EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated as of January 1, 2003,
by and between FREIGHT RATE, INC., a Delaware corporation, it's affiliates and
assigns (the "Company"), and Xxxx Xxxxxxxxxx (the "Employee").
W I T N E S S E T H:
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WHEREAS, the Company desires to employ the Employee as its VP of Technology
and Information and the Employee desires to be so employed; and
WHEREAS, Employee and the Company desire to set forth in writing all of their
respective duties, rights and obligations with respect to the Employee's
employment by the Company
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and
obligations hereinafter set forth, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Employment and Term. The Company hereby agrees to employ the Employee,
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and the Employee hereby accepts such continued employment by the Company, in the
capacity and upon the terms and conditions hereinafter set forth. The term of
employment under this Agreement shall be for the period commencing as of January
1, 2003 (the "Commencement Date") and ending on the fourth anniversary of the
Commencement Date or January 1, 2007) unless earlier terminated as herein
provided (the "Term of Employment"). Thereafter, this Agreement shall be renewed
for successive one (1) year terms unless previously terminated pursuant to
Section 6 herein or if either party elects to terminate his Agreement by written
notice to the other party at least ninety (90) days prior to the expiration of
the then-current Term of Employment. The last day of the Employee's Term of
Employment shall be referred to in this Agreement as the "Date of Termination."
2. Duties. During the Term of Employment, the Employee shall serve as the
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Company's VP of Technology and Information and shall assume those
responsibilities customarily associated with and incident to the position of VP
of Technology and Information and as the Company may, from time to time, require
of him, at the direction of the Company's Chief Executive Officer, President and
Board of Directors. The Employee shall serve the Company faithfully,
conscientiously and to the best of the Employee's ability and shall promote the
interests and reputation of the Company. Unless prevented by sickness or
disability, the Employee shall devote all of his time, attention, knowledge,
energy and skills, during normal working hours, and at such other times as the
Employee's duties may reasonably require, to the duties of the Employee's
employment. The principal place of employment of the Employee shall be the
Company's principal executive offices or at such other place(s) to be determined
by the Company and Employee. The Employee acknowledges that in the course of his
employment, Employee may be required, from time to time, to travel on behalf of
the Company at the Company's expense. The Employee's principal work place shall
be in South Florida or Chicago, Illinois. In the event the Company requests the
Employee to relocate either out of South Florida or Chicago, Illinois the
Employee may choose not to relocate by giving written notice to the Company
within ten (10) days of the date of such request. If the Company chooses to
terminate the Employee as a result of the Employee's unwillingness to relocate,
the Company shall pay the Employee, the remaining sum due Employee pursuant to
the terms of the Agreement. The Company shall not prohibit Employee from
additional opportunities in his free time as long as there is not a conflict of
interest now or in the future with Power2Ship and it's affiliates. Employee must
receive permission in writing from the Board of Directors to execute additional
opportunities.
3. Compensation and Benefits. As full and complete compensation for the
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Employee's execution and delivery of this Agreement and performance of any
services hereunder, the Company shall pay, grant or provide the Employee with
the following, commencing upon the date that the Company has secured aggregate
funding from any reverse merger of at least Two Million Dollars.
(a) Base Salary. When the Company is funded with at least Two Million
Dollars the Company shall pay the Employee a base salary (the "Base
Salary") at an annual rate of no less than $125,000 for the first
year, with annual increases of ten (10%) percent per year on each
anniversary of the Commencement Date. Base salary shall be payable at
such times and in accordance with the standard payroll practices of
the Company, but in no event less than twice per month. Until such
time as the funding for the Company is received the employee will
receive a minimum of 70% of full payment for Base Salary.
(b) Employee Benefits. The Company shall afford the Employee the
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opportunity to participate during the Term of Employment in any
medical, dental, disability and life insurance, retirement, savings
and any other employee benefits plans or programs (including
perquisites) which the Company maintains for its senior executives.
Nothing in this Agreement shall require the Company to establish
maintain or continue any benefit program already in existence or
hereafter adopted for senior executives of the Company, and nothing in
this Agreement shall restrict the right of the Company to amend,
modify or terminate any such benefit programs.
(c) Expenses. The Employee shall be entitled to reimbursement of all
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reasonable business expenses (in accordance with the Company's
policies for its senior executives, as the same may be amended from
time to time in the Company's sole discretion), within one week
following the Employee's submission of appropriate receipts and/or
vouchers to the Company.
(d) Stock Options. On the Effective Date of this Agreement, Employee shall
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be granted Three Hundred and Seventy Five Thousand stock options each
of which entitles Employee to purchase one share of the Company's
common stock at a price of $1.00 per share for a period of three years
from the date such options become vested as follows:
(i) One Hundred Seventy Five Thousand of such options shall vest on
January 1, 2003. Two Hundred Thousand of such options shall vest
on January 1, 2004 if employee is still employed by the Company
as of such date.
(ii) The foregoing options will be issued pursuant to the Company's
Stock Incentive Plan and shall be subject to the terms of this
Agreement and such Stock Incentive Plan. In the event of
Employee's death, all vested options shall be transferred in
accordance with the provisions of Employee's will.
(e) Vacations, Holidays or Temporary Leave. The Employee shall be entitled
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to take vacations in accordance with the Company's vacation policy for
other senior executives. Such vacation(s) shall be taken at such time
or times, and as a whole or in increments, as the Employee shall
elect, consistent with the reasonable needs of the Company's business.
The Employee shall further be entitled to the number of paid holidays
and leaves for illness or temporary disability in accordance with the
policies of the Company for its senior executives (as such policies
may be amended from time to time or terminated in the Company's sole
discretion).
(f) Performance Based Bonus. Will be deemed appropriate by the Board of
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Directors based on a tier one, two, three basis on an annual basis.
4. Restrictive Covenant; Protection of Confidential Information.
(a) The Employee recognizes and acknowledges that certain confidential
business and technical information used by the Employee in connection
with his duties hereunder including, without limitation, certain
confidential and proprietary information relating to the design,
development, construction and marketing of Internet services, is a
valuable, special and unique asset of the Company, such information,
subject to Section 4(c) below, collectively being referred to as the
"Confidential Information". During and subsequent to the Term of
Employment, the Employee shall not (a) use Confidential Information or
any part thereof other than in connection with his duties hereunder,
(b) disclose such information to any person, firm, corporation,
association or other entity for any purpose or reason unless directed
to do so by the Company's Chief Executive Officer, President or Board
of Directors. Notwithstanding the foregoing, the Employee is being
hired as an expert in the field of Logistics and Technology and,
therefore, logistic and Technology practices are excluded from this
provision.
(b) During the Term of Employment and for all time thereafter, the
Employee shall not, directly or indirectly, furnish or make accessible
to any person, firm, corporation or other business entity, whether or
not he competes with the business of the Company, any trade secret
obtained by the Employee during his employment by the Company which
relates to the business practices, methods, processes or other
confidential or secret aspects of the business of the Company without
the prior written consent from the Company (such information being
referred to as the "Company Confidential Information").
(c) Confidential Information and Company Confidential Information shall
not include any information or documents that (a) are, or become,
publicly available without breach by the Employee of this Section 4,
(b) the Employee receives from any third party who, to the best of the
Employee's knowledge upon reasonable inquiry, is not in breach of an
obligation of confidence with the Company, or (c) is required to be
disclosed by law, statute, governmental or judicial proceeding;
provided, however, that in the event that the Employee is requested by
any governmental or judicial authority to disclose any Confidential
Information, the Employee shall give the Company prompt notice of such
request, such that the Company may seek a protective order or other
appropriate relief, and in any such proceeding the Employee shall
disclose only so much of the Confidential Information as is required
to be disclosed.
(d) The Employee acknowledges that his services are of a special, unique
and extraordinary character and, his position with the Company places
him in a position of confidence and trust with the clients and
employees of the Company, and in connection with his services to the
Company, the Employee will have access to Confidential Information
vital to the Company's business. The Employee further acknowledges
that in view of the nature of the business, in which the Company is
engaged, the foregoing confidentiality provision is reasonable and
necessary in order to protect the legitimate interests of the Company
and that violation thereof would result in irreparable injury to the
Company. Accordingly, the Employee consents and agrees that if the
Employee violates or threatens to violate any of the provisions of
Section 4 hereof, the Company would sustain irreparable harm and,
therefore, the Company will be entitled to obtain from any court of
competent jurisdiction, without posting any bond or other security,
preliminary and permanent injunctive relief as well as damages and an
equitable accounting of all earnings, profits and other benefits
arising from such violation, which rights shall be cumulative and in
addition to any other rights or remedies in law or equity to which the
Company may be entitled.
5. Termination of Employment:
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(a) The Employee's employment with the Company shall terminate upon the
occurrence of any of the following events:
(i) The Scheduled Date of Termination;
(ii) The death of the Employee during the Term of Employment;
(iii) The Disability (as defined below) of Employee during the Term of
Employment; or
(iv) Upon written notice to the Employee by the Company of termination
of his employment for Cause (as defined 6(C)).
(v) Resignation without good reason
(vi) Termination without cause (as defined below)
(b) For purposes of this Agreement, the "Disability" of the Employee shall
mean his inability, because of mental or physical illness or
incapacity, whether total or partial, to perform his full time duties
under this Agreement with reasonable accommodation for a period
aggregating 90 days out of any 12-month period under circumstances
where, in the opinion of a qualified physician reasonably acceptable
to the Company, it is reasonably certain that the Employee will not be
able to resume his duties on a regular full time basis within 30 days
of the date the Employee receives notice of termination for
Disability.
(c) For purposes of this Agreement, the term "Cause" shall mean the
Employee's i) conviction or entry of a plea of guilty or nolo
contendere, with respect to any felony; (ii) commission of any act of
willful misconduct, gross negligence, fraud or dishonesty that
materially affects the Company as stated in the Power2Ship Employee
Handbook Code of Conduct; or (iii) violation of any material term of
this Agreement or any material written policy of the Company, provided
that the Company first deliver written notice thereof to the Employee
and the Employee shall not have cured such violation within thirty
(30) days after receipt of such written notice.
6. Payments upon Termination of Employment:
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(a) Death or Disability: If the Employee's employment hereunder is
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terminated due to the Employee's death or disability pursuant to
Sections 6(a)(ii)(iii), the Company shall pay or provide to the
Employee, his designated beneficiary or his estate (i) all Base Salary
pursuant to Section 3(a) hereof, any expenses pursuant to 3(c), any
accrued vacation pursuant to Section 3(e) and any bonus pursuant to
Section 3(f) hereof, in each case which has been earned but unpaid, or
incurred but not reimbursed, as of the Date of Termination; and (ii)
any benefits to which the Employee may be entitled under any employee
benefits plan or program pursuant to Section 3(b) hereof in which he
is a participant in accordance with the terms of such plan or program
up to and including the Date of Termination. Should the Company wish
to purchase insurance to cover the costs associated with the
Employee's termination of employment pursuant to Sections 6(a) (i),
(ii), (iii), the Employee agrees to execute any and all necessary
documents necessary to effectuate said insurance.
(b) Termination for Cause, Resignation Without Good Reason, or Expiration
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of Term of Employment: If the Employee's employment hereunder is
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terminated due to the termination of the Employee's employment by the
Company for "Cause" pursuant to Section 6(a)(iv) or due to the
Employee's resignation Without Good Reason pursuant, the Company shall
pay or provide to the Employee (i) all base salary pursuant to Section
3(a) hereof and any vacation pay pursuant to Section 3(e) hereof, in
each case which has been earned but unpaid as of the Date of
Termination and (ii) any benefits to which the Employee may be
entitled under any employee benefits plan or program pursuant to
Section 3(b) hereof in which he is a participant in accordance with
the terms of such plan or program up to and including the Date of
Termination.
(c) Termination Without Cause: If the Employee's employment hereunder is
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terminated due to the termination of the Employee's employment by the
Company Without Cause the Employee shall be entitled to all
compensation for the term of the Contract to be paid in a lump sum
payment within ten (10) days of termination.
(d) Rights on Change in Control. If within one year after, or 90 days
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prior to, a Change in Control of the Company, as defined below but not
including any reverse transaction where the shareholders are the
majority, the Company shall terminate the Employee's employment other
than by reason of the Employee's death or disability or for Cause, the
Company shall pay or provide to the Employee as compensation for
services rendered, not later than the fifth business day after the
Date of Termination:
(i) The Employee's base salary through the Date of Termination, and
any regular benefits and incentive compensation earned as of the
Date of Termination in accordance with any arrangements then
existing with the Employee; and
(ii) A lump sum severance payment equal to two times Employee's annual
current compensation.
(iii) All unvested stock options previously granted to Employee shall
be deemed vested.
(iv) For purposes of this Agreement, a Change in Control shall be
deemed to have occurred in the event that an entity or a related
group of shareholders or creditors that, prior to the occurrence
of such event, is not a majority shareholder of the Company,
becomes owner of 50% or more of the Company's issued and
outstanding shares through investment, merger, acquisition,
foreclosure or otherwise.
(e) No Other Payments. Employee shall not be entitled to receive any other
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payments or benefits from the Company due to the termination of his
employment, including but not limited to, any employee benefits under
any of the Company's employee benefits plans or programs (other than
at the Employee's expense under the Consolidated Omnibus Budget
Reconciliation Act of 1985 or pursuant to the terms of any pension
plan which the Company may have in effect from time to time). Upon
termination, all unvested options provided to Employee shall be deemed
null and void unless under the circumstances defined in 6(a) (vi) or
6(d) (iii). Unvested options shall not vest after Employee's receipt
of a notice of termination pursuant to Section 6(a)(iv) hereof
provided, however, if such notice was provided pursuant to Section
6(c)(iii) hereof and Employee cures such breach within the applicable
time period, Employee's options may vest subsequent thereto.
7. No Conflicting Agreements; Indemnification:
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(a) The Employee hereby represents and warrants that he is not a party to
any agreement, or non-competition or other covenant or restriction
contained in any agreement, commitment, arrangement or understanding
(whether oral or written), which would in any way conflict with or
limit his ability to commence work on the first day of the Term of
Employment or would otherwise limit his ability to perform all
responsibilities in accordance with the terms and subject to the
conditions of this Agreement.
(b) The Employee agrees that the compensation provided for in Section 3
represents the minimum compensation to be paid to Employee in respect
of the services performed or to be performed for the Company by
Employee.
8. Deductions and Withholding. The Employee agrees that the Company shall
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withhold from any and all compensation required to be paid to the Employee
pursuant to this Agreement all federal, state, local and/or other taxes which
the Company determines are required to be withheld in accordance with applicable
statutes and/or regulations from time to time in effect and all amounts required
to be deducted in respect of the Employee's coverage under applicable employee
benefit plans.
9. Entire Agreement. This Agreement embodies the entire agreement of the
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parties with respect to the Employee's employment and supersedes any other prior
oral or written agreements between the Employee and the Company, including but
not limited to, the Original Employment Agreement. This Agreement may not be
changed or terminated orally but only by an agreement in writing signed by the
parties hereto.
10. Waiver. The waiver by the Company or a breach of any provision of this
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Agreement by the Employee shall not operate or be construed as a waiver of any
subsequent breach by the Employee. The waiver by the Employee of a breach of any
provision of this Agreement by the Company shall not operate or be construed as
a waiver of any subsequent breach by the Company.
11. Governing Law. This Agreement shall be subject to, and governed by,
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the laws of the State of Florida applicable to contracts made and to be
performed in the State of Florida, regardless of where the Employee is in fact
required to work.
12. Jurisdiction. Any legal suit, action or proceeding against any party
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hereto arising out of or relating to this Agreement shall be instituted in a
federal or state court in the State of Florida, and each party hereto waives any
objection which it may now or hereafter have to the laying of venue of any such
suit, action or proceeding and each party hereto irrevocably submits to the
jurisdiction of any such court in any suit, action or proceeding.
13. Assignability. The obligations of the Employee may not be delegated and,
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except as expressly provided in Section 6 relating to the designation of
beneficiaries, the Employee may not, without the Company's written consent
thereto, assign, transfer, convey, pledge, encumber, hypothecate or otherwise
dispose of this Agreement or any interest therein. Any such attempted delegation
or disposition shall be null and void and without effect. The Company and the
Employee agree that this Agreement and all of the Company's rights and
obligations hereunder may be assigned or transferred by the Company to, and may
be assumed by, may become binding upon, and may inure to the benefit of, any
successor to the Company. The term "successor" shall mean, with respect to the
Company, any other corporation or other entity that by merger, consolidation or
purchase, acquires all or a material part of the assets of the Company. Any
assignment by the Company of its rights and obligations hereunder to any
successor shall not be considered a termination of employment for purposes of
this Agreement.
14. Severability. If any provision of this Agreement as applied to either
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party or to any circumstances shall be adjudged by a court of competent
jurisdiction to be void or unenforceable, the same shall in no way affect any
other provision of this Agreement or the validity or enforce-ability of this
Agreement.
15. Notices. All notices to the Employee here-under shall be in writing and
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shall be delivered personally or sent by registered or certified mail, return
receipt requested, to:
16. Xxxx Xxxxxxxxxx
17. 000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
18. All notices to the Company hereunder shall be in writing and shall be
delivered personally or sent by registered or certified mail, return receipt
requested, to:
Freight Rate, Inc.
00000 Xxxxxxx Xxxx, #000
Xxxxxx Xxxx, XX 00000
Either party may change the address to which notices shall be sent by sending
written notice of such change of address to the other party.
19. Section Headings. The section headings contained in this Agreement are
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for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
20. Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same instrument.
21. Attorneys' Fees. In the event that either party hereto commences
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litigation against the other to enforce such party's rights hereunder, the
prevailing party shall be entitled to recover all costs, expenses and fees,
including reasonable attorneys' fees.
22. Neutral Construction. Each party to this Agreement was represented by
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counsel, or had the opportunity to consult with counsel. No party may rely on
any drafts of this Agreement in any interpretation of the Agreement. Each party
to this Agreement has reviewed this Agreement and has participated in its
drafting and, accordingly, no party shall attempt to invoke the normal rule of
construction to the effect that ambiguities are to be resolved against the
drafting party in any interpretation of this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first above written.
FREIGHT RATE, INC.,
A Delaware corporation
By: /s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx, President
EMPLOYEE
/s/ Xxxx Xxxxxxxxxx
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Xxxx Xxxxxxxxxx
