EMPLOYMENT AGREEMENT
This Agreement is effective as of the 1st of May 2005 ("Agreement") and
is by and between EAUTOCLAIMS, INC., a Nevada corporation ("Company"), and,
Xxxxx Xxxxxx, a resident of the State of Florida ("Executive").
WITNESSETH:
WHEREAS, the Company desires to employ Executive in accordance with the
terms and conditions contained in this Agreement and to ensure the availability
of the Executive's services to the Company; and
WHEREAS, the Executive desires to accept such employment and render his
services in accordance with the terms and conditions contained in this
Agreement; and which supercedes the Change of Control and Termination Agreement
dated April 9, 2001; and the employment agreement Dated May 1st, 2003 and
WHEREAS, the Executive and the Company desire to enter into this
Agreement which will fully recognize the contributions of the Executive and
assure harmonious management of the Company's affairs.
NOW, THEREFORE, in consideration of the promises and the mutual
covenants set forth in this Agreement, and intending to be legally bound, the
Company and the Executive agree as follows:
1. Term of Employment
(a) Offer/Acceptance/Effective Date. The Company hereby offers
employment to the Executive and the Executive hereby accepts employment subject
to the terms and conditions set forth in this Agreement.
(b) Term. The term of this Agreement shall commence on the date
first indicated above. The term of employment shall commence on May 1, 2005, and
shall remain in effect for twenty-two (22) months; through February 28, 2007
("Term").
2. Duties.
(a) General Duties. The Executive shall serve as the Chief
Financial Officer of the Company with duties and responsibilities that are
customary for such executives plus such other responsibilities that are
specifically assigned by the Chief Executive Officer of the Company.
(b) Best Efforts. The Executive covenants to use his best
efforts to perform his duties and discharge his responsibilities pursuant to
this Agreement in a competent, diligent and faithful manner.
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(c) Devotion of Time. The Executive shall devote substantially
all of his time, attention and energies during normal business hours to the
Company's affairs (exclusive of periods of sickness and disability and of such
normal holiday and vacation periods as have been established by the Company).
Outside business opportunities may be pursued as long as those activities do not
conflict with eAutoclaims.
3. Compensation and Expenses.
(a) Base Salary. For the services of the Executive to be
rendered by him under this Agreement, the Company will pay the Executive for
each of the periods indicated below an annual base salary ("Base Salary") as
follows:
(i) From May 1, 2005 to April 30, 2006, the amount of
$84,800;
(ii) Automatic Adjustment to Base:
Company hits EDITDA of $1 in any month: Increase base
to $89,800
(iii) From May 1, 2006 to February 28, 2007, the amount of
$99,678;
The Company shall pay the Executive his Base Salary in equal
installments no less frequently than on a monthly basis.
(b) Base Salary Adjustment. The Base Salary may not be decreased
hereunder during the term of this Agreement, but may be increased upon review
by, and at the sole discretion of, the Company's Board of Directors or the Chief
Executive Officer.
(c) Stock Compensation: The Executive will receive 10,000 shares
of the Company's common stock per month (restricted by the Securities and
Exchange Commission's Rule 144), not to exceed 200,000 shares. The stock will
vest upon the Company raising material working capital. The Executive has the
option of receiving up to 25% of the value of the common shares in cash to help
pay for the taxes. The value of the Company's common shares will be based on the
closing price on the day of the shares become vested. The stock has piggy-back
right to the companies S8 registration filing.
(d) Bonus. Executive may receive bonus compensation in an amount
as approved by the Company's Board of Directors or the Chief Executive Officer
in its sole discretion based upon the performance criteria as may be established
by the Board of Directors or the Chief Executive Officer from time to time. Such
bonuses may be paid in cash or issued in shares of the Company's common stock on
such terms as approved by the Board of Directors or the Chief Executive Officer.
The Executive will also be entitled to participate in the "Executive Bonus Plan"
as set forth by the Company and may elect to take such cash compensation in
Restricted Stock at a value equal to 90% of the Fair Market price.
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(e) Expenses. In addition to any compensation received pursuant
to Section 3, the Company will reimburse the Executive for all reasonable,
ordinary or necessary travel, educational, seminar, trade shows, entertainment
and miscellaneous expenses incurred in connection with the performance of his
duties under this Agreement, provided that the Executive properly accounts for
such expenses to the Company in accordance with the Company's practices and the
expense is approved by the CEO.
(f) Subsidiary and Affiliate Payments. In recognition of the
fact that in the course of the performance of his duties hereunder, the
Executive may provide substantial benefits to the Company's subsidiaries or
affiliated companies, the Executive and the Company may at any time and from
time to time agree that all or any portion of the compensation due the Executive
hereunder may be paid directly to the Executive by one or more of the Company's
subsidiaries or affiliated companies.
(g) Change of Control. For purposes of this Agreement, "Change
of Control" means:
(1) The closing of any merger, combination, consolidation
or similar business transaction involving the Company in which the holders of
Common Stock immediately prior to such closing are not the holders of a majority
of the ordinary voting securities of the surviving person in such transaction (a
"Business Combination"); or
(2) The closing of any sale by the Company of all or
substantially all of its assets to an acquiring person in which the holders of
Common Stock immediately prior to such closing are not the holders of a majority
of the ordinary voting securities of the acquiring person (an "Asset Sale"); or
(3) The closing of any sale by the holders of Common Stock
of an amount of Common Stock that equals or exceeds a majority of the shares of
Common Stock immediately prior to such closing to a person in which the holders
of the Common Stock immediately prior to such closing are not the holders of a
majority of the ordinary voting securities (a "Stock Sales"); or
In the event of a Change in Control as defined in this
section all the Executive's unvested employee stock options will automatically
vest and the Executive will have one year from his termination date to exercise
all stock options issued to employee prior to his termination. Notwithstanding
the previous sentence in no event can the options be exercised past the
expiration date of the option.
4. Benefits.
(a) Vacation. Paid vacation each year with salary, consistent
with Company's policy for all Executive management employees.
The Executive shall take his vacation at such times as the
Executive may select and the affairs of the Company or any of its subsidiaries
or affiliates may permit upon prior written notice to the President of the
Company. If the Executive does not take the vacation due to them it can be paid
to Executive in cash; however, the timing of the expenditure must be approved by
the CEO.
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(b) Employee Benefit Programs. In addition to the compensation
to which the Executive is entitled pursuant to the provisions of Section 3
hereof, during the Term the Executive will be entitled to participate in any
stock option plan, stock purchase plan, pension or retirement plan, and
insurance or other employee benefit plan that is maintained at that time by the
Company for its employees, including any programs of life, disability, basic
medical and dental, and supplemental medical and dental insurance. All
applicable insurance coverage for spouse and family including all health and
dental coverage shall also be covered as a benefit to Executive.
(c) Automobile Allowance. During the term of this Agreement, the
Company shall pay the Executive an additional $400 per month as an automobile
allowance to be applied to any automobile expense incurred by the Executive.
5. Termination.
(a) Termination for Cause. The Company may terminate the
Executive's employment pursuant to this Agreement before expiration of the Term
at any time for cause upon written notice. Such termination will become
effective upon the giving of such notice. Upon any such termination for cause,
the Executive shall have no right to compensation, bonus or reimbursement under
Section 3 or to participate in any employee benefit programs or other benefits
to which he may be entitled under Section 4 for any period subsequent to the
effective date of termination; provided, however, that any vested but
unexercised options shall remain in effect following any such termination. For
purposes of this Agreement, the term "cause" shall mean only:
(i) the Executive's conviction of a felony;
(ii) the Executive's conviction of misappropriating assets;
or
(iii) otherwise defrauding the Company or any of its
subsidiaries or affiliates; or
(iv) a continuing material, willful and habitual breach by
the Executive of any provision of this Agreement or a
continuing failure to perform the Executive's assigned
job responsibilities following receipt of written notice
of such breach or failure.
(b) Non-Renewal of Contract If the Company elects not to renew
this Agreement, the Employee shall be entitled to receive Severance Pay (as
hereinafter defined) for a period of six (6) months from the effective date of
termination, payable in regular installments in accordance with the Company's
general payroll practices for salaried employees. Additionally, all unvested
employee stock options will automatically vest and the Executive will have one
year from termination date to exercise the employee stock options.
Notwithstanding the previous sentence in no event can the options be exercised
past the original expiration date of the options. Receipt of Severance Pay is
contingent upon Executive executing and adhering to a release of all employment
claims in a form acceptable to the Company. The Company shall have no further
obligations hereunder or otherwise with respect to Executive's employment from
and after the termination date.
(c) Death or Disability. This Agreement and the Company's
obligations hereunder will terminate upon the death or disability of the
Executive. For purposes of this Section 5(b), "disability" shall mean that for a
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period of six (6) months in any twelve-month period, the Executive is incapable
of substantially fulfilling the duties set forth in this Agreement because of
physical, mental or emotional incapacity resulting from injury, sickness or
disease as determined by an independent physician mutually acceptable to the
Company and the Executive. Upon any termination of this Agreement due to death
or disability, the Company will pay the Executive or his legal representative,
as the case may be, any accrued but unpaid Base Salary (which may include any
accrued but unused vacation time) through the date of such termination of
employment plus any other compensation that may be due and unpaid. Any vested
but unexercised options shall remain in effect following any termination by
death or disability.
(d) Voluntary Termination. Prior to any other termination of
this Agreement, the Executive may, on ninety (90) days' prior written notice to
the Company given at any time during the Term, terminate his employment with the
Company. Upon any such termination with proper notice, the Company shall pay the
Executive any accrued but unpaid Base Salary through the date of such effective
termination of employment (not including any accrued but unused vacation time)
and the Executive shall have no further right to compensation, bonus or
reimbursement under Section 3 or to participate in any employee benefit programs
or other benefits to which he may be entitled under Section 4 for any period
subsequent to the effective date of such termination; provided, however, that
any vested but unexercised options shall remain in effect following any such
termination.
6. Restrictive Covenants.
(a) Competition with the Company. The Executive covenants and
agrees that during the Term of this Agreement and for a period of six (6) months
after termination of this Agreement, the Executive shall not, without the prior
written consent of the Company, directly or indirectly (whether as a sole
proprietor, partner, member, stockholder, director, officer, employee or in any
other capacity as principal or agent) compete with the Company. Notwithstanding
this restriction, Executive shall be entitled to invest in stock of other
competing public companies so long as his ownership is less than 5% of such
company's outstanding shares.
(b) Disclosure of Confidential Information. The Executive
acknowledges that during his employment he will gain and have access to
confidential information regarding the Company and its subsidiaries and
affiliates. The Executive acknowledges that such confidential information as
acquired and used by the Company or any of its subsidiaries or affiliates
constitutes a special, valuable and unique asset in which the Company or its
subsidiaries or affiliates, as the case may be, holds a legitimate business
interest. All records, files, materials and confidential information (the
"Confidential Information") obtained by the Executive in the course of his
employment with the Company shall be deemed confidential and proprietary and
shall remain the exclusive property of the Company or its subsidiaries or
affiliates, as the case may be. The Executive shall not, except in connection
with and as required by his performance of his duties under this Agreement, (i)
use any Confidential Information for his own benefit or the benefit of any
person or entity with which he may be associated other than the Company; or (ii)
disclose any Confidential Information to any person, firm, corporation,
association or other entity for any reason or purpose whatsoever without the
prior written consent of the Board of Directors of the Company, unless such
information previously shall have become public knowledge through no action by
or omission of the Executive.
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(c) Subversion, Disruption or Interference. At no time during
the term of this Agreement and for two (2) years after termination shall the
Executive, directly or indirectly, interfere, induce, influence, combine or
conspire with, or attempt to induce, influence, combine or conspire with, any of
the employees of, or consultants to, the Company to terminate their relationship
with the Company or compete with or ally against the Company or any of its
subsidiaries or affiliates in the business in which the Company or any of its
subsidiaries or affiliates is then engaged in.
(d) Enforcement of Restrictions. The parties hereby agree that
any violation by Executive of the covenants contained in this Section 6 will
likely cause irreparable damage to the Company or its subsidiaries and
affiliates and may be restrained by process issued out of a court of competent
jurisdiction, in addition to any other remedies provided by law.
7. Assignability. The rights and obligations of the Company under this
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of the Company, provided that such successor or assign shall acquire all
or substantially all of the assets and business of the Company. The Executive's
rights and obligations hereunder may not be assigned or alienated (except as
provided in this agreement) and any attempt to do so by the Executive will be
void.
8. Severability. If any provision of this Agreement is deemed to be invalid or
unenforceable or is prohibited by the laws of the state or jurisdiction where it
is to be performed, this Agreement shall be considered divisible as to such
provision and such provision shall be inoperative in such state or jurisdiction
and shall not be part of the consideration moving from either of the parties to
the other; provided, however, that the provisions of Section 6 may be modified
and enforced by a court in any legal or equitable action as necessary to comply
with applicable law as determined by the court. The remaining provisions of this
Agreement shall be valid and binding.
9. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the internal, substantive laws of the
State of Florida without giving effect to the conflict of laws rules thereof.
(b) Waiver/Amendment. The waiver by any party to this Agreement
of a breach of any provision hereof by any other party shall not be construed as
a waiver of any subsequent breach by any party. No provision of this Agreement
may be terminated, amended, supplemented, waived or modified other than by an
instrument in writing signed by the party against whom the enforcement of the
termination, amendment, supplement, waiver or modification is sought.
(c) Attorney's Fees. In the event any legal or equitable action
is commenced to enforce the terms and conditions hereof, the prevailing party
shall be entitled to reasonable attorneys' fees, costs and expenses.
(d) Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
replaces and supersedes any prior agreements or understandings.
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(e) Counterparts. This Agreement may be executed in
counterparts, all of which shall constitute one and the same instrument.
(f) Facsimile. A facsimile copy of this agreement and any
signatures hereon shall be considered for all purposes as an original.
IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the day and year first above written.
COMPANY:
EAUTOCLAIMS, INC.
By:
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Its:
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EXECUTIVE:
dr/npl
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