EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT DATED MARCH 1, 1999 AND AMENDED AS OF AUGUST 24,
1999 BY AND BETWEEN COBRA TECHNOLOGIES, INC., a Nevada CORPORATION ("EMPLOYER"
OR THE "COMPANY"), AND XXXXXXX X. XXXXX ("Employee").
WHEREAS, Employee wishes to be employed by Employer with the duties and
responsibilities as hereinafter described, and Employer desires to assure itself
of the availability of Employee's services in such capacity.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, Employer and Employee hereby agree as follows:
1. EMPLOYMENT. Employer hereby agrees to employ Employee, and Employee
hereby agrees to serve Employer, upon the terms and conditions hereinafter set
forth.
2. TERM. The employment of Employee by Employer pursuant to this Agreement shall
be for a three (3) year term commencing March 1, 1999 and ending on February 28,
2002, unless sooner terminated pursuant to Section 8 below (hereinafter referred
to as the "Service Period").
3. DUTIES. Employee shall, subject to overall direction consistent with the
legal authority of the Board of Directors of Employer (the "Board"), serve as,
and have all power and authority inherent in the office of, Chairman of the
Board of Directors of Employer, and shall be responsible for those areas in the
conduct of the business assigned to him by the Board, including, without
limitation, (i) participating in the Company's capital raising efforts; (ii)
managing the identification of and negotiation with acquisition candidates;
(iii) involvement in the Company's public relations and investor relations
efforts; and (iv) management authority over executives and key employees of the
Company and all of its divisions and subsidiaries wherever situated. Employee
shall devote substantially all his business time and efforts to the business of
Employer.
4. COMPENSATION AND OTHER PROVISIONS. Employee shall be entitled to the
compensation and benefits hereinafter described in subsections (a) through (d)
(such compensation and benefits being hereinafter referred to as "Compensation
Benefits").
(A) BASE SALARY. Employer shall pay to Employee a base salary
of $75,000 per annum for the period commencing March 1, 1999 through December
31, 1999, and $150,000 per annum commencing on January 1, 2000 through the
remainder of the Service Period (such amount, as it may be increased from time
to time, may sometimes hereinafter be referred to as "Base Salary"). The Base
Salary and Employee's other compensation may be reviewed by the Board from time
to time during the Service Period and may be increased (but not decreased) as
the Board may determine.
(B) PARTICIPATION IN BENEFIT PLANS. During the Service Period,
Employee shall be eligible to participate in all employee benefit plans and
arrangements now in effect or which may hereafter be established, including,
without limitation, all life, group insurance and medical care plans and all
disability, retirement and other employee benefit plans of Employer consistent
with such benefits provided to executive management of Employer. Employee shall
in all events provide and pay the full costs of all medical and health insurance
for Employee throughout the Service Period.
(C) AUTOMOBILE ALLOWANCE. During the Service Period, Employee
shall be paid an automobile allowance of approximately $750.00 per month
throughout the Service Period, which shall be utilized for an automobile lease,
insurance, gasoline, maintenance and related expenses.
(D) EXPENSE REIMBURSEMENT. Employer will promptly reimburse
Employee for all reasonable out-of-pocket business expenses incurred in
connection with the performance of Employee's services hereunder, including,
without limitation, all travel, telephone, entertainment and similar business
expenses.
5. STOCK OPTIONS. Concurrent herewith, Employer and Employee shall enter into a
certain Stock Option Agreement ("Stock Option Agreement") providing for full
anti-dilution rights to Employee, participation in the Employer's qualified
incentive stock option plan, and cashless exercise. The terms of the
anti-dilution rights shall provide that:
if the Company issues additional shares, beyond 10 million
shares outstanding on a fully diluted basis, whether in the course of
further acquisition, capital raising activity or any other activity,
the Employee shall receive options for the purchase of shares of the
Employer such that the Employee shall maintain approximately 10% (ten
percent) ownership of Employer. This right shall be valid as long as
the total outstanding shares on a fully diluted basis is less than
25,000,000 shares. When the total shares on a fully diluted basis is
greater than 25,000,000 shares, then the Employee shall have no further
anti dilution rights. In the case of a stock split, recapitalization or
other similar share reissuance program, this anti-dilution right will
be proportionately adjusted. The stock options granted shall have an
exercise price that is equal to the average market price during the 60
days prior to the distribution to Employee and shall be exercisable for
a period of five years from the date of grant.
6. STOCK GRANT. Employee is entitled to receive shares as additional
compensation as the Board of Directors may from time to time grant. Any and all
non-vested shares to which Employee which may be granted under any Employer plan
shall become vested immediately prior to a Change of Control. For purposes of
this Agreement, "Change of Control" shall mean any of the following: (i) a
"person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the
Exchange Act) becoming the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act) of voting securities of the Company entitled to exercise more
than 30% of the total voting power of all outstanding voting securities of the
Company (calculated in accordance with Rule 13d-3 under the Exchange Act); (ii)
the consummation of any merger, consolidation, business combination or similar
transaction involving the Company that results in the beneficial owner's voting
securities of the Company immediately prior to such consummation owning in the
aggregate, directly or indirectly, voting securities representing less than 50%
of the voting securities of the surviving entity outstanding immediately
following such consummation; or (iii) the sale of all or substantially all of
the assets of the Company, or any liquidation, dissolution or bankruptcy of the
Company..
7. REGISTRATION RIGHTS AGREEMENT. Concurrent herewith, Employer and Employee
have entered into a certain Registration Rights Agreement pursuant to which
Employer has granted to Employee certain "piggy-back" rights to register
securities of Employer, including, without limitation, common stock granted
hereunder and underlying stock options granted or to be granted in connection
with the Stock Option Agreement and Incentive Stock Option plan.
8. TERMINATION. Employee's employment hereunder shall terminate as a result of
any of the following events:
(a) Employee's death;
(b) Employee shall be unable to perform his duties hereunder
by reason of illness, accident or other physical or mental disability, as
verified by a licensed physician mutually selected by the Employer and Employee,
for a continuous period of at least six months or an aggregate of nine months
during any continuous twelve month period ("Disability");
(c) termination by Employee; or
(d) for Cause, where "Cause" shall mean: (i) the final
non-appealable conviction of Employee of a felony; (ii) the reasonable
determination of seventy-five percent (75%) of the Board that Employee has
engaged in intentional misconduct, or the gross neglect of his duties, which has
a material and continuing adverse effect on the business of Employer; or (iii) a
final non-appealable determination by a court of competent jurisdiction that
Employee shall have failed to cure the breach of any material term of this
Agreement within thirty days following receipt of detailed written notice from
Employer of such breach.
Any termination pursuant to subparagraph (b), (c) or (d) of
this Section shall be communicated by a written notice ("Notice of
Termination"), such notice to set forth with specificity the grounds for
termination if the result of "Cause". Employee's employment under this Agreement
shall be deemed to have terminated as follows: (i) if Employee's employment is
terminated pursuant to subparagraph (a) above, on the date of his death; (ii) if
Employee's employment is terminated pursuant to subparagraph (b) or (d) above,
on the date on which Notice of Termination is given; and (iii) if Employee's
employment is terminated pursuant to subparagraph (c) above, fifteen (15) days
after the date on which a Notice of Termination is given, or Employee's last day
of employment, whichever is earlier. The date on which termination is deemed to
have occurred pursuant to this paragraph is hereinafter referred to as the "Date
of Termination".
9. PAYMENTS ON TERMINATION. In the event that Employee's employment is
terminated pursuant to Section 8 above, Employer shall pay to Employee his full
salary through the Date of Termination together with all benefits and other
compensation, if any, due and owing as of that date.
10. REPRESENTATIONS AND WARRANTIES. Employee hereby represents and warrants to
the Employer that (i) the execution, delivery and performance of this Agreement
by Employee do not and shall not conflict with, breach, violate or cause a
default under any contract, agreement, instrument, order, judgment or decree to
which Employee is a party or by which Employee is bound, and (ii) Employee is
not a party to or bound by any employment agreement, noncompetition agreement or
confidentiality agreement with any other person or entity which in any way may
restrict, impair or limit the performance of his duties hereunder.
11. DISCLOSURE AND PROTECTION OF CONFIDENTIAL INFORMATION.
(a) For purposes of this Agreement, "Confidential Information"
means knowledge, information and material which is proprietary to Employer, of
which Employee may obtain knowledge or access through or as a result of his
employment by Employer (including information conceived, originated, discovered
or developed in whole or in part by Employee). Confidential Information
includes, but is not limited to, (i) technical knowledge, information and
material such as trade secrets, processes, formulas, data, know-how,
improvements, inventions, computer programs, drawings, patents and experimental
and development work techniques, and (ii) marketing and other information, such
as supplier lists, customer lists, marketing and business plans, business or
technical needs of customers, consultants, licensees or suppliers and their
methods of doing business, arrangements with customers, consultants, licensees
or suppliers, manuals and personnel records or data. Confidential Information
also includes any information described above which Employer obtains from
another party and which Employer treats as proprietary or designates as
confidential, whether or not owned or developed by Employer. Notwithstanding the
foregoing, any information which is or becomes generally available to the
general public otherwise than by breach of this Section 11 shall not constitute
Confidential Information for purposes of this Agreement.
(b) During the term of this Agreement and thereafter, Employee
agrees, to hold in confidence all Confidential Information and not to use such
information for Employee's own benefit or to reveal, report, publish, disclose
or transfer, directly or indirectly, any Confidential Information to any person
or entity, or to utilize any Confidential Information for any purpose, except in
the course of Employee's work for Employer.
(c) Employee will abide by any and all security rules and
regulations, whether formal or informal, that may from time to time be imposed
by Employer for the protection of Confidential Information, and will inform
Employer of any defects in, or improvements that could be made to, such rules
and regulations.
(d) Employee agrees that all inventions, innovations,
improvements, developments, methods, designs, analysis, drawings, reports, and
all similar or related information which relates to Employer's actual or
anticipated business, research and development or existing or future products or
services and which are conceived, developed or made by Employee at any time
while employed by Employer, or made thereafter as a result of any invention
conceived or work done at any time during employment with Employer (hereinafter
referred to as "Work Product"), and all Employee's right, title and interest in
and to Work Product, shall be regarded as made and held by Employee in a
fiduciary capacity solely for the benefit of Employer and shall exclusively
belong to Employer. Employee will promptly disclose such Work Product to the
Board of Directors of Employer and perform all actions reasonably requested by
the Board of Directors of Employer (whether during or after the term of
Employee's employment with Employer) to establish and confirm such ownership
(including, without limitation, execution of any and all assignments,
conveyances, consents, powers of attorney and other instruments).
(e) Employee will notify Employer in writing immediately upon
receipt of any subpoena, notice to produce, or other compulsory order or process
of any court of law or government agency if such document requires or may
require disclosure or other transfer of Confidential Information.
(f) Upon termination of employment, Employee will deliver to
Employer any and all records and tangible property that contain Confidential
Information that are in his possession or under his control. The provisions of
this Section 11 shall survive the termination of Employee's employment with
Employer.
12. BOARD OF DIRECTORS. The Company agrees to nominate Employee for election to
its Board of Directors at its next meeting of shareholders and to otherwise
exercise its best efforts to cause Employee to be elected or appointed to the
Board of Directors in accordance with its Bylaws.
13. AVAILABILITY OF INJUNCTIVE RELIEF. Employee acknowledges and agrees that any
breach by him of the provisions of Section 9 hereof will cause Employer
irreparable injury and damage for which it cannot be adequately compensated in
damages. Employee therefore expressly agrees that Employer shall be entitled to
seek injunctive and/or other equitable relief, on a temporary or permanent basis
to prevent any anticipatory or continuing breach of this Agreement or any part
hereof, and is secured as an enforcement. Nothing herein shall be construed as a
waiver by Employer of any right it may have or hereafter acquired to monetary
damages by reason of any injury to its property, business or reputation or
otherwise arising out of any wrongful act or omission of it.
14. INDEMNIFICATION. Employer hereby releases and agrees to unconditionally
indemnify and hold Employee harmless from and against all losses, liabilities,
claims, actions, judgments, demands, costs, expenses, fines, penalties, fees,
and damages, of any kind or nature, including, without limitation, attorney's
fees and costs and whether or not suit is instituted, that are suffered or
incurred by Employee, directly or indirectly, relating to, arising out of or in
connection with any events, occurrences or circumstances of or involving
Employer prior to the effective date of this Agreement, irrespective of whether
or not Employee is now aware or shall hereafter become aware of such events,
occurrences or circumstances or additional facts relating thereto.
15. SURVIVAL. The covenants, agreements, representations and warranties
contained in or made pursuant to this Agreement shall survive Employee's
termination of employment, irrespective of any investigation made by or on
behalf of any party.
16. ENTIRE AGREEMENT; MODIFICATION. This Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof,
supersedes all existing agreements between them concerning such subject matter,
and may be modified only by a written instrument duly executed by each party.
17. NOTICES. Any notice required or permitted hereunder shall be deemed validly
given if delivered by hand, verified overnight delivery, or by first class,
certified mail to the following address of Employee (or to such other address as
Employee may notify in writing to Employer):
Cobra Technologies, Inc.
0000 Xxxx Xxxxxxxx Xxxx Xxxx
Xxxx Xxxxx, Xxxxxxx 00000
Xxxxxxx X. Xxxxx
0000 Xxxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxx Xxxxxxx, XX 00000
18. WAIVER. Any waiver by either party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. All waivers must be in writing.
19. BINDING EFFECT. The provisions of this Agreement shall be binding upon the
Employee and his heirs and personal representatives, and shall be binding upon
and inure to the benefit of Employer, its successors and assigns.
20. HEADINGS. The headings in this Agreement are solely for convenience of
reference and shall be given no effect in the construction or interpretation of
this Agreement.
21. GOVERNING LAW; VENUE. This Agreement will be governed and construed under
the laws of the State of Florida, without giving effect to rules governing
conflicts of law, with proper venue with respect to all disputes related to this
Agreement being Dade County, Florida.
22. INVALIDITY. The invalidity or unenforceability of any term of this Agreement
shall not invalidate, make unenforceable or otherwise affect any other term of
this Agreement, which shall remain in full force and effect.
23. ATTORNEYS' FEES. In the event any dispute or litigation arises hereunder
between any of the parties hereto, the prevailing party shall be entitled to all
reasonable costs and expenses incurred by it in connection therewith (including,
without limitation, all reasonable attorneys' fees and costs incurred before and
at any trial or other proceeding and at all tribunal levels), as well as all
other relief granted in any suit or other proceeding.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first hereinabove written.
EMPLOYER:
COBRA TECHNOLOGIES, INC., a Nevada corporation
BY:
TITLE:
EMPLOYEE:_____________________________
Xxxxxxx X. Xxxxx
