EXHIBIT 10.4
Employment Agreement of Xxxxx X. Xxxxxx
EMPLOYMENT AGREEMENT
This Employment Agreement is made and entered into between Win or Lose
Acquisition Corporation., a Delaware corporation, having a place of business at
0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxx, Xxxxxxx 00000 (the "Company") and Xxxxx X.
Xxxxxx an individual having her principal residence at 0000 Xxxxxxxx Xxxxxxxxx,
Xxxxxxx, Xxxxxxx 00000 (the "Employee").
WHEREAS, the Company is a "blank check company" that has been organized
for the purpose of conducting a public offering of securities and then
negotiating a business combination with an unidentified privately held company;
and
WHEREAS, the Employee has previously served as the sole officer and
director of five inactive and insolvent public shells that ultimately engaged in
business combination transactions with privately held companies; and
WHEREAS, the Employee is the sole officer, director and stockholder of
Capston Network Company, a Delaware corporation that entered into an
"Administration and Marketing Agreement" with the Company on December 20, 2000
which was subsequently amended by an "Administration Agreement" dated July 16,
2001; and
WHEREAS, the Employee has served as the Company's president and as the
administrative manager of its business affairs since December 20, 2000; and
WHEREAS, the Company and Capston are desirous of terminating the
Administration Agreement and the Company is desirous of making appropriate
long-term arrangements for the management of its business affairs; and
WHEREAS, the Company is desirous of retaining the Employee to perform
certain executive and administrative functions on the conditions set forth
herein for the entire term of this Agreement, and
WHEREAS, in such capacity, the Employee will develop or have access to
all of the business methods and confidential information relating to the Company
and its business activities, its operational and financial matters, its
contemplated property acquisition plans, its personnel training and development
programs and its industry relationships.
NOW THEREFORE, in consideration of the promises and of the mutual
covenants and agreements herein contained, the parties hereto agree as follows:
1. Employee Representations and Warranties. The Employee represents and
warrants to the Company as follows:
(a) She is free to accept employment hereunder and has no prior or
other obligations or commitments of any kind to anyone that would
in any way hinder or interfere with her acceptance of, or the
full, uninhibited and faithful performance of her duties under the
terms of this Agreement, or the exercise of her best efforts as an
executive officer of the Company;
(b) She is the sole officer, director and stockholder of Capston
Network Company and in such capacity has all necessary corporate
authority to agree to the termination of the Administration
Agreement on the terms set forth herein;
(c) The termination of the Administration Agreement on the terms set
forth herein has been approved by all necessary corporate action
and such termination will not constitute a breach under any
agreements to which the Employee or Capston is a party or
otherwise give rise to any third-party claims against the
Employee, Capston or the Company.
2. Termination of Administration Agreement. The "Administration and
Marketing Agreement" between Capston and the Company dated December 20, 2000, as
amended by the "Administration Agreement" dated July 16, 2001, is hereby
terminated in its entirety. In full and final settlement of the rights to
compensation specified in Article I of the Administration Agreement, the
Company's founders, Xxxx X. Xxxxxxxx, Xxxx X. Xxxxx and Xxxxxx X. Xxxxx have
each transferred to Xxxxx X. Xxxxxx, the individual designee of Capston, 125,000
shares of the Company's $0.001 par value common stock currently held by them. It
is acknowledged by the parties that the original cash purchase price of such
shares was $0.03 per share and that the aggregate cost of the shares transferred
to Xx. Xxxxxx is $11,250, an amount which constitutes full and fair compensation
for the facilities provided and the services rendered the date of the original
Administration and Marketing Agreement and the date of this agreement.
3. Employment and Duties. The Company shall employ the Employee as its
President, or in such other comparable executive capacity as the Board of
Directors of the Company shall specify from time to time. The Employee's initial
responsibilities shall include all of the duties and responsibilities of the
President as described in the By-laws of the Company, as the same may be amended
from time to time. Subject at all times to the supervision, direction and
control of the Company's board of directors, the Employee shall have all
necessary power and authority to (a) provide office facilities for the Company;
(b) administer the day-to-day operations of the Company during its search for an
acquisition Target; and (c) administer the accounting and reporting functions
during its search for an acquisition Target. In connection with the foregoing,
the Employee shall have all requisite power and authority to:
(a) Administer all of the Company's existing and proposed operations
in accordance with applicable law and the provisions of this
Agreement;
(b) Administer all of the Company's existing and proposed operations
in a good and workmanlike manner;
(c) Keep the board of directors informed with respect to all matters
that they are entitled to know under applicable law and such
additional matters she deems to be important under the
circumstances;
(d) Keep the stockholders informed of all matters that they are
entitled to know under applicable law and all additional matters
she deems to be important under the circumstances;
(e) Keep the Company's properties, if any, free from all liens and
encumbrances occasioned by the operations contemplated hereby;
(f) Retain at the sole cost, risk and expense of the Company, such
employees, experts and consultants as may be necessary or
desirable under the circumstances;
(g) Maintain complete, correct and accurate books, records and
accounts and furnish periodic reports to the board of directors in
such detail as may be reasonably required to permit the Company to
fully discharge its reporting obligations under the Exchange Act
and other applicable law; and
(h) Make all information concerning the Company available for
inspection by the board of directors, and the duly authorized
representatives of the stockholders.
In addition, the Employee shall, from time to time, perform such other functions
and duties in connection with the business of the Company as the board of
directors may entrust or delegate to her.
4. Conduct of Employee. During the entire Term of this Agreement, the
Employee shall devote as much time, effort, skill and attention to the affairs
of the Company as may be reasonably required under the circumstances. The
Employee will use her best efforts to promote the interests of the Company, and
will discharge her responsibilities in a diligent and faithful manner,
consistent with sound business practices. In furtherance of the foregoing:
(a) The Employee represents that her employment by the Company will
not conflict with any obligations which she has to any other
person, firm or entity. The Employee specifically represents that
she has not brought to the Company (during the period before the
signing of this Agreement)
and she will not bring to the Company any materials or documents
of a former or present employer, or any confidential information
or property of any other person, firm or entity.
(b) The Employee shall not, without disclosure to and approval of the
Board of Directors of the Company, directly or indirectly, assist
or have an active interest in (whether as a principal,
stockholder, lender, employee, officer, director, partner,
consultant or otherwise) in any person, firm, partnership,
association, corporation or business organization, entity or
enterprise that competes with or is engaged in a business which is
substantially similar to the business of the Company except that
ownership of not more than 5% of the outstanding securities of any
class of any publicly-held corporation shall not be deemed a
violation of this sub-paragraph 4(b).
(c) The Employee shall promptly disclose to the directors of the
Company, in accordance with the Company's policies, full
information concerning any interests, direct or indirect, she
holds (whether as a principal, stockholder, lender, Employee,
director, officer, partner, consultant or otherwise) in any
business which, as reasonably known to the Employee purchases or
provides services or products to, the Company or any of its
subsidiaries, provided that the Employee need not disclose any
such interest resulting from ownership of not more than 5% of the
outstanding securities of any class of any publicly-held
corporation.
(d) The Employee shall not disclose to any person or entity (other
than to the Company's Board of Directors or to others as required,
in her judgment, in the due performance of her duties under this
Agreement) any confidential or secret information with respect to
the business or affairs of the Company, or any of its subsidiaries
or affiliates.
Nothing in this Agreement shall be deemed to preclude the Employee from
participating in other business opportunities if and to the extent that (i) such
business opportunities are not directly competitive with or similar to the
business of the Company, and (ii) the Employee's activities with respect to such
opportunities do not have a material adverse effect on the performance of the
Employee's duties hereunder.
5. Conditions of Employment.
(a) Term of Employment. Unless terminated earlier in accordance with
the provisions of this Agreement, the Company will employ the
Employee for a period commencing on the effective date of its
registration statement under the Securities Act of 1933 and
terminating 17 months thereafter (the "Term"). Thereafter, this
Agreement shall be renewable on such reasonable terms and for such
periods as may be negotiated between the Employee and the Company.
(b) Place of Employment. The Employee shall work for the Company from
her office in Dunedin, Florida. All expenses associated with the
overhead, operation and maintenance of the Employee's office,
including the cost of any required support staff, shall be paid by
the Employee from her own funds. The Employee shall not be
required during the Term of this Agreement to relocate from
Dunedin, Florida to any other business location maintained by the
Company although the Employee expressly agrees that regular travel
shall be necessary as part of her duties.
(c) Ownership of Company Records and Reports. The Employee shall not,
except in the performance of her duties hereunder, at any time or
in any manner make or cause to be made any copies, pictures,
duplicates, facsimiles, or other reproductions or recordings or
any abstracts or summaries of any reports, studies, memoranda,
correspondence, manuals, records, plans or other written or
otherwise recorded materials of any kind whatever belonging to or
in the possession of the Company, or of any subsidiary or
affiliate of the Company, including but not limited to materials
describing or in any way relating to the Company's business
activities, its target evaluation and selection methods, its
operational and financial matters, its contemplated acquisition
plans, its personnel training and development programs and its
industry relationships. The Employee shall have no right, title or
interest in any such material, and the Employee agrees that,
except in the performance of her duties hereunder, she will not,
without the prior written consent of the Company remove any such
material from any premises of the Company, or any subsidiary or
affiliate of the Company, and immediately upon the termination of
her employment for any reason whatsoever Employee shall return to
the Company all such material in her possession.
(d) Company's Trade Secrets. Without the prior written consent of the
Company, the Employee shall not at any time (whether during or
after her employment with the Company) use for her own benefit or
purposes or for the benefit or purposes of any other person, firm,
partnership, association, corporation or business organization,
entity or enterprise, or disclose in any manner to any person,
firm, partnership association, corporation or business
organization, entity or enterprise, except in the performance of
her duties hereunder, any trade secrets, or any information data,
know-how or knowledge constituting trade secrets belonging to, or
relating to the affairs of the Company, or any subsidiary, former
subsidiary, or affiliate of the Company.
6. Compensation. The Company shall compensate the Employee
for all services to be rendered by her during the Term as follows:
(a) The Employee shall receive a fixed fee of $1,000 per month during
the initial term of this Agreement. Thereafter, the Executive's
Salary shall be reviewed on an annual basis and the amount of such
Salary shall be subject to renegotiation on the basis of the
performance of the Executive and the performance of the Company.
(b) The Employee shall not directly or indirectly participate in any
other or additional compensation plans unless the terms of such
plans are fully described in a post effective amendment to the
Company's registration statement.
(c) The Employee shall not directly or indirectly participate in any
medial/hospitalization insurance and group life insurance plans
unless the terms of such insurance plans are fully described in a
post effective amendment to the Company's registration statement.
(d) During the Term of this Agreement, the Company will reimburse the
Employee for all reasonable out-of-pocket business expenses
incurred by her on behalf of the Company in the performance of her
duties hereunder upon presentation of vouchers, receipts or other
evidence of such expenses in accordance with the policies of the
Company, and provided that the Employee shall incur no costs or
expenses that exceed five hundred dollars without prior
authorization of the board of directors.
(e) Notwithstanding any other provision of this Agreement, it is
agreed that the Employee shall be entitled to receive such
incentive bonuses and other benefits as may be granted by the
board of directors from time to time, but only if the terms the
terms of such incentive bonuses and other benefits are fully
described in a post effective amendment to the Company's
registration statement.
7. Termination of Employment.
(a) This Agreement and the compensation payable to Employee hereunder
shall terminate and cease to accrue forthwith upon Employee's
death.
(b) The Employee's employment under the terms of this Agreement may be
terminated by the Company at any time, with or without cause, upon
written notice to the Employee;
(c) If the Company terminates this Agreement without cause, the
Employee shall be entitled to receive all of the cash compensation
that would otherwise be payable to her during the initial term.
(d) If the Company terminates this Agreement for cause, however, the
Employee's right to receive additional compensation shall
forthwith terminate.
(e) As used herein, "cause" shall mean (i) any material failure by
Employee to observe or perform her Agreements herein contained,
(ii) any fraudulent or dishonest conduct in the performance of the
Employee's duties and functions, (iii) any gross negligence or
willful breach of the Employee's obligations under this Agreement,
(iv) any intentional disregard of the policies and instructions
established by the Board of Directors of the Company, or (v) any
use of illegal or controlled substances.
(f) The Employee's employment under the terms of this Agreement may be
terminated by the Employee at any time, with or without cause,
upon written notice to the Company. If the Employee terminates
this Agreement without cause, however, the Employee's right to
receive additional compensation shall forthwith terminate.
8. Specific Performance. If any portion of this Agreement is found by a
court of competent jurisdiction to be too broad to permit enforcement of such
restriction to its full extent, then such restriction shall be enforced to the
maximum extent permitted by law, and the Employee hereby consents and agrees
that such scope may be judicially modified accordingly in any proceeding brought
to enforce such restriction. All provisions of this Agreement are severable, and
the unenforceability or invalidity of any single provision hereof shall not
affect any remaining provision. The Employee acknowledges and agrees that the
Company's remedy at law for any breach of any of her obligations hereunder would
be inadequate, and agrees and consents that temporary and permanent injunctive
relief may be granted in any proceeding that may be brought to enforce any
provision of this Agreement without the necessity of proof of actual damage and
without any bond or other security being required. Such remedies shall not be
exclusive and shall be in addition to any other remedy which the Company may
have.
9. Miscellaneous.
(a) The failure of a party to insist on any occasion upon strict
adherence to any Term of this Agreement shall not be considered to
be 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. Any waiver must be in writing.
(b) All notices and other communications under this Agreement shall be
in writing and shall be delivered personally or mailed by
registered mail, return receipt requested, and shall be deemed
given when so delivered or mailed, to a party at such address as a
party may, from time to time, designate in writing to the other
party.
(c) This Agreement shall be assigned to and inure to the benefit of,
and be binding upon, any successor to substantially all of the
assets and business of the Company as a going concern, whether by
merger, consolidation, liquidation or sale of substantially all of
the assets of the Company or otherwise.
(d) This Agreement constitutes the entire Agreement between the
parties regarding the above matters, and each party acknowledges
that there are no other written or verbal Agreements or
understandings relating to such subject matter between the
Employee and the Company or between the Employee and any other
individuals or entities other than those set forth herein. No
amendment to this Agreement shall be effective unless it is in
writing and signed by both the parties hereto.
(e) This Agreement shall be construed according to the laws of the
State of Florida pertaining to Agreements formed and to be
performed wholly within the State of Florida. In the event action
be brought to enforce any provisions of this Agreement, the
prevailing party shall be entitled to reasonable attorney's fees
as fixed by the court. The Employee represents and warrants that
she has reviewed this Agreement in detail with her legal and other
advisors, as she considers appropriate, and that she fully
understands the consequences to her of its provisions. The
Employee is relying on her own judgment and the judgment of her
advisors with respect to this Agreement and she understands that
the Company is making no representations to her concerning taxes
or any other matters respecting this Agreement.
(f) Any dispute between the parties to this Agreement shall be
determined and settled by binding arbitration in Dunedin, Florida
under the rules of the American Arbitration Association. Judgment
on any award rendered by the arbitrators may be entered in any
court having jurisdiction over the party adversely by such award.
(g) This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original for all purposes
hereof.
IN WITNESS WHEREOF, the parties hereto have set their hands on this
28th day of December 2001.
WIN OR LOSE ACQUISITION CORPORATION XXXXX X. XXXXXX
By:
------------------------------- ----------------------------
Xxxx X. Xxxxx,
Executive Vice President
