EMPLOYMENT AGREEMENT
Exhibit 4.10
I. PARTIES
This Employment Agreement is between Metal Storm Inc., a corporation incorporated under the
laws of the state of Delaware in the United States of America with its registered office located at
9 East Lockerman, Dover, in the State of Delaware (hereinafter referred to as “MS”), and Xxxxxx X.
Xxxxxx, an individual residing at 0000 Xxxx Xxxx Xxxx, Xxxxxxxx, Xxxxxxxx (hereinafter referred to
as “Xxxxxx”).
II. AGREEMENT PURPOSE
The purpose of this agreement is to state the terms and conditions of employment for Xxxxxx by
MS and the responsibilities and obligations of Xxxxxx to MS.
III. EMPLOYMENT
A. Position
MS hereby employs Xxxxxx, and Xxxxxx hereby accepts such employment, as Senior Vice President,
North America, for MS on the terms and conditions set forth herein.
B. At-Will Employment
Xxxxxx’x employment as Senior Vice President, North America, is wholly at the will of MS and
subject to termination, with or without cause, at any time and for any reason.
C. Duties and Authority
As Senior Vice President, North America, Xxxxxx will report to Xx. X.X. X’Xxxxx, Chief
Executive Officer of MS, and will perform such duties and responsibilities regarding the overall
development and day-to-day direction and administration of MS’s business in North America as
defined by XX. Xxxxxx will be given full authority necessary to accomplish assigned duties. Such
duties and responsibilities shall include but not be limited to: overall responsibility for the
development, promotion and advancement of the company and its unique technology to military and
commercial interests in the United States of America and to discharge all duties instructed
generally by, and act under the general instructions of, the Managing Director of the company’s
holding company, Metal Storm Limited, who is, at the Commencement Date, Xx. Xxxxx Xxxxxxx X’Xxxxx
(hereinafter referred to as “the Managing Director”). In fulfilling his responsibilities as Senior
Vice President, North America, Xxxxxx will devote all of his time, attention, skill and best
efforts to the business and affairs of MS. In addition, Xxxxxx will use his best efforts at all
times to promote and protect the good name of MS as well as that of its respective officers,
directors, employees, agents, products and services. Xxxxxx will comply with all MS policies and
procedures. Without limiting the foregoing, both during his employment and following the
termination of such employment, Xxxxxx will not defame or disparage the business, products,
services, officers, employees or other representatives of MS or otherwise do anything to detract
from or reflect adversely upon their reputation. Finally, Xxxxxx warrants that he will not enter
into any contract for the sale of goods and/or services on behalf of MS without first obtaining
written approval from MS.
D. Laws and Regulations
Xxxxxx is solely responsible for compliance with all applicable laws, regulations, rules,
court orders, ordinances, and other requirements of the United States. Xxxxxx warrants that he is
or will become familiar with and will fully comply with all such requirements including, but not
limited to, Government security regulations, the Arms Export Control Act, the ITAR, the
1
Foreign
Corrupt Practices Act of 1977, and all federal, state, and local laws and regulations applicable to
Government contractors, including but not limited to such laws and regulations as may relate to
communications and dealings with Government employees and to the solicitation, disclosure and
handling of information relating to the procurement of goods and services by the Government. Since
Xxxxxx is not a lawyer, MS agrees to provide to him competent counsel to aid him in the discharge
of the responsibility described herein.
Xxxxxx specifically warrants that during his employment by MS, he will maintain eligibility
for all necessary security clearances with the Unites States Government. In particular, Xxxxxx
warrants that he will maintain eligibility to participate in all aspects of contracting with
federal, state and local governments.
E. Location
Xxxxxx shall operate out of an office located at his home in Bethesda, Maryland until the time
that MS’s offices in the Washington, D.C. metropolitan area are established. At that time, Xxxxxx
shall operate from MS’s offices.
F. Commencement Date
Xxxxxx’x employment with MS shall commence effective a date to be agreed with the Managing
Director
IV. COMPENSATION AND RELATED MATTERS
A. Base Salary
In consideration for Xxxxxx’x performance of the duties and responsibilities set forth in this
Agreement, MS shall pay Xxxxxx a base salary of One Hundred Thirty Thousand U.S. Dollars
($130,000.00) per year, payable in equal monthly installments or in such other manner as the
parties may mutually agree. The performance by Xxxxxx of his duties and responsibilities hereunder
shall be subject to periodic review by MS, and his salary as specified in this Section may be
increased or decreased, as necessary, as a result thereof. At any time, Xxxxxx shall be entitled to
treat an aggregate decrease in salary of fifteen percent (15%) or more as a termination by MS
triggering the provisions of Article V of this agreement.
B. Shares and Share Options
In further consideration for Xxxxxx’x performance of the duties and responsibilities set forth
in this Agreement, MS shall issue Xxxxxx 50,000 fully paid shares at the end of each year of
employment for the first two years of employment, subject to an annual review of Xxxxxx’x
performance which in the absolute view of the Managing Director is satisfactory in all respect. In
addition, pursuant to the Metal Storm Limited Employee Option Plan, MS shall xxxxx Xxxxxx 250,000
share options, exercisable at a price of not more than A$1.17 (On Dollar and seventeen cents
Australian currency). These options shall vest one year after due date of employment provided
Xxxxxx does not leave the employ of MS of his own volition except for illness, and must be
exercised by Xxxxxx within four years from the commencement date of employment. In the event that
Xxxxxx’x employment is terminated pursuant to Section V of this Agreement, Xxxxxx shall have 120
days from the date of termination in which to exercise any options, provided they are exercised
within four years from date of employment.
C. Expenses
MS shall reimburse Xxxxxx for such reasonable and necessary expenses, including travel and
entertainment expenses, actually incurred by him as are directly related to the rendering of
services in connection with this Agreement. Xxxxxx shall provide appropriate documentation of all
reimbursable expenses in accordance with MS’s procedures. MS shall reimburse approved expenses
within thirty (30) days after submission of the appropriate documentation.
D. Medical and Dental Expenses
2
MS shall contribute an amount not to exceed Three Thousand Six Hundred U.S. Dollars
($3,600.00) per year, payable in equal monthly installments, toward Xxxxxx’x medical and dental
insurance premiums during the period of his employment and, thereafter, only as may be required by
law.
E. Vacations
In addition to all statutory United States holidays, Xxxxxx shall be entitled to fifteen (15)
working days vacation in each calendar year to be taken at such time or times as the business of MS
permits.
V. TERMINATION
| 1. | A. Termination by MS This Agreement may be terminated at the will of MS, with or without cause, at any time and for any reason. | ||
| B. Termination by Xxxxxx |
This Agreement may be terminated by Xxxxxx upon sixty (60) days’ prior written notice by him.
Upon termination of this Agreement by Xxxxxx, MS shall pay him his then current annual Base Salary
through the effective date of such termination.
C. Termination Package
1. In the event that MS shall terminate Xxxxxx for any reason, other than on account of an act
of moral turpitude by him or on account of a serious, intentional breach of this agreement subject
to Xxxxxx’x execution of a Release of all claims against MS surrounding his employment and
termination, MS shall pay Xxxxxx his then current annual Base Salary through the effective date of
such termination, plus a payment in an amount equivalent to his, then current, annual Base Salary
but in no event less than his initial annual Base Salary. This amount will be payable in twelve
(12) equal monthly installments (“Termination Package”).
2. In the event MS is acquired by or merged into another corporation or entity and
Xxxxxx is terminated within one (1) year of such acquisition or merger, Xxxxxx is entitled to
receive a sum equal to twice his then annual Base Salary in a lump sum. If Xxxxxx’x employment is
terminated after one (1) year of, but before the expiration of the second year from such
acquisition or merger, Xxxxxx is entitled to receive a sum equal to his then annual Base Salary in
a lump sum. There shall be no entitlement under this sub-clause if Xxxxxx’x employment is
terminated after the expiration of two (2) years from the acquisition or merger date.
VI. PROHIBITION ON COMPETITION
Both during the term of this Agreement and for a period of twelve consecutive months after
Xxxxxx leaves MS’s employment for any reason, with the exception of the “other employment”
authorized by MS pursuant to Section VII of this Agreement, Xxxxxx shall not:
1. either directly or indirectly become employed by or in any way aid or associate
himself in any capacity with any business competitor of MS, or competitor of any subsidiary
corporations and affiliated organizations owned or managed by MS, which provides the same services
or substantially similar services as provided by MS or any subsidiary corporations and affiliated
organizations owned by, controlled by or managed by MS; or
2. solicit for employment or seek to employ or employ any individual who was an
employee of MS, or any subsidiary corporations and affiliated organizations owned by, managed by or
controlled by MS, at any time during the twelve (12) consecutive month period immediately preceding
Xxxxxx’x cessation of employment with MS, provided however, this prohibition shall not apply if
Xxxxxx recruits a MS employee to a business not in competition with MS.
3. The geographic scope of this non-competition agreement shall include all states
3
and/or countries in which MS has a facility or offices, or conducts business, during Xxxxxx’x
employment by MS.
4. Xxxxxx acknowledges that a breach of the competition prohibition contained
herein may result in irreparable and continuing damage to MS’s business for which there is no
adequate remedy at law. Xxxxxx further agrees that in the event of any such breach of such
restrictions, Xxxxxx shall forfeit any right to a Termination Package, and MS and its successors
and assigns shall be entitled to injunctive relief and to such other appropriate relief as may be
necessary.
5. If any provision of this Article is adjudged by a court to be invalid or unenforceable,
such a finding will in no way affect the validity or enforceability of any other provision of this
Article. The parties expressly agree that if a court holds any provision of this Article to be
invalid or unenforceable the court shall have the power to reduce the duration and/or geographic
scope of this Article, and/or delete specific words or phrases so that it is enforceable.
VII. OTHER EMPLOYMENT
X. Xxxxxx agrees not to enter into an employment relationship with any employer other than MS
during the term of his employment with MS unless he first receives express written approval from
MS.
VIII. PROHIBITION ON DISCLOSURE OF CONFIDENTIAL INFORMATION
A. Government Confidential Information
1. Xxxxxx shall not, directly or indirectly, improperly disclose to, solicit or
obtain, either from Government officials, other Government contractors or any other individual,
information prohibited by law from disclosure including, but not limited to, proprietary or source
selection information as defined by law and regulation. Xxxxxx shall notify MS immediately if he
comes into possession of proprietary or source selection information of the U.S. Government or
another Company or becomes aware of any possible violation of the federal laws and regulations
prohibiting the disclosure or solicitation of such information.
2. Xxxxxx agrees to comply with all applicable Laws, Executive Orders and other
requirements governing the use and handling of information subject to the Arms Export Control Act
and/or information classified for national security purposes.
B. MS Confidential Information
1. Xxxxxx acknowledges that, in connection with his employment, Xxxxxx may be furnished with,
or may otherwise receive or have access to, information which relates to the MS’s past, present or
future materials, products, software, research, development, improvements, inventions, processes,
techniques, pricing, designs or other technical data, customer and prospect lists or other
compilations for marketing or development, or regarding administrative, management, financial,
marketing or manufacturing activities of the MS or of a third party which provided such items or
proprietary information to the MS on a confidential basis. All such items and information,
including any materials or documents containing such information, shall be considered by MS and
Xxxxxx as proprietary and confidential (collectively, the “Proprietary Information”).
2. Both during and after the terms of this Agreement, Xxxxxx agrees to preserve
and protect the confidentiality of the Proprietary Information and all physical forms thereof,
whether disclosed to Xxxxxx before this Agreement is executed or afterward. In addition, Xxxxxx
shall not (i) disclose or disseminate the Proprietary Information to any third party, without a
legitimate need to know, which need to know relates to such third party’s responsibilities in
connection with the business of MS; (ii) copy the Proprietary Information or remove the Proprietary
Information for MS’s premises without a valid purpose directly related to Xxxxxx’x responsibilities
in connection with the business of MS; or (iii) use the Proprietary Information for Xxxxxx’x own
benefit or for the benefit of any third party.
3. Xxxxxx acknowledges and agrees that all Proprietary Information used or
4
generated during the course of working for MS is the property of XX. Xxxxxx agrees to deliver to MS
all originals and copies of documents and other tangibles (including diskettes and other storage
media) containing Proprietary Information immediately upon termination of his employment.
4. Xxxxxx agrees and acknowledges that during his employment, MS shall own all
rights, including all trade secrets and copyrights, in and to all works created by the Xxxxxx,
whether created on or off MS’s premises, including, but not limited to: (i) works that relate to or
arise out of MS’s actual or anticipated business; and (ii) works that results from or in any manner
arise out of any task assigned to Xxxxxx or any other employee by MS or work performed by Xxxxxx or
any other employee for MS (collectively “Works”). MS shall own such Works whether or not created
outside normal business hours and regardless of whether MS’s equipment, Xxxxxx’x equipment or the
equipment of a third party or entity is used to create the Works. Such Works shall include program
codes and source documentation. To the extent that any such Works do not qualify as works made for
hire under U.S. copyright law, this Agreement will constitute an irrevocable assignment by Xxxxxx
to MS of the ownership of, and all rights of copyright in, such Works, and Xxxxxx shall, at MS’s
expense, execute any writings to evidence such ownership. MS shall have the right to hold in its
own name all proprietary rights in the Works, including but not limited to, all rights of
copyright, trade secret, patent and trademark. Xxxxxx agrees to give MS or its designees all
assistance required to perfect such rights.
5. Xxxxxx shall, and hereby does, assign to MS his entire right, title and
interest in any invention, technique, software, computer program, process, device, discovery,
improvement or know-how, patentable or not, hereafter made or conceived solely or jointly by Xxxxxx
at any time during his employment which (i) are created using MS facilities, supplies, information
trade secrets or time; (ii) relate to MS’s business or actual or anticipated research and
development; or (iii) directly or indirectly result from any work performed by Xxxxxx. Xxxxxx shall
disclose any such invention, technique, process, device, discovery, improvement or know-how
promptly to an officer of MS and Xxxxxx shall, upon request, promptly execute s specific assignment
of title to MS, and do anything else reasonably necessary to enable MS to secure patent, trade
secret or any other proprietary rights protected in the United States or foreign countries.
IX. Xxxxxx acknowledges that a breach of this restriction of confidential information may
result in irreparable and continuing damage to MS’s business for which there is no adequate remedy
at law. Xxxxxx further agrees that in the event of any breach of this restriction of disclosure of
confidential information, Xxxxxx will forfeit any right to a Termination Package, and MS and its
successors shall be entitled to injunctive relief and to such other further relief as may be
proper. MISCELLANEOUS
A. Return of MS’s Property
Upon termination of Xxxxxx’x employment with the MS, for any reason, Xxxxxx shall return to
MS, in good condition, all property of MS, in whatever format, including without limitation, the
originals and all copies of any materials which contain, reflect, summarize, describe, analyze or
refer or relate to any items of information listed in Section VII this Agreement. In the event that
such items are not so returned, MS will have the right to charge Xxxxxx for all reasonable damages,
costs, attorneys’ fees and other expenses incurred in searching for, taking, removing and/or
recovering such property.
B. Remedy
1. In the event of any breach of the provisions of this Agreement by Xxxxxx, the parties
acknowledge that MS may suffer irreparable injury and that the injury to MS cannot be reasonably or
adequately compensated in damages in any action at law. Accordingly, Xxxxxx acknowledges and agrees
that in such case, MS shall be entitled to injunctive relief, specific performance or other
equitable relief and Xxxxxx hereby expressly agrees and consents to the entry of such order or
relief restraining him from such actions as would constitute a breach of
5
any of the provisions of this Agreement. Such relief shall be in addition to any other
remedy to which MS may be entitled at law or in equity.
2. Amendment
Any amendment to this Agreement shall be made in writing and signed by the parties.
C. Governing Law
This Agreement shall be governed by the law of the State of Maryland, without regard to
conflict of laws principles.
D. Notices
All notices under this Agreement shall be in writing and personally delivered or mailed, by
registered or certified mail, to the addresses of the parties first above written, or to such other
address as a party may designate by notice delivered in accordance with this Section. Any notice
shall be deemed to have been delivered when served, if personally served, and ten (10) business
days after mailing, if mailed.
E. Waivers
No claim or right arising out of a breach or default under this Agreement can be discharged in
whole or in part by a waiver of that claim or right unless the waiver is supported by consideration
and is in writing and executed by the aggrieved party hereto.
F. Assignment
The rights and obligations of MS under this Agreement shall be binding upon, and inure to the
benefit of, MS, its successors, affiliates, subsidiaries and assigns. This Agreement and the
obligations created hereunder may not be assigned by Xxxxxx.
G. Partial Invalidity
If any provision of this Agreement is held to be invalid, void or unenforceable, in whole or
in part, then such provision shall be deemed to be modified or restricted to the extent and in the
manner necessary to render the same valid and enforceable, or shall be deemed excised from this
Agreement, as the case may require, and this Agreement shall be construed and enforced to the
maximum extent permitted by law as if such provision had been originally incorporated herein as so
modified or restricted or as if such provision had not been originally incorporated herein, as the
case may be In the event that any provision of this Agreement is held to be invalid, void or
unenforceable, the remaining provisions shall continue in full force and effect, without being
impaired or invalidated in any way.
H. Entire Agreement
This Agreement supersedes any other oral or written agreements between the parties and contain
the entire agreement between the parties with respect to Xxxxxx’x performance of services for MS.
For
METAL STORM INC.
/S/ Xxxxx X. Xxxxxxx
|
/S/ Xxxxxx X. Xxxxxx | |||
Director
|
Xxxxxx X. Xxxxxx | |||
Dated: 22 May 2001
|
Dated: 22 May 2001 |
6
