PERFISANS HOLDINGS, INC.
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made as of this 12th day of February, 2004 by and
between PERFISANS HOLDINGS, INC. a Maryland corporation, having an office at
0000 Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx X0X 5P1(hereinafter referred to
as "Employer") and Xxx Xxxx, an individual residing at _____________________
(hereinafter referred to as "Employee");
W I T N E S S E T H:
WHEREAS, Employer desires to employ Employee as the Vice President of
Operations & Business Development of Employer; and
WHEREAS, Employee is willing to be employed as the Vice President of
Operations & Business Development of Employer in the manner provided for herein,
and to perform the duties of the Vice President of Operations & Business
Development of Employer upon the terms and conditions herein set forth;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein set forth it is agreed as follows:
1. EMPLOYMENT OF VICE PRESIDENT OF OPERATIONS & BUSINESS DEVELOPMENT.
Employer hereby employs Employee as Vice President of Operations & Business
Development.
2. TERM.
Subject to Section 9 the term of this Agreement shall be for a period
of twenty-four (24) months commencing on the date that the Employer's
registration statement on Form SB-2 (the "Registration Statement") filed with
the U.S. Securities and Exchange Commission (the "Commission") on February 12,
2004 is declared effective by the Commission. The Term of this Agreement shall
be automatically extended for additional one (1) year periods, unless either
party notifies the other in writing at least ninety (90) days prior to the
expiration of the then existing Term of its intention not to extend the Term.
During the Term, Employee shall devote substantially all of his business time
and efforts to Employer and its subsidiaries and affiliates.
3. DUTIES. The Employee shall perform those functions generally
performed by persons of such title and position, shall attend all meetings of
the stockholders and the Board, shall
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perform any and all related duties and shall have any and all powers as may be
prescribed by resolution of the Board, and shall be available to confer and
consult with and advise the officers and directors of Employer at such times
that may be required by Employer. Employee shall report directly and solely to
the Board.
4. COMPENSATION.
a. (i) Employee shall be paid a salary of $200,000 per year during
the Term of this Agreement. Employee shall be paid periodically in accordance
with the policies of the Employer during the term of this Agreement, but not
less than monthly.
(ii) Employee is eligible for an annual bonus of $50,000 in
the event that the Employer achieves revenues of $8,000,000 in fiscal 2004 and
$50,000 if the Employer achieves revenues of $36,000,000 in Fiscal 2005. In the
event that this Agreement is automatically extended for an additional year
pursuant to Section 2 hereof, the Employer will receive a bonus of $50,000 if
revenues in fiscal 2006 equal or exceed $90,000,000. Such bonus will be paid in
accordance with policies set from time to time by the Board.
b. [Employee shall receive a leased car of his choice paid for
by the Employer, at a cost not to exceed $1,000 per month].
c. Employer shall include Employee in its health insurance
program available to Employer's executive officers and shall pay 100% of the
premiums for such program.
d. Employee shall have the right to participate in any other
employee benefit plans established by Employer.
e. (i) In the event of a "Change of Control" (Each as defined
herein)
(A) Employee is entitled to receive (i) the unpaid amount of his
base salary earned through the date of termination; (ii) any bonus compensation
earned but not yet paid; and (iii) a severance payment equal to one (1) year of
his then current salary.
(B) All stock options and warrants ("Rights") granted by Employer
to Employee under any plan or otherwise prior to the effective date of the
Change of Control, shall become vested, accelerate and become immediately
exercisable.
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As used in Xx. Xxx'x employment agreement, "change in control" means
(1) the Employer's merger of consolidation with another entity where the members
of our Board, do not, immediately after the merger or consolidation, constitute
a majority of the Board of Directors of the entity issuing cash or securities in
the merger or consolidation immediately prior to the merger or consolidation, or
(2) the sale or other disposition of all or substantially all of our assets.
5. EXPENSES. Employee shall be reimbursed for all of his actual
out-of-pocket expenses incurred in the performance of his duties hereunder,
provided such expenses are acceptable to Employer, which approval shall not be
unreasonably withheld, for business related travel and entertainment expenses,
and that Employee shall submit to Employer reasonably detailed receipts with
respect thereto.
6. VACATION. Employee shall be entitled to receive four (4) weeks paid
vacation time after each year of employment upon dates agreed upon by Employer.
Upon separation of employment, for any reason, vacation time accrued and not
used shall be paid at the salary rate of Employee in effect at the time of
employment separation.
7. SECRECY. At no time shall Employee disclose to anyone any
confidential or secret information (not already constituting information
available to the public) concerning the internal affairs, business operations,
and trade secrets of Employer.
8. COVENANT NOT TO COMPETE.
(a) Subject to, and limited by, Section 10, Employee will not, at any time,
during the term of this Agreement, and for one (1) year thereafter, either
directly or indirectly, engage in, with or for any enterprise, institution,
whether or not for profit, business, or company, competitive with the business
(as identified herein) of Employer as such business may be conducted on the date
thereof, as a creditor, guarantor, or financial backer, stockholder, director,
officer, consultant, advisor, employee, member, or otherwise of or through any
corporation, partnership, association, sole proprietorship or other entity;
provided, that an investment by Employee, his spouse or his children is
permitted if such investment is not more than four percent (4%) of the total
debt or equity capital of any such competitive enterprise or business and
further provided that said competitive enterprise or business is a publicly held
entity whose stock is listed and traded on a national stock exchange, the NASDAQ
Stock Market, or the over-
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the-counter bulletin board or any successor thereto. As used in this Agreement,
the business of Employer shall be deemed to include wholesale monitoring and
related support services, and financing solutions and products, within the
security alarm industry.
(b) For a period one year from the date of termination of this agreement
Employee shall not contact or solicit any of the Employer's dealers, customers,
employees or suppliers.
9. TERMINATION.
a. TERMINATION BY EMPLOYER
(i) Employer may terminate this Agreement upon written
notice for Cause. For purposes hereof, "Cause" shall mean (A) Employee's
misconduct as could reasonably be expected to have a material adverse effect on
the business and affairs of Employer, (B) the Employee's disregard of lawful
instructions of Employer's Board of Directors consistent with Employee's
position relating to the business of Employer or neglect of duties or failure to
act, which, in each case, could reasonably be expected to have a material
adverse effect on the business and affairs of Employer,(C) engaging by the
Employee in conduct that constitutes activity in competition with Employer; (D)
the conviction of Employee for the commission of a felony; and/or (E) the
habitual abuse of alcohol or controlled substances. Notwithstanding anything to
the contrary in this Section 9(a)(i), Employer may not terminate Employee's
employment under this Agreement for Cause unless Employee shall have first
received notice from the Board advising Employee of the specific acts or
omissions alleged to constitute Cause, and such acts or omissions continue after
Employee shall have had a reasonable opportunity (at least 10 days from the date
Employee receives the notice from the Board) to correct the acts or omissions so
complained of. In no event shall alleged incompetence of Employee in the
performance of Employee's duties be deemed grounds for termination for Cause.
(ii) This agreement automatically shall terminate upon the
death of Employee, except that Employee's estate shall be entitled to receive
any amount accrued under Section 4(a).
b. TERMINATION BY EMPLOYEE
(i) Employee shall have the right to terminate his
employment under this Agreement upon 30 days' notice to Employer given within 90
days following the occurrence of any of the following events (A) through (F) or
within one year following the occurrence of event (G):
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(A) Employee is not elected or retained as Chief
Executive Officer.
(B) Employer acts to materially reduce Employee's
duties and responsibilities hereunder. Employee's duties and responsibilities
shall not be deemed materially reduced for purposes hereof solely by virtue of
the fact that Employer is (or substantially all of its assets are) sold to, or
is combined with, another entity, provided that Employee shall continue to have
the same duties and responsibilities with respect to Employer's business, and
Employee shall report directly to the chief executive officer and/or board of
directors of the entity (or individual) that acquires Employer or its assets.
(C) Employer acts to change the geographic location of
the performance of Employee's duties from the Toronto, Ontario area. For
purposes of this Agreement, the Toronto, Ontario area shall be deemed to be the
area within 60 miles of the current address of the Employer as set forth above.
(D) A Material Reduction (as hereinafter defined) in
Employee's rate of base compensation, or Employee's other benefits. "Material
Reduction" shall mean a ten percent (10%) differential;
(E) A failure by Employer to obtain the assumption of
this Agreement by any successor;
(F) A material breach of this Agreement by Employer,
which is not cured within thirty (30) days of written notice of such breach by
Employer;
(G) A Change of Control.
(ii) Anything herein to the contrary notwithstanding,
Employee may terminate this Agreement upon thirty (30) days written notice.
(iii) If Employee shall terminate this Agreement pursuant
to Section 9(b)(ii), Employee shall only be entitled to any accrued and unpaid
compensation as of the date of termination as provided in Section 4(a)(i).
10. REMEDIES
Employer recognizes that because of Employee's special talents,
stature and opportunities in the computer industry, and because of the special
creative nature of and
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compensation practices of said industry and the material impact that individual
projects can have on the Company's results of operations, in the event of
termination by Employer hereunder or in the event of termination by Employee
under Section 9(b)(i) before the end of the agreed term, the Employer
acknowledges and agrees that the provisions of this Agreement regarding further
payments of base salary, bonuses and the exercisability of rights constitute
fair and reasonable provisions for the consequences of such termination, do not
constitute a penalty, and such payments and benefits shall not be limited or
reduced by amounts' Employee might earn or be able to earn from any other
employment or ventures during the remainder of the agreed term of this
Agreement.
11. ATTORNEYS' FEES AND COSTS. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the prevailing
party shall be entitled to reasonable attorney's fees, costs and necessary
disbursements in addition to any other relief to which he may be entitled.
12. ENTIRE AGREEMENT; SURVIVAL. This Agreement contains the entire
agreement between the parties with respect to the transactions contemplated
herein and supersedes, effective as of the date hereof any prior agreement or
understanding between Employer and Employee with respect to Employee's
employment by Employer. The unenforceability of any provision of this Agreement
shall not effect the enforceability of any other provision. This Agreement may
not be amended except by an agreement in writing signed by the Employee and the
Employer, or any waiver, change, discharge or modification as sought. Waiver of
or failure to exercise any rights provided by this Agreement and in any respect
shall not be deemed a waiver of any further or future rights.
b. The provisions of Sections 4, 7, 8, 9(a)(ii), 10, 11, 12, 13,
15, 16 and 17 shall survive the termination of this Agreement.
13. ASSIGNMENT. This Agreement shall not be assigned to other parties.
14. GOVERNING LAW. This Agreement and all the amendments hereof, and
waivers and consents with respect thereto shall be governed by the internal laws
of the province of Ontario without regard to the conflicts of laws principles
thereof.
15. NOTICES. All notices, responses, demands or other communications
under this Agreement shall be in writing and shall be deemed to have been given
when
a. delivered by hand;
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b. sent be telex or telefax, (with receipt confirmed), provided
that a copy is mailed by registered or certified mail, return receipt requested;
or
c. received by the addressee as sent be express delivery service
(receipt requested) in each case to the appropriate addresses, telex numbers and
telefax numbers as the party may designate to itself by notice to the other
parties:
(i) if to the Employer:
Perfisans Holdings, Inc.
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Alpha Pang
Telefax: (000) 000-0000
Telephone:(000) 000-0000
Xxxxxxx, Savage, Kaplowitz,
Wolf & Marcus LLP
000 Xxxx 00xx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telefax: (000) 000-0000
Telephone: (000) 000-0000
(ii) if to the Employee:
Xxx Xxxx
16. SEVERABILITY OF AGREEMENT. Should any part of this Agreement for
any reason be declared invalid by a court of competent jurisdiction, such
decision shall not affect the validity of any remaining portion, which remaining
provisions shall remain in full force and effect as if this Agreement had been
executed with the invalid portion thereof eliminated, and it is hereby declared
the intention of the parties that they would have executed the remaining
portions of this Agreement without including any such part, parts or portions
which may, for any reason, be hereafter declared invalid.
IN WITNESS WHEREOF, the undersigned have executed this agreement as of
the day and year first above written.
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PERFISANS HOLDINGS, INC.
By: _____________________________
To-Xxx Xxx
President and Chief Executive
Officer
_____________________________
Xxx Xxxx
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