US DATA AUTHORITY, INC.
EMPLOYMENT AGREEMENT
AGREEMENT, made as of March 2", 2000 by and between US DATA AUTHORITY,
INC., a Florida corporation hereinafter referred to as the Company", having its
principal place of business at 0000 Xxxxx Xxxxxxx Xxxxxxx, Xxxx Xxxxx, Xxxxxxx
00000, arid XXXXXXX X. XXXXXX, hereinafter referred to as the "Employee',
currently residing at 0000 XX 0xx Xxxxxx, Xxxx 00, Xxxx Xxxxx, Xxxxxxx 00000.
BACKGROUND INFORMATION
The Company wishes to secure the employment services of the Employee
for a definite period of time and upon the particular terms and conditions
hereinafter set forth. The Employee is willing to be so employed, but
understands that financial compensation may be delayed. Accordingly, the
parties agree as foIlows,
OPERATIVE PROVISIONS
EMPLOYMENT AND TERM
The Company hereby employs Employee and the latter hereby accepts employment by
the Company for the two-year period commencing March 2, 2000 (the "Commencement
Date") and expiring March 2, 2002. This Employment Agreement will be renewed
for a two (2) year term on the third anniversary of the Commencement Date if
both parties are in agreement After the initial two (2) year renewal term,
providing notice of intent to terminate has not been given by either party as
provided herein below this employment shall be automatically extended for
unlimited successive lone year periods unless it is terminated during the
duration of any such period, whether initial or extended, by the occurrence of
one of the events described in Section 8. Hereof, or at the end of any such
period (subject to extension by operation of the disability provisions
contained in Section 8.) by one party furnishing the other with written notice,
at least 90 days prior to the expiration of such period, of an intent to
terminate this agreement upon the expiration of such period.
I. DUTIES AND PLACE OF PERFORMANCE.
A. Duties. During the term of this agreement, whether initial or extended,
the Employee shall render to the Company services as Interim President reporting
directly to the Board of Directors and Executive Committee and shall perform
such duties as may be designated by him and as set forth in Exhibit 'A' attached
and incorporated herein.
Employee will be asked to undertake a reasonable amount of travel on behalf of
the Company. However, this should not be excessive. During such period, the
Employee shall devote his fall atterition, time and energies to the business
and affairs of the Company, and will use his best efforts to promote the
interests and reputation of the Company.
B. Place of Performance. In connection with his employment by the Company, the
Employee shall be based at the Company's principal executive offices in Boca
Raton, Florida unless the Board of Directors deem it necessary to move the
corporate headquarters, or the control of the Company is sold and new owners
direct a move outside the Boca Raton-Fort Lauderdale Area at which time the
Employee may elect at his sole discretion to terminate this Agreement If the
Employee elects to move with the Company, the Company will promptly pay (or
reimburse the Employee for) all reasonable moving expenses incurred by the
Employee relating to a change in his principal residence in connection with any
such location of the Company's principal executive offices, and will indemnify
the Employee against any loss realized in the sale of his principal residence
in connection with any change of residence.
II. COMPENSATION
A. Deferred Base Compensation. When Company is fully funded, for the services
to be rendered by the Employee under this agreement, the Company shall pay him,
while he is rendering such services and performing his duties hereunder, and
the Employee shall accept as full payment for such service, a base compensation
of $125,000 per year for the first year following the Commencement Date
(inclusive of any amounts subject to federal or state employment related
withholding requirements). This amount shall be deferred until such time as the
Company has equity investment. At such time, compensation shall be payable in
arrears in equal installments on the last business day of each month occurring
during the period of employment, on a weekly basis or otherwise as the parties
may agree. After the initial year of employment, the Board of Directors of the
Company may adjust the Employees base Wary (but not below $125,000) in
accordance with sound business practices.
D. Incentive Bonus Additionally, Employee will be entitled to an incentive
bonus based on his performance and that of the corporation pursuant to an
incentive bonus on one percent (I %) of the Company's Profit before EBITDA as
shown in the following formula:
First $5 million in sales - $ 50,000
Second $5 million in sales - $ 50,000
Third $5 million in sales - $ 50,000
Fourth S5 million in sales - $ 50,000
This incentive bonus will be paid in cash or the company's stock, at the
Employees sole discretion. If the Employee chooses to be paid in stock, the
amount of stock issued will be based an 80% of the market (average bid (asked))
price on the day the Employee exercises his option to be paid in stock. As long
as the Employee is an employee of the Company there will be no time limit
restriction on the Employee exercising this stock option except for the
Employee having already received the cash bonus. If the company terminates the
Employee for any reason other than cause, and the Company has reached at least
50% of the first plateau in sales, the Employee will be given a prorata share
of bonus on termination.
C. Sign on Bonus. On execution of this Employment Agreement the Employee will
receive shares equaling no less than 4.444 percent (%) of US DATA AUTHORITY,
INC. restricted NON DILUTABLE common stock.
D. Business Expenses The Employee will be reimbursed for all reasonable
business expenses as documented and approved by the President that may be
incurred in carrying out his duties on behalf of the Company, including but not
limited to membership dues of professional associations, attendance at seminars
and conventions, continuing education and profession subscription.
III. VACATION; FRINGE BENEFITS.
The Employee shall be entitled to three (3) weeks of fully paid vacation during
the initial and each extended of this agreement. He shall not be entitled to
receive monetary or other valuable consideration for vacation time to which he
is entitled but does not take. The timing of vacation periods shall be within
the discretion of the Company, reasonably exercised so as not to unnecessarily
inconvenience the Employee.
During his period of employment hereunder, the Employee shall further be
entitled to such leave by reason of physical or mental disability or incapacity
and to such participation in medical and life insurance, pension benefits,
disability and other fringe benefit plans as the Company may make generally
available to all of its executive level employees from time to time; subject,
however, as to such plans, to such budgetary constraints or other limitations
as may be imposed by the Board of Directors of the Company from time to time.
IV. PROPRIETARY INTERESTS.
During of after the expiration of his term of employment with the
Company, the Employee shall not communicate or divulge to, or use for the
benefit of, any individual, association, partnership, trust, corporation or
other entity except the Company, any proprietary information of the Company
received by the Employee by virtue of such employment without first being in
receipt of the Company's written consent to do so.
V. RESTRICTIVE COVENANT.
During the term of his employment hereunder and for the two year period
following the termination thereof for any reason other than the Company's
discontinuance of activities; an adjudication of the Company's material breach
of any of its obligations set forth in Sections 1-4, inclusive; or a
termination of the Employee by the Company under the provisions of subparagraph
d. (2) of Section 8 herein below, the Employee shall not, directly or
indirectly, engage in or become an owner of, render any service to, enter the
employment of, or represent or solicit for any business which competes with any
activity of the Company conducted at any time during the Employee's period of
employment and which is located in any country in which the Company shall
maintain any sales, marketing or manufacturing activity. The parties expressly
agree that the duration and geographical area of this restrictive covenant are
reasonable.
This covenant shall be construed as an agreement independent of any other
provision herein, and the existence of any claim or cause of action of the
Employee against the Company regardless of how arising, shall not constitute a
defense to the enforcement by the company of its terms. If any portion of the
covenant is held by a court of law to be unenforceable with respect either to
its duration or geographical area, for whatever reason, it shall be considered
divisible both as to time and geographical areas, so that each month of the
specified period shall be deemed a separate period of time and each country a
separate geographical area, resulting in an intended requirement that the
longest lesser period of time or largest lesser geographical area found by such
court to be a reasonable restriction shall remain an effective restrictive
covenant, specifically enforceable against the Employee.
VI. REMEDIES FOR BREACH OF EMPLOYEE'S OBLIGATIONS.
The parties agree that the services of the Employee are of a personal,
specific, unique and extraordinary character and cannot be readily replaced by
the Company. They further agree that in the course of performing his services,
the Employee will have access to various types of proprietary information of
the Company, which, if released to others or used by the Employee other than
for the benefit of the Company, in either case without the Company's consent,
could cause the Company to suffer irreparable injury. Therefore, the
obligations of the Employee established under Sections 5 and 6 hereof shall be
enforceable both at law and in equity, by injunction, specific performance,
damages or other remedy; and the right of the Company to obtain any such remedy
shall be cumulative and not alternative and shall not be exhausted by any one
or more uses thereof.
VII. MODIFICATION AND TERMINATION.
A. Modification. This Agreement may be amended or modified only with the
mutual written consent of the parties, and in its present form consists of the
entire agreement between the parties.
B. Termination - General. This Agreement is subject to termination by either
party prior to the expiration of its initial or any extended term, upon
delivery to the other party of written notice of such intention, which notice
shall be deemed to result in termination in 90 days if given by the company and
30 days if given by Employee after its receipt, The Company will have the right
following such receipt of termination to accelerate the effective date of
termination but retaining the obligation to pay Employee his compensation due
for the full 90 days if terminated by the Company or 30 days if terminated by
the Employee.
If terminated by the Company Employee will be paid severance pay equivalent
to one (1) month of his base salary for each two (2) months worked for the
Company with a maximum severance of twelve (12) months and a minimum of six.
(6) months. Severance pay will be given if employee is terminated for reasons
other than cause; as set forth below, and/or if them is a change in control in
the ownership of the Company, and as a result of such change of ownership,
Employee is terminated by the Company. If not terminated during such a change
of ownership, Employee would still be eligible for severance pay if his salary
is materially reduced or adversely affected at any time within six (6) months
following such change in ownership his title, duties and responsibilities are
materially diminished during such six (6) month period or the corporate
headquarters is moved outside the Tampa Bay Area and he elects to terminate as
set forth in Section 2(b).
C. By Death or Disability In the event of the Employee's death, his base
compensation otherwise due for the succeeding two full calendar months
following his death shall be paid to his Beneficiary. In the event of his
disability, for the period ending on the last business day of the third
calendar mouth following the occurrence of such disability, the Employee shall
be paid his base compensation (reduced by any amount received by the Employee
under the terms of any disability insurance policy maintained by the Company at
its sole expense); thereafter, for the succeeding three month period, he shall
be paid 50% of such compensation (similarly reduced); and thereafter, until he
either returns to full-time active service or is terminated, he shall be
treated as being on an authorized but unpaid leave of absence.
D. For Cause.
If, in the judgment of the Company's Board of Directors, reasonably exercised,
such termination's is due to
(i) the Employee's willful misconduct or gross negligence;
(ii) his conscious disregard of his obligations hereunder or of any
other duties reasonably assigned his by the Company;
(iii) His repeated conscious violation of any provision of the
Company's by laws or of its other stated policies, standards or regulations;
(iv) his commission of any act involving moral turpitude or
(v) a determination that he has demonstrated a dependence upon any addictive
substance, including alcohol, controlled substances, narcotics or barbiturates;
then, upon termination, he shall be entitled to receive severance pay in an
amount equal to 2% of his annul base compensation.
As a condition precedent to the Company's right to terminate this Agreement for
one of the causes specified in the preceding sentence which requires a repeated
action or omission by the Employee (clauses (i), (ii) and (iii)), there shall
have been created by the Company and furnished to the Employee, within the 60
day period immediately following Commission of the proscribed act or omission,
a written description thereof and a statement advising his that the Company
views such conduct as being of the type which could lead to a termination of
this Agreement under the provisions of this Section (d). Further, if the
Company seeks to terminate this Agreement on the basis of clause (iii), it must
be able to demonstrate that the Employee has been furnished with a copy of the
by-law provision, or of the policy, standard or regulation, which he is being
accused of having violated, at a time prior to the alleged commission of the
violation.
If such termination is for a cause (the nature of which may be arbitrarily
determined) other than as specified in subparagraph (1) above, he shall be
entitled to receive an amount equal to 4% of his annual base compensation.
E. Payment of Termination Compensation: Continued Effectiveness of Certain
Obligations. Any compensation due the Employee as a result of the premature
termination of his employment status shall be paid to his upon termination as
one lump sum. No termination or expiration of this agreement, whether
consummated by action of either party or by operation of the terms hereof shall
relieve the Employee from his continued performance of the obligations
established under Sections 5.and 6.hereof.
F. Life and Disability Insurance Coverage. If termination of this Agreement is
due to any reason other than death, the Employee shall have the right, subject
to receiving approval of the Company (which shall not be unreasonably
withheld), to purchase any policy of insurance on his life or insuring against
his disability which is owned by the Company, the exercise of which right shall
be made by notice furnished to the Company within 30 days subsequent to the
date of termination. The purchase price of each policy of life insurance shall
be the sum of its interpolated terminal reserve value (computed as of the
closing date) and the proportional part of the gross premium last paid before
the closing date which covers any period extending beyond that date; or if the
policy to be purchased shall not have been in force for a period sufficient to
generate an interpolated terminal reserve value, the price shall be an amount
equal to all net premiums paid as of the closing date. The purchase price of
each disability income policy shall be the sum of its cash value and the
proportional part of the gross premium last paid before the closing date, which
covers any period extending beyond that date. The purchase of any insurance
policy by the Employee shall be closed as promptly as may be practicable after
the giving of notice, in no event to exceed 30 days therefrom.
G. INDEBTEDNESS OF EMPLOYEE. If, during the course of his employment, Employee
becomes indebted to the Company for any reason, the Company shall, if it so
elects, have the right to set-off and to collect any sums due it from the
Employee out of any amounts which it may owe to the Employee for unpaid
compensation, In the event that this Agreement terminates for any reason, all
sums owed by the Employee to the Company shall become immediately due and
payable.
H. MISCELLANEOUS PROVISIONS.
(i) Nonasssignability. Neither this agreement nor any right or interest
hereunder shall be assignable by the Employee, his Beneficiary of his legal
representatives except as otherwise expressly provided herein.
(ii) Enforceability: If any term or condition or this agreement shall be
invalid or unenforceable to any extent or in any application, then the
remainder of this agreement, and such term or condition except to such extent
or in such application, shall not be valid and enforced to the fullest extent
and in the broadest application permitted by law.
(iii) Notice: All notices or other communications required or permitted to
be furnished pursuant to this agreement shall be in writing and shall be
considered as properly furnished if hand delivered, mailed from within the
United States by certified or registered mail, or sent by prepaid telegram to
the recipient party at the address appearing in the preamble to this agreement
or to such other address as any such party may have designated by like notice
forwarded to the other party hereto. Change of address notices shall be deemed
furnished when received. All other notices shall be deemed furnished when
mailed, telegraphed or hand delivered.
(iv) Application of Florida Law: This agreement, and the application or
interpretation thereof, shall be governed exclusively by its terms and by the
laws of the State of Florida. Venue shall be deemed located in Palm Beach
County, Florida.
(v) Counterparts: This agreement may be executed by any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(vi) Binding Effect: Each of the provisions and agreements herein contained
shall be binding upon and enure to the benefit of the personal representatives,
devisees, heirs, successors, transferees and assigns of the respective parties
hereto.
(vii) Beneficiary: As used herein, the term "Beneficiary" shall mean the
person or persons (who may be designated contingently or successively and who
may be an entity other than an individual, including including an estate or
trust) designated on a written form prescribed by the Board of Directors to
receive the expiration of agreement or death benefits described in Section 8.
above. Each Beneficiary designation shall be effective only when filed with the
secretary of the Company during the Employee's lifetime. Each Beneficiary
designation filed with the Secretary will cancel all designations previously so
filed.
If the Employee fails to properly designate a Beneficiary or if the Beneficiary
predeceases the Employee or dies before complete distribution of the benefit
has been made, the Company shall distribute the benefit (or balance thereof) to
the surviving spouse of the Employee or if he be then deceased to the
Employee's estate.
IN WITNESS WHEREOF, the parties herein have hereunto executed this Agreement on
this, the 2nd day of March 2000.
Attest: US DATA AUTHORITY, INC.
By: ________________________________ By: ____________________________
Xxxx Xxxxx
President
Witnesses: EMPLOYEE
____________________________________ By: ____________________________
Xxxxxxxx X. Xxxxxx
