Exhibit 10.86
SEVERANCE AGREEMENT
This Severance Agreement (the "Agreement") is effective as of the 31st
day of December 2003 by and between Invisa, Inc. a Nevada corporation (the
"Company") and Xxxxxxx X. Xxxxx ("Xxxxx").
RECITALS:
WHEREAS, Xxxxx has been employed by the Company as Secretary, General
Counsel and Industry Liaison pursuant to an Employment Agreement dated as of May
15, 2001 ("May 15 Employment Agreement"); and
WHEREAS, on December 28, 2003, Xxxxx, for personal reasons, submitted
his 30-day Notice of voluntary termination of the May 15 Employment Agreement;
and
WHEREAS, the parties acknowledge that Xxxxx'x employment with the
Company was terminated on December 31, 2003; and
WHEREAS, Xxxxx and the Company have determined that it is in the best
interest of Xxxxx and the Company to waive the 30-day notice requirement under
the May 15 Employment Agreement; and
WHEREAS, Xxxxx and the Company have agreed to the terms of a severance
arrangement which is memorialized by this Agreement.
NOW, THEREFORE, in consideration of the mutual promises in this
Agreement, and for additional good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the Company
and Xxxxx agree as follows:
1. TERMINATION OF EMPLOYMENT. Xxxxx'x last day of employment with the
Company was December 31, 2003. In addition, Xxxxx and the Company acknowledge
that the May 15, 2001 Employment Agreement shall be cancelled, void and of no
effect, following the date written above. Accordingly, Xxxxx shall not be
entitled to any compensation or benefits under the Employment Agreement,
including, without limitation, any severance, car allowance, or health
insurance.
2. COVENANT NOT TO COMPETE AND CONFIDENTIALITY AGREEMENT. Attached
hereto is a Covenant Not to Compete and a Confidentiality Agreement/Waiver of
Interest Agreement which the Company and Xxxxx agree shall be entered into
simultaneously with the execution of this Agreement (collectively the
"Non-Compete and Confidentiality Agreements"), and the parties further
acknowledge and agree that the Non-Compete and Confidentiality Agreements
supersede and replace, in their entirety, the Covenant Not to Compete and
Confidentiality Agreements previously entered into by the parties on May 15,
2001. The parties further acknowledge that the mediation and remedy provisions
contained in Paragraphs 4 and 5 of the Non-Compete Agreement and Paragraphs 7
and 8 of the Confidentiality Agreement respectively, are the dispute resolution
and remedy provisions that govern the parties under the Non-Compete and
Confidentiality
Agreements respectively. To this extent, Section 10 of this Agreement shall not
be applicable to the Non Compete and Confidentiality Agreements,
3. RESTRICTION ON SALES OF SHARES. The Company acknowledges and agrees
that all of the 551,941 shares of the Company's common stock issued to and owned
by Xx. Xxxxx ("Xxxxx Shares") are fully vested, non-assessable, and subject to
no defenses or claims of any nature or kind. The Company and Xxxxx acknowledge
that the Xxxxx Shares are currently held by Xxxxxxx Xxxxxxxx as Trustee
("Trustee") of the Xxxxxxx X. Xxxxx Irrevocable Trust, a Trust created by Xx.
Xxxxx in which he is the beneficiary ("Trust"). Xxxxx and Trustee agree that any
sales of Xxxxx Shares shall be made in accordance with Rule 144 of the
Securities Act of 1933, and that: (i) during the period from January 1, 2004
through June 30 2004, there will be no sales of Xxxxx Shares; (ii) during the
period from July 1,2004 through December 31,2004, any sales of Xxxxx Shares
shall be limited to no more than 5,000 Xxxxx Shares per month; and (iii) during
the period from January 1, 2005 through December 31, 2005, any sales of Xxxxx
Shares shall be limited to no more than 10,000 Xxxxx Shares per month. The
Company agrees that it will furnish any legal opinions or other documents as
requested by Xxxxx or his broker in connection with any such Rule 144 sales of
Xxxxx Shares within five business days of the Company's receipt of said request.
The Trustee joins in this Agreement for the purpose of being bound by the
provisions of this Paragraph and Paragraph 11 of this Agreement. The Company
acknowledges that the restrictions on sales set forth in this Paragraph are
applicable only to the Xxxxx Shares, and are not applicable to shares owned by
trusts created by Xxxxxx X. Xxxxxx for his family members (i.e. - Xxxxxxx X.
Xxxxxx Irrevocable Trust u/a/d 7/29/98, Xxxxxxxxx Xxxxxxxx Xxxxxx Irrevocable
Trust u/a/d 7/29/98, Xxxxx Xxxxxx Irrevocable Trust u/a/d 1/16/00) which are
trusts in which Xx. Xxxxx serves as the trustee.
4. FORGIVENESS OF COMPANY OBLIGATIONS BY XXXXX. Xxxxx forgives notes
and interest due him from the Company as a result of the Radio Metrix Merger
transaction in the amount of $71,812.52.
5. ACCRUED COMPENSATION. The parties acknowledge that Xxxxx is owed
$140,000 in accrued salary and bonuses ("Accrued Compensation"). The Company
shall pay Xxxxx the Accrued Compensation as follows:
i. $6,000.00 on or before January 31, 2004; and
ii. Beginning in February 2004 and in each consecutive month
thereafter until the Accrued Compensation has been paid in full, the Company
shall deliver to Xxxxx a payment of $3,500 ("$3,500 Payment"), and the $3,500
Payment shall be delivered no later than on the last day of each consecutive
month;
In the event a $3,500 Payment is not timely made, the Company
shall have a cure period of 30 days from the due date to deliver the $3,500
Payment.
6. NOTICES. Any notice provided for in this Agreement must be in
writing and must be either personally delivered or mailed by certified mail,
return receipt required, or delivered by fax to the recipient at the address or
fax number indicated below:
2
To the Company: To Xxxxxxx X. Xxxxx:
Invisa, Inc. Xxxxxxx X. Xxxxx
4400 Independence Court 0000 Xxxx xx Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx 00000 Xxxxxxxx Xxx, Xxxxxxx 00000
(000) 000-0000 (000) 000-0000
or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party.
7. SEVERABILITY. In the event that any provision of this Agreement
shall be held to be unreasonable, invalid, or unenforceable for any reason
whatsoever, the parties agree that: (i) such invalidity or unenforceability
shall not affect any other provision of this Agreement and the remaining
covenants, restrictions, and provisions hereof shall remain in full force and
effect; and (ii) any arbitrator or arbitration panel, as the case may be, may so
modify the objectionable provisions as to make it valid, reasonable, and
enforceable, and such provision, as so modified, shall be valid and binding as
though the invalid, unreasonable, or unenforceable portion thereof had not been
included therein.
8. COMPLETE AGREEMENT. Except for the Non-Compete and Confidentiality
Agreements, and the three Stock Option Agreements between Xxxxx and the Company
(i.e.- the December 20, 2000 Agreement; the January 22, 2002 Agreement; and the
October 15, 2003 Agreement), this Agreement contains the entire agreement of the
parties and supersedes and preempts any prior understandings, agreements or
representations between Xxxxx and the Company, including, without limitation,
the May 15, 2001 Employment Agreement. Notwithstanding anything to the contrary,
the parties acknowledge that this Agreement shall not affect, in any manner,
that certain agreement made by and among the Company, the Xxxxxx Xxxxxx Family
Foundation, Inc., Xxxxxxx X. Xxxxxx Irrevocable Trust u/a/d 7/29/98, Xxxxxxxxx
Xxxxxxxx Xxxxxx Irrevocable Trust u/a/d 7/29/98, Xxxxx Xxxxxx Irrevocable Trust
u/a/d 1/16/00, Xxxxx Xxxxxxxx Xxxxxx, and Xxxxxx & Xxxxx, P.A., dated as of
November 13, 2003, which shall remain in full force and effect.
9. COUNTERPARTS. This Agreement may be simultaneously executed in two
counterparts each of which shall be an original, and all of which shall
constitute but one and the same instrument.
10. MEDIATION/ARBITRATION PROVISION. The parties shall in good faith
endeavor to resolve all claims or disputes arising from or relating to the terms
of this Agreement first by mediation through a mediator selected by the parties
and if not resolved by mediation, then the parties agree to resolve all claims
or disputes by binding arbitration in accordance with this Section. The party
seeking mediation shall submit a written notice for mediation to the other party
(the "Notice"). The parties shall agree on a mediator and mediation date within
ten business (10) days from the date of the Notice. If the parties are unable to
agree upon a mediator and mediation date within ten (10) days from the date of
the Notice, the matter shall, within twenty (20) days from the date of the
Notice, be referred to the American Arbitration Association for final and
binding arbitration. If the matter is mediated but not resolved by mediation,
the matter shall, within ten (10 days from the last mediation proceeding, be
referred to the American Arbitration Association for final and binding
arbitration. The arbitration proceedings shall take place in Sarasota County,
Florida and shall be governed by the Florida Arbitration Code and the rules
pertaining to commercial
3
arbitration of the American Arbitration Association then in effect (except the
provisions of this paragraph shall govern if in conflict with such rules). There
shall be one arbitrator if the amount in controversy is less than twenty four
thousand dollars ($24,000), and otherwise there shall be three arbitrators. The
arbitration award may be entered in any court of competent jurisdiction as
provided for in this Agreement for an order of enforcement if necessary. The
prevailing party in the arbitration proceeding shall be entitled to collect from
the non-prevailing party, the cost of the arbitration and reasonable attorneys'
fees incurred by the prevailing party as a direct result of the arbitration.
11. REMEDIES.
Xxxxx Breach - In the event Xxxxx or Trustee make sales of
Xxxxx Shares during the period from January 1, 2004 through December 31, 2005
("Restricted Sales Period") in excess of the amounts permitted under Paragraph
3, Xxxxx or Trustee shall immediately forfeit and deliver to the Company the
gross proceeds generated from the sale of the excess amount of shares ("Excess
Sales Forfeiture Delivery"). In order for the Company to have knowledge of sales
of Xxxxx Shares during the Restricted Sales Period, Xxxxx or Trustee shall
notify the Company each time a sale order for the sale of Xxxxx Shares is made
("Sales Notice"). The Sales shall be in writing and delivered to the Company no
later than at the same time the sale order is submitted. Further, in the event
Xxxxx or Trustee make excess sales of Xxxxx Shares as described in the first
sentence of this Paragraph, the Company, in addition to receipt of the Excess
Sales Forfeiture Delivery, shall also be relieved of any of its obligations
under Paragraph 5 of this Agreement.
Company Breach - In the event the Company breaches its
obligations under Paragraph 5 of this Agreement, Xxxxx shall be relieved of any
of his obligations under Paragraph 3 and this Paragraph 11 of this Agreement.
12. AMENDMENTS/WAIVERS. This Agreement may only be modified, amended,
or waived by a writing duly authorized and executed by all parties. The failure
of either party to require performance of any of the provisions herein shall not
operate as a waiver of that party's right to require strict performance of the
same or like provisions, or any other provisions hereof, at a later time.
13. DRAFTSMAN. In construing this Agreement, neither of the parties
hereto shall have any term or provision of this Agreement construed against such
party solely by reason of such party having drafted same as each provision of
this Agreement is deemed by the parties to have been jointly drafted by the
Company and Xxxxx.
14. BINDING AGREEMENT. The parties represent and warrant that each has
consulted with legal counsel of their choice in connection with the review,
approval and execution of this Agreement; that each understands this Agreement
is a legally binding contract; that each has read and understands this
Agreement; and that each intends to be bound by each provision of this
Agreement. Further, in addition to being binding on each of the parties hereto,
this Agreement shall be binding upon their respective personal representatives,
heirs, beneficiaries, trustees, successors and assigns, and the benefits of this
Agreement shall inure to the benefit of each of the foregoing.
15. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Florida and venue for any legal
action taken pursuant to this Agreement shall be in Sarasota County, Florida.
4
16. MISCELLANEOUS. Captions are for convenience only. In construing
this Agrement, feminine or neuter pronouns shall be substituted for those
masculine in form or vice versa and plural terms shall be substituted for
singular and singular for plural for any place which the context so requires.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date and year written below:
INVISA, INC.
By: /s/ Xxxx X. Xxxxxx
/s/ Xxxxxxx X. Xxxxx
---------------------------- --------------------------------
Xxxx X. Xxxxxx, CEO Xxxxxxx X. Xxxxx
Date: 1/6/04 Date: 1-06-04
-------------------------- --------------------------
For the purposes of Paragraphs 3 and 11 of this Agreement, the Trustee
joins in this Agreement.
Xxxxxxx X. Xxxxx Irrevocable Trust
By: /s/ Xxxxxxx Xxxxxxxx Date: 7 Jan 04
---------------------------- --------------------------
Xxxxxxx Xxxxxxxx, as Trustee
5
