Option shall be
the same after the event necessitating the adjustment as before. Thus, in the
event of a 2-for-1 stock split, the Purchase Price shall be divided by two and
the number of shares shall be doubled.
4.7 Adjustment for Reorganization, Consolidation, Merger, Etc. In case
the Company after the date hereof shall (a) effect a reorganization, (b)
consolidate with or merge into any other entity, or (c) transfer all or
substantially all of its properties or assets to any other entity under any plan
or arrangement contemplating the dissolution of the Company, then, in each such
case, the holder of this Option, on exercise hereof at any time after the
consummation of such reorganization, consolidation or merger or the effective
date of such dissolution, shall receive, in lieu of the Common Stock issuable
upon exercise prior to such consummation or effective date, the stock and other
securities and property (including cash) to which such holder would have been
entitled upon such consummation or in connection with such dissolution if such
holder had exercised this Option immediately prior thereto. Upon any such
reorganization, consolidation, merger or transfer, and any dissolution following
any event, referred to in this Section 4.2, this Option shall continue in full
force and effect and the terms thereof shall be applicable to the shares of
stock and other securities and property receivable upon exercise after the
consummation of such reorganization, consolidation, merger or transfer, or the
effective date of any dissolution following any such event, and shall be binding
upon the issuer of any such stock or other securities, including, in the case of
any such transfer, the entity acquiring all or substantially all of the
properties or assets of the Company.
4.8 No Dilution or Impairment. The Company will not, by amendment of
its Articles of Incorporation or through any reorganization, consolidation,
merger, transfer of assets, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or performance of
any of the terms of this Option, but will at all times in good faith assist in
the carrying out of all such terms and in the taking of all such action as may
be necessary or appropriate in order to protect the rights of the holder of this
Option against dilution or other impairment. Without limiting the generality of
the foregoing, the Company (a) will not set the par value of any shares of stock
receivable upon the exercise of this Option above the amount payable therefor
upon such exercise, and (b) will take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and nonassessable shares of stock upon exercise.
4.9 Certificate as to Adjustments. In case of any adjustment or
readjustment in the price or number or kind of securities issuable on the
exercise of this Option, the Company will compute such adjustment or
readjustment in accordance with the terms hereof and prepare a certificate
setting forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The Company will mail a
copy of each such certificate to the holder hereof.
4.10 Notices of Record Date, Etc. In the event of any of the following
events: (a) any taking by the Company of a record of the holders of any class of
securities for the purpose of determining the holders thereof who are entitled
to receive any dividend or other distribution, or any right to subscribe for,
purchase or otherwise acquire any shares of stock of any class or any other
securities or property, or to receive any other right; or (b) any capital
reorganization of the Company, any reclassification or reorganization of the
Company, any reclassification or recapitalization of the capital stock of the
Company or any transfer of all or substantially all the assets of the Company to
or consolidation or merger of the Company with or into any other person; or (c)
any voluntary or involuntary dissolution, liquidation or winding-up of the
Company; then and in each such event the Company will mail to the holder hereof
a notice specifying (x) the date on which any such record is to be taken for the
purpose of such dividend, distribution or right, and stating the amount and
character of such dividend, distribution or right, or (y) the date on which any
such reorganization, reclassification, recapitalization, consolidation, merger,
transfer, dissolution, liquidation or winding-up is to take place, and the time,
if one is to be fixed, as of which the holders of record of Common Stock or
other securities shall be entitled to exchange their shares of Common Stock or
other securities for securities or other property deliverable on such
reorganization, reclassification, recapitalization, consolidation, merger,
transfer, dissolution, liquidation or winding-up. Such notice shall be mailed at
least ten (10) days prior to the date therein specified.
4.11 Reservation of Shares, Etc. The Company will at all times reserve
and keep available out of its authorized Common Stock, solely for the purpose of
issue upon exercise of this Option as herein provided, such number of shares of
Common Stock as shall then be issuable upon exercise of this Option in full. The
Company covenants that all shares of Common Stock that shall be so issuable
shall be duly and validly issued and fully paid and nonassessable and free from
all taxes, liens and charges with respect to the issuance thereof; and without
limiting the generality of the foregoing, the Company covenants that it will
from time to time take all such action as may be required to ensure that the par
value, if any, per share of the Common Stock will at all times be equal to or
less than the then effective Purchase Price.
4.12 Registration Right. The Company will cause the shares underlying
this Option to be registered under the Act upon written request given by holder
after the occurrence of an event entitling holder to exercise this Option but at
least 15 days prior to exercise of this Option provided that such registration
may be made on Form S-8 prior to such exercise.
4.13 Assignment. This Option shall be assignable without the consent of
the Board of Directors of Company in whole or in part to the spouse or lineal
ancestors or descendants of Optionee, outright or in trust.
5. Benefits. During the term of this Agreement, Executive shall be
entitled to the following executive benefits:
5.1 Executive shall be entitled to vacation time without
reduction in salary, in accordance with the corporate
policies.
5.2 During the period of his employment, Executive shall
be reimbursed in accordance with the corporate
policies, for traveling and other business expenses
incurred in connection with the performance of his
duties hereunder, subject to reasonable verification
as required in order for the Corporation to comply
with applicable laws and regulations and accounting
practices.
5.3 Executive shall not be required to relocate.
5.4 Executive shall be provided paid health insurance for
himself and his family.
5.5 Executive shall be entitled to participate in the
Corporation's Profit Sharing Plan and Trust for each
fiscal year of the Corporation during the term of
this Agreement. The terms of the Plan and Trust and
the administration of said plan are hereby
incorporated by reference to the Plan originally
effective February 1, 1995, as amended January 1,
2001. A copy of the Plan is on file at the Offices of
the Corporation
5.6 Executive shall be entitled to all other benefits of
employment generally available to members of
management of the Corporation.
6. Termination. The employment of Executive may be terminated at any
time by:
(i) Mutual agreement with 30 days notice; or
(ii) Action of the Board of Directors, on thirty days' prior
written notice, in the event of illness or disability of Executive resulting in
failure to discharge his duties under this Agreement for ninety or more
consecutive days or for a total of one hundred eighty or more days in a period
of twelve consecutive months; or
(iii) Action of the Board of Directors, if the Board
determines that Executive is in material default in the performance of his
obligations, services or duties hereunder (other than for illness or incapacity)
or has materially breached any provision of this Agreement and such default or
breach has continued for twenty (20) days after written notice of such
non-performance or breach. Any breach charged by the Board will be considered
material if it causes serious and irreparable harm to the Company. If past
performance is cured within the twenty (20) days subsequent to written notice of
default, Executive will be considered restored to his position prior to the
breach, with subsequent actions by the Board for default by Executive subject to
all the provisions herein for written notice and time to cure. During any such
period that Executive is alleged to have breached, and until resolution, through
arbitration should Executive contest the Board's findings, or termination,
Executive shall receive his full compensation.
7. Trade Secrets. Executive agrees that he will not, during or after
the termination of his employment with the Corporation, furnish or make
accessible to any person, firm, corporation or any other entity any trade
secrets, technical data, customer list, sales representatives, or know-how
acquired by him during the term of his employment with the Corporation which
relates to the business, practices, methods, processes, programs, equipment or
other confidential or secret aspects of the business of the Company, or its
subsidiaries or affiliates or any portion thereof, without the prior written
consent of the Corporation, unless such information shall have become public
knowledge, other than being divulged or made accessible by Executive.
8. Non-disclosure. During the term of his employment and for two (2)
years after its termination, Executive will not, directly or indirectly,
disclose the names of the Corporation's customers, prospects or sales
representatives or those of its subsidiaries and affiliates or attempt to
influence such customers or representatives to cease doing business with the
Company or its subsidiaries or affiliates.
Executive shall communicate and make known to the Corporation all
knowledge possessed by him which he may legally impart relating to any methods,
developments, designs, processes, programs, services, and ideas which concern in
any way the business or prospects of the Corporation and its subsidiaries and
affiliates from the time of entering his employment until the termination
thereof.
9. Conflict of Interest. Executive agrees that during the term of his
employment and any extensions thereof, he will comply with the policy of the
Corporation with respect to the Executive entering into, directly or indirectly,
any transactions with any business organization or other entity in which he or
any member of his family has a direct or indirect interest.
10. Assignment, Change in Control
10.1 The rights and obligations of the Corporation under this
Agreement shall inure to the benefit of and be binding upon the successors and
assignees of the Corporation, including in the event of a Change in Control.
Change in Control shall mean any transaction or series of related transactions,
whether involving the Corporation, the Holders of any class or series of its
Stock (whether now or hereafter authorized), or both, resulting in any Person or
group
of Persons acting in concert who were not theretofore the Holder or Holders of
Voting Securities enabling the Holder or Holders thereof to cast more than a
majority of the votes which may be cast for the election of directors becoming
the Holder or Holders of at least such amount of Voting Securities (for such
purpose, treating instruments or Securities issued in such transaction which are
convertible into or exchangeable or exercisable for Voting Securities as being
so converted, exchanged or exercised upon issuance, regardless of the terms
thereof).
11. Miscellaneous.
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11.1 The failure of either party to enforce any provision of
this Agreement shall not be construed as a waiver of any such provision, nor
prevent such party thereafter from enforcing such provision or any other
provision of this Agreement. The rights granted both parties herein are
cumulative and the election of one shall not constitute a waiver of such party's
right to assert all other legal remedies available under the circumstances.
11.2 Any notice to be given to the Corporation under the terms
of this Agreement shall be addressed to the Corporation, at the address of its
principal place of business, and any notice to be given to Executive shall be
addressed to him at his home address last shown on the records of the
Corporation, or such other address as either party may hereafter designate in
writing to the other. Any notice shall be deemed duly given when mailed by
registered or certified mail, postage prepaid, as provided herein.
11.3 The provisions of the Agreement are severable, and if any
provision of this Agreement shall be held to be invalid or otherwise
unenforceable, in whole or in part, the remainder of the provisions, or
enforceable parts thereof, shall not be affected thereby.
11.4 This Agreement supersedes all prior agreements and
understandings between the parties hereto, oral or written, and may not be
modified or terminated orally. No modification, termination or attempted waiver
shall be valid unless in writing, signed by the party against whom such
modification, termination or waiver is sought to be enforced.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written. AMERICAN ACCESS TECHNOLOGIES, INC.
By: /s/ Xxxx Xxxxxxx
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Title: President
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XXXX XXXXXXX
