EMPLOYMENT AGREEMENT
This employment agreement (this "Agreement") is made and entered into as of the
1st day of January 2007, between eRoomSystem Technologies, Inc., a Nevada
corporation (the "Company"), and Xxxxx Xxxxxxxxx, an individual (the
"Executive").
WITNESSETH
WHEREAS, the Company and Executive deem it to be in their respective best
interests to enter into an agreement providing for the Company's employment of
Executive pursuant to the terms herein stated.
NOW THEREFORE, in consideration of the mutual provisions herein contained, the
parties agree as follows:
1. Duties. The Company hereby employs the Executive as the Chief
Executive Officer and President of the Company, with the powers and
duties in that capacity to be those powers and duties customary to
such positions in similar publicly held corporations, together with
any other duties of a senior executive nature as may be reasonably
requested by the Board of Directors (the "Board") from time to time,
which may include duties for one or more subsidiaries or affiliates
of the Company. The Executive, in his capacity as an employee and
officer of the Company, shall be responsible to obey the reasonable
and lawful directives of the Board.
2. Term of Employment. The term of employment pursuant to this
Agreement shall be two years commencing on the date of this
Agreement and ending on December 31, 2008 (the "Term of
Employment"), subject to earlier termination in accordance with
Section 7 below. The Term of Employment and this Agreement shall be
automatically extended for successive two-year periods following the
expiration of the Term of Employment, unless (i) terminated earlier
in writing, at least thirty days prior to such expiration, that the
Term of Employment and this Agreement shall not be so extended.
3. Compensation. The Executive shall receive the following compensation
for his services during the Term of Employment hereunder:
(a) Annual Base Salary. The Executive's annual base salary shall
be One Hundred Fifty Thousand dollars per calendar year.
Executive's base salary shall be reviewed annually by the
Compensation Committee. Such annual base salary shall be
payable on a pro rata basis, in twenty-six (26) equal
installments, in accordance with the Company's normal payroll
procedures.
(b) Performance Bonus. The Executive shall be eligible to receive
a performance bonus at the end of the Company's fiscal year.
The amount of such performance bonus, if any, shall be
determined by the Compensation Committee, in its sole and
absolute discretion, based upon such factors as the Company's
overall financial performance, anticipated working capital
requirements, cash reserves, anticipated liabilities or
threatened litigation, successful implementation of the
Company's business plan, establishment of relationships with
businesses, development of corporate projects and new
products, and any other short- and long-term interest of the
Company as it deems appropriate.
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(c) Stock Options. The Executive shall be eligible to participate
in the Company's 2000 Stock Option Plan, as amended from time
to time (the "Plan"). Executive shall have an irrevocable
right to exercise any and all options to purchase common stock
of the Company issued to him under the Plan, assuming such
options are fully vested, through the final date on which such
options are exercisable by Executive; provided, Executive
shall not be bound by the terms of Section 6(f) of the Plan.
(d) Car Allowance. The Executive shall be entitled to a monthly
car allowance of $400 or a company car. The monthly car
allowance shall cover Executive's car lease/purchase
installments, excluding mileage which will be reimbursed at
the IRS allowed rate, gas, insurance, repair and maintenance
expenses.
(e) Other Benefits. Executive shall be paid for (10) holidays
annually as designated by the Company. Additionally, Flexible
Time Off (FTO) will accrue at the rate of 4.31 hours upon the
completion of each pay period in which you are employed as
Chief Executive Officer.
(f) Health, Dental and Term Life Insurance. The Company shall
provide health, dental and term life insurance for Executive
and his dependents with an insurance carrier of Employer's
choice.
4. Expense Reimbursement. The Company shall reimburse the Executive for
all expenses incurred by him in the performance of his duties
hereunder as required by the Board, including, but not limited to,
transportation expenses, accommodations, entertainment, and other
expenses incurred in connection with the business of the Company, in
accordance with the Company's expense reimbursement policies, but
specifically excluding automobile related expenses as outlined in
Section 3(d) above.
5. Indemnification. The Company shall indemnify the Executive in his
capacity as an officer and a director and hold him harmless from any
cost, expense or liability arising out of or relating to any acts or
decisions made by him on behalf of or in the course of performing
services for the Company to the maximum extent provided by the
Company's bylaws and applicable law.
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6. Scope of Employment. The Executive agrees to devote in good faith
his full time and best efforts (allowing for usual vacations and
sick leave), during reasonable business hours to the duties that he
is required to render to the Company hereunder, and agrees to travel
to the extent he deems necessary to perform such duties.
Notwithstanding the foregoing, the Executive shall be permitted to
engage in other charitable, community or business affairs that may,
from time to time require minor portions of his time, but which
shall not interfere or be inconsistent with his duties hereunder.
7. Termination. This Agreement and the employment of the Executive
hereunder shall or may be terminated for any of the following
reasons:
(a) The Company may terminate this Agreement and employment of the
Executive hereunder without cause upon not less than thirty
(30) days advance written notice; provided, however, in such
event the Company shall pay to Executive severance equal to
one (1) year of his then existing salary as well as
continuation of Executive's health and dental benefits and car
allowance for such period. Severance payments shall be made on
a bi-weekly basis. The severance period shall commence upon
the conclusion of the notice period, or the first day
following Executive's final day of employment.
(b) By the Company at any time immediately for cause by providing
written notice to Executive. For purposes of this Agreement,
"cause" shall include, without limitation, (i) a breach of any
provision of this Agreement or a violation of any other duty
or obligation to the Company; (ii) a failure to follow a
written directive of the Board; (iii) fraud, misappropriation,
dishonesty or embezzlement, or (iv) any willful or negligent
misconduct, criminal conviction or similar conduct or
activities.
(c) Immediately without notice upon the Executive's death or
disability. For purposes of this Agreement, "disability" shall
mean the inability of the Executive to perform his duties
under this Agreement for a consecutive period of three (3)
months or a non-consecutive period of six (6) months within
any twelve-month period. In the event of the death or
disability of the Executive, the Executive or the estate,
beneficiary or legal representative of the Executive shall be
entitled to any applicable death or disability benefits (other
than key-man life insurance) which may be available under any
benefit plans maintained by the Company solely for the benefit
of the Executive at the time of the death or disability of the
Executive, and for the allowable duration of those benefit
plans as provided by their respective plan documents.
Except as otherwise provided in subsection (a) above, upon the termination of
this Agreement and the employment of Executive hereunder, the Company shall have
no further obligation or liability whatsoever to Employee under this Agreement
except with respect to any stock options granted under the Plan which have
vested as of such date or salary earned by the Executive and not paid by the
Company prior to the date of termination.
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8. Assignment. By reason of the special and unique nature of the
services hereunder, it is agreed that neither party hereto may
assign any interest, rights or duties which it or he may have in
this Agreement without the prior written consent of the other party,
except that upon any merger, liquidation, or sale of all or
substantially all of the assets of the Company to another
corporation, this Agreement shall inure to the benefit of and be
binding upon the Executive and the purchasing, surviving, or
resulting company or corporation in the same manner and to the same
extent as though such company or corporation were the Company.
9. Confidentiality.
(a) Recognizing that the knowledge and information about, or
relationships with, the business associates, partners,
customers, clients, suppliers, personnel and agents of the
Company and its affiliated companies and the business,
financing and marketing methods, systems, plans policies,
techniques and know-how of the Company and of its affiliated
companies (collectively, "Confidential Information") which the
Executive has heretofore and shall hereafter receive, obtain
or establish as an employee of the Company, or otherwise, is
valuable and a unique asset of the Company, the Executive
agrees that, during the Term of Employment and for a period of
three (3) years thereafter, he shall hold all Confidential
Information in the strictest confidence, and shall not
(otherwise than pursuant to his duties hereunder), directly or
indirectly, disclose without the express written consent of
the Company, any Confidential Information pertaining to any
person, firm, corporation or other entity, for any reason or
purpose whatsoever. The Executive acknowledges and agrees that
Confidential Information shall be deemed to include, without
limitation, all knowledge, data or information shared on any
electronic or other media. The Executive acknowledges and
agrees that all memoranda, notes records and other documents
made or compiled by the Executive or made available to the
Executive concerning any Confidential Information shall be the
Company's exclusive property and shall be delivered by the
Executive to the Company upon expiration or termination of
this Agreement or at any other time upon the request of the
Company.
(b) The Executive hereby acknowledges that the services to be
rendered by him are of a special, unique and extraordinary
character and, in connection with such services, he will have
access to Confidential Information. By reason of this, the
Executive consents and agrees that if he violates any of the
provisions of this Agreement with respect to confidentiality,
the Company would sustain irreparable harm and, therefore, in
addition to any other remedies which the Company may have
under this Agreement, or otherwise the Company will be
entitled to an injunction to be issued by any court of
competent jurisdiction restraining the Executive from
committing or continuing any such violation of this Agreement.
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(c) The provisions of this Section 9 shall survive the expiration
or termination (for any reason) of this Agreement or any part
thereof, without regard to the reason therefore.
10. Covenant Not to Compete: Nonsolicitation.
(a) The parties acknowledge that the Executive's performance of
all terms of this Agreement is necessary to protect the
Company's legitimate business interests. The Executive agrees,
that, during the Term of Employment and for a period of three
(3) years thereafter, he will not, on behalf of himself, or on
behalf of any person, company, corporation, partnership or
other entity or enterprise, directly or indirectly, as an
employee, proprietor, owner, stockholder, partner, member,
officer, director, manager, lender, advisor, consultant or
otherwise engage in any business or activity competitive with
the business activities of the Company or any subsidiary. The
Executive further agrees that he will not, directly or
indirectly, during the Term of employment and for a period of
two years thereafter, solicit the trade or patronage of any
customers or prospective customers of the Company, any
subsidiary of the Company or of anyone who has heretofore
traded or dealt with the Company or any subsidiary of the
Company with respect to any technologies, services, products,
trade secrets or other matters in which the Company is active.
(b) The Executive hereby acknowledges that the services to be
rendered by him under this Agreement are of a special, unique
and extraordinary character and, in connection with such
services, he will have access to Confidential Information. By
reason thereof, the Executive consents and agrees that if he
violates any of the provisions of this Agreement with respect
to noncompetition or nonsolicitation, the Company would
sustain irreparable harm and therefore, in addition to any
other remedies which the Company may have under t his
Agreement or otherwise, the Company shall be entitled to an
injunction to be issued by any court of competent jurisdiction
restraining the Executive from committing or continuing any
such violation of this Agreement
(c) The provisions of this Section 10 shall survive the expiration
or termination of this Agreement or any part thereof, without
regard to the reason therefore.
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11. Arbitration. Unless otherwise indicated, any dispute arising out of
the terms and conditions of this Agreement or the Executive's
employment with the company shall be settled by binding arbitration
to be held in Lakewood, New Jersey, in accordance with the rules for
employment disputes of the American Arbitration Association then in
effect. The prevailing party in such proceeding shall be entitled to
recover the costs of arbitration form the other party, including,
without limitation, reasonable attorneys' fee.
12. Governing Law. This Agreement shall be subject to, and governed by,
the laws of the State of New Jersey without reference to any
principles of conflict of law.
13. Notices. All notices and other communications required or permitted
under this Agreement shall be in writing (including a writing
delivered by facsimile transmission) and shall be deemed to have
been duly given (a) when delivered, if sent by registered or
certified mail (return receipt requested), (b) when delivered, if
delivered personally or by facsimile, or (c) on the second following
business day, if sent by overnight mail or overnight courier, in
each case to the parties at the following addresses (or at such
other addresses as shall be specified by like notice):
If to the Company: eRoom System Technologies, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
If to the Executive: c/o Xxxxxxx Xxxxxx
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
14. Severability: If any provision hereof is unenforceable, illegal or
invalid for any reason whatsoever, such fact shall not affect the
remaining provisions hereof. If any of the provisions hereof which
impose restrictions on the Executive are, with respect to such
restrictions, determined by a final judgment of any court of
competent jurisdiction to be unenforceable or invalid because of the
geographic scope or time duration of such restrictions, such
provisions shall be deemed retroactively modified to provide for the
maximum geographic scope and time duration which would make such
provisions enforceable and valid. However, no such retroactive
modification shall affect any of the Company's rights hereunder
arising out of the breach of any such restrictive provisions,
including, without limitation, the Company's rights to terminate
this Agreement.
15. Waiver: No Failure or delay on the part of the Company or the
Executive in exercising any right, power or remedy hereunder shall
operate as a waiver thereof nor shall any single or partial exercise
of any such right, power or remedy hereunder. The remedies herein
provided are cumulative and not exclusive of any remedies provided
by law.
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16. Modification: No amendment, modification, termination or waiver of
any provision of the Agreement nor consent to any departure by the
Executive or the Company there from shall in any event be effective
unless the same shall be in writing and signed by a duly authorized
officer of the Company or by the Executive, as the case may be. Any
such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
17. Taxes: The Compensation payable is stated in gross amounts and shall
be subject to withholding taxes and other taxes as may be required
by law.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
by its duly authorized officer, and the Executive has hereunto set his
signature as of the day and year first above written.
EROOMSYSTEM TECHNOLOGIES, INC., Executive
a Nevada Corporation
Compensation Committee
By: ___________________________ __________________________
Xxxxxxx Xxxxx Xxxxx Xxxxxxxxx
Member of the Board President, CEO
By: ___________________________
Xxxxxxxx X. Xxxx
Member of the Board
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