EXHIBIT 10.1
EMPLOYMENT AGREEMENT AS EXECUTIVE DIRECTOR
This EMPLOYMENT AGREEMENT is made on August 27, 2007, between
SteelCloud, Inc. ("SteelCloud") and Xxxxxx X. Xxxxx ("Employee").
WHEREAS, SteelCloud desires to employ Employee as SteelCloud's
Executive Director until a vacancy in the position of President and Chief
Executive Officer occurs, at which time SteelCloud intends to employ Employee as
President and Chief Executive Officer under the contract for said employment
entered into concurrently with this contract, and
WHEREAS, Employee desires to accept employment as Executive Director
from SteelCloud; and
WHEREAS the parties desire to record the arrangements made for such
employment;
NOW, THEREFORE, the parties agree as follows:
1. TERM OF EMPLOYMENT. Subject to the termination rights of either
party as set forth in sections 5 and 7 below, Employee's employment with
SteelCloud as Executive Director shall commence as of the date first above
written and shall continue from that date until the position of President and
Chief Executive Officer becomes vacant, at which time this Agreement shall
terminate. If the position of President and Chief Executive Officer does not
become vacant on or before November 1, 2008, then this Agreement shall
terminate.
2. DUTIES AND POSITION. Employee shall be the Executive Director of
SteelCloud, and shall be in charge of all executive management of the company.
The President and Chief Executive Officer shall report directly to the Executive
Director. The parties contemplate that Employee shall work not less than full
time, and shall be available seven days a week, as needed, throughout the period
of this Agreement.
3. SALARY / BENEFITS.
For his services, SteelCloud shall pay Employee a Base Salary of
$260,000 per year. The Employee's base salary shall be payable pro rata on the
regular payroll days of the company, less federal, state, and local taxes and
other required withholdings. The Base Salary is subject to section 5 of this
Agreement.
4. EMPLOYEE TO DEVOTE FULL TIME TO COMPANY.
a. Employee will exert his best efforts, energies and attention on a
full time basis to the business of SteelCloud. During this employment, Employee
will not engage in any other non-passive business activity, regardless of
whether such activity is pursued for profit, gain, or other pecuniary advantage.
b. Employee agrees that he will not compete, directly or indirectly,
with the business of SteelCloud during the period of his employment relationship
with SteelCloud. Employee understands that the term "not compete" as used in
this paragraph shall mean that he shall not own, manage, operate, consult with,
or be employed by, a business similar to or competitive with the present
business of SteelCloud or such other business activity in which SteelCloud may
engage during the term of his employment relationship with SteelCloud. He
understands that the "present business of SteelCloud" as used in this paragraph
shall mean any business related directly or indirectly to the design,
development, distribution, or sale of hardware or software. "Own" does not
include an ownership interest in the securities of a publicly traded company
which is an interest less than 1% of the outstanding publicly traded shares of
the company.
5. DISABILITY/ILLNESS. If Employee is unable to perform his duties (as
described in paragraph number 2, as a result of illness and such illness
continues for more than thirty (30) days, SteelCloud may terminate Employee's
employment, and/or modify this Agreement with regard to Employee's compensation
and duties.
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6. CONFIDENTIALITY/PROPRIETARY INFORMATION. Employee acknowledges that
during the course of his employment relationship with SteelCloud, there may be
disclosed to him certain trade secrets, methodology, or other proprietary data
of SteelCloud and others with which SteelCloud has contractual relationships
(hereinafter "Confidential Information"); said Confidential Information
consisting of, but not limited to: customer lists, pricing data, SteelCloud's
financial information, technical information, and marketing, production, or
merchandising systems or plans. Employee agrees that he shall not during, or at
any time after the termination of, his employment relationship with SteelCloud,
use for himself or others, or disclose or divulge to others, including but not
limited to future employers or other businesses with which he may have a
contractual relationship, any Confidential Information. Should Employee reveal
or threaten to reveal any of this information, SteelCloud shall be entitled to
an injunction restraining Employee from disclosing same, or from rendering any
services to any entity to whom said information has been or is threatened to be
disclosed. The right to secure an injunction is not exclusive, and SteelCloud
may pursue any other remedies it has against Employee for a breach or threatened
breach of this condition, including the recovery of damages from Employee. This
clause shall survive termination of this Agreement.
7. TERMINATION OF AGREEMENT.
a. If SteelCloud shall terminate Employee without cause, SteelCloud
shall pay Employee severance equal to his base salary through November 1, 2008.
SteelCloud may pay this severance, at its option, in a lump sum, or in
installments no less often than SteelCloud's regular salary payment schedule.
b. If SteelCloud shall terminate the Employee for cause, Employee shall
have no right to receive any notice or severance pay. "For cause" as used in
this paragraph shall mean: (a) a deliberate and willful disregard of standards
of behavior which SteelCloud has a right to expect (including but not limited to
misappropriation of SteelCloud assets, competition with SteelCloud, total
failure to perform assigned work, and breach of fiduciary duty), or (b) failure
to comply with the instructions of the Board of Directors.
c. Employee agrees that, immediately upon the termination of his
relationship with SteelCloud, regardless of the reason, he shall return to
SteelCloud all Confidential Information and also all other documents and
property of SteelCloud, including, but not necessarily limited to: data
descriptions, reports, manuals, correspondence, customer lists, computers, and
all other materials and all copies thereof relating in any way to SteelCloud's
business, or in any way obtained by him during the course of his employment
relationship with SteelCloud. Employee further agrees that he shall not retain
copies, notes or abstracts of the foregoing.
d. This clause shall survive termination of this Agreement.
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8. POST EMPLOYMENT RESTRICTIONS.
a. For a period of two (2) years after the termination of Employee's
employment, notwithstanding the cause or reason for termination, Employee shall
not compete, directly or indirectly, with SteelCloud. Employee understands that
the term "not compete" as used in this paragraph shall mean that he shall not
(i) own, manage, operate, consult with, or be employed by, a competing business
in the United States; (ii) solicit or assist in the solicitation of any of
SteelCloud's accounts or customer(s) who were SteelCloud's accounts or customers
while Employee was employed at SteelCloud; or (iii) encourage any of
SteelCloud's other employees to cease their employment with SteelCloud. Employee
understands that the term "competing business" as used in this paragraph means
any business engaged in the design, development, distribution, servicing, or
sale of hardware or software that competes with SteelCloud branded appliances,
SteelCloud licensed software, or SteelCloud antivirus, intrusion protection, and
security services.
b. Employee agrees that SteelCloud may notify any future or prospective
employer or third party business with which Employee may contract of the
existence of this Agreement. Employee agrees that the foregoing post-employment
restrictions are reasonable given the national scope of SteelCloud's products
and services.
c. As an additional and cumulative remedy to any other remedy available
to SteelCloud, the covenants contained in this Agreement shall be enforceable by
specific performance and by preliminary and permanent injunctive relief and if
any court of record shall finally adjudicate that the constraints provided for
herein are too broad as to the area, activity, time covered, or any other
matter, then said area, activity, time covered, or any other matter may be
reduced to whatever extent the court deems reasonable and the covenants may be
enforced as to such reduced area, activity, time, or other matter.
d. This clause shall survive termination of this Agreement.
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9. ASSISTANCE IN LITIGATION. Employee shall, upon reasonable notice,
furnish such information and proper assistance to SteelCloud as it may
reasonably require in connection with any litigation in which it is, or may
become, a party either during or after his employment. In the event that
Employee fails to assist SteelCloud, it shall reimburse SteelCloud all legal
fees, court costs and damages resulting in whole or in part from this failure to
assist. This clause shall survive termination of this Agreement.
10. ENFORCEMENT PROVISIONS.
a. In the event that either party is required to seek legal assistance
to obtain compliance with this Agreement or to enforce the provisions of this
Agreement, the second party shall pay to the first party in addition to all the
sums that it may be called on to pay, all the first party's costs and expenses,
including, but not limited to, attorneys' fees actually incurred by that party
regardless of whether court action is initiated.
b. Any legal action brought to enforce any claim or right arising from
the provisions of this agreement shall be brought in the court of appropriate
jurisdiction in the County of Fairfax in the Commonwealth of Virginia and the
law of the Commonwealth of Virginia shall govern. If any of the provisions of
this Agreement shall contravene, or be invalid under, the laws of the
Commonwealth of Virginia, such contravention or invalidity shall not invalidate
the entire Agreement, but it shall be construed as if not containing the
particular provision or provisions held to be invalid, and the rights and
obligations of the parties shall be construed and enforced accordingly.
c. This clause shall survive termination of this Agreement.
11. NOTICES. Any notice or communication required or permitted by the
terms of this Agreement shall be deemed received when hand delivered to the
person to whom the notice is directed, or when otherwise received by that person
as demonstrated by any mail, facsimile, or commercial courier receipt:
If to the Company, notice shall be directed to:
Chairman of the Board
SteelCloud
00000 Xxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
If to Employee, notice shall be directed to
Xxxxxx X. Xxxxx
0000 Xxxxx Xxxxx Xxxxx
Xxxxxxx Xxxxxxx, XX 00000
or to such other address as either party may designate from time to
time by written notice to the other party.
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12. MISCELLANEOUS PROVISIONS.
a. With the exception of the contingent Employment Agreement as
President and Chief Executive Officer entered into concurrently, this Agreement
sets forth all of the parties' promises, agreements, conditions, warranties and
representations, oral or written, express or implied, among them with respect to
the terms of employment, and there are no promises, agreements, conditions,
warranties or representations, oral or written, express or implied, among them
with respect to the terms of employment other than as set forth herein.
b. With the exception of the contingent Employment Agreement as
President and Chief Executive Officer entered into concurrently, this Agreement
supersedes any prior agreements between Employee and SteelCloud or any
predecessors of Employee and SteelCloud.
c. Any modification of this Agreement or additional obligation assumed
by either party in connection with this Agreement shall be binding only if
placed in writing and signed by each party or an authorized representative of
each party.
d. This Agreement shall inure to the benefit of, and shall be binding
upon, the parties and their respective successors, heirs, and personal
representatives.
e. This Agreement shall not be assignable by Employee.
f. The failure of either party to this Agreement to insist upon the
performance of any of the terms and conditions of this Agreement, or the waiver
of any breach of any of the terms and conditions of his Agreement, shall not be
construed as thereafter waiving any such terms and conditions, but the same
shall continue and remain in full force and effect as if no such forbearance or
waiver had occurred.
g. The parties hereto stipulate and agree that the rule of construction
to the effect that any ambiguities are to be or may be resolved against the
drafting party shall not be employed in the interpretation of this Agreement.
IN WITNESS WHEREOF, each party to this Agreement has caused it to be
executed on the date indicated above.
/S/ VADM X.X.XXXXXXXXXX /S/ XXXXXX X. XXXXX
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SteelCloud, Inc. by VADM X.X.XXXXXXXXXX Employee
its CHAIRMAN OF THE BOARD
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