EX 10.3
Employment Agreement
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into by and among Xxx
Xxxxxxxxx, an individual residing at _________________________________ (the
"Employee"); and Strategic Futures and Options, Inc. whose principal place of
business is located at 0000 Xxxxxx Xxxxxx Xxxx, Xxxxx 000 Xxxxx Xxxxxxxxx (the
"Employer").
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements hereby exchanged, as well as of the sum of Ten ($10.00) Dollars and
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the Parties, intending to be legally bound, hereby agree as
follows:
Witnesseth:
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ARTICLE ONE
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TERM, RENEWALS, EARLIER TERMINATION
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1.1 TERM.
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Subject to the provisions set forth herein, the term of the Employee's
employment hereunder shall be deemed to have commenced as of February 1, 2004
and shall continue for a period of one year thereafter.
1.2 RENEWALS.
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(a) This Agreement shall be renewed automatically, after expiration of the
original one year term, on a continuing annual basis, unless the Party wishing
not to renew this Agreement provides the other Party with written notice of its
election not to renew ("Termination Election Notice") on or before the 30th day
prior to termination of the then current term.
(b) In the event that in conjunction with a renewal of this Agreement, a Party
desires a modification of the terms of this Agreement that are not of general
application (e.g., the provisions pertaining to salary, commissions, etc.),
then:
(1) Such Party shall provide the other with a written notice specifying
the requested modifications (the "Modification Request Notice") on or before the
45th day prior to termination of the then current term which;
(2) If the modifications specified in the Modifications Request Notice
are accepted in writing by the other Party prior to expiration of the then
current term, the Modifications Request Notice shall be deemed a written
amendment to this Agreement, effective as of the first day of the new renewal
term;
(3) If the Party receiving the Modifications Request Notice finds the
proposed modifications unacceptable, it may initiate negotiations to reach
compromise modifications with the Party providing the Modifications Request
Notice, which must be concluded and reflected in a written amendment to this
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Agreement prior to the end of the then current term, failing which, the
provisions of Section 1.2(B)(4) will be deemed in effect;
(4) If the modifications specified in the Modifications Request Notice
are not accepted in writing by the other Party prior to expiration of the then
current term, the Modifications Request Notice shall be deemed a Notice of
Termination and this Agreement will expire effective as of the close of business
on the last day of the then current term.
1.3 EARLIER TERMINATION.
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EMPLOYER shall have the right to terminate this Agreement prior to the
expiration of its Term or of any renewals thereof:
(a) For Cause:
(1) EMPLOYER may terminate the Employee's employment under this
Agreement at any time for cause.
(2) Such termination shall be evidenced by written notice thereof to
the Employee, which notice shall specify the cause for termination.
(3) For purposes hereof, the term "cause" shall mean:
(A) The inability of the Employee, through sickness or other
incapacity, to discharge his duties under this Agreement for 30 or more
consecutive days or for Employee to be absent more than 60 days out of 270 days;
(B) The failure of the Employee to abide by the directions of
Employer's board of directors or the instructions from the Board of Directors of
Tels Corporation, the parent company of the Employer;
(C) Dishonesty; theft; insubordination or conviction of a
crime;
(D) Material default in the performance of the Employee's
obligations, services or duties required under this Agreement (other than due to
illness) or material breach of any provision of this Agreement, which default or
breach has not been completely remedied within five days after written notice of
such default or breach.
(b) Deterioration or Discontinuance of Business:
(1) In the event that EMPLOYER discontinues operating its business,
this Agreement shall terminate as of the last day of the month on which it
ceases operation with the same force and effect as if such last day of the month
were originally set as the termination date hereof; provided, however, that a
reorganization or merger of EMPLOYER shall not be deemed a termination of its
business.
(c) Death:
This Agreement shall terminate immediately on the death of the
Employee; however, all accrued compensation at such time shall be promptly paid
to the Employee's estate.
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1.4 SEVERANCE PAYMENTS AND ALTERNATIVES TO TERMINATION.
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In the event this Agreement is terminated by EMPLOYER for reasons other than for
cause as described in Section 1.3(a)(3)(b) or (c) above, the Employee shall be
entitled to receive:
(A) All salaries and reimbursements earned through the date of
termination;
(B) An amount equal to 90 days of the Employee's then prevailing salary
or the remaining compensation due under this Agreement whichever is less;
(C) Continued participation in those medical, life and disability
insurance benefits, if any, which are provided to the Employee as of the last
date of employment;
(D) In the event of a change in control (as defined below), Employee
shall have the option at any time after the date that the change in control
occurs to terminate his employment. Under such a change in control termination,
the Employee will receive from EMPLOYER compensation in the amount equal to 1.5
times the Base Salary, less any Base Salary paid to him from the date of the
change in control to the date of termination. The Employee shall have the option
to receive this change in control payment in (i) equal installments in the same
amount and at the same periodic intervals as if Employee had remained employed
by EMPLOYER or (ii) in a single lump sum payment. A Change in Control shall mean
the occurrence of any event resulting in the current control shareholders
individually or collectively beneficially own less than 50% of the then
outstanding common stock.
1.5 FINAL SETTLEMENT.
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Upon termination of this Agreement the Employee or the Employee's representative
shall execute and deliver to EMPLOYER on a form prepared by EMPLOYER, a release
of all claims except such claims as may have been submitted pursuant to the
terms of this Agreement and which remain unpaid, and, shall forthwith tender to
EMPLOYER all records, manuals and written procedures, as may be desired by it
for the continued conduct of its business.
ARTICLE TWO
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SCOPE OF EMPLOYMENT
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2.1 RETENTION.
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EMPLOYER hereby hires the Employee and the Employee hereby accepts such
employment, in accordance with the terms, provisions and conditions of this
Agreement.
2.2 GENERAL DESCRIPTION OF DUTIES.
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(a) The Employee shall serve as the president of Strategic Futures and Options,
Inc.
(b) The Employee shall oversee all operational issues related to the ongoing
business needs of the Employer. The Employee shall at all times be accountable
to the Board of Directors of both the Employer and Tels. The Employee is
expected to of 40 hours per week and devote his full time and attention to the
operations of EMPLOYER. However, nothing shall prohibit the Employee from
engaging in charitable and civic activities and managing his personal passive
investments, provided that such passive investments are not in a company which
competes in a business similar to that of EMPLOYER's business.
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(c) The Employee hereby represents and warrants to EMPLOYER that he is subject
to no legal, self regulatory organization (e.g., National Association of
Securities Dealers, Inc.'s bylaws) or regulatory impediments to the provision of
the services called for by this Agreement, or to receipt of the compensation
called for under this Agreement or any supplements thereto; and, the Employee
hereby irrevocably covenants and agrees to immediately bring to the attention of
EMPLOYER any facts required to make the foregoing representation and warranty
continuingly accurate throughout the term of this Agreement, or any supplements
or extensions thereof.
Notwithstanding anything else contained herein to the contrary nothing contained
in this Agreement shall require Employee to accept or be responsible for
employment on a full time basis requiring relocation to any facility outside of
the state of Minnesota.
2.3 EXCLUSIVITY.
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(a) Unless specifically authorized by this Agreement or is otherwise authorized
by EMPLOYER'S board of directors, on a case-by-case basis, in writing, all of
the Employee's business time shall be devoted exclusively to the affairs of
EMPLOYER.
(b) Without limiting the generality of the foregoing, the Employee covenants to
perform the employment duties called for hereby in good faith, devoting
substantially all business time, energies and abilities thereto and will not
engage in any other business or commercial activities for any person or entity
without the prior written consent of EMPLOYER.
2.4 LIMITATIONS ON SERVICES
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(a) The Parties recognize that certain responsibilities and obligations are
imposed by federal and state securities laws and by the applicable rules and
regulations of stock exchanges, the National Association of Securities Dealers,
Inc., in-house "due diligence" or "compliance" departments of Licensed
Securities Firms, etc.; accordingly, the Employee agrees that he will not:
(1) Release any financial or other material information or data about
EMPLOYER without the prior written consent and approval of EMPLOYER's General
Counsel or Securities Counsel;
(2) Conduct any meetings with financial analysts without informing
EMPLOYER'S General Counsel and board of directors in advance of the proposed
meeting and the format or agenda of such meeting.
(b) In any circumstances where the Employee is describing the securities of Tels
Corporation to a third party, the Employee shall disclose to such person any
compensation received from EMPLOYER to the extent required under any applicable
laws, including, without limitation, Section 17(b) of the Securities Act of
1933, as amended.
(c) In rendering his services, the Employee shall not disclose to any third
party any confidential non-public information furnished by EMPLOYER or otherwise
obtained by it with respect to EMPLOYER, except on a need to know basis, and in
such case, subject to appropriate assurances that such information shall not be
used, directly or indirectly, in any manner that would violate state or federal
prohibitions on xxxxxxx xxxxxxx of EMPLOYER's securities or those of TELS.
(d) The Employee shall not take any action which would in any way adversely
affect the reputation, standing or prospects of EMPLOYER or TELS or which would
cause EMPLOYER to be in violation of applicable laws.
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ARTICLE THREE
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COMPENSATION
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3.1 COMPENSATION.
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As consideration for the Employee's services to EMPLOYER the Employee shall be
entitled to the following compensation:
The Employee's salary shall be $66,000 per year. Employee shall also be paid
commissions equivalent to the commission policy established by the Company and
available to other employees. The salary shall be reviewed annually on the
anniversary of this contract. In addition to the Base Salary, the Employee shall
be entitled to receive such bonuses as may be determined by EMPLOYER from time
to time during the term of this agreement. The Salary shall be payable in
accordance with the EMPLOYER's customary payroll practices and procedures and
shall be prorated for any partial year during the Term.
3.2 BENEFITS.
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(a) The Employee shall be entitled to any benefits generally made available to
all other employees including without limitation medical, disability and life
insurance plans and programs established by EMPLOYER subject however to any
eligibility requirements and other provisions of such plans. The Employee shall
also be entitled to receive such fringe benefits as may be generally provided by
EMPLOYER from time to time to its employees, in accordance with the policies of
EMPLOYER in office from time to time.
(b) The Employee shall be entitled to two (2) weeks paid vacation annually, to
be take at such time(s) as shall not, in the reasonable judgment of EMPLOYER'S
Board, interfere with the fulfillment of the Employee's duties under this
Agreement. The Employee shall be entitled to as many holidays, sick days and
personal days as are generally provided from time to time to its employees in
accordance with EMPLOYER'S policies in effect from time to time.
(c) The Employer shall pay or reimburse the Employee for all approved travel,
entertainment, and other expenses incurred by him in connection with the
performance of his duties hereunder in accordance with the policies and
procedures established by EMPLOYER.
(d) The Employee shall be entitled to receive options of Tels corporation common
stock. The options will be issued pursuant to a stock option plan to be
established by Tels and the grant and price of the warrants will be subject to
the terms and conditions of the stock option program established by Tels.
3.3 INDEMNIFICATION.
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EMPLOYER will defend, indemnify and hold the Employee harmless from all
liabilities, suits, judgments, fines, penalties or disabilities, including
expenses associated directly, therewith (e.g. legal fees, court costs,
investigative costs, witness fees, etc.) resulting from any reasonable actions
taken by him in good faith on behalf of EMPLOYER, its affiliates or for other
persons or entities at the request of the board of directors of EMPLOYER, to the
fullest extent legally permitted, and in conjunction therewith, shall assure
that all required expenditures are made in a manner making it unnecessary for
the Employee to incur any out of pocket expenses; provided, however, that the
Employee permits the
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majority stockholders of EMPLOYER to select and supervise all personnel involved
in such defense and that the Employee waive any conflicts of interest that such
personnel may have as a result of also representing EMPLOYER, its stockholders
or other personnel and agrees to hold them harmless from any matters involving
such representation, except such as involve fraud or bad faith.
ARTICLE FOUR
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SPECIAL COVENANTS
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4.1 CONFIDENTIALITY, NON-CIRCUMVENTION AND NON-COMPETITION.
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During the term of this Agreement, all renewals thereof and for a period of two
years after its termination, the Employee hereby irrevocably agrees to be bound
by the following restrictions, which constitute a material inducement for
EMPLOYER's entry into this Agreement:
(a) Because the Employee will be developing for EMPLOYER, making use of,
acquiring and/or adding to, confidential information of special and unique
nature and value relating to such matters as EMPLOYER's trade secrets, systems,
procedures, manuals, confidential reports, personnel resources, strategic and
tactical plans, advisors, clients, investors and funders; as material inducement
to the entry into this Agreement by EMPLOYER, the Employee hereby covenants and
agrees not to personally use, divulge or disclose, for any purpose whatsoever,
directly or indirectly, any of such confidential information during the term of
this Agreement, any renewals thereof, and for a period of two years after its
termination.
(b) The Employee hereby covenants and agrees to be bound as a fiduciary of
EMPLOYER, as if the Employee were a partner in a partnership bound by the
partnership opportunities doctrine, as such concept has
been judicially and legislatively developed in the State of Minnesota, and
consequently, without the prior written consent of EMPLOYER, on a specific, case
by case basis, the Employee shall not, among other things, directly or
indirectly:
(1) Engage in any activities, whether or not for
profit, competitive with EMPLOYER's business.
(2) Solicit or accept any person providing
services to EMPLOYER, whether as an employee, consultant or independent
contractor, for employment or provision of services.
(3) Induce any client or customer of EMPLOYER to
cease doing business with EMPLOYER or to engage in business with any person
engaged in business activities that compete with EMPLOYER's business.
(4) Divert any business opportunity within the
general scope of EMPLOYER's business and business capacity, to any other person
or entity.
4.2 SPECIAL REMEDIES.
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In view of the irreparable harm and damage which would undoubtedly occur to
EMPLOYER as a result of a breach by the Employee of the covenants or agreements
contained in this Article Four, and in view of the lack of an adequate remedy at
law to protect EMPLOYER's interests, the Employee hereby covenants and agrees
that EMPLOYER shall have the following additional rights and remedies in the
event of a breach hereof:
(a) In addition to and not in limitation of any other rights, remedies
or damages
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Available to EMPLOYER, whether at law or in equity, it shall be entitled to a
permanent injunction in order to prevent or to restrain any such breach by the
Employee, or by the Employee's partners, agents, representatives, servants,
employers, employees, affiliates and/or any and all persons directly or
indirectly acting for or with him and the Employee hereby consents to the
issuance of such a permanent injunction; and
(b) Because it is impossible to ascertain or estimate the entire
or exact cost, damage or injury which EMPLOYER may sustain prior to the
effective enforcement of such injunction, the Employee hereby covenants and
agrees to pay over to EMPLOYER, in the event the employee violates the covenants
and agreements contained in Section 4.2 hereof, the greater of:
(1) Any payment or compensation of any kind received by the Employee or
by persons affiliated with or acting for or with the Employee, because of such
violation before the issuance of such injunction, or
(2) The sum of Twenty Five Thousand ($25,000.00) Dollars per
violation, which sum shall be liquidated damages, and not a penalty, for the
injuries suffered by EMPLOYER as a result of such violation, the Parties hereto
agreeing that such liquidated damages are not intended as the exclusive remedy
available to EMPLOYER for any breach of the covenants and agreements contained
in this Article Four, prior to the issuance of such injunction, the Parties
recognizing that the only adequate remedy to protect EMPLOYER from the injury
caused by such breaches would be injunctive relief.
4.3 CUMULATIVE REMEDIES.
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The Employee hereby irrevocably agrees that the remedies described in Section
4.2 shall be in addition to, and not in limitation of, any of the rights or
remedies to which EMPLOYER is or may be entitled to, whether at law or in
equity, under or pursuant to this Agreement.
4.4 ACKNOWLEDGMENT OF REASONABLENESS.
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(a) The Employee hereby represents, warrants and acknowledges that having
carefully read and considered the provisions of this Article Four, the
restrictions set forth herein are fair and reasonable and are reasonably
required for the protection of the interests of EMPLOYER, its officers,
directors and other employees; consequently, in the event that any of the
above-described restrictions shall be held unenforceable by any court of
competent jurisdiction, the Employee hereby covenants, agrees and directs such
court to substitute a reasonable judicially enforceable limitation in place of
any limitation deemed unenforceable and, the Employee hereby covenants and
agrees that if so modified, the covenants contained in this Article Four shall
be as fully enforceable as if they had been set forth herein directly by the
Parties.
(b) In determining the nature of this limitation, the Employee hereby
acknowledges, covenants and agrees that it is the intent of the Parties that a
court adjudicating a dispute arising hereunder recognize that the Parties desire
that these covenants not to circumvent, disclose or compete be imposed and
maintained to the greatest extent possible.
4.5 UNAUTHORIZED ACTS.
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The Employee hereby covenants and agrees not do any act or incur any obligation
on behalf of EMPLOYER except as authorized by its board of directors.
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4.6 COVENANT NOT TO DISPARAGE.
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The Employee hereby irrevocably covenants and agrees that during the term of
this Agreement and after its termination, he will refrain from making any
remarks that could be construed by anyone, under any circumstances, as
disparaging, directly or indirectly, specifically, through innuendo or by
inference, whether or not true, about EMPLOYER, its constituent members, or
their officers, directors, stockholders, employees, agent or affiliates, whether
related to the business of EMPLOYER, to other business or financial matters or
to personal matters.
ARTICLE FIVE
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MISCELLANEOUS
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5.1 NOTICES.
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(a) (1) All notices, demands or other communications hereunder shall be in
writing, and unless otherwise provided, shall be deemed to have been duly given
on the first business day after mailing by registered or certified mail, return
receipt requested, postage prepaid to the addresses as follows:
TO THE EMPLOYEE: XXXXXX XXXXXXXXX
____________________
____________________
EMPLOYER: TELS CORPORATION
0000 XXXXXX XXXXXX XXXX
XXXXX 000
XXXXX, XX 00000
(2) Copies of notices will also be provided to such other address or to
such other person, as any party shall designate to the other for such purpose in
the manner hereinafter set forth.
5.2 AMENDMENT.
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(a) No modification, waiver, amendment, discharge or change of this Agreement
shall be valid unless the same is in writing and signed by the Party against
which the enforcement of said modification, waiver, amendment, discharge or
change is sought.
(b) This Agreement may not be modified without the consent of a majority in
interest of EMPLOYER'S Board of Directors.
5.3 MERGER.
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(a) This instrument contains all of the understandings and agreements of the
Parties with respect to the subject matter discussed herein.
(b) All prior agreements whether written or oral, are merged herein and shall be
of no force or effect.
5.4 SURVIVAL.
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The several representations, warranties and covenants of the Parties contained
herein shall survive the execution hereof and shall be effective regardless of
any investigation that may have been made or may be made by or on behalf of any
Party.
5.5 SEVERABILITY.
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If any provision or any portion of any provision of this Agreement, or the
application of such provision or any portion thereof to any person or
circumstance shall be held invalid or unenforceable, the remaining portions of
such provision and the remaining provisions of this Agreement or the application
of such provision or portion of such provision as is held invalid or
unenforceable to persons or circumstances other than those to which it is held
invalid or unenforceable, shall not be effected thereby.
5.6 GOVERNING LAW AND VENUE.
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This Agreement shall be construed in accordance with the laws of the State of
Minnesota.
5.7 LITIGATION.
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(a) In any action between the Parties to enforce any of the terms of this
Agreement or any other matter arising from this Agreement, the prevailing Party
shall be entitled to recover its costs and expenses, including reasonable
attorneys' fees up to and including all negotiations, trials and appeals,
whether or not litigation is initiated.
(b) In the event of any dispute arising under this Agreement, or the negotiation
thereof or inducements to enter into the Agreement, the dispute shall, at the
request of any Party, be exclusively resolved through the following procedures:
(1) (A) First, the issue shall be submitted to mediation before a
mediation service in the county where Tels corporation conducts its primary
business operations.
(B) The mediation efforts shall be concluded within ten business
days after their initiation unless the Parties unanimously agree to an extended
mediation period.
(2) In the event that mediation does not lead to a resolution of the
dispute then at the request of any Party, the Parties shall submit the dispute
to binding arbitration before an arbitration service located in Dakota County,
Minnesota.
(3) (A) Expenses of mediation shall be borne by EMPLOYER, if
successful.
(B) Expenses of mediation, if unsuccessful and of arbitration shall
be borne by the Party or Parties against whom the arbitration decision is
rendered.
(C) If the terms of the arbitration award does not establish a
prevailing Party, then the expenses of unsuccessful mediation and arbitration
shall be borne equally by the Parties.
5.8 BENEFIT OF AGREEMENT.
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(a) This Agreement may not be assigned by the Employer without the prior written
consent of Employee.
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(b) Subject to the restrictions on transferability and assignment contained
herein, the terms and provisions of this Agreement shall be binding upon and
inure to the benefit of the Parties, their successors, assigns, personal
representative, estate, heirs and legatees.
5.9 CAPTIONS.
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The captions in this Agreement are for convenience and reference only and in no
way define, describe, extend or limit the scope of this Agreement or the intent
of any provisions hereof.
5.10 NUMBER AND GENDER.
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All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine, neuter, singular or plural, as the identity of the Party or
Parties, or their personal representatives, successors and assigns may require.
5.11 FURTHER ASSURANCES.
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The Parties hereby agree to do, execute, acknowledge and deliver or cause to be
done, executed or acknowledged or delivered and to perform all such acts and
deliver all such deeds, assignments, transfers, conveyances, powers of attorney,
assurances, recipes, records and other documents, as may, from time to time, be
required herein to effect the intent and purposes of this Agreement.
5.12 STATUS.
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Nothing in this Agreement shall be construed or shall constitute a partnership,
joint venture, agency, or lessor-lessee relationship; but, rather, the
relationship established hereby is that of employer-employee in EMPLOYER.
5.13 COUNTERPARTS.
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(a) This Agreement may be executed in any number of counterparts.
(b) Execution by exchange of facsimile transmission shall be deemed legally
sufficient to bind the signatory; however, the Parties shall, for aesthetic
purposes, prepare a fully executed original version of this Agreement, which
shall be the document filed with the Securities and Exchange Commission.
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In Witness Whereof, the Parties have executed this Agreement, effective as of
the last date set forth below.
Signed, Sealed & Delivered
In Our Presence
THE EMPLOYEE
/s/ Xxxxxx Xxxxxxxxx
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Xxxxxx Xxxxxxxxx
Dated: January 28, 2004
STRATEGIC FUTURES AND OPTIONS, INC.
/s/ Xxxxxx Xxxxxxxxx
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BY: Xxxxxx Xxxxxxxxx
ITS President
Dated: January 28, 2004
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