EMPLOYMENT AGREEMENT
Exhibit
10.4
HALBERD
CORPORATION, INC.
This Employment Agreement (“Agreement”) is entered into
this 28th day of
January,
2009,
by and between Xxxx X.
Xxxxxx, a Michigan resident (“Xxxxxx”), and Halberd Corporation,
Inc., a Nevada corporation (the “Company”).
RECITALS
WHEREAS,
the Company operates as a Holding Company with the operations in subsidiaries
under the umbrella of the Company; and
WHEREAS,
Xxxxxx has obtained certain unique and particular talents in all aspects of
managing companies; and
WHEREAS,
the Company desires to employ Xxxxxx as employee, and Xxxxxx desires to be
employed by the Company, subject to the terms, conditions and covenants
hereinafter set forth.
AGREEMENT
NOW,
THEREFORE, in consideration of the promises, representations, and covenants
described herein, and in consideration of the recitals above, which are
incorporated herein by reference, and for other good and valuable consideration,
the receipt and sufficiency of which the Parties hereby acknowledge, the Parties
hereby agree as fellows:
1. Employment.
Subject to all of the terms and conditions of this Agreement, the Company agrees
to employ Xxxxxx as the President & Chief Operating Officer and Xxxxxx
hereby accepts such employment and appointment.
2. Duties. Xxxxxx
will make the best use of his energy, knowledge and training in advancing the
Company’s interests. Xxxxxx will work full-time for the Company
and diligently and conscientiously perform the duties of President & Chief
Operating Officer, and such other positions within the general guidelines as
determined by the Company’s Board of Directors. Xxxxxx will keep the Company
informed of any other business activities or outside employment, and will
promptly restrict or stop any activity or employment that might conflict with
the Company’s interests upon written notice of the Board of
Directors.
3. Term. Subject
to earlier termination in accordance with Section 4 below, this Agreement shall
take effect as of the date hereof and shall remain in effect for a period of
Three (3) years. This Agreement shall automatically renew for successive one (1)
year periods after such initial term, unless and until terminated by either the
Board of Directors as prescribed in the Company’s by-laws or by Xxxxxx by
written letter to the Chairman with thirty (30) days notice.
4. Termination.
Subject to the respective continuing obligation of the Company and Xxxxxx
under Section 6 and 7 below:
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(a)
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The
Company may terminate this Agreement upon written notice to Xxxxxx without
“Cause” or because of a Change in Control (as defined in 4d below) shall
result in Termination payments to Xx. Xxxxxx equal to 100% of base salary
plus premiums on health insurance for either (i) the immediate 18-month
period following the date of termination if termination occurs in the
first 24 months of employment or (ii) the 12-month period beginning on the
date of termination if termination occurs after the first 24 months of
employment. Such amount will be paid in a lump sum on
termination in consideration for an 18-month or 12-month non-compete
agreement, depending on the period for determining the termination
payment. In the event the company waives its non-compete rights, then the
company shall pay Xx. Xxxxxx an amount equal to his normal pay for a
period of 12-months post
termination;
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(b)
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The
Company may terminate this Agreement immediately upon written notice to
Xxxxxx for cause, which is hereby defined as (i) the willful commission of
an act of fraud or embezzlement against the Company, (ii) conviction or
plea of nolo contendere of a crime constituting a felony, (iii) the
commission of actions involving willful malfeasance or gross misconduct in
connection with Xx. Xxxxxx’x employment and (iv) the material default in
performance of the employment agreement by Xx. Xxxxxx which has not been
cured within 30 days following written notice from the Company to Xx.
Xxxxxx specifying the nature of the default; provided, that in the event
the Company provides Xx. Xxxxxx with such written notice, Xx. Xxxxxx will
have a right to make a presentation to the Board, either personally or
through counsel, to present his viewpoint on the issue prior to any final
decision being made by the
Board;
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(c)
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The
Company may terminate this Agreement upon 12-weeks written notice to
Xxxxxx in the event that Xxxxxx has been determined by a certified medical
review board to be disabled in such a way that no reasonable
accommodations can be made to allow him to be capable of performing his
duties hereunder. However, the Board, in its sole discretion,
may extend the period of any compensation or
benefits;
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(d)
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Termination
because of “Change in Control.” a “Change in Control” as defined by the
Company’s by-laws or by the laws of the State in which the Company is
incorporated as in effect on the date of Xx. Xxxxxx’x employment; provided,
however,
that notwithstanding the foregoing, a Change in Control shall not include
the following: (i) any transaction (or series of related
transactions) in which the stockholders of the Company (or their
affiliates) immediately prior thereto own, directly or indirectly, at
least 50% of the outstanding voting power of the surviving or acquiring
entity (or any parent entity) immediately thereafter; or (ii) any
transaction the primary purpose of which is to generate financing for the
Company; and
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(e)
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This
Agreement will terminate upon the death of
Xxxxxx.
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5. Compensation.
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(a)
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Salary. Xxxxxx
shall receive an annual base salary of $120,000 to be paid as per the
Company’s usual and standard payroll practices, with an annual salary
increase of not less than the national average for the Cost of Living
Index for the positions as described in Section 1 above. Further, upon an
effective Form S-1, and with Board of Director approval, Xxxxxx base
salary shall increase $240,000 per annum. The Board of
Directors will conduct an annual performance and salary review of
Xxxxxx.
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(b)
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Bonus.
The Board of Directors shall determine the amount of bonuses to be paid,
if any, based upon the individual’s performance and the Company’s
performance, during each calendar year. For 2009 and for each successive
annual period completed, Xx. Xxxxxx will be eligible for bonus payments of
up to 80% of his annual base salary. Such payments shall be
determined by the Board, based upon achievement of the annual business
objectives set by the Company’s Board of
Directors.
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(c)
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Benefits. Health
Insurance: The Company will either provide a health
insurance program that will be available to the individual and his family
members and/or will compensate the individual for such health
insurance. The Company and Xxxxxx will agree upon the amount of
such program. Life
Insurance: The Company shall purchase and maintain a minimum of
$500,000 in life insurance and Xxxxxx shall name the Company as
beneficiary. Disability
Insurance: The Company shall maintain a policy for both short-term
and long-term disability. Long-term disability benefit shall be
equivalent to a minimum of 66% of the highest annual gross salary earned
during the previous 12-month period. Short-term disability
shall be equivalent to the entire base-salary for the short-term
disability period. Retirement:
It is the intent of the Board of Directors to review, evaluate and adopt a
retirement program for its officers within the next
12-months. Further, the Board of Directors shall review all
benefit programs at least annually and reserves the right to modify any
benefits based upon the financial condition of the Company. If
any modification to any benefit is determined, Xx. Xxxxxx shall be
notified at least 30-days in advance of any changes taking
place.
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(d)
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Vacation
& Holidays: The Company will provide Xxxxxx
with 3–weeks paid vacation time per annum which must be used in that
annual period. Xxxxxx must schedule all vacation times with the
Board of Directors and may not take more than two weeks consecutively
without permission from the Board of Directors. Any unused
vacation shall not accrue without written consent of the Board of
Directors and shall be paid as a cash bonus to Xxxxxx. Xxxxxx
must use at least 50% of his allotted vacation time within each annual
period. Holiday schedule shall be determined by the Board
of Directors.
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(e)
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Car
expense. The Company will reimburse Xxxxxx for an automobile to
include insurance, gas, maintenance expenses and miscellaneous expenses
for such use. The total cost, per month, for the automobile will not
exceed $750.00. The costs for insurance, maintenance, and gas will be in
addition to the monthly expense to a maximum combined total cost of
$1,200.
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(f)
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Expense
Reports and Company Credit Card: The Company shall
supply Xxxxxx with a Company Credit Card for use when doing business on
behalf of the Company. Xxxxxx shall submit a monthly expense
report with in 5-business days of the end of each month to the CFO
reflecting all expenses including those paid using the Company Credit
Card. Expenses shall be limited to those expressly used in connection with
Company business. Should it be determined that expenses either
reimbursed or paid for using the Company provided Credit Card were for
personal use or benefit, the Company, at its option, shall either (i)
deduct the personal expenses from Xx. Xxxxxx’x base salary through payroll
deduction; or, (ii) add such amounts including any interest or penalties
charged by the creditor to Xx. Xxxxxx’x end of year W2 as a wages
earned.
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(g)
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Relocation
expense. None.
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(h)
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Stock
compensation. The Board of Directors intends to
develop and implement a performance based stock compensation program for
Directors, Officers and non-officer employees and affiliates within
18-months of the signing of this Agreement. The Board of
Directors may also grant stock options and warrants to Xxxxxx with the
price of the options or warrants to be established by the Company and
within the general guidelines which govern the
securities. The shares may be issued pursuant to an
exemption from registration under the Securities Act of 1933 (the “1933
Act”) and from registration under any and applicable state securities
laws. The certificates representing the Shares shall bear the
restrictive legend set forth in Rule 144 of the Rules and Regulation of
the 1933 Act and any appropriate legend required under applicable state
securities laws. The shares shall vest in favor of Xxxxxx as
determined by the Board of Directors. The amount of stock
options and warrants issued shall be determined at least annually by the
Board of Directors and issued at least
annually.
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6. Confidential
Information.
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(a)
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“Confidential
Information” as used in this Section 6, means information that is not
generally known and that is proprietary to the Company of which Xxxxxx is
obligated to treat as proprietary. Any information that Xxxxxx
reasonably considers Confidential Information, or that the Company treats
as Confidential Information, will be presumed to be Confidential
Information (whether Xxxxxx or others originated it and regardless of how
Xxxxxx obtained it).
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(b)
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Except
as specifically permitted by an authorized officer of the Company or by
written Company policies, Xxxxxx will not, either during his employment by
the Company or for the period of compensation stated in Section 4a above
thereafter, use Confidential Information for any purpose other than the
business of the Company or disclose it to any person who is not also an
employee of the Company. When Xxxxxx’x employment with the
Company terminates, he will promptly deliver to the Company all records
and any customer lists, compositions, articles, devices, apparatus and
other items that disclose, describe or embody Confidential Information,
including all copies, reproductions and specimens of the Confidential
Information in Xxxxxx’x possession, regardless of who prepared the
information, and will promptly deliver any other property of the Company
in Xxxxxx possession, whether or not Confidential
Information.
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7.
Conflict of
Interest. Xxxxxx agrees that he will not directly
or indirectly transact business with the Company personally, or as agent, owner,
partner, or shareholder of any other entity, except for transactions with
entities currently transacting business with the Company, and consistent with
past practice, or except as otherwise approved by the Board of
Directors.
8.
No
Adequate Remedy. Xxxxxx understands and agrees that a
failure of Xxxxxx to fulfill his obligations under this Agreement may cause harm
to the Company. Further, damages to the Company may be very difficult
to determine. Therefore, in addition to any other rights or remedies
available by law to the Parties to this Agreement, Xxxxxx and Company hereby
consent to binding Arbitration in the State where the Company is then
headquartered for the specific enforcement of this Agreement.
9. Miscellaneous.
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(a)
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Successors and
Assigns. This Agreement is binding on and inures to the benefit of
the Company’s successors and assigns, all of which are included in the
term the “Company” as is used in this Agreement; provided, however, that
the Company may assign this Agreement only in connection with a merger,
consolidation, assignment, sale or other disposition of substantially all
of its assets or
business.
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(b)
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Modification. This
Agreement may be modified or amended only in writing, signed by the
Chairman of the Board of Directors and
Xxxxxx.
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(c)
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Governing
Law. The
laws of the State where the Company is then legally and lawfully
headquartered will govern the validity and performance of this
Agreement. Any legal proceedings related to this Agreement will
be brought in an appropriate court, and both the Company and Xxxxxx
hereby, consent to the exclusive jurisdiction of that court for this
purpose.
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(d)
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Severability.
Wherever
possible, each provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law but, if any
provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this
Agreement. If any part of any covenant or other provision
in this Agreement is determined by a court of law to be overly broad
thereby making the covenant unenforceable, the parties hereto agree, and
it is their desire, that the court shall substitute a judicially
enforceable limitation in its place, and that as so modified the covenant
shall be binding upon the parties as if originally set forth
herein.
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(e)
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Waivers. No
failure or delay by either the Company or Xxxxxx in exercising any rights
or remedy under this Agreement will waive any provision of the Agreement,
nor will any single or partial exercise by either the Company or Xxxxxx of
any right or remedy under this Agreement preclude either of them from
otherwise or further exercising these rights or remedies, or any other
rights or remedies granted by any law or any related
document.
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(f)
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Headings. The
headings in this Agreement are for convenience only and do not affect this
Agreement’s
interpretation.
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(g)
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Entire
Agreement. This Agreement supersedes all previous
and contemporaneous oral negotiations, commitments, writings and
understandings between the parties concerning the matters in this
Agreement, including without limitation any policy or personnel manuals of
the Company.
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(h)
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Notices. All
notices, requests, demands, and other communications required or permitted
hereunder shall be in writing and shall be deemed to have been given if
delivered by hand, overnight courier, facsimile, or mailed certified or
registered mail with postage prepaid, to the addresses set forth
below:
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If
to the Company:
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Halberd
Corporation, Inc.
00000
Xxxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx
Xxxxx, XX 00000
Attention:
Xxxxxx Xxxxxx
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With
a copy to:
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Xxxxxx
& Xxxxxx
000
Xxxxx 0 Xxxxx
Xxxxxxxxx,
XX 00000
TEL:
000-000-0000
FAX:
000-000-0000
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If
to Xxxxxx:
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Xxxx
X. Xxxxxx
00000
Xxxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx
Xxxxx, XX 00000
Attention:
Xxxx X. Xxxxxx
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IN WITNESS WHEREOF, the Company and Xxxxxx have executed
this Employment Agreement as of the date first above
written.
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Halberd
Corporation, Inc.
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Xxxx X.
Xxxxxx
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By:
/s/ Xxxx X. Xxxxxxxxx
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By:
/s/ Xxxx X.
Xxxxxx
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Name:
Xxxx X. Xxxxxxxxx
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Name:
Xxxx X. Xxxxxx
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Title:
CEO
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