Employment Agreement
This Employment Agreement ("Agreement"), dated as of May 5, 2006, is
entered into between ACIES CORPORATION, a Nevada corporation, having a place of
business at 00 Xxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000 ("Employer"),
and XXXX XXXXX, an individual residing at 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxxxx, Xxx
Xxxxxx 00000 ("Executive").
WHEREAS, Employer desires to continue to employ Executive as its President
and Chief Executive Officer; and
WHEREAS, Executive is willing to accept such continued employment on the
terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements set forth
herein, Employer and Executive hereby agree as follows:
ARTICLE I
EMPLOYMENT; POSITION, DUTIES AND AUTHORITY
1.01 Employment. Employer agrees to, and does hereby, continue to employ
Executive, and Executive agrees to, and does hereby accept such continued
employment, upon the terms and subject to the conditions set forth in this
Agreement. Executive represents and warrants to Employer that (A) Executive has
the legal capacity to execute and perform this Agreement, (B) this Agreement is
a valid and binding agreement enforceable against Executive according to its
terms, and (C) the execution and performance of this Agreement by Executive does
not violate the terms of any existing agreement or understanding to which
Executive is a party or by which Executive otherwise may be bound.
1.02 Position, Duties and Authority. During the Term (as defined below),
Executive shall serve as President and Chief Executive Officer of Employer and
its subsidiary, Acies, Inc., and in such other position or capacity for Employer
and/or its affiliates and subsidiaries as Employer may request, and shall have
such responsibilities, duties and authority that are customary for the positions
of President and Chief Executive Officer, subject at all times to the control
and direction of the Board of Directors of Employer (the "Employer Board") and
the Board of Directors of Acies, Inc. (the "Acies, Inc. Board," and together
with the Employer Board, the "Boards") and shall perform such services as
customarily are provided by the President and Chief Executive Officer of a
corporation and such other services consistent with his positions, as shall be
assigned to him from time to time by the Boards. During the Term, Employer shall
take reasonable and lawful actions to cause Executive to be re-nominated to
serve on the Boards. During the Term, Executive shall (A) report to the Boards,
(B) serve Employer and its affiliates and subsidiaries faithfully and to the
best of Executive's ability, and (C) except during any period of illness or
incapacity or vacation to which he is entitled, devote all of Executive's
business time, attention, skill and efforts exclusively to the business and
affairs of Employer and its affiliates and subsidiaries and the promotion of
their interests; provided, however, Executive may engage in charitable,
educational, religious, civic and similar types of activities and serve as a
member of the board of directors of other entities to the extent that such
activities and/or memberships do not inhibit or prohibit the performance of
Executive's duties hereunder, inhibit, conflict with or compete with the
business of Employer or its affiliates and subsidiaries, or otherwise violate
the terms of Article V below and provided that Executive promptly discloses such
activities and/or memberships to the Boards. Nothing in this Section 2.01 shall
be deemed to preclude Executive from making passive investments (constituting
ownership of less than five (5%) percent of any class of equity interest) in a
publicly held corporation, or passive investments (constituting ownership of
less than a controlling interest) in a non-public business, firm or entity, so
long as such investment does not interfere with Executive's duties to Employer,
its affiliates or subsidiaries or otherwise violate the terms of the provisions
set forth in Article V hereof. Executive shall perform his duties in a diligent
manner; shall not engage in activities that are or could be detrimental to the
existing or future business or reputation of Employer or its affiliates and
subsidiaries; and shall observe and comply with all laws, customs, standards of
business ethics and honest business practices, and policies and procedures of
Employer and its affiliates and subsidiaries in place from time to time.
Executive's principal base of operation for the performance of Executive's
duties under this Agreement shall be in New York, New York; provided, however,
that Executive shall perform such duties and responsibilities at such other
places as shall from time to time be reasonably necessary to fulfill Executive's
obligations under this Agreement in the discretion of Employer.
ARTICLE II
TERM
2.01 Term of Employment. Executive's employment under this Agreement shall
commence on May 5, 2006 (the "Commencement Date") and, subject to earlier
termination pursuant to Article IV hereof, shall continue until May 4, 2009 (the
"Term"); provided, however, unless either party hereto gives written notice to
the other at least ninety (90) days prior to the expiration of the then-current
Term that such party elects not to renew this Agreement, the then-current Term
shall be automatically extended for additional one-year periods. The election of
Employer or Executive not to extend the then-current Term, as provided in this
Section 2.01, shall not be deemed to be a termination by Employer under Sections
4.01(A) or 4.01(B) or by Executive for Good Reason (as defined below) under
Section 4.01(C), and, in such event, Executive only shall be entitled to the
payments and benefits set forth in Section 4.02(B).
ARTICLE III
COMPENSATION AND BENEFITS; EXPENSES
3.01 Compensation and Benefits. For all services rendered by Executive in any
capacity during the Term, including, without limitation, services as an officer,
director or member of any committee of Employer, or any subsidiary, affiliate or
division thereof, Executive shall be compensated as follows (subject, in each
case, to the provisions of Article IV below):
(A) Base Salary. During the Term, Employer shall pay to Executive a base
salary at the initial rate of $215,000 on an annualized basis ("Base Salary").
Executive's Base Salary shall be subject to periodic review (which shall occur
at least annually) and such periodic adjustments as the Employer Board or the
Compensation Committee of the Employer Board (the "Compensation Committee")
shall deem appropriate; provided, however, in no event shall any decrease in
Executive's Base Salary be greater than the average percentage decrease
applicable to Employer's and Acies, Inc.'s other employees. The term "Base
Salary" as used in this Agreement shall refer to Base Salary as may be adjusted
from time to time. Base Salary shall be payable in accordance with the customary
payroll practices of Employer in place from time to time.
(B) Bonuses.
(i) Incentive Bonus. During the Term, Executive shall be eligible to
earn periodically an incentive bonus (the "Incentive Bonus"). Qualification for,
and the amount of, each Incentive Bonus shall be related to the achievement of
milestones and/or objectives during the applicable performance period (the
"Performance Period") established by the Employer Board or the Compensation
Committee from time to time. For fiscal year ending 3/31/07, Executive shall be
eligible to earn quarterly Incentive Bonus payments in the aggregate annual
maximum amount of up to 70% of Executive's annualized Base Salary based upon the
achievement of milestones and objectives established by the Employer Board
relating to revenue growth, net income, and cash flow from operations. The
Incentive Bonus milestones and objectives, amount, manner and method of payment,
and applicable Performance Periods for periods following 3/31/07 shall be
established by the Employer Board or the Compensation Committee in its
discretion.
(ii) Discretionary Bonus. During the Term, Executive also shall be
eligible to earn a discretionary annual bonus, in such amount as may be
determined by the Employer Board or the Compensation Committee ("Discretionary
Bonus"). Qualification for the Discretionary Bonus and the amount of the
Discretionary Bonus, if any, shall be determined by the Employer Board or the
Compensation Committee based upon Employer's and its subsidiaries' financial
performance and both a subjective and objective review of Executive's
achievements throughout the applicable fiscal year which may include, without
limitation, the extent to which Executive (a) achieved his goals and objectives
for the fiscal year, (b) carried out the elements of Employer's and its
subsidiaries' strategic plans, (c) was effective in dealing with challenges, (d)
improved infrastructure, (e) achieved a significantly enhanced distribution
network, (e) succeeded in obtaining financing, and (f) strengthened Employer's
and its subsidiaries' management team, as well as other tangible and intangible
factors in the Employer Board's or the Compensation Committee's discretion. The
Discretionary Bonus, if any, shall be determined as of the end of each full
fiscal year during the Term, payable within three and one-half (3.5) months
after the last day of each such fiscal year. Executive's target Discretionary
Bonus for fiscal year ending 3/31/07 shall be 30% of Executive's annualized Base
Salary; provided, however, the actual amount of the Discretionary Bonus, as
determined by the Employer Board or the Compensation Committee, may be less than
or greater than the target amount. Executive's target Discretionary Bonus for
periods following 3/31/07 shall be determined by the Employer Board or the
Compensation Committee in its discretion.
To be eligible to earn any Incentive Bonus (or any portion thereof), Executive
must be employed by Employer on the last day of the applicable Performance
Period. Further, to be eligible to receive any Discretionary Bonus (or portion
thereof), Executive must be employed by Employer both at the time the amount of
the Discretionary Bonus, if any, is determined, and at the time any such
Discretionary Bonus is to be paid.
(C) Equity Compensation. Employer and Executive acknowledge that on July
1, 2004, Employer granted to Executive stock options to purchase 1,845,825
shares of Employer's common stock at an exercise price of $1.00 per share (the
"2004 Option Grant"), which stock options vest ratably on a quarterly basis over
a 3 year period from the date of the grant and expire on July 1, 2009; provided,
however, upon the consummation of a Change in Control (as defined below), all
such stock options granted in connection with the 2004 Option Grant shall become
vested immediately. During the Term, Executive shall be eligible to receive from
time to time additional stock option grants and/or restricted stock awards in
amounts to be approved by the Employer Board or the Compensation Committee in
its sole discretion. The additional stock option grants and restricted stock
awards, if any, will be based upon a combination of company performance and
performance by Executive, as determined by the Employer Board or the
Compensation Committee in its sole discretion. Such additional stock option
grants or restricted stock awards will be subject to the terms and conditions
established within any equity compensation plan as may be in place from time to
time ("Equity Compensation Plan") and a separate stock option grant or
restricted stock award agreement between Employer and Executive that sets forth
the terms and conditions of the award (e.g., exercise price, expiration date and
vesting schedule of stock options; the restricted period and/or other
restrictions such as performance objectives relating to stock awards). With
respect to the options covered by the 2004 Option Grant, Executive's rights and
obligations upon termination shall be governed by the terms set forth in Section
4.02 below. With respect to any option grants or restricted stock awards granted
on or after the Commencement Date, the terms of the Equity Compensation Plan and
the applicable stock option or restricted stock award agreement shall govern
Executive's rights and obligations upon termination.
(D) Benefits. During the Term, Executive shall be entitled to participate
in all Employer's employee benefit plans and programs (excluding severance
plans, if any) as Employer generally maintains from time to time during the Term
for the benefit of its senior executive-level employees, in each case subject to
the eligibility requirements, enrollment criteria and the other terms and
provisions of such plans or programs. Employer may amend, modify or rescind any
employee benefit plan or program and change employee contribution amounts to
benefit costs without notice in its discretion.
(E) Vacation, Sick and Personal Days. During the Term, Executive shall be
entitled to paid vacation, sick and personal days in accordance with Employer's
policies with respect to such vacation, sick and personal days in place from
time to time.
3.02 Expenses. Executive shall be entitled to receive reimbursement from
Employer for all reasonable out-of-pocket expenses incurred by Executive during
the Term in connection with the performance of Executive's duties and
obligations under this Agreement, according to Employer's expense account and
reimbursement policies in place from time to time and provided that Executive
shall submit reasonable documentation with respect to such expenses. During the
Term, Employer also shall pay, or reimburse Executive, for the premium payments
(not to exceed $1,350 per month) for an up to $1,000,000 whole life insurance
policy naming Executive's designee as beneficiary. In addition, during the Term,
Employer shall provide Executive with an automobile allowance in an amount not
to exceed $1,500 per month, which allowance shall be intended to cover the cost
of Executive's vehicle and insurance thereon, as well as all incidental costs
incurred by the Executive related to the operation of the vehicle, including
gas, maintenance, parking/garage and tolls.
ARTICLE IV
TERMINATION
4.01 Events of Termination. This Agreement and Executive's employment hereunder
shall terminate upon the occurrence of any one or more of the following events:
(A) Termination by Employer for Cause. Employer may, at its option,
terminate this Agreement and Executive's employment hereunder for Cause (as
defined herein) immediately upon giving notice of termination to Executive. As
used in this Agreement, "Cause" shall mean Executive's (i) conviction of, guilty
plea to or confession of guilt of a felony or act involving moral turpitude,
(ii) commission of a fraudulent, illegal or dishonest act in respect of Employer
or any of its affiliates or subsidiaries, (iii) willful misconduct or gross
negligence that reasonably could be expected to be injurious in the reasonable
discretion of Employer to the business, operations or reputation of Employer or
any of its affiliates or subsidiaries (monetarily or otherwise), (iv) material
violation of Employer's policies or procedures in effect from time to time;
provided, however, to the extent that such violation is subject to cure,
Executive shall have an opportunity to cure such violation within ten (10) days
following written notice of such violation from Employer, (v) after a written
warning and a ten (10) day opportunity to cure non-performance, material failure
or refusal to perform specific written directives consistent with his duties and
responsibilities as set forth in Section 1.02, (vi) breach or threatened breach
of Executive's obligation under Article V, or (vii) material breach of any other
term of this Agreement; provided, however, to the extent such breach is subject
to cure, Executive shall have an opportunity to cure such breach within ten (10)
days following written notice such breach from Employer.
For purposes of this Section 4.01(A), no act or failure to act, on the part of
Executive, shall be considered "willful" unless it is done, or omitted to be
done, by Executive in bad faith or without reasonable belief that Executive's
action or omission was in the best interests of Employer. Any act, or failure to
act, based upon authority given pursuant to a resolution duly adopted by the
Employer Board or based upon the advice of counsel for Employer shall be
conclusively presumed to be done, or omitted to be done, by Executive in good
faith and in the best interests of Employer. Employer's termination of the
Executive's employment shall not be deemed to be for "Cause" unless and until
there shall have been delivered to the Executive a copy of a resolution duly
adopted by the affirmative vote of not less than a majority of the entire
membership of the Employer Board at a meeting of the Employer Board called and
held for such purpose (after reasonable notice is provided to Executive and
Executive is given an opportunity, together with counsel, to be heard before
such Employer Board), finding that, in the good faith opinion of the Employer
Board, Executive is guilty of the conduct described in any of subparagraphs (i)
through (vii) above, and specifying the particulars thereof in detail. Executive
acknowledges and agrees that placing Executive on temporary paid leave pending a
good faith inquiry into whether Executive has engaged in conduct that could
constitute "Cause" under this Agreement shall not be considered Good Reason.
(B) Without Cause by Employer. Employer may, at its option, at any time
terminate Executive's employment for no reason or for any reason whatsoever
(other than for Cause or as a result of Executive's death or Disability) by
providing thirty (30) days advance written notice to Executive of its intention
to terminate this Agreement and Executive's employment hereunder. During all or
a portion of the thirty (30) day notice period described in the preceding
sentence, Employer may place Executive on a paid leave of absence, remove
Executive from his position(s) with Employer and/or its affiliates and
subsidiaries, and/or require Executive to provide services relating to the
transition of his duties.
(C) Termination By Executive. Executive may terminate this Agreement and
Executive's employment hereunder without Good Reason by giving ninety (90) days
prior written notice to Employer or for Good Reason by giving thirty (30) days
prior written notice of termination to Employer; provided, however, that
Employer reserves the right to accept Executive's notice of termination and to
accelerate such notice and make Executive's termination effective immediately,
or on any other date prior to Executive's intended last day of work as Employer
deems appropriate. For purposes of this Agreement, "Good Reason" shall mean, in
the absence of a written consent of Executive:
(i) any action by Employer that results in a material diminution in
Executive's title, position, authority or duties from those contemplated by
Section 1.02;
(ii) the failure of Employer to pay any amounts due to Executive or
to fulfill any other material obligations to Executive under this Agreement;
(iii) a reduction in Executive's Base Salary, unless such reduction
is not greater than the average percentage reduction in the base salary of
Employer's and Acies, Inc's other employees;
(iv) a change by Employer in the location at which Executive
performs his principal duties for Employer to a new location that is both (a)
outside a radius of 35 miles from Executive's principal residence, and (b) more
than 20 miles from the location at which Executive performs his principal duties
for Employer immediately prior to the date on which such change occurs; or
(v) any failure by Employer to comply with and satisfy its
obligations pursuant to Section 6.01(B) below.
Notwithstanding the foregoing, the occurrence of any of the events or actions
described in clauses (i)-(v) (inclusive) above shall not constitute "Good
Reason" if, within thirty (30) days after the giving by Executive of notice to
Employer of the occurrence or existence of an event or circumstance that would
otherwise constitute "Good Reason," such event of circumstance has been fully
corrected and Executive has been compensated for any actual damages or losses
resulting therefrom.
(D) Death. In the event of Executive's death, this Agreement and
Executive's employment hereunder shall automatically terminate on the date of
death.
(E) Disability. To the extent permitted by law, in the event of
Executive's physical or mental disability that prevents Executive from
performing Executive's duties under this Agreement for a period of at least 90
consecutive days in any 12-month period or 120 non-consecutive days in any
12-month period, Employer may terminate this Agreement and Executive's
employment hereunder upon written notice to Executive.
(F) Mutual Agreement. This Agreement and Executive's employment hereunder
may be terminated at any time by the mutual agreement of Employer and Executive.
(G) Expiration of Term. This Agreement and Executive's employment
hereunder shall automatically terminate upon the expiration of the Term.
4.02 Employer's Obligations Upon Termination.
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(A) For Cause; Other than For Good Reason; Mutual Agreement. If, during
the Term, Employer shall terminate this Agreement and Executive's employment
hereunder for Cause, Executive shall terminate this Agreement and Executive's
employment hereunder other than for Good Reason, or this Agreement and
Executive's employment hereunder shall terminate by mutual agreement of the
parties, then (i) Employer's sole obligation to Executive under this Agreement
or otherwise shall be to: (a) on the next regular paydate following the date of
termination, (1) pay to Executive any Base Salary earned, but not yet paid to
Executive, prior to the date of such termination, (2) reimburse Executive for
any expenses incurred by Executive through the date of termination, and (3) pay
to Executive any accrued, but unused, vacation days through the date of
termination; (b) pay to Executive any Incentive Bonus payments earned, but not
yet paid or payable, with respect to a Performance Period that ended prior to
the date of termination, which Incentive Bonus payments shall be payable on the
date that such Incentive Bonus payments would otherwise be paid if Executive's
employment had not terminated or, if such Incentive Bonus payments were due and
payable on the date of termination, such Incentive Bonus payments shall be made
on the next regular payroll date following the date of termination; and (c) pay
and/or provide any amounts or benefits that are vested amounts or vested
benefits or that Executive is otherwise entitled to receive under any plan,
program, policy or practice (with the exception of those, if any relating to
severance) on the date of termination, in accordance with such plan, program,
policy or practice (clauses (a), (b) and (c) of this sentence are collectively
referred to herein as the "Accrued Obligations"), (ii) any options granted
pursuant to the 2004 Option Grant that are unvested as of the date of
termination shall be forfeited, and (iii) any options granted pursuant to the
2004 Option Grant that are vested as of the date of termination shall remain
exercisable for a period of thirty (30) days following the date of termination,
but in no event later than July 1, 2009.
(B) Expiration of Term. Upon the expiration of the Term, this Agreement
and Executive's employment hereunder shall terminate and Employer's sole
obligation to Executive under this Agreement or otherwise shall be to pay and/or
provide, as applicable, the Accrued Obligations, which Accrued Obligations shall
be paid or provided in manner described in Section 4.02(A) above. Any options
granted pursuant to the 2004 Option Grant that are vested as of the date of the
expiration of the Term shall remain exercisable until July 1, 2009.
(C) Death. If, during the Term, this Agreement and Executive's employment
hereunder shall terminate as a result of Executive's death, then (i) Employer's
sole obligation to Executive's estate under this Agreement or otherwise shall be
to: (a) pay and/or provide, as applicable, to Executive's estate the Accrued
Obligations, which Accrued Obligations shall be paid or provided in manner
described in Section 4.02(A) above; and (b) if Executive's eligible dependents
timely elect COBRA coverage, Employer shall waive their healthcare continuation
payments under COBRA for a period of twelve (12) months following the date of
Executive's death, and (ii) all options granted pursuant to the 2004 Option
Grant shall be deemed fully vested as of the date of Executive's death and shall
remain exercisable by Executive's estate until July 1, 2009.
(D) Disability. If, during the Term, this Agreement and Executive's
employment hereunder shall terminate as a result of Executive's Disability, then
(i) Employer's sole obligation to Executive under this Agreement or otherwise
shall be to: (a) pay and/or provide, as applicable, to Executive the Accrued
Obligations, which Accrued Obligations shall be paid or provided in manner
described in Section 4.02(A) above; and (b) if Executive timely elects COBRA
coverage and provided that Executive continues to make contributions to such
continuation coverage equal to Executive's employee contribution in effect
immediately preceding the date of termination, Employer shall waive the
remaining portion of Executive's healthcare continuation payments under COBRA
for a period of twelve (12) months following Executive's termination (unless
Executive sooner becomes eligible to obtain alternate healthcare coverage from a
new employer, in which case Employer's obligation to waive the remaining portion
of Executive's healthcare continuation payments under COBRA shall cease), and
(ii) all options granted pursuant to the 2004 Option Grant shall be deemed fully
vested as of the date of Executive's termination and shall remain exercisable by
Executive until July 1, 2009.
(E) Without Cause; for Good Reason
(i) If, during the Term, Employer terminates this Agreement and
Executive's employment hereunder without Cause or Executive terminates this
Agreement and Executive's employment hereunder for Good Reason, then (a)
Employer's sole obligation to Executive under this Agreement or otherwise shall
be to: (1) pay and/or provide, as applicable, to Executive the Accrued
Obligations, which Accrued Obligations shall be paid or provided in manner
described in Section 4.02(A) above; (2) if Executive timely elects COBRA
coverage and provided that Executive continues to make contributions to such
continuation coverage equal to Executive's employee contribution in effect
immediately preceding the date of termination, Employer shall waive the
remaining portion of Executive's healthcare continuation payments under COBRA
for a period of twelve (12) months following Executive's termination (unless
Executive sooner becomes eligible to obtain alternate healthcare coverage from a
new employer, in which case Employer's obligation to waive the remaining portion
of Executive's healthcare continuation payments under COBRA shall cease); and
(3) continue to pay to Executive his Base Salary (at the rate in effect on the
date of termination) for a period equal to the greater of (y) twelve (12)
months, or (z) through the end of the then-current Term, and (b) all options
granted pursuant to the 2004 Option Grant shall be deemed fully vested as of the
date of termination and shall remain exercisable by Executive until July 1,
2009.
(ii) Notwithstanding the provisions of Section 4.02(E)(i) above, in
the event that, within the period commencing three (3) months prior to the
consummation of a Change in Control (as defined below) and ending on the
twenty-four (24) month anniversary of the consummation a Change in Control,
Employer terminates this Agreement and Executive's employment hereunder without
Cause or Executive terminates this Agreement and Executive's employment
hereunder for Good Reason, then, in lieu of the amounts to be paid and benefits
to be provided by Employer pursuant to Section 4.02(E)(i) above and subject to
Section 6.07 below, (a) Employer's sole obligation to Executive under this
Agreement or otherwise shall be to: (1) pay and/or provide, as applicable, to
Executive the Accrued Obligations, which Accrued Obligations shall be paid or
provided in manner described in Section 4.02 (A) above; (2) if Executive timely
elects COBRA coverage and provided that Executive continues to make
contributions to such continuation coverage equal to Executive's employee
contribution in effect immediately preceding the date of termination, Employer
shall waive the remaining portion of Executive's healthcare continuation
payments under COBRA for a period of eighteen (18) months following Executive's
termination (unless Executive sooner becomes eligible to obtain alternate
healthcare coverage from a new employer, in which case Employer's obligation to
waive the remaining portion of Executive's healthcare continuation payments
under COBRA shall cease); and (3) continue to pay to Executive his Base Salary
(at the rate in effect on the date of termination) for a period equal to thirty
(36) months, and (b) all options granted pursuant to the 2004 Option Grant shall
be deemed fully vested as of the date of termination and shall remain
exercisable by Executive until July 1, 2009.
As used in this Agreement, "Change in Control" shall mean (a) in any one or
series of related or unrelated transactions (i) the sale of all or substantially
all of the assets of Employer, (ii) the merger or consolidation of Employer with
another corporation or entity in which Employer is not the surviving entity,
(iii) the acquisition by any single person or entity or related persons or
entities of more than fifty percent (50%) of the outstanding and issued voting
securities of Employer, or (iv) a merger or consolidation of Employer with
another corporation or entity that results in the former stockholders of
Employer, as they existed immediately prior to such merger or consolidation,
owning in the aggregate less than 50% of the outstanding voting securities of
the surviving or resulting corporation or entity, or (b) during any period of
two consecutive years, when individuals who at the beginning of such period
constitute the Board of Directors of Employer cease for any reason to constitute
at least a majority thereof, unless the election, or the nomination for election
by the stockholders of Employer, of each new director was approved by a vote of
at least two-thirds of the directors then still in office who were directors at
the beginning of such period
(iii) The salary continuation payments contemplated by this Section
4.02(E) shall commence to be paid on the next regular paydate following the 8th
day after Executive's execution and delivery of the Release (as defined in
Section 4.02(F) below); provided, however, if necessary to comply with the
restriction in Section 409(A)(a)(2)(B) of the Internal Revenue Code of 1986, as
amended (the "Code") concerning payments to "specified employees," the salary
continuation payments shall commence on the first regular paydate in the seventh
(7th) month following the date of Executive's termination and the first such
payment shall include the cumulative amount of any payments that would have been
paid prior to such date if not for such restriction, together with interest on
such cumulative amount during the period of such restriction at a rate, per
annum, equal to the applicable federal short-term rate (compounded monthly) in
effect under Section 1274(d) of the Code on the date of termination.
(F) Release. Except with respect to the Accrued Obligations, Employer
shall not be required to make the payments and provide the benefits specified in
this Section 4.02 unless Executive or his estate, as applicable, executes and
delivers to Employer (and does not revoke) a general release in a form
reasonably satisfactory to Employer (the "Release"). The Release shall include,
without limitation, a general release of Employer, its affiliates and
subsidiaries and their respective officers, directors, managers, members,
shareholders, partners, employees, agents and other related parties (the
"Releasees") from all liability (excluding Employer's obligations to pay and
provide the post-termination payments and benefits described in Section 4.02), a
covenant not to xxx the Releasees and such other terms deemed reasonably
necessary by Employer for its protection.
(G) No Mitigation or Offset. Executive shall have no obligation to
mitigate the payments or benefits provided in this Section 4.02 by seeking
substitute employment or otherwise and, except as provided in Sections
4.02(D)(i)(b), 4.02(E)(i)(a)(2), and 4.02(E)(ii)(a)(2), there shall be no offset
of the payments or benefits provided in Section 4.02. In addition, except as
provided in Section 5.07 below, Employer's obligation to make any payment
pursuant to, or otherwise perform its obligation under, this Agreement shall not
be affected by any claim or other right Employer may have against Executive.
ARTICLE V
Confidentiality, Assignment of Inventions, Non-Competition,
Non-Solicitation and Other Covenants
5.01 Confidentiality. While working or performing services for Employer or
otherwise, Executive may have previously developed or acquired, or may in the
future develop or acquire, knowledge in Executive's work or from directors,
officers, employees, agents or consultants of Employer and its subsidiaries and
affiliates (collectively, the "Company") or otherwise of Confidential
Information relating to the Company, its business, potential business or that of
their respective customers and merchants. "Confidential Information" includes
all trade secrets, know-how, show-how, theories, technical, operating,
financial, and other business information, whether or not reduced to writing or
other medium and whether or not marked or labeled confidential, proprietary or
the like, specifically including, but not limited to, information regarding
source codes, software programs, computer systems, algorithms, formulae,
apparatus, concepts, creations, costs, plans, materials, enhancements, research,
specifications, works of authorship, techniques, documentation, models and
systems, sales and pricing techniques, designs, inventions, discoveries,
products, improvements, modifications, methodology, forecasts, processes,
concepts, records, files, memoranda, reports, plans, proposals, price lists,
customer and merchant lists, customer and merchant preferences, product
development and project procedures. Confidential Information does not include
general skills, experience or information that is generally available to the
public, other than information which has become generally available as a result
of Executive's direct or indirect act or omission.
With respect to Confidential Information of the Company and its customers
and merchants:
(A) Executive has used, and will use, Confidential Information only in the
performance of Executive's duties for Employer. Executive has not used, and will
not use, Confidential Information at any time (during or after Executive's
employment with Employer) for Executive's personal benefit, for the benefit of
any other individual or entity, or in any manner adverse to the interests of the
Company and its customers and merchants;
(B) Executive has not disclosed, and will not disclose, Confidential
Information at any time (during or after Executive employment with Employer)
except to authorized Employer personnel, unless Employer consents in advance in
writing or unless the Confidential Information indisputably becomes of public
knowledge or enters the public domain (other than through Executive's direct or
indirect act or omission);
(C) Executive has safeguarded, and will safeguard, the Confidential
Information by all reasonable steps and has abided, and will abide, by all
policies and procedures of Employer in effect from time to time regarding
storage, copying and handling of documents; and
(D) Executive will return all materials, substances, models, software,
prototypes and the like containing and/or relating to Confidential Information,
together with all other property of the Company (all of which shall remain the
exclusive property of the Company) and its customers and merchants, to Employer
when Executive's employment relationship with Employer terminates or otherwise
on demand and, at that time Executive will certify to Employer, in writing and
under oath, that Executive has complied with this Agreement. Executive shall not
retain any copies or reproductions of correspondence, memoranda, reports,
notebooks, drawings, photographs, databases, diskettes, or other documents or
electronically stored information of any kind relating in any way to the
business, potential business or affairs of the Company and its customers and
merchants.
5.02 Assignment of Developments. Executive has disclosed, and will
disclose, promptly and fully to Employer and to no one else: (A) all inventions,
ideas, improvements, discoveries, works, modifications, processes, software
programs, works of authorship, documentation, formulae, techniques, designs,
methods, trade secrets, technical specifications and technical data, know-how
and show-how, concepts, expressions or other developments whatsoever or any
interest therein (whether or not patentable or registrable under copyright,
trademark or similar statutes or subject to analogous protection) made,
authored, devised, developed, discovered, reduced to practice, conceived or
otherwise obtained by Executive ("Developments"), solely or jointly with others,
during the course of Executive's employment with Employer (whether prior to of
after the Commencement Date) that (i) are related to the business of the Company
or any of the products or services being researched, developed, distributed,
manufactured or sold by the Company or which may be used in relation therewith
or (ii) result from tasks assigned to Executive by the Company; (B) any
Development which is related to the business of the Company and in which
Executive had an assignable interest at the time of Executive's first employment
by Employer; or (C) any Development made using the time, materials or facilities
of the Company, even if such Development does not relate to the business of the
Company. The determination as to whether a Development is related to the
business of the Company shall be made solely by an authorized representative of
Employer. Any Development relating to the business of the Company and disclosed
to the Company within one year following the termination of Executive's
employment with Employer shall be presumed to fall within the provisions of this
Section 5.02. The "business of the Company" as used in this Section 5.02
includes the actual business currently conducted by the Company, as well as any
business in which the Company proposes to engage at any time during the period
of Executive's employment. Executive agrees that all such Developments listed
above and the benefits thereof are and shall immediately become the sole and
absolute property of Employer from conception, as "works made for hire" (as that
term is used under the U.S. Copyright Act of 1976, as amended) or otherwise.
Executive shall have no interest in any Developments. To the extent that title
to any Developments or any materials comprising or including any Developments
does not, by operation of law, vest in Employer, Executive hereby irrevocably
assigns to Employer all of Executive's right, title and interest, including,
without limitation, tangible and intangible rights such as patent rights,
trademarks and copyrights, that Executive may have or may acquire in and to all
such Developments, benefits and/or rights resulting therefrom, and agrees
promptly to execute any further specific assignments related to such
Developments, benefits and/or rights at the request of Employer. Executive also
hereby assigns to Employer, or waives if not assignable, all of Executive's
"moral rights" in and to all such Developments, and agrees promptly to execute
any further specific assignments or waivers related to moral rights at the
request of Employer.
Executive agrees to assist Employer without charge for so long as Executive is
an employee of Employer and for as long thereafter as may be necessary (but at
Employer's expense including reasonable compensation to Executive if Executive
is no longer an employee of Employer): (1) to apply, obtain, register and renew
for, and vest in, Employer's benefit alone (unless Employer otherwise directs),
patents, trademarks, copyrights, mask works, and other protection for such
Developments in all countries, and (2) in any controversy or legal proceeding
relating to Developments. In the event that Employer is unable to secure
Executive's signature after reasonable effort in connection with any patent,
trademark, copyright, mask work or other similar protection relating to a
Development, Executive hereby irrevocably designates and appoints Employer and
its duly authorized officers and agents as Executive's agent and
attorney-in-fact, to act for and on Executive's behalf and stead to execute and
file any such application and to do all other lawfully permitted acts to further
the prosecution and issuance of patents, trademarks, copyrights, mask works or
other similar protection thereon with the same legal force and effect as if
executed by Executive.
5.03 Obligations to Other Persons. Executive is not a party to or
otherwise bound by any non-competition agreements, non-solicitation agreements
or other restrictive covenants with any previous employer or other individual or
entity that would prohibit, limit or conflict with the performance of
Executive's duties to Employer or any of its affiliates or subsidiaries.
Executive shall not disclose to Employer or any of its affiliates or
subsidiaries or induce Employer or any of its affiliates or subsidiaries to use
any secret or confidential information or material belonging to others,
including, without limitation, Executive's former employers, if any.
5.04 Covenant Against Competition and Solicitation.
(A) Executive acknowledges and understands that, in view of the
position that Executive holds as an executive-level employee of Employer,
Executive's relationship with Employer will afford Executive extensive access to
Confidential Information of the Company. Executive therefore agrees that during
the course of Executive's employment with Employer and for a period of eighteen
(18) months after termination of Executive's employment with Employer (for any
reason or no reason) (collectively, "Restricted Period"), Executive shall not:
(i) anywhere within the United States of America or any other country in which
the Company then conducts or proposes to conduct business, either directly or
indirectly, as an owner, stockholder, member, partner, joint venturer, officer,
director, consultant, independent contractor, agent or employee, engage in any
business or other commercial activity which is engaged in or is seeking to
engage in a "competitive business." As used in this Agreement, the term
"competitive business" shall mean any individual or enterprise engaged in or
seeking to engage in (a) the business of providing payment processing solutions
to merchants, or (b) the development research, production, marketing,
distribution or sale of any product or service that is directly competitive
with, or that may be purchased in replacement of substitution of, any product of
service that is being produced, marketed, distributed, sold, or actively
developed by Employer or any of its affiliates or subsidiaries. A product or
service shall be deemed to be under "active development" by Employer, its
affiliates or subsidiaries as of a particular date, if Employer or such
affiliate or subsidiary has devoted material resources to the development
thereof and intends to produce, market, distribute or sell such product or
service within the following eighteen (18) months.
(B) Executive further agrees that, during the Restricted Period,
Executive shall not, directly or indirectly, either on Executive's own behalf or
on behalf of any other individual or commercial enterprise: (i) contact,
communicate, solicit or transact any business with or assist any third party in
contacting, communicating, soliciting or transacting any business with (a) any
of the customers or merchants of the Company, (b) any prospective customers or
merchants of the Company being solicited at the time of Executive's termination,
or (c) any individual or entity who or which was within the most recent twelve
(12) month period a customer or merchant of Company, for the purpose of inducing
such customer or merchant or potential customer or merchant to be connected to
or benefit from any competitive business or to terminate its or their business
relationship with the Company; (ii) solicit, induce or assist any third party in
soliciting or inducing any individual or entity who or which is then (or was at
any time within the preceding 12 months) an employee, consultant, independent
contractor or agent of Company) to leave the employment of the Company or cease
performing services for the Company; (iii) hire or engage or assist any third
party in hiring or engaging, any individual or entity that is or was (at any
time within the preceding 12 months) an employee, consultant, independent
contractor or agent of the Company; or (iv) solicit, induce or assist any third
party in soliciting or inducing any other person or entity (including, without
limitation, any third-party service provider or distributor) to terminate its
relationship with the Company or otherwise interfere with such relationship.
5.05 Non-Disparagement. Executive will not at any time (during or after
Executive employment with Employer) disparage the reputation of Employer, its
affiliates and their respective customers and merchants and its or their
respective officers, directors, agents or employees.
5.06 Cooperation. Executive agrees to cooperate both during and after
Executive's employment with Employer, at Employer's sole cost and expense, with
the investigation by the Company involving the Company or any employee or agent
of the Company.
5.07 Reasonable Restrictions/Damages Inadequate Remedy. Executive
acknowledges that the restrictions contained in this Article V are reasonable
and necessary to protect the legitimate business interests of the Company and
that any breach by Executive of any provision contained in this Article V will
result in immediate irreparable injury to the Company for which a remedy at law
would be inadequate. Executive further acknowledges that the restrictions
contained in this Article V will not prevent Executive from earning a livelihood
during the applicable period of restriction. Accordingly, Executive acknowledges
that, in the event of a breach or threatened breach by Executive of any
provisions of this Article V, Employer and/or its affiliates and subsidiaries
shall be entitled to temporary, preliminary and permanent injunctive or other
equitable relief (without being obligated to post a bond or other collateral)
and an equitable accounting of all earnings, profits and other benefits arising,
directly or indirectly, from such violation, which rights shall be cumulative
and in addition to (rather than instead of) any other rights or remedies to
which Employer, its affiliates and/or its subsidiaries may be entitled at law or
in equity. In addition (and not instead of those rights), Executive further
covenants that Executive shall be responsible for payment of the fees and
expenses of Employer's and its affiliates' and subsidiaries' attorneys and
experts, as well as their respective court costs, pertaining to any suit,
arbitration, mediation, action or other proceeding (including the costs of any
investigation related thereto) arising directly or indirectly out of Executive's
violation or threatened violation of any of the provisions of this Article V.
Further, in the event that a court of competent jurisdiction determines that
Executive has breached his obligations set forth in this Article V in any
material respect (other than through the issuance of an injunction issued
without a determination on the merits), Employer, in addition to pursuing all
available remedies under this Agreement, at law or otherwise, and without
limiting its right to pursue the same, shall be entitled to cease all payments
due the Executive under this Agreement as of the date of such determination.
5.08 Separate Covenants. In the event that any court of competent
jurisdiction shall determine that any one or more of the provisions contained in
this Article V shall be unenforceable in any respect, then such provision shall
be deemed limited and restricted to the extent that the court shall deem the
provision to be enforceable. It is the intention of the parties to this
Agreement that the covenants and restrictions in this Article V be given the
broadest interpretation permitted by law. The invalidity or unenforceability of
any provision of this Article V shall not affect the validity or enforceability
of any other provision hereof. If, in any judicial or arbitration proceedings, a
court of competent jurisdiction or arbitration panel should refuse to enforce
all of the separate covenants and restrictions in this Article V, then such
unenforceable covenants and restrictions shall be eliminated from the provisions
of this Agreement for the purpose of such proceeding to the extent necessary to
permit the remaining separate covenants and restrictions to be enforced in such
proceeding.
ARTICLE VI
MISCELLANEOUS
6.01 Benefit of Agreement and Assignment.
(A) This Agreement shall inure to the benefit of Employer, its
affiliates and subsidiaries and its and their respective successors and assigns
(including, without limitation, the purchaser of all or substantially all of any
such entity's assets) and shall be binding upon Employer and its successors and
assigns. This Agreement also shall inure to the benefit of and be binding upon
Executive and Executive's heirs, administrators, executors and assigns.
Executive may not assign or delegate Executive's duties under this Agreement,
without the prior written consent of Employer.
(B) Employer will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of Employer to assume expressly in writing and agree to
perform this Agreement in the same manner and to the same extent that Employer
would be required to perform it if no such succession had taken place. As used
in this Agreement, "Employer" shall mean the Employer as defined in the caption
of this Agreement and any successor to its business and/or assets that assumes
and agrees to perform this Agreement by operation of law or otherwise.
6.02 Indemnification; D&O Insurance. Employer shall indemnify Executive
against all claims arising out of Executive's actions or omissions occurring
during Executive's employment with Employer to the fullest extent provided (A)
by Employer's Certificate of Incorporation and/or Bylaws, (B) under Employer's
Directors and Officers Liability and general insurance policies, and (C) under
the Nevada General Corporation Law, as each may be amended from time to time.
Employer agrees that it will continue to maintain Directors and Officers
Liability and general insurance policies to fund the indemnity described above
in the same amount and to the same extent it maintains such coverage for the
benefit of its other officers and directors.
6.03 Notices. Any notice required or permitted hereunder shall be in
writing and shall be sufficiently given if personally delivered or if sent by
telecopier, overnight delivery service or by registered or certified mail,
postage prepaid, with return receipt requested, addressed in the case of the
Company to:
Acies Corporation :
00 Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 10005
Attn:
and in the case of Executive to:
Xxxx Xxxxx
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxxxx, Xxx Xxxxxx 00000
Any party may notify the other party in writing of the change in address by
giving notice in the manner provided in this Section 6.03. Service of process in
connection with any suit, action or proceeding (whether arbitration or
otherwise) may be served on each party hereto anywhere in the world by the same
methods as are specified for the giving of notices under this Agreement.
6.04 Entire Agreement. This Agreement contains the entire agreement of the
parties hereto with respect to the terms and conditions of Executive's
employment during the Term and activities following termination of this
Agreement and supersedes any and all prior agreements and understandings,
whether written or oral, between the parties with respect to the subject matter
of this Agreement, including, without limitation, the Employment Agreement
between Atlantic Synergy, Inc and Executive dated July 1, 2004. This Agreement
may not be changed or modified except by an instrument in writing, signed by
both the Chairman of the Employer Board or the Chairman of the Compensation
Committee and Executive.
6.05 No Attachment. Except as required by law, no right to receive
payments under this Agreement shall be subject to anticipation, commutation,
alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation or
to execution, attachment, levy, or similar process or assignment by operation of
law, and any attempt, voluntary or involuntary, to effect any such action shall
be null, void and of no effect; provided, however, that nothing in this Section
6.04 shall preclude the assumption of such rights by executors, administrators
or other legal representatives of Executive or his estate and their assigning
any rights hereunder to the person or persons entitled thereto.
6.06 Source of Payment. All payments provided for under this Agreement
shall be paid in cash from the general funds of Employer. Employer shall not be
required to establish a special or separate fund or other segregation of assets
to assure such payments, and, if Employer shall make any investments to aid it
in meeting its obligations hereunder, Executive shall have no right, title or
interest whatever in or to any such investments except as may otherwise be
expressly provided in a separate written instrument relating to such
investments. Nothing contained in this Agreement, and no action taken pursuant
to its provisions, shall create or be construed to create a trust of any kind,
or a fiduciary relationship, between Employer and Executive or any other person.
To the extent that any person acquires a right to receive payments from Employer
hereunder, such right, without prejudice to rights which employees may have,
shall be no greater than the right of an unsecured creditor of Employer.
6.07 Limitation as to Amounts Payable. In the event that any payment,
coverage or benefit provided under this Agreement would, in the opinion of
counsel for Employer, not be deemed to be deductible in whole or in part in the
calculation of the Federal income tax of Employer, or any other person making
such payment or providing such coverage or benefit, by reason of Section 280G of
the Code, the aggregate payments, coverages or benefits provided under this
Agreement shall be reduced to the "safe harbor" level under Section 280G so that
the entire amount which is paid to Executive shall be deductible notwithstanding
the provisions of Section 280G of the Code.
6.08 No Waiver. The waiver by other party of a breach of any provision of
this Agreement shall not operate or be construed as a continuing waiver or as a
consent to or waiver of any subsequent breach hereof.
6.09 Headings. The Article and Section headings in this Agreement are for
the convenience of reference only and do not constitute a part of this Agreement
and shall not be deemed to limit or affect any of the provisions hereof.
6.10 Governing Law; Jurisdiction. Any and all actions or controversies
arising out of this Agreement or Executive's employment, including, without
limitation, tort claims, shall be construed and enforced in accordance with the
internal laws of the State of New York, without regard to the choice of law
principles thereof. Any and all actions arising out of this Agreement or
Executive's employment by Employer or termination therefrom shall be brought and
heard in the state and federal courts of the State of New York and the parties
hereto hereby irrevocably submit to the exclusive jurisdiction of any such
courts. Employer and Executive hereby agree to waive their respective rights to
a trial by jury.
6.11 Validity. The invalidity or enforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision or provisions of this Agreement, which shall remain in full
force and effect.
6.12 Employee Withholdings and Deductions. All payments to Executive
hereunder shall be subject to such withholding and other employee deductions as
may be required by law.
6.13 Counterparts. This Agreement may be executed in one more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
6.14 Agreement to Take Actions. Each party to this Agreement shall execute
and deliver such documents, certificates, agreements and other instruments, and
shall take all other actions, as may be reasonably necessary or desirable in
order to perform his or its obligations under this Agreement.
6.15 Survival. The provisions of Section 4.02, Article V and Article VI
shall survive the termination of this Agreement and Executive's employment by
Employer.
6.16 Legal Counsel. Executive acknowledges and warrants that (A) he has
been advised that Executive's interests may be different from Employer's
interests, (B) he has been afforded a reasonable opportunity to review this
Agreement, to understand its terms and to discuss it with an attorney and/or
financial advisor of his choice and (C) he knowingly and voluntarily entered
into this Agreement. Employer and Executive shall each bear their own costs and
expenses in connection with the negotiation and execution of this Agreement.
IN WITNESS WHEREOF, Employer and Executive have duly executed this
Agreement as of the date first written above.
EMPLOYER:
ACIES CORPORATION
BY: /s/ Xxxxxxx X. Xxxxxxxx
------------------------
Xxxxxxx X. Xxxxxxxx,
Executive Vice President,
Chief Financial Officer and
Treasurer
EXECUTIVE:
/s/ Xxxx Xxxxx
-------------------------
Xxxx Xxxxx, individually
Exhibit 10.2
