EXHIBIT 10.90
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT ("AGREEMENT") made this 3rd day of October 2003
("EFFECTIVE DATE") by and between ULTRASTRIP SYSTEMS, INC., a Florida
corporation ("COMPANY"), and XXXXXXX X. XXXXXXX ("EXECUTIVE").
In consideration of the mutual covenants and agreements herein
contained, the compensation to be paid hereunder and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. TERM OF EMPLOYMENT. The Company hereby employs Executive, and
Executive hereby accepts employment with the Company, for a
period beginning on the Effective Date and terminating, unless
sooner terminated as provided herein, on the date that is the
third year's anniversary of the Effective Date (such third
anniversary or earlier date of termination, the "TERMINATION
DATE", and such period, the "TERM"). Notwithstanding the
foregoing sentence, this Agreement may be terminated by the
Company effective as of the first year's anniversary of the
Effective Date (the "FIRST ANNIVERSARY", and the period
between the effective date and the First Anniversary, "YEAR
1", and the subsequent annual periods covering the same
months, "YEAR 2" and "YEAR 3", respectively), by delivery of
written notice of termination to Executive at any time (but no
later than sixty (60) days after the First Anniversary, if
either of the following two requirements are not met:
(i) At all times during the ninety (90) days preceding
and inclusive of the First Anniversary, the Company
must be "cash positive"; "cash positive" means that
the Company is able to pay all of its obligations as
they become due (excluding obligations that were
already due and payable on the Effective Date) out of
the Company's cash flow from operations; the
determination of whether the Company is "cash
positive" shall be within the reasonable discretion
of its Board of Directors ("BOARD"); and
(ii) During Year 1 the Company shall operate as a unified
team, with its management, employees and consultants
all fulfilling or working towards fulfilling their
assigned duties, not impeding or interfering with the
assigned duties of others at the Company, and working
generally in harmony towards the common goals
established by the Board and the Executive; the Board
shall determine, in the exercise of its reasonable
judgment, if the foregoing requirement has been met.
2. DUTIES OF EXECUTIVE. Executive is hereby hired and employed by
the Company as its Chief Executive Officer. Executive shall
perform the duties and accept the responsibilities typical for
the chief executive of an emerging technology sales and
service company, and Executive shall devote his efforts to
rendering services to the Company in such capacity. Executive
shall not be required without his consent to undertake
responsibilities not commensurate with his position. Executive
shall report to the Board.
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3. COMPENSATION OF EXECUTIVE.
(I) BASE SALARY. Executive shall be entitled to receive
from the Company a base salary ("BASE SALARY") of:
(A) two hundred thousand dollars ($200,000) in Year
1; (B) two hundred twenty five thousand dollars
($225,000) in Year 2; and (C) two hundred fifty
thousand dollars ($250,000) in Year 3. Base Salary
shall be payable in accordance with the normal
payroll scheduling practices of the Company;
provided, however, that the Company may at any time,
and from time to time, defer up to fifty percent
(50%) of the Base Salary until such time as the
Company is, in the Board's discretion, financially
able to pay the full Base Salary. If Base Salary is
deferred, it shall be paid in full on the ninetieth
(90th) day after the date that the Board determines,
by resolution, that the Company is "fully funded",
meaning that it is financially able to pay the full
Base Salary and all deferred Base Salary.
(II) STOCK OPTIONS.
(A) Upon execution of this Agreement, Company
shall grant Executive a non-statutory stock
option to acquire five hundred thousand
(500,000) shares of the Company's common
stock at an exercise price of one dollar and
thirty cents ($1.30) per share, exercisable
at any time prior to the date that is the
tenth year's anniversary of the Effective
Date ("TENTH ANNIVERSARY"), subject to
Section 3(ii)(F), below.
(B) If on the thirtieth (30th) day following the
First Anniversary Executive remains employed
by the Company and has not been notified by
the Board that his employment hereunder is
terminated, Company shall grant Executive a
non-statutory stock option to acquire an
additional five hundred thousand (500,000)
shares of the Company's common stock at an
exercise price per share that is equal to
110% of the fair market value per share of
the Company's common stock as of the date of
the option grant. Fair market value shall be
determined as provided in the stock option
plan then maintained by the Company for its
employees, and if there is no such plan,
then fair market value shall be determined
by the Board of Directors in the good faith
exercise of its discretion (either case to
be hereinafter referred to "FMV". Such
option shall be exercisable at any time
prior to the Tenth Anniversary, subject to
Section 3(ii)(F), below.
(C) If the Company files a Form 10-KSB or Form
10-K (hereinafter, a "10-K") with the SEC
for calendar year 2004 that contains audited
financial statements showing the Company's
2004 earnings before interest and taxes
("EBIT") to be at least two million dollars
($2,000,000), and if Executive remains
employed hereunder on the date that such
filing is made, then effective as of the
date such filing is made, the Company shall
grant Executive a non-statutory stock option
to acquire one hundred thousand (100,000)
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shares of the Company's common stock at an
exercise price equal to 110% of such common
stock's FMV on the date of the option grant.
FMV wherever referred to in this Agreement
shall be determined in the same manner as is
set forth for grants of options under
Company's stock option plan for its
employees then in effect, and if no such
plan is then in effect, then fair market
value shall be determined by the Board of
Directors in the good faith exercise of its
discretion. This option shall be exercisable
at any time prior to the Tenth Anniversary,
subject to Section 3(ii)(F), below.
(D) If the Company files a Form 10-K with the
SEC for calendar year 2005 that contains
audited financial statements showing the
Company's 2005 EBIT to be at least five
million dollars ($5,000,000), and if
Executive remains employed hereunder on the
date such filing is made, then effective as
of the date such filing is made, the Company
shall grant Executive a non-statutory stock
option to acquire one hundred thousand
(100,000) shares of the Company's common
stock at an exercise price equal to one 110%
of such common stock's FMV on the date of
the option grant. This option shall be
exercisable at any time prior to the Tenth
Anniversary, subject to Section 3(ii)(F),
below..
(E) If the Company files a Form 10-K with the
SEC for calendar year 2006 that contains
audited financial statements showing the
Company's 2006 EBIT to be at least ten
million dollars ($10,000,000), and if
Executive remained employed hereunder
through the third year's anniversary of the
Effective Date, then effective as of the
date such filing is made, the Company shall
grant Executive a non-statutory stock option
to acquire one hundred thousand (100,000)
shares of the Company's common stock at an
exercise price equal to one 110% of such
common stock's FMV on the date of the option
grant. This option shall be exercisable at
any time prior to the Tenth Anniversary,
subject to Section 3(ii)(F), below.
(F) All options granted to Executive under this
Section 3(ii) are referred to herein as the
"OPTIONS". If Executive's employment
hereunder is terminated by Company for any
reason other than for "cause" (defined
below), or if Executive terminates his
employment for "good reason" (also defined
below), or if this Agreement expires in
accordance with its terms, then all Options
that are granted, vested and effective prior
to such date of termination or expiration
shall remain in effect, but those that are
not then granted, vested and effective shall
expire ninety (90) days after the date of
such termination or expiration. If
Executive's employment hereunder is
terminated by Company for "cause", or if
Executive terminates his employment and does
not have "good reason" to terminate, then
all Options that have been granted but are
not exercised by Executive on or before the
date of such termination shall expire on the
date of termination of employment.
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(G) All shares acquired upon exercise of options
granted under this Section 3(ii) shall have
"piggyback" registration rights no more
restrictive than those granted to any other
officer of the Company; provided, however,
that if Executive's employment hereunder is
terminated by Company for "cause", or if
Executive terminates his employment and does
not have "good reason" to terminate, then
these piggyback registration rights shall
terminate on the date of termination of
Executive's employment.
(H) All provisions of this Section 3(ii) that
are to be performed after expiration or
termination of this Agreement shall survive
the expiration or termination of this
Agreement until such provisions expire or
terminate in accordance with their terms.
(III) CASH SIGNING BONUS. Upon execution of this Agreement,
Executive shall become entitled to receive a signing
bonus of twenty-five thousand dollars ($25,000); such
bonus shall be payable no later than execution of
this Agreement if funds are then available to make
such payment or if funds are not then available, then
in the Company's discretion, such bonus shall be
payable in immediately available funds no later than
the date upon which Executive closes his purchase of
a residence within commuting distance of the Company.
(IV) ANNUAL CASH BONUS. Following each calendar year
during the Term, the Board of Directors or its
Compensation Committee shall evaluate the Executive's
performance during such calendar year and may pay
Executive a cash bonus of up to one percent (1%) of
annual gross revenues of the Company, as reflected in
its Form 10-K. This provision shall obligate the
Board or its Compensation Committee to evaluate
Executive and consider payment of a bonus annually,
but does not require payment of any bonus unless the
Board or Compensation Committee determines to pay a
bonus.
4. OTHER BENEFITS.
(i) In the course of his employment Executive shall be
expected to incur various business expenses
customarily incurred by persons holding like
positions, including, but not limited to, traveling,
entertainment and similar expenses, for the benefit
of the Company. Subject to the Company's policy
regarding the reimbursement of such expenses, the
Company shall reimburse Executive for such expenses
from time to time, at Executive's request, and
Executive shall account to the Company for such
expenses.
(ii) The Company shall, so long as it is available,
maintain health insurance coverage for Executive in
such amount, on such terms, and with such carriers as
shall reasonably be determined by the Board of
Directors. However, Company shall, at a minimum,
provide Executive with such insurance coverage as may
be made available to other executive-level employees
at the Company.
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(iii) Executive shall be entitled to three (3) weeks
vacation during each of Year 1, Year 2 and Year 3. In
the event Executive does not take all of his vacation
during any year, the unused vacation shall not carry
over into the next year, nor shall the Company be
required to pay Executive for any unused vacation.
(iv) Executive shall receive five hundred dollars ($500)
per month as a car allowance.
5. TERMINATION BY THE COMPANY.
(i) In addition to its right to terminate this Agreement
at the end of Year 1 pursuant to Section 1 hereof,
the Company shall have the right to terminate this
Agreement under the following circumstances:
(A) Upon the death of Executive;
(B) Upon notice from the Company to Executive in
the event of an illness or other disability
which has incapacitated him from performing
a material portion of his duties for twelve
(12) consecutive weeks as determined in good
faith by the Board; or
(C) For "cause" upon notice from the Company.
Termination by the Company of Executive's
employment for "cause" shall be limited to
the following circumstances:
1. Executive is convicted of, pleads
guilty to or pleads NOLO CONTENDERE
to a felony crime involving moral
turpitude;
2. Executive is found guilty of or
pleads no contest to fraud,
conversion, embezzlement,
falsifying records or reports or a
similar crime involving the
Company's property;
3. Executive willfully breaches this
Agreement in a material way, which
breach remains uncured thirty (30)
days after written notice thereof
shall have been sent to Executive;
4. The voluntary resignation by
Executive as an employee of the
Company (except pursuant to Section
6 below); or
5. Insubordination or incompetence, as
reasonably determined by the Board
after Executive has had the
opportunity to address the Board
with respect to the matter.
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(ii) If this Agreement is terminated pursuant to Section
5(i) above, all of Executive's rights and all of the
Company's obligations hereunder shall forthwith
terminate except as expressly provided in this
Agreement.
(iii) If this Agreement is terminated pursuant to Section
5(i)(A) or Section 5(i)(B) above, Executive or his
estate shall be entitled to receive cash equal to
Executive's remaining unpaid Base Salary through the
period that ends on the 360th consecutive day
following the date of termination of this Agreement
or that ends on the third year's anniversary of the
Effective Date, whichever occurs first. Such cash
shall be payable to Executive or his estate in
accordance with the Company's normal payroll
practices that would otherwise have applied to
payment of his Base Salary. The Company may purchase
insurance to cover all or any part of its obligations
set forth in this Section 5(iii), and Executive
agrees to take a physical examination to facilitate
the obtaining of such insurance. However, death and
disability benefits are not conditioned upon the
Executive's insurability or the Company's obtaining
insurance.
(iv) Whenever compensation is payable to Executive
hereunder during a time when he is partially or
totally disabled and such disability (except for the
provisions hereof) would entitle him to disability
income or to salary continuation payments from the
Company according to the terms of any plan now or
hereafter provided by the Company or according to any
Company policy in effect at the time of such
disability, the compensation payable to him hereunder
shall be inclusive of any disability income or salary
continuation and shall not be in addition thereto. If
disability income is payable directly to Executive by
an insurance company under an insurance policy paid
for by the Company, the amounts paid to him by said
insurance company shall be considered to be part of
the payments to be made by the Company to him
pursuant to this Section, and shall not be in
addition thereto.
6. TERMINATION BY EXECUTIVE. Executive shall have the right to
terminate his employment under this Agreement for "good
reason", by giving at least sixty (60) days' prior written
notice of termination to the Company if the Company materially
reduces Executive's duties and responsibilities hereunder.
Executive's duties and responsibilities shall not be deemed
materially reduced for purposes hereof solely by virtue of the
fact that the Company is (or substantially all of its assets
are) sold to, or is combined with, another entity. If this
Agreement is terminated pursuant to Section 5(i) above, all of
Executive's rights and all of the Company's obligations
hereunder shall forthwith terminate except as expressly
provided in this Agreement.
7. CERTAIN CONSEQUENCES OF TERMINATION.
(i) If Executive terminates this Agreement for "good
reason" pursuant to Section 6 hereof, or if the
Company terminates Executive's employment under this
Agreement for any reason other than any that is set
forth in Section 1 or 5(i), Executive shall receive a
cash payment equal Executive's remaining unpaid Base
Salary through the period that ends on the 360th
consecutive day following the date of termination of
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this Agreement or that ends on the third year's
anniversary of the Effective Date, whichever occurs
first. Such cash shall be payable to Executive in
accordance with the Company's normal payroll
practices that would otherwise have applied to
payment of his Base Salary.
(ii) If any benefit under the preceding subsection is
finally determined by the Internal Revenue Service to
be an "Excess Parachute Payment" under Section 280G
of the Internal Revenue Code of 1986, as amended
("Code"), the Company shall pay Executive an
additional amount such that (x) the excess of all
Excess Parachute Payments (including payments under
this sentence) over the sum of excise tax thereon
under Section 4999 of the Code and income tax thereon
under Subtitle A of the Code and under applicable
state law is equal to (y) the excess of all Excess
Parachute Payments (excluding payments under this
sentence) over income tax thereon under Subtitle A of
the Code and under applicable state law.
8. REMEDIES. The Company recognizes that because of Executive's
special talents and stature, in the event of termination by
the Company hereunder (except under Section 1 or 5(i)), or in
the event of termination by Executive for "good reason" under
Section 6, before the end of the agreed term, the Company
acknowledges and agrees that the provisions of this Agreement
regarding further payments of Base Salary constitute fair and
reasonable provisions for the consequences of such
termination, do not constitute a penalty, and such payments
and benefits shall not be limited to or reduced by amounts
Executive might earn or be able to earn from any other
employment or ventures during the remainder of the agreed term
of this Agreement.
9. COVENANT NOT TO COMPETE; DISCLOSURE OF INFORMATION.
(i) Executive agrees that all information concerning
Company and its business, customers and suppliers,
that is not generally known to the public by means
other than disclosure by or on behalf of Executive,
is confidential (collectively, "CONFIDENTIAL
INFORMATION") and shall be kept confidential by
Executive. Executive agrees not to use or disclose
any Confidential Information to any person, under any
circumstances, at any time, except solely to the
extent required to perform his duties to the Company
under this Agreement. If Executive is legally
required to disclose any Confidential Information
pursuant to a subpoena or court order, he may make
such disclosure, upon giving at least ten (10) days'
prior written notice to Company (or upon such shorter
notice as is available to Executive if the subpoena
is returnable within less than ten (10) days).
(ii) During the term of Executive's employment with
Company and for a period of two (2) years after his
employment terminates ("NONCOMPETE PERIOD"):
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(A) Executive shall not directly or indirectly
compete, or assist another person in
competing, against Company anywhere in the
world; and for these purposes, to "compete"
shall mean to provide the same or similar
products or services as those provided,
marketed, or actively being developed, by
Company at any time during the Noncompete
Period;
(B) Except on behalf of and for the benefit of
the Company in the performance of his duties
hereunder, Executive shall not directly or
indirectly recruit, solicit or influence any
employee of the Company to discontinue his
or her employment relationship with the
Company, or employ or seek to employ, or
cause or encourage any other person to
employ or seek to employ, any person who is
then, or was at any time within the then
preceding two (2) years, employed by the
Company;
(C) Executive shall not directly or indirectly
compete with the Company by soliciting,
inducing or influencing any of the Company's
suppliers or customers, or former suppliers
or customers, to discontinue or reduce the
extent of their relationship with the
Company; and
(D) Executive shall not interfere with, or
disrupt or attempt to disrupt, any business
relationship, whether established by formal
contract or otherwise, between the Company
and any supplier, customer, employee or
agent of the Company.
(iii) The parties hereto acknowledge that the worldwide
scope of this Noncompete is reasonable because the
Company conducts business worldwide.
(iv) The covenants in this Section 9 shall survive the
termination of this Agreement.
(v) If Executive shall breach or threaten to breach any
of the provisions of this Section 9, Executive agrees
that, in addition to remedies at law available to
Company, Company shall be entitled to obtain, and
Executive agrees not to oppose on any basis,
equitable relief in the form of specific performance,
temporary or permanent injunction or any other
equitable remedy available to Company.
10. NOTICES AND DEMANDS. Any notice or demand which, by any
provision of this Agreement or any agreement, document or
instrument executed pursuant hereto, except as otherwise
provided therein, is required or provided to be given shall be
deemed to have been sufficiently given or served for all
purposes if hand delivered or sent by certified or registered
mail, postage and charges prepaid, to the following addresses:
if to the Company, Attention: Chairman of the Board, 0000 X.X.
Xxxxxx Xxxxxxx, Xxxxxx, Xxxxxxx 00000, or at any other address
designated by the Company to Executive in writing; and if to
Executive, at his last known address provided by him in
writing to Company.
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11. SEVERABILITY. In case any covenant, condition, term or
provision contained in this Agreement shall be held to be
invalid, illegal or unenforceable in any respect, in whole or
in part, by judgment, order or decree of any court or other
judicial tribunal of competent jurisdiction, from which
judgment, order or decree no further appeal or petition for
review is available, the validity of the remaining covenants,
conditions, terms and provisions contained in this Agreement,
and the validity of the remaining part of any term or
provision held to be partially invalid, illegal or
unenforceable, shall in no way be affected, prejudiced or
disturbed thereby.
12. WAIVER OR MODIFICATION. No waiver or modification of this
Agreement or of any covenant, condition or limitation herein
contained shall be valid unless in writing and duly executed
by the party to be charged therewith. Furthermore, no evidence
of any waiver or modification shall be offered or received in
evidence in any proceeding, arbitration or litigation between
the parties arising out of or affecting this Agreement, or the
rights or obligations of any party hereunder, unless such
waiver or modification is in writing and duly executed as
aforesaid. The provisions of this Section may not be waived
except as herein set forth.
13. COMPLETE AGREEMENT. This Agreement constitutes the entire
agreement of the parties hereto with respect to the subject
matter of this Agreement and supersedes any and all previous
agreements between the parties, whether written or oral, with
respect to such subject matter.
14. APPLICABLE LAW, BINDING EFFECT AND VENUE. This Agreement shall
be construed and regulated under and by the laws of the State
of Florida, and shall inure to the benefit of and be binding
upon the parties hereto and their heirs, personal
representatives, successors and assigns. Venue for any action
related to or arising out of this Agreement shall lie in
Xxxxxx County, Florida.
IN WITNESS WHEREOF, the undersigned have executed this Employment Agreement as
of the date first written above with the intent to be legally bound.
ULTRASTRIP SYSTEMS, INC.
By: /s/ Xxxx Xxxxx
Chairman of the Board
Its:
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XXXXXXX X. XXXXXXX
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